Exam 17: Pricing Concepts

Marketing managers who attempt to raise the quality image of their product by selling it at high prices are following a(n)_____ strategy.

HeartGood Eggs decided to offer a much larger than customary profit margin to grocery wholesalers and retailers on its new low-cholesterol eggs.This pricing strategy is designed to do all of the following EXCEPT:

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 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 _____ pricing.

Profit maximization occurs when:

Which of the following statements about pricing strategies throughout the product life cycle is FALSE?

Len knows little about atlases and does not want to spend the time to learn about them.However,he needs to buy at atlas to use in a school history project.Not wanting to make a poor choice,he is likely to:

When pricing is used as part of a promotion strategy,it:

_____ is the extra revenue associated with selling an additional unit of output.

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

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

_____ costs do not change as output is increased or decreased.

A marketers using a profit maximization strategy will charge the highest prices the market will bear.

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.The airline industry's demand curve slopes downward and to the right.This curve indicates the quantity demanded is increased as:

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 Specialty Cakes.Which of the following is the BEST example of a fixed cost for Cecilia Villaveces Cakes?

Deco Furniture sells reproductions of furniture and collectibles that were seen during the early part of the 20th century.The store's owner does not take into account competition when pricing the store's merchandise.The markup on all items in the store is 100 percent over cost (or double the cost).Deco Furniture uses:

Why are marketing managers finding it more difficult to set prices in today's environment?

Which of the following is most likely to be a variable cost for a manufacturer of amusement park rides?

How do shopbots affect pricing strategies?

What are the problems associated with the use of a cost-based pricing strategy? What contribution does cost make to the setting of prices?