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Exam 12: Pricing Concepts and Management

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Question 1

True/False

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The role played by the attitude toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

A) True
B) False

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Question 2

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Product demand usually becomes more elastic over time because more substitutes are found.

A) True
B) False

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Question 3

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Non-price competition can be used to establish brand loyalty.

The management at Allied Electronics is having difficulty in raising the introductory price on system components to cover the increased costs of producing the sensing devices for home security systems. Apparently, Allied used a(n) strategy in pricing these components.

A seller can change prices quickly in a price competition situation.

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) price.

Random discounting means discounting various products on a systematic basis.

A manager at Kohl's discovers that Macy's 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:

Scenario 12.1 Use the following to answer the questions. Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6. -Refer to Scenario 12.1. To break even, Concession Supply should sell cases of hot dogs per day at Wrigley Field.

If a product is priced based on how many or how few people want it at a particular time and place, pricing is being used.

Executives in Japan decided to price Lexus luxury cars in the United States at $55,000 while pricing them at $66,000 in their own country. This is an example of:

Explain what is meant by price elasticity of demand.

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.

Scenario 12.4 Use the following to answer the questions. The BASF Chemical Company in Germany has developed a new rubberized coating. The product is used on cell phones and other hand-held electronic devices that give them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. -Refer to Scenario 12.4. BASF has decided to offer discounts to its businesses customers in the form of the following: For each order of $100,000 or more during the next 90 days, the buyer will receive a rebate of 5 percent. This type of pricing would be an example of discounts.

What type of discount is given to marketing intermediaries or middlemen?

If PepsiCo sets its twelve-pack price to match the price charged by Coca-Cola, Pepsi is using pricing methods?

To gain market share, when Hyundai first entered the U.S. car market it did so with a comparatively low pricing strategy. One of the negative side effects of making this pricing decision is:

Seasonal discounts provide price incentives to customers during peak-selling seasons.

The local florist advertises a discount on arrangements during the month of April because the anniversary of the store's opening is in April. This is an example of special-event pricing.

When products in an industry are relatively homogeneous and price is a key purchase consideration: