Scenario 12.3 Use the Following to Answer the Questions

question 75

Multiple Choice

Scenario 12.3
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's closest competitor, The Hearthstone Pet Hospital, currently charges $60 for each basic office visit. If Glenwood were to price its basic office visit at $45, it would most likely be employing:

• A) customary pricing.
• B) penetration pricing.
• C) prestige pricing.
• D) price skimming.
• E) cost-based pricing.

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Definitions:

Sales Territory

The group of customers or a geographical area assigned to a salesperson.

Market Development Area

A specific geographic or demographic region identified for potential growth or expansion of a company's products or services.

Sales Quota

A specific sales target set for a salesperson or team to achieve within a defined time frame.

Break-even Volume

The quantity of products or services a business needs to sell to cover its costs, without making a profit or loss.