Question 1

Noncumulative quantity discounts

Accepted Answer

A)  apply only to individual orders. 
B)  are designed to primarily encourage repeat buying. 
C)  reduce the customer's cost for additional purchases. 
D)  tie a buyer to the seller after a single purchase. 
E)  are never attractive to buyers. 
A)  apply only to individual orders. 
B)  are designed to primarily encourage repeat buying. 
C)  reduce the customer's cost for additional purchases. 
D)  tie a buyer to the seller after a single purchase. 
E)  are never attractive to buyers.

Question 2

World Imports/Exports, Inc., is pricing a product sold in a foreign market below the cost of producing it. It sells the same product at a higher price in its domestic market. The company is engaging in

Accepted Answer

A)  price dealing. 
B)  skimming 
C)  dumping 
D)  fair trade. 
E)  conscious parallel action. 
A)  price dealing. 
B)  skimming 
C)  dumping 
D)  fair trade. 
E)  conscious parallel action.

Question 3

Genetech Corp. has invested heavily to develop a patented new product. Genetech wants to achieve a rapid return on its investment. It probably should set a ______________ pricing objective.

Accepted Answer

A)  profit maximization 
B)  target return 
C)  sales-oriented 
D)  status-quo 
E)  None of the above 
A)  profit maximization 
B)  target return 
C)  sales-oriented 
D)  status-quo 
E)  None of the above

Question 4

Which of the following is a sales-oriented pricing objective?

Accepted Answer

A)  Meet competition 
B)  Market share growth 
C)  Profit maximization 
D)  Target return 
E)  Non price competition 
A)  Meet competition 
B)  Market share growth 
C)  Profit maximization 
D)  Target return 
E)  Non price competition

Question 5

The target return figure is zero for an organization that sets a price level that will just recover costs.

Accepted Answer

A) True 
 B)False

Question 6

A one-price policy means:

Accepted Answer

A)  offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. 
B)  never using temporary sales or rebates. 
C)  selling to different customers at different prices. 
D)  setting a price at the "right" level from the start and never changing it. 
E)  None of the above. 
A)  offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. 
B)  never using temporary sales or rebates. 
C)  selling to different customers at different prices. 
D)  setting a price at the "right" level from the start and never changing it. 
E)  None of the above.

Question 7

Some marketing managers have set up relationships with Internet companies whose ads invite customers to "set your own price." Such marketing managers

Accepted Answer

A)  have given up on administering prices. 
B)  are carefully administering a flexible price. 
C)  are following a one-price policy. 
D)  make it easier for competition to undercut them. 
E)  are following a penetration pricing policy. 
A)  have given up on administering prices. 
B)  are carefully administering a flexible price. 
C)  are following a one-price policy. 
D)  make it easier for competition to undercut them. 
E)  are following a penetration pricing policy.

Question 8

A discount that is offered to encourage buyers to stock earlier than present demand requires is:

Accepted Answer

A)  a cash discount. 
B)  a seasonal discount. 
C)  a quantity discount. 
D)  "push money." 
E)  a trade discount. 
A)  a cash discount. 
B)  a seasonal discount. 
C)  a quantity discount. 
D)  "push money." 
E)  a trade discount.

Question 9

A one-price policy means offering the same price:

Accepted Answer

A)  All four seasons of the year. 
B)  For all types of merchandise. 
C)  For individual consumers and organizational buyers. 
D)  For store brands and national brands. 
E)  To all customers. 
A)  All four seasons of the year. 
B)  For all types of merchandise. 
C)  For individual consumers and organizational buyers. 
D)  For store brands and national brands. 
E)  To all customers.

Question 10

Sales-oriented pricing objectives are sensible because sales growth almost guarantees higher profits.

Accepted Answer

A) True 
 B)False

Question 11

A marketing manager may choose a pricing objective that is:

Accepted Answer

A)  sales oriented. 
B)  status-quo oriented. 
C)  profit oriented. 
D)  any of the above--depending on the situation. 
E)  None of the above. 
A)  sales oriented. 
B)  status-quo oriented. 
C)  profit oriented. 
D)  any of the above--depending on the situation. 
E)  None of the above.

Question 12

There are more pricing options in pure competition than in monopolistic competition.

Accepted Answer

A) True 
 B)False

Question 13

In states which have unfair trade practice acts, wholesalers and retailers are usually required to mark up merchandise a certain minimum percentage above cost.

Accepted Answer

A) True 
 B)False

Question 14

Pricing a product sold in a foreign market higher than in its domestic market is referred to as dumping.

Accepted Answer

A) True 
 B)False

Question 15

A sales-oriented objective may seek all of the following except

Accepted Answer

A)  some level of unit sales. 
B)  some level of dollar sales. 
C)  target return profits. 
D)  share of the market. 
E)  percentage of the market. 
A)  some level of unit sales. 
B)  some level of dollar sales. 
C)  target return profits. 
D)  share of the market. 
E)  percentage of the market.

