Market Structures and Marketing Strategies Quiz

What is the narrowest sense definition of price?

The amount of money charged for a product or service

Why has price historically been the major factor affecting buyer choice?

Due to its direct impact on firm's bottom line profitability

What makes pricing a big headache for many marketing executives?

The difficulty in handling pricing well

Why do smart managers treat pricing as a key strategic tool?

Due to its direct impact on firm's profitability Signup and view all the answers

What is the most important aspect of price that determines a firm’s market share and profitability?

The amount of money charged for a product or service Signup and view all the answers

How can a small percentage improvement in price impact a firm’s profitability?

It can produce a large percentage increase in revenue Signup and view all the answers

What is the pricing challenge according to the text?

To find the price that captures the value created for customers Signup and view all the answers

What does cost-based pricing involve according to the text?

Setting prices based on the costs for producing, distributing, and selling products Signup and view all the answers

What is one of the two types of value-based pricing mentioned in the text?

Good-value pricing Signup and view all the answers

Which element of a company’s broader marketing strategy is price according to the text?

The only element that produces revenue Signup and view all the answers

What influences price-setting decisions within a company according to the text?

Company's marketing mix and overall marketing strategy Signup and view all the answers

What is the main focus of customer value–based pricing according to the text?

Using buyers’ perceptions of value as the basis for setting price Signup and view all the answers

What is the key difference between good-value pricing and value-added pricing?

Good-value pricing focuses on offering quality and good service at a fair price, while value-added pricing involves adding quality, services, and value-added features to differentiate offers. Signup and view all the answers

In what way does cost-based pricing influence a company's pricing strategy?

Cost-based pricing sets prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for the company’s effort and risk. Signup and view all the answers

How do companies differentiate their offers in value-added pricing?

By adding quality, services, and value-added features to their offers. Signup and view all the answers

What is the role of top management in setting prices in large companies?

Top management often approves the prices proposed by lower-level management or salespeople. Signup and view all the answers

How do customer perceptions of value affect the prices that they are willing to pay?

Customers are willing to pay higher prices if they perceive higher quality and more benefits. Signup and view all the answers

What is the primary focus of good-value pricing?

The primary focus is on offering quality and good service at a fair price. Signup and view all the answers

What role does price play in creating customer value and building customer relationships?

Price plays a key role in creating customer value and building customer relationships Signup and view all the answers

What sets the ceiling for the price of a product according to the text?

Customer value Signup and view all the answers

How does effective customer-oriented pricing involve setting the price?

Understanding how much value consumers place on the benefits they receive from the product Signup and view all the answers

What is the focus of cost-based pricing?

Designing a product and adding up the costs of making the product Signup and view all the answers

What is the starting point for setting the target price in value-based pricing?

Analyzing consumer needs and value perceptions Signup and view all the answers

What does 'good value' refer to according to the text?

Not the same as low price Signup and view all the answers

What is one common pricing objective that companies might have?

Building profitable customer relationships Signup and view all the answers

What should price decisions be coordinated with to form a consistent and effective marketing program?

Product design, distribution, and promotion decisions Signup and view all the answers

Who within the organization is responsible for setting price?

Management Signup and view all the answers

What external pricing considerations can impact pricing decisions?

Government actions Signup and view all the answers

What determines whether the company has set the right price?

Customer perception of value and price Signup and view all the answers

What concept helps the company understand consumer sensitivity to prices?

Demand curves Signup and view all the answers

What did the Great Recession cause consumers to rethink?

The price–value equation Signup and view all the answers

How have marketers responded to consumers' thriftier ways?

By increasing emphasis on value-for-the-money pricing strategies Signup and view all the answers

What do consumers not buy based on alone according to the text?

Prices alone Signup and view all the answers

What has a major impact on pricing decisions according to the text?

Environmental factors such as economy and government actions Signup and view all the answers

In a purely competitive market, what role do marketing research, product development, pricing, advertising, and sales promotion play?

They play no role in shaping the market and influencing customer behavior. Signup and view all the answers

How do sellers in monopolistic competition differentiate their offers to buyers?

By freely using branding, advertising, and personal selling to set their offers apart. Signup and view all the answers

What distinguishes the pricing strategies in an oligopolistic market from those in a purely competitive market?

