Question 1

What activities occur once the marketing manager has established pricing goals? Why are these activities important?

Accepted Answer

The marketing manager must first estimate quantity demand levels and elasticity of demand,which allows for an estimate of revenues at a variety of price levels.Next,corresponding costs should be determined for each price.Then the manager can estimate the amount of profit and market share that can be earned at each possible price.Alternative pricing policies can be examined in terms of revenues,costs,and profits.This information becomes the core of the price policy by determining which price can best meet the firm's pricing goals.

Question 2

List in order the four steps used to set the right price for a product.

Accepted Answer

The answer of List in order the four steps used...

Question 3

SCENARIOS
Art Supplies
It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school.In her Sunday newspaper was a flyer from Michael's,an arts and crafts retailer.As she looked through the newspaper insert,she noticed that if she purchased three or more bottles of Alene's Tacky Glue,the regular price of $1.50 each was reduced to $1.15 each.She also saw that the store priced its plastic storage boxes at $1.99,$3.99,and $5.99.She thought they would be useful for storing each individual child's projects.On the front page of the flyer was an ad for Funky Girls Gel Pens,something she knew her daughter would love to use.The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens.She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michael's had a scrapbook starter kit,which includes scissors,book,pages,and stickers for only $15.The items could be purchased separately for $19.99.The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.
-Refer to Mrs.K's Premium Wisconsin cheese.The type of discount offered by Mrs.K's to buyers who are willing to assume the transportation of products from the farm to their warehouses is called a:

Accepted Answer

A)  seasonal discount 
B)  promotional allowance 
C)  quantity discount 
D)  functional discount 
E)  potential (or base)allowance 
A)  seasonal discount 
B)  promotional allowance 
C)  quantity discount 
D)  functional discount 
E)  potential (or base)allowance D

Question 4

The marketing manager of icruise.com (a Web site travel site targeted to consumers who want a luxury vacation)finds that the firm can gain market share and become the industry leader if it slashes prices by 50 percent during the month of December.However,the vice-president of finance is committed to reporting a 25 percent return on investment at all times.This conflict illustrates:

Accepted Answer

A)  a need to eliminate low-profit products 
B)  a lack of corporate concentration on the marketing concept 
C)  how pricing operates in a mature marketplace 
D)  the need for trade-offs in pricing objectives 
E)  how target markets can be ignored 
A)  a need to eliminate low-profit products 
B)  a lack of corporate concentration on the marketing concept 
C)  how pricing operates in a mature marketplace 
D)  the need for trade-offs in pricing objectives 
E)  how target markets can be ignored

Question 5

Gary Thrower is a chimney sweep.He gives large discounts to homeowners that use his services in June and July.This is an example of a seasonal discount.

Accepted Answer

A) True 
 B)False

Question 6

Dell's new line of computers is selling for up to 20 percent lower than similar computers sold by its largest competitors.Since Dell's goal is to maximize its sales,it is probably using a _____ strategy.

Accepted Answer

A)  price lining 
B)  price fixing 
C)  status quo pricing 
D)  penetration pricing 
E)  price skimming 
A)  price lining 
B)  price fixing 
C)  status quo pricing 
D)  penetration pricing 
E)  price skimming

Question 7

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)  demand is greater than supply 
A)  competition is abundant 
B)  revenues are equal to expenses 
C)  supply is greater than demand 
D)  production capacity is large and flexible 
E)  demand is greater than supply

Question 8

Rag fibers for paper and cotton seeds for cottonseed oil are two byproducts of the cotton textile industry.Because these products are produced together,they are complementary products.

Accepted Answer

A) True 
 B)False

Question 9

A company that is allowed to deduct 3 percent from its total bill if it pays by a specific date is receiving a cash discount.

