Question 1

The uniform-delivered pricing strategy means that goods sold are placed free on board a carrier with the customer paying the freight from the factory to the destination.

Accepted Answer

A) True 
 B)False

Question 2

How might a consumer view a price cut?

Accepted Answer

The answer of How might a consumer view a price...

Question 3

When faced with a competitor who has cut its product's price, which of the following is the most cost-effective way for a company to maintain its own price but raise the perceived value of its offer?

Accepted Answer

A)  by improving the quality of the product 
B)  by introducing a higher-priced premium brand 
C)  by altering the company's marketing communications 
D)  by bundling the offer with add-ons 
E)  by distributing the product through less costly channels

Question 4

Multiprint, a printer manufacturing firm, sells ink cartridges for each of its specific models. Only Multiprint cartridges are compatible with Multiprint printers, and no two models share the same specifications. What type of pricing does Multiprint use?

Accepted Answer

A)  product line pricing 
B)  captive product pricing 
C)  optional product pricing 
D)  by-product pricing 
E)  product bundle pricing

Question 5

Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production, the company generates a great deal of scrap hardwood. How can using by-product pricing benefit the company?

Accepted Answer

The answer of Sensenig Propeller manufactures replica antique wooden airplane...

Question 6

Price discrimination is permissible if the seller manufactures different qualities of the same product for different retailers and can prove that the price difference is proportional.

Accepted Answer

A) True 
 B)False

Question 7

Refer to the scenario below to answer the following question(s).
Champion, Inc. is a manufacturer of lunch boxes, school bags, and school stationery. Charles Payton, the CEO of Champion, hopes to sell the products at a low price to penetrate the market quickly.
-Noticing that themed envelopes aren't selling well, Charles Payton decides to offer customers a special "letter writing" kit. He prices the kit-which comprises letter paper, matching envelopes, and pens-at $5, even though the combined prices of the individual items is $8. Which of the following pricing strategies is he using?

Accepted Answer

A)  optional product pricing 
B)  product bundle pricing 
C)  by-product pricing 
D)  dynamic pricing 
E)  captive product pricing

Question 8

Price discrimination is legal when a ________.

Accepted Answer

A)  manufacturer and reseller have agreed upon a specified retail price for a product 
B)  manufacturer sells to retailers in different markets 
C)  seller can prove its costs are different when selling to different retailers 
D)  seller advertises prices that are not actually available to consumers 
E)  seller has not communicated with competitors before announcing prices

Question 9

List four types of segmented pricing.

Accepted Answer

The answer of List four types of segmented pricing....

Question 10

When are competitors most likely to react to price changes? How can a firm anticipate the likely reactions of its competitors?

Accepted Answer

The answer of When are competitors most likely to react...

Question 11

A seller offers a ________ to trade-channel members who perform certain functions, such as selling, storing, and record keeping.

Accepted Answer

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

Question 12

Companies set not a single price, but a pricing ________ that covers different items in its line and changes over time as products move through their life cycles.

Accepted Answer

A)  by-product 
B)  structure 
C)  loop 
D)  cycle 
E)  bundle

Question 13

Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________ pricing.

Accepted Answer

A)  comparative 
B)  competitive 
C)  market-skimming 
D)  market-segmentation 
E)  cost-plus

Question 14

When theaters vary seat prices due to audience preferences for seats in coveted rows, they use ________ pricing.

Accepted Answer

A)  customer-segment 
B)  location-based 
C)  time-based 
D)  product line 
E)  captive product

Question 15

Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most likely guilty of ________.

Accepted Answer

A)  market skimming 
B)  price fixing 
C)  deceptive pricing 
D)  price collusion 
E)  predatory pricing

Question 16

Casual Comfort sells its catalog items using FOB-origin pricing. Who pays the freight charges?

Accepted Answer

The answer of Casual Comfort sells its catalog items using...

Question 17

Hearth & Home, a store which sells household products, has announced a one-week sale on its new carpet line. This is an example of ________.

Accepted Answer

A)  promotional pricing 
B)  seasonal pricing 
C)  by-product pricing 
D)  product bundle pricing 
E)  time-based pricing

Question 18

Freight-absorption pricing is used for ________.

Accepted Answer

A)  penetrating international markets 
B)  generating customer buzz about new products 
C)  holding on to increasingly competitive markets 
D)  generating quick profits to offset input costs 
E)  maintaining quality service records

Question 19

________ are formed by noting current prices, remembering past prices, or assessing the buying situation.

Accepted Answer

A)  Product line prices 
B)  Seasonal prices 
C)  Reference prices 
D)  Time-based prices 
E)  Product bundle prices

Question 20

In addition to its customary services, On the Spot, a moving company, also sells the boxes and padding that are used when moving household furniture. This is an example of customer-segmented pricing.

Accepted Answer

A) True 
 B)False

Exam 11: Pricing Strategies: Additional Considerations

The uniform-delivered pricing strategy means that goods sold are placed free on board a carrier with the customer paying the freight from the factory to the destination.

How might a consumer view a price cut?

When faced with a competitor who has cut its product's price, which of the following is the most cost-effective way for a company to maintain its own price but raise the perceived value of its offer?

Multiprint, a printer manufacturing firm, sells ink cartridges for each of its specific models. Only Multiprint cartridges are compatible with Multiprint printers, and no two models share the same specifications. What type of pricing does Multiprint use?

Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production, the company generates a great deal of scrap hardwood. How can using by-product pricing benefit the company?

Price discrimination is permissible if the seller manufactures different qualities of the same product for different retailers and can prove that the price difference is proportional.

Price discrimination is legal when a ________.

List four types of segmented pricing.

When are competitors most likely to react to price changes? How can a firm anticipate the likely reactions of its competitors?

A seller offers a ________ to trade-channel members who perform certain functions, such as selling, storing, and record keeping.

Companies set not a single price, but a pricing ________ that covers different items in its line and changes over time as products move through their life cycles.

Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________ pricing.

When theaters vary seat prices due to audience preferences for seats in coveted rows, they use ________ pricing.

Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most likely guilty of ________.

Casual Comfort sells its catalog items using FOB-origin pricing. Who pays the freight charges?

Hearth & Home, a store which sells household products, has announced a one-week sale on its new carpet line. This is an example of ________.

Freight-absorption pricing is used for ________.

________ are formed by noting current prices, remembering past prices, or assessing the buying situation.

In addition to its customary services, On the Spot, a moving company, also sells the boxes and padding that are used when moving household furniture. This is an example of customer-segmented pricing.