Question 1

JCPenney sends representatives to shop at similar retailers to make sure it is charging comparable prices for its products.JCPenney probably uses a _____ strategy.

Accepted Answer

A)  leader pricing 
B)  preemptive pricing 
C)  status quo pricing 
D)  flexible pricing 
E)  functional pricing 
A)  leader pricing 
B)  preemptive pricing 
C)  status quo pricing 
D)  flexible pricing 
E)  functional pricing

Question 2

Nestlé Purina sells chicken feed and Wheat Chex,but the sale of one of these products has no known impact on demand for the other.In this case,the two products have a(n)_____ relationship.

Accepted Answer

A)  inverse 
B)  neutral 
C)  complementary 
D)  substitute 
E)  negative 
A)  inverse 
B)  neutral 
C)  complementary 
D)  substitute 
E)  negative

Question 3

Distinguish between a cumulative and a noncumulative quantity discount.

Accepted Answer

A cumulative quantity discount is a dedu

Question 4

A penetration pricing strategy tends to be most effective:

Accepted Answer

A)  when demand is relatively inelastic 
B)  under unitary conditions 
C)  in price-sensitive markets 
D)  when the company can only perform small production runs 
E)  if unit costs are high 
A)  when demand is relatively inelastic 
B)  under unitary conditions 
C)  in price-sensitive markets 
D)  when the company can only perform small production runs 
E)  if unit costs are high

Question 5

When a channel intermediary is compensated for the ordinary services and tasks performed within the channel of distribution,the compensation usually comes in the form of a discount from base price.This discount is called a:

Accepted Answer

A)  seasonal discount 
B)  promotional allowance 
C)  cumulative or noncumulative quantity discount 
D)  functional (or trade)discount 
E)  rebate or refund 
A)  seasonal discount 
B)  promotional allowance 
C)  cumulative or noncumulative quantity discount 
D)  functional (or trade)discount 
E)  rebate or refund

Question 6

All of the following are geographic pricing methods EXCEPT:

Accepted Answer

A)  latitude pricing 
B)  FOB origin pricing 
C)  zone pricing 
D)  freight absorption pricing 
E)  basing-point pricing 
A)  latitude pricing 
B)  FOB origin pricing 
C)  zone pricing 
D)  freight absorption pricing 
E)  basing-point pricing

Question 7

Which type of quantity discount is a deduction from the list price that applies to a single order?

Accepted Answer

A)  Base discount 
B)  Cumulative discount 
C)  Noncumulative discount 
D)  Cash discount 
E)  Functional discount 
A)  Base discount 
B)  Cumulative discount 
C)  Noncumulative discount 
D)  Cash discount 
E)  Functional discount

Question 8

If a company decides to divide its market area into segments or regions and charge a flat rate for freight to all customers in a given region,the company is using _____ pricing.

Accepted Answer

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

Question 9

An Internet picture frame manufacturer offers retailers reduced prices on any combination of size or style frames purchased.The discount is shown as they shop and adjusted as the quantity of frames purchased increases.What common form of purchase discount is the frame manufacturer using?

Accepted Answer

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

Question 10

A shortage of blood for transfusions for injured animals has resulted in the introduction of a synthesized product called Oxyglobin,which can be used effectively as a blood replacement.The manufacturer of the product has put a high price on the product in order to recoup its research and development costs.The manufacturer of Oxyglobin is using a _____ policy.

Accepted Answer

A)  price-banding 
B)  penetration pricing 
C)  price-lining 
D)  bundling costs 
E)  price-skimming 
A)  price-banding 
B)  penetration pricing 
C)  price-lining 
D)  bundling costs 
E)  price-skimming

Question 11

Suppose an advertising agency develops logos for its clients.It charges $10,000 per logo-whether the team that's working on the logo takes 30 minutes or days to design the logo.Agency management explain that clients pay for the agency's expertise and creativity,not the amount of time it literally takes to develop a logo.This pricing approach is known as:

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 12

One form of extreme penetration pricing that has dramatically increased sales during the recent economic downturn is _____ grocers.

Accepted Answer

A)  black market 
B)  scratch-and-dent 
C)  elastic 
D)  break-even 
E)  salvage 
A)  black market 
B)  scratch-and-dent 
C)  elastic 
D)  break-even 
E)  salvage

Question 13

If items are _____,an increase in the sale of one good causes an increase in the sale of the other (and vice versa).

Accepted Answer

A)  inverse 
B)  neutral 
C)  complementary 
D)  substitute 
E)  negative 
A)  inverse 
B)  neutral 
C)  complementary 
D)  substitute 
E)  negative

Question 14

Tickets to the combined amusement park and water slide were $49 for the day.Then the company gave customers the option to purchase tickets for either the amusement park or the water slide for $18.To help keep costs in line,the park management also began charging its customers a small parking fee.Initially,the cost of parking was figured into the $49 price.The amusement park is using:

Accepted Answer

A)  price lining 
B)  potential (or base)pricing 
C)  unbundling 
D)  professional services pricing 
E)  price maintenance 
A)  price lining 
B)  potential (or base)pricing 
C)  unbundling 
D)  professional services pricing 
E)  price maintenance

Question 15

A(n)_____ discount is a deduction from list prices that applies to the buyer's total purchases made during a specific period and intended to encourage customer loyalty.

