Question 1

What are slotting allowances? Why do some marketers consider them unfair?

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Question 2

Harry's Industrial Supply Company has always used cost-based pricing.Harry's son-in-law is joining the business and recommends they change to value-based pricing.Harry enumerates the disadvantages of value-based pricing,while his son-in-law points out the advantages.What will each of them say?

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Question 3

Ryan is the only retailer in his market selling a new,ergonomically designed pen.What are the objectives of using a market penetration pricing strategy? Why would Ryan consider using a market penetration pricing strategy?

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Question 4

Harry's Industrial Supply Company has always used cost-based pricing.Harry's son-in-law is joining the business and recommends they change.Harry enumerates the advantages of cost-based pricing,while his son-in-law points out the disadvantages.What will each of them say?

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Question 5

Explain the key difference among the three different pricing methods a firm might choose.

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Question 6

What does an everyday low prices strategy say to consumers?

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Question 7

What is predatory pricing? What federal acts make it illegal? How are consumers hurt by predatory pricing?

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Question 8

What is the experience curve effect? What pricing strategy is it associated with?

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Question 9

Almost every time a new-to-the-market electronic device (iPods,flat-screen TVs,digital cameras,PlayStation,etc.)has been introduced,the marketer has used a price skimming strategy.Why?

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Question 10

Rebecca is an artist who created her own line of greeting cards and sold them through local retailers.After a few months she said,"I knew I was beginning to understand marketing and pricing when I found myself telling a retailer that her terms were "3 / 10,net 30."" What was Rebecca conveying to retailers?

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Question 11

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

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Question 12

Describe when each of the following five business-to-business pricing tactics would be most appropriate:
* seasonal discounts
* cash discounts
* allowances
* quantity discounts
* uniform delivered versus zone pricing

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Question 13

John Deere farming equipment has been around for over a century and is known for its durability.Its equipment is usually priced higher than competitors' offerings.What type of value-based pricing method would be appropriate for John Deere,and why?

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Question 14

Why would the manufacturer of custom-made yachts not use a market penetration strategy?

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Question 15

What is the added benefit to a manufacturer of using rebates rather than coupons?

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Question 16

Most automobile manufacturers appear to use price lining.What is price lining and how does it relate to value-based pricing for automobile manufacturers?

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Question 17

Wilbur sells home-made hot dogs from his stand next to campus.Students flock to his stand to buy his hot dogs but rarely buy anything else.What type of pricing strategy could Wilbur use to improve his sales? Create an example.

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Question 18

Why would a price skimming strategy probably not work for a "me-too" product,something very similar to a new-to-the-market product?

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Question 19

Marketers know that coupons might not result in a net increase in sales,yet they continue to issue them.Why do marketers continue to use coupons?

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Question 20

What is the advantage to a business of price bundling? What is the advantage to a consumer?

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Quiz 15: Strategic Pricing Methods