Exam 20: Setting Prices

When consumers are making do with less expensive products and shopping more selectively, manufacturers and retailers must focus on the ____ of their products.

A product that has more features than those of its competition, or that is perceived to be of higher quality, warrants using which type of pricing strategy?

Services that are performed by lawyers, dentists, or doctors are typically priced using ____; sometimes these prices are not based on the amount of time that is spent in each situation, but are based on a flat fee regardless of the difficulty involved.

Captive pricing, premium pricing, bait pricing, and price lining are all strategies aimed at maximizing the profits of an entire product line rather than an individual product.

Maria recently put her house on the market at an asking price of $260,000. She realizes, however, that in order to sell the house, she may have to use

You are the head of pricing strategy for your firm and you are very excited about a new point-of-sale system that has just been installed in all your firm's retail outlets. The system is a state-of-the-art, real-time information system that captures the details of every sale made in your retail outlets. Now, you will have up-to-the-minute data on sales volume trends and performances for your entire product line. You plan to use this data to set prices based on these volume trends.Which of the following basis for pricing are you intending to use? ​

A manager at Kohl's discovers that Macy's has reduced the price of its children's Levi's from $31.99 to $24.99, according to an advertisement in the Sunday newspaper. She immediately phones her store and instructs the salesperson on duty to put a sign up next to their children's Levi's that reads, "SALE: $24.99." This is an example of what pricing strategy?

Scenario 20.2 Use the following to answer the questions.Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit. -Refer to Scenario 20.2. Glenwood is considering a markup pricing basis, with the cost for office visit plus vaccines at $45. If Glenwood were to add a markup of 33.3 percent of the costs, its price would be ____.

Markup can be stated as a percentage of the cost or as a percentage of the selling price.

​You are a brand manager for a large chain of grocery stores. You have been working overtime for the last two weeks to prepare for your pricing objectives meeting with the head of sales and marketing. You walk into the meeting with a high degree of confidence in the strategy that you have for setting the pricing objectives for your brand category for the upcoming year. You are speechless when the marketing head tells you that no changes in the pricing objectives will be made for your brand category. He says he believes it is most prudent to leave the existing pricing objectives as they are for the upcoming year.Which of the following statements is the best explanation for the marketing head's decision to leave the existing pricing objectives in place with no change? ​

An early-bird special offered by a restaurant during off-peak hours is an example of the secondary-market pricing strategy.

The government frequently uses competition-based pricing in granting defense contracts.

A marketer uses only one pricing objective to avoid organizational confusion.

A sale that advertised prices "up to 65 percent off" the original price uses

A major reason why retailers use markup pricing is that it is convenient.

The way that pricing is used in the marketing mix will influence the determination of the final price.

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is

Wet Seal, a retailer of swimwear, employs a commonly used cost-based pricing method called

When a satellite dish company uses bundling to combine phone, dish, and broadband Internet access prices, it is attempting to influence a consumer's perception of price to make a product's price more attractive and reduce "sticker shock." This is an example of using a ____ pricing strategy.

Executives in Japan decided to price Lexus luxury cars in the United States at $55,000 while pricing them at $66,000 in their own country. This is an example of