GBS151 Chapter 12 REVIEW QUESTIONS 1-5 - Chapter 12 Pricing...

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Chapter 12: Pricing, Distributing, and Promoting Products REVIEW QUESTIONS 1-5 Page 323 1. How does breakeven analysis help manages measure the potential impact of prices? Breakeven analysis and cost-oriented pricing are used together to measure the potential impact on pricing objectives prior to deciding on final prices. Both tools allow managers to identify prices that allow companies to reach their objectives. 2. Discuss the goal of price skimming and penetration pricing: Price skimming allows the marketer to recoup development costs and/or earn high profits early since price is set high in the beginning. This strategy can be particularly effective for products with few substitutes or competitors. Penetration pricing is an attempt to create awareness and stimulate trial purchases by setting prices low. Once consumer loyalty is built, marketers may be able to raise prices without losing customers. 3. Identify the channels of distribution. In what key ways do they differ from one another?
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  • Spring '14
  • Marketing, producer, price skimming, potential impact, breakeven analysis help

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