Question

Topic: Student Questions

Pricing Questions...

Posted by Anonymous on 12/12/2008 at 11:55 PM ET 50 Points
I am hoping you can help me with the logic of these questions, I will greatly appreciate if you provide the answer of each question with the explanation... I have provided my answer as well, if you agree with my answer please let me know why you do that...thanks ;o)

1.-Proctor and Gamble sells Tide detergent to Wal-Mart for $2.75 per 64-ounce bottle. If Wal-Mart uses a "keystoning" pricing method when selling Tide, then the Wal-Mart customer can expect to pay which of the following (full, not discounted) retail prices for the 64-oz bottle of Tide:
a)$2.75
b)$6.00
c)$8.25
d)$5.50
e)$4.13
So the answer for that one I think is a)$2.75 since retailers don't want to increase price...

As a short-term pricing objective, _____ can be effectively used on a temporary basis to sell off excessive inventory.
a)market share pricing
b)sales maximization
c)profit maximization
d)status quo pricing
e)profit-oriented pricing
The answer will be d)status quo pricing since status quo pricing means that a firm changes prices only to meet those of competition.

The ______ is the quantity of products that will be sold in the market at various prices for a specified time period, and _____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.
a)demand; equity
b)demand; supply
c)liquidity; supply
d)purchase; distribution
e)supply; demand
The answer will be b)demand and suppply since demand shows how many units consumers will demand during a specific period at different prices.
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RESPONSES

  • Posted by wnelson on 12/13/2008 at 12:33 AM Member
    Hi, there. Happy weekend! Another one spent with marketing homework, huh?

    Well, the first thing you have to do is figure out what Keystone pricing is. Here's a link that will help:

    https://retail.about.com/od/glossary/g/keystone.htm

    From this, you can figure the correct answer - got it?

    Second question - Status quo pricing - you have the definition correct. Just doesn't fit the situation described in the problem. Your goal is to sell off a bunch of inventory in a hurry. If you want to sell it off in a hurry, you want to price such that you sell as much as you can as fast as you can. Which pricing model relates to selling the most you can?

    Third question - I agree with your answer.

    I hope this helps.

    Wayde
  • Posted on 12/13/2008 at 11:34 PM Author
    The only question I got wrong is #1... My teacher said that the price is set not too low or not too high...
    Thanks all for helping me with the logic of understanding better the questions ;o)
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