Unformatted text preview: is the practice of offering a product line with several items at specific price points.
KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application 115. Refer to Art Supplies. Michaels was trying to get consumers into the store with the Funky Girls
Gel Pens promotion in hope that they will purchase other, higher-margin items. This is an
Leader pricing is an attempt by the marketing manager to attract customers by selling a product
near or even below cost in the hope that shoppers will buy other items once they are in the store.
KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application 116. Refer to Art Supplies. What pricing practice was used with the scrapbook starter kit?
Price bundling is marketing two or more products in a single package for a special price.
KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application E-Books
With the explosive growth of electronic book, or e-book, readers like Amazon’s Kindle and
Barnes & Noble’s Nook and even Smartphones like the iPhone and BlackBerry devices, book
pricing is becoming a significant concern for publishers. Digital book sales have grown
exponentially from almost nonexistent in 2002 to more than $120 million in 2009. While these
sales are still small compared to industry sales, they are expected to grow even more in the
coming years due to the plethora of e-book readers coming on the market. This creates a dilemma
for publishers, though, because the average price of a hardcover book, which is the bread-andbutter of publishers’ profits, is $27.00, whereas the price of an e-book is $9.99. To protect profits,
some publishers, like Simon & Schuster, are delaying the electronic editions by four months.
Other publishers are following suit, claiming consumers will not buy the hardcover at $27.00 if they can purchase it at a much lower price electronically.
117. Refer to E-Books. Prices for new releases average $27.00. Publishers price books this high to
maximize profits. This an example of which pricing strategy?
Price skimming is a pricing policy whereby a firm charges a high introductory price, often
coupled with heavy promotion.
KEY: CB&E Model Pricing OBJ: 20-1 TOP: AACSB Reflective MSC: BLOOMS Application 118. Refer to E-Books. If the $27.00 price of a new release came about because two or more
publishers agreed on the same price they charge book resellers for the books, they would be
participating in which type of illegal pricing activity?
Unfair trade practices
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- Fall '13