Question 1

Skimming pricing refers to

Accepted Answer

A) setting the lowest initial price possible when introducing a new or innovative product in order to skim sales from competitors. 
B) setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product. 
C) setting a low initial price on a new product to appeal immediately to the mass market. 
D) the practice of replacing promotional allowances with higher manufacturer list prices. 
E) setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it. 
A) setting the lowest initial price possible when introducing a new or innovative product in order to skim sales from competitors. 
B) setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product. 
C) setting a low initial price on a new product to appeal immediately to the mass market. 
D) the practice of replacing promotional allowances with higher manufacturer list prices. 
E) setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

Question 2

The __________ equation = (Unit price × Quantity sold) - Total cost.

Accepted Answer

A) total revenue 
B) variable cost 
C) net present value 
D) profit 
E) break-even point 
A) total revenue 
B) variable cost 
C) net present value 
D) profit 
E) break-even point

Question 3

What is the difference between fixed costs and variable costs?

Accepted Answer

Fixed cost is the sum of the expenses of

Question 4

$$\begin{array} { | l c c c c | } 
\hline \text { Brand } & { \text { Dollar Sales Market Share } } &&{ \text { Unit Volume Market Share } } \
\hline \text { Red Bull } & \mathbf { 2 0 1 0 } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 1 0 } & \mathbf { 2 0 0 9 } \
\hline \text { Monster } & 18 & 37 \% & 33 \% & 33 \% \
\hline \text { Rockstar } & 7 & 17 & 19 & 18 \
\hline \begin{array} { l } 
\text { Other } \
\text { Brands }
\end{array} & \frac { 37 } { 100 \% } & \frac { 38 } { 100 \% } & \frac { 40 } { 100 \% } & \frac { 40 } { 100 \% } \
\hline
\end{array}$$
-The Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks. What is the price premium for Monster in 2010?

Accepted Answer

A) -12.5% 
B) -7.5% 
C) -5.3% 
D) 0% 
E) 15.2% 
A) -12.5% 
B) -7.5% 
C) -5.3% 
D) 0% 
E) 15.2%

Question 5

An ad campaign by Suave shampoo asked television viewers to identify the heads of hair of women who used Suave shampoo and conditioner and those that used the much more expensive salon hair-care products. The idea of the ad was that no one could tell which woman used the much cheaper Suave brand. By making price its selling point, Suave is most likely using __________.

Accepted Answer

A) customary pricing 
B) loss-leader pricing 
C) prestige pricing 
D) skimming pricing 
E) below-market pricing 
A) customary pricing 
B) loss-leader pricing 
C) prestige pricing 
D) skimming pricing 
E) below-market pricing

Question 6

Give an example of yield management pricing and explain why it is used.

Accepted Answer

Yield management pricing is charging dif

Question 7

Skimming pricing is considered to be a __________ approach to pricing.

Accepted Answer

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

Question 8

The reward a manufacturer gives to wholesalers and retailers for marketing functions they will perform in the future is referred to as __________.

Accepted Answer

A) seasonal discounts 
B) cash discounts 
C) promotional allowances 
D) trade discounts 
E) trade-in allowances 
A) seasonal discounts 
B) cash discounts 
C) promotional allowances 
D) trade discounts 
E) trade-in allowances

Question 9

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Accepted Answer

A) experience curve pricing 
B) loss-leader pricing 
C) a quantity discount 
D) a promotional discount 
E) everyday low pricing 
A) experience curve pricing 
B) loss-leader pricing 
C) a quantity discount 
D) a promotional discount 
E) everyday low pricing

Question 10

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 11

A demand curve graph typically appears as

Accepted Answer

A) a parabola with the apex representing the highest price that can be charged without losing customers. 
B) a diagonal line going from upper left to lower right demonstrating that as price goes down, demand goes up. 
C) an inverted parabola with the lowest point representing the lowest price that can be charged and still meet the company's profit objectives. 
D) a diagonal line going from lower left to upper right demonstrating that as prices go up, demand goes up proportionately. 
E) two intersecting lines that identify the point at which supply and demand are exactly the same 
A) a parabola with the apex representing the highest price that can be charged without losing customers. 
B) a diagonal line going from upper left to lower right demonstrating that as price goes down, demand goes up. 
C) an inverted parabola with the lowest point representing the lowest price that can be charged and still meet the company's profit objectives. 
D) a diagonal line going from lower left to upper right demonstrating that as prices go up, demand goes up proportionately. 
E) two intersecting lines that identify the point at which supply and demand are exactly the same

Question 12

A __________ approach often changes prices based on time, day, week, or season.

Accepted Answer

A) skimming pricing 
B) bundle pricing 
C) yield management pricing 
D) target return on investment pricing 
E) standard markup pricing 
A) skimming pricing 
B) bundle pricing 
C) yield management pricing 
D) target return on investment pricing 
E) standard markup pricing

Question 13

The four types of discounts are

Accepted Answer

A) quantity, trade-in, promotional, and cash. 
B) quantity, seasonal, trade (functional), and cash. 
C) quantity, seasonal, promotional, and FOB. 
D) cash, trade-in, seasonal, and promotional. 
E) trade-in, promotional, geographic, and functional. 
A) quantity, trade-in, promotional, and cash. 
B) quantity, seasonal, trade (functional), and cash. 
C) quantity, seasonal, promotional, and FOB. 
D) cash, trade-in, seasonal, and promotional. 
E) trade-in, promotional, geographic, and functional.

Question 14

Discounts refer to reductions from the __________ that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller.

