Question 1

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 E

Question 2

Many businesses find recessions to be an excellent time to build market share through the use of price shading.

Accepted Answer

A) True 
 B)False  False

Question 3

There are two limousine services that drive customers from communities in North Georgia to the Atlanta airport.Whenever one reduces its fare,its competitor reduces its fares by the same amount.This is an example of status quo pricing.

Accepted Answer

A) True 
 B)False  True

Question 4

Alissa Dunn is the owner and operator of Dunn's Best Jams,which she sells at craft festivals.She only makes and sells three types of jams--pecan pie jam,chocolate pie jam,and lemon tart jam.The costs of leasing her professional kitchen for manufacturing,travel to craft shows,insurance,and so on are allocated on an equal basis to the three types of jam sold.In other words,these costs are:

Accepted Answer

A) derived costs. 
B) elastic costs. 
C) joint costs. 
D) revenue impediments. 
E) synergistic costs. 
A) derived costs. 
B) elastic costs. 
C) joint costs. 
D) revenue impediments. 
E) synergistic costs.

Question 5

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 6

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

Question 7

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 8

Discuss the two reasons why managers sometimes price their products too low,thereby reducing company profits.

Accepted Answer

First,managers attempt to buy market sha

Question 9

Apple iPhone
Apple,Inc.'s 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 eight 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 its exclusive U.S.carrier was AT&T.
On July 11,2008,Apple,Inc.released the iPhone 3G,which it advertised as being 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 contract would allow iPhone users to receive phone calls,receive e-mail,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 voice mail,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 10

The marketing manager of Icruise.com (a travel Web site targeted to consumers who want a luxury vacation)finds that the firm can gain market share and become the industry leader if it slashes prices by 50 percent during the month of December.However,the VP of finance is committed to reporting a 25 percent return on investment at all times.This conflict illustrates:

Accepted Answer

A) a need to eliminate low-profit products. 
B) a lack of corporate concentration on the marketing concept. 
C) how pricing operates in a mature marketplace. 
D) the need for trade-offs in pricing objectives. 
E) how target markets can be ignored. 
A) a need to eliminate low-profit products. 
B) a lack of corporate concentration on the marketing concept. 
C) how pricing operates in a mature marketplace. 
D) the need for trade-offs in pricing objectives. 
E) how target markets can be ignored.

Question 11

Describe which pricing method (skimming,penetration,or status quo)would be most appropriate for each of the following products: (1)a new kind of automatic vacuum cleaner;(2)brightly colored wooden blocks to be used as a child's toy;(3)a new,low-cost,no-calorie fat substitute;(4)a home computer;and (5)a designer perfume.Briefly justify your answers.

Accepted Answer

VACUUM CLEANER.Skimming could be used be

Question 12

Loss-leader pricing is a tactic that prices products below cost in an attempt to run competitors out of business.

Accepted Answer

A) True 
 B)False

Question 13

Escalator pricing and price shading are two examples of cost-oriented pricing tactics.

Accepted Answer

A) True 
 B)False

Question 14

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 15

A discount off the base price to customers who pay immediately,or within a specified time period,is called a:

Accepted Answer

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

Question 16

Rebates involve a cash refund for the purchase of a product during a specific period.

Accepted Answer

A) True 
 B)False

Question 17

Distinguish between a cumulative and a noncumulative discount.

Accepted Answer

A CUMULATIVE QUANTITY DISCOUNT is a dedu

Question 18

Manufacturers are stakeholders in Black Friday sales,even though they were paid earlier in the year.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Black Friday offers retailers the opportunity to aggressively use _________ as a pricing strategy.

Accepted Answer

A) price skimming 
B) status quo pricing 
C) market plus 
D) penetration pricing 
E) bargain anchoring 
A) price skimming 
B) status quo pricing 
C) market plus 
D) penetration pricing 
E) bargain anchoring

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

Many businesses find recessions to be an excellent time to build market share through the use of price shading.

There are two limousine services that drive customers from communities in North Georgia to the Atlanta airport.Whenever one reduces its fare,its competitor reduces its fares by the same amount.This is an example of status quo pricing.

Uniform delivered pricing:

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?

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

Discuss the two reasons why managers sometimes price their products too low,thereby reducing company profits.

Loss-leader pricing is a tactic that prices products below cost in an attempt to run competitors out of business.

Escalator pricing and price shading are two examples of cost-oriented pricing tactics.

Uniform delivered pricing enables a firm to:

A discount off the base price to customers who pay immediately,or within a specified time period,is called a:

Rebates involve a cash refund for the purchase of a product during a specific period.

Distinguish between a cumulative and a noncumulative discount.

Manufacturers are stakeholders in Black Friday sales,even though they were paid earlier in the year.

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.

Black Friday offers retailers the opportunity to aggressively use _________ as a pricing strategy.

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 Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Integrated Marketing Communications

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

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

Many businesses find recessions to be an excellent time to build market share through the use of price shading.

There are two limousine services that drive customers from communities in North Georgia to the Atlanta airport.Whenever one reduces its fare,its competitor reduces its fares by the same amount.This is an example of status quo pricing.

Uniform delivered pricing:

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?

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

Discuss the two reasons why managers sometimes price their products too low,thereby reducing company profits.

Loss-leader pricing is a tactic that prices products below cost in an attempt to run competitors out of business.

Escalator pricing and price shading are two examples of cost-oriented pricing tactics.

Uniform delivered pricing enables a firm to:

A discount off the base price to customers who pay immediately,or within a specified time period,is called a:

Rebates involve a cash refund for the purchase of a product during a specific period.

Distinguish between a cumulative and a noncumulative discount.

Manufacturers are stakeholders in Black Friday sales,even though they were paid earlier in the year.

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.

Black Friday offers retailers the opportunity to aggressively use _________ as a pricing strategy.

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 Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Integrated Marketing Communications

Advertising and Public Relations

Sales Promotion and Personal Selling

Pricing Concepts

Customer Relationship Management Crm

Social Media and Marketing

Filters