Exam 11: Pricing and Credit Strategies

A skimming price strategy is best for quickly building market share.

When a computer manufacturer offers its computer with software pre-installed,a printer,and Internet service,as all part of one price,the manufacturer is using a:

When developing a marketing approach to pricing,business owners must establish prices that are compatible with what their customers expect and are willing to pay.

The break-even selling price is calculated by dividing the profit desired plus the variable cost per unit times the quantity produced plus the total fixed cost by the quantity produced.

Retailers have three pricing techniques available to them.Describe each technique,explain why a retailer would use it,and offer advantages or disadvantages that exist for each technique.

How does price convey an image for the product or service?

Even if a small business cannot differentiate its product by creating a distinctive image in the consumer's mind,it can afford its own line of prices.

Cost-plus pricing has several disadvantages,including:

Explain the different kinds of credit a small business can offer its customers and the impact each has on pricing.

Most stores use a standard markup across all products due to the heavy labor costs involved in individual pricing.

For most products,there is an ideal price.

The Pastry Shop normally sells cheese Danishes for 60 cents each.On Mondays and Tuesdays,its slowest days,The Pastry Shop offers cheese Danishes at "4 for $2.00." This is:

Name and explain the three basic pricing strategies a small business owner has in establishing a new product's price.

________ pricing strategy introduces a new product at a low price to gain quick acceptance and extensive distribution in a mass market.

The ________ pricing strategy often reinforces the unique,prestigious image of a company.

A penetration pricing strategy is designed to recover a company's developmental and promotional cost of a new product very quickly.

A skimming pricing strategy permits a small business owner to correct pricing mistakes more quickly and easily than a penetration pricing strategy.

Most often,small business owners ________ their goods and services,believing that ________ prices are the only way they can achieve a competitive advantage.

The most effective pricing strategy for small businesses is follow-the-leader pricing due to its simplicity and its ability to keep price parity for the small business.

Today's business environment requires firms to separate their pricing strategy with their credit strategy.