A firm develops a satisfactory product/service, evaluates the total expense of the product/service, and sets a price that covers all expenses and a target profit. This type of pricing is product/service driven. What is being described?

Why has the practice of running frequent sales often backfired for retailers?

A) Fewer shoppers are interested in bargain hunting. B) Changing price points have had little effect on store images. C) Consumers become trained to buy only when the retailer is having a sale. D) Shoppers are more interested in store image than in price points. E) Department stores have resisted using everyday-low-pricing strategies.

A store using an everyday low-pricing (EDLP) strategy does which of the following?

A) relies on its pricing strategy to create its competitive advantage and engages in a price war if necessary to maintain the advantage B) has weekly sales C) sets prices between the list price the manufacturer suggests and the deeply discounted price stores that compete on price alone offer D) positions itself as an anchor store in a shopping center E) eliminates customer service in order to maintain low prices