Question 1

A British aircraft manufacturer sold planes to Brazil for 70 percent cash and the rest in coffee. This is an example of what kind of a countertrade?

Accepted Answer

This is an example of a compen

Question 2

What are some ways to respond to overdemand?

Accepted Answer

When a company cannot supply all its cus

Question 3

Deducting the desired profit margin from the price at which a product will sell, given its appeal and competitors' prices, is known as ________.

Accepted Answer

A)  overhead costing 
B)  target costing 
C)  activity-based costing 
D)  benefit analysis 
E)  estimate costing 
A)  overhead costing 
B)  target costing 
C)  activity-based costing 
D)  benefit analysis 
E)  estimate costing

Question 4

________ auctions let would-be suppliers submit only one bid; they cannot know the other bids.

Accepted Answer

A)  Descending bid 
B)  Sealed-bid 
C)  English 
D)  Dutch 
E)  Reverse 
A)  Descending bid 
B)  Sealed-bid 
C)  English 
D)  Dutch 
E)  Reverse

Question 5

When museums charge a lower admission fee to students and senior citizens, this form of price discrimination is known as ________ pricing.

Accepted Answer

A)  location 
B)  channel 
C)  customer-segment 
D)  special-customer 
E)  loss-leader 
A)  location 
B)  channel 
C)  customer-segment 
D)  special-customer 
E)  loss-leader

Question 6

Generally, consumers prefer small price increases on a regular basis to sudden, sharp increases.

Accepted Answer

A) True 
 B)False

Question 7

A company must consider the product's stage in the life cycle and its importance in the company's portfolio before responding to a competitor's price cut.

Accepted Answer

A) True 
 B)False

Question 8

In a(n) ________, the buyer announces something he or she wants to buy, and potential sellers compete to offer the lowest price.

Accepted Answer

A)  Dutch auction with one buyer and many sellers 
B)  English auction with one buyer and many sellers 
C)  English auction with one seller and many buyers 
D)  sealed-bid auction 
E)  ascending auction 
A)  Dutch auction with one buyer and many sellers 
B)  English auction with one buyer and many sellers 
C)  English auction with one seller and many buyers 
D)  sealed-bid auction 
E)  ascending auction

Question 9

Price discrimination in all forms is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 10

A retailer who utilizes a(n) ________ policy charges a constant low price with little or no price promotions and special sales.

Accepted Answer

A)  everyday low pricing 
B)  high-low pricing 
C)  low cost 
D)  going-rate pricing 
E)  auction-type pricing 
A)  everyday low pricing 
B)  high-low pricing 
C)  low cost 
D)  going-rate pricing 
E)  auction-type pricing

Question 11

Consumers are less price sensitive when ________.

Accepted Answer

A)  price is only a small part of the total cost spent on the product over its lifetime 
B)  they perceive the higher prices to be unjustified 
C)  they change their buying habits regularly 
D)  there are many substitutes and competitors in the market 
E)  they are buying high-cost items 
A)  price is only a small part of the total cost spent on the product over its lifetime 
B)  they perceive the higher prices to be unjustified 
C)  they change their buying habits regularly 
D)  there are many substitutes and competitors in the market 
E)  they are buying high-cost items

Question 12

While shopping at the mall, Jane was asked by one of the sales representatives at the cosmetics counter to try out a new lipstick that her company was test marketing. The company representative asks her how much she would be willing to pay for the lipstick. After trying it out, Jane is of the opinion that $5 is just the right price for it. What type of a reference price is Jane using?

Accepted Answer

A)  usual discounted price 
B)  fair price 
C)  maximum retail price 
D)  last price paid 
E)  historical competitor price 
A)  usual discounted price 
B)  fair price 
C)  maximum retail price 
D)  last price paid 
E)  historical competitor price

Question 13

A company that is looking to maximize its market share would do well to follow ________ pricing.

Accepted Answer

A)  markup 
B)  market-penetration 
C)  market-skimming 
D)  survival 
E)  target-return 
A)  markup 
B)  market-penetration 
C)  market-skimming 
D)  survival 
E)  target-return

Question 14

In a compensation deal, the seller sells a plant, equipment, or technology to another country and agrees to accept as partial payment products manufactured with the supplied equipment.

Accepted Answer

A) True 
 B)False

Question 15

If consumers were largely indifferent to a $0.05 increase in the price of a gallon of milk, the price rise is said to fall within customers' ________.

