Exam 20: Pricingdecisions

Use the following to answer the questions. Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services.After reviewing the previous three years' revenue,Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill.Glenwood's objective is to generate more income per customer on an annual basis.The hospital has previously priced its services by charging a flat fee for the office visit,a fee for each vaccine,and a fee for each type of examination beyond the basic office visit.Most customers pay the flat office fee and a fee for a rabies vaccine.Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit,the required rabies vaccine,and additional vaccines that prevent heartworm,kennel-cough,and fleas.Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program,rather than a one-time annual visit. -Refer to Scenario 20.2.Glenwood's previous pricing strategy is an example of ____ pricing,while the new strategy is an example of ____ pricing.

If an organization sets prices to recover research and development expenses and establish a premium quality image for its product,it would be using a ____ pricing objective.

If REVO sets the price for its sunglasses at $240,it is using psychological pricing to convey

Which of the following is a requirement for setting pricing objectives?

When Gabriella logs on to Dell's website,she sees a notebook model priced well below $1,000.As she continues through the site to view the other options,she realizes the first one she saw was the cheapest model available,but she of course wants more features.Dell is utilizing

Bundle pricing may be perceived to be of value by customers because

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.

One pitfall of cost-plus pricing for the buyer is that the seller may increase costs to establish a larger profit base.

A manager at JC Penney discovers that Sears has reduced the price of its children's Levi's from $31.99 to $24.99,according to an advertisement in the Sunday newspaper.She immediately phones her store and instructs the salesperson on duty to put a sign up next to their children's Levi's that reads,"SALE: $24.99." This is an example of what pricing strategy?

Westin Inc.has an objective of achieving a 25 percent return from its overall sales.This is an example of a ____ pricing objective.

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?

Odd-even pricing is

Price skimming is designed to yield maximum unit sales volume.

Breyer's produces a variety of ice cream flavors and lines of varying qualities.The higher quality ice cream varieties are priced higher than the basic ones.Breyer's is using ____ to price its ice cream.

The effectiveness of demand-based pricing often depends on a marketer's ability to determine all the costs associated with the product.

If Wrigley set its pricing objective as attaining 38 percent of the chewing gum market,what else would be needed to make this a true pricing objective?

Markup can be stated as a percentage of the cost or as a percentage of the selling price.

When a company prices one item in a line low with the intention of selling a higher-priced item in the same line,it is using

All of the following are psychological techniques except

A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy.