Question 1

Acme Lawnmowers sells its mowers to retailers at different prices,depending on whether they are independent stores or members of a national chain.It uses:

Accepted Answer

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

Question 2

The market for turkey products is large.If a major producer of turkeys were to introduce a boneless fresh turkey wrapped around savory dressing,most of the large market for this new product would be aware of its existence.The market is price sensitive,and there is some potential competition.The appropriate strategy would be:

Accepted Answer

A)  price skimming. 
B)  penetration pricing. 
C)  status quo. 
D)  cost bundling. 
E)  price lining. 
A)  price skimming. 
B)  penetration pricing. 
C)  status quo. 
D)  cost bundling. 
E)  price lining.

Question 3

Uniform delivered pricing is illegal because it discriminates against buyers who are located close to the point of shipping because they pay the same amount as buyers located far from the point of shipping pay.

Accepted Answer

A) True 
 B)False

Question 4

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 5

During a recent worldwide recession when wine usage was declining,Nickel & Nickel launched a new brand of wine,which it sold at $125 a bottle.The wine is allowed to age three times as long as lower-priced wines,and the grapes used in the wine's production are hand-picked.Wine lovers appreciate how both production techniques improve wine quality.Nickel & Nickel used _____ to build market share.

Accepted Answer

A)  value-based pricing 
B)  unbundling 
C)  price lining 
D)  status quo pricing 
E)  leader pricing 
A)  value-based pricing 
B)  unbundling 
C)  price lining 
D)  status quo pricing 
E)  leader pricing

Question 6

Tickets to a combined amusement park and water slide were $49 for the day.Then the company gave customers the option to purchase tickets for either the amusement park or the water slide for $18.To help keep costs in line,the park management also began charging its customers a small parking fee.Initially,the cost of parking was figured into the $49 price.The amusement park is using:

Accepted Answer

A)  price lining. 
B)  potential (or base) pricing. 
C)  Unbundling. 
D)  professional services pricing. 
E)  price maintenance. 
A)  price lining. 
B)  potential (or base) pricing. 
C)  Unbundling. 
D)  professional services pricing. 
E)  price maintenance.

Question 7

Reducing the services that come with the basic product is called:

Accepted Answer

A)  Demarketing. 
B)  Contraction. 
C)  two-part pricing. 
D)  retroactive pricing. 
E)  Unbundling. 
A)  Demarketing. 
B)  Contraction. 
C)  two-part pricing. 
D)  retroactive pricing. 
E)  Unbundling.

Question 8

Which type of pricing means pricing at odd-numbered prices to connote bargains and pricing at even-numbered prices to imply quality?

Accepted Answer

A)  Bait pricing 
B)  Price bundling 
C)  1-2 pricing 
D)  Odd-even pricing 
E)  Two-part pricing 
A)  Bait pricing 
B)  Price bundling 
C)  1-2 pricing 
D)  Odd-even pricing 
E)  Two-part pricing

Question 9

One example of price bundling occurs when Nintendo sells the Wii Fit balance board with the Wii game system at a lower price than the total price of each if bought separately.

Accepted Answer

A) True 
 B)False

Question 10

Best Buy charges customers a 15 percent restocking fee on some returned items.A restocking fee is for putting a returned item back into inventory.This is an example of a:

Accepted Answer

A)  bait-and-switch. 
B)  trade-in. 
C)  consumer penalty. 
D)  product absorption strategy. 
E)  price bundle. 
A)  bait-and-switch. 
B)  trade-in. 
C)  consumer penalty. 
D)  product absorption strategy. 
E)  price bundle.

Question 11

Cashtown Used Cars aired a radio spot announcing,"Today only,previously owned cars are only $200!" Meghan just wanted some kind of in-town transportation.When she went to Cashtown,the salesperson said,"We have only one $200 car left,and it's not the kind of car I'd want my wife to drive.However,we do have some great deals on newer models." Meghan went home with an $8,000 used car.Cashtown is probably practicing:

Accepted Answer

A)  decoy pricing. 
B)  deal pricing. 
C)  functional pricing. 
D)  bait pricing. 
E)  price pressuring. 
A)  decoy pricing. 
B)  deal pricing. 
C)  functional pricing. 
D)  bait pricing. 
E)  price pressuring.

Question 12

Apple iPhone
Apple, Inc.'s iPhone first 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 then-exclusive U.S. carrier 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 approach succeeded, and over a million iPhone 3Gs were sold during the introductory weekend. In 2011, the iPhone 4S-the fifth generation iPhone-led cellular phone sales with more than 25 million units sold. Several Android-based phones manufactured by Samsung were not far behind, however.
-Refer to Apple iPhone.Consumers who agree to the two-year AT&T service contract are required to pay a cancellation fee if they leave AT&T prior to the end of the two-year period.This fee is a consumer:

Accepted Answer

A)  bundling. 
B)  penalty. 
C)  lining. 
D)  stimulus. 
E)  markdown. 
A)  bundling. 
B)  penalty. 
C)  lining. 
D)  stimulus. 
E)  markdown.