In an oligopolistic market, sellers are less affected by competitors’ pricing strategies. Signup and view all the answers

What is the major competitive tool for sellers in an oligopolistic competition?

Price Signup and view all the answers

When does demand become elastic?

When demand changes greatly with a small change in price. Signup and view all the answers

How do economic factors such as inflation and interest rates affect pricing decisions?

They affect consumer perceptions of the product’s price and value. Signup and view all the answers

What pricing strategy involves initially setting high prices to 'skim' the maximum amount of revenue from various segments of the market?

Market-skimming pricing Signup and view all the answers

In the context of product life cycles, what pricing strategy involves setting a low initial price to penetrate the market deeply and win a large market share?

Market-penetrating pricing Signup and view all the answers

In the context of product mix pricing, what strategy does a company use when it adjusts product prices to account for variations in buyers and situations?

Adaptive pricing Signup and view all the answers

What type of pricing structure does a company design to cover all its products and adjust over time to account for different customers and situations?

Dynamic pricing Signup and view all the answers

Which external factor can impact a company's pricing decisions?

Technological advancements Signup and view all the answers

What is the main focus of good-value pricing as described in the text?

Balancing price and product quality Signup and view all the answers

What is the primary objective of market-penetrating pricing strategy?

Gaining a large market share Signup and view all the answers

What is the major focus of a company using market-skimming pricing strategy?

Maximizing short-term revenue Signup and view all the answers

"Pricing is a dynamic process" implies that:

"Pricing changes over time" Signup and view all the answers

"Companies adjust product prices to reflect changes in costs and demand" implies that:

"Prices are responsive to changes in costs and demand" Signup and view all the answers

What does 'initiating price changes and reacting to them' signify for a company?

The company should consider when to initiate price changes and when to respond to them Signup and view all the answers

What is the primary role of top management in setting prices in large companies as mentioned in the text?

Setting broad price guidelines and policies Signup and view all the answers

In product line pricing, what does the company decide on?

Price steps for the entire set of products Signup and view all the answers

Which pricing strategy involves the company selling a product at two or more prices to accommodate different customers, product forms, locations, or times?

Segmented pricing Signup and view all the answers

What approach involves a company adjusting prices continually to meet the characteristics and needs of individual customers and situations?

Dynamic and personalized pricing Signup and view all the answers

When a company faces a price change initiated by a competitor, what are the possible strategic reactions mentioned in the text?

Sit tight, improve quality and raise price Signup and view all the answers

What are the major public policy concerns in pricing mentioned in the text?

Deceptive pricing, price-fixing Signup and view all the answers

What type of products are described as waste or residual products produced when making the main product?

By-products Signup and view all the answers

What is the strategy where a company offers discounts or temporarily sells a product below list price as a special event?

Promotional pricing Signup and view all the answers

What is the primary concern when considering initiating a price change?

Buyer reactions to the price change Signup and view all the answers

What is one of the implications of initiating price cuts according to the text?

Influence on buyer reactions to the price change Signup and view all the answers

What does promotional pricing involve according to the text?

Selling a product below list price as a special event Signup and view all the answers

What is one of the key pieces of legislation that affect pricing decisions according to the text?

Predatory pricing laws Signup and view all the answers

What type of products are included with the main product and required for its use according to the text?

Captive products Signup and view all the answers

What is the term for products that are required for the use of the main product?

Captive products Signup and view all the answers

What pricing strategy involves the company selling a product at two or more prices to accommodate different customers, product forms, locations, or times?

Segmented pricing Signup and view all the answers

What does dynamic and personalized pricing involve?

Adjusting prices continually to meet the characteristics and needs of individual customers and situations Signup and view all the answers

What is the primary focus of market-skimming pricing strategy?

Setting high prices to skim maximum revenue from various market segments Signup and view all the answers

What are the major public policy issues in pricing mentioned in the text?

Price-fixing and predatory pricing Signup and view all the answers

In value-based pricing, what is the starting point for setting the target price?

Customer perceptions of value Signup and view all the answers

What factors should a company consider when responding to competitor’s price changes?

Understanding the competitor's intent and likely duration and impact of the change Signup and view all the answers

What type of pricing structure does a company design to cover all its products and adjust over time to account for different customers and situations?

Pricing structure changes Signup and view all the answers

What is the role of geographical pricing?

