Exam 10: Pricing: Understanding and Capturing Customer Value

Companies bringing out a new product can choose between two broad strategies: market-skimming pricing and market-penetration pricing. Distinguish between the two.

Give an example of a cash discount.

List four types of segmented pricing.

Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains. Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets. -How could optional product pricing be used by Quills?

Which of the following is likely to be the least effective action that a company can take to combat a competitor's price cut on a product?

The demand curve indicates the higher the price, the higher the demand.

Consumers usually perceive higher-priced products as ________.

Which of the following is a reason for a company to raise its prices?

Value-based pricing is the reverse of cost-based pricing.

The Winnipeg Goldeyes ballpark charges different prices for seats in different areas of the ballpark, even though their costs are the same. What is this form of pricing called?

Overhead cost is another term for variable cost.

When amusement parks and movie theaters charge admission plus fees for food and other attractions, they are following a(n)________ pricing strategy.

The Competition Act is the federal law that was enacted to curb the formation of ________.

If demand changes greatly with a small change in price, we say the demand is ________.

EDLP is very similar to high-low pricing.

In a pure monopoly, the market consists of one seller.

Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains. Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets. -How might product line pricing be initiated at Quills?

Of the following, which is a poor reason for a company to set prices low?

Costs that do not vary with production or sales level are referred to as ________ costs.

Why is product line pricing used?