Module 1.2 Module Approaches

Question 1

During this phase, marketers face the challenge of
setting prices of business offerings for the first
time.

Answer 1

New Product Pricing Strategies

Question 2

New Product Pricing Strategies

Answer 2

1. Price Skimming
2. Market Penetration

Question 3

involves setting rates high during
the introductory phase. This is designed to help
businesses maximize sales on new products and
services.

Answer 3

Price Skimming

Question 4

It aims to attract buyers by
offering lower prices on goods and services.

Answer 4

Market Penetration

Question 5

The pricing strategy for each of the products is
different when you sell different set of products.
This variation in pricing is based on the costs,
demand and the different level of competition that
a product has to face in the market.

Answer 5

Product Mix Pricing Strategies

Question 6

Product Mix Pricing Strategies Include

Answer 6

Product Line Pricing
Optional Product Pricing
Captive Product Pricing
By Product Pricing
Bundle Pricing

Question 7

It is a strategy that sets
different prices for various offerings in a product
line in case your business offers different product
lines. This price differentiation takes into account
cost differences between the products in a given
product line.

Answer 7

Product Line Pricing

Question 8

it is adding the
price of accessories to the base price of the
product in case you offer accessory products along
with the main product. This means that
accessories are given as an option to the
customers.

Answer 8

Optional Product Pricing

Question 9

This pricing
strategy is used by companies manufacturing
products that are essential for using the main
product.

Answer 9

Captive Product Pricing

Question 10

hold no value at times
and it is a costly affair to dispose them off. This
scenario may lead to increasing the cost of the
core product.

Answer 10

By Product Pricing

Question 11

means selling a package of
goods or services for a lower rate than what
consumers would pay on purchasing each item
individually. This pricing strategy is more
effective for companies that sell complimentary
products.

Answer 11

Bundle Pricing

Question 12

Price Adjustment Strategies

Answer 12

Premium Pricing
Economy Pricing
Psychology Pricing
Segmented Pricing
Discount and Allowance Pricing strategies
Promotional Pricing
Geographical Pricing
Dynamic Pricing

Question 13

businesses set costs higher
than their competitors. It is is often most effective
in the early days of a product’s life cycle.
Furthermore, it is ideal for small businesses that
sell unique goods.

Answer 13

Premium Pricing

Question 14

Premium Pricing– There are many things a business
can do to support premium pricing of its offerings.
These include:

Answer 14

*creating a high-quality product,
*intense marketing efforts,
*quality product packaging and
*plush store décor

Question 15

This aims to attract the most priceconscious consumers. This strategy is used by a wide range
of businesses. These include generic food suppliers,
discount retailers etc. Thus, businesses are able to minimize
costs associated with marketing and production with this
strategy.

Answer 15

Economy Pricing

Question 16

It refers to techniques marketers
use to encourage customers to respond on emotional levels
rather than logical ones. It considers the psychology of
prices and not just the economics behind the pricing of
product.

Answer 16

Psychology Pricing

Question 17

This pricing strategy involves
selling a product or service at two or more prices. Provided
such difference in pricing is not due to a difference in
manufacturing a product or rendering a service. Rather
prices are adjusted based on the customer segment,
location and timing when a product is offered.

Answer 17

Segmented Pricing

Question 18

Segmented Pricing

Answer 18

customer segment pricing
Location pricing
Time pricing

Question 19

Different prices are charged for the
same set of products or services from different customers

Answer 19

customer segment pricing

Question 20

It is setting brand charges different prices for
products or services at different locations

Answer 20

Location pricing

Question 21

price of its products or services as per the
changing seasons, month, day or even hours in case of time
pricing.

Answer 21

Time pricing

Question 22

Brands usually change the basic price of their offerings in order to
honor customers for their actions. These actions may include volume
purchases, early clearance of bills, off season purchases or stays etc.

Answer 22

Discount and Allowance Pricing strategies

Question 23

refers to a money paid by a brand to the retailers in return for the retailer promoting the brand’s products in some way or the other.

Answer 23

Allowances

Question 24

Allowance come in two forms

Answer 24

Trade-in Allowances
Promotional Allowances

Question 25

Refers to the price reductions given by a brand to the customers for returning an old item in lieu of purchasing the new one.

Answer 25

Trade-in Allowances

Question 26

These include the promotional money or price reductions given by a brand to its dealers as a reward for promoting its offerings.

Answer 26

Promotional Allowances

Question 27

Sometimes companies reduce product prices below the market price or even below cost for a temporary period of time. This strategy is followed in order to increase sales in the short run or to reduce inventories.

Answer 27

Promotional Pricing

Question 28

This pricing strategy refers to adjusting the list price of the products based on the location of the customer.

Answer 28

Geographical Pricing

Question 29

Geographical Pricing Include

Answer 29

FOB Pricing
Uniform Delivered Pricing
Zone Pricing
Basing- Point Pricing
Freight- Absorption Pricing

Question 30

The goods are placed free on board a carrier at a specific location under this pricing strategy.

Answer 30

FOB Pricing

Question 31

This pricing strategy is in contrast to FOB pricing. Thus, a company charges the same price plus freight for the products under this strategy.

Answer 31

Uniform Delivered Pricing

Question 32

This pricing strategy falls somewhere between FOB pricing and uniform delivered pricing strategies.

Answer 32

Zone Pricing

Question 33

The company chooses a particular city as a basing point as per this strategy. Additionally, the company charges freight costs to all customers from that city to the location of the customer.

Answer 33

Basing-Point Pricing

Question 34

The seller absorbs all or part of freight charges in order to get more business from a particular location under this strategy.
This strategy is used to penetrate a particular market and clinging to highly competitive markets.

Answer 34

Freight Absorption Pricing

Question 35

Earlier, a fixed price policy was followed by companies while setting the price for goods. However today, companies are resorting to dynamic pricing. Dynamic pricing involves adjusting the price of products continuously to meet the needs of individual customers.

Answer 35

Dynamic Pricing