Exam 11: Developing New Products

Ochre Inc.had marked its refrigerators at $729.94 as the original price.This was close to the standard price for refrigerators of the same quality in the market.Later,the price is brought down to $650.99.A customer compares Ochre's marked-down price with the original price and perceives an increased value.This is an example of:

When different companies sell commodity products that consumers perceive as substitutable,this is called:

When a market legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer,it is called a:

Slate Inc.is the parent company of five brands.Slate decides that all the products under every brand must make a 20 percent gain margin in the upcoming financial year.This is an example of:

Jeff is a hockey player who uses hockey sticks manufactured by Teal Inc.Teal increases the price of hockey sticks,so Jeff switches to another brand offering the same quality of hockey sticks at a lower price.This change in brand is an example of the:

Which of the following would a shipping company adopt in order to set a price that would charge its customers based on the actual distance?

Meg wants to start a gym in her hometown.Two other gyms already exist in the town.What kind of pricing method could she employ to establish herself?

A method for setting prices that determines the total expense of possessing a product over its useful life is called the:

A department store announces 30 percent off the price of Christmas trees if the trees are bought before December 1.This is an example of:

Explain the concept of price skimming.

It is illegal to charge a different price to a reseller if the firm is attempting to meet a specific competitor's price.

Differentiate between complementary products and substitute products.

A shoe store gets a 30 percent discount from the manufacturer when it places an order worth $5000.The discount increases when the order worth increases.This is an example of a(n):

Ray Inc.,a shoe manufacturer,pays a good amount to a department store to allow it to display its shoes in the store's window where they are likely to attract a lot of attention from customers.The money paid by Ray's to the department store is an example of a(n):

A strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular,nonsale price and the deep-discount sale prices their competitors may offer is called:

The price excluding the variable costs per unit is referred to as the:

Jade's manufactures electronic appliances.Jade's does not have any retail stores of its own and prefers to sell its products through Ramon.Ramon stores are striking in decor,well maintained,and serviced by a polite and well-informed staff that pays great attention to customer service and feedback.Ramon also has a huge promotional budget and launches prominent promotional campaigns on a regular basis.In fact,Jade's offers Ramon a discount on products that are included in these campaigns.This is an example of a(n):

Cost-based methods recognize the role that consumers or competitors' prices play in the marketplace.

As the number of tourists in a village increases during Christmas,the hotels in the locality temporarily increase the rates of accommodation to make profit.This is an example of:

Mike wants to set up a factory to manufacture roller skates.He plans to employ a hundred people in his factory.Mike's primary expenses include rent,utilities,insurance,administrative salaries (for executives and higher-level managers),and depreciation of the physical plant and equipment.The expenses for raw material and labour to make the skates constitute the: