Question 1

Prestige products tend to sell better at a high price than at a low price.

Accepted Answer

A) True 
 B)False

Question 2

When establishing prices, a marketer's first step is to:

Accepted Answer

A)  determine demand. 
B)  develop pricing objectives. 
C)  select a pricing policy. 
D)  evaluate competitors' prices. 
E)  determine a pricing method. 
A)  determine demand. 
B)  develop pricing objectives. 
C)  select a pricing policy. 
D)  evaluate competitors' prices. 
E)  determine a pricing method.

Question 3

A firm that competes on a price basis is unable to change prices frequently.

Accepted Answer

A) True 
 B)False

Question 4

A product under non-price competition would most likely not succeed in the market if:

Accepted Answer

A)  a new advertising campaign is established for it. 
B)  it is easy to duplicate. 
C)  it is packaged differently from similar products. 
D)  it is priced near the competitors' price. 
E)  its quality has been upgraded. 
A)  a new advertising campaign is established for it. 
B)  it is easy to duplicate. 
C)  it is packaged differently from similar products. 
D)  it is priced near the competitors' price. 
E)  its quality has been upgraded.

Question 5

The manager at Target puts a sign up next to a Samsung audio system that reads, "Only $299.99! $60 less than at Best Buy." This is an example of:

Accepted Answer

A)  random discounting. 
B)  periodic discounting 
C)  comparison discounting. 
D)  penetration pricing. 
E)  everyday low prices. 
A)  random discounting. 
B)  periodic discounting 
C)  comparison discounting. 
D)  penetration pricing. 
E)  everyday low prices.

Question 6

Elastic demand is usually a result of the lack of substitute products.

Accepted Answer

A) True 
 B)False

Question 7

What is bundle pricing? Give three examples, each one from a different industry.

Accepted Answer

Bundle pricing is the packaging together

Question 8

The pricing strategy that assumes that demand is relatively inelastic over certain price ranges is called:

Accepted Answer

A)  price lining. 
B)  odd-even pricing. 
C)  price skimming. 
D)  prestige pricing. 
E)  customary pricing. 
A)  price lining. 
B)  odd-even pricing. 
C)  price skimming. 
D)  prestige pricing. 
E)  customary pricing.

Question 9

Breyer's produces a variety of ice cream flavors and of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using to price its ice cream.

Accepted Answer

A)  captive pricing 
B)  price baiting 
C)  premium pricing 
D)  bait pricing 
E)  differential pricing 
A)  captive pricing 
B)  price baiting 
C)  premium pricing 
D)  bait pricing 
E)  differential pricing

Question 10

Safe Auto advertises its automobile insurance as "minimum coverage for minimum budgets." Safe Auto is engaging in:

Accepted Answer

A)  non-price competition. 
B)  demand-based pricing. 
C)  competitive pricing. 
D)  price differentiation. 
E)  price competition. 
A)  non-price competition. 
B)  demand-based pricing. 
C)  competitive pricing. 
D)  price differentiation. 
E)  price competition.

Question 11

A concession in price in business markets to achieve a desired goal is called a(n):

Accepted Answer

A)  allowance. 
B)  objective-oriented discount. 
C)  cash discount. 
D)  trade discount. 
E)  cumulative discount. 
A)  allowance. 
B)  objective-oriented discount. 
C)  cash discount. 
D)  trade discount. 
E)  cumulative discount.

Question 12

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

Accepted Answer

A)  The quantity demanded would immediately fall. 
B)  The quantity demanded would always increase. 
C)  Above some price level, the quantity demanded would begin to decrease. 
D)  The demand curve for the product would always shift to the right. 
E)  The demand curve for the product would always shift to the left. 
A)  The quantity demanded would immediately fall. 
B)  The quantity demanded would always increase. 
C)  Above some price level, the quantity demanded would begin to decrease. 
D)  The demand curve for the product would always shift to the right. 
E)  The demand curve for the product would always shift to the left.

Question 13

Transfer pricing involves the sale of a product to another unit within the same organization.

Accepted Answer

A) True 
 B)False

Question 14

A certain location of O'Charley's Restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must O'Charley's serve per year in order to break even?

Accepted Answer

A)  2,000 
B)  5,000 
C)  10,000 
D)  3,333 
E)  2,500 
A)  2,000 
B)  5,000 
C)  10,000 
D)  3,333 
E)  2,500

Question 15

A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase.

Accepted Answer

A) True 
 B)False

Question 16

Chris is planning three sales during the third quarter of the year at Toys R' Us. The first is at the beginning of the school year, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be:

Accepted Answer

A)  psychological pricing. 
B)  calendar discounting. 
C)  sales promotion pricing. 
D)  special-event pricing. 
E)  captive pricing. 
A)  psychological pricing. 
B)  calendar discounting. 
C)  sales promotion pricing. 
D)  special-event pricing. 
E)  captive pricing.

