Question 1

What are the different types of price discounts and allowances?

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Question 2

What are the different possible consumer reference prices?

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Question 3

Briefly describe the different types of pricing objectives.

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Question 4

A company that pays its bills each month for its rent,heat,interest,and salaries regardless of its output is said to be incurring what type of costs?

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Question 5

Ellie's manager has asked her to come up with ways to reduce costs of their new product by utilizing a process called "target costing." What should Ellie do?

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Question 6

Explain the concept of overdemand.

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Question 7

Bella's has estimated the demand and costs associated with alternative prices.It has finally chosen to price its new offering in such a way that it will maximize the rate of return on investment.What can be deduced about the company's objective?

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Question 8

How can companies initiate price cuts and what are the traps that companies can fall into because of this?

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Question 9

When Ian goes shopping,he comes across a T-shirt that is priced at $35.Although he wants to buy it,judging from the material used,he feels that the T-shirt should only cost $20.What reference price is Ian using here?

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Question 10

When Carl's company introduced its new product in the market,it introduced it at the lowest possible price assuming that the demand for the product is going to be highly responsive to the price it is being introduced at.It also believes that a higher sales volume will lead to lower unit costs and higher long-run profit.What can be said about the company's objective?

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Question 11

What are the different price-setting methods? Briefly describe each of them.

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Question 12

Agatha's is about to introduce a new product in the market,but is not sure as to how it should price the product.The company is facing intense competition from 5 other companies.In the past,it has also failed to keep up with the changing consumer wants.In such a situation,what should be its main objective?

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Question 13

What is third-degree price discrimination?

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Question 14

How does the Internet help sellers discriminate between buyers and vice-versa?

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Question 15

What are the different types of promotional pricing?

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Question 16

NV Inc.has launched a touch-sensitive handset in the Indian market and priced it at INR 9500.Although many people are checking it out and showing interest about purchasing it,majority of them are holding themselves back because they feel that it is not worth INR 9500.They compare the handsets' feature with that of its other competitors offering the same features and come to a conclusion that it is worth INR 8500 and nothing more than that.What kind of a reference price are the consumers using?

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Question 17

What are the different forms of countertrade?

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Question 18

Daryl convinced his prospective client that Car A was the best for him.But,the client insisted that the car cost him a good $10,000 more than Car B,the one which he was thinking of buying.Daryl told him that the amount he would have to spend on the fuel,insurance,repairs,and maintenance for Car B would be 5 times more than what he would have to spend on Car A.Finally convinced,the client consented to buy Car A.What technique did Daryl use to convince his customer?

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Question 19

When Cathy went shopping,she paid a lot to buy a jacket that had a well-known designer's tag attached to it.After a few days,she came across a jacket which was undistinguishable from the one she had bought but was priced 5 times lesser than the earlier one.She didn't give this a second thought because she was convinced that the designer label she had bought was worth it.What can be deduced from this?

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Question 20

When Sony introduced the world's first high-definition television to the Japanese market in 1990,it was priced at $43,000.This helped Sony to scoop the maximum amount of revenue from the various segments of the market.The price dropped steadily through the years-a 28-inch Sony HDTV cost just over $6,000 in 1993,but a 40-inch Sony HDTV cost only $600 in 2010.What pricing strategy did Sony use here?

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Quiz 14: Developing Pricing Strategies and Programs