Question 1

_____ are extra fees paid by consumers for violating the terms of purchase agreements.

Accepted Answer

A) Decoy fees 
B) Misuse discounts 
C) Punitive fees 
D) Consumer penalties 
E) Financial judgments 
A) Decoy fees 
B) Misuse discounts 
C) Punitive fees 
D) Consumer penalties 
E) Financial judgments

Question 2

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 3

A Black Friday advertisement for a heavily discounted Android tablet has some fine print: Only 3 per store.This is an example of __________.

Accepted Answer

A) bait and switch 
B) leader pricing 
C) manufacturer's rebate 
D) a promotional allowance 
E) quantity discount 
A) bait and switch 
B) leader pricing 
C) manufacturer's rebate 
D) a promotional allowance 
E) quantity discount

Question 4

Pharmacies are a new addition to Sam's Clubs.They could exert a greater influence on the marketplace for prescription drugs than their newness indicates.Sam's has a stated philosophy of marking up merchandise a maximum of 14 percent.When that philosophy is applied to prescription drugs,especially generics,warehouse club prices can be dramatically lower than those of conventional drugstores,supermarkets,or discount store pharmacies.Sam's is using a _____ strategy to convince consumers to use its pharmacies rather than its competitors.

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 5

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 Apple 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 6

When using _____,price is not set on the product until the item is either finished or delivered.

Accepted Answer

A) price shading 
B) escalator pricing 
C) delayed-quotation pricing 
D) bid pricing 
E) two-part pricing 
A) price shading 
B) escalator pricing 
C) delayed-quotation pricing 
D) bid pricing 
E) two-part pricing

Question 7

Price lining presents certain drawbacks to sellers,especially if:

Accepted Answer

A) costs are continually rising. 
B) competition suddenly increases. 
C) profit margins are lowered. 
D) demand is rising. 
E) costs are flat. 
A) costs are continually rising. 
B) competition suddenly increases. 
C) profit margins are lowered. 
D) demand is rising. 
E) costs are flat.

Question 8

What can a marketing manager do to make demand for his or her product more inelastic?

Accepted Answer

A) Eliminate brand equity 
B) Eliminate any unique products from the product line 
C) Cultivate selected demand 
D) Avoid making any product changes 
E) Implement escalator pricing 
A) Eliminate brand equity 
B) Eliminate any unique products from the product line 
C) Cultivate selected demand 
D) Avoid making any product changes 
E) Implement escalator pricing

Question 9

With _____,the seller pays the actual freight charges and bills every purchase with an identical,flat freight charge.

Accepted Answer

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

Question 10

The price of a television sold in Black Friday sale can use more than one pricing tactic to discount the price below the competition.

Accepted Answer

A) True 
 B)False

Question 11

In a catalog targeted to people who like to bake,customers can buy a single yeast bread mix designed specifically to be baked in bread machines for $3.95 each or 12 different mixes for $37.50.This is an example of:

Accepted Answer

A) price bundling. 
B) CRM pricing. 
C) psychological pricing. 
D) penetration pricing. 
E) status quo pricing. 
A) price bundling. 
B) CRM pricing. 
C) psychological pricing. 
D) penetration pricing. 
E) status quo pricing.

Question 12

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 13

When Microsoft introduced its Zune MP3 player,many people thought it would capture the MP3 player market by pricing its product so low that a smaller competitor,like the Apple iPod,would be unable to compete.If Microsoft had used this approach,it would have been would be guilty of:

Accepted Answer

A) predatory pricing. 
B) unfair trade practices. 
C) channel manipulation pricing. 
D) price fixing. 
E) price discrimination. 
A) predatory pricing. 
B) unfair trade practices. 
C) channel manipulation pricing. 
D) price fixing. 
E) price discrimination.

Question 14

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 version.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 15

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

Accepted Answer

A) True 
 B)False

Question 16

Consumers are required to pay consumer fees because businesses allegedly:

Accepted Answer

A) will sell more if the consumer is unaware of the actual costs. 
B) suffer an irrevocable revenue loss. 
C) are required by the federal government to charge this fee. 
D) avoid additional transactional costs when purchase agreements are violated. 
E) incur greater fixed costs as a result of the purchase agreement violation. 
A) will sell more if the consumer is unaware of the actual costs. 
B) suffer an irrevocable revenue loss. 
C) are required by the federal government to charge this fee. 
D) avoid additional transactional costs when purchase agreements are violated. 
E) incur greater fixed costs as a result of the purchase agreement violation.

