Which of the following conditions favors adopting a market-penetration pricing strategy?
Explanation
This question assesses the understanding of the specific market conditions that make a market-penetration pricing strategy effective.
Other questions
According to the text, what is the one element of the marketing mix that produces revenue?
Which of the following is NOT listed as a way the Internet allows buyers to discriminate between sellers?
What is the term for the pricing strategy where a company sets a high price for a new technology product and then slowly lowers it over time?
When Apple dropped the price of its early iPhone from $600 to $400 two months after introduction, how did it appease the initial buyers?
Which of the following factors reduces price sensitivity according to the text?
A comprehensive review of academic research on price elasticity found that the average price elasticity across all products, markets, and time periods was what value?
What is the term for the decline in the average cost with accumulated production experience?
In the example of Samsung's tablet production, what was the average cost per tablet after producing the first 100,000 units?
What is the most elementary pricing method, which involves adding a standard amount to the product's cost?
A toaster manufacturer has a unit cost of $16 and wants to earn a 20 percent return on an investment of $1,000,000 with expected sales of 50,000 units. What is the target-return price?
What is the break-even volume for the toaster manufacturer with fixed costs of $300,000, a price of $20, and a variable cost of $10 per unit?
In the PACCAR example, what is a key reason the trucking company Contract Freighters justified ordering 700 new, higher-priced trucks?
A retailer that charges a constant low price with little or no price promotion or special sales is practicing what type of pricing?
Which type of auction features one seller and many buyers where the auctioneer announces a high price and then slowly decreases it until a bidder accepts?
According to a study by Farris and Reibstein, which type of brands obtained the highest prices?
What form of countertrade involves a seller receiving some percentage of payment in cash and the rest in products?
What does the payment term '2/10, net 30' mean?
When a supermarket drops the price on a well-known brand to stimulate additional store traffic, what promotional pricing technique is being used?
When a company sells a product at two or more prices that do not reflect a proportional difference in costs, it is engaging in what practice?
Pricing the same product at two different levels based on image differences, such as with perfume, is an example of which type of third-degree price discrimination?
Which of the following is NOT listed as a potential trap of a price-cutting strategy?
If a company has a profit margin of 3 percent of sales, what is the effect on profits of a 1 percent price increase, assuming sales volume remains unaffected?
When a company requires a customer to pay today's price plus all or part of any inflation that occurs before delivery, what is this practice called?
What is the term for consumers' tendency to process prices 'left to right' rather than by rounding?
A study on price endings showed that demand for a dress increased by one-third when the price rose from $34 to what amount?
In the context of consumer psychology, what is an 'upper-bound price' also known as?
What is the term for products, such as Kiehl's skin care, that are priced between average middle-market brands and super-premium Old Luxury brands?
In the case of Parker Hannifin, the company changed its pricing from a cost-plus model to one that charged what customers were willing to pay. The division making industrial fittings reviewed 2,000 items and found that what percentage were priced too low?
The pricing method where the firm bases its price largely on what competitors are charging is known as what?
In the Caterpillar tractor example illustrating perceived-value pricing, what is the final price of the tractor after accounting for all value premiums and a discount?
A research study cited in the text on the effects of 'stealth price increases' found that U.S. airlines collected how much in baggage fees in 2013?
What is the term for a promotional pricing strategy where a company adds a free or low-cost warranty or service contract to promote sales?
Predatory pricing is defined as selling below cost with what specific intention?
According to the text, a sharing economy is one in which consumers share items and skills, moving from a world organized around ownership to one organized around what?
What are the six steps in setting a pricing policy, as summarized in Table 16.2?
Which company is described as having successfully applied a 'freemium' model by offering a free version of its open source Linux software and selling a long-term support edition for a subscription fee?
What is the primary reason that many companies do not handle pricing well and fall back on strategies like adding traditional margins to costs?
When Ferrari deliberately curtailed sales of its sports car to below 7,000 despite growing demand, what concept was it trying to maintain?
What is the term for fixed costs, which are costs that do not vary with production level or sales revenue?
In the pricing example of ConAgra's Banquet frozen dinners, when the retail price increased from $1 to $1.25, what was the outcome?
Which company, described as a 'value player', is known for its powerful combination of low price and high quality in groceries and other goods?
According to the Three Cs Model for Price Setting, what establishes the 'price ceiling'?
What does countertrade, a form of geographical pricing, account for as a percentage of world trade?
What is an extra payment designed to gain reseller participation in special programs called?
In the example of a net price analysis, a company with a list price of $3,000 gives an average discount of $300 and has promotional spending of $450. Retailers are given $150 in co-op advertising money. What is the company's net price?
What is it called when a seller charges different amounts to different classes of buyers, such as lower museum admission for students and senior citizens?
According to the text, when Walmart began to run ads claiming lower prices than Publix, how did the regional supermarket chain retaliate?
In a market characterized by high product homogeneity, what is one of the first things a firm can do to respond to a competitor's price cut?
Which of the five major pricing objectives is a short-run objective pursued when a firm is plagued with overcapacity, intense competition, or changing consumer wants?