Use the following to answer the questions.
Glenwood Pet Hospital is considering implementing a new pricing strategy for its
veterinarian services. After reviewing the previous three years’ revenue, Glenwood
finds that most of its customers bring their pets in for the required annual vaccinations
only if the animal is ill. Glenwood’s objective is to generate more income per customer
on an annual basis. The hospital has previously priced its services by charging a flat fee
for the office visit, a fee for each vaccine, and a fee for each type of examination
beyond the basic office visit. Most customers pay the flat office fee and a fee for a
rabies vaccine. Glenwood is now considering a new plan where the pet owner would
pay one fee that would cover an office visit, the required rabies vaccine, and additional
vaccines that prevent
heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to
view their pet’s health as part of a prevention program, rather than a one-time annual
visit.
Refer to Scenario 12.3. Glenwood has decided that it is going to offer a special package
if the prevention plan is purchased within the first 30 days of each year’s time for
vaccinations. This type of pricing strategy would be an example of:
a. customary pricing.
b. secondary-market pricing.
c. introductory pricing.
d. periodic discounting.
e. random discounting.
The main reason a manufacturer will prohibit intermediaries from selling its products
outside designated sales territories is to:
a. tighten its control over distribution of its products.
b. discourage competition from other manufacturers.
c. incorporate selective distribution.