Page 370 -

11-7 Identify three online price-comparison shopping sites or
11-8 apps and shop for a product you are interested in pur-
chasing. Compare the price ranges given at the three
sites. Based on your search, determine a “fair” price for
the product. (AACSB: Communication; Use of IT; Reflec-
tive Thinking)
One psychological pricing tactic is “just-below” pricing.
It is also called “9-ending” pricing because prices usually
MINICASES AND APPLICATIONS
Online, Mobile, and Social Media Marketing Online Price Glitches
Walmart’s recent online price glitches—erroneous prices acci-
dentally posted on the Web—is just one in a string of Web price
glitches haunting sellers. The error led to very low prices for
regularly higher-priced items such as treadmills, televisions, and and Zappos honored the mistakenly priced orders at a cost in the
computer monitors, with some priced under $10. Word spread
quickly through social media and consumers rushed to place or-
ders before Walmart wised up. No one was interested in purchas-
ing the incorrectly priced Lysol for $100 or the Kool-Aid packets
for $70, but they sure wanted to take advantage of the steals.
Social media made matters worse as lucky customers tweeted
about the deals. Web sites such as FatWallet and SlickDeals also
sent e-mail alerts for “possible PMs”—price mistakes—discussed
in forums. Walmart was not alone, however. Amazon incorrectly
priced DVDs at more than 75 percent off the actual price, Dell
priced a $1,000 computer at $25, Sears offered an iPad2 for $69,
Best Buy priced a 52-inch HDTV for just $10, Zappos site 6pm.
com capped all prices at $49.99, Delta airlines had flights priced
Marketing Ethics Breaking the Law or Cultural Norm?
Tokyo-headquartered Bridgestone Corporation, the world’s larg-
est tire and rubber producer, recently agreed to plead guilty to
price-fixing along with 25 other Japanese automotive suppliers.
Twenty-eight executives were involved and pled guilty to the
charges; some face prison sentences. Bridgestone and other
suppliers were charged with conspiring to fix prices, rig bids,
and allocate sales of parts sold to Japanese automakers Toyota,
Isuzu, Nissan, Suzuki, and Fuji Heavy Industries in the United
States during most of the 2000s. The company was slapped with
a whopping $425 million criminal fine, more than double any of
the other offenders’ fines. In 2011, Bridgestone paid a $28 mil-
lion fine for conspiring to fix prices with competitors in the ma-
rine hose industry but did not disclose that it was conducting the
same activity in the automotive industry. The U.S. Justice De-
partment didn’t take kindly to that—hence the much larger fine
Marketing by the Numbers Louis Vuitton Price Increase
One way to maintain exclusivity for a brand is to raise its price. slowing its expansion in China. The Louis Vuitton brand is the
That’s what luxury fashion and leather goods maker Louis Vuitton
did. The company did not want the brand to become overex-
posed and too common, so it raised prices 10 percent and is
|CHAPTER 11 Pricing Strategies: Additional Considerations 369
end in the number 9 (or 99). In a small group, have each
member select five different products and visit a store to
learn the price of those items. Is there a variation among
the items and stores with regard to 9-ending pricing?
Why do marketers use this pricing tactic? (AACSB: Com-
munication; Reflective Thinking)
as low as $12, and a glitch on the American Airlines Web site
gave away flights for free! Walmart reacted by cancelling the or-
ders and offering buyers a $10 e-gift card, but American Airlines
millions. Most online price glitches, if caught before the item is
shipped, are not honored by the seller.
11-9 Research the legal requirements regarding orders re-
sulting from a pricing mistake. Must sellers honor such
orders? Write a report of what you learn. (AACSB: Com-
munication; Reflective Thinking)
11-10 Research these and other online pricing glitches and
summarize what marketers did that was well and/or not
well received by consumers. What suggestions would
you make to marketers for handling such problems?
(AACSB: Communication; Reflective Thinking)
this time. Collaboration among competitors is not unusual and is
accepted in many Eastern cultures, such as Japan. Perhaps that
is why the conspiracy continued for so many years. It involved
Japanese suppliers selling to Japanese manufacturers, albeit in
the United States.
11-11 No U.S.-based automotive manufacturers were victim-
ized by this price-fixing scheme by Japan-based suppli-
ers selling to Japan-based buyers in the United States.
Should companies from different cultures that seem
to accept such practices be punished so severely?
(AACSB: Communication; Ethical Reasoning; Reflective
Thinking)
11-12 Discuss other recent examples of price fixing. (AACSB:
Communication; Reflective Thinking)
largest contributor to the company’s $13.3 billion revenue from
its fashion and leather division, accounting for $8 billion of those
sales. It might seem counterintuitive to want to encourage fewer