Chapter 8: Pricing Strategies through the Product Life Cycle

Question 1

When determining a pricing strategy, it is important to know _____.

Answer 1

1) what competitive products are selling for
2) how great the demand is for the product
3) how sensitive customers are to changes in price

Question 2

Which type of pricing calculates the cost of producing the product and adds a percentage (profit) to that price to render the selling price?

Answer 2

Cost-plus pricing

Question 3

Price discrimination

Answer 3

A different price is set for the same product in various segments of the market.

Question 4

Define Freemium:

Answer 4

A type of pricing that offers a product or service free of charge while charging a premium for advanced features, functionality, or related products and services.

Question 5

Define high-low pricing:

Answer 5

Displaying higher prices than those of competitors, but through promotional discounts, offering lower prices on most items?

Question 6

Define price elasticity:

Answer 6

The lower the price you offer, the more products you will sell; the higher the price, the fewer products you will sell.

Question 7

In every category, prices _____ over time.

Answer 7

Decrease