Exam 11: Pricing Concepts and Strategies: Establishing Value

A pricing strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases, is called:

In any given market, the firm that offers the lowest price tends to be the dominant brand.

The price excluding the variable costs per unit is referred to as the:

A strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer is called:

Target profit pricing is designed to produce a specific return on investment, usually expressed as a percentage of sales.

Ben wants to open a restaurant in his hometown.What would be the fixed and variable costs that he would need to take care of while setting up the restaurant?

The method in which a manager must estimate how much more, or less, consumers are willing to pay for a product relative to other comparable products is called the:

Slate Inc.is the parent company of five brands.Slate decides that all the products under every brand must make a 20 percent gain margin in the upcoming financial year.This is an example of:

Clove, a fitness centre, opens a new gym in Boston. Two gyms already exist around the same locality. To attract customers and drive its competitors out of business, Clove, offers a very low enrolment and monthly fee. The owners of the other gyms meet with the director of Clove to negotiate. Finally, all three gyms collude and decide to fix a standard enrolment and monthly fee that customers will have to pay. They also decide to charge a higher fee for men because they spend greater time in the gym. -When Clove decided to offer enrolment at a very low price, it was with an intention to drive its competitors out of business.This is an example of:

Briefly explain reference price and external reference price.

A company launches a new car in the luxury segment.It studies the quality and price of other luxury cars available in the market and ensures that the price and features of the new launch are similar to the existing cars.The company's objectives are most likely to be:

A strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay to obtain is called:

Ramsons manufactures binoculars.Although the binoculars are priced unreasonably high, Ramsons manages to sell a large number of units each year because Ramsons is the sole supplier of binoculars in the market.This is an example of:

If a pricing strategy is implemented well, it could last for a long time without changes.

A wealthy industrialist purchases a Van Gogh painting for his new home.He pays $140 million to procure this piece of work.In this case, the painting is an example of a(n):

The usual pricing strategy implemented by firms when they have a particular gain goal as their overriding concern is the:

A shoe store gets a 30 percent discount from the manufacturer when it places an order worth $5000.The discount increases when the order worth increases.This is an example of a(n):

Tangerine, an exclusive retailer of handbags, chooses its suppliers very carefully.It prefers one supplier mainly because it offers great quality and 40 percent discount on any single order of more than $20,000.The supplier is offering a(n):

A company manufacturing shampoo charges a low price to customers who buy sachets on the premise that these customers belong to lower income groups and are more price sensitive.On the other hand, it charges higher prices to customers who purchase the same shampoo in bottles.This is an example of:

When many firms sell closely related but not homogeneous products, it is called: