Price is the cash expenditure plus taxes that consumers have to pay for a good or service.
The key to successful pricing is to match the product with the consumer’s perception of value
Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.
Brands that have developed loyal customers have a higher price elasticity of demand.
Price is the only part of the marketing mix that does not generate costs.
A demand curve shows the relationship between income and demand.
Rarely is the lowest-price product offering the dominant brand in a given market.
In U.S. markets, there are many substitute products for Fruit Loops cereal, suggesting the price elasticity of demand for Fruit Loops is high.
At the break-even point, profits are maximized.
A gray market employs irregular but not necessarily illegal methods of distributing products
Diana owns a boutique specializing in ball gowns. Sales are stable and Diana feels it is time she had a 20 percent increase in her salary. If Diana takes this increase in compensation, it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.
If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.
Firm A has set very low prices for its products in an attempt to drive its competitor, Firm B, out of business. This is known as monopolistic pricing.
False– its predatory pricing
Odd prices suggest low quality.
When Sony released its PlayStation 3 game machines, it charged a high price, attracting the most avid game players. This was a market penetration pricing strategy.
False– its a price skimming strategy
Cheryl wants to quickly establish a dominant market share for her new line of ergonomic pens. To do this, she will likely use a market penetration pricing strategy.
Proving that a company has engaged in the deceptive bait and switch practice is easy.
The Robinson-Patman Act does NOT apply to end consumers, at which point many forms of price discrimination occur.
When a retail store rarely sells deeply discounted or sale products, it is known as everyday low pricing.
The demand curve for prestige products generally slopes downward due to higher prices.
Price is the _____________ a consumer is willing to make to acquire a specific product or service.
Earl was known for driving 30 miles to save a dollar on the price for his favorite beverage. Earl perceived price as ________________, while most consumers recognize price as the ______________ made to acquire a good or service.
money paid; overall sacrifice
The full price of a product or service includes all of the following EXCEPT
the price of alternative products and services
Gerald has a number of customers for his lawn care service who never question his bill but expect their lawns to be perfect. These customers do not want low prices, they want
Unlike product, promotion, or place, price is the only part of the marketing mix
the generates revenue
Price is often the most challenging of the four Ps to manage, partly because it is often ______________ in developing marketing strategies.
treated as an afterthought
Historically, prices were
rarely changed except in response to radical shifts in market conditions
Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as
an indicator of quality
Which of the following is NOT one of the five Cs of pricing?
Tess is the marketing manager for a fast food restaurant chain. She uses a target return pricing strategy because her firm’s primary objective is to
Gary is the marketing manager for an automobile dealership. His boss tells him the firm’s primary goal is to increase its local market share from 15 to 30 percent. His firm is using a ________ orientation.
Bernard’s firm has set corporate direction to become one of the leaders in each of its significant market segments. It was Bernard’s job to examine the pricing to determine how to maximize market share, even at the expense of profits in the short run. What kind of company objective would guide Bernard’s effort?
Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy.
A _________________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.
Health clubs often use a low, introductory offer price to get people to join their club. These low prices represent a ______________ pricing strategy.
Many years ago Honda’s Accord and Ford’s Taurus were the top two selling cars in the United States. As the year was coming to an end, Ford cut the price of the Taurus, hoping to outsell the Accord and allow Ford to claim that “Taurus is the best-selling car in America.” Ford was using a ___________________ pricing strategy.
Julia wants her firm’s gourmet snacks to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that
rarely is the lowest-price offering the dominant brand in a market
Sharon knew that her established customers liked her product much better than her competitor’s. She was planning to expand into new markets, and she was considering pricing. She was leaning toward charging a higher price than competitors to help demonstrate that hers was a high-quality product. Sharon was considering
When Ursula decides how to price new products in her gift store, she measures the value of her product offerings against those of the other stores in her area. Ursula uses a __________________ pricing strategy.
A customer orientation toward pricing implicitly invokes the concept of
In many high-end resort markets, Westin hotels compete directly with Crown Plaza hotels. Each firm weighs the comparative advantages and disadvantages of its offerings to determine whether to price above, equal to, or below the other hotel. In these markets, the hotels are using a _______________ pricing strategy.
A no-haggle pricing policy is a type of _______________ pricing strategy.
Julia’s is an upscale women’s clothing store. Prices are based on customers’ beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia’s is using a ________________ pricing strategy.
A strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy
is supported by consistent advertising and distribution strategies
Traditional demand curve economic theory is used by marketers to understand _______________ in the five Cs of pricing.
Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all customers see the same value in a product. To analyze how many units will be sold at any given price point, marketers draw on
a demand curve
A demand curve shows the relationship between ___________________ in a period of time.
price and demand
A demand curve is built assuming that
everything but price and demand remains the same