Question 1

In attempt to "rein in" the continued discounting by the sales force, you implement a net price analysis program to arrive at the "real price" of your products. Describe the steps necessary to implement such a program.

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Question 2

Starbucks coffee, Aveda shampoo, and Grey Goose vodka position themselves as quality leaders in their category. What is their pricing objective and how can it be achieved?

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Question 3

As the marketing manager for a "brand leader" in your industry, you noticed that a competitor has just reduced his prices by 15 percent on his number one selling product. In a memo to your boss, you must outline how (or if you wish to) respond to this latest threat. In creating your letter, you outline three possible response alternatives that are available to you. These three responses are?

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Question 4

How could a department store attempt to manipulate the reference prices of women's apparel?

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Question 5

Executives complain that pricing is a big headache. Many companies determine their costs then add the industry's traditional margin. Your firm decides to use price as a "strategic tool" in the marketing mix. What is it that your firm needs to do to be able to use price as a "strategic tool"?

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Question 6

Movie matinees are priced lower than the evening shows; afternoon ball games are sometimes priced cheaper than the evening games, television advertising costs less when run after midnight. These are examples of what type of price discrimination?

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Question 7

How is it that Centrum Vitamins can price their products much higher than their private-label competitors?

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Question 8

When a company initiates a price cut in an attempt to dominate the market through lower costs (such as the $1.00 special lunch menus at key fast food restaurants) the company must ensure that it does not fall into certain low cost traps. List these four "traps."

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Question 9

Your local retailer has instituted an EDLP pricing program for his stores. What would one of the reasons be for the retailer to adopt an EDLP pricing policy?

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Question 10

In deciding on the price for your product's introduction, you must consider what is best described as the "three Cs." Define and explain what is meant by this statement?

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Question 11

What are the different possible consumer reference prices?

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Question 12

As a small firm in a commodity industry, you are often faced with a pricing policy that can best be described as "going-rate pricing." Explain how this pricing policy works.

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Question 13

What are the different forms of countertrade?

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Question 14

How would you explain the concept of "price elasticity" to a co-worker?

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Question 15

Your company has recently sold its resin producing plant in India to a local concern. As part of the sales price, your company agrees to accept as partial payment the production of the resin at an agreed upon price for six years. This is an example of what type of countertrade?

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Question 16

Explain the type of auction found on eBay.

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Question 17

As a newly hired marketing associate, you have been given the responsibility to reduce the costs of your product by utilizing a process called "target costing." Explain how you would go about implementing a "target costing" program.

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Question 18

When the salesperson at the local "luxury" car dealer pitches a customer on the dealer's "free maintenance for 36 months or 36 000 miles whichever comes first," the salesperson is trying to overcome the car's initial high cost by using what method?

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Question 19

IKEA and WestJet Airlines are among the best practitioners of value pricing--win loyal customers by charging a fairly low-price for a high-quality offering. Why is value pricing not a matter of simply lowering prices?

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Question 20

How was Apple able to gain market leadership for the iPod with a starting price much higher than its competition's?

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Quiz 14: Developing Pricing Strategies and Programs