LESSON 3- PRICING STRATEGIES

Question 1

is a pricing strategy that allows the seller a fixed markup every
time the product is sold.

Answer 1

Mark Up PRICING

Question 2

is a pricing method that allows a product manufacturer to certain portion of his/her investment every year

Answer 2

Target Return Pricing

Question 3

is a pricing method premised to the thee that consumers welll perceive products with odd price ending as lower in price than they actually are

Answer 3

Odd Pricing or Psychological Pricing

Question 4

this pricing strategy refers to the practice of setting low prices on selected products which will result in the generation of less profits, but with the objective of increasing the sales volume of other products sold by the company

Answer 4

Loss leader pricing

Question 5

a pricing strategy designed to simplify a consumer’s buying decision. This method involves reducing the number of price points on merchandise to as little as possible, in extreme cases to only one price point

Answer 5

Price lining

Question 6

a pricing strategy that disregards the unit cost of a product or service. Instead, it capitalizes on the high value perception or positive brand reputation farsstuct or service. It charges a price much higher than its unit cost

Answer 6

Prestige Pricing

Question 7

it to a pricing strategy where a business organization prices Its product at a range below its unit cost but higher than its unit variable cost

Answer 7

Marginal Pricing

Question 8

It is the pricing strategy where a business organization prices its product at a range below the unit cost but higher than its unit variable

Answer 8

Marginal Pricing

Question 9

a pricing strategy where the firm prices its product lower
than unit variable cost. Initially resulting in short term losses. The objective of this pricing strategy is to price a new or persistent competitor out of the market share.

Answer 9

Predatory Pricing

Question 10

a pricing strategy where a company prices its product at the

same level as or very close to its competitor’s prices. This effectively maintains the product’s price competitiveness in its market

Answer 10

Going rate Pricing

Question 11

a pricing strategy involving a temporary reduction in the selling price of a product and service in order to indicate induce trial or total encourage repeat purchase

Answer 11

Promotional Pricing

Question 12

this is the form where the prices of the products of the firm are reduced for a Iimited time.

Answer 12

Sale

Question 13

special prices in certain seasons are made to draw in more customers.

Answer 13

Special Event Pricing

Question 14

these are offered to customers to encourage them to make

purchases within a specified time period

Answer 14

Cash Rebates

Question 15

this involves low-interest financing to customers.

Answer 15

Low interest financing

Question 16

these involves adding free warranty offer or service contract.

Answer 16

Warranty and service contacts

Question 17

where the product’s selling price is way above its unit cost.

Answer 17

Price skimming

Question 18

a pricing strategy where the new products are priced only

marginally above its unit cost. The objective of this strategy is to capture a larger part of the market at an early stage by making the product affordable to the greatest number of people

Answer 18

Penetration Pricing