Question

________ value is the price customers would be willing to pay if they perfectly understood the benefits offered, while ________ value is what determines the price they are willing to pay.

Select one:

a. Objective; perceived

b. Perceived; objective

c. Objective; quantitative

d. Perceived; real

Once a company has invested time and money developing a unique new product, to recoup some of the high R&D costs, they will likely use a ________ pricing strategy.

Select one:

a. skimming

b. penetration

c. sliding-down-the-demand-curve

d. discount

________ is a short-term strategy that assumes that competition will eventually emerge.

Select one:

a. Life cycle pricing

b. Odd pricing

c. Price lining

d. Penetration pricing

A market penetration pricing strategy is designed to recover a company's development and promotional cost of a new product very quickly.

Select one:

a. True

b. False

Answer 1

1 A- Objective; perceived

The customers have objective in their mind. It is determined by the value offered by the company. The value is what the product can offer to the customers and the price the customers will pay for that. The perception is what the customers think about the product they should pay for.

2 A- Skimming

In skimming price strategy the product cost is very high. Generally the products are new, innovative hence the product cost is high. Apple products use this strategy.

3 A. Life cycle pricing

In this pricing strategy the product is launched at a very high price. The companies which are technologically advanced reduce the price of a product before the competitions can reduce the price. In this strategy the prices are lowered to tackle the competition and if competition is not then also products price is lowered to tackle the largest segment of market

4 False

In market penetration pricing strategy products are offered at lower pricing to tackle larger segment of the market. The given statement is describing skimming pricing strategy .