marketing - pricing unit plan

8/21/2019 Marketing - Pricing Unit Plan

1/65

Seth Reicks

Education 233

Unit PlanSection 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 StandardsMarketing:

Analyze the characteristics, motivations, and behaviors of consumersAnalyze the elements of the marketing mix, their interrelationships, and how they are used in the marketing

process

Iowa Core Standards21st

Century SkillsEmployability Skills:

Communicate and work productively with others, incorporating different perspectives and cross culturalunderstanding, to increase innovation and the quality of work

Unit Objectives:

Students will

Identify the importance of pricing in todays environmentExplain the major pricing strategiesConnect pricing with production costs and market demandDescribe the major strategies for pricing new productsDetail how companies find a set of prices that maximizes profitsDetermine how companies adjust their prices to take into account different types of customers and situationsDiscuss the key issues related to initiating and responding to price changesLink social and legal issues of marketing with pricing decisionsDiscover sales and promotional campaigns that they see around themWork in teams to create a product pricing strategy

Unit Goals:

Students will


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Recognize the impact that pricing decisions have on products in terms of consumers perceptionsUnderstand the pricing limitations as it relates to production costs and competitionBecome savvier consumers who can better maximize their dollarsBe 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 service-

based, 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.


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Seth Reicks

Education 233

Unit PlanSection 2

Outline of Lessons by Topics:

1. Defining Price & Major Pricing Strategiesa. Objectivesb. Pre-assessmentfun 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 importanced. Major pricing strategiese. Jigsaw activityStudent-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. Assignmentread Amazon vs. Walmart case studyi. Differentiated instructionstudents can write an entry ticket or be prepared to share aloud

pending on if they are more comfortable writing or speaking

2. Production Costsa. Objectivesb. Discussion on Amazon vs. Walmart case studyc. Market demandd. Price elasticity

i. Questioning activityWhat products are students price sensitive to? Helps students betterunderstand the content by relating it to their prior knowledge; formative assessment for

understanding

e. Fixed and variable costsi. Questioning activityWhat 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 ownmeaning 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 Strategiesa. Objectivesb. New-product pricing strategies

i. Questioning on skimming vs. penetrating to formatively assess


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c. Product mix pricing strategiesd. Group activitystudent-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 Changesa. Objectivesb. Price adjustment strategies

i. Geographical pricingc. Trader Joes case study

i. Discussiond. 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 Policya. Objectivesb. Public policy issues with pricingc. Group activitystudent-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 Promotiona. Objectivesb. Sales promotionc. Group activitystudent-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 salespromotions they see in the world around them

7. Project work dayassist groups and formatively assess understanding8. Project work dayassist groups and formatively assess understanding9.

Present projects

10.Unit testsummative assessment


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Seth Reicks

Education 233

Unit PlanSection 3

Materials Needed

Lesson 1: PowerPoint, textbooks to read further into major pricing strategies for the jigsaw activity, graphic organizer fo

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


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Seth Reicks

Education 233

Unit PlanSection 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.


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Seth Reicks

Education 233

Unit PlanSection 5

Assessments:

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

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

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

Lesson 4o Discussion of Trader Joes case study5 participation points

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

Lesson 6o Group activity on sales promotionformative assessment for 5 participation pointso 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 th

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.


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Defining Price &Major PricingStrategies


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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


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Introduction to Price

What do prices signifyabout products to you?

Discuss.


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Introduction to Price

For what items do youpersonally want to buy the

lowest price? Why?

Discuss.

For what items do youpersonally notwant to buythe lowest price? Why?


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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 aproduct 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


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The Importance of Pricing Today We are in a fast-changing pricing environment with value-

seeking customers today because Economic woes

The pricing power of the internet and the ability to shop around

Large retailers such as Walmart


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Major Pricing Strategies

Customer Value-Based Pricing: Setting price based on buyers perceptions ofvalue rather than on the sellers cost

Good-Value Pricing: Offering the right combination of quality and goodservice at a fair price

Value-Added Pricing: Attaching value-added features and services todifferentiate 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 andselling a product

Competition-Based Pricing: Setting prices based on competitors strategies,prices, costs, and marketing offerings


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Jigsaw Activity

Number off into groups of 6

1. Customer Value-Based Pricing

2. Good-Value Pricing

3. Value-Added Pricing

4. Cost-Based Pricing

5. Break-Even Pricing

6. 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!


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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.


