Reference no: EM13736299

True or False

1) Pricing strategies tend to change and evolve as the average product passes through its life cycle.

2) For market skimming to be successful, the cost of producing a smaller quantity of goods should not be higher than the prices charged.

3) When The Candy Store sets a low initial price in order to get its "foot in the door" and to quickly attract a large number of buyers, the company is practicing market-skimming pricing.

4) Pricing is difficult because various products have related demand and costs, and producers face different degrees of competition.

5) In product line pricing, the price steps should account for differences in customer perceptions of the value of different features.

6) Thinking Cap Corp. prices its various cap designs at different price levels, ranging from $2.05 to $5.95. This is an example of optional product pricing.

7) In addition to its customary services, On the Spot, a house mover, also sells the boxes and padding that are used when moving household furniture. This is an example of customer-segmented pricing.

8) When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

9) Some industries commonly use two-part pricing, breaking the price down into a fixed fee and a fixed usage rate.

10) When using product bundle pricing, sellers combine several of their products and offer the bundle at an increased price for increased profit.

11) Consumers who have no past experience with a product are especially likely to judge it by its price.

12) A seasonal discount is a price reduction to buyers who buy merchandise while the products are in season.

13) Online flash sales are used to create buying urgency and make buyers feel lucky to have gotten in on the deal.

14) If used infrequently, price promotions create "deal-prone" customers who wait until brands go on sale before buying them.

15) Constantly reduced prices can erode a brand's value in the eyes of customers.

16) In segmented pricing, the difference in prices is based on differences in costs.

17) For segmented pricing to be an effective strategy, the prices should reflect real differences in customers' perceived value.

18) Sellers cannot influence or use consumers' reference prices when setting prices.

19) Customers located close to a firm are less likely to benefit from FOB-origin pricing than customers located further away.

20) The uniform-delivered pricing strategy means that the goods sold are placed free on board a carrier with the customer paying the freight from the factory to the destination.

21) Dynamic pricing is least prevalent online.

22) Excess capacity leads to companies initiating an increase in price.

23) Launching a fighter brand is an effective way to deal with a situation in which the market segment being lost is price sensitive and will not respond to arguments of higher quality.

24) Price discrimination is permissible if the seller manufactures different qualities of the same product for different retailers and can prove that the price difference is proportional.

25) The widespread use of scanner-based computer checkouts has eradicated complaints of retailers overcharging their customers.