Accepted Answer

A) True 
 B)False

Question 10

Single-price selling:

Accepted Answer

A)  removes price comparisons from the buyer's decision-making process 
B)  does not benefit the retailer 
C)  is most effective when used during an inflationary period 
D)  encourages clerical errors 
E)  is accurately described by none of the above 
A)  removes price comparisons from the buyer's decision-making process 
B)  does not benefit the retailer 
C)  is most effective when used during an inflationary period 
D)  encourages clerical errors 
E)  is accurately described by none of the above

Question 11

A Rhode Island-based catalog retailer features cast-iron skillets.Its customers in New England are charged one shipping rate,and customers west of the Rocky Mountains are charged a different rate.Customers in the Southeastern states are charged yet another rate.What kind of geographical pricing is the catalog using?

Accepted Answer

A)  FOB origin pricing 
B)  FOB factory 
C)  zone pricing 
D)  freight absorption pricing 
E)  uniform delivered pricing 
A)  FOB origin pricing 
B)  FOB factory 
C)  zone pricing 
D)  freight absorption pricing 
E)  uniform delivered pricing

Question 12

A company's pricing strategy should do all of the following EXCEPT:

Accepted Answer

A)  give direction for price movements over the product life cycle 
B)  define the initial price 
C)  ignore the targeting and positioning strategy of the company 
D)  set a competitive price 
E)  interact with the other elements of the marketing mix 
A)  give direction for price movements over the product life cycle 
B)  define the initial price 
C)  ignore the targeting and positioning strategy of the company 
D)  set a competitive price 
E)  interact with the other elements of the marketing mix

Question 13

Uniform delivered pricing:

Accepted Answer

A)  creates no geographical price discrimination 
B)  is sometimes called "postage stamp pricing" 
C)  is prevalent in the steel,cement,corn oil,and lead industries 
D)  is common where freight costs are a large portion of total costs 
E)  is calculated from regional base points 
A)  creates no geographical price discrimination 
B)  is sometimes called "postage stamp pricing" 
C)  is prevalent in the steel,cement,corn oil,and lead industries 
D)  is common where freight costs are a large portion of total costs 
E)  is calculated from regional base points

Question 14

When a customer of Vegas Sign Company chooses to pay immediately on delivery rather than wait to be billed in 30 days,the buyer receives a 5 percent discount.This 5 percent discount is an example of a:

Accepted Answer

A)  quantity discount 
B)  cash discount 
C)  rebate 
D)  functional discount 
E)  promotional allowance 
A)  quantity discount 
B)  cash discount 
C)  rebate 
D)  functional discount 
E)  promotional allowance

Question 15

A base price may be lowered through the use of a discount.Discounts take a variety of forms and have several different objectives.Name and define three types of discounts (do not include allowances or rebates).State the main objective of the each type of discount you identify.

Accepted Answer

QUANTITY DISCOUNTS are offered to buyers

Question 16

Once he compiles information on pricing objectives,market demand,quantity supplied,and the price elasticity of demand,the marketing manager for a firearms training system will be ready to determine optimal price for a new product extension.

Accepted Answer

A) True 
 B)False

Question 17

What is a promotional allowance? What is the difference between a promotional allowance and a functional discount? Give two specific examples of promotional allowances.

Accepted Answer

A promotional allowance is a payment to

Question 18

A shortage of blood for transfusions for injured animals has resulted in the introduction of a synthesized product called Oxyglobin,which can be used effectively as a blood replacement.The manufacturer of the product has put a high price on the product in order to recoup its research and development costs.The manufacturer of Oxyglobin is using a _____ policy.

Accepted Answer

A)  price-banding 
B)  penetration pricing 
C)  price-lining 
D)  bundling costs 
E)  price skimming 
A)  price-banding 
B)  penetration pricing 
C)  price-lining 
D)  bundling costs 
E)  price skimming

Question 19

A firm charging a price identical to or very close to the competition's price is using a _____ strategy.

Accepted Answer

A)  differentiation pricing 
B)  penetration pricing 
C)  preemptive pricing 
D)  status quo pricing 
E)  leader pricing 
A)  differentiation pricing 
B)  penetration pricing 
C)  preemptive pricing 
D)  status quo pricing 
E)  leader pricing

Question 20

_____ are cash refunds given for the purchase of a product during a specific period.

Accepted Answer

A)  Rebates 
B)  Loss leaders 
C)  Reciprocal allowances 
D)  Demand discounts 
E)  Promotional allowances 
A)  Rebates 
B)  Loss leaders 
C)  Reciprocal allowances 
D)  Demand discounts 
E)  Promotional allowances

What activities occur once the marketing manager has established pricing goals? Why are these activities important?

