Question 1

Single-price selling:

Accepted Answer

A)  removes price comparisons from the buyer's decision-making process 
B)  does not benefit the retailer 
C)  is most effective when used during an inflationary period 
D)  encourages clerical errors 
E)  is accurately described by none of these choices 
A)  removes price comparisons from the buyer's decision-making process 
B)  does not benefit the retailer 
C)  is most effective when used during an inflationary period 
D)  encourages clerical errors 
E)  is accurately described by none of these choices

Question 2

When the Mosquito Magnet was introduced,it was designed to rid the immediate area of mosquitoes and other annoying insects.The technology for the Mosquito Magnet had taken years to develop.It is a patented grill-like apparatus that emits carbon dioxide to attract bugs to a fan that draws them into the device where they die.What type of pricing policy would you recommend the company use to introduce this product to the market?

Accepted Answer

A)  Status quo pricing 
B)  Penetration pricing 
C)  Price-skimming 
D)  Flexible pricing 
E)  Leader pricing 
A)  Status quo pricing 
B)  Penetration pricing 
C)  Price-skimming 
D)  Flexible pricing 
E)  Leader pricing

Question 3

Often a seller will establish a series of prices for a family of merchandise items.There may be several different models at specific price points but no prices in between.This policy is called:

Accepted Answer

A)  price lining 
B)  price bracketing 
C)  family pricing 
D)  variable pricing 
E)  price bundling 
A)  price lining 
B)  price bracketing 
C)  family pricing 
D)  variable pricing 
E)  price bundling

Question 4

Lea Kirkham is a physician.She charges each patient the same price for a physical examination,whether the procedure takes 10 minutes or a full hour.Which pricing policy is Dr.Kirkham following?

Accepted Answer

A)  Professional services pricing 
B)  Potential (or base)pricing 
C)  Price maintenance 
D)  Psychological pricing 
E)  Flexible (or variable)pricing 
A)  Professional services pricing 
B)  Potential (or base)pricing 
C)  Price maintenance 
D)  Psychological pricing 
E)  Flexible (or variable)pricing

Question 5

Two effective pricing tactics,which can be used during a recession,to hold or build market share are:

Accepted Answer

A)  flexible pricing and price shading 
B)  price shading and price lining 
C)  unbundling and price shading 
D)  value-based pricing and bundling 
E)  price lining and escalator pricing 
A)  flexible pricing and price shading 
B)  price shading and price lining 
C)  unbundling and price shading 
D)  value-based pricing and bundling 
E)  price lining and escalator pricing

Question 6

In the United States,price fixing is only illegal in some instances.

Accepted Answer

A) True 
 B)False

Question 7

After managers understand both the legal and the marketing consequences of price strategies,they should set a _____ price-the general level at which a company expects to sell a good or service.

Accepted Answer

A)  functional 
B)  zone 
C)  demand 
D)  leader 
E)  base 
A)  functional 
B)  zone 
C)  demand 
D)  leader 
E)  base

Question 8

States developed unfair trade practice acts to

Accepted Answer

A)  enforce the Sherman Act that makes bait pricing illegal 
B)  prevent oligopoly leaders from getting together and fixing prices at the highest the market will bear 
C)  establish penalties for companies that break the Clayton Act by engaging in predatory pricing 
D)  make sure that all pricing policies are equitable 
E)  protect small,local firms from giant companies that operate efficiently on razor-thin profit margins 
A)  enforce the Sherman Act that makes bait pricing illegal 
B)  prevent oligopoly leaders from getting together and fixing prices at the highest the market will bear 
C)  establish penalties for companies that break the Clayton Act by engaging in predatory pricing 
D)  make sure that all pricing policies are equitable 
E)  protect small,local firms from giant companies that operate efficiently on razor-thin profit margins

Question 9

In 2008 United Airlines and American Airlines disclosed settlements in a class-action lawsuit over allegations of airfreight price fixing.This means the companies:

Accepted Answer

A)  tried to charge fees for air fright that were below costs 
B)  charged customers different amounts for the same shipments 
C)  agreed on the price they would charge customers for air freight 
D)  used uniform geographic pricing 
E)  created an artificial demand for shipping 
A)  tried to charge fees for air fright that were below costs 
B)  charged customers different amounts for the same shipments 
C)  agreed on the price they would charge customers for air freight 
D)  used uniform geographic pricing 
E)  created an artificial demand for shipping

Question 10

The Comcast Triple Play package includes cable television,Internet,and telephone service for a price significantly lower than the cost of the three services priced separately.This is an example of _____.

