Question 1

For which of the following situations would a price-skimming strategy be most appropriate?

Accepted Answer

A)  the addition of a new comic book series with an obviously gay hero 
B)  the introduction of a new brand of bottled water 
C)  the elimination of demand for low wattage light bulbs 
D)  the introduction of a unique,roomy automobile model that has extremely low energy and fuel costs 
E)  the introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee 
A)  the addition of a new comic book series with an obviously gay hero 
B)  the introduction of a new brand of bottled water 
C)  the elimination of demand for low wattage light bulbs 
D)  the introduction of a unique,roomy automobile model that has extremely low energy and fuel costs 
E)  the introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee

Question 2

Uniform delivered pricing enables a firm to:

Accepted Answer

A)  charge each customer the actual cost of shipping its products 
B)  stir up price competition between buyers 
C)  maintain a nationally advertised price 
D)  discriminate in favor of buyers that are geographically closer to the seller 
E)  charge each customer its fair share of the cost of shipping 
A)  charge each customer the actual cost of shipping its products 
B)  stir up price competition between buyers 
C)  maintain a nationally advertised price 
D)  discriminate in favor of buyers that are geographically closer to the seller 
E)  charge each customer its fair share of the cost of shipping

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 American Girl Catalog.Why does American Girl use even-numbered pricing?

Accepted Answer

A)  because no one else does 
B)  because it is the norm in the retail catalog industry 
C)  because even-numbered pricing is used to denote quality 
D)  because even-numbered makes consumers feel they are paying a lower amount 
E)  because it is the norm in the toy industry 
A)  because no one else does 
B)  because it is the norm in the retail catalog industry 
C)  because even-numbered pricing is used to denote quality 
D)  because even-numbered makes consumers feel they are paying a lower amount 
E)  because it is the norm in the toy industry

Question 4

Imagine you are the marketing manager for the Chicago Metallic Company.It manufactures all types of baking sheets and pans.You are responsible for coming up with a rebate plan.What is a rebate? What different types of rebates could you elect to use? Why would you prefer to use a rebate rather than a simple price reduction?

Accepted Answer

A rebate is a cash refund given for the

Question 5

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 Art Supplies.Which type of discount is being using to price the tacky glue?

Accepted Answer

A)  noncumulative quantity discount 
B)  promotional allowance 
C)  seasonal discount 
D)  cash discount 
E)  cumulative quantity discount 
A)  noncumulative quantity discount 
B)  promotional allowance 
C)  seasonal discount 
D)  cash discount 
E)  cumulative quantity discount

Question 6

List the three basic pricing methods.Name one advantage and one disadvantage associated with using each method.

Accepted Answer

PRICE-SKIMMING advantages include (1)qui

Question 7

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 American Girl Catalog.Look at the prices of items found in the American Girl catalog.Which fine-tuning pricing tactic did American Girl use?

Accepted Answer

A)  disintermediation 
B)  cross-docking 
C)  unbundling 
D)  psychological pricing 
E)  penetration pricing 
A)  disintermediation 
B)  cross-docking 
C)  unbundling 
D)  psychological pricing 
E)  penetration pricing

Question 8

If a manufacturer designates a shipping point from which to calculate all freight charges and charges customers' freight from that point (even if the goods were shipped from another location),the manufacturer is using _____ pricing.

Accepted Answer

A)  freight absorption 
B)  uniform delivered 
C)  zone 
D)  FOB origin 
E)  basing-point 
A)  freight absorption 
B)  uniform delivered 
C)  zone 
D)  FOB origin 
E)  basing-point

Question 9

_____ occurs when a firm is customer-driven and seeks to understand the attributes customers want in the goods and services they buy and the value customers contribute to those attributes.Thus,the price of the product is set at a level that seems to the customer to be a good price compared with the prices of other options.

Accepted Answer

A)  Value-based pricing 
B)  Noncumulative pricing 
C)  CRM pricing 
D)  Market concept pricing 
E)  Price bundling 
A)  Value-based pricing 
B)  Noncumulative pricing 
C)  CRM pricing 
D)  Market concept pricing 
E)  Price bundling

Question 10

Which pricing method (skimming,penetration,or status quo)would be most appropriate for each of the following products: (1)a new kind of automatic vacuum cleaner; (2)brightly colored wooden blocks to be used as a child's toy; (3)a new,low-cost,no-calorie fat substitute; (4)a home computer; and (5)a designer perfume.Briefly justify your answers.

