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9.Marketing 3250 Final Exam Questions with Complete Answers
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9.Marketing 3250 Final Exam Questions with Complete Answers
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9.Marketing 3250 Final Exam Questionswith Complete Answers
Price - Answer-amount of money charged for a product/service; sum of values
customers exchange for the benefits of the product/service
Value-Based Pricing - Answer-setting prices based on buyer's perceptions of value
rather than on seller's cost; customer-driven
Cost-Based Pricing - Answer-setting prices based on costs of producing, distributing,
and selling the product plus a fair rate of return for effort and risk; manufacturer-driven
Competition-Based Pricing - Answer-setting prices based on competitor's strategies,
prices, costs, and market offerings
Demand Curve - Answer-shows the # of units the market will buy in a given time period,
at different prices
Price Elasticity of Demand - Answer-measure of sensitivity of demand to changes in
price
Elastic Demand - Answer-demand changes greatly with a small change in price (steak,
Starbucks)
Inelastic Demand - Answer-demand hardly changes with a small change in price (milk,
gas)
Equation for Price Elasticity of Demand - Answer-(% change in quantity demanded) / (%
change in price)
Market-Skimming Pricing - Answer-setting a high price for a new product to skim max
revenue layer by layer from segments willing to pay higher prices; fewer but more
profitable sales
Market-Penetration Pricing - Answer-setting a low price for a new product to attract a
large number of buyers and a large market share; high sales volume
Product Line Pricing - Answer-setting prices steps between various products in a
product line
Optional Product Pricing - Answer-offering to sell optional or accessory products along
with the main product (ex- ice makers in a refrigerator)
, Captive Product Pricing - Answer-pricing product that must be used with the main
product (ex- blades for a razor and games for a video-game console)
By-Product Pricing - Answer-setting a price for by-products in order to make the main
product's price more competitive
Product Bundle Pricing - Answer-combining several products and offering the bundle at
a reduced price (ex- burger, fries, and soft drink at a "combo" price)
Reference Prices - Answer-prices that buyers carry in their minds and refer to when
they look at a given product
Price Image - Answer-firms, especially retailers, may compete more on price image,
than on price; managing through non-price cues or irrelevant price cues
Everyday Low Pricing - Answer-saves search costs of finding lowest overall prices
High/Low Pricing - Answer-provides the thrill of the chase for the lowest price
Odd-Even Pricing - Answer-setting prices a few dollars or cents below an even number
(cell phone for $39.99)
Price-Quality Relationship - Answer-using price as an indictor of quality
Loss Leader Pricing - Answer-setting prices near or below cost in order to attract
customers to a store (expecting customers to buy other stuff at the store)
Horizontal Price Fixing - Answer-illegal to agree on a price within a group of
manufacturers OR retailers OR wholesalers
Vertical Price Fixing - Answer-retailers cannot be forced to adhere to a minimum retail
price, manufacturers/wholesalers CAN set maximum prices if it doesn't adversely
impact competition
Price Discrimination (Robinson-Patman Act) - Answer-manufacturers/wholesalers
cannot charge a different price to different retailers, discounts must be equitable
Price Advertising - Answer-guidelines/laws regarding advertising price reductions,
advertising prices in relation to competitor's prices, and bait-and-switch advertising
Predatory Pricing - Answer-means that a company sets a very low price for the purpose
of driving competitors out of business, they will then raise prices when competitors are
gone
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