Question 1

Why is price lining a valuable tactic for marketing managers?

Accepted Answer

A)  Price lining results in a greater inventory carrying charge. 
B)  Reduces confusion for its customers. 
C)  A company that uses price lining has more price markdowns and greater markup. 
D)  The price lining strategy allows the company to gain brand loyalty from its targeted segments. 
E)  Price lining tends to confuse customers and requires them to listen closely to the salesperson's pitch. 
A)  Price lining results in a greater inventory carrying charge. 
B)  Reduces confusion for its customers. 
C)  A company that uses price lining has more price markdowns and greater markup. 
D)  The price lining strategy allows the company to gain brand loyalty from its targeted segments. 
E)  Price lining tends to confuse customers and requires them to listen closely to the salesperson's pitch.

Question 2

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.When Apple Inc.introduced the iPhone at a high price it was probably using a _____ strategy to maximize profits.

Accepted Answer

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

Question 3

Uniform delivered pricing is illegal because it discriminates against buyers who are located close to the point of shipping because they pay the same amount as buyers located far from the point of shipping pay.

Accepted Answer

A) True 
 B)False

Question 4

A winery that makes a huge profit on merlot wines may lower its price on pinot noir wines to cause damage to wineries that only produce pinot noir.This is an example of predatory pricing.

Accepted Answer

A) True 
 B)False

Question 5

If Dunn's Best Jams and its distributors agree that the retailers will sell Dunn's jams at a certain price,at or above the price floor,Dunn's and its distributors probably practice:

Accepted Answer

A)  unfair pricing 
B)  resale price maintenance 
C)  deceptive pricing 
D)  price escalation 
E)  price depression 
A)  unfair pricing 
B)  resale price maintenance 
C)  deceptive pricing 
D)  price escalation 
E)  price depression

Question 6

Most companies do a very good job of doing research to create a price strategy.

Accepted Answer

A) True 
 B)False

Question 7

The market for turkey products is large.If a major producer of turkeys were to introduce a boneless fresh turkey wrapped around savory dressing,most of the large market for this new product would be aware of its existence.The market is price sensitive,and there is some potential competition.The appropriate strategy would be:

Accepted Answer

A)  price skimming 
B)  penetration pricing 
C)  status quo 
D)  cost bundling 
E)  price lining 
A)  price skimming 
B)  penetration pricing 
C)  status quo 
D)  cost bundling 
E)  price lining

Question 8

L.L.Bean charges all customers the same flat freight rate.It uses:

Accepted Answer

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

Question 9

For sports marketers,an inelastic demand curve means they have greater flexibility in making pricing decisions.What can a sports marketer do to make demand for his or her product more inelastic?

Accepted Answer

A)  Have a winning team that people want to see play. 
B)  Sell the rights to buy a season pass. 
C)  Eliminate all quantity discounts. 
D)  Use discriminatory pricing. 
E)  Any of these strategies will help render demand more inelastic. 
A)  Have a winning team that people want to see play. 
B)  Sell the rights to buy a season pass. 
C)  Eliminate all quantity discounts. 
D)  Use discriminatory pricing. 
E)  Any of these strategies will help render demand more inelastic.

Question 10

Marketing managers can use a wide variety of special pricing tactics beyond discounts and allowances to fine-tune prices.Name and define five of the other pricing tactics that are legal.For each tactic,give an example of a specific company,industry,or product that would use the tactic.

Accepted Answer

SINGLE-PRICE TACTIC means all goods and

Question 11

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 also carries the iPhone.If Best Buy,AT&T,and Apple meet to agree on a price for the iPhone,it could be said that _____ has occurred.

Accepted Answer

A)  price fixing 
B)  retail price maintenance 
C)  price discrimination 
D)  penetration pricing 
E)  price skimming 
A)  price fixing 
B)  retail price maintenance 
C)  price discrimination 
D)  penetration pricing 
E)  price skimming

Question 12

List in order the four steps used to set the right price for a product.

Accepted Answer

1.Establish pricing goals.
2.E

Question 13

If the seller pays all or part of the actual freight charges and does not pass them on to the buyer,the seller is using _____ pricing.

Accepted Answer

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

Question 14

Flexible pricing enables a seller to close a sale with price-conscious consumers.

Accepted Answer

A) True 
 B)False

Question 15

Cashtown Used Cars aired a radio spot announcing,"Today only,previously owned cars are only $200!" Meghan just wanted some kind of in-town transportation.When she went to Cashtown,the salesperson said,"We have only one $200 car left,and it's not the kind of car I'd want my wife to drive.However,we do have some great deals on newer models." Meghan went home with an $8,000 used car.Cashtown is probably practicing:

Accepted Answer

A)  decoy pricing 
B)  deal pricing 
C)  functional pricing 
D)  bait pricing 
E)  price pressuring 
A)  decoy pricing 
B)  deal pricing 
C)  functional pricing 
D)  bait pricing 
E)  price pressuring

Question 16

South Africa's Competition Commission accused South African Airways of conspiring with its partner,Germany's Lufthansa,to set prices on flights between Cape Town,Johannesburg,and Frankfurt.As a result,the two airlines were charged with:

Accepted Answer

A)  price discrimination 
B)  price fixing 
C)  bait pricing 
D)  unfair trade practices 
E)  channel control pricing tactics 
A)  price discrimination 
B)  price fixing 
C)  bait pricing 
D)  unfair trade practices 
E)  channel control pricing tactics

Question 17

Reducing the services that come with the basic product is called:

