Question 1

A(n) ________ is an extra payment designed to gain reseller participation in special programs.

Accepted Answer

A)  seasonal discount 
B)  allowance 
C)  discount 
D)  quantity discount 
E)  functional discount 
A)  seasonal discount 
B)  allowance 
C)  discount 
D)  quantity discount 
E)  functional discount

Question 2

When hotels, motels, and airlines offer discounts in slow selling periods, they are said to be offering ________.

Accepted Answer

A)  trade discounts 
B)  quantity discounts 
C)  functional discounts 
D)  seasonal discounts 
E)  trade-in allowances 
A)  trade discounts 
B)  quantity discounts 
C)  functional discounts 
D)  seasonal discounts 
E)  trade-in allowances

Question 3

The airline and hospitality industries use ________, by which they offer discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires.

Accepted Answer

A)  special-customer pricing 
B)  yield pricing 
C)  cash rebates 
D)  location pricing 
E)  customer-segment pricing 
A)  special-customer pricing 
B)  yield pricing 
C)  cash rebates 
D)  location pricing 
E)  customer-segment pricing

Question 4

When the airline industry offers discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires, what kind of a pricing technique are they said to be using?

Accepted Answer

The airlin

Question 5

What is third-degree price discrimination?

Accepted Answer

In third-degree price discrimination, th

Question 6

In high-low pricing, retailers charge low prices on an everyday basis with occasional price increases.

Accepted Answer

A) True 
 B)False

Question 7

Price elasticity depends upon the magnitude and direction of the contemplated price change.

Accepted Answer

A) True 
 B)False

Question 8

Caterpillar uses target-return pricing to set prices on its construction equipment, and justifies a higher price by showing lower lifetime operating costs.

Accepted Answer

A) True 
 B)False

Question 9

A toaster manufacturer who has invested $1 million in the business wants to set a price to earn a 20 percent return on investment, specifically $200,000. What pricing method should it choose?

Accepted Answer

The toaster manufacture should

Question 10

Loss leader pricing dilutes a company's brand image.

Accepted Answer

A) True 
 B)False

Question 11

What are the different forms of countertrade?

Accepted Answer

Countertrade can take the following form

Question 12

When a company maintains its price but removes or prices separately one or more elements that were part of the former offer, such as free delivery or installation, it is known as ________.

Accepted Answer

A)  escalating 
B)  differentiation 
C)  unbundling 
D)  reverse discounting 
E)  delayed quotation pricing 
A)  escalating 
B)  differentiation 
C)  unbundling 
D)  reverse discounting 
E)  delayed quotation pricing

Question 13

When Yolanda went shopping, she paid a lot to buy a jacket that had a well-known designer's tag attached to it. After a few days, she came across a jacket which was undistinguishable from the one she had bought but was priced 5 times lesser than the earlier one. She didn't give this a second thought because she was convinced that the designer label she had bought was worth it. What can be deduced from this?

Accepted Answer

Yolanda was using the price as an indica

Question 14

Pricing cues such as sale signs and prices that end in 9 are more influential when ________.

Accepted Answer

A)  customers have substantial knowledge about prices 
B)  customers purchase the particular item regularly 
C)  product quality is standardized 
D)  product designs vary over time 
E)  prices do not vary from time to time 
A)  customers have substantial knowledge about prices 
B)  customers purchase the particular item regularly 
C)  product quality is standardized 
D)  product designs vary over time 
E)  prices do not vary from time to time

Question 15

What are the different possible consumer reference prices?

Accepted Answer

Although consumers have fairly good know

Question 16

Price elasticity magnitudes are lower for durable goods than for other goods.

Accepted Answer

A) True 
 B)False

Question 17

After estimating the demand and costs associated with alternative prices, a company has chosen to price its product in such a way that it gains the highest rate of return on its investment. The company is looking to ________.

Accepted Answer

A)  maximize market share 
B)  skim the market 
C)  become a product-quality leader 
D)  survive in the market 
E)  maximize current profit 
A)  maximize market share 
B)  skim the market 
C)  become a product-quality leader 
D)  survive in the market 
E)  maximize current profit

Question 18

What should a firm consider if it is in a nonhomogeneous market and a competitor lowers its prices?

Accepted Answer

A firm should consider:
• Why did the co

Question 19

The key to perceived-value pricing is to ________.

Accepted Answer

A)  reengineer the company's operations 
B)  deliver more unique value than competitors 
C)  adopt subtle marketing tactics compared to competitors 
D)  deliver more value but at a lower cost 
E)  invest heavily in advertising in order to convey superior value 
A)  reengineer the company's operations 
B)  deliver more unique value than competitors 
C)  adopt subtle marketing tactics compared to competitors 
D)  deliver more value but at a lower cost 
E)  invest heavily in advertising in order to convey superior value

Question 20

An umbrella manufacturing company's fixed costs are $275,000. The variable cost per unit is $5 and each umbrella is sold at $10. How many units should the firm sell in order to break even?

Accepted Answer

A)  1,819 
B)  5,500 
C)  18,000 
D)  27,500 
E)  55,000 
A)  1,819 
B)  5,500 
C)  18,000 
D)  27,500 
E)  55,000

Exam 16: Developing Pricing Strategies and Programs

A(n) ________ is an extra payment designed to gain reseller participation in special programs.

When hotels, motels, and airlines offer discounts in slow selling periods, they are said to be offering ________.

The airline and hospitality industries use ________, by which they offer discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires.

When the airline industry offers discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires, what kind of a pricing technique are they said to be using?

What is third-degree price discrimination?

In high-low pricing, retailers charge low prices on an everyday basis with occasional price increases.

Price elasticity depends upon the magnitude and direction of the contemplated price change.

Caterpillar uses target-return pricing to set prices on its construction equipment, and justifies a higher price by showing lower lifetime operating costs.

A toaster manufacturer who has invested $1 million in the business wants to set a price to earn a 20 percent return on investment, specifically $200,000. What pricing method should it choose?

Loss leader pricing dilutes a company's brand image.

What are the different forms of countertrade?

When a company maintains its price but removes or prices separately one or more elements that were part of the former offer, such as free delivery or installation, it is known as ________.

Pricing cues such as sale signs and prices that end in 9 are more influential when ________.

What are the different possible consumer reference prices?

Price elasticity magnitudes are lower for durable goods than for other goods.

After estimating the demand and costs associated with alternative prices, a company has chosen to price its product in such a way that it gains the highest rate of return on its investment. The company is looking to ________.

What should a firm consider if it is in a nonhomogeneous market and a competitor lowers its prices?

The key to perceived-value pricing is to ________.

An umbrella manufacturing company's fixed costs are $275,000. The variable cost per unit is $5 and each umbrella is sold at $10. How many units should the firm sell in order to break even?

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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