Exam 11: Manage Pricing Decisions

Captive pricing entails gaining a commitment from a customer to a basic product or system that requires continual purchase of peripherals to operate.

Amelia is the marketing manager at a cafe in Charleston, and is responsible for deciding the price of dishes included on the cafe's menu. The chef of the cafe introduced a new dish, which was initially priced at $20 by Amelia, but she increased its price slowly over a period of 6 months. In this scenario, Amelia utilized a ________ strategy.

The Internet created a rise in ________ as more and more people decided to meet online to sell products to the highest bidder.

Define price-fixing and differentiate horizontal price-fixing from vertical price-fixing. Give an example of how price-fixing might manifest in the market.

The fundamental philosophy behind ________ is to reduce investment in promotion and transfer part of the savings to lower price.

________ costs are the sum of the fixed and variable costs.

Due to its use of an everyday low pricing tactic, Walmart has historically needed to make heavy investment in promotional activities.

Firms that have an objective of utilizing pricing to communicate positioning use a stability pricing strategy.

Effectively communicating a product's differential advantages is at the heart of positioning strategy, and exposure to these elements spurs the customer to develop perceptions of value and a subsequent understanding of the value proposition.

Dag runs a hardware store. He learned that customers process the price of $9.99 as significantly lower than the price of $10.00 because of the reduced digit count in the price point. Accordingly, he follows this rule to set up the prices for all products. Dag uses a ________ strategy.

A strategy of ________ addresses the objective of entering a market at a relatively high price point.

Odd pricing can backfire if misapplied, especially with respect to service industries.

Dyani runs Cute Cakes, a gourmet cupcake bakery. To set prices for her cupcakes, Dyani looks at the cost of making each cupcake and then adds an additional amount on top of that to arrive at her price. Dyani is using ________.

Companies that collude to set prices at a mutually beneficial high level are engaged in ________.

________ are typically expressed as greatly extended invoice due dates.

James is trying to determine the best price for his new fishing poles and thus uses the sales price as a basis of calculating the markup percentage. He is using a ________ approach.

Besides the standard auction approach where buyers bid for a seller's offering, it is now very common for sellers to utilize ________ to bid prices to capture a buyer's business.

In markets where customers are sensitive to price and where internal efficiencies lead to cost advantages allowing for acceptable margins even with aggressive pricing, a ________ strategy can create a powerful barrier to market entry for other firms.

Regardless of whether the setting is B2C or B2B, most costs are associated with the purchase price.

________ require that a certain percentage markup be applied to all products.