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Exam 9: Pricing

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Question 21

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Clean-up, a manufacturer of dishwashers, concluded that consumers would be willing to pay approximately $989 for a dishwasher that was quieter than any other machine on the market.Based on this price, Clean-up determined the margins that would have to be allowed for wholesalers and retailers to give the $989 retail price.In this scenario, Clean-up used _____.

A) prestige pricing
B) price lining
C) bundle pricing
D) target pricing

E) All of the above
F) A) and B)

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Question 22

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What is the difference between a one-price policy and a flexible-price policy? Provide examples of where you would expect to find each approach.

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A one-price policy is setting the same p...

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Question 23

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How do consumers use price as an indicator of value?

Describe a typical use of break-even analysis for marketers.

Price is unique in the 4 Ps as it is the only element that can affect both Total Revenues and Total Costs.

Which of the following statements about pricing objectives is true?

Several companies produce latex gloves that are used in a variety of different industries.If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in the quantity demanded from this manufacturer.The demand for latex gloves is _____.

For many consumers, the higher the price, the lower the perceived quality of the product.

Explain why price elasticity is important to marketing managers.

Often, the earlier a product is in its life cycle, the:

The cash payment or extra amount of free goods awarded to sellers in the channel of distribution for undertaking certain advertising or selling activities to endorse the product is a _____.

How is the free-on-board (FOB) origin pricing method used?

The break-even point (BEP) is the quantity at which total revenue and total cost are equal.

Lady Marion Seafood, Inc.sells five-pound packages of Alaska salmon.Its variable cost per package is $30, and its fixed cost is $250,000.It wants a target profit of $38,000 on a volume of 16,000 packages.What should it charge for a five-pound package of salmon?

Seasonal discounts are used by firms to encourage customers to buy larger quantities of a product.

Dumping comes about when individuals buy products in a lower-priced country from a manufacturer's authorized retailer, ship them to higher-priced countries, and then sell them below the manufacturer's suggested retail price through unauthorized retailers.

Evergreen Inc.is a distributor of high-quality fruit, flowering, and shade trees.Every client of Evergreen Inc.is supplied with a catalogue since the prices tend to change with seasons. The catalogue specifies that an order of an assortment of five different trees will cost $89.99 each as opposed to $108.99 each when ordered separately.Evergreen Inc.uses _____.

Setting the highest initial price that customers really desiring the product are willing to pay is _____.

Target return-on-sales pricing is:

Penetration pricing discourages competitors from entering the market.