5

Question 1

give 3 primary pricing strategies and their descriptions

Answer 1

1. cost-based pricing - price = total cost / volume * % markup
2. competitive pricing - setting prices based on competitor’s strategies
3. value-based pricing - price based on buyer’s perception of value

Question 2

name corresponding pricing model
charging different customers different prices
direct ( distribution channels, regions, places)
indirect (usage, coupons, vouchers)

Answer 2

discriminatory pricing

Question 3

name corresponding pricing model

generate revenue from small percentage of users who are willing to pay to enhance their experience

Answer 3

freemium

Question 4

name corresponding pricing model

price changes based on usage (fuel, electricity, water)

Answer 4

dynamic pricing

Question 5

name corresponding pricing model

start high, progressively lower as popularity declines

Answer 5

skimming

Question 6

name corresponding pricing model

start super low, not a long term strategy

Answer 6

penetration pricing

Question 7

name corresponding pricing model

combine different products

Answer 7

bundles / kits

Question 8

name corresponding pricing model

pricing per hour

Answer 8

pricing services

Question 9

price elasticity of demand = … / …

Answer 9

%change in quantity / %change in price

Question 10

veblen goods =

Answer 10

products whose demand increases with an increase in its price

Question 11

elastic demand =

inelastic demand =

Answer 11

• change price leads to big change demand

- change price leads to small change demand