Exam 13: Pricing Concepts for Establishing Value

Internet comparison shopping sites like Shopping.com and Pricegrabber.com allow consumers to compare prices of substitute products much more easily than is possible without the Internet.These sites have:

Gerhard explains the concept of break-even analysis to his father who owns a daycare center.Gerhard's father grimaces,saying,that break-even analysis is too simplistic and won't work for him.What specific limitations associated with break-even analysis will Gerhard's father probably point out?

According to a typical demand curve,the higher the price:

Diane owns a bakery where she sells cupcakes.Two blocks down there is another bakery,CC's Bakery,that sells cupcakes for $1 less than Diane.Diane decides to lower her price and match CC's Bakery prices.What type of pricing strategy is Diane implementing?

___________________ are costs that remain constant as the volume of production increases or decreases.

Sales of national brands of orange juice tend to increase when the economy is doing well,while sales of generic orange juice increase when the economy is not doing well.Among industry members this is called the "orange juice indicator." This is an example of how ____________ impacts demand for products.

Jacob rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20,to cover maid service and utilities.His fixed costs are $100,000 and his profit last year was $20,000.For Jacob,the contribution per unit is:

A demand curve shows the relationship between ___________________ in a period of time.

Economic trends that affect pricing decisions include increases in disposable income and status consciousness,a trend for customers to shop cheap,global economic conditions,and local economic conditions.

Which of the following is NOT one of the Five Cs of pricing?

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

Historically,prices were:

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection.Ryan told the manager to always match the gasoline prices of the other store.Ryan is using a _____________________ pricing strategy.

What is cross-shopping and what does it mean for marketers' pricing strategy?

Because there are many firms in monopolistic competition markets:

Your spice company's pricing is set according to the laws of supply and demand.Therefore,when selling your spices you depend on the market to establish the price at which you will sell your spices.Which type of market are you operating in?