Deciding how to price to near or distant customers Signup and view all the answers

How do companies differentiate their offers in value-added pricing?

By adding features to the product to differentiate it from competitors' offerings Signup and view all the answers

What does promotional pricing involve?

Offering discounts or temporarily selling a product below list price as a special event Signup and view all the answers

What is a common misconception about initiating price changes and reacting to them?

It always leads to increased market share Signup and view all the answers

Psychological pricing aims to achieve which objective?

Better communicating a product’s intended position Signup and view all the answers

What strategy does a company use when it adjusts product prices to account for variations in buyers and situations?

Good-value pricing Signup and view all the answers

Discount and allowance pricing involves establishing which of the following?

Cash, quantity, functional, or seasonal discounts Signup and view all the answers

'Pricing is a dynamic process' implies that:

Prices change over time based on various factors Signup and view all the answers

International pricing involves adjusting prices to meet what?

Different world markets' conditions and expectations Signup and view all the answers

What makes pricing a big headache for many marketing executives?

The complexity of considering different customer segments and situations Signup and view all the answers

In promotional pricing, what does a company sometimes do as a special event?

Sell below cost as a loss leader. Signup and view all the answers

'Good value' refers to:

'Getting more for less' Signup and view all the answers

What strategy does the company use when it decides on price steps for the entire set of products it offers?

Product line pricing. Signup and view all the answers

'Companies adjust product prices to reflect changes in costs and demand' implies that:

'Value-based' approach influences pricing decisions Signup and view all the answers

When does demand become elastic?

When a change in price leads to a proportionally larger change in quantity demanded Signup and view all the answers

What are some of the functions fulfilled by some members of the distribution channel?

All of the above Signup and view all the answers

Why is leadership and power not formally set in a distribution channel composed of independent firms?

Because traditional distribution channels have lacked leadership for role assignment and conflict management Signup and view all the answers

What is the first step in channel design according to the text?

Assessing customer channel service needs Signup and view all the answers

What does channel management call for according to the text?

Selecting qualified intermediaries and motivating them Signup and view all the answers

What does marketing logistics address according to the text?

Inbound logistics and reverse logistics Signup and view all the answers

What sets the ceiling for the price of a product?

Economic factors like inflation and interest rates Signup and view all the answers

What is the primary concern when considering initiating a price change according to the text?

Effect on customer perceived value Signup and view all the answers

What is the primary objective of a market-penetrating pricing strategy according to the text?

Capturing a large market share quickly Signup and view all the answers

What is the strategy where a company offers discounts or temporarily sells a product below list price as a special event according to the text?

Promotional pricing strategy Signup and view all the answers

What type of pricing structure does a company design to cover all its products and adjust over time to account for different customers and situations according to the text?

Product mix pricing structure Signup and view all the answers

Which external factor can impact a company's pricing decisions according to the text?

Nature and intensity of competition in market Signup and view all the answers

Why is the goal of logistics management NOT to maximize customer service and minimize distribution costs?

It is impossible to achieve both goals simultaneously Signup and view all the answers

What does the integrated supply chain management concept recognize about achieving improved logistics?

It requires cross-functional teamwork within the company and across the supply chain Signup and view all the answers

How can companies achieve logistics harmony among functions, according to the text?

By creating integrative supply manager positions Signup and view all the answers

What is a form of channel partnership mentioned in the text?

Creating cross-company teams Signup and view all the answers

Why are some companies outsourcing their logistics functions to third-party providers?

To save costs and increase efficiency Signup and view all the answers

What is the primary focus of logistics management?

Providing a targeted level of service at the least cost Signup and view all the answers

How does the integrated supply chain management concept recognize the need for improved logistics?

By requiring close working relationships across functional areas inside the company and across various organizations in the supply chain Signup and view all the answers

What is an example of a strategic reaction mentioned in the text when a company faces a price change initiated by a competitor?

Undertaking a promotional pricing strategy Signup and view all the answers

What does a company need to create customer engagement and value?

A value delivery network Signup and view all the answers

What role do intermediaries play in bringing products to the market?

Forging marketing channels Signup and view all the answers

What is the primary reason for most producers to use intermediaries in the distribution process?

To achieve more than they can on their own Signup and view all the answers

What is the main focus of a company using a market-skimming pricing strategy?

