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Exam 9: Pricing: Understanding and Capturing Customer Value

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Question 1

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________ uses buyers' perceptions of what a product is worth as the key to pricing.

A) Customer value-based pricing
B) Target return pricing
C) Cost-plus pricing
D) Psychological pricing
E) Competition-based pricing

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Question 2

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When demand hardly changes with a small change in the price of a product, the demand for the product is best described as ________.

A) elastic
B) flexible
C) inelastic
D) variable
E) cyclical

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Question 3

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With reference to pricing in different types of markets, compare oligopolistic competition with a pure monopoly.

Overuse of promotional pricing can erode a brand's value in the eyes of customers.

Target costing starts with an ideal selling price based on customer value considerations and then aims at costs that will ensure that the price is met.

Which of the following pricing strategies charges the same price plus freight to all customers, regardless of their location?

Providing extra amenities to differentiate and support high-priced products is referred to as ________ pricing.

A break-even chart shows the total cost and total revenue expected at various sales volume levels of a product.

NerdHerd Electronics sells three different sizes of televisions at three different prices. In this case, the company's pricing strategy is referred to as ________ pricing.

Which of the following pricing strategies is the opposite of FOB-origin pricing?

Busch Stadium in St. Louis charges different prices for seats in different areas of the ball park, even though each seat costs the same for the owners of the stadium. What is this form of pricing called?

Under oligopolistic competition, the market consists of only a few large sellers.

The relationship between the price charged for a product and the resulting demand level can be shown in a(n) ________.

________ pricing refers to selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business.

Vac "N" Sew, a consumer electronics outlet, offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine. This is an example of a ________.

What is customer value-based pricing? Describe the two types of value-based pricing.

Value-based pricing is often product driven, and customer value perceptions are secondary.

How do firms that use captive-product pricing make up for the low prices of their main products?

Dynamic pricing is particularly suitable for Internet-based companies like Amazon who want to be responsive to shoppers' desires and marketplace changes.

Los Amigos, a new Mexican restaurant, has set up shop across the street from Hot Tamales and More. Which of the following pricing strategies will Los Amigos likely use?