73) If a company wants quick acceptance and extensive distribution when introducing a new product into a highly competitive market with a large number of similar products, a market penetration pricing is the best strategy.
74) A market penetration pricing strategy is designed to recover a company’s development and promotional cost of a new product very quickly.
75) A skimming price strategy is used to introduce relatively low-priced goods into a market where no “elite” segment exists.
76) A skimming pricing strategy sets a relatively high price for a product to appeal to the segment of the market that is not sensitive to price.
77) Life cycle pricing is a short-term pricing strategy that assumes that competition will eventually emerge and the price will be lowered.
78) James decides to price his products in his small hardware store with “.95,” thinking that customers will perceive a price of $9.95 is much lower than a price of $10. This is an example of odd pricing.
79) A technique that greatly simplifies the pricing function by pricing different products in a product line at different price points, depending on their quality, features and cost, is referred to as odd pricing.
80) Price lining occurs when a small company raises the price of all of its goods by the same percentage to cover operating expenses.
81) It is much easier to lower a product’s price once it is on the market than to increase it after its introduction.
82) Leader pricing is a technique in which a small company marks down the price of a popular item below its normal price in an attempt to increase customer traffic and to boost sales of other items.
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