Maximizing short-term profits from early adopters Signup and view all the answers

Why can't a company go it alone in creating customer engagement and value?

Because it must work within an entire network of partners—a value delivery network—to accomplish this task Signup and view all the answers

What is the significance of management carefully making channel decisions?

To incorporate today’s needs with tomorrow’s likely selling environment Signup and view all the answers

What do marketing channels directly affect?

Every other marketing decision Signup and view all the answers

What is the primary function of some help in the distribution channel?

Gathering and distributing information Signup and view all the answers

What does channel design begin with, according to the text?

Assessing customer channel service needs Signup and view all the answers

In a large company, what provides needed leadership and assigns roles?

Formal organization structure Signup and view all the answers

What is the starting point for setting the target price in value-based pricing?

Identifying major channel alternatives Signup and view all the answers

What does marketing logistics (or physical distribution) address according to the text?

The entire supply chain management Signup and view all the answers

What calls for selecting qualified intermediaries and motivating them?

Channel management Signup and view all the answers

What does the company need to forge with channel members to create a marketing system that meets the needs of both the manufacturer and the partners?

Strong partnerships Signup and view all the answers

What are three important trends affecting channel cooperation, conflict, and competition?

Vertical, horizontal, and multichannel marketing systems Signup and view all the answers

What does the entire supply chain management involve according to the text?

Addressing inbound logistics and reverse logistics as well Signup and view all the answers

What role does price play in creating customer value and building customer relationships as described in the text?

It can serve as an important part of creating value and building relationships. Signup and view all the answers

What is one of the implications of initiating price cuts according to the text?

It often results in a decrease in perceived quality. Signup and view all the answers

What is the primary reason for a company to use marketing channels?

To bring their products to market Signup and view all the answers

What is the role of intermediaries in a marketing channel?

To offer more than the firm can achieve on its own Signup and view all the answers

What does a value delivery network refer to?

The network of partners working to accomplish customer engagement and value creation Signup and view all the answers

Why do most producers use intermediaries to bring their products to market?

To benefit from intermediaries' contacts, experience, and scale of operation Signup and view all the answers

What is the purpose of a marketing channel or distribution channel?

To make a product or service available for use or consumption by the consumer or business user Signup and view all the answers

What is the main focus of logistics management as mentioned in the text?

Maximizing customer service and minimizing distribution costs Signup and view all the answers

How do marketing channels impact other marketing decisions?

They directly affect every other marketing decision Signup and view all the answers

In what way do some companies gain a competitive advantage in distribution?

By using imaginative distribution systems Signup and view all the answers

What is meant by 'a company can’t go it alone' in the context of creating customer engagement and value?

'Going it alone' means that companies need to work within a network of partners to achieve customer engagement and value creation Signup and view all the answers

What are some key functions performed by marketing channels as mentioned in the text?

Perform many key functions related to making a product or service available for use or consumption by consumers or business users Signup and view all the answers

Why do companies need to make channel decisions carefully?

To incorporate today’s needs with tomorrow’s likely selling environment Signup and view all the answers

What is the primary focus of integrated supply chain management concept?

Recognizing the need for improved logistics Signup and view all the answers

How can companies achieve logistics harmony among functions, as mentioned in the text?

By creating cross-functional logistics teams Signup and view all the answers

What is the significance of channel partnerships according to the text?

Creating cross-company teams Signup and view all the answers

In the context of logistics management, what is the primary role of senior-level logistics executive positions with cross-functional authority?

Achieving logistics harmony among functions Signup and view all the answers

What is the primary objective of companies outsourcing their logistics functions to third-party logistics (3PL) providers?

Gaining faster and more effective access to global markets Signup and view all the answers

Why is the goal of logistics management NOT to maximize customer service and minimize distribution costs?

To provide a targeted level of service at the least cost Signup and view all the answers

What role do channel partnerships play in achieving improved logistics?

Creating close working relationships across functional areas inside the company and across various organizations in the supply chain Signup and view all the answers

What is one implication of the integrated supply chain management concept's recognition of the need for improved logistics?

Increased teamwork across functional areas inside the company Signup and view all the answers

What is the primary goal of creating cross-functional logistics teams, according to the text?

Achieving logistics harmony among functions Signup and view all the answers

Why do some companies choose to outsource their logistics functions to third-party logistics (3PL) providers?

