AACSB 3 LL 2 Learning Describe how to establish the approximate

Aacsb 3 ll 2 learning describe how to establish the

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AACSB: 3LL: 2Learning Objective: 14-01 Describe how to establish the "approximate price level" using demand-oriented; cost-oriented; profit-oriented; and competition-oriented approaches14-109
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Chapter 14 - Arriving at the Final Price32.(p. 347)When Hallmark cards introduced a line of $.99 cards (about half the price of the previously least expensive cards sold by Hallmark), the greeting card company was trying to appeal to a mass market that was price sensitive. Hallmark was using a __________ pricing strategy. A. prestigeB. skimmingC.penetrationD. demand-backwardE. experience-curvePenetration pricing is the setting of a low initial price on a new product (inexpensive greeting cards) to appeal immediately to the mass market.AACSB: 3LL: 3Learning Objective: 14-01 Describe how to establish the "approximate price level" using demand-oriented; cost-oriented; profit-oriented; and competition-oriented approaches33.(p. 347)The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product. Which of the following conditions would argue againstusing a penetration pricing strategy for the tasty fat-free ice cream? A. The ice cream market is highly conservative.B.A large portion of the market has inelastic demand for ice cream—over a fairly broad range of prices.C. Economies of scale in production would be substantial.D. Retailers are not willing to pay for new brands of premium ice cream in the already overcrowded category.E. Once the initial price is set, it is nearly impossible to lower price without alienating early buyers.Setting a low initial price on a new product to appeal immediately to the mass market is penetration pricing. Inelastic demand would result in small sales increases due to lower price, in which case a skimming strategy--not a penetration strategy, would be best.AACSB: 3LL: 3Learning Objective: 14-01 Describe how to establish the "approximate price level" using demand-oriented; cost-oriented; profit-oriented; and competition-oriented approaches14-110
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Chapter 14 - Arriving at the Final Price34.(p. 347)Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as A. skimming pricing.B. status pricing.C. price lining.D. value pricing.E.prestige pricing.Key term definition—prestige pricing.AACSB: 3LL: 1Learning Objective: 14-01 Describe how to establish the "approximate price level" using demand-oriented; cost-oriented; profit-oriented; and competition-oriented approaches35.(p. 347)A manufacturer using _________ is setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it. A. skimming pricingB. penetration pricingC. price liningD. odd-even pricingE.prestige pricingKey term definition—prestige pricing.AACSB: 3LL: 1Learning Objective: 14-01 Describe how to establish the "approximate price level" using demand-oriented; cost-oriented; profit-oriented; and competition-oriented approaches14-111
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Chapter 14 - Arriving at the Final Price36.
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