Accepted Answer

A)  demarketing 
B)  contraction 
C)  two-part pricing 
D)  retroactive pricing 
E)  unbundling 
A)  demarketing 
B)  contraction 
C)  two-part pricing 
D)  retroactive pricing 
E)  unbundling

Question 18

All of the following statements regarding trade-ins are true EXCEPT:

Accepted Answer

A)  If a trade-in is involved,the consumer must negotiate two prices,one for the new product and one for the existing product. 
B)  On average,customers who traded-in an automobile when purchasing a new one end up paying more than customers who simply buy a new car from a dealer. 
C)  Research found that trade-in customers tend to care more about the trade-in value they receive than the price they pay for the new product. 
D)  About 95 percent of all new car sales involve a trade-in. 
E)  All of the above statements are true. 
A)  If a trade-in is involved,the consumer must negotiate two prices,one for the new product and one for the existing product. 
B)  On average,customers who traded-in an automobile when purchasing a new one end up paying more than customers who simply buy a new car from a dealer. 
C)  Research found that trade-in customers tend to care more about the trade-in value they receive than the price they pay for the new product. 
D)  About 95 percent of all new car sales involve a trade-in. 
E)  All of the above statements are true.

Question 19

_____ are cash refunds given for the purchase of a product during a specific period.

Accepted Answer

A)  Rebates 
B)  Loss leaders 
C)  Reciprocal allowances 
D)  Demand discounts 
E)  Promotional allowances 
A)  Rebates 
B)  Loss leaders 
C)  Reciprocal allowances 
D)  Demand discounts 
E)  Promotional allowances

Question 20

Each fall,ABC Men's Wear holds a major sale,reducing the prices of suits that didn't sell.ABC Men's Wear expects the suit manufacturers to absorb some of the cost of the price reduction through:

Accepted Answer

A)  promotional allowances 
B)  leader pricing reductions 
C)  manufacturer price skimming 
D)  markdown money 
E)  make-up allowances 
A)  promotional allowances 
B)  leader pricing reductions 
C)  manufacturer price skimming 
D)  markdown money 
E)  make-up allowances

Why is price lining a valuable tactic for marketing managers?

Uniform delivered pricing is illegal because it discriminates against buyers who are located close to the point of shipping because they pay the same amount as buyers located far from the point of shipping pay.

A winery that makes a huge profit on merlot wines may lower its price on pinot noir wines to cause damage to wineries that only produce pinot noir.This is an example of predatory pricing.

If Dunn's Best Jams and its distributors agree that the retailers will sell Dunn's jams at a certain price,at or above the price floor,Dunn's and its distributors probably practice:

Most companies do a very good job of doing research to create a price strategy.

L.L.Bean charges all customers the same flat freight rate.It uses:

For sports marketers,an inelastic demand curve means they have greater flexibility in making pricing decisions.What can a sports marketer do to make demand for his or her product more inelastic?

Marketing managers can use a wide variety of special pricing tactics beyond discounts and allowances to fine-tune prices.Name and define five of the other pricing tactics that are legal.For each tactic,give an example of a specific company,industry,or product that would use the tactic.

List in order the four steps used to set the right price for a product.

If the seller pays all or part of the actual freight charges and does not pass them on to the buyer,the seller is using _____ pricing.

Flexible pricing enables a seller to close a sale with price-conscious consumers.

South Africa's Competition Commission accused South African Airways of conspiring with its partner,Germany's Lufthansa,to set prices on flights between Cape Town,Johannesburg,and Frankfurt.As a result,the two airlines were charged with:

Reducing the services that come with the basic product is called:

All of the following statements regarding trade-ins are true EXCEPT:

_____ are cash refunds given for the purchase of a product during a specific period.

Each fall,ABC Men's Wear holds a major sale,reducing the prices of suits that didn't sell.ABC Men's Wear expects the suit manufacturers to absorb some of the cost of the price reduction through:

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

Why is price lining a valuable tactic for marketing managers?

Uniform delivered pricing is illegal because it discriminates against buyers who are located close to the point of shipping because they pay the same amount as buyers located far from the point of shipping pay.

A winery that makes a huge profit on merlot wines may lower its price on pinot noir wines to cause damage to wineries that only produce pinot noir.This is an example of predatory pricing.

If Dunn's Best Jams and its distributors agree that the retailers will sell Dunn's jams at a certain price,at or above the price floor,Dunn's and its distributors probably practice:

Most companies do a very good job of doing research to create a price strategy.

L.L.Bean charges all customers the same flat freight rate.It uses:

For sports marketers,an inelastic demand curve means they have greater flexibility in making pricing decisions.What can a sports marketer do to make demand for his or her product more inelastic?

Marketing managers can use a wide variety of special pricing tactics beyond discounts and allowances to fine-tune prices.Name and define five of the other pricing tactics that are legal.For each tactic,give an example of a specific company,industry,or product that would use the tactic.

List in order the four steps used to set the right price for a product.

If the seller pays all or part of the actual freight charges and does not pass them on to the buyer,the seller is using _____ pricing.

Flexible pricing enables a seller to close a sale with price-conscious consumers.

South Africa's Competition Commission accused South African Airways of conspiring with its partner,Germany's Lufthansa,to set prices on flights between Cape Town,Johannesburg,and Frankfurt.As a result,the two airlines were charged with:

Reducing the services that come with the basic product is called:

All of the following statements regarding trade-ins are true EXCEPT:

_____ are cash refunds given for the purchase of a product during a specific period.

Each fall,ABC Men's Wear holds a major sale,reducing the prices of suits that didn't sell.ABC Men's Wear expects the suit manufacturers to absorb some of the cost of the price reduction through:

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