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Exam 10: Pricing: Understanding and Capturing Customer Value

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Question 71

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What is competition-based pricing?

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Competition-based pricing refe...

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Question 72

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In the aftermath of the Great Recession of 2008 to 2009, consumers ________.

A) have become more value conscious
B) have become less value conscious
C) exhibit great interest in prestige pricing
D) show no interest in price cutting
E) rarely endorse value-for-money deals

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Question 73

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Price decisions must be coordinated with product design, distribution, and promotion decisions to form a consistent and effective integrated marketing mix program.

To take advantage of a downward-sloping experience curve, a company must do all of the following EXCEPT ________.

In a pure monopoly, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

If demand hardly changes with a small change in price, the demand is ________.

________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.

________ refers to a measure of the sensitivity of demand to changes in price.

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Refer to the scenario below to answer the following question(s) . Alden Manufacturing produces small kitchen appliances-blenders, hand mixers, and electric skillets-under the brand name First Generation. Alden attempts to target newlyweds and first-time home buyers with this brand. Considering that most young households have limited financial resources, Alden attempts to engage in target costing. "In doing this," says Milt Alden, the co-founder of Alden Electronics, "we have better control over keeping price right in line with customers." Alden manufactures a three-speed blender, its top seller, along with a five-speed blender. The hand mixers are manufactured in two variants-a small handheld mixer with two rotating beaters and another that comes with an optional stand and an attached mixing bowl. Alden's temperature-controlled skillets are manufactured in a single style with three color options. "Our product offerings are narrower," Milt Alden added, "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low. -Milt Alden uses which of the following strategies for pricing his products?

Who typically sets prices in large and small companies?

Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________ pricing.

Fixed costs ________.

Markup pricing is popular because when all firms in the industry use this pricing method, prices tend to be similar, so price competition is minimized.

Which of the following is true of value-based pricing?

Variable costs change directly with the level of production.

The simplest pricing method is cost-plus pricing, which involves adding a standard markup to the cost of the product.

With accumulated production experience and a higher volume of production, companies not only become more efficient but also ________.

Why is markup pricing most likely popular?

Using value-based pricing, a marketer would not design a product and marketing program before setting the price.