Chapter 20

Question 1

Survival and profit pricing objective:

Answer 1

Survival is temporary, increases sales volume. Profit is attainable, actual $ or % of sales.

Question 2

Return on investment and market share pricing objectives:

Answer 2

Return on investment is profit-related, recoup development. Market share is product sales related to total industry.

Question 3

Cash flow and status quo pricing objectives:

Answer 3

Cash flow is generate capital quickly, status quo is maintaining market share, prices, and image.

Question 4

Product quality pricing objective:

Answer 4

Prices tend to be higher, set apart.

Question 5

Assess target markets evaluation of price:

Answer 5

Quality and value, convenience, and necessity.

Question 6

Evaluate competitors price:

Answer 6

Marketing research used on comparative shoppers and systematic collection of price data.

Question 7

Competing on price:

Answer 7

Homogenous goods use beat/match. Prestigious image, higher price.

Question 8

Selecting a basis for pricing:

Answer 8

Cost-based, cost-plus, demand-based, markup, competition based.

Question 9

Things to consider when setting prices:

Answer 9

Price objective, target market, competitor prices, price basis, strategy.

Question 10

Setting prices steps:

Answer 10

1. Develop pricing objectives. 2. Assess target market’s evaluation of price. 3. Evaluate competitors prices. 4. Select basis for pricing. 5. Select a pricing strategy. 6. Setting price.