Question 16

White Sands Heavy Equipment Co. produces industrial equipment that it sells through its national sales force. Its sales reps often must negotiate with customers to match the low prices of foreign competitors. Apparently, the firm has

Accepted Answer

A)  an "F.O.B.-Seller's Factory" price policy. 
B)  been violating the Robinson-Patman act. 
C)  a skimming price policy. 
D)  a status quo pricing objective. 
E)  a flexible-price policy. 
A)  an "F.O.B.-Seller's Factory" price policy. 
B)  been violating the Robinson-Patman act. 
C)  a skimming price policy. 
D)  a status quo pricing objective. 
E)  a flexible-price policy.

Question 17

"Zone pricing":

Accepted Answer

A)  allows a uniform delivered price to be charged to all buyers in each zone. 
B)  simplifies the calculation of transportation charges. 
C)  means making an average freight charge to all buyers within some geographic area. 
D)  may make it possible to compete with sellers located closer to the buyer. 
E)  All of the above. 
A)  allows a uniform delivered price to be charged to all buyers in each zone. 
B)  simplifies the calculation of transportation charges. 
C)  means making an average freight charge to all buyers within some geographic area. 
D)  may make it possible to compete with sellers located closer to the buyer. 
E)  All of the above.

Question 18

Jackson Motors, Inc. normally sells its electric motors to all buyers for $100. However, a competitor offered to sell similar motors to one of Jackson Motors' biggest customers for only $80 and Jackson Motors offered that customer--but not its other customers--a $80 selling price. According to the Robinson-Patman Act:

Accepted Answer

A)  Jackson Motors has not violated the law--it is just meeting competition. 
B)  Jackson Motors is breaking the law--unless it offers to sell motors to all of its customers for $80. 
C)  Jackson Motors cannot lower its $100 selling price. 
D)  Jackson Motors cannot use the "meeting competition in good faith" defense unless it beats its competitor's $80 selling price. 
E)  Jackson Motors AND its competitor are both guilty of price fixing. 
A)  Jackson Motors has not violated the law--it is just meeting competition. 
B)  Jackson Motors is breaking the law--unless it offers to sell motors to all of its customers for $80. 
C)  Jackson Motors cannot lower its $100 selling price. 
D)  Jackson Motors cannot use the "meeting competition in good faith" defense unless it beats its competitor's $80 selling price. 
E)  Jackson Motors AND its competitor are both guilty of price fixing.

Question 19

Sears reduces prices on gas grills between November and February, prior to spring and summer. This price reduction is a:

Accepted Answer

A)  Trade discount. 
B)  Seasonal discount. 
C)  Noncumulative quantity discount. 
D)  Cumulative quantity discount. 
E)  Cash discount. 
A)  Trade discount. 
B)  Seasonal discount. 
C)  Noncumulative quantity discount. 
D)  Cumulative quantity discount. 
E)  Cash discount.

Question 20

A penetration pricing policy:

Accepted Answer

A)  Tries to sell the whole market at one low price. 
B)  Tries to sell the top of the market at a high price. 
C)  Is used when demand for the product involved is inelastic. 
D)  Usually involves a slow reduction in price over time. 
E)  Is used when the firm does not expect strong competition soon after its product is introduced. 
A)  Tries to sell the whole market at one low price. 
B)  Tries to sell the top of the market at a high price. 
C)  Is used when demand for the product involved is inelastic. 
D)  Usually involves a slow reduction in price over time. 
E)  Is used when the firm does not expect strong competition soon after its product is introduced.

Exam 17: Pricing Objectives and Policies

Noncumulative quantity discounts

World Imports/Exports, Inc., is pricing a product sold in a foreign market below the cost of producing it. It sells the same product at a higher price in its domestic market. The company is engaging in

Genetech Corp. has invested heavily to develop a patented new product. Genetech wants to achieve a rapid return on its investment. It probably should set a ______________ pricing objective.

Which of the following is a sales-oriented pricing objective?

The target return figure is zero for an organization that sets a price level that will just recover costs.

A one-price policy means:

Some marketing managers have set up relationships with Internet companies whose ads invite customers to "set your own price." Such marketing managers

A discount that is offered to encourage buyers to stock earlier than present demand requires is:

A one-price policy means offering the same price:

Sales-oriented pricing objectives are sensible because sales growth almost guarantees higher profits.

A marketing manager may choose a pricing objective that is:

There are more pricing options in pure competition than in monopolistic competition.

In states which have unfair trade practice acts, wholesalers and retailers are usually required to mark up merchandise a certain minimum percentage above cost.

Pricing a product sold in a foreign market higher than in its domestic market is referred to as dumping.

A sales-oriented objective may seek all of the following except

White Sands Heavy Equipment Co. produces industrial equipment that it sells through its national sales force. Its sales reps often must negotiate with customers to match the low prices of foreign competitors. Apparently, the firm has

"Zone pricing":

Sears reduces prices on gas grills between November and February, prior to spring and summer. This price reduction is a:

A penetration pricing policy:

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Demographic Dimensions of Global Consumer Markets

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers,wholesalers,and Their Strategy Planning

Promotion-Introduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Economics Fundamentals

Marketing Arithmetic

Filters