Question 17

One pharmaceutical manufacturer did not price a new antiulcer drug by adding up the costs of developing and manufacturing the medication and tacking on the amount of profit it wanted to make.Instead,the company justified a higher price than it might otherwise have been able to get from medical insurers by using studies that showed the new drug could help patients avoid expensive surgery and save the insurance companies money.The pharmaceutical company used:

Accepted Answer

A) value-based pricing. 
B) noncumulative pricing. 
C) CRM pricing. 
D) price bundling. 
E) market concept pricing. 
A) value-based pricing. 
B) noncumulative pricing. 
C) CRM pricing. 
D) price bundling. 
E) market concept pricing.

Question 18

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

Accepted Answer

1.Establish pricing goals.
2.E

Question 19

Art Supplies
It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school.In her Sunday newspaper was a flyer from Michaels,an arts and crafts retailer.As she looked through the newspaper insert,she noticed that if she purchased three or more bottles of Alene's Tacky Glue,the regular price of $1.50 each was reduced to $1.15 each.She also saw that the store priced its plastic storage boxes at $1.99,$3.99,and $5.99.She thought they would be useful for storing each child's projects.On the front page of the flyer was an ad for Funky Girls Gel Pens,something she knew her daughter would love to use.The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens.She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michaels had a scrapbook starter kit,which includes scissors,book,pages,and stickers for only $15.The items could be purchased separately for $19.99.The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.
-Refer to Art Supplies.Which of the following merchandise is offered in the flyer with a seasonal discount?

Accepted Answer

A) Tacky glue 
B) Plastic storage boxes 
C) Flag-related items 
D) Funky Girls Gel Pens 
E) Scrapbook starter kit 
A) Tacky glue 
B) Plastic storage boxes 
C) Flag-related items 
D) Funky Girls Gel Pens 
E) Scrapbook starter kit

Question 20

Penetration pricing means charging a relatively low price for a product as a way to reach the mass market.The low price is designed to capture a large share of a substantial market.Thus,penetration pricing:

Accepted Answer

A) tends to be more effective in a less price-sensitive market. 
B) tempts competitors to enter the market. 
C) provides a large profit per unit sold. 
D) recoups product development costs quickly. 
E) tends to lower production costs. 
A) tends to be more effective in a less price-sensitive market. 
B) tempts competitors to enter the market. 
C) provides a large profit per unit sold. 
D) recoups product development costs quickly. 
E) tends to lower production costs.

_____ are extra fees paid by consumers for violating the terms of purchase agreements.

Quantity discounts are most often used to:

A Black Friday advertisement for a heavily discounted Android tablet has some fine print: Only 3 per store.This is an example of __________.

When using _____,price is not set on the product until the item is either finished or delivered.

Price lining presents certain drawbacks to sellers,especially if:

What can a marketing manager do to make demand for his or her product more inelastic?

With _____,the seller pays the actual freight charges and bills every purchase with an identical,flat freight charge.

The price of a television sold in Black Friday sale can use more than one pricing tactic to discount the price below the competition.

In a catalog targeted to people who like to bake,customers can buy a single yeast bread mix designed specifically to be baked in bread machines for $3.95 each or 12 different mixes for $37.50.This is an example of:

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.

When Microsoft introduced its Zune MP3 player,many people thought it would capture the MP3 player market by pricing its product so low that a smaller competitor,like the Apple iPod,would be unable to compete.If Microsoft had used this approach,it would have been would be guilty of:

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

Consumers are required to pay consumer fees because businesses allegedly:

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

Penetration pricing means charging a relatively low price for a product as a way to reach the mass market.The low price is designed to capture a large share of a substantial market.Thus,penetration pricing:

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

_____ are extra fees paid by consumers for violating the terms of purchase agreements.

Quantity discounts are most often used to:

A Black Friday advertisement for a heavily discounted Android tablet has some fine print: Only 3 per store.This is an example of __________.

When using _____,price is not set on the product until the item is either finished or delivered.

Price lining presents certain drawbacks to sellers,especially if:

What can a marketing manager do to make demand for his or her product more inelastic?

With _____,the seller pays the actual freight charges and bills every purchase with an identical,flat freight charge.

The price of a television sold in Black Friday sale can use more than one pricing tactic to discount the price below the competition.

In a catalog targeted to people who like to bake,customers can buy a single yeast bread mix designed specifically to be baked in bread machines for $3.95 each or 12 different mixes for $37.50.This is an example of:

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.

When Microsoft introduced its Zune MP3 player,many people thought it would capture the MP3 player market by pricing its product so low that a smaller competitor,like the Apple iPod,would be unable to compete.If Microsoft had used this approach,it would have been would be guilty of:

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

Consumers are required to pay consumer fees because businesses allegedly:

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

Penetration pricing means charging a relatively low price for a product as a way to reach the mass market.The low price is designed to capture a large share of a substantial market.Thus,penetration pricing:

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