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Exam 14: Developing Pricing Strategies and Programs

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Question 71

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At 1,000 calculators per day,Texas Instrument's factory is running at full capacity.This means that the cost of each calculator is now at its ________ cost.

A) total
B) average
C) lowest
D) highest
E) undetermined

F) C) and D)
G) B) and C)

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Question 72

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To maximize market share,a firm may use _____________ pricing,which is based on the theory that as sales volume increases,unit costs will decrease.

A) market-penetration
B) market-skimming
C) value pricing
D) demand pricing
E) price bands

F) C) and D)
G) B) and E)

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Question 73

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Manufacturing costs such as rent,utilities,interest expense,and some salaries are considered ________ and these costs do not vary with the production or sale of the item.

A company's costs take two forms.________ are costs that do not vary with production or sales revenue.

Today,________ is partially reversing the fixed pricing trend.

In one type of ________,the auctioneer announces a high price for a product and then slowly decreases the price until a bidder accepts the price.

Pricing cues such as sale signs and prices that end in 9 become more influential when ________.

Pricing methods narrow the range from which the company selects its final price.In selecting that price,the company must consider additional factors,including the impact of other marketing activities,company pricing policies,gain-and-risk-sharing pricing,and the impact of price on ________.

One of the traps of instituting a price decrease is when that low price buys market share in the short term.The same customers will shift to any lower-priced product that may come along.This trap is called ________.

Executives often complain that pricing is a big headache.Common mistakes include: price is not revised often enough to capitalize on market changes; price is set ________ of the rest of the marketing mix rather than an intrinsic element of a market-positioning strategy.

Movie matinees are priced lower than the evening shows; afternoon ball games are sometimes priced cheaper than the evening games,television advertising costs less when run after midnight.These are examples of what type of price discrimination

In oligopolistic industries that sell a commodity,firms base their prices largely on competitors' prices.This is an example of ________.

IKEA and Southwest Airlines are among the best practitioners of value pricing-win loyal customers by charging a fairly low price for a high-quality offering.Why is value pricing not a matter of simply lowering prices

The most elementary pricing method is to add a standard ________ to the product's cost.

A price indifference band is that section of the price increase in which the consumer does not notice or does not have any effect in demand.

Your company has invested $1,000,000 in plant and equipment and wants to ensure that it receives a 20% ROI on the pricing of its products.This 20% translates into $200,000.At a $16.00 cost and a 50,000 expected sales volume,at what price must your product "go out the door" to satisfy this ROI return

Price elasticities are higher for individual items than for overall brands.

Psychological discounting involves setting an artificially high price and then offering the product at substantial savings.

Your local retailer has instituted an EDLP pricing program for his stores.What would one of the reasons be for the retailer to adopt an EDLP pricing policy

When prices start off high and are slowly lowered over time,this is called market-skimming pricing.