Question 17

When a company that produces computer printers prices them low, but the ink required to operate the printer is priced higher per relative usage, it is using:

Accepted Answer

A)  bait pricing. 
B)  premium pricing 
C)  penetration pricing. 
D)  price lining. 
E)  captive pricing. 
A)  bait pricing. 
B)  premium pricing 
C)  penetration pricing. 
D)  price lining. 
E)  captive pricing.

Question 18

Since Victoria's Secret has decided to use non­price competition, it distinguishes its brand through all of the following except .

Accepted Answer

A)  distinctive product features. 
B)  exceptional service. 
C)  rebates. 
D)  variety and selection. 
E)  product quality and style. 
A)  distinctive product features. 
B)  exceptional service. 
C)  rebates. 
D)  variety and selection. 
E)  product quality and style.

Question 19

If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as:

Accepted Answer

A)  penetration pricing. 
B)  psychological pricing. 
C)  price lining. 
D)  price skimming. 
E)  odd-even pricing. 
A)  penetration pricing. 
B)  psychological pricing. 
C)  price lining. 
D)  price skimming. 
E)  odd-even pricing.

Question 20

What does the demand curve for a prestige product look like?

Accepted Answer

A)  It is a straight line where the quantity sold continues to increase as the price of each product increases. 
B)  It is a curve where the highest and the lowest prices yield the greatest quantity sold and mid-range prices produce the fewest sales. 
C)  It forms a curve where the greatest quantity sold comes at a medium price and the quantities fall as the price increases or decreases. 
D)  It forms a straight vertical line because of the prestige of the product, and quantity sold will remain stable regardless of the price. 
E)  It slopes from left to right at a very mild slope, and as quantity increases, price decreases slowly. 
A)  It is a straight line where the quantity sold continues to increase as the price of each product increases. 
B)  It is a curve where the highest and the lowest prices yield the greatest quantity sold and mid-range prices produce the fewest sales. 
C)  It forms a curve where the greatest quantity sold comes at a medium price and the quantities fall as the price increases or decreases. 
D)  It forms a straight vertical line because of the prestige of the product, and quantity sold will remain stable regardless of the price. 
E)  It slopes from left to right at a very mild slope, and as quantity increases, price decreases slowly.

Prestige products tend to sell better at a high price than at a low price.

When establishing prices, a marketer's first step is to:

A firm that competes on a price basis is unable to change prices frequently.

A product under non-price competition would most likely not succeed in the market if:

The manager at Target puts a sign up next to a Samsung audio system that reads, "Only $299.99! $60 less than at Best Buy." This is an example of:

Elastic demand is usually a result of the lack of substitute products.

What is bundle pricing? Give three examples, each one from a different industry.

The pricing strategy that assumes that demand is relatively inelastic over certain price ranges is called:

Breyer's produces a variety of ice cream flavors and of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using to price its ice cream.

Safe Auto advertises its automobile insurance as "minimum coverage for minimum budgets." Safe Auto is engaging in:

A concession in price in business markets to achieve a desired goal is called a(n):

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

Transfer pricing involves the sale of a product to another unit within the same organization.

A certain location of O'Charley's Restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must O'Charley's serve per year in order to break even?

A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase.

Chris is planning three sales during the third quarter of the year at Toys R' Us. The first is at the beginning of the school year, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be:

When a company that produces computer printers prices them low, but the ink required to operate the printer is priced higher per relative usage, it is using:

Since Victoria's Secret has decided to use nonprice competition, it distinguishes its brand through all of the following except .

If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as:

What does the demand curve for a prestige product look like?

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Markets: Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packaging Concepts

Developing and Managing Goods and Services

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Filters

Exam 12: Pricing Concepts and Management

Prestige products tend to sell better at a high price than at a low price.

When establishing prices, a marketer's first step is to:

A firm that competes on a price basis is unable to change prices frequently.

A product under non-price competition would most likely not succeed in the market if:

The manager at Target puts a sign up next to a Samsung audio system that reads, "Only $299.99! $60 less than at Best Buy." This is an example of:

Elastic demand is usually a result of the lack of substitute products.

What is bundle pricing? Give three examples, each one from a different industry.

The pricing strategy that assumes that demand is relatively inelastic over certain price ranges is called:

Breyer's produces a variety of ice cream flavors and of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using to price its ice cream.

Safe Auto advertises its automobile insurance as "minimum coverage for minimum budgets." Safe Auto is engaging in:

A concession in price in business markets to achieve a desired goal is called a(n):

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

Transfer pricing involves the sale of a product to another unit within the same organization.

A certain location of O'Charley's Restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must O'Charley's serve per year in order to break even?

A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase.

Chris is planning three sales during the third quarter of the year at Toys R' Us. The first is at the beginning of the school year, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be:

When a company that produces computer printers prices them low, but the ink required to operate the printer is priced higher per relative usage, it is using:

Since Victoria's Secret has decided to use non­price competition, it distinguishes its brand through all of the following except .

If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as:

What does the demand curve for a prestige product look like?

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Markets: Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packaging Concepts

Developing and Managing Goods and Services

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Filters

Since Victoria's Secret has decided to use nonprice competition, it distinguishes its brand through all of the following except .