Question 1

In product line pricing, price steps should account for differences in customer perceptions of the value of different features.

Accepted Answer

A) True 
 B)False

Question 2

When a competitor cuts its price, a company should ________ if it believes it will not lose much market share or would lose too much profit by cutting its own prices.

Accepted Answer

A)  reduce its production costs 
B)  reduce its marketing costs 
C)  maintain its current prices and profit margin 
D)  increase its marketing budget to raise the perceived value of the product 
E)  increase its production costs to improve the quality of the product 
A)  reduce its production costs 
B)  reduce its marketing costs 
C)  maintain its current prices and profit margin 
D)  increase its marketing budget to raise the perceived value of the product 
E)  increase its production costs to improve the quality of the product

Question 3

After entering a market by using market-penetration pricing, a company can easily raise its price and maintain its market share.

Accepted Answer

A) True 
 B)False

Question 4

Ways to avoid accusations of price gouging include ________.

Accepted Answer

A)  bundling products together 
B)  matching competitors' pricing 
C)  communications to customers explaining why prices are being increased 
D)  passing along increased costs 
E)  increase quality of the product 
A)  bundling products together 
B)  matching competitors' pricing 
C)  communications to customers explaining why prices are being increased 
D)  passing along increased costs 
E)  increase quality of the product

Question 5

Which of the following is true of price changes?

Accepted Answer

A)  Over-demand leads to companies initiating price cuts. 
B)  Changes in price do not affect a brand's image. 
C)  Customer reaction to price changes is not as important as competitor reaction. 
D)  A drop in price can adversely affect how consumers view the brand. 
E)  Excess capacity is a factor that causes increases in price. 
A)  Over-demand leads to companies initiating price cuts. 
B)  Changes in price do not affect a brand's image. 
C)  Customer reaction to price changes is not as important as competitor reaction. 
D)  A drop in price can adversely affect how consumers view the brand. 
E)  Excess capacity is a factor that causes increases in price.

Question 6

Which of the following involves adjusting prices to account for the physical location of customers?

Accepted Answer

A)  location-based pricing 
B)  geographical pricing 
C)  domestic pricing 
D)  interior pricing 
E)  captive pricing 
A)  location-based pricing 
B)  geographical pricing 
C)  domestic pricing 
D)  interior pricing 
E)  captive pricing

Question 7

A number of top fashion-modeling agencies would most likely be charged with ________ for jointly determining what commissions they charge for models.

Accepted Answer

A)  prestige pricing 
B)  competitive pricing 
C)  price bundling 
D)  dynamic pricing 
E)  price fixing 
A)  prestige pricing 
B)  competitive pricing 
C)  price bundling 
D)  dynamic pricing 
E)  price fixing

Question 8

Which of the following is a price adjustment strategy?

Accepted Answer

A)  product bundle pricing 
B)  by-product pricing 
C)  product line pricing 
D)  optional product pricing 
E)  discount and allowance pricing 
A)  product bundle pricing 
B)  by-product pricing 
C)  product line pricing 
D)  optional product pricing 
E)  discount and allowance pricing

Question 9

In response to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor's price cut?

Accepted Answer

A)  raising the perceived value of a product 
B)  improving product quality 
C)  accepting a reduced market share 
D)  launching a "fighter brand" 
E)  using high-low pricing 
A)  raising the perceived value of a product 
B)  improving product quality 
C)  accepting a reduced market share 
D)  launching a "fighter brand" 
E)  using high-low pricing

Question 10

When using product bundle pricing, sellers combine several of their products and offer the bundle at an increased price for increased profit.

Accepted Answer

A) True 
 B)False

Question 11

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

Accepted Answer

A)  product line prices 
B)  reference prices 
C)  location-based prices 
D)  product form prices 
E)  time-based prices 
A)  product line prices 
B)  reference prices 
C)  location-based prices 
D)  product form prices 
E)  time-based prices

Question 12

If a large retailer sold numerous items below cost with the intention of punishing small competitors and gaining higher long-run profits by putting those competitors out of business, the retailer would be guilty of ________.

Accepted Answer

A)  price collusion 
B)  price fixing 
C)  predatory pricing 
D)  competitive pricing 
E)  penetration pricing 
A)  price collusion 
B)  price fixing 
C)  predatory pricing 
D)  competitive pricing 
E)  penetration pricing

Question 13

Which of the following companies uses product bundle pricing?

Accepted Answer

A)  Photo Genie, which sells inexpensive cameras that run only on their own, expensive, batteries 
B)  Go Zone, which launched a range of tablet models, each priced according to its features 
C)  Penguin's Parlor, which offers customers a 20 percent discount on their birthdays 
D)  Green Thumb, which gives away free watering cans with the purchase of certain potted plants 
E)  Panizza, whose combo meals are priced lower than its individual components sold together 
A)  Photo Genie, which sells inexpensive cameras that run only on their own, expensive, batteries 
B)  Go Zone, which launched a range of tablet models, each priced according to its features 
C)  Penguin's Parlor, which offers customers a 20 percent discount on their birthdays 
D)  Green Thumb, which gives away free watering cans with the purchase of certain potted plants 
E)  Panizza, whose combo meals are priced lower than its individual components sold together

Question 14

Thinking Cap Corp. prices its various cap designs at different price levels, ranging from $2.05 to $5.95. This is an example of optional product pricing.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following factors would most likely lead to a company initiating a price cut?