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Name: _____________________________

Activity - Defining Price and Major Pricing Strategies

Pros Cons

Customer Value-

Based Pricing

Good-Value Pricing

Value-Added Pricing

Cost-Based Pricing

Break-Even Pricing

Competition-Based

Pricing


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ProductionCosts


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Agenda

Objectives: Connect pricing with market demand and production costs

Activities

Discussion of Amazon vs. Walmart case study

Lecture

Individual Activity


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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?


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Market DemandPrices depend largely on the demand curve: a curve that shows thenumber of units the market will buy in a given time period, atdifference prices that might be charged

Discuss:

What are some productsthat used to be popularbut are not anymore?

What are some productsthat werent popular butare now?

What happened to theprices of these products?


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Market Demand

Consumer demand is tied directly to the performance of theeconomy

Price elasticity: The measure of the sensitivity of demand to thechanges in price; in other words, how much a consumer is will tospend for a certain good at a certain time

Price elasticity is a good indicator of consumer confidence in theeconomy

Discuss:

What items do you personally considerto be price elastic?

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


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Production Costs

To make a profit, companies have to sell products for more than itcosts them to product those products

The Total Costof 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


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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:

Then Moe, Larry, and Curly decide

to come over:

Movie $5 /6 people $0.83Pizza $30 /6 people $5.00

Total Bill $35 /6 people $5.83

Movie $5 /9 people $0.56Pizza $40 /9 people $4.44

Total Bill $45 /9 people $5.00

The more the merrier!


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Fixed and Variable Costs

Fixed and variable costs are very relevant for companies becausethe 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


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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 forgetthe 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 theclass and turn the paper in for 5 participation points


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Name: ________________________________ Product: ________________________________

ActivityProduction Costs

Product Input Variable Cost Fixed Cost


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New-ProductPricingStrategies &

Product MixPricingStrategies


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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


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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 pricingstrategies that are used:

Price-Skimming: Setting a high price for a new product to skimmaximum revenues layer by layer from the segments willing topay the high price; the company makes fewer but moreprofitable sales

Price-Penetrating:Setting a low price for a new product toattract a large number of buyers and a large market share

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


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Price Skimming vs. Price Penetrating

Technology companies, particularly Apple, are notorious for priceskimming 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 beverageindustry and similar industries where products are similar no matterthe brand, and companies just want to get consumers to try theirproducts in order to get their name out there


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Product Mix Pricing StrategiesWhen 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!!!


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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 alongwith the main product

Captive Product Pricing: Setting a price for products that must be used alongwith 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 mainproducts price more competitive

Product Bundle Pricing: Combine several products and offering the bundle ata reduced price

Product Mix Pricing Strategies


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Group Activity


1. Product Line Pricing

2. Optional Product Pricing

3. Captive Product Pricing

4. By-Product Pricing

5. Product Bundle Pricing

For 5 participation pointsBrainstorm 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)


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Name: _____________________________

ActivityProduct Mix Pricing Strategies

Examples

Product Line Pricing

Optional Product

Pricing

Captive Product

Pricing

By-Product Pricing

Product Bundle

Pricing


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Price-AdjustmentStrategies &Price Changes


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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


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Price Adjustment Strategies

Discount: A straight reduction in price on purchases during a stated periodof 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, notsimply 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 possiblythe specifics of Geographical Pricingwhich we will discuss nextbut justknow a good deal when you see one!!!


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Geographical PricingProduct 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 paysthe freight from the factory to the destination

Uniform Delivered Pricing: the company charges the same price plus freight toall 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 toget the desired business


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Changing Prices

After setting their price structures, companies may face situationswhere they must initiate a price change or respond to changesby competitors

Initiating Price Cuts

Excess capacity

Strong Competition

Week economy

Initiating Price Increases

Inflation Overdemand


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Read the Trader Joes Case Study

(p. 312-313)

Discuss:

Who has all been to a Trader Joes? What are yourimpressions?

What makes Trader Joes so unique in terms of the price-value equation?

How does Trader Joes control costs?


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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


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Public Policy


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Agenda

Objectives: Link social and legal issues of marketing with pricing decisions

Activities

Lecture

Group activity


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Public Policy

As a free-market economy, it is essential for there to bestrong competition in the marketplace in order to keepprices in line with supply and demand


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Price-Fixing & Predatory Pricing

Federal legislation prohibits monopolies and collusion:

Competing sellers working together to set prices for a product

Federal laws pertaining to collusion and monopolies:

Sherman Anti Trust

Clayton Act

Robinson-Patman Act

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


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Group Activity


1.

