Question 1

Uniform delivered pricing enables a firm to:

Accepted Answer

A)  charge each customer the actual cost of shipping its products 
B)  stir up price competition between buyers 
C)  maintain a nationally advertised price 
D)  discriminate in favor of buyers that are geographically closer to the seller 
E)  charge each customer its fair share of the cost of shipping 
A)  charge each customer the actual cost of shipping its products 
B)  stir up price competition between buyers 
C)  maintain a nationally advertised price 
D)  discriminate in favor of buyers that are geographically closer to the seller 
E)  charge each customer its fair share of the cost of shipping

Question 2

Jones Soda Company and Big Sky Brands have introduced Jones Soda Carbonated Candy,a candy that delivers a blast of the most popular Jones Soda flavors along with an oddly enjoyable tongue-tingling sensation.Which pricing strategy would be appropriate if the company wants to convince price-sensitive consumers to try it and not buy some other brand?

Accepted Answer

A)  price-lining 
B)  price-fixing 
C)  status quo pricing 
D)  penetration pricing 
E)  price-skimming 
A)  price-lining 
B)  price-fixing 
C)  status quo pricing 
D)  penetration pricing 
E)  price-skimming

Question 3

A firm charging a price identical to or very close to the competition's price is using a _____ strategy.

Accepted Answer

A)  differentiation pricing 
B)  penetration pricing 
C)  preemptive pricing 
D)  status quo pricing 
E)  leader pricing 
A)  differentiation pricing 
B)  penetration pricing 
C)  preemptive pricing 
D)  status quo pricing 
E)  leader pricing

Question 4

In which of the following countries is Procter & Gamble MOST likely to sell razor blades using a penetration pricing strategy?

Accepted Answer

A)  the United States 
B)  France 
C)  Bangladesh 
D)  Japan 
E)  Canada 
A)  the United States 
B)  France 
C)  Bangladesh 
D)  Japan 
E)  Canada

Question 5

Marketers must take care when using _____ since a lower price often signals to consumers that product quality is also low.

Accepted Answer

A)  price skimming 
B)  status quo pricing 
C)  penetration pricing 
D)  unbundling 
E)  cost sharing 
A)  price skimming 
B)  status quo pricing 
C)  penetration pricing 
D)  unbundling 
E)  cost sharing

Question 6

A catalog retailer offers three styles of khaki pants at three price levels.The special pricing tactic used by the catalog retailer is best described as variable psychological pricing.

Accepted Answer

A) True 
 B)False

Question 7

One example of price bundling occurs when Nintendo sells the Wii Fit balance board with the Wii game system at a lower price than the total price of each if bought separately.

Accepted Answer

A) True 
 B)False

Question 8

All pricing objectives have trade-offs that managers must weigh.

Accepted Answer

A) True 
 B)False

Question 9

If a marketer decides to price goods at odd-numbered dollar amounts to denote bargains,and at even-numbered amounts to denote quality,he or she is using:

Accepted Answer

A)  two-part pricing 
B)  price lining 
C)  price bracketing 
D)  decoy pricing 
E)  psychological pricing 
A)  two-part pricing 
B)  price lining 
C)  price bracketing 
D)  decoy pricing 
E)  psychological pricing

Question 10

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.Samsung recently introduced its Instinct cellular phone,apparently to compete directly with the iPhone.If Samsung checked the price of the iPhone at the Apple Store and AT&T locations and then set the price of the Instinct to match the iPhone's price,it would be using a _____ pricing approach.

Accepted Answer

A)  bracketing 
B)  penetration 
C)  status quo 
D)  retain maintenance 
E)  skimming 
A)  bracketing 
B)  penetration 
C)  status quo 
D)  retain maintenance 
E)  skimming

Question 11

Costs that are shared in the manufacturing and marketing of several products in a product line are called:

Accepted Answer

A)  joint costs 
B)  integrated costs 
C)  fixed costs 
D)  variable costs 
E)  combined costs 
A)  joint costs 
B)  integrated costs 
C)  fixed costs 
D)  variable costs 
E)  combined costs

Question 12

For which of the following situations would a price-skimming strategy be most appropriate?

Accepted Answer

A)  the addition of a new comic book series with an obviously gay hero 
B)  the introduction of a new brand of bottled water 
C)  the elimination of demand for low wattage light bulbs 
D)  the introduction of a unique,roomy automobile model that has extremely low energy and fuel costs 
E)  the introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee 
A)  the addition of a new comic book series with an obviously gay hero 
B)  the introduction of a new brand of bottled water 
C)  the elimination of demand for low wattage light bulbs 
D)  the introduction of a unique,roomy automobile model that has extremely low energy and fuel costs 
E)  the introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee

Question 13

Redline Editorial Services sent a $1,000 invoice to a customer for copyediting a booklet.According to the terms of the invoice,the customer would receive a 3 percent discount on the invoice price if the invoice was paid within 15 days.This is an example of a:

Accepted Answer

A)  quantity discount 
B)  cash discount 
C)  rebate 
D)  functional discount 
E)  promotional allowance 
A)  quantity discount 
B)  cash discount 
C)  rebate 
D)  functional discount 
E)  promotional allowance

Question 14

Markdown allowances are illegal.

Accepted Answer

A) True 
 B)False

Question 15

Kiddieland Amusement Park charges customers an admission fee of $10.Customers must pay 50 cents for each ride they want to ride while inside the park.This is an example of two-part pricing.

