Exam 14: Pricing Concepts for Establishing Value

What methods might a firm use when pricing based on a profit orientation and how do they differ?

Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000.He expects the branch to attract 1,000 new customer accounts in the first year,each of which will cost $50 per year to service.He also expects to generate $100,000 per year in revenue.For Raymond,the total cost of opening the new branch and remaining open for one year will be

American Airlines just reduced its fares for summer flights by $100.Delta Airlines changes its pricing structure and reduces its flights by $100 as well.Delta is employing status quo pricing.

When Apple Computer Company introduced the iPhone-a combination phone,MP3 player,and Internet access device-in 2007,it was priced at $499,considerably higher than either the iPod or competing cell phones.Hoping to attract innovators and early adopters,Apple was most likely pursuing a __________ pricing strategy.

When a retail store rarely sells deeply discounted or sale products,it is known as "everyday low pricing."

What situation is occurring if a 1 percent decrease in price results in more than a 1 percent increase in quantity demand?

Historically,prices were

The saying "leaving money on the table" is associated with

For which of the following is demand likely to be most sensitive to price increases?

David manages a Shoney's restaurant.He is considering staying open later in the evening.For David,the variable costs associated with staying open longer hours will include all of the following except

_______ measures consumers' sensitivity to price changes.

Which of the following is not one of the five Cs of pricing?

Brad always buys and uses Nike brand golf balls.If he finds a Titleist or Callaway ball in the rough,he gives it away.Brand-loyal golfers like Brad allow Nike to charge a higher price and not lose many sales.By building a strong brand,Nike has effectively

According to your text,research has consistently shown that consumers usually rank which of the four Ps as one of the most important factors in their purchase decisions?

Proving that a company has engaged in the deceptive bait and switch practice is easy.

__________ is the practice of colluding with other firms to control prices.

For market penetration pricing to work,the product or service must be perceived as breaking new ground in some way.

Price is the only part of the marketing mix that does not generate costs.

A high / low pricing strategy relies on the promotion of sales,during which prices are temporarily reduced to encourage purchases.

Bill is a yacht broker in the southeastern United States.For years he has had difficulty selling large yachts locally because there were few places to dock these boats.Yachts and spaces to dock them are an example of