Exam 12: Pricing for Value

Acme Business Services offers commercial consultancy services to manufacturers and wholesalers. The company guarantees that it will improve their client's productivity by five per cent within the first year after their recommendations have been implemented. Acme's approach to pricing is BEST described as a:

The approach to pricing that incorporates shared risk and reward is known as:

When a customer takes title to goods at the point where a carrier assumes responsibility for the goods and the customer agrees to pay for the freight from the factory to the customer's preferred destination, this is known as:

Wangaratta Grocery Chain often features a few products priced below cost to attract customers to their stores. WGC is employing:

All customers within a specified geographic area pay the same freight charges under a system known as:

Tiger Airways entered the Australian air passenger services market as the lowest cost operator. Its fares are priced well below competitors. Tiger operates in a market that is highly price sensitive and one in which low prices stimulate market growth. Its costs have fallen as it has become more efficient at providing airplane service to its customers. Tiger Airways is MOST likely using a_________ pricing strategy.

Freight is charged from a specified location regardless of the location where goods are shipped under a system known as:

In industries in which price changes occur frequently and must be met quickly, firms would be wise to develop reaction programmes.

Which of the following statements about pricing psychology is FALSE?

Cutting prices in a market loaded with excess capacity is MOST likely to result in:

Firms which utilise uniform delivered pricing may lose some business to competitors that employ FOB- origin pricing and are located nearer to their customers.

Auckland Plastics would like to improve its cash flow by offering its customers a discount for prompt payment. The company would MOST likely use:

Mark- ups are generally higher on products that have an elastic demand.

Under FOB- origin pricing, title passes to the buyer as soon as the goods reach the point of origin of the order.

New product pricing strategies can be implemented at any stage of the product life cycle.

Sacrificing current profits is a strategy which should be avoided for such uncertain goals as future market- share leadership.

What is the experience curve in pricing? Upon what basic economic concept is it based?

If the demand for a product is inelastic, the seller should consider lowering price in order to increase quantity demanded.

A product- market that consists of a few sellers who are highly sensitive to each other's pricing and marketing strategies is known as:

Dealers who assist a manufacturer with advertising or sales support may be offered a(n):