Bus 312 Final Exam Updated Actual Questions And Correct Answers

BUS 312 FINAL EXAM UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS

Question:
1. 3 Major Pricing Strategies

Answer:
1. Cost Based
2. Customer Value
3. Competitor Based

Question:
2. Cost Based Pricing Strategy

Answer:
Based on costs for producing, distributing, and selling the product + fair rate of
return for effort & risk

Question:
3. Customer Value Pricing Strategy

Answer:
Uses buyers' perceptions of value rather than seller's cost

Question:
4. Competition Based Pricing Strategy

Answer:
Based on competitors' strategies, costs, prices, & market offerings

Question:
5. What is Price Floor? (Major consideration when setting a
price)

Answer:
- Lowest legal price a commodity can be sold at
- Used by the government to prevent prices from being too low

Question:
6. What is Price Ceiling? (Major consideration when setting
a price)

Answer:
- 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.

,Question:
7. Good Value Pricing (+ Examples)

Answer:
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

Question:
8. Value Added Pricing (+ Examples)

Answer:
Attaches value-added features & services to differentiate the companies offers &
higher prices
Example:
- Lululemon (Indulge customers at a premium price)

Question:
9. Break Even Pricing (What are fixed costs, variable costs)

Answer:
Set price to break even on costs or to make a target return (Target return pricing)

Question:
10. Trader Joe's Example (Good Value Pricing)

Answer:
"Cheap gourmet"
- Offering right combo of quality & good service at a fair price

Question:
11. Lululemon Company Case (Prestige pricing,
psychological pricing, added value pricing)

Answer:
- High price for high quality
- Paying for customer service, experience
- Never goes on sale to keep up brand image

, Question:
12. Market Skimming Pricing

Answer:
Set high initial price (but eventually lower it?)
- Quality & image must support price
- Buyers want to pay premium price (be first to have it)
Example:
- Apple iPhones

Question:
13. Market Penetration Pricing

Answer:
Set low price for new product in order to attract large # of buyers & large market
share
Example:
- Wavestorm Surfboard -> $99 @ Costco
- Samsung in African markets (emerging markets)

Question:
14. What are the 5 Product Mix Pricing Strategies?

Answer:
- Bundle pricing
- By product
- Optional
- Captive
- Line

Question:
15. Explain Bundle Pricing (Product Mix Pricing Strategy)

Answer:
Combines several products @ a reduced price (promote sales of products
consumers might not otherwise buy)
Example:
- Combo price for Burger, fires, drink
- TV, phone, internet service

Question:
16. Explain By Product (Product Mix Pricing Strategy)

Answer:
Help offset the costs of disposing of them & help make price of main product
more competitive (turning cash into trash)
Example:
- Dasani's "plant bottle"