Exam 21: Setting Prices

A pricing strategy is a course of action designed to achieve pricing and marketing objectives.

A major reason why retailers use markup pricing is that it is convenient.

Explain the difference between cost-plus and markup pricing.

Under what conditions would a marketer most likely use a price leader strategy?

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.

Pricing strategies and methods

Scenario 21.1 Use the following to answer the questions. Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. -Refer to Scenario 21.1. Ray-Ban's plan of gathering information about the other brands sold in department stores, including their prices, would most likely be used in a ____ basis for pricing.

The manager at Target puts a sign up next to a Samsung audio system that reads, "Only $299.99! $60 less than at Best Buy ." This is an example of what type of pricing strategy?

When a seller's costs are usually determined during or after a product is made and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using ____ pricing.

Scenario 21.1 Use the following to answer the questions. Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. -Refer to Scenario 21.1. Ray-Ban has decided to promote the new sunglass line as an "affordable luxury" and plans significant promotional expenditures. With these objectives, which of the following should Ray-Ban use to price its product line?

Competitors' prices, along with the marketing variables they emphasize, are determining factors in

If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used.

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

Competition-based pricing is

A market share objective

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

Kendra has been doing research for a smartphone manufacturing company. She has just been reviewing the results of several focus groups and has found that for customers, value is a function of the product's

The "White Sale" that many department stores have every year a few weeks after Christmas is an example of

Most pricing objectives based on ____ are achieved by trial and error because not all cost and revenue data are available when prices are set.

The objective of maintaining or increasing market share depends on growth in industry sales.