Accepted Answer

A)  multiple unit pricing 
B)  professional services pricing 
C)  price lining 
D)  price bundling 
E)  two-part pricing 
A)  multiple unit pricing 
B)  professional services pricing 
C)  price lining 
D)  price bundling 
E)  two-part pricing

Question 11

During a recent recession,many manufacturers determined that their suppliers were an excellent source of cost savings.Specific cost-reduction strategies manufacturers have used with their suppliers include:

Accepted Answer

A)  offer help in boosting productivity of suppliers 
B)  renegotiate contracts 
C)  set annual across-the-board cost reduction targets for suppliers 
D)  improve economies of scale by cutting number of suppliers 
E)  all of the choices 
A)  offer help in boosting productivity of suppliers 
B)  renegotiate contracts 
C)  set annual across-the-board cost reduction targets for suppliers 
D)  improve economies of scale by cutting number of suppliers 
E)  all of the choices

Question 12

Sometimes managers price their products too low,resulting in a loss of company profits.One reason this happens is that:

Accepted Answer

A)  managers attempt to buy market share through aggressive pricing,but the cuts are quickly met by competitors,which wipe out any gain in market share 
B)  consumers tend to equate lower prices with low-quality goods,and they are never able to regain that lost market share 
C)  price-skimming strategies only work in the short-term,and always eventually result in lower profits 
D)  most managers simply lack good business sense,especially in regard to finances 
E)  all of the above are reasons 
A)  managers attempt to buy market share through aggressive pricing,but the cuts are quickly met by competitors,which wipe out any gain in market share 
B)  consumers tend to equate lower prices with low-quality goods,and they are never able to regain that lost market share 
C)  price-skimming strategies only work in the short-term,and always eventually result in lower profits 
D)  most managers simply lack good business sense,especially in regard to finances 
E)  all of the above are reasons

Question 13

Escalator pricing is:

Accepted Answer

A)  a demand-oriented pricing tactic 
B)  similar to delayed-quotation pricing 
C)  similar to price shading 
D)  a form of market penetration pricing 
E)  also called postage stamp pricing 
A)  a demand-oriented pricing tactic 
B)  similar to delayed-quotation pricing 
C)  similar to price shading 
D)  a form of market penetration pricing 
E)  also called postage stamp pricing

Question 14

Which type of pricing means pricing at odd-numbered prices to connote a bargain and pricing at even-numbered prices to imply quality?

Accepted Answer

A)  Bait pricing 
B)  Price bundling 
C)  1-2 pricing 
D)  Odd-even pricing 
E)  Two-part pricing 
A)  Bait pricing 
B)  Price bundling 
C)  1-2 pricing 
D)  Odd-even pricing 
E)  Two-part pricing

Question 15

Evergreen Lighting,a manufacturer of decorative,energy-efficient lighting products,requires its buyers to pay for the cost of transportation from the manufacturing site to their place of businesses.Evergreen Lighting uses FOB origin pricing.

Accepted Answer

A) True 
 B)False

Question 16

A _____ is a price reduction that shifts the storage function forward to the purchaser and enables manufacturers to maintain steady production year-round.

Accepted Answer

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

Question 17

The price skimming strategy is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.This strategy works best when:

Accepted Answer

A)  competition is abundant 
B)  revenues are equal to expenses 
C)  supply is greater than demand 
D)  production capacity is large and flexible 
E)  demand is greater than supply 
A)  competition is abundant 
B)  revenues are equal to expenses 
C)  supply is greater than demand 
D)  production capacity is large and flexible 
E)  demand is greater than supply

Question 18

Apple iPhone
Apple Inc.iPhone went on sale on June 29,2007.Apple's loyal and enthusiastic customer base is known for rushing to purchase its new products and the iPhone enjoyed a tremendous amount of "buzz" before its introduction.As expected,the iPhone entered the market at what many believed to be a high price ($599).However,within weeks the price was reduced to $399.By the end of 2007 over 8 million iPhones had sold in the U.S.marketplace.By most,if not all measures,the original iPhone was a huge success for Apple and it exclusive U.S.carrier AT&T.
On July 11,2008,Apple Inc.released the iPhone 3G,which it advertised as twice as fast as the original iPhone for half the cost.However,in order to obtain an iPhone at the new price of $199,buyers had to agree to a two-year service contract with AT&T.This allows iPhone users to receive phone calls and email,and search the web on the same device.A single charge of $59.99 from AT&T included 450 minutes of cellular calls,with free nights and weekend minutes,unlimited data,visual voicemail,200 text messages,rollover minutes,and unlimited mobile-to-mobile service within the AT&T network.This approach succeeded and over a million iPhone 3Gs were sold during the introductory weekend.
-Refer to Apple iPhone.Consumers who agree to the two-year AT&T service contract will be required to pay a cancellation fee if they leave AT&T prior to the end of the two-year period.This fee is a consumer:

Accepted Answer

A)  bundling 
B)  penalty 
C)  lining 
D)  stimulus 
E)  markdown 
A)  bundling 
B)  penalty 
C)  lining 
D)  stimulus 
E)  markdown

Question 19

How do value-based pricing,unbundling,and bundling help marketers hold onto market share during a recession?