Accepted Answer

A)  cumulative quantity 
B)  noncumulative quantitative 
C)  functional 
D)  cash 
E)  integrated 
A)  cumulative quantity 
B)  noncumulative quantitative 
C)  functional 
D)  cash 
E)  integrated

Question 16

Quantity discounts are most often used to:

Accepted Answer

A)  reward the buyer who pays in cash 
B)  encourage large orders 
C)  increase supply for a specific raw material 
D)  reward a channel intermediary for performing some service 
E)  shift the storage function backward to the supplier 
A)  reward the buyer who pays in cash 
B)  encourage large orders 
C)  increase supply for a specific raw material 
D)  reward a channel intermediary for performing some service 
E)  shift the storage function backward to the supplier

Question 17

Louisiana State University football season ticket holders have to pay a fee (also known as a "donation")to the LSU Foundation every January,which is not deemed to be part of the ticket price.They pay for their tickets later in the year for the next football season.The Foundation fee must be paid in order to retain the rights to purchase a season ticket.LSU is using:

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 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.Best Buy carries the Samsung Instinct for $599.If it had disappointing sales and Best Buy decided to reduce the price and expected Samsung to absorb some of the cost of the lowered price at the end of the season,this would require:

Accepted Answer

A)  a functional discount 
B)  a cash discount 
C)  markdown money 
D)  a rebate 
E)  a quantity discount 
A)  a functional discount 
B)  a cash discount 
C)  markdown money 
D)  a rebate 
E)  a quantity discount

Question 19

Ace Hardware's spring snowblower sale is an example of which of the following pricing tactics?

Accepted Answer

A)  Quantity discount 
B)  Seasonal discount 
C)  Temporal discount 
D)  Promotional allowance 
E)  Functional discount 
A)  Quantity discount 
B)  Seasonal discount 
C)  Temporal discount 
D)  Promotional allowance 
E)  Functional discount

Question 20

Name and describe the three basic strategies for setting a price on a new good or service.Under what conditions is each of the three basic pricing methods successful?

Accepted Answer

PRICE SKIMMING.With this method,a high i

JCPenney sends representatives to shop at similar retailers to make sure it is charging comparable prices for its products.JCPenney probably uses a _____ strategy.

Nestlé Purina sells chicken feed and Wheat Chex,but the sale of one of these products has no known impact on demand for the other.In this case,the two products have a(n)_____ relationship.

Distinguish between a cumulative and a noncumulative quantity discount.

A penetration pricing strategy tends to be most effective:

When a channel intermediary is compensated for the ordinary services and tasks performed within the channel of distribution,the compensation usually comes in the form of a discount from base price.This discount is called a:

All of the following are geographic pricing methods EXCEPT:

Which type of quantity discount is a deduction from the list price that applies to a single order?

If a company decides to divide its market area into segments or regions and charge a flat rate for freight to all customers in a given region,the company is using _____ pricing.

An Internet picture frame manufacturer offers retailers reduced prices on any combination of size or style frames purchased.The discount is shown as they shop and adjusted as the quantity of frames purchased increases.What common form of purchase discount is the frame manufacturer using?

One form of extreme penetration pricing that has dramatically increased sales during the recent economic downturn is _____ grocers.

If items are _____,an increase in the sale of one good causes an increase in the sale of the other (and vice versa).

A(n)_____ discount is a deduction from list prices that applies to the buyer's total purchases made during a specific period and intended to encourage customer loyalty.

Quantity discounts are most often used to:

Ace Hardware's spring snowblower sale is an example of which of the following pricing tactics?

Name and describe the three basic strategies for setting a price on a new good or service.Under what conditions is each of the three basic pricing methods successful?

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

JCPenney sends representatives to shop at similar retailers to make sure it is charging comparable prices for its products.JCPenney probably uses a _____ strategy.

Nestlé Purina sells chicken feed and Wheat Chex,but the sale of one of these products has no known impact on demand for the other.In this case,the two products have a(n)_____ relationship.

Distinguish between a cumulative and a noncumulative quantity discount.

A penetration pricing strategy tends to be most effective:

When a channel intermediary is compensated for the ordinary services and tasks performed within the channel of distribution,the compensation usually comes in the form of a discount from base price.This discount is called a:

All of the following are geographic pricing methods EXCEPT:

Which type of quantity discount is a deduction from the list price that applies to a single order?

If a company decides to divide its market area into segments or regions and charge a flat rate for freight to all customers in a given region,the company is using _____ pricing.

An Internet picture frame manufacturer offers retailers reduced prices on any combination of size or style frames purchased.The discount is shown as they shop and adjusted as the quantity of frames purchased increases.What common form of purchase discount is the frame manufacturer using?

One form of extreme penetration pricing that has dramatically increased sales during the recent economic downturn is _____ grocers.

If items are _____,an increase in the sale of one good causes an increase in the sale of the other (and vice versa).

A(n)_____ discount is a deduction from list prices that applies to the buyer's total purchases made during a specific period and intended to encourage customer loyalty.

Quantity discounts are most often used to:

Ace Hardware's spring snowblower sale is an example of which of the following pricing tactics?

Name and describe the three basic strategies for setting a price on a new good or service.Under what conditions is each of the three basic pricing methods successful?

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