Differentiate between market-skimming and market-penetration pricing strategies. Explain the conditions within which they are effective
What will be an ideal response?
Market-skimming is used to skim revenues layer by layer from the market by entering the market with high initial prices. The product's quality and image must support its higher price, and enough buyers must want the product at that price. The costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. Competitors should not be able to enter the market easily and undercut the high price. Market penetration is used to penetrate the market quickly and deeply to attract a large number of buyers quickly and win a large market share by setting a low price initially when it enters the market. The market must be highly price sensitive so that a low price produces more market growth. Production and distribution costs must fall as sales volume increases. Also, the low price must help keep out competition and be maintained over time.
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Which of the following transactions involves an accrued asset?
a. Wages earned by employees but not yet paid b. Rent collected in advance from a tenant c. Rent owed by a tenant but not yet collected d. One year's premium on life insurance policy paid in advance
Cash dividends become a liability to a corporation on the date of record
a. True b. False Indicate whether the statement is true or false
Discuss efficient consumer response (ECR) and the continuous replenishment program (CRP)
What will be an ideal response?
After the business analysis phase of the new product development process, a physical version of the product is typically developed. This is called a ________
A) test market B) focus group C) business analysis D) product concept E) prototype