Pricing Strategies: Additional Considerations

A company that invents a new product and sets a high initial price to maximize revenue from the various segments of the market is using which pricing strategy?

For market-skimming pricing to be successful, what condition regarding competitors must be met?

AGIT Global set a low initial price of only $99.99 for its Wavestorm surfboard to attract a large number of buyers quickly and gain a large market share. This strategy is known as what?

Which pricing strategy involves setting price steps between various products in a product line based on cost differences, customer evaluations of different features, and competitors' prices?

When a car buyer chooses to order a navigation system and a premium entertainment system with their new vehicle, the automaker is using which product mix pricing strategy?

Amazon makes little or no profit on its Kindle e-readers, hoping to make up for the thin margins through sales of digital books, music, and other content. This is an example of what kind of pricing?

Cheese makers in Wisconsin discovered they could sell their leftover brine to local highway departments to melt icy roads, turning a waste disposal cost into a revenue stream. This is an example of which pricing strategy?

When fast-food restaurants offer a burger, fries, and a soft drink together at a 'combo' price, they are using which pricing strategy?

A price reduction offered to buyers who pay their bills promptly is known as a what?

When a movie theater charges lower prices for students and senior citizens, what type of pricing strategy is it employing?

An airline charges $1,100 for an economy seat and $3,400 for a business-class seat on the same flight, even though the difference in cost to the airline is much less than the price difference. This is an example of what?

What type of pricing considers the psychology of prices, where price is used to say something about the product, rather than simply its economics?

A grocery retailer places its $2.49 store brand of cereal next to Kellogg's Raisin Bran priced at $3.79 to influence the consumer's perception of value. This retailer is making use of what?

Temporarily pricing products below the list price, and sometimes even below cost, to create buying excitement and urgency is called what?

A potential negative consequence of using promotional pricing too frequently is that it can create what kind of customers?

The Peerless Paper Company is in Atlanta. If it charges a customer in Compton, California the same total price (product price plus freight) as a customer in Atlanta, what geographical pricing strategy is it using?

Which geographical pricing strategy is considered the fairest way to assess freight charges because each customer picks up its own cost?

A ride-sharing service like Uber or Lyft adjusting its fares during slow or peak times is a practice known as what?

According to the text, a company that shrinks the amount of product in a package while keeping the price the same is effectively doing what?

If a consumer sees a price cut from a luxury brand like Rolex, what is a likely negative interpretation they might have?

When a company faces a competitor's price cut, what is the first question it should ask itself according to the response framework?

If a company decides to respond to a competitor's price cut by improving its product quality and increasing its price, what is its strategic goal?

What term describes adding a lower-price item to a product line or creating a separate lower-price brand to counter a competitor's price cut?

Federal legislation on price-fixing, such as the Sherman Act, is primarily concerned with preventing what activity among sellers?

What is the term for the practice of selling below cost with the specific intention of punishing a competitor or driving them out of business?

The Robinson-Patman Act seeks to prevent what kind of unfair pricing practice?

A manufacturer cannot require a dealer to charge a specified retail price for its product. This practice is known as what?

A retail store advertises a large price reduction from a 'regular' price that is artificially high and not the usual retail price. This practice is an example of what?

If Louis Vuitton raises its prices by 10 percent and its original contribution margin was 40 percent, what is the new contribution margin?

Which of the five product mix pricing situations applies to setting price steps across an entire product line, like Quicken does with its different software versions?

What is the primary motivation for a company to use market-penetration pricing for a new product?

A theater that varies its seat prices because audiences prefer certain locations over others is using what form of segmented pricing?

A manufacturer of a new toaster has a variable cost of $10 per unit and fixed costs of $300,000. If the company wants to earn a 20 percent markup on sales and expects to sell 50,000 units, what should the markup price be?

In the case of services, what is the term for breaking the price into a fixed fee plus a variable usage rate, such as at an amusement park?

When Microsoft offered customers up to $650 toward the purchase of a Surface Pro when they traded in a MacBook Air, it was using what form of promotional pricing?

A seller in Atlanta selects Chicago as a 'basing point' and charges all customers the freight cost from Chicago to their location, regardless of where the goods are actually shipped from. This is an example of:

A seller who is anxious to do business with a certain customer or in a specific geographical area might absorb all or part of the actual freight charges. This strategy is called:

What is a major reason that international pricing can lead to price escalation, causing a product that is inexpensive at home to have a much higher price tag in another country?

When launching the CLA model, Mercedes-Benz was engaging in what type of product mix pricing strategy?

When a company faces falling demand or excess capacity, it may be tempted to initiate which type of price change?

A regular Snickers bar that now weighs 1.86 ounces, down from 2.07 ounces in the past, is an example of what?

What is the key difference between predatory pricing and legitimate loss-leader pricing?

A luxury fashion company with an original contribution margin of 40 percent wants to maintain the same total contribution after a price increase, even if sales volume drops. If it raises prices by 10 percent, by what percentage can its sales volume decrease before the total contribution falls below the original level?

Apple's strategy of launching new iPhone models at a high price and then working down to lower price points for older models as new versions are introduced is a classic example of what?

If a company using a market-penetration strategy experiences high sales volume, what corresponding effect should it see on its costs?

What is the primary risk for a company using an overextended line extension strategy, such as McDonald's offering a very large and complex menu?

For segmented pricing to be effective, what condition must be true about the market segments?

In a legal context, is dynamic pricing—continually adjusting prices based on market forces and consumer data—considered permissible?

When a company launches a fighter brand like Starbucks did with Seattle's Best Coffee, what is a primary risk it must manage?

The primary concern with scanner fraud and price confusion in retail is that they can damage what?