Accepted Answer

VACUUM CLEANER.Skimming could be used,be

Question 11

The Dollar Tree is a small chain of discount stores where all of the merchandise is priced at $1.The Dollar Tree uses:

Accepted Answer

A)  a single-price tactic 
B)  flexible pricing 
C)  price lining 
D)  price bundling 
E)  leader pricing 
A)  a single-price tactic 
B)  flexible pricing 
C)  price lining 
D)  price bundling 
E)  leader pricing

Question 12

During the recent worldwide recession when wine usage was declining,Nickel & Nickel launched a new brand of wine,which they 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 13

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 American Girl Catalog.What kind of geographic pricing does American Girl use?

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 14

The DCS Stainless Steel Gas Grill for outside cooking costs $3,995.The market for a grill that could easily replace a kitchen range is limited even though a lot of people have seen articles about this grill in cooking magazines and in the cooking section of newspapers.There is no potential competitor for this grill.The _____ strategy is probably best.

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 15

What are the three basic strategies for setting a price on a new good or service? Briefly describe each strategy.

Accepted Answer

PRICE SKIMMING.With this method,a high i

Question 16

Price fixing is clearly illegal in all instances.

Accepted Answer

A) True 
 B)False

Question 17

DeBeers and General Electric were accused of price fixing of industrial-grade diamonds.This means the companies:

Accepted Answer

A)  tried to sell diamonds at below costs 
B)  charged customers different amounts for the same number of diamonds 
C)  colluded on the price they would charge customers for the diamonds 
D)  used uniform geographic pricing 
E)  created an artificial demand for the diamonds 
A)  tried to sell diamonds at below costs 
B)  charged customers different amounts for the same number of diamonds 
C)  colluded on the price they would charge customers for the diamonds 
D)  used uniform geographic pricing 
E)  created an artificial demand for the diamonds

Question 18

When the Mosquito Magent was introduced,it was designed to rid the immediate area of mosquitoes and other annoying insects.The technology for the Mosquito Magnet had taken years to develop.It is a patented grill-like apparatus that emits carbon dioxide to attract bugs to a fan which draws them into the device where they die.What type of pricing policy would you recommend the company have used to introduce this product to the market?

Accepted Answer

A)  status quo pricing 
B)  penetration pricing 
C)  price skimming 
D)  flexible pricing 
E)  leader pricing 
A)  status quo pricing 
B)  penetration pricing 
C)  price skimming 
D)  flexible pricing 
E)  leader pricing

Question 19

When using _____,price is not set on the product until the item is either finished or delivered.

Accepted Answer

A)  price shading 
B)  escalator pricing 
C)  delayed-quotation pricing 
D)  bid pricing 
E)  two-part pricing 
A)  price shading 
B)  escalator pricing 
C)  delayed-quotation pricing 
D)  bid pricing 
E)  two-part pricing

Question 20

What can a marketing manager do to make demand for his or her product more inelastic?

Accepted Answer

A)  eliminate brand equity 
B)  eliminate any unique products from the product line 
C)  cultivate selected demand 
D)  avoid making any product changes 
E)  implement escalator pricing 
A)  eliminate brand equity 
B)  eliminate any unique products from the product line 
C)  cultivate selected demand 
D)  avoid making any product changes 
E)  implement escalator pricing

For which of the following situations would a price-skimming strategy be most appropriate?

Uniform delivered pricing enables a firm to:

List the three basic pricing methods.Name one advantage and one disadvantage associated with using each method.

If a manufacturer designates a shipping point from which to calculate all freight charges and charges customers' freight from that point (even if the goods were shipped from another location),the manufacturer is using _____ pricing.

The Dollar Tree is a small chain of discount stores where all of the merchandise is priced at $1.The Dollar Tree uses:

What are the three basic strategies for setting a price on a new good or service? Briefly describe each strategy.

Price fixing is clearly illegal in all instances.

DeBeers and General Electric were accused of price fixing of industrial-grade diamonds.This means the companies:

When using _____,price is not set on the product until the item is either finished or delivered.

What can a marketing manager do to make demand for his or her product more inelastic?

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

For which of the following situations would a price-skimming strategy be most appropriate?

Uniform delivered pricing enables a firm to:

List the three basic pricing methods.Name one advantage and one disadvantage associated with using each method.

If a manufacturer designates a shipping point from which to calculate all freight charges and charges customers' freight from that point (even if the goods were shipped from another location),the manufacturer is using _____ pricing.

The Dollar Tree is a small chain of discount stores where all of the merchandise is priced at $1.The Dollar Tree uses:

What are the three basic strategies for setting a price on a new good or service? Briefly describe each strategy.

Price fixing is clearly illegal in all instances.

DeBeers and General Electric were accused of price fixing of industrial-grade diamonds.This means the companies:

When using _____,price is not set on the product until the item is either finished or delivered.

What can a marketing manager do to make demand for his or her product more inelastic?

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