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Exam 13: Pricing Products and Services

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Question 131

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Argue one side of the following statement: Companies who charge premium pricing for required goods (such as home heating and pharmaceuticals)should be allowed to.

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Question 132

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What are the conditions favouring the use of penetration pricing?

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Question 133

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When Hallmark cards introduced a line of $.99 cards (about half the price of the previously least expensive cards sold by Hallmark) , the greeting card company was trying to appeal to a mass market that was price sensitive. Hallmark was using a ___________pricing strategy.

Explain why Sears may sell their Craftsman radial alarm saw for $499.99 instead of $500.00.

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:

When Pepsi sells 1,000 cases of Pepsi, their cost per case is $0.30. However, when they sell 2,000 cases, their cost per case is $0.22. These costs are considered Pepsi's:

One of the key drivers in setting the pricing of Carmex lip products is the cost of ________ and ___________.

Ace Shoe Co. has fixed costs of $6 million and unit variable costs of $5 per pair. Suppose a consultant tells Ace it can sell 700,000 pairs of shoes, it should seek a profit of $2.5 million, and it should select an appropriate price to meet that 700,000 target. What potential error is the consultant making?

When Coca-Cola considers their variable production costs, fixed costs, and revenue, they begin making money when revenue is 85 percent of total costs. This is referred to as their:

Which of the following would be an example of a variable cost for a publication like SHAPE magazine that is targeted to young women seeking a healthier lifestyle?

Which of the following statements about pricing objectives is true?

Leupold & Stevens, Inc., makes Leupold scopes for rifles and has introduced a new scope that has the quality and performance for which Leupold & Stevens is famous, at a price much lower than it has ever sold a rifle scope before. The new scope offers several different magnifications and is the only scope in the $200 range that is made in Canada. Which pricing strategy is Leupold & Stevens using to appeal to a larger market?

The practice of replacing promotional allowances with lower manufacturer list prices is called:

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:

A new startup was thinking of offering fruits and vegetables directly from 'farm to front door' for all residents in British Columbia. In order to understand what individuals were interested in purchasing, how much they would purchase, and at what price, they conducted a mail-out survey to all residents. They plotted the information they received on a demand curve. This showed management at the startup anticipated:

Which cost-based pricing method holds that a product's unit costs predictably decline by 10 to 30 percent each time the firm's production volume doubles?

When you order a new laptop from Future Shop's online store the price is $550.00. However, when you head to a Future Shop store, you realize that the exact same laptop is priced at $600.00. This pricing discrepancy is referred to as:

To reduce manufacturing costs, Carmex has started using environmentally friendly packaging. This packaging uses 20% less

Which of the following companies would be most likely to use target return-on-investment pricing?

Describe the advantages of implementing a freemium based pricing model and provide an example of a business that may benefit from using this model?