Question 1

According to the textbook,which industry typically adopts an experience curve pricing approach?

Accepted Answer

A) advertising 
B) space exploration 
C) ready-to-eat cereal 
D) electronics 
E) mining 
A) advertising 
B) space exploration 
C) ready-to-eat cereal 
D) electronics 
E) mining D

Question 2

Explain the deceptive pricing practice known as bait and switch.

Accepted Answer

One common deceptive pricing practice is known as bait and switch;for example,advertising a very low price on a microwave oven to attract customers to the store but persuading them to buy a more expensive model by (a)ridiculing the advertised model or (b)not having the advertised model in stock.

Question 3

Carmex uses all of the following approaches to setting the price of its products except which?

Accepted Answer

A) profit-oriented 
B) competition-oriented 
C) cost-oriented 
D) elasticity-oriented 
E) demand-oriented 
A) profit-oriented 
B) competition-oriented 
C) cost-oriented 
D) elasticity-oriented 
E) demand-oriented D

Question 4

Marketing two or more products in a single package price is referred to as

Accepted Answer

A) package pricing. 
B) loss-leader pricing. 
C) bundle pricing. 
D) tie-in pricing. 
E) multi-product pricing. 
A) package pricing. 
B) loss-leader pricing. 
C) bundle pricing. 
D) tie-in pricing. 
E) multi-product pricing.

Question 5

What is loss-leader pricing and why do retailers use it?

Accepted Answer

For a special promotion,many retail stor

Question 6

A claim that a price is below a manufacturer's suggested or list price may be deceptive if

Accepted Answer

A) the items for sale had been purchased from another retailer. 
B) the items for sale were part of a manufacturer's promotional allowance. 
C) the items were part of a bulk order. 
D) few or no sales occur at that price in a retailer's market area. 
E) the items were purchased from the manufacturer at a higher price and the sale was part of a loss-leader promotion. 
A) the items for sale had been purchased from another retailer. 
B) the items for sale were part of a manufacturer's promotional allowance. 
C) the items were part of a bulk order. 
D) few or no sales occur at that price in a retailer's market area. 
E) the items were purchased from the manufacturer at a higher price and the sale was part of a loss-leader promotion.

Question 7

Standard markup pricing refers to

Accepted Answer

A) adjusting the price of a product so it is "in line" with that of its largest competitor. 
B) setting the price of a line of products at a number of different price points. 
C) setting prices to achieve a profit that is a specified percentage of the sales volume. 
D) increasing the price slightly to protect against undue profit losses from unforeseen environmental forces. 
E) adding a fixed percentage to the cost of all items in a specific product class. 
A) adjusting the price of a product so it is "in line" with that of its largest competitor. 
B) setting the price of a line of products at a number of different price points. 
C) setting prices to achieve a profit that is a specified percentage of the sales volume. 
D) increasing the price slightly to protect against undue profit losses from unforeseen environmental forces. 
E) adding a fixed percentage to the cost of all items in a specific product class.

Question 8

Setting a price to achieve an annual target return-on-investment (ROI)is referred to as

Accepted Answer

A) target return-on-investment pricing. 
B) target return-on-profit pricing. 
C) target return-on-sales pricing. 
D) target profit pricing. 
E) customary pricing. 
A) target return-on-investment pricing. 
B) target return-on-profit pricing. 
C) target return-on-sales pricing. 
D) target profit pricing. 
E) customary pricing.

Question 9

Skimming pricing is a strategy that introduces a new or innovative product by

Accepted Answer

A) following a price elastic strategy. 
B) creating multiple price points. 
C) setting a high initial price. 
D) setting a low initial price. 
E) setting the price at the average of competitors' prices. 
A) following a price elastic strategy. 
B) creating multiple price points. 
C) setting a high initial price. 
D) setting a low initial price. 
E) setting the price at the average of competitors' prices.

Question 10

When establishing product-line pricing,the highest priced item is typically positioned as

Accepted Answer

A) the oldest product item in the line. 
B) the premium item in the line in terms of quality and features. 
C) the largest selling product item in the line. 
D) the loss-leader item for the rest of the product line. 
E) the most price-insensitive product item in the line. 
A) the oldest product item in the line. 
B) the premium item in the line in terms of quality and features. 
C) the largest selling product item in the line. 
D) the loss-leader item for the rest of the product line. 
E) the most price-insensitive product item in the line.

Question 11

Customary pricing refers to

Accepted Answer

A) a pricing method where the price the seller quotes includes all transportation costs. 
B) setting the same price for similar customers who buy the same product and quantities under the same conditions. 
C) deliberately selling a product below its list price to attract attention to it. 
D) setting a price that is dictated by tradition,a standardized channel of distribution,or other competitive factors. 
E) pricing based on what the market will bear. 
A) a pricing method where the price the seller quotes includes all transportation costs. 
B) setting the same price for similar customers who buy the same product and quantities under the same conditions. 
C) deliberately selling a product below its list price to attract attention to it. 
D) setting a price that is dictated by tradition,a standardized channel of distribution,or other competitive factors. 
E) pricing based on what the market will bear.

Question 12

Figure 14-2
  
-Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box B represents which approach?

Accepted Answer

A) cost-oriented 
B) profit-oriented 
C) competition-oriented 
D) demand-oriented 
E) results-oriented 
A) cost-oriented 
B) profit-oriented 
C) competition-oriented 
D) demand-oriented 
E) results-oriented

Question 13

A box of Cascade dishwasher detergent shrink-wrapped with a bottle of Jet Dry is sold for $1.50 less than the regular price of the products sold separately.This is an example of ________ pricing.

