Exam 20: Setting Prices

Compare and contrast price skimming and penetration pricing.

Bundle pricing may be perceived to be of value by customers because

Breyer's produces a variety of ice cream flavors and lines of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using ____ to price its ice cream.

When establishing prices, a marketer's first step is to

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

The management at Allied Electronics is having difficulty in raising the introductory price on system components to cover the increased costs of producing the sensing devices for home security systems. Apparently, Allied used a(n) ____ strategy in pricing these components.

The newest version of a product like Bose headphones is likely to use _____, while the new version of Red Bull is likely to use _____ .

Which of the following is a requirement for setting pricing objectives?

Marketers that evaluate competitors' prices do so to set their own prices slightly below those of competitors.

Markup is measured either as a percentage of ____ or a percentage of ____.

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

The three primary bases for developing prices are

Pricing objectives should be considered overall goals to aid the organization in its long-range plans.

Under what conditions would a marketer most likely use a price leader strategy?

Differential pricing means different buyers pay different prices for the same quality and quantity of product.

Scenario 20.1 Use the following to answer the questions.Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. -Refer to Scenario 20.1. Given Ray-Ban's plan for positioning the new sunglass line, they should use a ____ strategy when introducing their new product.

A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy.

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

Describe, compare, and contrast the three major bases for setting prices.