Exam 17: Pricing Concepts

What is price?

Entertainment Central makes video game consoles,which it sells for $500.00.It estimates its variable costs to be $200.00 per console.It figures its fixed costs to be $600,000 per year.How many consoles does it have to sell to break-even?

The quantity of a product that people will buy/demand is most dependent on its:

Extranets between suppliers and customers:

_____ is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price).

_____ cost is the change in total costs associated with a one-unit change in output.

One of the most stressful and pressure-filled tasks of the marketing manager is attempting to set the right price.Specify three aspects of the current pricing environment in consumer markets that have contributed to the difficulty in setting correct prices.

Al has opened a auto repair shop .The monthly payment on the tools he recently purchased,the rent on his business location,and his business license are all examples of _____ costs.

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

What is the impact of the Internet and extranets on pricing strategies?

SCENARIOS Continental Lite In the mid-1990s,Continental Airlines chose to compete head-on with Southwest Airlines by launching Continental Lite,an alternative low-fare commercial airline passenger operation.Top executives at Continental 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 Continental'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 Continental tried to sell three "brands" at once--Lite,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 Continental Lite.Consumers who traveled on Continental Lite or Southwest were very sensitive to price changes.This suggests:

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

What is a break-even point? The Catera Company makes and sells cotton candy machines.What is the break-even volume for Catera machines in units?

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

Which of the following statements about price is true?

An analyst at Onyx,a company that makes bakers' racks,has calculated the sales volume at which the company's costs equal revenue.This analyst announced at the company's quarterly sales meeting that 13,000 racks at an average cost of $150 must be sold to retail stores during the next quarter to reach this point.Which important factor has been excluded from his analysis?

At her local supermarket,Tara saw a pizza pan and a package of mix to make homemade pizza.The items,which were sold together,retailed at $28.50,but were marked down to $19.99.The $19.99 is the:

The Pizza Depot is an independent retailer of pizzas and deli sandwiches.Which of the following is the BEST example of one of its fixed costs?

Status quo pricing objectives indicate that prices are adjusted to meet the competition.

When Laser Technology developed and introduced a high-tech crash investigation system to be used by law enforcement officers,the company determined that demand for the product was inelastic,and there was no existing competition.The pricing strategy for the system should be: