Question 1

Refer to the scenario below to answer the following questions.
Pilot is a manufacturer of ballpoint pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains. Iwao Takada, CEO of Pilot, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets.
-Why might Iwao Takada have avoided using market-skimming pricing at Pilot?

Accepted Answer

A)  A high price was likely to produce more market growth. 
B)  It was difficult for competitors to enter the market. 
C)  The costs of producing a larger volume of the firm's products were too high. 
D)  The quality and image of the products would not have likely supported the high initial price. 
E)  The market for the products was not highly price sensitive.

Question 2

Price discrimination is legal under which of the following conditions?

Accepted Answer

A)  when a manufacturer and reseller have agreed upon a specified retail price for a product 
B)  when a manufacturer sells to retailers in different markets 
C)  when a seller manufactures different qualities of the same product for different retailers. 
D)  when a seller advertises prices that are not actually available to consumers 
E)  when a seller has not communicated with competitors before announcing prices

Question 3

Describe the differences between dynamic and fixed pricing.

Accepted Answer

The answer of Describe the differences between dynamic and fixed...

Question 4

Which of the following is NOT a geographical pricing strategy?

Accepted Answer

A)  FOB-origin pricing 
B)  zone pricing 
C)  dynamic pricing 
D)  uniform-delivered pricing 
E)  basing-point pricing

Question 5

Bose prices its most expensive noise reduction earphones at $399.95,which is a full $100.00 more than its next most expensive earphones.It costs Bose only a few dollars more to make the most expensive earphones.Bose is using ________ pricing.

Accepted Answer

A)  customer-segment 
B)  product-form 
C)  promotional 
D)  penetration 
E)  captive product

Question 6

Give two examples of products for which marketers may use optional-product pricing.

Accepted Answer

The answer of Give two examples of products for which...

Question 7

Companies bringing out a new product can choose between two broad strategies: market-skimming pricing and market-penetration pricing.Distinguish between the two.

Accepted Answer

The answer of Companies bringing out a new product can...

Question 8

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 9

If a large retailer sold numerous items below cost with the intention of punishing competitors and gaining higher long-run profits by putting those competitors out of business,the retailer would be guilty of ________.

Accepted Answer

A)  price collusion 
B)  price fixing 
C)  predatory pricing 
D)  discriminatory pricing 
E)  penetration pricing

Question 10

When Asia Electronics sets its televisions at three price levels of $699,$899,and $1,099,it is using ________.

Accepted Answer

A)  product line pricing 
B)  market-skimming pricing 
C)  market-penetration pricing 
D)  break-even pricing 
E)  target return pricing

Question 11

________ results when a company uses pricing methods that make it difficult for consumers to understand just what price they are really paying.

Accepted Answer

A)  Comparison pricing 
B)  Skimming pricing 
C)  Price confusion 
D)  Predatory pricing 
E)  Price collusion

Question 12

Stylish Bamboo manufactures bamboo floorings.In the process of production,the company generates a great deal of scrap bamboo.Which pricing mix strategy should Stylish use,and how does it function?

Accepted Answer

The answer of Stylish Bamboo manufactures bamboo floorings.In the process...

Question 13

The strategy for setting a product's price changes when the product is part of a product mix.

Accepted Answer

A) True 
 B)False

Question 14

Your company may respond to a competitor's price reduction by launching a low-price fighting brand.This is likely necessary if the particular market segment being lost is price sensitive and will not respond to arguments of higher quality.

Accepted Answer

A) True 
 B)False

Question 15

List four types of segmented pricing.

Accepted Answer

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

Question 16

A quantity discount is a price reduction to buyers who purchase ________.

Accepted Answer

A)  frequently 
B)  large volumes 
C)  close outs 
D)  inferior merchandise 
E)  superior merchandise

Question 17

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

Accepted Answer

A)  market-level pricing 
B)  market-competitive pricing 
C)  market-skimming pricing 
D)  market-price lining 
E)  market-price filling

Question 18

Big Mike's Health Food Store sells nutritional energy-producing foods.The price of the products sold varies according to individual customer accounts and situations.For example,long-time customers receive discounts.This strategy is an example of ________.

Accepted Answer

A)  price elasticity 
B)  cost-plus pricing 
C)  dynamic pricing 
D)  everyday low pricing 
E)  penetration pricing

Question 19

The flexibility of the Internet allows companies to use ________.

Accepted Answer

A)  captive pricing 
B)  segmented pricing 
C)  promotional pricing 
D)  dynamic pricing 
E)  geographical pricing

Question 20

Consumers usually perceive higher-priced products as ________.

Accepted Answer

A)  being in the maturity stage of the product life cycle 
B)  having a higher quality 
C)  having low profit margins 
D)  popular brands 
E)  being in the introductory stage of the product life cycle

Exam 11: Pricing Products: Pricing Strategies