Seth Reicks Education 233 Unit Plan Section 1

Course: Principles of Marketing Unit Topic: Pricing Strategies Sequence Number: Unit 4 of 7 (1. Defining Marketing; 2. The Marketplace and Consumers; 3. Product Strategies; 4. Pricing Strategies; 5. Channel Strategies; 6. Advertising Strategies; 7. Selling Strategies) Reference: I designed this unit using the following textbook as a guide: Kotler, Philip and Gary Armstrong. Principles of Marketing. 14th. Upper Saddle River: Pearson Education, Inc., 2012.

Standards: NBEA Standards Marketing: Analyze the characteristics, motivations, and behaviors of consumers Analyze the elements of the marketing mix, their interrelationships, and how they are used in the marketing process Iowa Core Standards 21st Century Skills Employability Skills: Communicate and work productively with others, incorporating different perspectives and cross cultural understanding, to increase innovation and the quality of work

Unit Objectives: Students will Identify the importance of pricing in todays environment Explain the major pricing strategies Connect pricing with production costs and market demand Describe the major strategies for pricing new products Detail how companies find a set of prices that maximizes profits Determine how companies adjust their prices to take into account different types of customers and situations Discuss the key issues related to initiating and responding to price changes Link social and legal issues of marketing with pricing decisions Discover sales and promotional campaigns that they see around them Work in teams to create a product pricing strategy

Unit Goals: Students will

 Recognize the impact that pricing decisions have on products in terms of consumers perceptions Understand the pricing limitations as it relates to production costs and competition Become savvier consumers who can better maximize their dollars Be able to make pricing recommendations in the workplace

Lesson Rationale: Most American families are still feeling the economic effects of the 2008s Great Recession. Along with the hit that household incomes have taken, Americans are also dealing with the rising prices of commodities that are necessary for survivalsuch as food and energy. Many people also have a desire to own any number of the plethora of technology goods that are being constantly churned out. These factors make it necessary for students to understand concepts related to pricing, so that they can become more informed and savvy consumers. This unit is also of importance because as the U.S. economy sifts from being manufacturing to more servicebased, it is likely that many of the students will work in a marketing or sales career. The lessons in this unit are designed to help students gain a better understanding of pricing concepts and how to apply them as product managers; enabling students to succeed in the workplace and create a better life for themselves.

Seth Reicks Education 233 Unit Plan Section 2

Outline of Lessons by Topics: 1. Defining Price & Major Pricing Strategies a. Objectives b. Pre-assessment fun intro discussion to hook students; discuss what students perceive prices to mean and when are they willing to purchase higher and lower priced goods c. Definition of price and explanation of its importance d. Major pricing strategies e. Jigsaw activity Student-centered activity for students to dig deeper on pricing strategies and evaluate the pros and cons of each one; fill in graphic organizer; regroup and large class discussion for formative assessment f. Assignment read Amazon vs. Walmart case study i. Differentiated instruction students can write an entry ticket or be prepared to share aloud pending on if they are more comfortable writing or speaking 2. Production Costs a. Objectives b. Discussion on Amazon vs. Walmart case study c. Market demand d. Price elasticity i. Questioning activity What products are students price sensitive to? Helps students better understand the content by relating it to their prior knowledge; formative assessment for understanding e. Fixed and variable costs i. Questioning activity What costs are fixed and variable for a cookie manufacturer? Opportunity for me to formatively assess for understanding ii. Individual activity - Student-centered activity for students to help construction their own meaning of fixed and variable costs by applying them to a convenience store product they like; fill in graphic organizer; share aloud to help others better understand the concept and for me to formatively assess for understanding 3. New-Product Pricing Strategies & Product Mix Pricing Strategies a. Objectives b. New-product pricing strategies i. Questioning on skimming vs. penetrating to formatively assess