Accepted Answer

A) True 
 B)False

Question 16

The 99-Center is a retail store where all of the merchandise is priced at 99 cents.This retailer uses:

Accepted Answer

A)  a single-price tactic 
B)  flexible pricing 
C)  price lining 
D)  price bundling 
E)  leader pricing 
A)  a single-price tactic 
B)  flexible pricing 
C)  price lining 
D)  price bundling 
E)  leader pricing

Question 17

Uniform delivered pricing:

Accepted Answer

A)  creates no geographic price discrimination 
B)  is sometimes called "postage stamp pricing" 
C)  is prevalent in the steel,cement,corn oil,and lead industries 
D)  is common where freight costs are a large portion of total costs 
E)  is calculated from regional base points 
A)  creates no geographic price discrimination 
B)  is sometimes called "postage stamp pricing" 
C)  is prevalent in the steel,cement,corn oil,and lead industries 
D)  is common where freight costs are a large portion of total costs 
E)  is calculated from regional base points

Question 18

At the Greenville Florist,there are four different prices for funeral bouquets.The smallest bouquet sells for $30;there is also a $40 version and a $75 version.For those who want to express their grief through the purchase of a dramatic floral arrangement,the florist also offers a $150 value.The owner of the florist shop has chosen price lining because it will:

Accepted Answer

A)  enable the shop to carry a larger total inventory 
B)  maintain all of the product line at the same stage in the product life cycle 
C)  confuse customers and allow salespeople to sell more of the expensive models 
D)  reach several different target market segments 
E)  thwart competitors that are trying to sell similar products 
A)  enable the shop to carry a larger total inventory 
B)  maintain all of the product line at the same stage in the product life cycle 
C)  confuse customers and allow salespeople to sell more of the expensive models 
D)  reach several different target market segments 
E)  thwart competitors that are trying to sell similar products

Question 19

Toyota periodically offers customers _____,allowing purchasers to borrow money to pay for new cars without incurring an interest charge.

Accepted Answer

A)  markdown money 
B)  zero percent financing 
C)  promotional allowances 
D)  make-up allowances 
E)  leader pricing reductions 
A)  markdown money 
B)  zero percent financing 
C)  promotional allowances 
D)  make-up allowances 
E)  leader pricing reductions

Question 20

The basic assumption behind value-based pricing is that:

Accepted Answer

A)  the firm is sales-driven 
B)  the firm is both customer-driven and competitor-driven 
C)  increased profitability for wholesalers will increase the number of services they are willing to perform 
D)  consumers are more concerned about price than quality 
E)  additional long-term costs to manufacturers will increase 
A)  the firm is sales-driven 
B)  the firm is both customer-driven and competitor-driven 
C)  increased profitability for wholesalers will increase the number of services they are willing to perform 
D)  consumers are more concerned about price than quality 
E)  additional long-term costs to manufacturers will increase

Uniform delivered pricing enables a firm to:

A firm charging a price identical to or very close to the competition's price is using a _____ strategy.

In which of the following countries is Procter & Gamble MOST likely to sell razor blades using a penetration pricing strategy?

Marketers must take care when using _____ since a lower price often signals to consumers that product quality is also low.

A catalog retailer offers three styles of khaki pants at three price levels.The special pricing tactic used by the catalog retailer is best described as variable psychological pricing.

One example of price bundling occurs when Nintendo sells the Wii Fit balance board with the Wii game system at a lower price than the total price of each if bought separately.

All pricing objectives have trade-offs that managers must weigh.

If a marketer decides to price goods at odd-numbered dollar amounts to denote bargains,and at even-numbered amounts to denote quality,he or she is using:

Costs that are shared in the manufacturing and marketing of several products in a product line are called:

For which of the following situations would a price-skimming strategy be most appropriate?

Redline Editorial Services sent a $1,000 invoice to a customer for copyediting a booklet.According to the terms of the invoice,the customer would receive a 3 percent discount on the invoice price if the invoice was paid within 15 days.This is an example of a:

Markdown allowances are illegal.

Kiddieland Amusement Park charges customers an admission fee of $10.Customers must pay 50 cents for each ride they want to ride while inside the park.This is an example of two-part pricing.

The 99-Center is a retail store where all of the merchandise is priced at 99 cents.This retailer uses:

Uniform delivered pricing:

Toyota periodically offers customers _____,allowing purchasers to borrow money to pay for new cars without incurring an interest charge.

The basic assumption behind value-based pricing is that:

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

Uniform delivered pricing enables a firm to:

A firm charging a price identical to or very close to the competition's price is using a _____ strategy.

In which of the following countries is Procter & Gamble MOST likely to sell razor blades using a penetration pricing strategy?

Marketers must take care when using _____ since a lower price often signals to consumers that product quality is also low.

A catalog retailer offers three styles of khaki pants at three price levels.The special pricing tactic used by the catalog retailer is best described as variable psychological pricing.

One example of price bundling occurs when Nintendo sells the Wii Fit balance board with the Wii game system at a lower price than the total price of each if bought separately.

All pricing objectives have trade-offs that managers must weigh.

If a marketer decides to price goods at odd-numbered dollar amounts to denote bargains,and at even-numbered amounts to denote quality,he or she is using:

Costs that are shared in the manufacturing and marketing of several products in a product line are called:

For which of the following situations would a price-skimming strategy be most appropriate?

Redline Editorial Services sent a $1,000 invoice to a customer for copyediting a booklet.According to the terms of the invoice,the customer would receive a 3 percent discount on the invoice price if the invoice was paid within 15 days.This is an example of a:

Markdown allowances are illegal.

Kiddieland Amusement Park charges customers an admission fee of $10.Customers must pay 50 cents for each ride they want to ride while inside the park.This is an example of two-part pricing.

The 99-Center is a retail store where all of the merchandise is priced at 99 cents.This retailer uses:

Uniform delivered pricing:

Toyota periodically offers customers _____,allowing purchasers to borrow money to pay for new cars without incurring an interest charge.

The basic assumption behind value-based pricing is that:

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