Malcolm has decided that he wants to open up his own law practice. The time has come to establish prices for his services. Due to his extensive experience and legal background, he believes that his fees should not relate directly to the time or effort spent on specific cases. Now that Malcolm has chosen the pricing strategy he wants to use, what is his next step?

a. evaluating competitors' prices

b. choosing a basis for setting prices

c. determining the final price

d. assessing the target market's evaluation of price

e. developing pricing objectives

The use of comparative shoppers would generally occur during which step of the pricing process?

a. assessing the target market's evaluation of price
b. evaluating competitors' prices
c. determining the final price
d. developing pricing objectives
e. choosing a basis for setting prices
Chantel, a resident of Denver, Colorado, decided to open up her own fine jewelry store. To do so, she used her life savings and a loan from the bank. Chantel was able to open up a store with sufficient inventory. She markets the jewelry as the "finest jewelry in the West." The most popular item Chantel sells is a rose gold bracelet that sells for $550. During one month, Chantel's fixed costs are $6,000. Her variable costs average about $400.

Refer to Scenario 12.1. Chantel decided to raise the price of her rose gold bracelets even higher to $750. To her surprise, though, demand went down. Based on this information, the rose gold bracelets are most likely a

competitive

fixed product

elastic

prestige product

Sam has a dilemma. He works for a chocolate company and the price of chocolate is going up. The most logical solution would be to raise the price. However, Sam knows from his history in the business that their loyal customers would not look favorably on a price increase. For customers, candy bars are one of those items where the price rarely changes. Sam's firm has sold its candy bars for $0.99 for the past two decades. Sam feels that the next best solution to absorbing the extra costs is to make the candy bars slightly smaller without lowering the price. Sam's company is most likely using which of the following pricing strategies?

a. everyday low price
b. customary
c. penetration
d. price leader
e. product-line
Philip goes to a Toyota dealership looking for a new car. He finds a Toyota Corolla he really likes. The time has come to meet with the salesperson. What type of pricing strategy is the salesperson likely to adopt with Philip?

a. professional pricing
b. negotiated pricing
c. penetration pricing
d. secondary-market pricing
e. customary pricing
Demand-based pricing is best used when the company has .

a. a fixed amount of available resources that are perishable
b. different products that can be substituted for one another
c. heterogeneous products that are difficult to value
d. a large amount of variable costs for product development
e. a product line with great diversity in quality