Saving costs and increasing efficiency Signup and view all the answers

What is the definition of advertising as mentioned in the text?

Non-personal presentation and promotion of ideas, goods, or services by an identified sponsor Signup and view all the answers

Which tool focuses on providing short-term incentives to encourage the purchase or sale of a product or service?

Sales Promotion Signup and view all the answers

What is the primary focus of personal selling as mentioned in the text?

Personal presentation by the firm’s sales force for making sales and building customer relationships Signup and view all the answers

Which element is included in a company's total promotion mix according to the text?

Direct and Digital Marketing Signup and view all the answers

What is the primary concept that companies have adopted to prevent creating a communications hodgepodge for consumers?

Integrated marketing communications (IMC) Signup and view all the answers

What is the first task of the communicator when preparing marketing communications?

Identifying the target audience Signup and view all the answers

What approach is NOT commonly used by companies to determine how much to spend for promotion?

Base promotion on competitors' spending Signup and view all the answers

What is the strategy that involves both push and pull promotional strategies?

Integrated promotion strategy Signup and view all the answers

What must companies be aware of in relation to legal and ethical issues surrounding marketing communications?

Communicating openly, honestly, and agreeably with customers and resellers Signup and view all the answers

What is the starting point for setting the target price in value-based pricing?

Identifying the target audience Signup and view all the answers

What is a common misconception about initiating price changes and reacting to them?

Price changes always result in increased demand Signup and view all the answers

'Companies adjust product prices to reflect changes in costs and demand' implies that:

'Pricing decisions are independent of changes in costs or demand' Signup and view all the answers

'International pricing' involves adjusting prices to meet what?

'To meet varying economic conditions' Signup and view all the answers

'Pricing is a dynamic process' implies that:

'Prices change over time based on different factors' Signup and view all the answers

What is the primary objective of market-penetrating pricing strategy?

Gaining market share by offering lower prices than competitors Signup and view all the answers

What is one of the key functions performed by marketing channels as mentioned in the text?

Facilitating the exchange process by reducing the number of transactions Signup and view all the answers

What is the purpose of integrated marketing communications (IMC) as mentioned in the text?

To engage current and prospective consumers and communicate customer value Signup and view all the answers

Which of the following is NOT part of a company’s total promotion mix or marketing communications mix according to the text?

Strategic planning Signup and view all the answers

What is the focus of public relations in a company’s marketing communications mix?

Building good relations with the company’s various publics Signup and view all the answers

What is the primary purpose of using sales promotion in a company’s promotion mix?

To provide short-term incentives to encourage the purchase or sale of a product or service Signup and view all the answers

What is the purpose of integrated marketing communications (IMC) as mentioned in the text?

To coordinate the promotional activities and timing of major campaigns Signup and view all the answers

What is the first task of a communicator when preparing marketing communications?

Identifying the target audience and its characteristics Signup and view all the answers

Which method is commonly used to determine the promotion budget according to the text?

Use a percentage of sales Signup and view all the answers

What are the elements involved in the communication process as mentioned in the text?

Sender, receiver, encoding, decoding, response, and feedback Signup and view all the answers

In marketing communications, what do marketers aim to guide customers through according to the text?

The five As of the customer journey: awareness, appeal, ask, act, and advocacy Signup and view all the answers

What is the primary role of top management in setting prices according to the text?

To set prices based on competitors’ pricing Signup and view all the answers

What is the main focus of logistics management as described in the text?

To maximize customer service and minimize distribution costs Signup and view all the answers

Why do companies adopt integrated marketing communications (IMC) according to the text?

To prevent a communication hodgepodge for consumers Signup and view all the answers

What are some of the elements involved in preparing effective marketing communications according to the text?

Identifying the target audience and its characteristics Signup and view all the answers

Which strategy does cost-based pricing involve according to the text?

Establishing prices based on production and other costs plus a standard markup for profit Signup and view all the answers

What is an important consideration when determining how much to spend for promotion according to the text?

Using a percentage of sales as a method to determine promotion budget Signup and view all the answers

Market Structures and Marketing Strategies Quiz

Questions and Answers

What is the narrowest sense definition of price?

Why has price historically been the major factor affecting buyer choice?

What makes pricing a big headache for many marketing executives?

Why do smart managers treat pricing as a key strategic tool?

What is the most important aspect of price that determines a firm’s market share and profitability?

