GB 350 Exam 4 Ole Miss Cascio
profit oriented - CORRECT ANSWER-a. Profit maximization- Lululemon
b. Satisfactory profits - Old Navy
c. Return on investment (ROI)
20-30% general rule of thumb
sales oriented - CORRECT ANSWER-d. market share - UPS simple rate
e. sales maximization- wait until to buy vehicle at the end of year
status quo - CORRECT ANSWER-f. price matching - coastal contact lenses
e. maintain existing prices
elasticity of demand - CORRECT ANSWER-consumers' responsiveness or sensitivity to
changes in price
American Express - CORRECT ANSWER--price goes down
-revenue goes up
-demand is elastic
dynamic pricing - CORRECT ANSWER-adjusts prices in a real-time to balance changes
in demand, supply, and competitor pricing actions
-allows sellers to price in a competitive manner
-stimulate purchases when demand is low and supply is high
-maximize profits when demand is high and supply is low
-match or beat competitor prices
Ex: StubHub concert tickets, pricing assistant tools, adjust seller prices based on
competing prices
variable cost - CORRECT ANSWER-cost that varies with changes in the level of output
Ex: Cocoa prices, encourage farmers to pay workers fair wages
fixed cost - CORRECT ANSWER-cost that does not change as output is increased or
decreased
break-even prices - CORRECT ANSWER-price at which fixed and variable costs =
revenues
price skimming - CORRECT ANSWER-setting the highest price the market will bear in
the introductury stages of the market, with plans to lower prices throughout the product
life cycle
-objective: profit maximization
Ex: pharmaceutical companies
Ex: plant based meat, beyond meat, expensive
, penetration pricing - CORRECT ANSWER-setting a low price in the introductory stages
of the market, with plans to achieve a large customer base at low prices and/or increase
prices as product value increases during the growth stage of the product life cycle
-objective: market share
Ex: delta airlines, charging foods on plane
Ex: Allegiant, buy bundling packages
Ex: Dollar general, wal mart, cosco
price match pricing - CORRECT ANSWER-entering the market with plans to match
prices of competitors throughout the product life cycle; OR offering price matching at
different stages of the product life cycle
- 7 stores that price match & their policies
Ex: Macys, Khols, Target
Ex: car dealerships, Westerns slope auto, match all prices
Unfair trade practice acts - CORRECT ANSWER-*are determined at state level and not
federal
-place retail markups on products to protest smaller competitors
-over half the states have them
Ex: Chaneys pharmacy
price fixing - CORRECT ANSWER--agreement between 2 or more firms on price
charged for a product
-can be a "vertical" agreement between suppliers and retailers/distributors
-horizontal agreements happen too
Ex: Canadian Grocer Loblaw's admits to price fixing with bread producer
Ex: starkest executive describes price discussions with bumble bee, tuna
price - CORRECT ANSWER-that which is given up in an exchange to acquire a good or
service
two perspectives of pricing - CORRECT ANSWER--price = sacrifice
-price = information signal
price = sacrifice - CORRECT ANSWER--what are we willing to give up?
Ex: 2/3 of Americans with children under 18 report willingness to spend beyond their
means for holiday presents
price = information signal (sometimes) - CORRECT ANSWER--when local identity is
important, price = quality
-when global identity is important, price = quality
Ex: Amazon launches lower priced grocery service
Ex: Panera bread, local
Ex: Eyewear company, global
profit oriented - CORRECT ANSWER-a. Profit maximization- Lululemon
b. Satisfactory profits - Old Navy
c. Return on investment (ROI)
20-30% general rule of thumb
sales oriented - CORRECT ANSWER-d. market share - UPS simple rate
e. sales maximization- wait until to buy vehicle at the end of year
status quo - CORRECT ANSWER-f. price matching - coastal contact lenses
e. maintain existing prices
elasticity of demand - CORRECT ANSWER-consumers' responsiveness or sensitivity to
changes in price
American Express - CORRECT ANSWER--price goes down
-revenue goes up
-demand is elastic
dynamic pricing - CORRECT ANSWER-adjusts prices in a real-time to balance changes
in demand, supply, and competitor pricing actions
-allows sellers to price in a competitive manner
-stimulate purchases when demand is low and supply is high
-maximize profits when demand is high and supply is low
-match or beat competitor prices
Ex: StubHub concert tickets, pricing assistant tools, adjust seller prices based on
competing prices
variable cost - CORRECT ANSWER-cost that varies with changes in the level of output
Ex: Cocoa prices, encourage farmers to pay workers fair wages
fixed cost - CORRECT ANSWER-cost that does not change as output is increased or
decreased
break-even prices - CORRECT ANSWER-price at which fixed and variable costs =
revenues
price skimming - CORRECT ANSWER-setting the highest price the market will bear in
the introductury stages of the market, with plans to lower prices throughout the product
life cycle
-objective: profit maximization
Ex: pharmaceutical companies
Ex: plant based meat, beyond meat, expensive
, penetration pricing - CORRECT ANSWER-setting a low price in the introductory stages
of the market, with plans to achieve a large customer base at low prices and/or increase
prices as product value increases during the growth stage of the product life cycle
-objective: market share
Ex: delta airlines, charging foods on plane
Ex: Allegiant, buy bundling packages
Ex: Dollar general, wal mart, cosco
price match pricing - CORRECT ANSWER-entering the market with plans to match
prices of competitors throughout the product life cycle; OR offering price matching at
different stages of the product life cycle
- 7 stores that price match & their policies
Ex: Macys, Khols, Target
Ex: car dealerships, Westerns slope auto, match all prices
Unfair trade practice acts - CORRECT ANSWER-*are determined at state level and not
federal
-place retail markups on products to protest smaller competitors
-over half the states have them
Ex: Chaneys pharmacy
price fixing - CORRECT ANSWER--agreement between 2 or more firms on price
charged for a product
-can be a "vertical" agreement between suppliers and retailers/distributors
-horizontal agreements happen too
Ex: Canadian Grocer Loblaw's admits to price fixing with bread producer
Ex: starkest executive describes price discussions with bumble bee, tuna
price - CORRECT ANSWER-that which is given up in an exchange to acquire a good or
service
two perspectives of pricing - CORRECT ANSWER--price = sacrifice
-price = information signal
price = sacrifice - CORRECT ANSWER--what are we willing to give up?
Ex: 2/3 of Americans with children under 18 report willingness to spend beyond their
means for holiday presents
price = information signal (sometimes) - CORRECT ANSWER--when local identity is
important, price = quality
-when global identity is important, price = quality
Ex: Amazon launches lower priced grocery service
Ex: Panera bread, local
Ex: Eyewear company, global