c. Product mix pricing strategies d. Group activity student-centered learning to help them construct better meaning of product mix pricing strategies by applying the strategies to products that they are familiar with; fill in graphic organizer and read aloud for me to formatively assess understanding 4. Price-Adjustment Strategies & Price Changes a. Objectives b. Price adjustment strategies i. Geographical pricing c. Trader Joes case study i. Discussion d. This is a short lesson so students will be given time to search for a sales promotion they will need in a future lesson 5. Public Policy a. Objectives b. Public policy issues with pricing c. Group activity student-centered learning activity for students to research historical pricing and monopoly scandals to understand the importance of the topic as it applies to them as informed citizens; fill in double-entry journal with their reactions and present findings to class 6. Sales Promotion a. Objectives b. Sales promotion c. Group activity student-centered learning where students select a local business and create a sales promotion; helps students better understand sales promotion by relating the content to their prior knowledge of a business in the area; opportunity to formatively assess d. Discussion on the sales promotion ad they chose; continuing to build on their understanding of sales promotions they see in the world around them 7. Project work day assist groups and formatively assess understanding 8. Project work day assist groups and formatively assess understanding 9. Present projects 10. Unit test summative assessment

Seth Reicks Education 233 Unit Plan Section 3

Materials Needed

Lesson 1: PowerPoint, textbooks to read further into major pricing strategies for the jigsaw activity, graphic organizer for jigsaw activity, textbook for homework assignment of reading Amazon vs. Walmart

Lesson 2: PowerPoint, textbook to discuss Amazon vs. Walmart case study, computers to research items in the selected convenience store product in the fixed vs. variable costs activity, graphic organizer for fixed vs. variable cost activity

Lesson 3: PowerPoint, computers to research on the internet for products that fit into product mix pricing strategies, graphic organizers for product mix pricing strategies group work

Lesson 4: PowerPoint, textbook to read and discuss the Trader Joes case study, computers to search of sales promotion

Lesson 5: PowerPoint, internet to research pricing scandals, double entry journal to record thoughts on pricing scandals

Lesson 6: PowerPoint, construction paper to create sales promotion for local business, previously selected sales promotion to discuss, instructions and rubric for unit project, computers and textbook to begin unit project

Day 7: computers to and textbook to being unit project, PowerPoint and/or poster board and markers to create unit project

Day 8: computers to and textbook to being unit project, PowerPoint and/or poster board and markers to create unit project

Day 9: PowerPoint and/or poster board to present unit project

Day 10: unit test

Seth Reicks Education 233 Unit Plan Section 4

Accommodations:

3 with IEPs: The students can take their tests to the special education teachers room if they desire, and may have an extra 10 minutes to complete the test. Their special needs were not specified, but if any of them have difficulty reading, the test may be read aloud to them.

Student with low vision: I will create a test with larger font. They may have the test read to them if necessary.

G&T student: The will be given more autonomy in selecting parameters of the individual and group activities. They can opt out of instructions for activities in lessons 2, 3 and 5. In the lesson 2 activity the student can choose a more complex product than a convenience store to analyze the fixed and variable costssuch as a car or tablet. In the lesson 3 activity the student can work individually to think of brands that fit with multiple product mix pricing strategies. In lesson 5 the student can research to discover their own pricing scandal case instead of using one of the four assigned.

Seth Reicks Education 233 Unit Plan Section 5

Assessments: Lesson 1 o o Pre-assessment intro discussion to evaluate what students perceive prices to mean Jigsaw activity on major pricing strategiesformative assessment worth 5 participation points

Lesson 2 o o o o Discussion of Amazon vs. Walmart case study5 participation points Questioning activity on price elasticity as it relates to their own demandformative assessment Fixed and variable costs questioningformative assessment Fixed and variable costs individual activityformative assessment worth 5 participation points

Lesson 3 o o New-product pricing strategies questioning on price skimming & penetratingformative assessment Product mix pricing strategies group activityformative assessment for 5 participation points

Lesson 4 o Discussion of Trader Joes case study5 participation points

Lesson 5 o Double-entry journal on pricing scandalsformative assessment for 5 participation points

Lesson 6 o o Group activity on sales promotionformative assessment for 5 participation points Discussion on selected sales promotionformative assessment for 5 participation points

Unit projectsummative assessment worth 60 points Unit testsummative assessment worth 25 points