Accepted Answer

Value-based pricing stresses to customer

Question 20

Procter & Gamble entered the electric toothbrush market with the Crest SpinBrush at a price considerably lower than lesser-known competitors.It used penetration to gain market share.

Accepted Answer

A) True 
 B)False

Single-price selling:

Often a seller will establish a series of prices for a family of merchandise items.There may be several different models at specific price points but no prices in between.This policy is called:

Lea Kirkham is a physician.She charges each patient the same price for a physical examination,whether the procedure takes 10 minutes or a full hour.Which pricing policy is Dr.Kirkham following?

Two effective pricing tactics,which can be used during a recession,to hold or build market share are:

In the United States,price fixing is only illegal in some instances.

After managers understand both the legal and the marketing consequences of price strategies,they should set a _____ price-the general level at which a company expects to sell a good or service.

States developed unfair trade practice acts to

In 2008 United Airlines and American Airlines disclosed settlements in a class-action lawsuit over allegations of airfreight price fixing.This means the companies:

The Comcast Triple Play package includes cable television,Internet,and telephone service for a price significantly lower than the cost of the three services priced separately.This is an example of _____.

During a recent recession,many manufacturers determined that their suppliers were an excellent source of cost savings.Specific cost-reduction strategies manufacturers have used with their suppliers include:

Sometimes managers price their products too low,resulting in a loss of company profits.One reason this happens is that:

Escalator pricing is:

Which type of pricing means pricing at odd-numbered prices to connote a bargain and pricing at even-numbered prices to imply quality?

Evergreen Lighting,a manufacturer of decorative,energy-efficient lighting products,requires its buyers to pay for the cost of transportation from the manufacturing site to their place of businesses.Evergreen Lighting uses FOB origin pricing.

A _____ is a price reduction that shifts the storage function forward to the purchaser and enables manufacturers to maintain steady production year-round.

The price skimming strategy is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.This strategy works best when:

How do value-based pricing,unbundling,and bundling help marketers hold onto market share during a recession?

Procter & Gamble entered the electric toothbrush market with the Crest SpinBrush at a price considerably lower than lesser-known competitors.It used penetration to gain market share.

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics and Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Decisions

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Promotional Planning for Competitive Advantage

Advertising and Public Relations

Sales Promotion and Personal Selling

Pricing Concepts

Customer Relationship Management (CRM)

Social Media and Marketing

Filters

Exam 20: Setting the Right Price

Single-price selling:

Often a seller will establish a series of prices for a family of merchandise items.There may be several different models at specific price points but no prices in between.This policy is called:

Lea Kirkham is a physician.She charges each patient the same price for a physical examination,whether the procedure takes 10 minutes or a full hour.Which pricing policy is Dr.Kirkham following?

Two effective pricing tactics,which can be used during a recession,to hold or build market share are:

In the United States,price fixing is only illegal in some instances.

After managers understand both the legal and the marketing consequences of price strategies,they should set a _____ price-the general level at which a company expects to sell a good or service.

States developed unfair trade practice acts to

In 2008 United Airlines and American Airlines disclosed settlements in a class-action lawsuit over allegations of airfreight price fixing.This means the companies:

The Comcast Triple Play package includes cable television,Internet,and telephone service for a price significantly lower than the cost of the three services priced separately.This is an example of _____.

During a recent recession,many manufacturers determined that their suppliers were an excellent source of cost savings.Specific cost-reduction strategies manufacturers have used with their suppliers include:

Sometimes managers price their products too low,resulting in a loss of company profits.One reason this happens is that:

Escalator pricing is:

Which type of pricing means pricing at odd-numbered prices to connote a bargain and pricing at even-numbered prices to imply quality?

Evergreen Lighting,a manufacturer of decorative,energy-efficient lighting products,requires its buyers to pay for the cost of transportation from the manufacturing site to their place of businesses.Evergreen Lighting uses FOB origin pricing.

A _____ is a price reduction that shifts the storage function forward to the purchaser and enables manufacturers to maintain steady production year-round.

The price skimming strategy is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.This strategy works best when:

How do value-based pricing,unbundling,and bundling help marketers hold onto market share during a recession?

Procter & Gamble entered the electric toothbrush market with the Crest SpinBrush at a price considerably lower than lesser-known competitors.It used penetration to gain market share.

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics and Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Decisions

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Promotional Planning for Competitive Advantage

Advertising and Public Relations

Sales Promotion and Personal Selling

Pricing Concepts

Customer Relationship Management (CRM)

Social Media and Marketing

Filters