Question 1

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

Accepted Answer

A)  return on investment 
B)  survival 
C)  product quality 
D)  market share 
E)  status quo 
A)  return on investment 
B)  survival 
C)  product quality 
D)  market share 
E)  status quo

Question 2

Lexmark sells some of its color printers for about $100, but the refill cartridges cost over $30 each. Lexmark's pricing strategy would be best labeled as

Accepted Answer

A)  bait pricing. 
B)  captive pricing. 
C)  customary pricing. 
D)  price lining. 
E)  complementary pricing. 
A)  bait pricing. 
B)  captive pricing. 
C)  customary pricing. 
D)  price lining. 
E)  complementary pricing.

Question 3

Breyer's produces a variety of ice cream flavors and lines 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 4

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

Accepted Answer

A) True 
 B)False

Question 5

All for Fun is a retail store that offers a variety of board games, magic cards, and other collectible items and caters to teens and adults who enjoy strategy-based games. The store has over 20,000 magic cards and utilizes a sophisticated computer system to identify the value of each card. All for Fun determines the rarity of a given card and adjusts prices according to how much money customers are likely to pay for a particular card. Cards that are in limited production or considered "rare" are more expensive than cards that are widely available. Thus, the price for a single magic card might vary between $25 and $50 or more per card depending on the market. What type of pricing is All for Fun utilizing?

Accepted Answer

A)  Demand-based pricing 
B)  Markup pricing 
C)  Cost-plus pricing 
D)  Competition-based pricing 
A)  Demand-based pricing 
B)  Markup pricing 
C)  Cost-plus pricing 
D)  Competition-based pricing

Question 6

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 7

The use of price skimming discourages competitors from entering a market.

Accepted Answer

A) True 
 B)False

Question 8

After selecting a pricing strategy, what is the next step in the establishment of prices?

Accepted Answer

A)  Developing pricing objectives 
B)  Determining a specific price 
C)  Assessing the target market's evaluation of price 
D)  Selecting a basis for pricing 
E)  Evaluating competitors' prices 
A)  Developing pricing objectives 
B)  Determining a specific price 
C)  Assessing the target market's evaluation of price 
D)  Selecting a basis for pricing 
E)  Evaluating competitors' prices

Question 9

One pitfall of cost-plus pricing for the buyer is that the seller may increase costs to establish a larger profit base.

Accepted Answer

A) True 
 B)False

Question 10

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is

Accepted Answer

A)  keeping the status quo. 
B)  profit. 
C)  survival. 
D)  market share. 
E)  recovery. 
A)  keeping the status quo. 
B)  profit. 
C)  survival. 
D)  market share. 
E)  recovery.

Question 11

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 12

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of

Accepted Answer

A)  differential pricing. 
B)  incentives. 
C)  competition-based pricing. 
D)  demand-based pricing. 
E)  random discounting. 
A)  differential pricing. 
B)  incentives. 
C)  competition-based pricing. 
D)  demand-based pricing. 
E)  random discounting.

Question 13

Wet Seal, a retailer of swimwear, employs a commonly used cost-based pricing method called

Accepted Answer

A)  value pricing. 
B)  cost-plus pricing. 
C)  cost discounting. 
D)  differential pricing. 
E)  markup pricing. 
A)  value pricing. 
B)  cost-plus pricing. 
C)  cost discounting. 
D)  differential pricing. 
E)  markup pricing.

Question 14

Bundle pricing may be perceived to be of value by customers because

Accepted Answer

A)  they always pay a lower price per item than they would have if they bought each item separately. 
B)  they prefer buying a combination of bundled products in a single transaction, which saves time, effort, and perhaps money. 
C)  the companies selling the products can sell them at a lower price because their costs of packaging are lower. 
D)  they are purchasing complementary products, which is convenient for them. 
E)  they can purchase items that are consumed frequently in larger quantities. 
A)  they always pay a lower price per item than they would have if they bought each item separately. 
B)  they prefer buying a combination of bundled products in a single transaction, which saves time, effort, and perhaps money. 
C)  the companies selling the products can sell them at a lower price because their costs of packaging are lower. 
D)  they are purchasing complementary products, which is convenient for them. 
E)  they can purchase items that are consumed frequently in larger quantities.

Question 15

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

Accepted Answer

A)  price reduction planning. 
B)  random discounting. 
C)  bait pricing. 
D)  periodic discounting. 
E)  penetration pricing. 
A)  price reduction planning. 
B)  random discounting. 
C)  bait pricing. 
D)  periodic discounting. 
E)  penetration pricing.

Question 16

What are some issues to consider when determining a specific price?

Accepted Answer

A pricing strategy will yield a certain

Question 17

Sony management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does not

Accepted Answer

A)  generate capital to cover research and development costs. 
B)  discourage competitors from entering the market. 
C)  provide flexibility in the introductory base price. 
D)  protect the firm from covering costs if prices are set too low. 
E)  reduce the stress that may be placed on the firm's production capabilities. 
A)  generate capital to cover research and development costs. 
B)  discourage competitors from entering the market. 
C)  provide flexibility in the introductory base price. 
D)  protect the firm from covering costs if prices are set too low. 
E)  reduce the stress that may be placed on the firm's production capabilities.

Question 18

All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except

Accepted Answer

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

Question 19

Demand-based pricing strategies are easy to use.

Accepted Answer

A) True 
 B)False

Question 20

Most pricing objectives based on ____ are achieved by trial and error because not all cost and revenue data are available when prices are set.

Accepted Answer

A)  market share 
B)  cash flow 
C)  return on investment 
D)  survival 
E)  profit 
A)  market share 
B)  cash flow 
C)  return on investment 
D)  survival 
E)  profit

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

Lexmark sells some of its color printers for about $100, but the refill cartridges cost over $30 each. Lexmark's pricing strategy would be best labeled as

Breyer's produces a variety of ice cream flavors and lines 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.

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

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

The use of price skimming discourages competitors from entering a market.

After selecting a pricing strategy, what is the next step in the establishment of prices?

One pitfall of cost-plus pricing for the buyer is that the seller may increase costs to establish a larger profit base.

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is

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

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of

Wet Seal, a retailer of swimwear, employs a commonly used cost-based pricing method called

Bundle pricing may be perceived to be of value by customers because

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

What are some issues to consider when determining a specific price?

Sony management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does not

All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except

Demand-based pricing strategies are easy to use.

Most pricing objectives based on ____ are achieved by trial and error because not all cost and revenue data are available when prices are set.

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

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 Concepts, Branding, and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Pricing Concepts

Filters

Exam 20: Setting Prices

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

Lexmark sells some of its color printers for about $100, but the refill cartridges cost over $30 each. Lexmark's pricing strategy would be best labeled as

Breyer's produces a variety of ice cream flavors and lines 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.

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

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

The use of price skimming discourages competitors from entering a market.

After selecting a pricing strategy, what is the next step in the establishment of prices?

One pitfall of cost-plus pricing for the buyer is that the seller may increase costs to establish a larger profit base.

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is

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

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of

Wet Seal, a retailer of swimwear, employs a commonly used cost-based pricing method called

Bundle pricing may be perceived to be of value by customers because

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

What are some issues to consider when determining a specific price?

Sony management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does not

All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except

Demand-based pricing strategies are easy to use.

Most pricing objectives based on ____ are achieved by trial and error because not all cost and revenue data are available when prices are set.

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

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 Concepts, Branding, and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Pricing Concepts

Filters