Accepted Answer

A)  price indifference band 
B)  experience curve 
C)  arm's-length price 
D)  learning curve 
E)  net price index 
A)  price indifference band 
B)  experience curve 
C)  arm's-length price 
D)  learning curve 
E)  net price index

Question 16

The minimum price that most consumers would pay for a given product is known as the ________ price.

Accepted Answer

A)  everyday low 
B)  usual discounted 
C)  fair 
D)  typical 
E)  lower-bound 
A)  everyday low 
B)  usual discounted 
C)  fair 
D)  typical 
E)  lower-bound

Question 17

Pricing cues such as sale signs and prices that end in 9 are more influential when consumers are experienced in the category.

Accepted Answer

A) True 
 B)False

Question 18

For price discrimination to work ________.

Accepted Answer

A)  the market must be segmentable and the segments must show similar intensities of demand 
B)  members in the lower-price segment must be able to resell the product to the higher-price segment 
C)  competitors must be able to undersell the firm in the higher-price segment 
D)  the practice must not breed customer resentment and ill will 
E)  the extra revenue derived from price discrimination must not exceed the cost of segmenting and policing the market 
A)  the market must be segmentable and the segments must show similar intensities of demand 
B)  members in the lower-price segment must be able to resell the product to the higher-price segment 
C)  competitors must be able to undersell the firm in the higher-price segment 
D)  the practice must not breed customer resentment and ill will 
E)  the extra revenue derived from price discrimination must not exceed the cost of segmenting and policing the market

Question 19

Armac Ltd. is a sluice-box manufacturer based in China. A sluice-box is used for gold prospecting. Armac is interested in selling a few of its machines to an American mining company, but it wants 95 percent of the machines' price in gold and the rest in ores recovered by using the machines. This is an example of a ________.

Accepted Answer

A)  buyback arrangement 
B)  functional discount 
C)  barter deal 
D)  compensation deal 
E)  sealed bid 
A)  buyback arrangement 
B)  functional discount 
C)  barter deal 
D)  compensation deal 
E)  sealed bid

Question 20

How can a firm anticipate a competitor's reactions to a price change?

Accepted Answer

One way is to assume the competitor reac

Exam 16: Developing Pricing Strategies and Programs

A British aircraft manufacturer sold planes to Brazil for 70 percent cash and the rest in coffee. This is an example of what kind of a countertrade?

What are some ways to respond to overdemand?

Deducting the desired profit margin from the price at which a product will sell, given its appeal and competitors' prices, is known as ________.

________ auctions let would-be suppliers submit only one bid; they cannot know the other bids.

When museums charge a lower admission fee to students and senior citizens, this form of price discrimination is known as ________ pricing.

Generally, consumers prefer small price increases on a regular basis to sudden, sharp increases.

A company must consider the product's stage in the life cycle and its importance in the company's portfolio before responding to a competitor's price cut.

In a(n) ________, the buyer announces something he or she wants to buy, and potential sellers compete to offer the lowest price.

Price discrimination in all forms is illegal in the United States.

A retailer who utilizes a(n) ________ policy charges a constant low price with little or no price promotions and special sales.

Consumers are less price sensitive when ________.

A company that is looking to maximize its market share would do well to follow ________ pricing.

In a compensation deal, the seller sells a plant, equipment, or technology to another country and agrees to accept as partial payment products manufactured with the supplied equipment.

If consumers were largely indifferent to a $0.05 increase in the price of a gallon of milk, the price rise is said to fall within customers' ________.

The minimum price that most consumers would pay for a given product is known as the ________ price.

Pricing cues such as sale signs and prices that end in 9 are more influential when consumers are experienced in the category.

For price discrimination to work ________.

How can a firm anticipate a competitor's reactions to a price change?

Defining Marketing for the New Realities

Developing Marketing Strategies and Plans

Collecting Information and Forecasting Demand

Conducting Marketing Research

Creating Long-Term Loyalty Relationships

Analyzing Consumer Markets

Analyzing Business Markets

Tapping Into Global Markets

Identifying Market Segments and Targets

Crafting the Brand Positioning

Creating Brand Equity

Addressing Competition and Driving Growth

Setting Product Strategy

Designing and Managing Services

Introducing New Market Offerings

Designing and Managing Integrated Marketing Channels

Managing Retailing, Wholesaling, and Logistics

Designing and Managing Integrated Marketing Communications

Managing Mass Communications: Advertising, Sales Promotions, Events and Experiences, and Public Relations

Managing Digital Communications: Online, Social Media, and Mobile

Managing Personal Communications: Direct and Database Marketing and Personal Selling

Managing a Holistic Marketing Organization for the Long Run

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