Informal Assessments: They exist in every lesson except lesson 4

Score: This unit is worth 85 points of non-participation points. I will add up all of the participation points at the end of the year for 20% of their grade. 20% is a lot, but I feel that participating is crucial to listening and understanding. Although the 5 points arent that impactful in the long-run because they will be very watered down by the many participation opportunities, I think that stating that the work is worth 5 points each time helps to keep the students involved because they are concerned about their grades. I definitely wanted to weight the project heavier than the test because the project requires a lot more higher order thinking skills on Blooms Taxonomywhich is also why I weighted the short answer questions on the test higher than the multiple choice ones. The project is worth 60 points because I like doing increments of 0-5 and there were 12 categories.

Defining Price & Major Pricing Strategies

Agenda

Objectives:

Identify the importance of pricing in todays environment Explain the major pricing strategies

Activities

Class discussion on what we know and think about price Lecture Group Activity Case Study Assignment

Introduction to Price
Discuss.
What do prices signify about products to you?

Introduction to Price
Discuss.
For what items do you personally want to buy the lowest price? Why? For what items do you personally not want to buy the lowest price? Why?

What is Price & Why Does It Matter?

Price: the sum of all the values that customers give up to gain the benefits of having or using a product or service Recall the Marketing Mix (aka the 4 Ps)

Price is the only element that represents revenue; all of the others represent costs

There is a delicate balance that companies face

A small improvement in price can generate a large improvement in profitability Reducing prices too much can lead to lost profits Raising prices too much can alienate customers

The Importance of Pricing Today

We are in a fast-changing pricing environment with valueseeking customers today because

Economic woes The pricing power of the internet and the ability to shop around Large retailers such as Walmart

Major Pricing Strategies

Customer Value-Based Pricing: Setting price based on buyers perceptions of value rather than on the sellers cost Good-Value Pricing: Offering the right combination of quality and good service at a fair price Value-Added Pricing: Attaching value-added features and services to differentiate a companys offers and charging higher prices Cost-Based Pricing: Setting prices based on the costs for producing, distributing, and selling the product, plus a fair rate of return for effort and risk Break-Even Pricing: Setting price to break even on the costs of making and selling a product Competition-Based Pricing: Setting prices based on competitors strategies, prices, costs, and marketing offerings

Jigsaw Activity
Number off into groups of 6
1. 2. 3. 4. 5. 6.

Customer Value-Based Pricing Good-Value Pricing Value-Added Pricing Cost-Based Pricing Break-Even Pricing Competition-Based Pricing

For 5 participation points: Read your assigned pricing strategy section and discuss it with your group Record the pros and cons of your strategy in your graphic organizer We will regroup in teams with a person from each of the different strategies Record the pros and cons to each strategy Large group discussion to verify and add any content Save as a study guide for the test!

For Tomorrow
Read the pricing strategy case study on Amazon vs. Walmart(p. 288-289) For 5 participation points, you have the option to Turn in a paragraph-long entrance ticket Share tomorrow aloud in class Topics you should be able to answer What stood out to you? Is online retail a fad or is Walmart in trouble? Why or why not? Does Amazon have the capability to compete with Walmart? Why or why not? Which retailer do you prefer? Why?

Also, we will be talking about costs tomorrow, so keep in mind what the case study says about each retailers cost structure.

Name: _____________________________

Activity - Defining Price and Major Pricing Strategies

Pros
Customer ValueBased Pricing

Cons

Good-Value Pricing

Value-Added Pricing

Cost-Based Pricing

Break-Even Pricing

Competition-Based Pricing

Production Costs

Agenda

Objectives:

Connect pricing with market demand and production costs

Activities

Discussion of Amazon vs. Walmart case study Lecture Individual Activity

Amazon vs. Walmart

Discuss: What stood out to you? Is online retail a fad or is Walmart in trouble? Why or why not? Does Amazon have the capability to compete with Walmart? Why or why not? Which retailer do you prefer? Why?

