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COB300 Marketing Exam 2 Atav questions n answers
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COB300 Marketing Exam 2 Atav questions n answers
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COB300 Marketing Exam 2 Atavidentify 3 methods that firms use to set their prices - correct answer ✔✔cost-based, competition based,
value-based
cost-based - correct answer ✔✔markup pricing
competition based - correct answer ✔✔above or below
customary
value-based - correct answer ✔✔improvement value
cost of ownership
Everyday low pricing strategy - correct answer ✔✔promising consumers a low price without the need to
wait for sale price events or comparison shopping
example of everyday low pricing - correct answer ✔✔Walmart communicates that for any given group of
often purchased items, its prices will tend to be lower than those of any company in market
High/Low pricing strategy - correct answer ✔✔where a firm initially charges a high price for a product
and later, when it has become less desirable, sells it at a discount or through clearance sales. It is
appealing at first because it attracts 2 distinct market segments: non price sensitive (willing to pay the
high price), price sensitive customers (wait for the low-price sales price). Often communicate their
strategy through creative use of reference prices.
price skimming - correct answer ✔✔appeals to these segments of consumers who are willing to pay the
premium price to have the innovation first. (starts high)
(ex: iphones)
market penetration pricing - correct answer ✔✔set the initial price low for the introduction of the new
product/service. (as sales continue to grow, the costs continue to grow)
, tactics used to reduce prices to consumers (9) - correct answer ✔✔markdowns, quantity discounts,
seasonal discounts, coupons, rebates, leasing, price bundling, leader pricing, price lining
price tactics - correct answer ✔✔short term response to competitive threat or broadly accept method of
calculating a final price for the customer that is short term in nature
markdowns - correct answer ✔✔reductions retailers take on the initial selling price of the
product/service
seasonal discounts - correct answer ✔✔an additional reduction offered as an incentive to retailers to
order merchandise in advance of the normal buying season (ex: christmas decorations go on sale after
christmas)
coupons - correct answer ✔✔offer a discount on the price of specific items when they're purchased
rebates - correct answer ✔✔provide another form of discounts for consumers off the final selling price
leasing - correct answer ✔✔consumers pay a fee to purchase the right to use a product for a specific
amount of time then give it back (ex: cars, gowns/suits)
price bundling - correct answer ✔✔practice of selling more than one product for a single, lower price
(ex: T-mobile = free Netflix)
leader pricing - correct answer ✔✔attempts to build store traffic by aggressively pricing and advertising
a regularly purchased item, often priced at or just above the store's cost (ex: happy hour restaurants and
bars).
price lining - correct answer ✔✔establish a price floor or price ceiling for an entire line of similar
products and then set a few other price points in between to represent distinct difference in quality (ex:
purchasing middle quality items bc you dont want to look cheap and cant afford the higher priced item).
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