Question 1

Explain product line pricing.

Accepted Answer

In product line pricing,management must decide on the price steps to set between the various products in a line.The price steps should take into account cost differences between products in a line.More important,they should account for differences in customer perceptions of the value of different features.

Question 2

Computer Works is a computer accessories manufacturer based in Brazil.All customers in South America pay the same freight charge,$20,when they order products from the company.All customers in North America pay a freight charge of $50.The company's pricing strategy is referred to as ________ pricing.

Accepted Answer

A)  basing-point 
B)  FOB-origin 
C)  freight-absorption 
D)  zone 
E)  uniform-delivered 
A)  basing-point 
B)  FOB-origin 
C)  freight-absorption 
D)  zone 
E)  uniform-delivered D

Question 3

Consumers rely less on price to judge the quality of a product when they ________.

Accepted Answer

A)  lack information about the product 
B)  are unable to research the product 
C)  have prior experience with the product 
D)  are unable to judge the quality of the product 
E)  rely on cues from sellers to differentiate a high or low price 
A)  lack information about the product 
B)  are unable to research the product 
C)  have prior experience with the product 
D)  are unable to judge the quality of the product 
E)  rely on cues from sellers to differentiate a high or low price C

Question 4

________ refers to the amount of money charged for a product or service.

Accepted Answer

A)  Payroll 
B)  Profit 
C)  Price 
D)  Cost 
E)  Salary 
A)  Payroll 
B)  Profit 
C)  Price 
D)  Cost 
E)  Salary

Question 5

The Fashion Store,a new startup,sets product prices so that revenues will equal manufacturing and marketing costs.The pricing strategy used by the company is referred to as ________ pricing.

Accepted Answer

A)  good-value 
B)  value-added 
C)  cost-plus 
D)  competition-based 
E)  target return 
A)  good-value 
B)  value-added 
C)  cost-plus 
D)  competition-based 
E)  target return

Question 6

Vac "N" Sew,a consumer electronics outlet,offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine.This is an example of a ________.

Accepted Answer

A)  functional discount 
B)  cash discount 
C)  seasonal discount 
D)  trade-in allowance 
E)  by-product allowance 
A)  functional discount 
B)  cash discount 
C)  seasonal discount 
D)  trade-in allowance 
E)  by-product allowance

Question 7

A small percentage improvement in price can generate a large percentage increase in profitability.

Accepted Answer

A) True 
 B)False

Question 8

Costs that change directly with the level of production are referred to as ________ costs.

Accepted Answer

A)  fixed 
B)  variable 
C)  target 
D)  capital 
E)  payroll 
A)  fixed 
B)  variable 
C)  target 
D)  capital 
E)  payroll

Question 9

Which of the following would most likely trigger a price increase?

Accepted Answer

A)  cost inflation 
B)  reduced demand 
C)  cheaper alternatives 
D)  reduced expenses 
E)  overproduction 
A)  cost inflation 
B)  reduced demand 
C)  cheaper alternatives 
D)  reduced expenses 
E)  overproduction

Question 10

Under ________,the market consists of a few large sellers who are highly sensitive to each other's pricing and marketing strategies.

Accepted Answer

A)  pure competition 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  a pure monopoly 
E)  pure monopsony 
A)  pure competition 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  a pure monopoly 
E)  pure monopsony

Question 11

A value-based pricing strategy most likely begins with ________.

Accepted Answer

A)  assessing customer needs 
B)  designing a stylish product 
C)  evaluating the product's costs 
D)  promoting the product's benefits 
E)  setting a price based on perceived value 
A)  assessing customer needs 
B)  designing a stylish product 
C)  evaluating the product's costs 
D)  promoting the product's benefits 
E)  setting a price based on perceived value

Question 12

Rent,electricity,and executive salaries that do not vary with production level are referred to as ________ costs.

Accepted Answer

A)  fixed 
B)  variable 
C)  break-even 
D)  target 
E)  promotional 
A)  fixed 
B)  variable 
C)  break-even 
D)  target 
E)  promotional

Question 13

Busch Stadium in St.Louis charges different prices for seats in different areas of the ball park,even though each seat costs the same for the owners of the stadium.What is this form of pricing called?

Accepted Answer

A)  location-based pricing 
B)  market-skimming pricing 
C)  product-form pricing 
D)  time-based pricing 
E)  market-penetration pricing 
A)  location-based pricing 
B)  market-skimming pricing 
C)  product-form pricing 
D)  time-based pricing 
E)  market-penetration pricing

Question 14

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products,the manufacturer is able to reduce the main product's price to make it more competitive.

Accepted Answer

A) True 
 B)False

Question 15

Federal legislation on price-fixing states that sellers must set prices after talking to customers and competitors.

Accepted Answer

A) True 
 B)False

Question 16

Distinguish between market-skimming pricing and market-penetration pricing.

