Unformatted text preview: ce structure of the firm, so
assumptions about the company’s pricing objectives and other pricing policies will affect
responses. Additionally, assumptions about competitors’ practices and customs in the industry are
BUBBLE GUM. In this case, identical retail prices would be sought, so the bubble gum should be
delivered at the same price throughout the country. This would result in a pricing policy of
uniform delivered pricing or possibly freight absorption pricing if competition is extremely
ENGINES. Because engines are large and heavy, transportation costs are an important component
of pricing. In this case, FOB origin pricing could be used to put the burden of transportation on
the purchasers. This pricing policy could be assumed if there were few competitors in the jet
engine business. Otherwise, basing-point pricing would be the most appropriate pricing policy,
although this type of pricing is being used less frequently due to adverse court rulings.
SPICE. Zone pricing would be appropriate in this case. Because the spices are sold in bulk, it
should be assumed that transportation costs are not insignificant. Uniform delivered pricing is not
appropriate because there is no heavy competition. FOB origin pricing could be used as well
because other pricing aspects of the spice might outweigh the transportation costs.
KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB MSC: BLOOMS Synthesis 14. Marketing managers can use a wide variety of special pricing tactics beyond discounts and
allowances to fine-tune prices. Name and define five of the other pricing tactics that are legal. For
each tactic, give an example of a specific company, industry, or product that would use the tactic.
SINGLE-PRICE TACTIC means all goods and services are offered at the same price (or perhaps
two or three prices). Examples of retailers include One Price Clothing Stores, Dre$$ to the Nine$,
Your $10 Store, and Fashions $9.99.
FLEXIBLE PRICING OR VARIABLE PRICING means different customers pay different prices
for essentially the same merchandise purchased in equal quantities. Car dealers and many
appliance retailers commonly use this method.
PROFESSIONAL SERVICES PRICING is used by people with lengthy experience, training, and
often certification by a licensing board. This pricing refers to the charging of an hourly rate or a
fee based on some problem solution or performance. Lawyers, physicians, and family counselors
are some examples.
PRICE LINING is the practice of offering a product line with several items at specific price
points. Text examples include cell phone carriers and Apple’s iTunes.
LEADER PRICING is a method used to attract customers to a store by offering a product near or
even below cost in the hope that shoppers will buy other merchandise once they are in the store.
Supermarkets, social coupon sites, and health clubs use leader pricing. ODD–EVEN PRICING OR PSYCHOLOGICAL PRICING uses a price...
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- Fall '13
- Marketing, AACSB Reflective, CB&E Model Strategy, CB&E Model