Market Demand
Prices depend largely on the demand curve: a curve that shows the number of units the market will buy in a given time period, at difference prices that might be charged Discuss: What are some products that used to be popular but are not anymore? What are some products that werent popular but are now? What happened to the prices of these products?

Market Demand

Consumer demand is tied directly to the performance of the economy Price elasticity: The measure of the sensitivity of demand to the changes in price; in other words, how much a consumer is will to spend for a certain good at a certain time Price elasticity is a good indicator of consumer confidence in the economy

Discuss: What items do you personally consider to be price elastic?

In other words, when money is tight, what items to you choose not to buy?

Production Costs
To make a profit, companies have to sell products for more than it costs them to product those products The Total Cost of a product is the sum of:

Fixed costs

Costs that do not vary with production or sales levels

Variable Costs

Costs that vary directly with the level of production

Demonstrating Fixed & Variable Costs

You want to have a get-together with friends to eat pizza and watch movies; the costs will be divided evenly between everybody The 2 movies you rented cost $5; this cost is fixed because the price remains the same no matter how many more people come over For every 3 additional people who come over you need to order an additional $10 pizza

Initially, the get-together is you and 5 other friends:

Movie Pizza Total Bill $5 $30 $35 /6 people /6 people /6 people $0.83 $5.00 $5.83

Then Moe, Larry, and Curly decide to come over:

Movie Pizza Total Bill $5 $40 $45 /9 people /9 people /9 people $0.56 $4.44 $5.00

The more the merrier!

Fixed and Variable Costs

Fixed and variable costs are very relevant for companies because the more that a company can produce, generally the cheaper their product will be per unit For a cookie manufacturer, are the following costs fixed or variable? Dough Chocolate chips An accountant Electric bill Heating bill (thermostat is always set at 70) Contract employee TV commercials

Individual Activity

Pick a convenience store product Brainstorm all of the costs that went into making the product, and record them in your graphic organizer Identify which costs are variable and which are fixed Search the internet to find all of the ingredients, but dont forget the people who work for the company, the packaging materials, and the factory facilities Take 15 minutes to work on this and then we will share with the class and turn the paper in for 5 participation points

Name: ________________________________

Product: ________________________________

Activity Production Costs

Product Input Variable Cost Fixed Cost

New-Product Pricing Strategies & Product Mix Pricing Strategies

Agenda

Objectives:

Describe the major strategies for pricing new products Detail how companies find a set of prices that maximizes profits

Activities

Lecture Group activity

New-Product Pricing Strategies

When a company is trying to introduce a new product or take an existing product into a new market, there are 2 common pricing strategies that are used:

Price-Skimming: Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales Price-Penetrating: Setting a low price for a new product to attract a large number of buyers and a large market share

When would a company want to use skimming vs. penetrating?

Price Skimming vs. Price Penetrating

Technology companies, particularly Apple, are notorious for price skimming because people want to be the first to have the latest & greatest, and wont wait for the price to drop

Price penetrating is more common in the food and beverage industry and similar industries where products are similar no matter the brand, and companies just want to get consumers to try their products in order to get their name out there

Product Mix Pricing Strategies

When companies introduce a new product, they must consider how the pricing strategy of that product with fit in with the rest of the product line

Think about it If Apple wanted to create a more affordable version of the iPad, would they want to create one so cheap that it would ruin the Apple image? Could Kia make a luxury sports car and charge as much for it as a Mercedes Benz?

NO!!!

Product Mix Pricing Strategies

Product Line Pricing: Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors prices Optional Product Pricing: The pricing of optional or accessory products along with the main product

Captive Product Pricing: Setting a price for products that must be used along with a main product, such as blades for a razor or for a video game console
By-Product Pricing: Setting a price for by-products to make the main products price more competitive Product Bundle Pricing: Combine several products and offering the bundle at a reduced price

Group Activity
Number off into groups of 5
1. 2. 3.

4.
5.

