Chapter 8 – Price
8.4 Discussion Questions and Activities
REVIEW QUESTIONS
- What are the steps in the pricing framework?
- In addition to profit-oriented objectives, what other types of pricing objectives do firms utilize?
- What factors do organizations consider when making price decisions?
- How do a company’s competitors affect the pricing decisions the firm will make?
- What is the difference between fixed costs and variable costs?
- Explain the difference between a penetration and a skimming pricing strategy.
- Describe how both buyers and sellers use sealed bid pricing.
- Identify an example of each of the following: odd-even pricing, prestige pricing, price bundling, and captive pricing.
DISCUSSION QUESTIONS
- What is the difference between leader pricing and a loss leader?
- Which pricing approaches do you feel work best long term?
- Which pricing strategies have you noticed when you shop?
- What new products have you purchased in the last two years that were priced using either a penetration or a skimming approach?
- What are the steps in the pricing framework?
- In addition to profit-oriented objectives, what other types of pricing objectives do companies utilize?
- What factors do companies consider when making price decisions?
- How do a company’s competitors affect the pricing decisions the company will make?
- What is the difference between fixed costs and variable costs?
- We discussed in this chapter that Facebook offers consumers a ‘free’ service in exchange for their information. Could it be that whoever pays money for a product/service is the actual customer, therefore in this case the advertiser is the customer and the users are the product. If you are a Facebook user how to you feel about considered ‘the product’?
ACTIVITIES
- In order to understand revenues and costs, get a two-liter bottle of diet soft drink, ten to twenty cups, and a bucket of ice. Fill each cup with ice and then fill it with the soft drink. Assume each cup of soft drink sells for at least $1 and you paid $1 for the soft drink and $1 for the cups. How much profit can you make?
- Go to a fast-food restaurant for lunch. Figure out how much the price of a bundled meal is versus buying the items separately. Then decide if you think many consumers add a drink or fries because they feel like they’re getting a deal.
