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In setting prices, an astute marketer should ask a variety of questions from the perspective of a sales orientation.

Analysis of competitive, legal, and ethical factors will almost always result in setting an initial price that is somewhere within the range bounded by a product’s floor and ceiling prices.

The final price set for a product is often somewhat different than the initial price set for the product due to the firm’s pricing policies and discount terms.

Price plays the same role in every marketing mix.  It is the primary basis for attracting customers and achieving sales objectives.

Pricing objectives vary from firm to firm, with some companies primarily oriented toward meeting competitive prices and others primarily oriented toward meeting profitability objectives.  Other objectives include achieving volume goals and achieving a desired prestige/image for products.

Firms establish pricing policies in order to be consistent in their pricing decision-making.

Price structure is more important strategically than pricing policy, which takes the price structure as a given.

A skimming strategy is not used during most stages of a product’s life cycle.

Most firms take a penetration pricing approach in setting the prices for their new products.

Making a policy decision to price above or below competition on an ongoing basis is based on the profitability goals set for a firm by its shareholders.

With a price lining policy, products are sold at a limited number of prices.  It requires identifying market segments and then using different price levels to appeal to the different market segments.

Loblaws sometimes offers Tide detergent for sale below cost.  What they are hoping to do is to attract customers who, once they are in the store, will then buy other, regularly priced merchandise. Under these circumstances, Loblaws is using Tide as a loss leader.

Psychological pricing involves selling products at prices set just below the next rounded number.  For example, a car might be advertised at $20,999 rather than $21,000.  Prestige pricing involves setting relatively high prices in order to maintain an image of quality and exclusiveness.  For example, a Cadillac might be priced at $44,999, well above the price for most cars.  Prestige pricing is not a form of psychological pricing.

Kathy has decided that she will pay between $500 and $700 for a new sofa for her living room. This range represents her “price limits” and, within this range, her perception of product quality will vary directly with price.  Her perception of product quality will not vary for sofas priced outside this price range because she will consider sofas below this range too cheap, and sofas above this range too expensive.

Unit pricing is a means of helping consumers compare products that are available in different-size packages or containers.

Every industry has a standard procedure for quoting prices, no matter whether the industry’s primary customers are businesses or consumers.

Cash discounts are legal, provided they are offered to all customers on the same terms.

Trade discounts are legal, as long as all buyers in the same category, such as wholesalers and retailers, receive the same discount privilege.

Quantity discounts are justified on the basis that large-volume customers are more likely to be loyal to the seller for a longer period of time.

The alternative methods available for handling distribution costs (FOB plant, uniform delivered price, and zone pricing) are similar in that they all involve some type of expense sharing between the seller and the buyer of a product.

A marketing approach to pricing considers which of the following factors in addition to economic and cost analysis?

According to the marketing approach to pricing, _______________ sets the general parameters for pricing decisions and ______________ becomes the reference point against which pricing effectiveness is measured.

Establishing a price range that a product can be sold for involves determining a price ceiling based on _________________ and a price floor based on ____________.

A low price is not always the best price to set for a product.  Under which of the following circumstances is it appropriate to set a low price for a product?

A company pricing its products in order to attain a certain market share level has established which type of pricing objective?

The net result of meeting prices charged by major competitors is to

A firm has developed a robot that will do basic housekeeping chores.  The company expects to have the market to itself for a lengthy period of time due to its patents on several unique engineering features of the robot.  What kind of introductory price would you recommend?

One disadvantage of the skimming pricing policy for new products is that

A company introducing a product that has highly elastic demand and is likely to attract strong competitors should use a ___________ pricing policy.

The key decision, after a product has been introduced with penetration pricing, is when to move the price to its intended level.  This should happen when

Flexible pricing is a policy area that deals with whether the firm is going to have just one price or pursue a variable price approach in the market.  In Canada, a one-price policy is common in ______________ while flexible pricing is common in _______________.

If a marketer wants the retailers who carry his or her product to feature it for a short time at a lower-than-normal price, which of the following is a concern that he or she must be aware of with regard to making promotional price decisions?

The Sterling Company believes that its products possess certain superior qualities over competing products.  How can the Sterling Company gain greater consumer focus on these qualities?

Many buyers believe that the higher the price, the better the quality of the product.  This means

When a firm states the price of its products in terms of a standard unit of measure, such as seven cents per gram, it is using a pricing policy based on

Which term refers to the rate normally quoted to potential buyers?

The actual price that the consumer pays for a product is called the

Payments to channel members for performing marketing functions are called

If Maytag found itself in a period of slow sales, one useful approach it might use to improve sales would be to offer

Sellers of cement must include ______________ considerations when pricing their product.