Product Line Pricing Optional Product Pricing Captive Product Pricing By-Product Pricing Product Bundle Pricing

For

5 participation points Brainstorm at least 2 brands for each pricing strategy in which you have seen their products demonstrate that strategy; feel free to use the internet to search Teams will write their answers on the board The rest of the groups will record the answers in their graphic organizers to use for the test (You will be asked to give examples of these strategies)

Name: _____________________________

Activity Product Mix Pricing Strategies

Examples
Product Line Pricing

Optional Product Pricing

Captive Product Pricing

By-Product Pricing

Product Bundle Pricing

Price-Adjustment Strategies & Price Changes

Agenda

Objectives:

Determine how companies adjust their prices to take into account for different types of customers and situations Discuss the key issues related to initiating and responding to price changes

Activities

Lecture Trader Joes Case Study Find a sales promotion

Price Adjustment Strategies

Discount: A straight reduction in price on purchases during a stated period of time or of larger quantities Allowance: Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturers products in some way Segmented Pricing: Selling a product or service at two or more prices, where the difference in prices is not based on the difference in costs Psychological Pricing: Pricing that considers the psychology of prices, not simply the economics; the price says something about the product Promotional Pricing: Temporarily pricing products below the list price, and sometimes even below cost, to increase short run sales Geographical Pricing: Setting prices for customers located in different parts of the world Dynamic Pricing: Adjusting prices continually to meet the characteristics and needs of the individual customers and situations International Pricing: Adjusting prices for international markets
*You will not be tested on price adjustment strategies except for possibly the specifics of Geographical Pricing which we will discuss next but just know a good deal when you see one!!!

Geographical Pricing
Product costs vary with geography because of the transportation it takes to get the products the extra distance to market (driver, fuel, maintenance costs, etc.); buyers and sellers may arrange payment agreements such as:
FOB-origin

Pricing: goods are placed free on board a carrier; the customer pays the freight from the factory to the destination Uniform Delivered Pricing: the company charges the same price plus freight to all customers, regardless of their location Zone Pricing: The company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price Basing-Point Pricing: The seller designates some city as a basing point and charges all customers the freight cost from that city to the customer Freight-Absorption Pricing: The seller absorbs all or part of the freight charges to get the desired business

Changing Prices
After setting their price structures, companies may face situations where they must initiate a price change or respond to changes by competitors

Initiating Price Cuts

Excess capacity Strong Competition Week economy

Initiating Price Increases

Inflation Overdemand

Read the Trader Joes Case Study (p. 312-313)

Discuss:

Who has all been to a Trader Joes? What are your impressions? What makes Trader Joes so unique in terms of the pricevalue equation? How does Trader Joes control costs?

Remaining Time

Search online for any type of a sales promotion (e.g. coupon, BOGO, etc.) Print it off and save it for next Mondays class

Public Policy

Agenda

Objectives:

Link social and legal issues of marketing with pricing decisions

Activities

Lecture Group activity

Public Policy
As a free-market economy, it is essential for there to be strong competition in the marketplace in order to keep prices in line with supply and demand

Price-Fixing & Predatory Pricing

Federal legislation prohibits monopolies and collusion:

Competing sellers working together to set prices for a product

Sherman Anti Trust Clayton Act Robinson-Patman Act

Federal laws pertaining to collusion and monopolies:

Sellers are also not allowed to use predatory pricing:

Temporarily selling a product below cost, with the intent of putting a competitor out of business, and making a lot more money in the long run from not having competition

Group Activity
Number off into groups of 4
1. 2. 3. 4.

Standard Oil Trust NCAA monopoly Archer Daniels Midland lysine price-fixing Microsoft monopoly
For 5 participation points Research on your assigned scandal Fill in a double-entry journal Provide background on the case to the rest of the class

The final verdict and the repercussions of the decision Discuss your feelings about the case

We will have a group discussion about all of the groups findings and the impact illegal pricing has on consumers

Tomorrow
Dont forget to bring your sales promotion in tomorrow!

