BUS 312 Final Exam with correct solutions 2024

3 Major Pricing Strategies correct answers 1. Cost Based 2. Customer Value 3. Competitor Based Cost Based Pricing Strategy correct answers Based on costs for producing, distributing, and selling the product + fair rate of return for effort & risk Customer Value Pricing Strategy correct answers Uses buyers' perceptions of value rather than seller's cost Competition Based Pricing Strategy correct answers Based on competitors' strategies, costs, prices, & market offerings What is Price Floor? (Major consideration when setting a price) correct answers - Lowest legal price a commodity can be sold at - Used by the government to prevent prices from being too low What is Price Ceiling? (Major consideration when setting a price) correct answers - Maximum prices set by the government for particular goods and services that they believe are being sold at too high of a price and thus consumers need some help purchasing them. Good Value Pricing (+ Examples) correct answers Offering right combo of quality & good service at a fair price - Everyday low pricing (constant everyday low price w/ few/no temp. price discounts) - High-low pricing (charge higher prices but frequent promos for temp. price discounts) Examples: - Everyday low pricing: Walmart - High-low pricing: Macy's Value Added Pricing (+ Examples) correct answers Attaches value-added features & services to differentiate the companies offers & higher prices Example: - Lululemon (Indulge customers at a premium price) Break Even Pricing (What are fixed costs, variable costs) correct answers Set price to break even on costs or to make a target return (Target return pricing)