Question 1

Deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well, is referred to as

Accepted Answer

Loss-leader pricing is a strategy in which a product is intentionally priced below its usual price to attract customers' attention and encourage them to buy other products. The goal is not necessarily to increase sales of the discounted product, but to lure customers into the store or website in the hope that they will make additional purchases.

Question 2

A price premium is the percentage by which the actual price charged for a specific brand exceeds (or falls short of) a benchmark established for a similar product or basket of products.This premium can be calculated as:

Accepted Answer

Price premium is calculated by dividing the dollar sales market share by the unit volume market share and then subtracting 1.

Question 3

A Swedish company such as Asko that prides itself on manufacturing and marketing some of the best-built and most expensive appliances in the world is using which competition-oriented method of pricing?

Accepted Answer

Asko is using above-market pricing method, where they are pricing their products higher compared to their competitors to show the superiority of their products and attract customers who are willing to pay for quality.

Question 4

FIGURE 12-4 
-Position "D" in Figure 12-4 above represents the price premium of which of the following?

Accepted Answer

The answer of FIGURE 12-4 
-Position "D" in Figure 12-4...

Question 5

FIGURE 12-3 
-Retailers such as Bloomingdale (Figure 12-3 above), set __________ for their products.

Accepted Answer

The term "premium prices" refers to prices set above customary prices to reflect the quality or prestige of a product. Bloomingdale is a high-end retailer that sells luxury brands, and therefore, it sets premium prices for its products.

Question 6

Loss-leader pricing refers to

Accepted Answer

Loss-leader pricing is the practice of intentionally selling a product below its usual price in order to draw attention to it and attract customers, with the hope that they will purchase other products with higher profit margins as well.

Question 7

For most products, it is difficult to identify a specific market price for a product or product class.Still, marketing managers often have a subjective feel for the competitors' price or market price.Using this benchmark, they then may deliberately choose a strategy of

Accepted Answer

Marketing managers often use the competitors' price or market price as a benchmark to determine their pricing strategy. Based on this benchmark, they may choose to price their product above, at, or below the market price to create a competitive advantage or to maximize profits. A, above-, at-, or below-market pricing, is the strategy that would best fit this scenario. The other pricing strategies listed do not necessarily require the use of a benchmark price to determine their pricing strategy.

Question 8

FIGURE 12-4 
-Position "B" in Figure 12-4 above represents the price premium of which of the following?

Accepted Answer

The answer of FIGURE 12-4 
-Position "B" in Figure 12-4...

Question 9

Large department stores chains such as Sears generally use _________ pricing.

Accepted Answer

Large department store chains like Sears typically use "at" pricing, which means they set prices at the market level to remain competitive with other retailers.

Question 10

FIGURE 12-4 
-Position "E" in Figure 12-4 above represents the price premium of which of the following?

Accepted Answer

The answer of FIGURE 12-4 
-Position "E" in Figure 12-4...

Question 11

Manufacturers of generic products use which method of competition-oriented pricing?

Accepted Answer

Manufacturers of generic products often use below-market pricing to offer their products at lower prices than branded competitors, attracting cost-conscious consumers.

Question 12

FIGURE 12-4 
-Position "C" in Figure 12-4 above represents the price premium of which of the following?

Accepted Answer

The answer of FIGURE 12-4 
-Position "C" in Figure 12-4...

Question 13

Basic to setting a product's price is the extent of _________.This information is used in estimating the revenues the firm expects to receive.

Accepted Answer

Customer demand is a crucial factor in determining a product's price as it affects the revenues the firm expects to receive. The level of demand can indicate the price sensitivity of the target market and also help the firm estimate how much they can charge for the product without losing customers to competitors. Factors such as management commitment, market testing, promotional budget, and distribution requirements may also affect pricing decisions, but customer demand is likely the most fundamental consideration.

Question 14

When Kroger's, a national supermarket chain, prices soda at $2.09 a six-pack, it is attempting to

Accepted Answer

By pricing soda at $2.09 a six-pack, Kroger's is trying to attract customers in the hope that they will purchase other products as well. This pricing strategy is aimed at increasing sales and revenue for the supermarket chain.

Question 15

FIGURE 12-4 
-Position "A" in Figure 12-4 above represents the price premium of which of the following?

Accepted Answer

The answer of FIGURE 12-4 
-Position "A" in Figure 12-4...

Question 16

Setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark is referred to as

Accepted Answer

Above-, at-, or below-market pricing is based on the subjective feel for the competitors' price or market price as the benchmark. This approach involves setting the price above, at, or below the prevailing market price, depending on the company's perceived product positioning strategy. The other options listed do not involve using competitors' prices or market prices as a benchmark for setting prices.

Question 17

Using _________, many retailers deliberately sell products below their normal prices (and sometimes below cost) to attract attention and induce additional store traffic.

Accepted Answer

Loss-leader pricing is a strategy in which retailers sell products at a loss to attract customers to their store, with the hope of them purchasing other profitable and related products.

Question 18

As the brand manager for Cracker Jack, what information does Figure 12-4 above give you?

Accepted Answer

Figure 12-4 shows that Cracker Jack has the highest average retail price among the four brands listed, indicating that the brand has a price premium relative to Crunch 'n Munch.

Question 19

An ad campaign by Suave shampoo asked television viewers to identify the hair that was shampooed and conditioned with Suave products and the hair on which expensive salon hair-care products were used.The idea of the ad was that a person could not tell by looking that a woman was using the much cheaper Suave brand.By making price its selling point, Suave is most likely using _________.

Accepted Answer

Suave is using below-market pricing as its selling point by highlighting that despite being cheaper, it can still provide comparable results to expensive salon hair-care products.

Question 20

Companies use a " __________ " to assess whether its products and brands are above, at, or below the market.

Accepted Answer

A "price premium" is used by companies to determine if their products and brands are priced above, at, or below the market compared to competitors.

Quiz 12: Pricing Products and Services

Deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well, is referred to as

A price premium is the percentage by which the actual price charged for a specific brand exceeds (or falls short of) a benchmark established for a similar product or basket of products.This premium can be calculated as:

A Swedish company such as Asko that prides itself on manufacturing and marketing some of the best-built and most expensive appliances in the world is using which competition-oriented method of pricing?

FIGURE 12-4 -Position "D" in Figure 12-4 above represents the price premium of which of the following?

FIGURE 12-3 -Retailers such as Bloomingdale (Figure 12-3 above) , set __________ for their products.