Ideas From the Text

Reaction/Connection

Sales Promotion

Agenda

Objectives:

Discover sales and promotional campaigns around you

Activities

Lecture Group Activity Discussion Project Assigned

Sales Promotion
Companies use sales promotions to increase sales:
Short-term

incentives to encourage the purchase or sale of a product or a service; these include

Consumer

promotions: sales promotion tools used to boost short-term customer buying and involvement, or enhance long-term customer relationships
coupons, refunds, premiums, point-of-purchase displays, sweepstakes, and event sponsorships

Samples,

Trade

promotions: Sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers; these are from manufacturers to wholesalers and retailers
81% of sales promotions; in the form of price-offs, allowances, buy-back guarantees, and free goods

Represent

Business

Promotions: Sales promotion tools used to generate business leads, stimulate purchases, reward customers, and motivate sales people
Includes

such things as conventions, trade shows, and sales contests

*Since you are all consumers but probably not involved in trade or business promotions, I am only going to ask you about consumer promotions on the test.

Activity

For 5 participation points today, number off into groups of 7 Read more about and discuss your assigned consumer promotionsamples, coupons, refunds, premiums, point-ofpurchase displays, sweepstakes, and event sponsorshipson pages 483-486 Select a business where one of your group members works Brainstorm a consumer promotion for that business Record the promotional elements on construction paper Present to the class

Discussion

For 5 participation points Take out the sales promotion you were to find How does this relate to the sales promotions sections that were just presented? What does the sales promotion they do well? What could be improved?

Unit Project

Count off into groups of 5 Take an assignment sheet and rubric Decide as a team which product you would like to create a pricing strategy and consumer promotion for Spend the rest of the class time today, Tuesday, and Wednesday creating your presentations Presentations will be on Thursday, along with a review session for the test on Fridayso begin studying!

Unit Project
1. Choose an existing product or create a new invention to develop a pricing strategy for 2. Create a PowerPoint and/or use a poster board to incorporate the following pricing elements: a. A picture of your product and its MSRP (manufacturers suggested retail price) b. Your major pricing strategy(ies) c. Project the demand and plan B strategies for specific shifts in demand d. List your fixed and variable costs, and project how much they are (costs should be factored into Part A to ensure a profit) e. Specify your new-product entry strategy f. Choose your product mix pricing strategy(ies) g. Choose your price adjustment strategy(ies) h. Choose your geographical pricing strategy i. Dont collude with the competition to price fix!!!! j. Choose your consumer promotion(s) k. Choose your trade promotion(s) l. Choose your business promotion(s) 3. Except for step I, justify your rationale for your choices 4. Designate a person to pitch this business proposal to the class

Criteria
Teamwork and on task Aesthetics and grammar/punctuation

Needs Improvement (0-1)

Team does not cooperate with one another and is routinely off task Report doesnt reflect an attention to visual or language arts details There isnt a picture or an MSRP Major pricing strategy(ies) isnt listed and/or not justified, or is unrealistic Projected demand and plan B strategy(ies) arent listed and/or not justified, or are unrealistic Fixed and variable costs arent listed and/or not projected, or are unrealistic New-product entry strategy isnt listed and/or not justified, or is unrealistic Product mix pricing strategy(ies) isnt listed and/or not justified, or is unrealistic Geographical pricing strategy(ies) isnt listed and/or not justified, or is unrealistic Consumer promotions arent listed and/or not justified, or is unrealistic Trade promotions arent listed and/or not justified, or is unrealistic Business promotions arent listed and/or not justified, or is unrealistic

Satisfactory (2-3)
Team works ok together and is sometimes off task Report looks decent visually and has only minor grammatical/punctuation errors Missing a picture or MSRP Majoring pricing strategy(ies) is listed and justified but doesnt fit or isnt feasible Projected demand and plan B strategy(ies) are listed but dont fit or arent feasible Fixed and variable costs are listed and projected, but arent feasible New-product entry strategy is listed but doesnt fit or isnt feasible Product mix pricing strategy(ies) is listed but doesnt fit or isnt feasible Geographical pricing strategy(ies) is listed but doesnt fit or isnt feasible Consumer promotions are listed but dont fit or arent feasible Trade promotions are listed but dont fit or arent feasible Business promotions are listed but dont fit or arent feasible

