87 swatch surveyed the market and identified an

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87) Swatch surveyed the market and identified an unserved segment of watch buyers. Using these results, Swatch created a watch at a price consumers were willing to pay. The unorthodox order of this marketing mix decision is an example of ________. A) competition-based pricing B) cost-plus pricing C) target costing D) value pricing E) penetration pricing Answer: C Diff: 2
LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical Thinking 88) The average price Xerox charged when it introduced the first stand-alone fax machine was
$12,700. This premium price was a way for Xerox to recoup some of the research and development costs that went into production. Xerox used ________. A Diff: 2
LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical Thinking 89) Valeo Fashions has just introduced a new line of fashion dresses for teens. The line will initially enter the market at high prices in a ________ strategy. B
Diff: 2 LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical Thinking 90) When a beverage maker came out with a new drink and priced it at half price for a month to attract buyers, the company was using a(n) ________ strategy. D Diff: 2
LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical Thinking
91) Johnson Boats wants to introduce a new model of boat into mature markets in highly developed countries with the goal of quickly gaining mass-market share. As a consultant, you should recommend a ________ pricing strategy. A) skimming B) penetration C) price leadership D) cost-plus E) value Answer: B
Diff: 3 LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of Knowledge 92) Mach 5 razor blades must be used in the Mach 5 razor. Which type of pricing is most likely used for the razor blades? C Diff: 3
LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of Knowledge 93) Manufacturers of which of the following would be most likely to use freight absorption pricing? B
Diff: 3 LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of Knowledge 94) Cost-based pricing considers factors such as the nature of the target market, demand, competition, and the product life cycle.
Diff: 2 LO: 10.3: Understand key pricing strategies and tactics
95) The simplest pricing method is break-even pricing: adding a standard markup to the cost of the product.

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