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Marketing > : PRICING STRATEGIES & PROGRAMS > Flashcards

: PRICING STRATEGIES & PROGRAMS Flashcards

1
Q

communicates the intended value positioning of a
product or brand to the market

A

Price

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2
Q

is the element of the marketing mix that produces
revenue; and the easiest to adjust.

A

Price

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3
Q

Among the 4Ps, this is the first to be adjusted

A

Price

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4
Q

The highest amount a retailer may charge to a
consumer for a medicine placed under price regulation

A

MAXIMUM DRUG RETAIL PRICE (MDRP) IN THE
PHILIPPINES

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5
Q

MDRRP: Prices of medicines were reduced at a median of __________%
from current retail prices. Reductions were up to as
much as ___________%

A

40; 93

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6
Q

MDRRP EO

A

Executive Order 821, s. 2009

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7
Q

T/f: On top of the MDRP, senior citizens and persons-with
disability (PWDs) are still eligible to avail of special
discounts

A

True

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8
Q

Violation/Penalty of RA 9502 or Cheaper Medicines Act

A

Php 50,000 to Php 5,000,000

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9
Q

drugs that are
included in the maximum retail price on 5 drug
molecules

A

Amlodipine, Atorvastatin, Zzithromycin,
Cytarabine, Doxorubicin.

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10
Q

EO 821 has been repealed by

A

EO 155 s.
2021

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11
Q

CRITERIA FOR DETERMINING MDRP

A
  1. Public health priorities
  2. High price differentials compared to international
    prices
  3. Limited competition or lack of generic counterparts
  4. Expensive and commonly prescribed drugs
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12
Q

PRICING CONCEPTS

A
  1. Reference Prices
  2. Price-Quality Inferences
  3. Price Endings
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13
Q

comparing an observed price to an internal reference
price they remember or an external frame of reference
such as a posted “regular retail price”.

A

REFERENCE PRICES

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14
Q

Types of Reference Prices

A

Fair
Typical
Upper-Bound
Lower-bound

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15
Q

price based on customer feelings

A

Fair

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16
Q

usual price of a product in the
market

A

Typical

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17
Q

maximum price that consumers
would pay; also called reservation
price

A

Upper bound

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18
Q

minimum price that consumers
would pay; also called lower
threshold price

A

Lower-Bound

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19
Q

is a pricing concept where price is used as an indicator
of a product’s quality

A

PRICE-QUALITY INFERENCES

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20
Q

is a pricing concept based on consumer psychology
where price is determined based on the numerical
structure of a product’s price.

A

PRICE ENDINGS

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21
Q

EXAMPLES OF PRICE ENDING PRICING:

A

Odd number pricing
9 endings
0 and 5 endings

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22
Q

LIMITATIONS OF PRICE ENDING PRICING

A

Only useful when consumer knowledge is poor
Not usually effective for items that are not bought
frequently
Not usually effective if product design changes
frequently

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23
Q

Steps in Setting a Product’s Price
1. Selecting the ___________
2. Determining ___________
3. Estimating ___________
4. Analyzing Competitors’ ___________
5. Selecting a ___________
6. Selecting the ___________

A
  1. Selecting the Pricing Objective
  2. Determining Demand
  3. Estimating Costs
  4. Analyzing Competitors’ Costs, Prices, and Offers
  5. Selecting a Pricing Method
  6. Selecting the Final Price
24
Q

The company first decides where it wants to position its
market offering

A

Selecting the pricing objective

25
Q

5 Pricing Objectives.

A

Survival
Maximum Current Profit
Maximum Market Share
Market Skimming
Product-Quality Leadership

26
Q

intense competition, changing
market wants, overcapacity (just
enough to cover fixed costs and
some variable costs)

A

Survival

27
Q

maximum profit based on demand
and cost estimation

A

Maximum
Current Profit

28
Q

setting a lower price to
capture/penetrate most of the
market (if market is price sensitive

A

Maximum
Market Share

29
Q

price starts very high and goes
down slowly over time (only if
product communicates premium
quality)

A

. Market
Skimming

30
Q

best-in-class quality products can
set the highest price (Ex. Innovator
drug brands often set the highest
price

A

Product-Quality Leadership

31
Q

Price and demand normally has an _________ relationship.

A

inverse

32
Q

pertains to the reaction of a market
to changes in price

A

Price Sensitivity

33
Q

Consumers tend to be less price sensitive
when:
1. The product has __________ competitors
2. They are __________ to change their buying habits
3. They think the price increase is __________
4. Price increase is too __________ to notice

A
  1. The product has no or few competitors
  2. They are slow to change their buying habits
  3. They think the price increase is justified
  4. Price increase is too small to notice
34
Q

sets the maximum (Ceiling price); price
above ceiling price

A

demand

35
Q

sets the minimum (Floor price); price below
floor price

A

Costs

36
Q

also called as overhead are costs
that remain constant in producing a product

A

Fixed costs

37
Q

are costs that change depending
on production output

A

Variable costs

38
Q

T/F: increasing the price of a
product should always be the last resort of any
business

A

True

39
Q

Ways on how to avoid price increase:

A

Decreasing the amount of product per usual price
Using cheaper raw and packaging materials
Removing product features
Removing existing variants of a brand
Offering cheaper, less premium products

40
Q

Also called Nophreal’s Marketing

A

Decreasing the amount of product per usual price

41
Q

4 General Methods in Pricing

A

○ Markup Pricing
○ Target-Return Pricing
○ Perceived Value Pricing
○ Value Pricing

42
Q

the amount added to the
cost it took to make the product and
is the source of a company’s profit.

A

markup

43
Q

the company
decides on the price that would give
back the target rate of return on
investmen

A

target-return pricing

44
Q

The company delivers its promised
features and values and the
customers perceive the value which
justifies the price

A

Perceived-Value Pricing

45
Q

Is a pricing approach where a
company optimizes its production
system so well that it can produce a
product so efficiently that it can offer
it at a very low price

A

Value Pricing

46
Q

Price Adaptation Strategies

A

■ Geographical Pricing
■ Price Discounts
■ Promotional Pricing
■ Differentiated Pricing

47
Q

a price reduction for
buyers who pay promptly

A

Discount

48
Q

a price
reduction for buyers who buy more

A

Quantity Discount

49
Q

also called
trade discount; offered to a buyer
(drugstore) that also performs a
specific function

A

Functional Discount

50
Q

a price
reduction given for products that
are outside peak season

A

Seasonal Discount

51
Q

offering a
well-known brand at a cheaper
price to stimulate customer traffic

A

Loss-leader pricing

52
Q

offering
special prices to “club” members.

A

Special customer pricing

53
Q

offering a
usually high- priced product at a
very low price (usually done for
near-expiry products that are still
within acceptable shelf life)

A

Psychological pricing

54
Q

occurs when
a company sells a product or
service at two or more prices that
do not reflect a proportional
difference in costs

A

Price discrimination

55
Q

offering the same product but at
different prices to different
customer segment

A

Customer-segment pricing

56
Q

offering
same product at different prices as
different forms

A

Product-form pricing

57
Q

offering the same
product at different price based on
location

A

Channel pricing

Marketing (3 decks)

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