Outstanding (4-5)
Team performs well as a functioning unit and is always on task Report is visually appealing and errorfree in terms of grammar/punctuation Has both a picture and MSRP listed Major pricing strategy(ies) fits very well with the product and the justification makes sense Projected demand and plan B strategy(ies) fit very well with the product Fixed and variable costs are listed, justified, and realistic New-product entry strategy fits very well with the product and the justification makes sense Product mix pricing strategy(ies) fits very well with the product and the justification makes sense Geographical pricing strategy(ies) fits very well with the product and the justification makes sense Consumer promotions fit very well with the product and the justification makes sense Trade promotions fit very well with the product and the justification makes sense Business promotions fit very well with the product and the justification makes sense

Picture of product and MSRP Major pricing strategy(ies)

Projected demand and Plan B strategy(ies) for shift in demand Fixed and variable costs

New-product entry strategy

Product mix pricing strategy(ies)

Geographical pricing strategy

Consumer promotions

Trade promotions

Business promotions

___/60

Pricing Unit Exam

Name___________________ Questions 1-10 are multiple choice worth 1 point each; Question 11-15 are short answer worth 3 points each; 25 points possible.
1. Offering the right combination of quality and god service at a fair price is what type of pricing strategy?

A. B. C. D.

Customer Value-Based Good-Value Value-Added Cost-Based

2. Pricing is different from all other marketing activities because it A. B. C. D. Represents Revenue Represents Cost Is More Complex None of the above

3. What does the demand curve show? A. B. C. D. The number of units the market will buy at a future time The number of units the market will produce at a given time at prices that might be charged The number of units the market will buy in a given time at prices that might be charged All of the above

4. Which of the following is NOT a variable cost for a farmer? A. B. C. D. Tractor Seeds Fertilizer Diesel

5. Product bundle pricing is A. B. C. D. Pricing of optional or accessory products along with the main product Setting a price for products that must be used along with the main product Setting a price for by-products to make the main products price more competitive Combining several products and offering them at a reduced price

6. Temporarily pricing products below the list price, and sometimes below cost, to increase short run sales is? A. B. C. D. Discounting Segmented Pricing Dynamic Pricing None of the Above

7. A company charging the same price plus freight to all customers, regardless of the location is A. B. C. D. Uniform Delivered Pricing Zone Pricing Basing-Point Pricing Freight-Absorption Pricing

8. Which of the following is NOT a reason to initiate a price cut? A. B. C. D. Excess Capacity Overdemand Strong Competition Weak Economy

9. All of the following are consumer promotions except for 1. 2. 3. 4. Trade shows Samples Premiums Event Sponsorships

10. Competing sellers working together to fix prices is known as 1. 2. 3. 4. Predatory Pricing The Clayton Act Collusion A Monopoly

11. Select one of the four pricing scandals discussed in class and explain how it harmed consumers?

12. You are the Chief Marketing Officer for Apple and are deciding how to price the new iPhone, describe what new-product entry strategy should you use, and why?

13. As a manufacturer, determine if youd prefer to have FOB-Origin or Freight-Absorption pricing; why?

14. What is predatory pricing, and evaluate its result?

15. Explain the concept of price elasticity.

Pricing Unit Exam Visually Impaired

Name___________________ Questions 1-10 are multiple choice worth 1 point each; Question 11-15 are short answer worth 3 points each; 25 points possible.
1. Offering the right combination of quality and god service at a fair price is what type of pricing strategy?

A. Customer Value-Based B. Good-Value C. Value-Added D. Cost-Based 2. Pricing is different from all other marketing activities because it A. Represents Revenue B. Represents Cost C. Is More Complex D. None of the above 3. What does the demand curve show? A. The number of units the market will buy at a future time B. The number of units the market will produce at a given time at prices that might be charged C. The number of units the market will buy in a given time at prices that might be charged D. All of the above 4. Which of the following is NOT a variable cost for a farmer? A. Tractor B. Seeds C. Fertilizer D. Diesel 5. Product bundle pricing is

