Exam 12: Pricing for Value

Which of the following is a common pricing objective?

Market penetration would NOT be recommended when:

Monopolistic competition is characterised by the enforcement of a single market price established by the only seller in the market.

The Lorne Lawn Company produces several lawn mowers and prices each of its mowers to reflect their advantages and features. This is an example of:

Under basing point pricing, freight is charged from a designated location regardless of the actual location of shipment.

Amy's Boutique is offering massive price discounts to celebrate the store's tenth year of operation. The store is using:

If a firm wants to be able to react swiftly to a competitor's price change, the firm should anticipate possible price changes and prepare contingency plans.

When a price is broken down into a fixed fee component and a variable usage component, this is known as:

A product- market that consists of many buyers and sellers who trade over a range of prices rather than a single market price and where the sellers differentiate their offers, is known as:

Alice Springs Collectibles sells an item and loads it onto a carrier for the customer, who pays the actual freight costs and assumes title as soon as the goods are loaded. Alice Springs Collectibles is using:

As a general rule, buyers are more price sensitive when the products they are buying are unique.

An effective way to move slow- selling items is by bundling them with a faster- selling item and offering them for sale as a package for an attractive price.

Under which of the following conditions are buyers MOST likely to be price insensitive?

In the 1980s, American company, Amana, pioneered a new technology that would become the modern micro- wave oven. Although the technology used in micro- waves was well known and well understood in industrial contexts, Amana had long experienced difficulties developing a prototype that was small enough and cheap enough for domestic applications. Just when it seemed that the product concept was doomed, along came a new company director, George Foerstner, with a sales and marketing background. He issued the design team with a seemingly impossible challenge. Before it would be commercialised, the new product concept was to be shaped like an air- conditioner, should look like an oven, have buttons like an oven and be priced around the same as a conventional oven (at the time, not more than $500). Foerstner's challenge to the design team was an example of which type of pricing strategy?

You are thirsty and crave a cola so you pop into your local supermarket to make a purchase. On the shelves, you notice that you can buy a cold 600 ml bottle for $3.20; a 1.25 litre bottle for $2.99 and a 2 litre bottle for $3.90. You want to purchase the 600 ml bottle for its convenience, but you are aware that the 2 litre bottle represents the best value for money on a price per ml basis. You are witnessing an example of:

If demand is elastic, a lower price will produce more revenue.

Select the words that BEST complete the following sentence. Most demand curves slope__________ in either a straight or a curved line; but for luxury goods the demand curve sometimes slopes _________.

In spite of its failure to account for customer value or customer demand, cost- plus pricing remains one of the most popular methods of price setting. Which of the following statements BEST accounts for its continued currency?

Sealed- bid pricing often forces the firm to estimate the expected profit that would be associated with various pricing strategies.

When demand changes greatly with a small change in price, then demand is said to be: