CHAPTER 6 : PRICING STRATEGIES

What is customer value-based pricing?

• Setting prices based on production costs

• Setting prices based on customers' perception of value

• Setting prices lower than competitors

• Adding a fixed percentage to the total cost

Which of the following is an example of good-value pricing?

• A luxury brand charging high prices for premium services

• A company setting prices below competitors to attract more customers

• A fast-food restaurant offering value meals at affordable prices

• A retailer using cost-plus pricing

In cost-based pricing, what is a key factor in determining price?

• Customer perception

• Competitor pricing

• Cost of production plus a markup

• Market demand

What is the primary goal of break-even pricing?

• Maximizing profit

• Charging a higher price than competitors

• Determining the price at which total costs are covered

• Increasing perceived product value

Which formula represents markup pricing?

• Competitor price + 10%

• Selling price – Variable cost

• Fixed cost ÷ Number of units sold

• Total cost + (Total cost × Markup percentage)

What is the main characteristic of target profit pricing?

• Setting prices equal to competitors

• Pricing products to achieve a specific level of profit

• Pricing products lower than production cost

• Ignoring variable costs when determining price

What pricing strategy involves setting prices lower than competitors?

• Below-competition pricing

• Value-added pricing

• Parity pricing

• Above-competition pricing

Which pricing strategy is used when a company sets its price the same as competitors?

• Cost-plus pricing

• Break-even pricing

• Value-added pricing

• Parity pricing

Which of the following is a feature of value-added pricing?

• Keeping prices below the competition

• Reducing production costs to maximize profit

• Offering additional features to justify a higher price

• Setting prices at break-even levels

These are pricing strategies focus on competition rather than cost or customer perception except

• Cost-plus pricing

• Parity pricing

• Below-competition pricing

• Above-competition pricing