List in order the four steps used to set the right price for a product.

Gary Thrower is a chimney sweep.He gives large discounts to homeowners that use his services in June and July.This is an example of a seasonal discount.

Dell's new line of computers is selling for up to 20 percent lower than similar computers sold by its largest competitors.Since Dell's goal is to maximize its sales,it is probably using a _____ strategy.

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:

Rag fibers for paper and cotton seeds for cottonseed oil are two byproducts of the cotton textile industry.Because these products are produced together,they are complementary products.

A company that is allowed to deduct 3 percent from its total bill if it pays by a specific date is receiving a cash discount.

Single-price selling:

A company's pricing strategy should do all of the following EXCEPT:

Uniform delivered pricing:

When a customer of Vegas Sign Company chooses to pay immediately on delivery rather than wait to be billed in 30 days,the buyer receives a 5 percent discount.This 5 percent discount is an example of a:

A base price may be lowered through the use of a discount.Discounts take a variety of forms and have several different objectives.Name and define three types of discounts (do not include allowances or rebates).State the main objective of the each type of discount you identify.

Once he compiles information on pricing objectives,market demand,quantity supplied,and the price elasticity of demand,the marketing manager for a firearms training system will be ready to determine optimal price for a new product extension.

What is a promotional allowance? What is the difference between a promotional allowance and a functional discount? Give two specific examples of promotional allowances.

A firm charging a price identical to or very close to the competition's price is using a _____ strategy.

_____ are cash refunds given for the purchase of a product during a specific period.

An Overview of Marketing

Strategic Planning for Competitive Advantag

Social Responsibility, ethics, and the Marketing Environment

Developing a Global Vision27

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels and Supply Chain Management

Retailing

Integrated Marketing Communications

Advertising and Public Relations

Sales Promotion and Personal Selling

Pricing Concepts

Internet Marketing

Customer Relationship Management

Filters

Exam 18: Setting the Right Price

What activities occur once the marketing manager has established pricing goals? Why are these activities important?

List in order the four steps used to set the right price for a product.

Gary Thrower is a chimney sweep.He gives large discounts to homeowners that use his services in June and July.This is an example of a seasonal discount.

Dell's new line of computers is selling for up to 20 percent lower than similar computers sold by its largest competitors.Since Dell's goal is to maximize its sales,it is probably using a _____ strategy.

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:

Rag fibers for paper and cotton seeds for cottonseed oil are two byproducts of the cotton textile industry.Because these products are produced together,they are complementary products.

A company that is allowed to deduct 3 percent from its total bill if it pays by a specific date is receiving a cash discount.

Single-price selling:

A company's pricing strategy should do all of the following EXCEPT:

Uniform delivered pricing:

When a customer of Vegas Sign Company chooses to pay immediately on delivery rather than wait to be billed in 30 days,the buyer receives a 5 percent discount.This 5 percent discount is an example of a:

A base price may be lowered through the use of a discount.Discounts take a variety of forms and have several different objectives.Name and define three types of discounts (do not include allowances or rebates).State the main objective of the each type of discount you identify.

Once he compiles information on pricing objectives,market demand,quantity supplied,and the price elasticity of demand,the marketing manager for a firearms training system will be ready to determine optimal price for a new product extension.

What is a promotional allowance? What is the difference between a promotional allowance and a functional discount? Give two specific examples of promotional allowances.

A firm charging a price identical to or very close to the competition's price is using a _____ strategy.

_____ are cash refunds given for the purchase of a product during a specific period.

An Overview of Marketing

Strategic Planning for Competitive Advantag

Social Responsibility, ethics, and the Marketing Environment

Developing a Global Vision27

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels and Supply Chain Management

Retailing

Integrated Marketing Communications

Advertising and Public Relations

Sales Promotion and Personal Selling

Pricing Concepts

Internet Marketing

Customer Relationship Management

Filters