Exam 16: Pricing Concepts

Which of the following factors directly affect the elasticity of demand?

Because the price of condensed soup is small relative to a consumer's purchasing power,and there are several alternate uses for the product,condensed soup probably has elastic demand.

In a sluggish economy,consumers will buy even the most modest of products with the same discretion once shown only to big-ticket items,such as computers,air fares,and designer clothes.The result is a growing popularity of cheaper private-label products,and the likelihood that price wars among consumer goods could lead to the same kind of consolidation that occurred in the airline and electronics industries.Moreover,analysts say changing buying habits will force premium brand marketers to lower their prices to protect their positions.These companies may also upgrade products to distinguish them from private labels and promote their brands more aggressively than ever. One analyst says that consumers are forcing product innovation.Products have to be sold on merit.As a result,there will be fewer brands of significance,but the significant brands will be stronger.Brand loyalty is believed to exist only when,or if,value is provided.How do the significant brands compete? One analyst says that a combination of sensible pricing and innovation with a strong brand name can stabilize market share.Reformulated or repackaged products are typical examples of innovative attempts to solidify market share. -Refer to Consumer Buying Habits.One analyst said that the big brands can compete by combining sensible pricing and innovation with a strong brand name.This is done to stabilize market share.This is an example of which type of pricing?

An event planner wants to determine a price for a package of garland of silk flowers.Its cost is $7.00.She wants a markup of 30 percent based on selling price.Which of the following is closest to the price she should charge her customers?

When there is only one product manufacturer left for a product in the decline stage,prices will stabilize.

What happens when demand is elastic?

In the mid-1990s,WestJet chose to compete head-on with Air Canada by launching WestJetLite,an alternative low-fare commercial airline passenger operation.Top executives at WestJet had expected its no-frills operation to break even within a year of its inception,but the airline fell short of the goal.A source close to the company explained it by saying,"Its costs were too high,and its revenues were too low." Some observers criticized WestJetLite's marketing efforts.When the no-frills service was first launched,it lacked a distinct name or identity,missing its chance to make a splash.Then WestJet tried to sell three "brands" at once-Plush ,a new premium service,and its more traditional long-haul domestic flights.As one rival expressed it,"You cannot be all things to all people." -Refer to WestJetLite.The airline industry's demand curve slopes downward and to the right.This curve indicates the quantity demanded is increased as which of the following occurs?

Mickaela McAuliffe wants to open a store to sell quilting supplies.She cannot decide whether to base her store's pricing objectives on market share,dollar sales,or unit sales.Regardless of which she chooses,how can her firm's pricing objective be categorized?

The Canadian Girl catalogue began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Manitoba.Her story begins with her long sea voyage from Iceland.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Manitoba costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered. -Refer to Canadian Girl Doll.The popularity of the Canadian Girl dolls is so great that an increase in the price of the basic Kristen doll and books by 5 percent will not significantly affect the demand for the product.This means that the demand for the Canadian Girl doll is which of the following?

Critics claim bank ATMs take advantage of which customers who suffer a poverty of time and have a strong need for convenience?

The Canadian Girl catalogue began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Manitoba.Her story begins with her long sea voyage from Iceland.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Manitoba costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered. -Refer to Canadian Girl Doll.What is the revenue to Canadian Girl if it sells 20 basic Kristen doll and books?

What happens when pricing is used as part of a promotion strategy?

Sales-oriented pricing objectives are either based on market share or dollar or unit sales.

If a company's pricing objective is to meet the competition or to maintain existing prices,what type of pricing is it using?

When pricing goals are mainly sales-oriented,cost considerations are usually subordinated to demand considerations.

Which of the following BEST describes revenue?

List the three categories of pricing objectives and then two specific strategies in each category that a marketer could implement to achieve those objectives.

When price decreases and total revenue falls,demand is which of the following?

What are yield management systems (YMS).?In what type of industry were they first used?

What is the point at which there is no inclination for the price to rise or fall?