Exam 10: Pricing: Understanding and Capturing Customer Value

________ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key to pricing.

In industrial markets, salespeople may be able to negotiate price with customers.

In ________, price is considered along with the other marketing mix variables before the marketing program is set.

Break-even pricing, or a variation called ________, is when the firm tries to determine the price at which it will break even or make the return it is seeking.

Price setting is usually determined by ________ in small companies.

Value-based pricing is the reverse process of ________ pricing.

Value-based pricing is being used when costs vary directly with the level of product.

When using price steps, the seller must establish perceived ________ that support the price differences among the products in the line.

With ________ pricing, price is set to match consumers' perceptions of product value.

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. -Quills started out with a market-penetration pricing strategy. What assumptions could be made about the market(s)Quills was serving?

Market-skimming pricing is practiced by companies that set a low initial price in order to get their "foot in the door" quickly and deeply, attract a large number of buyers quickly, and win a large market share.

Costs that vary directly with the level of production are referred to as ________ costs.

________ is the amount of money charged for a product or service.

Underpriced products sell very well, but they produce less revenue than they would have if price were raised to the ________ level.

Market-skimming is a more popular strategy for pricing new products, while market-penetration is a more popular strategy for pricing products that are more advanced in the product life cycle.

Under ________, the market consists of a few sellers who are highly sensitive to each other's pricing and marketing strategies.

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

Under which type of geographic pricing strategy does each customer pay the exact freight for the product from the factory to its destination?

Target costing reverses the usual process of first designing a product.

________ pricing is the approach of setting a low initial price in order to attract a large number of buyers quickly and win a large market share.