Question 13

All pricing objectives have trade-offs that managers must weigh.

Accepted Answer

A) True 
 B)False

Question 14

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 15

An awning manufacturer that is allowed to deduct 3 percent from its total bill if it pays by a specific date is receiving a promotional discount.

Accepted Answer

A) True 
 B)False

Question 16

Leader pricing is used to:

Accepted Answer

A)  attract customers to a store so they can be persuaded to buy a more expensive product instead. 
B)  bundle products together for sale. 
C)  attract customers to the store so they will buy other products in addition to the leader product. 
D)  price products at odd-numbered amounts to stimulate demand. 
E)  maintain a status quo pricing strategy. 
A)  attract customers to a store so they can be persuaded to buy a more expensive product instead. 
B)  bundle products together for sale. 
C)  attract customers to the store so they will buy other products in addition to the leader product. 
D)  price products at odd-numbered amounts to stimulate demand. 
E)  maintain a status quo pricing strategy.

Question 17

Which of the following pricing methods can be used to build market share during a recession?

Accepted Answer

A)  Price lining 
B)  Resale price maintenance 
C)  Psychological pricing 
D)  Bundling 
E)  Variable pricing 
A)  Price lining 
B)  Resale price maintenance 
C)  Psychological pricing 
D)  Bundling 
E)  Variable pricing

Question 18

The price skimming strategy is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.This strategy works best when:

Accepted Answer

A)  competition is abundant. 
B)  revenues are equal to expenses. 
C)  supply is greater than demand. 
D)  production capacity is large and flexible. 
E)  The product is perceived as having unique advantages. 
A)  competition is abundant. 
B)  revenues are equal to expenses. 
C)  supply is greater than demand. 
D)  production capacity is large and flexible. 
E)  The product is perceived as having unique advantages.

Question 19

Kiddieland Amusement Park charges customers an admission fee of $10.Customers must pay 50 cents for each ride they want to ride while inside the park.This is an example of two-part pricing.

Accepted Answer

A) True 
 B)False

Question 20

What is product line pricing? What three relationships among products in the line must managers be aware of before setting prices? For each relationship,give an example of a product that fits the situation.

Accepted Answer

Product line pricing is setting prices f

Exam 39: Setting the Right Price

Acme Lawnmowers sells its mowers to retailers at different prices,depending on whether they are independent stores or members of a national chain.It uses:

Uniform delivered pricing is illegal because it discriminates against buyers who are located close to the point of shipping because they pay the same amount as buyers located far from the point of shipping pay.

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:

Reducing the services that come with the basic product is called:

Which type of pricing means pricing at odd-numbered prices to connote bargains and pricing at even-numbered prices to imply quality?

One example of price bundling occurs when Nintendo sells the Wii Fit balance board with the Wii game system at a lower price than the total price of each if bought separately.

Best Buy charges customers a 15 percent restocking fee on some returned items.A restocking fee is for putting a returned item back into inventory.This is an example of a:

All pricing objectives have trade-offs that managers must weigh.

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.

An awning manufacturer that is allowed to deduct 3 percent from its total bill if it pays by a specific date is receiving a promotional discount.

Leader pricing is used to:

Which of the following pricing methods can be used to build market share during a recession?

The price skimming strategy is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.This strategy works best when:

Kiddieland Amusement Park charges customers an admission fee of $10.Customers must pay 50 cents for each ride they want to ride while inside the park.This is an example of two-part pricing.

What is product line pricing? What three relationships among products in the line must managers be aware of before setting prices? For each relationship,give an example of a product that fits the situation.

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Strategic Planning for Competitive Advantage

Case Study Disney: The Happiest Brand on Earth

Ethics and Social Responsibility

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The Marketing Environment

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Developing a Global Vision

Case Study P&G Unilever Panasonic: The $2-a-Day Initiative

Consumer Decision Making

Case Study eBay: Creating Customers on the Move

Business Marketing

Case Study Pantone: This Year’s Color: Honeysuckle

Segmenting and Targeting Markets

Coke Zero

Marketing Research

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Product Concepts

Case Study Ford Motor Co.: One Ford; One Big Turnaround

Developing and Managing Products

Case Study Harmonix: Embrace Your Inner Rock Star

Services and Nonprofit Organization Marketing

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Supply Chain Management

The U.S.Transportation Industry: Planning for a Potential Post-Recession Capacity Crunch

Marketing Channels and Retailing

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Marketing Communications

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Advertising Public Relations and Sales Promotion

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Personal Selling and Sales Management

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Social Media and Marketing

Facebook: Advertising’s Troubling Future

Pricing Concepts

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Mary Kay Inc: Taps into a Changing Demographic

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Microsoft Implies Distribution of Angry Birds on Windows Phone 7

Yellow Tail’s Tails-for-Tails Campaign

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