Accepted Answer

A)  over-demand 
B)  weakened economy 
C)  poor competition 
D)  cost inflation 
E)  weak price competition 
A)  over-demand 
B)  weakened economy 
C)  poor competition 
D)  cost inflation 
E)  weak price competition

Question 16

In segmented pricing, the difference in prices is based on differences in costs.

Accepted Answer

A) True 
 B)False

Question 17

A seasonal discount is a price reduction to buyers who buy merchandise while the products are in season.

Accepted Answer

A) True 
 B)False

Question 18

For a market penetration-price strategy to succeed, which of the following is LEAST likely to be true?

Accepted Answer

A)  Production costs decrease as sales volume increases. 
B)  A low price triggers market growth. 
C)  Distribution costs decrease as sales volume increases. 
D)  Low prices must inhibit competition from entering the market. 
E)  The strategy can be changed quickly, to a higher-priced position, with no negative impact. 
A)  Production costs decrease as sales volume increases. 
B)  A low price triggers market growth. 
C)  Distribution costs decrease as sales volume increases. 
D)  Low prices must inhibit competition from entering the market. 
E)  The strategy can be changed quickly, to a higher-priced position, with no negative impact.

Question 19

Online flash sales are used to create buying urgency and make buyers feel lucky to have gotten in on the deal.

Accepted Answer

A) True 
 B)False

Question 20

Federal legislation on price fixing requires that sellers set their prices ________.

Accepted Answer

A)  based on their fixed and variable costs 
B)  without communication from competitors 
C)  to achieve a specific profit margin 
D)  without the intention of cutting into competitors' profits 
E)  consistently throughout a region 
A)  based on their fixed and variable costs 
B)  without communication from competitors 
C)  to achieve a specific profit margin 
D)  without the intention of cutting into competitors' profits 
E)  consistently throughout a region

In product line pricing, price steps should account for differences in customer perceptions of the value of different features.

When a competitor cuts its price, a company should ________ if it believes it will not lose much market share or would lose too much profit by cutting its own prices.

After entering a market by using market-penetration pricing, a company can easily raise its price and maintain its market share.

Ways to avoid accusations of price gouging include ________.

Which of the following is true of price changes?

Which of the following involves adjusting prices to account for the physical location of customers?

A number of top fashion-modeling agencies would most likely be charged with ________ for jointly determining what commissions they charge for models.

Which of the following is a price adjustment strategy?

In response to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor's price cut?

When using product bundle pricing, sellers combine several of their products and offer the bundle at an increased price for increased profit.

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

If a large retailer sold numerous items below cost with the intention of punishing small competitors and gaining higher long-run profits by putting those competitors out of business, the retailer would be guilty of ________.

Which of the following companies uses product bundle pricing?

Thinking Cap Corp. prices its various cap designs at different price levels, ranging from $2.05 to $5.95. This is an example of optional product pricing.

Which of the following factors would most likely lead to a company initiating a price cut?

In segmented pricing, the difference in prices is based on differences in costs.

A seasonal discount is a price reduction to buyers who buy merchandise while the products are in season.

For a market penetration-price strategy to succeed, which of the following is LEAST likely to be true?

Online flash sales are used to create buying urgency and make buyers feel lucky to have gotten in on the deal.

Federal legislation on price fixing requires that sellers set their prices ________.

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing: Understanding and Capturing Customer Value

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters

Exam 11: Pricing Strategies: Additional Considerations

In product line pricing, price steps should account for differences in customer perceptions of the value of different features.

When a competitor cuts its price, a company should ________ if it believes it will not lose much market share or would lose too much profit by cutting its own prices.

After entering a market by using market-penetration pricing, a company can easily raise its price and maintain its market share.

Ways to avoid accusations of price gouging include ________.

Which of the following is true of price changes?

Which of the following involves adjusting prices to account for the physical location of customers?

A number of top fashion-modeling agencies would most likely be charged with ________ for jointly determining what commissions they charge for models.

Which of the following is a price adjustment strategy?

In response to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor's price cut?

When using product bundle pricing, sellers combine several of their products and offer the bundle at an increased price for increased profit.

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

If a large retailer sold numerous items below cost with the intention of punishing small competitors and gaining higher long-run profits by putting those competitors out of business, the retailer would be guilty of ________.

Which of the following companies uses product bundle pricing?

Thinking Cap Corp. prices its various cap designs at different price levels, ranging from $2.05 to $5.95. This is an example of optional product pricing.

Which of the following factors would most likely lead to a company initiating a price cut?

In segmented pricing, the difference in prices is based on differences in costs.

A seasonal discount is a price reduction to buyers who buy merchandise while the products are in season.

For a market penetration-price strategy to succeed, which of the following is LEAST likely to be true?

Online flash sales are used to create buying urgency and make buyers feel lucky to have gotten in on the deal.

Federal legislation on price fixing requires that sellers set their prices ________.

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing: Understanding and Capturing Customer Value

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters