BA 220 MARKETING TEST 3
QUESTIONS WITH 100% CORRECT
ANSWERS { GRADED A+}
Cost-plus pricing - ✔✔setting prices based on the costs of producing, distributing,
and selling the product plus a fair rate of return for effort and risk.
Target costing - ✔✔pricing that starts with an ideal selling price, then targets
costs that will ensure that the price is met.
Market-skimming pricing (e.g. price skimming) - ✔✔setting a high price for a
new product to skim maximum revenues layer by layer from the segments willing
to pay the high price; the company makes fewer but more profitable sales.
Market-penetration pricing (e.g. market share pricing) - ✔✔setting a low price for
a new product in order to attract a large number of buyers and a large market share.
,Price elasticity - ✔✔a measure of the sensitivity of demand to changes in price.
This is not a new pricing strategy but an important concept considered in either of
the new product pricing strategies above.
Product line pricing - ✔✔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.
Captive-product pricing - ✔✔setting a price for products that must be used along
with a main product, such as blades for a razor and games for a video-game
console.
Product bundle pricing - ✔✔combining several products and offering the bundle
at a reduced price.
Optional-product pricing - ✔✔the pricing of optional or accessory products along
with a main product.
By-product pricing - ✔✔setting a price for by-products in order to make the main
product's price more competitive.
Psychological pricing - ✔✔pricing that considers the psychology of prices and not
simply the economics; the price is used to say something about the product.
, Dynamic pricing - ✔✔adjusting prices continually to meet the characteristics and
needs of individual customers and situations.
Price Fixing - ✔✔the maintaining of prices at a certain level by agreement
between competing sellers.
Deceptive Pricing - ✔✔Any pricing scheme that is likely to mislead consumers.
Predatory Pricing - ✔✔Pricing below product cost levels with the intent to drive
competitors from the market.
Many companies set 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. What pricing approach is this?
product line pricing
captive product pricing
by-product pricing
product form pricing - ✔✔product line pricing
QUESTIONS WITH 100% CORRECT
ANSWERS { GRADED A+}
Cost-plus pricing - ✔✔setting prices based on the costs of producing, distributing,
and selling the product plus a fair rate of return for effort and risk.
Target costing - ✔✔pricing that starts with an ideal selling price, then targets
costs that will ensure that the price is met.
Market-skimming pricing (e.g. price skimming) - ✔✔setting a high price for a
new product to skim maximum revenues layer by layer from the segments willing
to pay the high price; the company makes fewer but more profitable sales.
Market-penetration pricing (e.g. market share pricing) - ✔✔setting a low price for
a new product in order to attract a large number of buyers and a large market share.
,Price elasticity - ✔✔a measure of the sensitivity of demand to changes in price.
This is not a new pricing strategy but an important concept considered in either of
the new product pricing strategies above.
Product line pricing - ✔✔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.
Captive-product pricing - ✔✔setting a price for products that must be used along
with a main product, such as blades for a razor and games for a video-game
console.
Product bundle pricing - ✔✔combining several products and offering the bundle
at a reduced price.
Optional-product pricing - ✔✔the pricing of optional or accessory products along
with a main product.
By-product pricing - ✔✔setting a price for by-products in order to make the main
product's price more competitive.
Psychological pricing - ✔✔pricing that considers the psychology of prices and not
simply the economics; the price is used to say something about the product.
, Dynamic pricing - ✔✔adjusting prices continually to meet the characteristics and
needs of individual customers and situations.
Price Fixing - ✔✔the maintaining of prices at a certain level by agreement
between competing sellers.
Deceptive Pricing - ✔✔Any pricing scheme that is likely to mislead consumers.
Predatory Pricing - ✔✔Pricing below product cost levels with the intent to drive
competitors from the market.
Many companies set 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. What pricing approach is this?
product line pricing
captive product pricing
by-product pricing
product form pricing - ✔✔product line pricing