Accepted Answer

A) final price 
B) list price 
C) wholesaler's cost 
D) manufacturer's cost 
E) retailer's cost 
A) final price 
B) list price 
C) wholesaler's cost 
D) manufacturer's cost 
E) retailer's cost

Question 15

Four cost concepts are important in pricing decisions: total cost, variable cost, unit variable cost, and __________.

Accepted Answer

A) dividend cost 
B) liquidity cost 
C) discretionary cost 
D) fixed cost 
E) elastic cost 
A) dividend cost 
B) liquidity cost 
C) discretionary cost 
D) fixed cost 
E) elastic cost

Question 16

The first Apple iPad was introduced in 2010 at an initial price of $650 for the 16 GB version. People waited in line overnight so they could be one of the first to own this unique tablet device. Which pricing strategy did Apple use to help recoup its research and development costs for the iPad?

Accepted Answer

A) price lining 
B) penetration pricing 
C) skimming pricing 
D) customary pricing 
E) target pricing 
A) price lining 
B) penetration pricing 
C) skimming pricing 
D) customary pricing 
E) target pricing

Question 17

Flexible Pricing Chart
-Consider the dynamic pricing chart above, which shows the results of a National Bureau of Economic Research study of 750,000 car purchases. The data indicate that some groups of car buyers, on average, paid roughly $105, $423, and $483 respectively for a new car in the $21,000 range than the typical purchaser. Who are the car buyers in B?

Accepted Answer

A) women 
B) the elderly 
C) Hispanics 
D) African Americans 
E) Asian Americans 
A) women 
B) the elderly 
C) Hispanics 
D) African Americans 
E) Asian Americans

Question 18

Setting different prices for products and depending on individual buyers and purchase situations is referred to as

Accepted Answer

A) price lining. 
B) a flexible-price policy. 
C) customary pricing. 
D) price fixing. 
E) discretionary pricing. 
A) price lining. 
B) a flexible-price policy. 
C) customary pricing. 
D) price fixing. 
E) discretionary pricing.

Question 19

Loss-leader pricing refers to

Accepted Answer

A) a pricing method where the price the seller charges is below its customary price to attract customers. 
B) setting a low initial price and gradually but consistently increasing that price so as not to antagonize the consumer. 
C) deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well. 
D) a method of pricing based on a product's tradition, standardized channel of distribution, or other competitive factors. 
E) pricing a product between 8 and 10 percent lower than nationally branded competitive products. 
A) a pricing method where the price the seller charges is below its customary price to attract customers. 
B) setting a low initial price and gradually but consistently increasing that price so as not to antagonize the consumer. 
C) deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well. 
D) a method of pricing based on a product's tradition, standardized channel of distribution, or other competitive factors. 
E) pricing a product between 8 and 10 percent lower than nationally branded competitive products.

Question 20

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Accepted Answer

A) the frequency of the order. 
B) where they are in the channel. 
C) when orders are placed during the year. 
D) the length of the relationship with the manufacturer. 
E) the size of the order. 
A) the frequency of the order. 
B) where they are in the channel. 
C) when orders are placed during the year. 
D) the length of the relationship with the manufacturer. 
E) the size of the order.

Skimming pricing refers to

The __________ equation = (Unit price × Quantity sold) - Total cost.

What is the difference between fixed costs and variable costs?

Brand Dollar Sales Market Share Unit Volume Market Share Red Bull Monster 18 37\% 33\% 33\% Rockstar 7 17 19 18 Other Brands -The Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks. What is the price premium for Monster in 2010?

Give an example of yield management pricing and explain why it is used.

Skimming pricing is considered to be a __________ approach to pricing.

The reward a manufacturer gives to wholesalers and retailers for marketing functions they will perform in the future is referred to as __________.

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Standard markup pricing refers to

A demand curve graph typically appears as

A __________ approach often changes prices based on time, day, week, or season.

The four types of discounts are

Discounts refer to reductions from the __________ that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller.

Four cost concepts are important in pricing decisions: total cost, variable cost, unit variable cost, and __________.

The first Apple iPad was introduced in 2010 at an initial price of $650 for the 16 GB version. People waited in line overnight so they could be one of the first to own this unique tablet device. Which pricing strategy did Apple use to help recoup its research and development costs for the iPad?

Setting different prices for products and depending on individual buyers and purchase situations is referred to as

Loss-leader pricing refers to

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

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

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Using Social Media to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Filters

Exam 11: Pricing Products and Services

Skimming pricing refers to

The __________ equation = (Unit price × Quantity sold) - Total cost.

What is the difference between fixed costs and variable costs?

Brand Dollar Sales Market Share Unit Volume Market Share Red Bull Monster 18 37\% 33\% 33\% Rockstar 7 17 19 18 Other Brands -The Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks. What is the price premium for Monster in 2010?

Give an example of yield management pricing and explain why it is used.

Skimming pricing is considered to be a __________ approach to pricing.

The reward a manufacturer gives to wholesalers and retailers for marketing functions they will perform in the future is referred to as __________.

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Standard markup pricing refers to

A demand curve graph typically appears as

A __________ approach often changes prices based on time, day, week, or season.

The four types of discounts are

Discounts refer to reductions from the __________ that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller.

Four cost concepts are important in pricing decisions: total cost, variable cost, unit variable cost, and __________.

The first Apple iPad was introduced in 2010 at an initial price of $650 for the 16 GB version. People waited in line overnight so they could be one of the first to own this unique tablet device. Which pricing strategy did Apple use to help recoup its research and development costs for the iPad?

Setting different prices for products and depending on individual buyers and purchase situations is referred to as

Loss-leader pricing refers to

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

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

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Using Social Media to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Filters