How can a small percentage improvement in price impact a firm’s profitability?

What is the pricing challenge according to the text?

What does cost-based pricing involve according to the text?

What is one of the two types of value-based pricing mentioned in the text?

Which element of a company’s broader marketing strategy is price according to the text?

What influences price-setting decisions within a company according to the text?

What is the main focus of customer value–based pricing according to the text?

What is the key difference between good-value pricing and value-added pricing?

In what way does cost-based pricing influence a company's pricing strategy?

How do companies differentiate their offers in value-added pricing?

What is the role of top management in setting prices in large companies?

How do customer perceptions of value affect the prices that they are willing to pay?

What is the primary focus of good-value pricing?

What role does price play in creating customer value and building customer relationships?

What sets the ceiling for the price of a product according to the text?

How does effective customer-oriented pricing involve setting the price?

What is the focus of cost-based pricing?

What is the starting point for setting the target price in value-based pricing?

What does 'good value' refer to according to the text?

What is one common pricing objective that companies might have?

What should price decisions be coordinated with to form a consistent and effective marketing program?

Who within the organization is responsible for setting price?

What external pricing considerations can impact pricing decisions?

What determines whether the company has set the right price?

What concept helps the company understand consumer sensitivity to prices?

What did the Great Recession cause consumers to rethink?

How have marketers responded to consumers' thriftier ways?

What do consumers not buy based on alone according to the text?

What has a major impact on pricing decisions according to the text?

In a purely competitive market, what role do marketing research, product development, pricing, advertising, and sales promotion play?

How do sellers in monopolistic competition differentiate their offers to buyers?

What distinguishes the pricing strategies in an oligopolistic market from those in a purely competitive market?

What is the major competitive tool for sellers in an oligopolistic competition?

When does demand become elastic?

How do economic factors such as inflation and interest rates affect pricing decisions?

What pricing strategy involves initially setting high prices to 'skim' the maximum amount of revenue from various segments of the market?

In the context of product life cycles, what pricing strategy involves setting a low initial price to penetrate the market deeply and win a large market share?

In the context of product mix pricing, what strategy does a company use when it adjusts product prices to account for variations in buyers and situations?

What type of pricing structure does a company design to cover all its products and adjust over time to account for different customers and situations?

Which external factor can impact a company's pricing decisions?

What is the main focus of good-value pricing as described in the text?

What is the primary objective of market-penetrating pricing strategy?

What is the major focus of a company using market-skimming pricing strategy?

"Pricing is a dynamic process" implies that:

"Companies adjust product prices to reflect changes in costs and demand" implies that:

What does 'initiating price changes and reacting to them' signify for a company?

What is the primary role of top management in setting prices in large companies as mentioned in the text?

In product line pricing, what does the company decide on?

Which pricing strategy involves the company selling a product at two or more prices to accommodate different customers, product forms, locations, or times?

What approach involves a company adjusting prices continually to meet the characteristics and needs of individual customers and situations?

When a company faces a price change initiated by a competitor, what are the possible strategic reactions mentioned in the text?

What are the major public policy concerns in pricing mentioned in the text?

What type of products are described as waste or residual products produced when making the main product?

What is the strategy where a company offers discounts or temporarily sells a product below list price as a special event?

What is the primary concern when considering initiating a price change?

What is one of the implications of initiating price cuts according to the text?

What does promotional pricing involve according to the text?

What is one of the key pieces of legislation that affect pricing decisions according to the text?

What type of products are included with the main product and required for its use according to the text?

What is the term for products that are required for the use of the main product?

What pricing strategy involves the company selling a product at two or more prices to accommodate different customers, product forms, locations, or times?

What does dynamic and personalized pricing involve?

What is the primary focus of market-skimming pricing strategy?

What are the major public policy issues in pricing mentioned in the text?

In value-based pricing, what is the starting point for setting the target price?

What factors should a company consider when responding to competitor’s price changes?

What type of pricing structure does a company design to cover all its products and adjust over time to account for different customers and situations?

What is the role of geographical pricing?

How do companies differentiate their offers in value-added pricing?

What does promotional pricing involve?

What is a common misconception about initiating price changes and reacting to them?

Psychological pricing aims to achieve which objective?

What strategy does a company use when it adjusts product prices to account for variations in buyers and situations?