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Exam 13: Pricing Management

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Question 31

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For custom-made equipment or commercial construction projects, which pricing method is most likely used?

A) Prestige
B) Premium
C) Differential
D) Return-on-investment
E) Cost-plus

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

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Question 32

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Marketers at organizations engaged in nonprice competition

A) are more concerned about knowing competitors' prices than are marketers in organizations that are engaged in price competition.
B) are not concerned about the prices of competing brands.
C) need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands.
D) rely on customers to help them gather information regarding the prices of competing brands.
E) experience high levels of price instability.

F) A) and D)
G) A) and E)

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Question 33

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Price skimming is designed to yield maximum unit sales volume.

Pricing strategies and methods

The pricing of Clinique makeup considerably higher than brands such as Cover Girl, Revlon, and Maybelline is used to communicate ____, which is the company's primary pricing objective.

Which of the following statements about markup pricing is correct?

All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except

What are some of the objectives a firm might hope to achieve when setting prices?

The effectiveness of demand-based pricing often depends on a marketer's ability to determine all the costs associated with the product.

If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as

Some stores employ comparison shoppers to learn what prices their competitors are charging.

Scenario 13.2 Use the following to answer the questions. Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit. -Refer to Scenario 13.2. Glenwood's closest competitor, The Hearthstone Pet Hospital, currently charges $60 for each basic office visit. If Glenwood were to price its basic office visit at $45, it would most likely be employing which of the following?

Price skimming and penetration pricing are both strategies used for

If REVO sets the price for its sunglasses at $240, it is using psychological pricing to convey

Scenario 13.2 Use the following to answer the questions. Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit. -Refer to Scenario 13.2. Glenwood's previous pricing strategy is an example of ____ pricing, while the new strategy is an example of ____ pricing.

Two types of new-product pricing are price skimming and product-line pricing.

When an organization sets a number of prices for selected groups of merchandise, this is commonly referred to as

A company wanting to maximize profits from its new product would use product-line pricing.

A firm establishes which of the following pricing objectives to maintain or increase its product's sales in relation to total industry sales?

Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition.