Exam 17: Setting the Right Price

Razer-Edge makes machines for sharpening the blades used by butchers to slice meat.When Razer-Edge priced its Primary Sharpener,its salespeople were told that it would be sold for $1,700,but that there would be room for discounts and flexibility.The $1,700 price is which of the following prices for the Primary Sharpener?

The Hagarty & Adolph funeral home has coffins priced at $1,200,$2,000,$3,500,and $5,000.Why have the owners of the funeral home chosen price lining?

In Canada,most of the legal issues regarding pricing are covered by which of the following?

After managers understand both the legal and the marketing consequences of price strategies,they should set a price,the general level at which a company expects to sell a good or service.What is this price?

The owner of a flower shop decided to sell a dozen red roses for $13.50.He hopes the below-cost price for the roses will attract current and new customers who will also buy regularly priced items.The manager is encouraging store patronage through which of the following?

The basic assumption with price skimming is that the firm is customer driven,seeking to understand the attributes customers want in goods and services they buy and the value of that bundle of attributes to customers.

A base price may be lowered through the use of a discount.Discounts take a variety of forms and have several different objectives.Name and define three types of discounts (do not include allowances or rebates).State the main objective of each type of discount you identify.

Current is a catalogue retailer that sells greeting cards,wrapping paper,and decorative bows.Since its inception,the catalogue retailer has offered three separate prices on each item purchased.The highest price is for purchases of a single item.The middle price is for purchases between two and five of the same item.The lowest price is for purchases over five of the same item.What common form of purchase discount is Current using?

The introductory price for the Nintendo Gamecube video game console was $100 lower than the list price of Xbox and Playstation 2,its only two competitors.Given this information,you can assume Nintendo used what type of policy for its Gamecube?

What type of geographic pricing policy would a marketing manager most appropriately choose for the following products: (1)nationally advertised bubble gum, (2)rebuilt engines for jet airplanes,and (3)bulk amounts of a rare spice harvested from a single mountain in Canada and used in high-priced restaurants? Justify your answers,and specify any assumptions you used to arrive at your answer.

It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school.In her Sunday newspaper was a flyer from Michael's,an arts-and-crafts retailer.As she looked through the newspaper insert,she noticed that if she purchased three or more bottles of Alene's Tacky Glue,the regular price of $1.50 each was reduced to $1.15 each.She also saw that the store priced its plastic storage boxes at $1.99,$3.99,and $5.99.She thought they would be useful for storing each individual child's projects.On the front page of the flyer was an ad for Funky Girls Gel Pens,something she knew her daughter would love to use.The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens.She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michael's had a scrapbook starter kit,which includes scissors,book,pages,and stickers for only $15.The items could be purchased separately for $19.99.The flyer also announced that all flag-related items leftover from its Canada Day sale were reduced by 40 percent. -Refer to Art Supplies.What pricing practice was used to price the plastic storage boxes?

Lipton makes several easy-to-prepare side dishes that all use macaroni shells.In promoting this product line,Lipton offers a 50-cents-off coupon that can be used for any of its macaroni-based mixes.Therefore,what must Lipton consider when pricing its mixes?

R.W.Hunt & Sons,a distributor of hunting bows and anything needed for hunting or target practice,has packaged a new range-finder scope with a package of paper targets at one low price.R.W.Hunt is selling the scope slightly below cost,but the paper targets are very profitable.Which pricing technique is R.W.Hunt using?

Sharyl Kabbes manufactures dairy products on her farm outside Walkerton,Ontario.Her products carry the brand name Mrs.K's Premium.The company sells milk,cheese,and sausage products.The products are sold individually or in sets that include a variety of cheeses and sausage products for a special price.Currently the products are sold only in Ontario.Mrs.K's products were introduced with a high price relative to competition.Kabbes says that her products are premium and therefore justify the high initial price.To get retailers to carry Mrs.K's products,the company offers discounts to buyers who will transport the products from the Kabbes Farm to their warehouses.Kabbes also offers retailers money to run ads for Mrs.K's products. Because Mrs.K's products are perishable,transportation is very important,and some of her customers could not take advantage of the discount offered for picking up the product from the farm.As such,Kabbes has decided to divide the province into several segments and base her freight charges on the location of the buyer within these segments. -Refer to Mrs.K's Premium Cheese.The money offered by Mrs.K's to retailers to advertise the company's products is called which of the following?

When a coffee shop in a suburban mall and an upscale cafe in a luxury hotel charge different prices for the same cup of coffee served to customers who find the atmosphere in the hotel worth the difference,what is the pricing method used?

Lee Valley,Inc.is a catalogue retailer of woodworking tools used by craftspeople.It uses two different shipping prices.All customers west of Manitoba pay $6.99 shipping and handling costs per order,while all east of Manitoba pay $8.99.This is an example of which type of pricing?

The DCS Stainless Steel Gas Grill for outside cooking costs $3,995.The market for a grill that could easily replace a kitchen range is limited even though a lot of people have seen articles about this grill in cooking magazines and in the cooking section of newspapers.There is no potential competitor for this grill.Which strategy is probably best?

It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school.In her Sunday newspaper was a flyer from Michael's,an arts-and-crafts retailer.As she looked through the newspaper insert,she noticed that if she purchased three or more bottles of Alene's Tacky Glue,the regular price of $1.50 each was reduced to $1.15 each.She also saw that the store priced its plastic storage boxes at $1.99,$3.99,and $5.99.She thought they would be useful for storing each individual child's projects.On the front page of the flyer was an ad for Funky Girls Gel Pens,something she knew her daughter would love to use.The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens.She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michael's had a scrapbook starter kit,which includes scissors,book,pages,and stickers for only $15.The items could be purchased separately for $19.99.The flyer also announced that all flag-related items leftover from its Canada Day sale were reduced by 40 percent. -Refer to Art Supplies.What pricing practice was used with the scrapbook starter kit?

What is the term for marketing two or more products in a single package for a special price?

A June sale on chocolate eggs,an Easter staple for many people,is an example of which of the following pricing tactics?