Question 1

A skimming pricing policy is likely to be most effective when

Accepted Answer

A skimming pricing strategy,which entails setting a high initial price,is most effective when (1)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable,(2)the high initial price will not attract competitors,(3)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost,and (4)customers interpret the high price as signifying high quality.

Question 2

Skimming pricing refers to

Accepted Answer

Key term definition-skimming pricing.

Question 3

Demand-oriented approaches weigh factors that underlie expected ________ more heavily than such factors as cost,profit,and competition when selecting a price level.

Accepted Answer

Demand-oriented approaches weigh factors underlying expected customer tastes and preferences more heavily than such factors as cost,profit,and competition when selecting a price level.

Question 4

Amazon wanted lower retail prices for e-books to

Accepted Answer

The dynamics in the e-book market were found to be quite different from the printed book market.For example,traditional distributors,such as bookstores,had an incentive to set a printed book's retail price from the publisher higher.In contrast,e-reader suppliers,such as Amazon,wanted lower retail prices for e-books to build the e-reader business.

Question 5

The latest in appliance technology allows your refrigerator to send messages to your smartphone and even photos of the interior to remind you of what you need to pick up at the store.Taking advantage of strong consumer demand for technology-enabled products,marketers set prices for these refrigerators at thousands above other models.These marketers are using a ________ pricing strategy.

Accepted Answer

Skimming pricing strategies are used for new,innovative products that are highly sought after by a significant number of customers.Such customers are relatively insensitive to price because of the product's ability to satisfy their needs and wants in relation to alternative products.

Question 6

Figure 14-2
 
-Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box C represents which approach?

Accepted Answer

Four approaches for selecting an approximate price level include: demand-oriented approach (D);cost-oriented approach (C);profit-oriented approach (A);and competition-oriented approach (B).

Question 7

Which of the following is the step in setting a final price for a product that occurs immediately after determining cost,volume,and profit relationships?

Accepted Answer

The fourth step in setting the final price is to select an approximate price level.

Question 8

Figure 14-2
 
-Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box B represents which approach?

Accepted Answer

Four approaches for selecting an approximate price level include: demand-oriented approach (D);cost-oriented approach (C);profit-oriented approach (A);and competition-oriented approach (B).

Question 9

There are several factors that predict when a skimming pricing policy is likely to be most effective,including situations in which

Accepted Answer

A skimming pricing strategy,which entails setting a high initial price,is most effective when (1)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable,(2)the high initial price will not attract competitors,(3)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost,and (4)customers interpret the high price as signifying high quality.

Question 10

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Which of the following is one of four common approaches to selecting an approximate price level?

Accepted Answer

Four common approaches to selecting an approximate price level are (1)demand-oriented,(2)cost-oriented,(3)profit-oriented,and (4)competition-oriented.

Question 11

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product is referred to as a(n)

Accepted Answer

Key term definition-skimming pricing.

Question 12

A manufacturer of a portable digital HD camera is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue against using a skimming pricing strategy for the camera?

Accepted Answer

A skimming pricing strategy,which entails setting a high initial price,is most effective when (1)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable,(2)the high initial price will not attract competitors,(3)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost,and (4)customers interpret the high price as signifying high quality.Increasing volume reducing production costs substantially would suggest a penetration pricing strategy.

Question 13

Skimming pricing is a strategy that introduces a new or innovative product by

Accepted Answer

A firm introducing a new or innovative product can use skimming pricing,setting the highest initial price that relatively price-insensitive customers who really desire the product are willing to pay.

Question 14

Figure 14-2
 
-Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box D represents which approach?

Accepted Answer

Four approaches for selecting an approximate price level include: demand-oriented approach (D);cost-oriented approach (C);profit-oriented approach (A);and competition-oriented approach (B).

Question 15

Which of the following statements about the price-setting process is most accurate?

Accepted Answer

Sometimes pricing strategies overlap,and a seasoned marketing manager will consider several in selecting an approximate price level.

Question 16

With the introduction of e-books,distributors could still set their own retail prices,but with a restriction.Distributors could set prices below a publisher's retail list price so long as they

Accepted Answer

Distributors could still set their own retail prices,but with a restriction.Distributors could set prices below a publisher's retail list price so long as they did not exceed the commission received from a publisher.

Question 17

To accommodate the changes in the book selling market,publishers changed their pricing approach so that

Accepted Answer

Book publishers changed their pricing approach.Publishers would set e-book list retail prices,and distributors,like Amazon,Barnes & Noble,or Apple,would get a commission on every e-book sold.The commission was usually 30 percent.

Question 18

Skimming pricing is considered to be a ________ approach to pricing.

Accepted Answer

Skimming pricing is a demand-oriented approach for selecting an approximate price level.

Question 19

All of the following are demand-oriented approaches to selecting an approximate price level except which?

Accepted Answer

Demand-oriented pricing approaches to select an approximate price level include skimming,penetration,prestige,price lining,odd-even,target,bundle,and yield management pricing strategies.

Question 20

Figure 14-2
 
-Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box A represents which approach?

Accepted Answer

Four approaches for selecting an approximate price level include: demand-oriented approach (D);cost-oriented approach (C);profit-oriented approach (A);and competition-oriented approach (B).

Quiz 14: Arriving at the Final Price

A skimming pricing policy is likely to be most effective when

Skimming pricing refers to

Demand-oriented approaches weigh factors that underlie expected ________ more heavily than such factors as cost,profit,and competition when selecting a price level.

Amazon wanted lower retail prices for e-books to

Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box C represents which approach?

Which of the following is the step in setting a final price for a product that occurs immediately after determining cost,volume,and profit relationships?

Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box B represents which approach?

There are several factors that predict when a skimming pricing policy is likely to be most effective,including situations in which

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Which of the following is one of four common approaches to selecting an approximate price level?

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product is referred to as a(n)

A manufacturer of a portable digital HD camera is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue against using a skimming pricing strategy for the camera?

Skimming pricing is a strategy that introduces a new or innovative product by

Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box D represents which approach?

Which of the following statements about the price-setting process is most accurate?

With the introduction of e-books,distributors could still set their own retail prices,but with a restriction.Distributors could set prices below a publisher's retail list price so long as they

To accommodate the changes in the book selling market,publishers changed their pricing approach so that

Skimming pricing is considered to be a ________ approach to pricing.

All of the following are demand-oriented approaches to selecting an approximate price level except which?

Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box A represents which approach?