Accepted Answer

A) penetration 
B) prestige 
C) bundle 
D) odd-even 
E) standard markup 
A) penetration 
B) prestige 
C) bundle 
D) odd-even 
E) standard markup

Question 14

When establishing product-line pricing,the lowest-priced item is typically positioned as

Accepted Answer

A) the youngest product item in the line. 
B) the smallest selling product item in the line. 
C) the lost-cost item in the line in terms of quality and features. 
D) the profit leader for the rest of the product line. 
E) the traffic builder designed to capture the attention of first-time buyers. 
A) the youngest product item in the line. 
B) the smallest selling product item in the line. 
C) the lost-cost item in the line in terms of quality and features. 
D) the profit leader for the rest of the product line. 
E) the traffic builder designed to capture the attention of first-time buyers.

Question 15

The Robinson-Patman Act covers promotional allowances as well as discounts.To legally offer promotional allowances to buyers,the seller must do so on a(n)________ basis to all buyers distributing the seller's products.

Accepted Answer

A) proportionally equal 
B) limited 
C) disproportionally equal 
D) geographical 
E) across-the-board 
A) proportionally equal 
B) limited 
C) disproportionally equal 
D) geographical 
E) across-the-board

Question 16

A construction company was offered a 3 percent reduction in price off all invoices from a lumberyard for paying within 10 days of issue.The lumberyard was offering a

Accepted Answer

A) trade discount. 
B) cash discount. 
C) promotional allowance. 
D) rebate. 
E) flexible price. 
A) trade discount. 
B) cash discount. 
C) promotional allowance. 
D) rebate. 
E) flexible price.

Question 17

Odd-even pricing refers to

Accepted Answer

A) setting prices one way for product lines and another way for individual brands. 
B) setting prices of luxury items at even price points and setting the price of necessities at odd price points. 
C) setting prices a few dollars or cents under an odd number. 
D) adding a fixed percentage to the cost of all items in a specific product class. 
E) setting prices a few dollars or cents under an even number. 
A) setting prices one way for product lines and another way for individual brands. 
B) setting prices of luxury items at even price points and setting the price of necessities at odd price points. 
C) setting prices a few dollars or cents under an odd number. 
D) adding a fixed percentage to the cost of all items in a specific product class. 
E) setting prices a few dollars or cents under an even number.

Question 18

One problem in the interstate trucking industry is the number of trucks that return empty after making a delivery.There is a website where independent interstate truckers can look for loads to carry on their return trips,known as backhauls.Because the trucks would normally return empty,truckers who use this website to generate business they would not have had otherwise receive a reduced shipping rate.This reduced rate for a backhaul is an example of

Accepted Answer

A) penetration pricing. 
B) target pricing. 
C) cost-plus pricing. 
D) odd-even pricing. 
E) yield management pricing. 
A) penetration pricing. 
B) target pricing. 
C) cost-plus pricing. 
D) odd-even pricing. 
E) yield management pricing.

Question 19

If the cash discount terms for a $500 purchase are 4/10 net 30,the number 10 refers to

Accepted Answer

A) the percentage discounted if the bill is paid within 30 days. 
B) the percentage increase in price if the bill is not paid within 10 days. 
C) the number of days for which the discount is valid. 
D) the discount in dollars per unit if the order is paid on time within 30 days. 
E) the penalty in dollars if the bill is not paid within 10 days. 
A) the percentage discounted if the bill is paid within 30 days. 
B) the percentage increase in price if the bill is not paid within 10 days. 
C) the number of days for which the discount is valid. 
D) the discount in dollars per unit if the order is paid on time within 30 days. 
E) the penalty in dollars if the bill is not paid within 10 days.

Question 20

Setting prices a few dollars or cents under an even number is referred to as

Accepted Answer

A) odd-even pricing. 
B) prestige pricing. 
C) price lining. 
D) above-,at-,or below-market pricing. 
E) every day fair pricing. 
A) odd-even pricing. 
B) prestige pricing. 
C) price lining. 
D) above-,at-,or below-market pricing. 
E) every day fair pricing.

Exam 14: Arriving at the Final Price

According to the textbook,which industry typically adopts an experience curve pricing approach?

Explain the deceptive pricing practice known as bait and switch.

Carmex uses all of the following approaches to setting the price of its products except which?

Marketing two or more products in a single package price is referred to as

What is loss-leader pricing and why do retailers use it?

A claim that a price is below a manufacturer's suggested or list price may be deceptive if

Standard markup pricing refers to

Setting a price to achieve an annual target return-on-investment (ROI)is referred to as

Skimming pricing is a strategy that introduces a new or innovative product by

When establishing product-line pricing,the highest priced item is typically positioned as

Customary pricing refers to

Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box B represents which approach?

A box of Cascade dishwasher detergent shrink-wrapped with a bottle of Jet Dry is sold for $1.50 less than the regular price of the products sold separately.This is an example of ________ pricing.

When establishing product-line pricing,the lowest-priced item is typically positioned as

The Robinson-Patman Act covers promotional allowances as well as discounts.To legally offer promotional allowances to buyers,the seller must do so on a(n)________ basis to all buyers distributing the seller's products.

A construction company was offered a 3 percent reduction in price off all invoices from a lumberyard for paying within 10 days of issue.The lumberyard was offering a

Odd-even pricing refers to

If the cash discount terms for a $500 purchase are 4/10 net 30,the number 10 refers to

Setting prices a few dollars or cents under an even number is referred to as

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation, targeting, and Positioning

Developing New Products and Services

Managing Successful Products, services, and Brands

Services Marketing

Building the Price Foundation

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising,sales Promotion,and Public Relations

Using Social Media and Mobile Marketing to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Pulling It All Together: the Strategic Marketing Process

Writing Successful Marketing and Business Plans: Tips and Guidelines

Financial Statements and Ratios

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