Chapter 18 Review and Applications

1.1
I would suggest using a price-skimming method instead because it is a specialty product that should exude higher class and quality. I think they would be more successful in portraying the product that way instead of starting low.

2.1
The three defenses are
Cost: a firm can charge different prices to different customers if the prices represent manufacturing or quantity discount savings
Market conditions: price variations are justified if designed to meet fluid product or market conditions.
Competition: a reduction in price may be necessary to stay even with the competition.

3.5
The information age gives consumers more of an advantage in comparing prices and finding the best and the best quality for the best price. With the advances in technology consumers can find information quickly and efficiently using the web.

5.1
During a recession it can be beneficial to use strategies such as bundling or unbundling; this adds features to a bundle so the consumer feels like theyre getting a better value or value-based pricing is also useful during this time as it stresses to customers that they are getting the best value for their money.