Question 1

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

Accepted Answer

A)  product line prices 
B)  reference prices 
C)  location-based prices 
D)  product form prices 
E)  time-based prices 
A)  product line prices 
B)  reference prices 
C)  location-based prices 
D)  product form prices 
E)  time-based prices B

Question 2

Trade-in allowances are most commonly used in the ________ industry.

Accepted Answer

A)  real estate 
B)  automobile 
C)  dairy products 
D)  financial services 
E)  health care 
A)  real estate 
B)  automobile 
C)  dairy products 
D)  financial services 
E)  health care B

Question 3

Which of the following is true of price skimming?

Accepted Answer

A)  It is effective in situations in which competitors are able to undercut prices easily. 
B)  It can be profitably used when the product's quality and image support its price. 
C)  It involves underpricing products so that companies make larger sales. 
D)  It is ineffective in situations in which competitors are unable to enter the market easily. 
E)  It leads to a situation in which the company completes more, though less profitable, sales. 
A)  It is effective in situations in which competitors are able to undercut prices easily. 
B)  It can be profitably used when the product's quality and image support its price. 
C)  It involves underpricing products so that companies make larger sales. 
D)  It is ineffective in situations in which competitors are unable to enter the market easily. 
E)  It leads to a situation in which the company completes more, though less profitable, sales. B

Question 4

Differentiate between market-skimming and market-penetration pricing strategies. Explain the conditions within which they are effective.

Accepted Answer

Market-skimming is used to skim revenues

Question 5

The "bottom of the pyramid" refers to ________.

Accepted Answer

A)  the world's poorest consumers 
B)  the middle classes of Brazil, Russia, India, and China 
C)  a market with little or no purchasing power 
D)  people with easy access to luxury goods 
E)  the middle class of high-income countries 
A)  the world's poorest consumers 
B)  the middle classes of Brazil, Russia, India, and China 
C)  a market with little or no purchasing power 
D)  people with easy access to luxury goods 
E)  the middle class of high-income countries

Question 6

When amusement parks charge customers for admission and later for food and beverages, they are following a ________ pricing strategy.

Accepted Answer

A)  by-product 
B)  product line 
C)  penetration 
D)  skimming 
E)  two-part 
A)  by-product 
B)  product line 
C)  penetration 
D)  skimming 
E)  two-part

Question 7

The ________ seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given price level.

Accepted Answer

A)  FTC's "Guides against Deceptive Pricing" 
B)  Robinson-Patman Act 
C)  Sherman Act 
D)  Clayton Act 
E)  Automobile Information Disclosure Act 
A)  FTC's "Guides against Deceptive Pricing" 
B)  Robinson-Patman Act 
C)  Sherman Act 
D)  Clayton Act 
E)  Automobile Information Disclosure Act

Question 8

Federal legislation on price fixing requires that sellers set their prices ________.

Accepted Answer

A)  based on their fixed and variable costs 
B)  without communication from competitors 
C)  to achieve a specific profit margin 
D)  without the intention of cutting into competitors' profits 
E)  consistently throughout a region 
A)  based on their fixed and variable costs 
B)  without communication from competitors 
C)  to achieve a specific profit margin 
D)  without the intention of cutting into competitors' profits 
E)  consistently throughout a region

Question 9

In which of the following geographic pricing strategies would customers located close to the company pay the same amount as customers in distant locations?

Accepted Answer

A)  uniform-delivered pricing 
B)  zone pricing 
C)  FOB-origin pricing 
D)  location-based pricing 
E)  reference pricing 
A)  uniform-delivered pricing 
B)  zone pricing 
C)  FOB-origin pricing 
D)  location-based pricing 
E)  reference pricing

Question 10

In a bid to attract more customers in a market that has several competitors, Barrymore's Bakery slashed the prices of all its products by 50 percent. Managers at the firm reasoned that lower prices would draw in even more customers, making up for the reduction in price several times over. Which of the following pricing strategies are they using?

Accepted Answer

A)  market-skimming pricing 
B)  market-penetration pricing 
C)  captive-product pricing 
D)  cash discount pricing 
E)  by-product pricing 
A)  market-skimming pricing 
B)  market-penetration pricing 
C)  captive-product pricing 
D)  cash discount pricing 
E)  by-product pricing

Question 11

Companies set not a single price, but a pricing ________ that covers different items in its line and changes over time as products move through their life cycles.

Accepted Answer

A)  by-product 
B)  structure 
C)  loop 
D)  cycle 
E)  bundle 
A)  by-product 
B)  structure 
C)  loop 
D)  cycle 
E)  bundle

Question 12

The Sherman, Clayton, and Robinson-Patman Acts are all federal laws that were enacted to curb the formation of ________.

Accepted Answer

A)  monopolies 
B)  global partnerships 
C)  competitive markets 
D)  internal markets 
E)  intrastate partnerships 
A)  monopolies 
B)  global partnerships 
C)  competitive markets 
D)  internal markets 
E)  intrastate partnerships

Question 13

Sparkling Valley, a luxury resort, prices cottages facing the lake higher than cottages that do not, even though the cottages and services offered are identical in every other aspect. This form of pricing is called ________ pricing.

Accepted Answer

A)  location-based 
B)  time-based 
C)  by-product 
D)  seasonal 
E)  captive product 
A)  location-based 
B)  time-based 
C)  by-product 
D)  seasonal 
E)  captive product

Question 14

Midnight Magic, a perfume manufacturing company, plans to release a new fragrance during the holiday season at $99 per bottle. The company intends to bring the price down to $49 within six months of its release to attract buyers who couldn't afford the initial price. Which of the following pricing strategies is Midnight Magic using?

