week 14 & 15

Question 1

COST-BASED PRICING (5)

Answer 1

PRODUCT
COST
PRICE
VALUE
CUSTOMER

Question 2

Prices are set based largely on competitors’ prices rather than on company costs or demand.
Example: Coca-Cola & Pepsi war

Answer 2

COMPETITOR-BASED PRICING

Question 2

VALUE-BASED PRICING (5)

Answer 2

CUSTOMER
VALUE
PRICE
COST
PRODUCT

Question 3

usually change as a product passes through its life cycle. The introductory stage of the product life cycle is particularly challenging.

Answer 3

• PRICING STRATEGIES

Question 4

2 types of * PRICING STRATEGIES

Answer 4

MARKET-SKIMMING PRICING
MARKET-PENETRATION PRICING

Question 5

Involves setting a high price for a new product to skim maximum revenue from the segments willing to pay the high price.

; Fewer sales but more profitable sales. —Iphone15’S
price in the PH starts at 56,990.

Answer 5

*MARKET-SKIMMING PRICING

Question 6

A true standout in the penetration pricing approach is Netflix. The company has avoided significant price hikes while at the same time building steady growth of its customer base.

Answer 6

MARKET-PENETRATION PRICING

Question 7

; Setting a low price for a new product in order to attract a large number of buyers and large market share.

Answer 7

MARKET-PENETRATION PRICING

Question 8

Pricing is difficult because the variations of products have related demand and costs, and face different degrees of competition.

Answer 8

PRODUCT-MIX PRICING STRATEGIES

Question 9

PRODUCT-MIX PRICING STRATEGIES (5)

Answer 9

Product line pricing
Optional product pricing
Captive product pricing
By-product pricing
Product-bundle Pricing

Question 10

Involves setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors’ prices.

Answer 10

Product line pricing

Question 11

Involves the pricing of optional or accessory products along with a main product. (i.e. camera bag)

Answer 11

Optional product pricing

Question 12

Involves setting a price for products that must be used along with a main product. (i.e. film)

Answer 12

Captive product pricing

Question 13

Involves setting a price for by-products in order to make the main product’s price more competitive. (i.e. sawdust)

Answer 13

By-product pricing

Question 14

Involves combining several products and offering the bundle at a reduced price.

Answer 14

Product-bundle Pricing

Question 15

Companies usually adjust their basic prices to account for various customer differences and changing situations.

Answer 15

PRICE-ADJUSTMENT STRATEGIES:

Question 16

Is a straight reduction on price on purchases during stated period of time.

Answer 16

discount

Question 17

Is a price reduction given for turning in an old item when buying a new one.

Answer 17

allowance

Question 18

Companies of Ten adjust their prices to allow for differences in customers, products, and locations.

Answer 18

segmenting price

Question 19

It is a pricing approach that considers the psychology of prices and not simply the economics: the price is used to say something about the product.

Answer 19

PSYCHOLOGICAL PRICING

Question 20

It is temporarily pricing products below the list price, and sometimes even below cost, to increase short-term sales.

Answer 20

PROMOTIONAL PRICING

Question 21

Must be decided on how to price products to consumers located in different parts of the country.

• International pricing

Answer 21

GEOGRAPHICAL PRICING

Question 22

Reduce the product’s price to match the competitors price

Answer 22

RESPONDING TO PRICE CHANGE

Question 23

Maintain the company’s price but raise the perceived quality of its offer.

Answer 23

RESPONDING TO PRICE CHANGE

Question 24

Improve quality and increase price

Answer 24

RESPONDING TO PRICE CHANGE

Question 25

Launch a new low-price “fighting brand”

Answer 25

RESPONDING TO PRICE CHANGE