Major Pricing Strategies
New Product Pricing
Product Mix Pricing
Price Adjustment Strategies
Public Policy and Pricing
100
This sets the ceiling for product prices.
What are customer perceptions of the product's value?
100
Companies set not a single price, but a pricing ________ that covers different items in its line and changes over time as products move through their life cycles.
What is structure?
100
Noticing that themed envelopes aren't selling well, Charles Payton decides to offer customers a special "letter writing" kit. He prices the kit—which comprises letter paper, matching envelopes, and pens—at $5, even though the combined prices of the individual items is $8. This is an example of.
What is product bundle pricing?
100
This term refers to prices that buyers carry in their minds and check with when they look at a given product.
What is reference prices?
100
When sellers set prices after talking to competitors and engaging in collusion, they are involved in ________.
What is price fixing?
200
This sets the floor for product prices.
What is product costs?
200
When a company sets a high price for a new product with the intention of reducing the price in the future, it is using the ________ pricing strategy.
What is market-skimming?
200
Using ________ pricing, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive.
What is by-product pricing?
200
The New Age Gallery has three admission prices for students, adults, and seniors, even though all three groups are entitled to the same services. This form of pricing is called ________ pricing.
What is segmented pricing?
200
Selling below cost to drive out competitors is an example of this.
What is predatory pricing?
300
________ pricing uses buyers' perceptions of value as the key to pricing.
What is customer value-based?
300
Midnight Magic, a perfume manufacturing company, plans to release a new fragrance during the holiday season at $99 per bottle. The company intends to bring the price down to $49 within six months of its release to attract buyers who couldn't afford the initial price. Midnight Magic is using this type of pricing strategy.
What is market-skimming pricing?
300
Multiprint, a printer manufacturing firm, sells ink cartridges for each of its specific models. Only Multiprint cartridges are compatible with Multiprint printers, and no two models share the same specifications. Multiprint uses this type of pricing.
What is captive product pricing?
300
Low-interest financing and longer warranties are both examples of ________ pricing.
What is promotional?
300
Price discrimination is legal when a seller can prove its costs are different when...
What is selling to different retailers?
400
A company must pay each month's bills for rent, heat, interest, and executive salaries regardless of the company's level of output. This exemplifies its ________ costs.
What is overhead?
400
Companies that set a low price for a new product in order to attract a large number of buyers and a large market share are using the ________ strategy.
What is market-penetration pricing?
400
This product mix pricing strategy involves pricing additional or accessory products sold along with the main product.
What is optional-product pricing?
400
Big Mike's Health Food Store sells nutritional energy foods. The price of the products sold varies according to individual customer accounts and situations. For example, long-time customers receive discounts. This strategy is an example of ________.
What is dynamic pricing?
400
The Sherman, Clayton, and Robinson-Patman Acts are all federal laws that were enacted to curb the formation of ________.
What are monopolies?
500
Bruno Servers has decided to decrease its prices on its popular higher-range servers. The company can reasonably expect ________ to increase.
What is demand?
500
Whizz Corp. wishes to introduce a new hybrid car into mature markets in developed countries with the goal of gaining mass-market share quickly. This pricing strategy would help the firm meet its goal.
What is market-penetration pricing?
500
This product mix pricing strategy involves setting prices across an entire product range based on cost differences between the products, customer evaluations of different features, and competitors' prices.
What is product line pricing?
500
A supermarket places its store brand of blackberry jam priced at $5 per jar in the fruit preserves aisle, alongside the jam jars of a better known brand—whose products are priced at $8 apiece. Store managers reason that customers are more likely to choose the store brand instead of the better-known brand when they realize the price difference. This price adjustment strategy is evident in the supermarket's reasoning.
What is psychological pricing?
500
The ________ Act seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given price level.
What is Robinson-Patman Act?
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