Deck 6: Strategic Pricing: The Hook

Question 1

Competition is never a pricing consideration.

Answer 1

False

Question 2

A new venture's primary consideration when pricing must be cost.

Answer 2

True

Question 3

There is no question that in today's environment a new venture entrepreneur should never consider the targeted customer in the pricing strategy decision.

Answer 3

False

Question 4

Entrepreneurs must be willing to enhance their venture's image of value as that will eventually impact the price.

Question 5

The primary objective of pricing for profit is to set a price that is high enough to cover the cost of the goods and the expenses incurred in selling them to generate some profit.

Question 6

Selling Price = Purchase Price - Operating Expenses - Profit

Question 7

Skimming pricing is the technique of selling at a high price to skim off the strongest demand in the marketplace.

Question 8

Leader pricing involves a combination of skimming and penetration pricing.

Question 9

Markon is an increase above the initial markup on goods that will be reduced in price later or on goods that can be damaged or stolen easily.

Question 10

Which of these products or services would Most Likely be purchased on the basis of price?

A) Haircut
B) Television
C) Milk
D) Shoes

Question 11

Which of the following is not a benefit of a marketing strategy?

A) Helps the business establish an image
B) Helps insulate the business from negative economic impacts
C) Allows the business to charge a higher price relative to competitors
D) It minimizes the cost of goods sold

Question 12

What strategy do wholesalers typically employ to sell their products in comparison to other industries?

A) Sell large quantities of goods on a high profit margin.
B) Sell large quantities of goods on a very narrow profit margin.
C) Sell batch goods with high profit margins.
D) Use monopolistic pricing to maximize margins

Question 13

What three basic factors must be considered in setting a price for a product?

A) Cost of Goods, Revenue, Fixed Expenses
B) Cost of Goods, Competitive Prices, Market Demand
C) Market Demand, Geographic Location, Industry analysis
D) Market Demand, Industry analysis, Competitor Analysis

Question 14

What is skimming pricing?

A) The strategy where the company charges at or near what the competitors are charging
B) The strategy of employing a low price that is competitive and designed both to stimulate demand and to discourage competition
C) The technique of selling at a high price to skim off the strongest demand in the marketplace.
D) The method of moving prices in relation to demand

Question 15

This pricing scheme exists when an industry has many firms, each producing only a small share of the output demand:

A) a monopoly
B) an oligopoly
C) monopolistic competition
D) anarchy

Question 16

Marking down the price of a popular product, in order to attract more customers and build consumer traffic is called:

A) price lining
B) leader pricing
C) price fixing
D) price bundling

Question 17

An increase above the initial markup on goods that will be reduced in price later or on goods that can be damaged or stolen easily is called:

A) Markup
B) Markon
C) Margin
D) Estimated Cost

Question 18

There are two basic ways of marking up goods: one, you use a percentage of the retail selling price; two, you:

A) use a percentage of your competitor's price
B) use a percentage of the cost of the good
C) add up the total manufacturing cost plus profit
D) guess

Question 19

These types of companies generally just charge what everyone else is charging:

A) Manufacturers
B) Retailers
C) Wholesalers
D) Service Enterprises

Question 20

The top market niche danger signal for your store is:

A) you don't have enough new products
B) many customers leave without buying anything
C) you have too many old customers and no new ones
D) you are selling too much lead pricing material

Question 21

This is a method of moving prices in relation to demand, which involves a combination of skimming and penetration pricing:

A) sliding pricing
B) skimming pricing
C) leader pricing
D) price bundling

Question 22

Price Lining is also known as:

A) price bundling
B) price sliding
C) price fixing
D) price flexibility

Question 23

A demand-oriented pricing strategy is used in what phase of the product life cycle?

A) unique product stage
B) maturity stage
C) decline stage
D) product life extension stage

Question 24

Giving a reduction in price based on someone's age, for example, is called:

A) special group discounting
B) seasonal discounting
C) quantity discounting
D) cash discounting

Question 25

This is when pricing is predetermined by the market:

A) pure competition
B) predestination
C) pretext rivalry
D) none of the above

Question 26

Charging at or near what your competitors are charging is called:

A) competitive pricing
B) parity pricing
C) comparison pricing
D) leader pricing

Question 27

The process of offering merchandise in several different price ranges is called:

A) price ranging
B) price bundling
C) price lining
D) combination pricing

Question 28

According to the chapter, which of these is an issue that retailers should focus on when developing a price strategy?

A) Identify key determinants of local store pricing
B) Segment pricing based on store format and competitors
C) Coordinate pricing based on category
D) All of the above

Question 29

From the New Venture Issues, name and describe four of the strategies that are available to use to prevent the business from entering a price war. (Use any of the four with an example for each.)

Question 30

How do different retailers set prices, and what are the six issues retailers should focus on when developing a pricing strategy?

Question 31

What are the considerations for a Service Enterprise when pricing with the competition?

Question 32

How can a Manufacturer differentiate its product and charge a premium price, and what considerations does it have to take into account?

Question 33

Discuss the challenges and considerations associated with pricing in an international market?