Pricing Strategy Reviewer PDF

Pricing Strategy Reviewer 1. Value-Based Pricing - The perceived value to the customer 2. Formula for Breakeven Volume - Fixed Costs / (Selling Price per unit - Variable Cost per unit) or FC / (SP-VC) 3. Primary goal of value creation - To deliver significant benefits that customers are willin...

Pricing Strategy Reviewer 1. Value-Based Pricing - The perceived value to the customer 2. Formula for Breakeven Volume - Fixed Costs / (Selling Price per unit - Variable Cost per unit) or FC / (SP-VC) 3. Primary goal of value creation - To deliver significant benefits that customers are willing to pay for 4. Penetration Pricing - Setting a low price to quickly gain market share 5. Primary goal of a pricing strategy - To improve profit margins 6. Price Skimming - commonly used for premium or exclusive products 7. Why is setting a price that is too high problematic? - It can make customers lose trust in the product’s value 8. Factor can increase the exchange value of a product - High competition 9. pricing strategy that sets low prices to penetrate the market - Penetration Pricing 10. Dynamic pricing - Changing prices in real-time based on demand 11. Competitive advantage in pricing is often achieved by - Offering the lowest price on the market 12. Markup Strategy - Adding a specific markup to the product’s cost 13. How can companies enhance the use value of their products? - By improving product features and functionality 14. What does a pricing structure help define? - The setup of core price points, discounts, offers, and strategy 15. Which of the following best describes the difference between pricing structure and pricing strategy? - Pricing structure focuses on customers, while pricing strategy focuses on market competitiveness 16. What is a key reason why pricing structures are important? - They ensure the right customers are aware of a product's value 17. Pricing strategy that sets prices based on what similar competitors are changing - Competitive Pricing 18. During an economic downturn, a company may adjust prices by: - Introducing cheaper meal options like value menus 19. Single Price Strategy - Charging all customers the same price regardless of product variations 20. What are Price Fences? - Rules customers must meet to qualify for specific prices 21. Cost-Based Pricing - Setting prices based on production costs plus a markup for profit 22. Which of the following is an example of a Non-Physical Price Fence? - Offering discounts based on customer demographics 23. Targeting early adopters with a high initial price - Price Skimming 24. NOT considered a "Value Driver" - Time Sensitivity 25. Relative Cost of Search - The effort, time, and resources customers invest in finding alternatives 26. Which of the following is NOT a primary type of benefit customers seek? - Operational Benefits 27. First Step in the Customer buying Process - Problem Recognition 28. What can happen if the price of a product is set too low? - Customers might perceive it as low-quality 29. Which of the following is NOT a mechanism of a Segmented Price Structure? - Price Elasticity 30. What is the "Fairness Effect"? - Customers' perception of whether a price is justified 31. Use value refers to: - The practical benefits or utility that a customer gains from using a product 32. Shared-Cost Effect - The cost is divided between the buyer and a third-party 33. Market-Based Pricing Policy primarily considers: - Competitor pricing 34. What does "Value Communication" refer to? - Conveying the benefits of a product or service clearly to customers 35. Dynamic Pricing Policy is commonly used in which industries? - Airlines, hotels, and online retailing 36. Which of the following is a strategy for conveying value? - Highlighting features over benefits 37. In response to a price increase, how can a company mitigate customer dissatisfaction? - Providing clear communication and justification 38. Loss Leader Pricing refers to: - Offering products at a loss to attract customers to buy other full-price items 39. Psychological Pricing - Set prices just below whole numbers to create an emotional impact 40. What is a Cumulative Quantity Discount? - A discount based on the total quantity purchased over a period of time 41. What is the key factor when estimating consumer response to price changes? - Historical data or market research 42. What is a "price window"? - The range between the lowest acceptable price and the highest price a customer is willing to pay 43. Which of the following is NOT a pricing objective? - Defining price volume trade-off 44. Exchange value refers to: - What a customer is willing to pay for a product in the market 45. Which strategy involves pricing a product in line with competitors and competing on other factors like service or product quality? - Which strategy involves pricing a product in line with competitors and competing on other factors like service or product quality? 46. Which pricing strategy involves changing prices in real-time based on demand and competition? - Dynamic pricing 47. What does breakeven analysis determine? - The number of units that must be sold to cover costs