Question 1

It makes the most sense to use price skimming as a pricing policy when supply is greater than demand.

Accepted Answer

A) True 
 B)False

Question 2

Last year,a single infield box ticket for an Atlanta Braves baseball game cost $40,but fans who bought a season pass for the same seat got a reduced price.This $40 price was a _____ price.

Accepted Answer

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

Question 3

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 4

The tactic that allows different customers to pay different prices for essentially the same merchandise bought in equal quantities is called _____.It is often found in the sale of shopping goods,specialty merchandise,and most industrial goods except supply items.

Accepted Answer

A) zoning (or basing)pricing 
B) illegal price fixing 
C) price maintenance 
D) psychological (or odd-even)pricing 
E) flexible (or variable)pricing 
A) zoning (or basing)pricing 
B) illegal price fixing 
C) price maintenance 
D) psychological (or odd-even)pricing 
E) flexible (or variable)pricing

Question 5

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 6

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.For one fee,the basic AT&T cellular package includes 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.AT&T is using price:

Accepted Answer

A) bundling 
B) skimming 
C) baiting 
D) leading 
E) lining 
A) bundling 
B) skimming 
C) baiting 
D) leading 
E) lining

Question 7

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 8

Hunter's Alley is a chain of stores targeted to people who are proud of their National Rifle Association membership.It has agreed to set up a special display of Swartklip ammunition near its rifle and shotgun aisles and also to run an advertisement in newspapers in communities where its stores are located.Swartklip has agreed to supply the display material free and to pay for half the cost of the advertisement.This is an example of a:

Accepted Answer

A) bundled pricing tactic. 
B) functional discount. 
C) promotional allowance. 
D) quantity discount. 
E) direct allowance. 
A) bundled pricing tactic. 
B) functional discount. 
C) promotional allowance. 
D) quantity discount. 
E) direct allowance.

Question 9

Rag fibers for paper and cotton seeds for cottonseed oil are two by-products of the cotton textile industry.Because these products are produced together,they are complementary products.

Accepted Answer

A) True 
 B)False

Question 10

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,it is following a _____ strategy.The low price is designed to capture a large share of a substantial market and produce lower production costs.

Accepted Answer

A) penetration pricing 
B) price-insensitive demand 
C) price skimming 
D) price elasticity 
E) cost bundling 
A) penetration pricing 
B) price-insensitive demand 
C) price skimming 
D) price elasticity 
E) cost bundling

Question 11

Which of the following is a price tactic that offers all goods and services at the same price (or perhaps two or three prices)?

Accepted Answer

A) Primary pricing 
B) Uniform-price tactic 
C) Single-price tactic 
D) Constant-pricing 
E) EDLP 
A) Primary pricing 
B) Uniform-price tactic 
C) Single-price tactic 
D) Constant-pricing 
E) EDLP

Question 12

Black Friday is a short-term fix for months of slow sales.

Accepted Answer

A) True 
 B)False

Question 13

Apple's "Back to School" program offered students who purchased an iMac computer and an iPod Touch MP3 player a $250 refund.The $250 check was essentially a:

Accepted Answer

A) rebate. 
B) reciprocal allowance. 
C) cash discount. 
D) functional discount. 
E) trade promotion. 
A) rebate. 
B) reciprocal allowance. 
C) cash discount. 
D) functional discount. 
E) trade promotion.

Question 14

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.When the iPhone 3G was released at half the cost of the current iPhone,it appeared that Apple's strategic focus had shifted from maximizing profits to gaining market share.Its lowered price was consistent with the _____ approach.

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 15

Once he compiles information on pricing objectives,market demand,quantity supplied,and the price elasticity of demand,the owner/operator of a home cleaning service will be ready to determine the optimal price for a new service offering.

Accepted Answer

A) True 
 B)False

Question 16

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.HSBC Group is the world's largest banking group.It is considering switching from BlackBerry handsets to iPhone 3Gs.This would mean ordering 200,000 iPhones,so HSBC would probably receive special pricing incentives,including a:

Accepted Answer

A) functional discount. 
B) cash discount. 
C) seasonal discount. 
D) rebate. 
E) quantity discount. 
A) functional discount. 
B) cash discount. 
C) seasonal discount. 
D) rebate. 
E) quantity discount.

Question 17

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 18

For sports marketers,an inelastic demand curve means that 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 19

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 20

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

Accepted Answer

A) True 
 B)False

It makes the most sense to use price skimming as a pricing policy when supply is greater than demand.

Last year,a single infield box ticket for an Atlanta Braves baseball game cost $40,but fans who bought a season pass for the same seat got a reduced price.This $40 price was a _____ price.

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

The tactic that allows different customers to pay different prices for essentially the same merchandise bought in equal quantities is called _____.It is often found in the sale of shopping goods,specialty merchandise,and most industrial goods except supply items.

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

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.

Rag fibers for paper and cotton seeds for cottonseed oil are two by-products of the cotton textile industry.Because these products are produced together,they are complementary products.

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,it is following a _____ strategy.The low price is designed to capture a large share of a substantial market and produce lower production costs.

Which of the following is a price tactic that offers all goods and services at the same price (or perhaps two or three prices)?

Black Friday is a short-term fix for months of slow sales.

Apple's "Back to School" program offered students who purchased an iMac computer and an iPod Touch MP3 player a $250 refund.The $250 check was essentially a:

Once he compiles information on pricing objectives,market demand,quantity supplied,and the price elasticity of demand,the owner/operator of a home cleaning service will be ready to determine the optimal price for a new service offering.

Escalator pricing is:

For sports marketers,an inelastic demand curve means that 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.

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

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

It makes the most sense to use price skimming as a pricing policy when supply is greater than demand.

Last year,a single infield box ticket for an Atlanta Braves baseball game cost $40,but fans who bought a season pass for the same seat got a reduced price.This $40 price was a _____ price.

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

The tactic that allows different customers to pay different prices for essentially the same merchandise bought in equal quantities is called _____.It is often found in the sale of shopping goods,specialty merchandise,and most industrial goods except supply items.

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

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.

Rag fibers for paper and cotton seeds for cottonseed oil are two by-products of the cotton textile industry.Because these products are produced together,they are complementary products.

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,it is following a _____ strategy.The low price is designed to capture a large share of a substantial market and produce lower production costs.

Which of the following is a price tactic that offers all goods and services at the same price (or perhaps two or three prices)?

Black Friday is a short-term fix for months of slow sales.

Apple's "Back to School" program offered students who purchased an iMac computer and an iPod Touch MP3 player a $250 refund.The $250 check was essentially a:

Once he compiles information on pricing objectives,market demand,quantity supplied,and the price elasticity of demand,the owner/operator of a home cleaning service will be ready to determine the optimal price for a new service offering.

Escalator pricing is:

For sports marketers,an inelastic demand curve means that 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.

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

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