Exam 14: Pricing Strategies

In the absence of other cues:

Defense based on cost differentials against charges of price discrimination under the Robinson-Patman Act works only if the price differences exceed the cost differences resulting from selling to various classes of buyers.

A _____ pricing strategy helps manufacturers to distinguish their high-end products from similar products of their competitors.

Unfair-trade laws were intended to protect small specialty shops, such as dairy stores, from loss-leader pricing tactics.

Well, this is frustrating! Six months ago, you decided to attract more customers to your gas station/mini-mart by offering all snacks, candy, and beverages for 50% off. When you checked your finances three months ago, you could see a noticeable uptick in business. Having achieved your goal, you then discontinued the snack specials, and you've just discovered that business has dropped off so much that you're earning even less than when you started! What do you think went wrong?

Oscar Mayer has recently developed a new snack product that's targeted to kids and young adults as a healthy, protein-based after-school or pre-dinner snack. They expect the product to complement their Lunchables product line and appeal to teen-age or college-age consumers who think of Lunchables as just for younger kids. In order to promote product trial and subsequent adoption, the company plans to use a relatively low entry price compared to the competition. What type of pricing strategy does Oscar Mayer plan to utilize?

Lenovo is developing a new tablet computer that they believe will revolutionize mobile computing. Since the company believes there is little direct competition for this new product, they plan to set a high price in comparison to other computer models. Lenovo is using a _____ pricing strategy. ​

Price is an important indicator of quality for many consumers.​

You're the marketing director of Southern Pride Candle Company, and you've been studying sales data for the last five years. Despite several newcomers entering the market, sales have been increasing steadily during this period. Specifically, sales increased by 8.9%, 9.1%, 8.7%, and 9.3% over each previous year's sales, respectively. What does your trend analysis tell you about sales for the coming year?

As the marketing director for a highly respected menswear manufacturer, you've been asked to offer your insights on pricing and positioning the company's first line of men's cologne. Your company's cologne will be sold in department stores, and for a number of reasons, you've suggested pricing it slightly higher than comparable competitors. What is the disadvantage to this strategy?

A buyer at CVS Pharmacy has a fairly good sense of which seasonal products she wants to stock for the coming summer, but she'd like to quickly get a confirmation of her plans. She would most likely use ___ to get an immediate, inexpensive reading on these seasonal products.

As the marketing director for a hospital, you've decided to develop a quick survey about your hospital's services for outgoing patients. The CEO would like you to include the following question on the survey: Do you intend to use our hospital again in the next three years? How do you react to his suggestion?

The amounts of a product that consumers will purchase at different prices during a specified period is referred to as:

Choose any product or service you're familiar with, and determine which one of the six sales forecasting techniques would be best suited to forecasting demand for your product or service. Explain why you've selected the technique, and briefly describe how you would implement it.

Neither Logan Home Builders nor any other developers in your region has ever built a housing development this nice! These homes are quite large on expansive lots with plenty of high-end detailing. As Logan's marketing director, you want to add an air of prestige and exclusivity to your marketing plans for the development. You've already established that you'll use a skimming pricing strategy to start, so which pricing tactic makes the most sense to use?

The ticket reselling market is both highly fragmented and susceptible to fraud and distorted pricing.

A smartphone manufacturer introduced a new device into the marketplace with pricing set according to the skimming approach. The CEO of the company reviews financial reports from the device and notes that the pricing approach used is not cost-effective for the company. How should the CEO adjust the pricing strategy for this device? ​

Setting prices is a one-time decision for most products in most companies.

Executives at Pfizer are trying to forecast sales of the company's popular cholesterol-lowering drug, Lipitor. Trend analysis has given them a fairly good sense of projected sales, but they'd like to get some additional feedback from the marketplace. A good technique to use for this purpose would be ____.

You're involved in an intense debate with your co-worker at the pharmaceutical manufacturing firm where you both work. As the head of sales, he maintains that his salespeople are the best source of sales forecasting data. As the head of marketing, you feel that trend analysis is the best choice for forecasting sales. What is the best solution to this dilemma?