Standard Oil Trust2. NCAA monopoly

3. Archer Daniels Midland lysine price-fixing

4. 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 findingsand the impact illegal pricing has on consumers


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Tomorrow

Dont forget to bring your sales promotion intomorrow!


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Ideas From the Text Reaction/Connectio


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Sales Promotion


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Agenda

Objectives: Discover sales and promotional campaigns around you

Activities

Lecture

Group Activity

Discussion

Project Assigned


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Sales Promotion

Companies use sales promotionsto increase sales:

Short-term incentives to encourage the purchase or sale of aproduct or a service; these include

Consumer promotions: sales promotion tools used to boost short-termcustomer buying and involvement, or enhance long-term customer

relationships

Samples, coupons, refunds, premiums, point-of-purchase displays, sweepstakes, andevent sponsorships

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

Represent 81% of sales promotions; in the form of price-offs, allowances, buy-backguarantees, and free goods

Business Promotions: Sales promotion tools used to generate businessleads, 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.


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Activity For 5 participation points today, number off into groups of 7

Read more about and discuss your assigned consumerpromotionsamples, coupons, refunds, premiums, point-of-

purchase displays, sweepstakes, and event sponsorshipsonpages 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


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Discussion For 5 participation points

Take out the sales promotion you were to find

How does this relate to the sales promotions sectionsthat were just presented?

What does the sales promotion they do well?

What could be improved?


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Unit Project

Count off into groups of 5

Take an assignment sheet and rubric

Decide as a team which product you would like to createa pricing strategy and consumer promotion for

Spend the rest of the class time today, Tuesday, andWednesday creating your presentations

Presentations will be on Thursday, along with a reviewsession for the test on Fridayso begin studying!


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Unit Project

1. Choose an existing product or create a new invention to develop a pricing strategy for2. 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 demandd. 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 strategyf. Choose your product mix pricing strategy(ies)g. Choose your price adjustment strategy(ies)h. Choose your geographical pricing strategyi. 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 choices4. Designate a person to pitch this business proposal to the class


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Criteria Needs Improvement (0-1) Satisfactory (2-3) Outstanding (4-5)eamwork and on task Team does not cooperate with one

another and is routinely off task

Team works ok together and is

sometimes off task

Team performs well as a functioning

unit and is always on task

esthetics and grammar/punctuation Report doesnt reflect an attention to

visual or language arts details

Report looks decent visually and has

only minor grammatical/punctuation

errors

Report is visually appealing and error

free in terms of grammar/punctuatio

cture of product and MSRP There isnt a picture or an MSRP Missing a picture or MSRP Has both a picture and MSRP listed

Major pricing strategy(ies) Major pricing strategy(ies) isnt listed

and/or not justified, or is unrealistic

Majoring pricing strategy(ies) is listed

and justified but doesnt fit or isnt

feasible

Major pricing strategy(ies) fits very

well with the product and the

justification makes sense

rojected demand and Plan B

rategy(ies) for shift in demand

Projected demand and plan B

strategy(ies) arent listed and/or not

justified, or are unrealistic


strategy(ies) are listed but dont fit or

arent feasible


strategy(ies) fit very well with the

productxed and variable costs Fixed and variable costs arent listed

and/or not projected, or are

unrealistic

Fixed and variable costs are listed and

projected, but arent feasible

Fixed and variable costs are listed,

justified, and realistic

ew-product entry strategy New-product entry strategy isnt listed


New-product entry strategy is listed

but doesnt fit or isnt feasible

New-product entry strategy fits very

well with the product and the


roduct mix pricing strategy(ies) Product mix pricing strategy(ies) isnt

listed and/or not justified, or is

unrealistic

Product mix pricing strategy(ies) is

listed but doesnt fit or isnt feasible

Product mix pricing strategy(ies) fits

very well with the product and the


eographical pricing strategy Geographical pricing strategy(ies) isnt

listed and/or not justified, or is

unrealistic

Geographical pricing strategy(ies) is

listed but doesnt fit or isntfeasible

Geographical pricing strategy(ies) fits

very well with the product and the


onsumer promotions Consumer promotions arentlisted


Consumer promotions are listed but

dont fit or arentfeasible

Consumer promotions fit very well

with the product and the justificationmakes sense

rade promotions Trade promotions arent listed and/or

not justified, or is unrealistic

Trade promotions are listed but dont

fit or arent feasible

Trade promotions fit very well with

the product and the justification

makes sense

usiness promotions Business promotions arent listed


Business promotions are listed but

dont fit or arent feasible

Business promotions fit very well with

the product and the justification

makes sense

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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. Customer Value-BasedB. Good-ValueC. Value-AddedD. Cost-Based