Accepted Answer

Many companies that invent new products

Question 17

NerdHerd Electronics sells three different sizes of televisions at three different prices.In this case,the company's pricing strategy is referred to as ________ pricing.

Accepted Answer

A)  product line 
B)  optional-product 
C)  by-product 
D)  product bundle 
E)  captive-product 
A)  product line 
B)  optional-product 
C)  by-product 
D)  product bundle 
E)  captive-product

Question 18

Target return pricing is a variation of break-even pricing.

Accepted Answer

A) True 
 B)False

Question 19

Under oligopolistic competition,the market consists of only a few large sellers.

Accepted Answer

A) True 
 B)False

Question 20

________ pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

Accepted Answer

A)  Predatory 
B)  Psychological 
C)  Deceptive 
D)  Cost-plus 
E)  Allowance 
A)  Predatory 
B)  Psychological 
C)  Deceptive 
D)  Cost-plus 
E)  Allowance

Explain product line pricing.

Computer Works is a computer accessories manufacturer based in Brazil.All customers in South America pay the same freight charge,$20,when they order products from the company.All customers in North America pay a freight charge of $50.The company's pricing strategy is referred to as ________ pricing.

Consumers rely less on price to judge the quality of a product when they ________.

________ refers to the amount of money charged for a product or service.

The Fashion Store,a new startup,sets product prices so that revenues will equal manufacturing and marketing costs.The pricing strategy used by the company is referred to as ________ pricing.

Vac "N" Sew,a consumer electronics outlet,offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine.This is an example of a ________.

A small percentage improvement in price can generate a large percentage increase in profitability.

Costs that change directly with the level of production are referred to as ________ costs.

Which of the following would most likely trigger a price increase?

Under ________,the market consists of a few large sellers who are highly sensitive to each other's pricing and marketing strategies.

A value-based pricing strategy most likely begins with ________.

Rent,electricity,and executive salaries that do not vary with production level are referred to as ________ costs.

Busch Stadium in St.Louis charges different prices for seats in different areas of the ball park,even though each seat costs the same for the owners of the stadium.What is this form of pricing called?

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products,the manufacturer is able to reduce the main product's price to make it more competitive.

Federal legislation on price-fixing states that sellers must set prices after talking to customers and competitors.

Distinguish between market-skimming pricing and market-penetration pricing.

NerdHerd Electronics sells three different sizes of televisions at three different prices.In this case,the company's pricing strategy is referred to as ________ pricing.

Target return pricing is a variation of break-even pricing.

Under oligopolistic competition,the market consists of only a few large sellers.

________ pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

Marketing: Creating and Capturing Customer Value

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Understanding Consumer and Business Buyer Behavior

Customer-Driven Marketing Strategy: Creating Value for Target Customers

Products,Services,and Brands: Building Customer Value

New Product Development and Product Life Cycle Strategies

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

The Global Marketplace

Social Responsibility and Ethics

Filters

Exam 9: Pricing: Understanding and Capturing Customer Value

Explain product line pricing.

Consumers rely less on price to judge the quality of a product when they ________.

________ refers to the amount of money charged for a product or service.

The Fashion Store,a new startup,sets product prices so that revenues will equal manufacturing and marketing costs.The pricing strategy used by the company is referred to as ________ pricing.

Vac "N" Sew,a consumer electronics outlet,offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine.This is an example of a ________.

A small percentage improvement in price can generate a large percentage increase in profitability.

Costs that change directly with the level of production are referred to as ________ costs.

Which of the following would most likely trigger a price increase?

Under ________,the market consists of a few large sellers who are highly sensitive to each other's pricing and marketing strategies.

A value-based pricing strategy most likely begins with ________.

Rent,electricity,and executive salaries that do not vary with production level are referred to as ________ costs.

Busch Stadium in St.Louis charges different prices for seats in different areas of the ball park,even though each seat costs the same for the owners of the stadium.What is this form of pricing called?

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products,the manufacturer is able to reduce the main product's price to make it more competitive.

Federal legislation on price-fixing states that sellers must set prices after talking to customers and competitors.

Distinguish between market-skimming pricing and market-penetration pricing.

NerdHerd Electronics sells three different sizes of televisions at three different prices.In this case,the company's pricing strategy is referred to as ________ pricing.

Target return pricing is a variation of break-even pricing.

Under oligopolistic competition,the market consists of only a few large sellers.

________ pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

Marketing: Creating and Capturing Customer Value

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Understanding Consumer and Business Buyer Behavior

Customer-Driven Marketing Strategy: Creating Value for Target Customers

Products,Services,and Brands: Building Customer Value

New Product Development and Product Life Cycle Strategies

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

The Global Marketplace

Social Responsibility and Ethics

Filters