Define cost-plus pricing. Why is it used so frequently? What are the drawbacks associated with using it? What is penetration pricing? Can you think of an example of a company that has used penetration pricing to introduce a new product? Which firm is it and what is the example?

I. Chapter 8

Key Concept Questions

Define cost-plus pricing. Why is it used so frequently? What are the drawbacks associated with using it?
What is penetration pricing? Can you think of an example of a company that has used penetration pricing to introduce a new product? Which firm is it and what is the example?
What is the relationship between pricing and competition?
How can a pocket price waterfall assist a business?
What is meant by “15/10 net 45”? What is the impact on the seller’s pocket price when a customer takes advantage of this?

II. Chapter 9

Critical Thinking Exercises

Identify a well-known public figure and discuss his or her brand. How has this individual enhanced the brand? How has he or she damaged it?
Brainstorm five creative ways for a small business with a low budget to advertise and promote its products or services using the latest developments in communications and Internet technology.
Why does viral marketing have such success potential? How can a viral marketing campaign work against a company?
What role should the unique selling proposition play in a company’s advertising strategy?