2. Pricing is different from all other marketing activities because it

A. Represents RevenueB. Represents CostC. Is More ComplexD. None of the above

3. What does the demand curve show?

A. The number of units the market will buy at a future timeB. The number of units the market will produce at a given time at prices that might be chargedC. The number of units the market will buy in a given time at prices that might be chargedD. All of the above

4. Which of the following is NOT a variable cost for a farmer?

A. TractorB. SeedsC. FertilizerD. Diesel

5. Product bundle pricing is

A. Pricing of optional or accessory products along with the main productB. Setting a price for products that must be used along with the main productC. Setting a price for by-products to make the main products price more competitiveD. 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. DiscountingB. Segmented PricingC. Dynamic PricingD. None of the Above


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7. A company charging the same price plus freight to all customers, regardless of the location is

A. Uniform Delivered PricingB. Zone PricingC. Basing-Point PricingD. Freight-Absorption Pricing

8. Which of the following is NOT a reason to initiate a price cut?

A. Excess CapacityB. OverdemandC. Strong CompetitionD. Weak Economy

9. All of the following are consumer promotions except for

1. Trade shows2. Samples3.

Premiums

4. Event Sponsorships10. Competing sellers working together to fix prices is known as

1. Predatory Pricing2. The Clayton Act3. Collusion4. A Monopoly

11. Select oneof 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.


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Pricing Unit ExamVisually 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-BasedB.Good-ValueC.Value-AddedD.Cost-Based


A.Represents RevenueB.Represents CostC.Is More ComplexD.None of the above


A.The number of units the market will buy at a future timeB.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 mightbe charged

D.All of the above4. Which of the following is NOT a variable cost for a farmer?

A.TractorB.SeedsC.FertilizerD.Diesel



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A.Pricing of optional or accessory products along with the main productB.Setting a price for products that must be used along with the main productC.Setting a price for by-products to make the main products price more

competitive

D.Combining several products and offering them at a reduced price6. Temporarily pricing products below the list price, and sometimes below cost, to

increase short run sales is?

A.DiscountingB.Segmented PricingC.Dynamic PricingD.None of the Above

7. A company charging the same price plus freight to all customers, regardless of

the location is

A.Uniform Delivered PricingB.Zone PricingC.Basing-Point PricingD.Freight-Absorption Pricing


A.Excess CapacityB.OverdemandC.Strong CompetitionD.Weak Economy


1.Trade shows2.Samples3.Premiums4.Event Sponsorships

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


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1.Predatory Pricing2.The Clayton Act3.Collusion4.A Monopoly

11. Select oneof 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 haveFOB-Origin or Freight-

Absorption pricing; why?




63/65

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. Customer Value-BasedB. Good-ValueC. Value-AddedD. Cost-Based


A. Represents RevenueB. Represents CostC. Is More ComplexD. None of the above


A. The number of units the market will buy at a future timeB. The number of units the market will produce at a given time at prices that might be chargedC. The number of units the market will buy in a given time at prices that might be chargedD. All of the above

4. Which of the following is NOT a variable cost for a farmer?

A. TractorB. SeedsC. FertilizerD. Diesel


A. Pricing of optional or accessory products along with the main productB. Setting a price for products that must be used along with the main productC. Setting a price for by-products to make the main products price more competitiveD. 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. DiscountingB. Segmented PricingC. Dynamic PricingD. None of the Above


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7. A company charging the same price plus freight to all customers, regardless of the location is

A. Uniform Delivered PricingB. Zone PricingC. Basing-Point PricingD. Freight-Absorption Pricing


A. Excess CapacityB. OverdemandC. Strong CompetitionD. Weak Economy


1. Trade shows2. Samples3.

Premiums

4. Event Sponsorships10. Competing sellers working together to fix prices is known as

1. Predatory Pricing2. The Clayton Act3. Collusion4. A Monopoly

11. Select oneof 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


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.


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How sensitive demand is to changes in price.

marketing - pricing unit plan

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