Exam 13: Pricing Products and Services

A new Apple iPad 5 is priced at $599.99 regardless of whether it is purchased in California or New York,or purchased at an Apple Store,online,or at Best Buy.This pricing policy is called:

TB Figure: 1 -TB Figure 1 represents the six distinct steps in the pricing process.In which cell would a firm do price elasticity estimation?

The Swedish manufacturer of Asko dishwashers concluded that consumers would be willing to pay approximately $989 for a dishwasher that was quieter than any other machine on the market.Based on this price,Asko determined the margins that would have to be allowed for wholesalers and retailers to give the $989 retail price.Asko used:

A custom kitchen cabinet storeowner wishes to use target profit pricing to establish a price for a typical section of cabinets.Assume variable cost is $200 per unit,fixed cost is $44,000,and a target profit of $10,000 on a volume of 400 cabinets is desired.What should be charged for a typical cabinet section?

Which of the following statements about pricing objectives is true?

Most consumers realize the quality of diamonds varies,and most believe the higher the price of the diamond,the higher its quality.This is an example of price influencing the perception of overall quality,and _____ to consumers.

Bijan's in New York City has offered a five-piece set of crocodile luggage for $55,000.This is an example of _____ pricing.

Ace Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $6 million and unit variable costs of $5 per pair.Ace is considering a switch from manual labour to an automated process.New equipment would cost an additional $4 million per year while lowering variable costs by $3 per shoe repair kit.How many kits would Ace have to sell at $15 per pair to make $2 million in profits in the next year with the automated process?

If you buy one pair of Uvex Clear UVExtreme safety eyewear,the cost is $7.40,but if you buy ten at one time,the price per pair is reduced to $6.85.This is an example of a:

The Precision Writing Instruments Company makes two pen designs - the Cordova design and the Savannah design.These data apply,regardless of which of two pen designs is being implemented.Materials cost per pen is $6.Labour cost per pen is $5.Production overhead is $1,000,000.Advertising and promotion is $1,000,000.Marketing research has estimated the following demand functions for the next year of sales for the two pen designs where Q represents demand in thousands and P represents price.For the Cordova design,Q = 150 - 2.5P.For the Savannah design,Q = 175 - 2.1P.A penetration strategy is proposed for the Savannah design and a price of $25 is selected.What will be the profit or loss for the first year?

Which of the following is NOT a competition-based pricing method?

Explain why price elasticity is important to marketing managers.

Two individuals at a spice market in Marrakesh swap cinnamon in exchange for saffron,where both sides are equally happy with the arrangement.This occurred rather than exchanging:

All of the major wireless providers in Canada (Bell,Telus,Rogers,Shaw,MTS,and Bell Aliant)decide that beginning next year all smartphone data plans will be $75 per GB,even though their delivery costs are far less.This activity is known as:

A new special on this week at your local dress shop is a 2 for 1 dress special with free tailoring.Last week,it was regular pricing on everything and tailoring was being charged $25.00 a dress.The marketers at this dress shop are engaging in:

What is a loss-leader and why is it used by retailers?

Which of the following statements most likely would account for the shift in the demand curve shown in Figure 13-5b?

Prices such as: $19.99,$29.99,and $39.99 are examples of:

An electronics retailer,"Buy Less" has a price tag on a home theatre system.The price tag has $500.00 crossed out and a new price of $350.00 is shown on the tag.Which deceptive practice should the retailer be careful not to violate based on this example?

Figure: 13-7 -Figure 13-7 shows that by selling 200 pictures the firm will