Which of the following is a cost oriented approach to pricing a skimming

Which of the following is a cost oriented approach to

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Which of the following is a cost-oriented approach to pricing? a.skimming pricingb.prestige pricingc.loss-leader pricingd.experience curve pricinge.bundle pricingAnswer:d Page(s): 345, 347-349 LO: 1 AACSB: Analytic QD: Medium Rationale: Experience curve pricing is a cost-oriented approach to pricing. Loss-leader pricing is a competition-oriented approach to pricing. Skimming, prestige, and bundle pricing are demand- oriented approaches to pricing. See Figure 14-2 in the textbook. 14-119 COST-ORIENTED APPROACHES COMPREHENSION All of the following are cost-oriented approaches to select an approximate price level EXCEPT : a. cost-plus fixed-fee pricing. b. standard markup pricing. c. yield management. d. experience curve pricing. e. cost-plus percentage-of-cost pricing. Answer: c Page(s): 345, 347-349 LO: 1 AACSB: Analytic QD: Medium Rationale: Cost-oriented pricing approaches to select an approximate price level include standard markup, cost-plus, and experience curve pricing strategies. See Figure 14-2 in the textbook. 14-120 COST-ORIENTED APPROACHES COMPREHENSION With a __________ pricing strategy, a price setter stresses the __________ side of the pricing problem. a. demand-oriented; cost b. supply-oriented; target ROI c. competition-oriented; marketing channel d. cost-oriented; cost e. profit-oriented; revenue Answer: d Page(s): 347 LO: 1 AACSB: Analytic QD: Medium Rationale: With cost-oriented approaches, a price setter stresses the cost side of the pricing problem, not the demand side. Price is set by looking at production and marketing costs and then adding enough of a margin to cover direct expenses, overhead, and profit. 14-121 COST-ORIENTED APPROACHES COMPREHENSION With cost-oriented approaches, a price setter stresses the cost side of the pricing problem, not the __________ side. - 40 -
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LO: 1 AACSB: Analytic QD: Medium Rationale: With cost-oriented approaches, a price setter stresses the cost side of the pricing problem, not the demand side. Price is set by looking at production and marketing costs and then adding enough of a margin to cover direct expenses, overhead, and profit. 14-122 COST-ORIENTED APPROACHES COMPREHENSION With cost-oriented approaches to pricing, a price setter stresses the __________ side of the pricing problem, not the __________ side. a. cost; revenue b. cost; demand c. cost; profit d. cost; supply e. cost; service Answer: b Page(s): 347 LO: 1 AACSB: Analytic QD: Medium Rationale: With cost-oriented approaches to pricing, a price setter stresses the cost side of the pricing problem, not the demand side. Price is set by looking at the production and marketing costs and then adding enough to cover direct expenses, overhead, and profit. 14-123 COST-ORIENTED APPROACHES COMPREHENSION With a cost-oriented pricing strategy, a price setter stress the __________ side of the pricing problem and the price is set by looking at _________.
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