A. Pricing of optional or accessory products along with the main product B. Setting a price for products that must be used along with the main product C. Setting a price for by-products to make the main products price more competitive D. Combining several products and offering them at a reduced price 6. Temporarily pricing products below the list price, and sometimes below cost, to increase short run sales is? A. Discounting B. Segmented Pricing C. Dynamic Pricing D. None of the Above

7. A company charging the same price plus freight to all customers, regardless of the location is A. Uniform Delivered Pricing B. Zone Pricing C. Basing-Point Pricing D. Freight-Absorption Pricing 8. Which of the following is NOT a reason to initiate a price cut? A. Excess Capacity B. Overdemand C. Strong Competition D. Weak Economy 9. All of the following are consumer promotions except for 1. 2. 3. 4. Trade shows Samples Premiums Event Sponsorships

10. Competing sellers working together to fix prices is known as

1. 2. 3. 4.

Predatory Pricing The Clayton Act Collusion A Monopoly

11. Select one of the four pricing scandals discussed in class and explain how it harmed consumers?

12. You are the Chief Marketing Officer for Apple and are deciding how to price the new iPhone, describe what new-product entry strategy should you use, and why?

13. As a manufacturer, determine if youd prefer to have FOB-Origin or FreightAbsorption pricing; why?

14. What is predatory pricing, and evaluate its result?

15. Explain the concept of price elasticity.

Pricing Unit Exam Key

Name___________________ Questions 1-10 are multiple choice worth 1 point each; Question 11-15 are short answer worth 3 points each; 25 points possible.
1. Offering the right combination of quality and god service at a fair price is what type of pricing strategy?

A. B. C. D.

Customer Value-Based Good-Value Value-Added Cost-Based

2. Pricing is different from all other marketing activities because it A. B. C. D. Represents Revenue Represents Cost Is More Complex None of the above

3. What does the demand curve show? A. B. C. D. The number of units the market will buy at a future time The number of units the market will produce at a given time at prices that might be charged The number of units the market will buy in a given time at prices that might be charged All of the above

4. Which of the following is NOT a variable cost for a farmer? A. B. C. D. Tractor Seeds Fertilizer Diesel

5. Product bundle pricing is A. B. C. D. Pricing of optional or accessory products along with the main product Setting a price for products that must be used along with the main product Setting a price for by-products to make the main products price more competitive Combining several products and offering them at a reduced price

6. Temporarily pricing products below the list price, and sometimes below cost, to increase short run sales is? A. B. C. D. Discounting Segmented Pricing Dynamic Pricing None of the Above

7. A company charging the same price plus freight to all customers, regardless of the location is A. B. C. D. Uniform Delivered Pricing Zone Pricing Basing-Point Pricing Freight-Absorption Pricing

8. Which of the following is NOT a reason to initiate a price cut? A. B. C. D. Excess Capacity Overdemand Strong Competition Weak Economy

9. All of the following are consumer promotions except for 1. 2. 3. 4. Trade shows Samples Premiums Event Sponsorships

10. Competing sellers working together to fix prices is known as 1. 2. 3. 4. Predatory Pricing The Clayton Act Collusion A Monopoly

11. Select one of the four pricing scandals discussed in class and explain how it harmed consumers? ADM colluded to fixed the price of the lysine additive in consumer goods; charging more than market value The NCAA held a monopoly on TV rights, shifting the fair value of TV money for its members and for fans Microsoft held a monopoly on the PC software market and was not receiving enough competition Standard Oil held a monopoly in the oil market and was not receiving enough competition 12. You are the Chief Marketing Officer for Apple and are deciding how to price the new iPhone, describe what new-product entry strategy should you use, and why? Price skimming because people will be willing to pay more initially for the latest and greatest must-have item 13. As a manufacturer, determine if youd prefer to have FOB-Origin or Freight-Absorption pricing; why? FOB-origin because the customer pays for the freight charge 14. What is predatory pricing, and evaluate its result? Temporarily selling a product below cost with the intent of putting competitors out of business. The offending company will make more money in the long run because they will have diminished competition.

15. Explain the concept of price elasticity. How sensitive demand is to changes in price.