Ch 14 Developing Pricing Strategies And Programs Manalang

TOP 10 Learning Questions for CHAPTER 14: DEVELOPING PRICING STRATEGIES AND PROGRAMS Antonieta Manalang September 23, 2010

1. The following are pricing mistakes except ,[object Object],[object Object],[object Object],[object Object],[object Object],1

Steps in Setting Price Select the price objective Determine demand Estimate costs Analyze competitor price mix Select pricing method Select final price 2 1

Steps in Setting Price Select the price objective (The clearer a firm’s objective, the easier it is to set price) Determine demand ( Setting of different prices by product item, market segment, distribution channels, and purchase occasion) Estimate costs (Companies must consider the product costs and utilize different pricing methods) Analyze competitor price mix (The company must take into account its competitors’ costs, prices, and possible price reactions) Select pricing method (The 3 considerations for pricing are the 3 C’s: Cost of Product, Customers and Competitors Select final price (Other factors to consider in pricing are: impact of marketing activities, company pricing policies, gain and risk sharing pricing, and the impact of price on other parties 3

1. The following are pricing mistakes except ,[object Object],[object Object],[object Object],[object Object],[object Object],4

2. ______ is a type of consumer pricing psychology wherein consumers tend to process prices in a “left-to-right” manner rather than by rounding, e.g. stereo amplifier priced at 299 instead $300 as a price in the $200 range rather than $300 range ,[object Object],[object Object],[object Object],[object Object],[object Object],5

Consumer Psychology and Pricing Reference Prices Price-quality inferences Price endings Price cues 6 1

Consumer pricing psychology  how consumers arrive at their perceptions of price, the marketers must think of: ,[object Object],[object Object],[object Object],[object Object],7

2. ______ is a type of consumer pricing psychology wherein consumers tend to process prices in a “left-to-right” manner rather than by rounding, e.g. stereo amplifier priced at 299 instead $300 as a price in the $200 range rather than $300 range ,[object Object],[object Object],[object Object],[object Object],[object Object],8

3. Which of the following statement is FALSE in considering a pricing objective? ,[object Object],[object Object],[object Object],[object Object],[object Object],9

Step 1: Selecting the Pricing Objective ,[object Object],[object Object],[object Object],[object Object],[object Object],10

5 Major Pricing Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],11

3. Which of the following statement is FALSE in considering a pricing objective? ,[object Object],[object Object],[object Object],[object Object],[object Object],12

4. A behavior wherein a consumer prefers to buy an Armani shirt at $275 over a GAP shirt which costs $14.90 is an example of: ,[object Object],[object Object],[object Object],[object Object],13

Consumer Psychology and Pricing Reference Prices Price-quality inferences Price endings Price cues 14 1

Consumer pricing psychology  how consumers arrive at their perceptions of price, the marketers must think of: ,[object Object],[object Object],[object Object],[object Object],15

4. A behavior wherein a consumer prefers to buy an Armani shirt at $275 over a GAP shirt which costs $14.90 is an example of: ,[object Object],[object Object],[object Object],[object Object],16

5. Which of the following statement is TRUE on factors to price sensitivity? ,[object Object],[object Object],[object Object],[object Object],[object Object],17

Step 2: Determining Demand Price Sensitivity Estimating Demand Curves Price Elasticity of Demand 18

Determining Demand- the demand curve shows the market’s probable purchase quantity at alternative prices. Price sensitivity- reactions of individuals who have different price sensitivities They are less price sensitive when: ,[object Object],[object Object],[object Object],[object Object],[object Object],19

5. Which of the following statement is TRUE on factors to price sensitivity? ,[object Object],[object Object],[object Object],[object Object],[object Object],20

6. A company’s way of increasing the price by maintaining its price but removes or prices separately one or more elements that were part of the former offer, such as free delivery or installation ,[object Object],[object Object],[object Object],[object Object],[object Object],21

Initiating Price Increases ,[object Object],[object Object],[object Object],[object Object],[object Object],23

6. A company’s way of increasing the price by maintaining its price but removes or prices separately one or more elements that were part of the former offer, such as free delivery or installation ,[object Object],[object Object],[object Object],[object Object],[object Object],24

7. The following are price-adaptation strategies except ,[object Object],[object Object],[object Object],[object Object],[object Object],25

Price-adaptation strategies are: ,[object Object],[object Object],[object Object],[object Object],27

7. The following are price-adaptation strategies except ,[object Object],[object Object],[object Object],[object Object],[object Object],28

8. Companies do the following approaches to avoid price increase shock among consumers except ,[object Object],[object Object],[object Object],[object Object],[object Object],29

Approaches companies do to avoid price increase shock among consumers are: ,[object Object],[object Object],[object Object],[object Object],[object Object],31

8. Companies do the following approaches to avoid price increase shock among consumers except ,[object Object],[object Object],[object Object],[object Object],[object Object],32

9. A pricing method wherein customers are charged of low price for a high-quality offering: ,[object Object],[object Object],[object Object],[object Object],[object Object],33

Step 5: Selecting a Pricing Method ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],34

Pricing Methods ,[object Object],[object Object],[object Object],[object Object],[object Object],35

9. A pricing method wherein customers are charged of low price for a high-quality offering: ,[object Object],[object Object],[object Object],[object Object],[object Object],36

10. Which of the following statement is FALSE on the impact of other marketing activities? ,[object Object],[object Object],[object Object],[object Object],[object Object],37

Selecting the final price: the 6 th step in price setting The final price must take into account the brand’s quality and advertising relative to the competition ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],39

10. Which of the following statement is FALSE on the impact of other marketing activities? ,[object Object],[object Object],[object Object],[object Object],[object Object],40

TOP 10 Learning Questions for ( CHAPTER 14: DEVELOPING PRICING STRATEGIES AND PROGRAMS) Antonieta Manalang September 23, 2010

Ch 14 Developing Pricing Strategies And Programs Manalang

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