Accepted Answer

A)  market-penetration pricing 
B)  market-skimming pricing 
C)  competitive pricing 
D)  cost-plus pricing 
E)  product-line pricing 
A)  market-penetration pricing 
B)  market-skimming pricing 
C)  competitive pricing 
D)  cost-plus pricing 
E)  product-line pricing

Question 15

Why do businesses use cash discounts when they are in essence losing some money on the sale?

Accepted Answer

Such discounts are customary in many ind

Question 16

Give two examples of products for which captive product pricing might be used.

Accepted Answer

Student answers will vary. Exa

Question 17

Print-Fast Printers prices its printer cartridges at a premium, since customers must buy Print-Fast cartridges to work with their Print-Fast printer. Print-Fast uses optional-product pricing.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true of promotional pricing?

Accepted Answer

A)  It leads to 'deal-prone' customers who buy products only during sales. 
B)  It fortifies the brand's image in the eyes of customers if relied upon extensively. 
C)  It simplifies shopping for customers if used simultaneously by multiple stores. 
D)  It makes balancing short-term sales incentives against long-term brand building unnecessary. 
E)  It is extremely beneficial for the brand's profitability if practiced repeatedly. 
A)  It leads to 'deal-prone' customers who buy products only during sales. 
B)  It fortifies the brand's image in the eyes of customers if relied upon extensively. 
C)  It simplifies shopping for customers if used simultaneously by multiple stores. 
D)  It makes balancing short-term sales incentives against long-term brand building unnecessary. 
E)  It is extremely beneficial for the brand's profitability if practiced repeatedly.

Question 19

Companies need to respond to a competitor's price change if its own market share and profits will decrease because of the change.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is an adverse effect of using promotional pricing?

Accepted Answer

A)  It makes shopping stressful if used by multiple stores simultaneously. 
B)  It erodes the value of competing brands in the eyes of customers. 
C)  It gives pricing secrets away to competitors. 
D)  It creates "deal-immune" customers if used often. 
E)  It delays the company's focus on short-term strategies. 
A)  It makes shopping stressful if used by multiple stores simultaneously. 
B)  It erodes the value of competing brands in the eyes of customers. 
C)  It gives pricing secrets away to competitors. 
D)  It creates "deal-immune" customers if used often. 
E)  It delays the company's focus on short-term strategies.

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

Trade-in allowances are most commonly used in the ________ industry.

Which of the following is true of price skimming?

Differentiate between market-skimming and market-penetration pricing strategies. Explain the conditions within which they are effective.

The "bottom of the pyramid" refers to ________.

When amusement parks charge customers for admission and later for food and beverages, they are following a ________ pricing strategy.

The ________ seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given price level.

Federal legislation on price fixing requires that sellers set their prices ________.

In which of the following geographic pricing strategies would customers located close to the company pay the same amount as customers in distant locations?

Companies set not a single price, but a pricing ________ that covers different items in its line and changes over time as products move through their life cycles.

The Sherman, Clayton, and Robinson-Patman Acts are all federal laws that were enacted to curb the formation of ________.

Sparkling Valley, a luxury resort, prices cottages facing the lake higher than cottages that do not, even though the cottages and services offered are identical in every other aspect. This form of pricing is called ________ pricing.

Why do businesses use cash discounts when they are in essence losing some money on the sale?

Give two examples of products for which captive product pricing might be used.

Print-Fast Printers prices its printer cartridges at a premium, since customers must buy Print-Fast cartridges to work with their Print-Fast printer. Print-Fast uses optional-product pricing.

Which of the following is true of promotional pricing?

Companies need to respond to a competitor's price change if its own market share and profits will decrease because of the change.

Which of the following is an adverse effect of using promotional pricing?

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing: Understanding and Capturing Customer Value

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

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Exam 11: Pricing Strategies: Additional Considerations

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

Trade-in allowances are most commonly used in the ________ industry.

Which of the following is true of price skimming?

Differentiate between market-skimming and market-penetration pricing strategies. Explain the conditions within which they are effective.

The "bottom of the pyramid" refers to ________.

When amusement parks charge customers for admission and later for food and beverages, they are following a ________ pricing strategy.

The ________ seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given price level.

Federal legislation on price fixing requires that sellers set their prices ________.

In which of the following geographic pricing strategies would customers located close to the company pay the same amount as customers in distant locations?

Companies set not a single price, but a pricing ________ that covers different items in its line and changes over time as products move through their life cycles.

The Sherman, Clayton, and Robinson-Patman Acts are all federal laws that were enacted to curb the formation of ________.

Sparkling Valley, a luxury resort, prices cottages facing the lake higher than cottages that do not, even though the cottages and services offered are identical in every other aspect. This form of pricing is called ________ pricing.

Why do businesses use cash discounts when they are in essence losing some money on the sale?

Give two examples of products for which captive product pricing might be used.

Print-Fast Printers prices its printer cartridges at a premium, since customers must buy Print-Fast cartridges to work with their Print-Fast printer. Print-Fast uses optional-product pricing.

Which of the following is true of promotional pricing?

Companies need to respond to a competitor's price change if its own market share and profits will decrease because of the change.

Which of the following is an adverse effect of using promotional pricing?

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing: Understanding and Capturing Customer Value

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters