Dealing with competition and Developing Pricing Strategies and Programs Flashcards
What is the primary goal of competitive analysis in marketing?
To understand competitors’ strengths and weaknesses to improve one’s own market position.
True or False: A pricing strategy should be static and not change over time.
False.
Fill in the blank: The _____ strategy involves setting a low price to attract customers and gain market share.
penetration
What are the four main types of pricing strategies?
Cost-plus pricing, value-based pricing, competition-based pricing, and dynamic pricing.
Which pricing strategy focuses on setting prices based on competitors’ prices?
Competition-based pricing.
What is a key characteristic of value-based pricing?
Prices are set based on the perceived value to the customer rather than the cost of production.
Multiple Choice: Which of the following is NOT a factor influencing pricing decisions? A) Costs B) Market demand C) Customer preferences D) Employee salaries
D) Employee salaries
What does dynamic pricing allow companies to do?
Adjust prices in real-time based on demand and market conditions.
True or False: Price skimming is used to maximize short-term profits from early adopters.
True.
What is a disadvantage of penetration pricing?
It may lead to lower profit margins initially.
Fill in the blank: _____ pricing is often used in competitive markets to attract price-sensitive customers.
Discount
What is the purpose of a pricing program?
To establish guidelines for setting prices and responding to market changes.
Multiple Choice: Which of the following is a psychological pricing strategy? A) Odd-even pricing B) Cost-plus pricing C) Dynamic pricing D) Value-based pricing
A) Odd-even pricing
What is the significance of understanding customer segments in pricing strategies?
Different segments may have varying willingness to pay, affecting pricing decisions.
True or False: A successful pricing strategy must align with the overall marketing strategy.
True.
What role does elasticity of demand play in pricing strategies?
It helps determine how price changes will affect consumer demand.
Fill in the blank: The _____ approach to pricing involves creating a product that justifies a premium price.
premium
What is cost-plus pricing?
A pricing strategy where a fixed percentage is added to the total cost of production.
Multiple Choice: Which of the following is a common method for setting prices? A) Market research B) Random selection C) Customer complaints D) Employee suggestions
A) Market research
What is the importance of competitor pricing in developing one’s own pricing strategy?
It helps to position products effectively in the market and avoid price wars.
True or False: Pricing has no impact on the perceived quality of a product.
False.
What is the role of promotional pricing?
To temporarily reduce prices to increase sales or attract customers.
Fill in the blank: _____ is the practice of offering a product at a lower price for a limited time to stimulate demand.
Promotional pricing
What is the concept of price anchoring?
Setting a high initial price to make subsequent prices seem more attractive.
Multiple Choice: Which pricing strategy is most appropriate for a new product in a saturated market? A) Skimming B) Penetration C) Cost-plus D) Dynamic
B) Penetration
What is the significance of reviewing pricing strategies regularly?
To adapt to changing market conditions and consumer preferences.
