Question 1

Which of the following is NOT a cue to consumers about whether a price is high or low?

Accepted Answer

A)  price-matching guarantees 
B)  prices of surrounding, similar products 
C)  signs such as "Clearance" 
D)  "Coming Soon!" signs 
E)  location in the store, especially at the entry

Question 2

Mark's Markers, a manufacturer of white board markers, has required its dealers to charge a specified retail price for its markers. Mark's is most likely guilty of ________.

Accepted Answer

A)  captive pricing 
B)  retail price maintenance 
C)  price discrimination 
D)  competitive pricing 
E)  unfair price skimming

Question 3

When amusement parks charge customers for admission and later for food and beverages, they are following a ________ pricing strategy.

Accepted Answer

A)  by-product 
B)  product line 
C)  penetration 
D)  skimming 
E)  two-part

Question 4

Constantly reduced prices can erode a brand's value in the eyes of customers.

Accepted Answer

A) True 
 B)False

Question 5

________ occurs when a seller states price savings that are not actually available to consumers.

Accepted Answer

A)  Comparative pricing 
B)  Scanner fraud 
C)  Deceptive pricing 
D)  Market skimming 
E)  Price collusion

Question 6

Which of the following is true of promotional pricing?

Accepted Answer

A)  It leads to 'deal-prone' customers who buy products only during sales. 
B)  It fortifies the brand's image in the eyes of customers if relied upon extensively. 
C)  It simplifies shopping for customers if used simultaneously by multiple stores. 
D)  It makes balancing short-term sales incentives against long-term brand building unnecessary. 
E)  It is extremely beneficial for the brand's profitability if practiced repeatedly.

Question 7

Launching a fighter brand is an effective way to deal with a situation in which the market segment being lost is price sensitive and will not respond to arguments of higher quality.

Accepted Answer

A) True 
 B)False

Question 8

Reasons sellers go beyond what is required by pricing regulations include all of the following EXCEPT that ________.

Accepted Answer

A)  it is good business to treat customers fairly 
B)  customers that fully understand prices and pricing terms are happy customers 
C)  word-of-mouth from dissatisfied customers spreads rapidly 
D)  building strong and lasting relationships is key to business success 
E)  it improves profitability to earn additional revenue due to customer confusion

Question 9

Under ________ pricing, different versions of the product are priced differently but not according to differences in their costs.

Accepted Answer

A)  product form 
B)  optional product 
C)  captive product 
D)  by-product 
E)  seasonal

Question 10

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 11

What should the price steps of product line pricing take into account?

Accepted Answer

The answer of What should the price steps of product...

Question 12

Discuss the conditions under which a company might consider using price cuts or price increases.

Accepted Answer

The answer of Discuss the conditions under which a company...

Question 13

Pricing strategies tend to change and evolve as the average product passes through its life cycle.

Accepted Answer

A) True 
 B)False

Question 14

Compare the practices of price fixing and predatory pricing. Explain why each is prohibited by law.

Accepted Answer

The answer of Compare the practices of price fixing and...

Question 15

When The Candy Store sets a low initial price in order to get its "foot in the door" and to quickly attract a large number of buyers, the company is using market-skimming pricing.

Accepted Answer

A) True 
 B)False

Question 16

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Which form of geographic pricing is a company using when it charges the same rate to ship a product anywhere in the United States?

Accepted Answer

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

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

Customers located close to a firm are less likely to benefit from FOB-origin pricing than customers located farther away.

Accepted Answer

A) True 
 B)False

Exam 11: Pricing Strategies: Additional Considerations

Which of the following is NOT a cue to consumers about whether a price is high or low?

Mark's Markers, a manufacturer of white board markers, has required its dealers to charge a specified retail price for its markers. Mark's is most likely guilty of ________.

When amusement parks charge customers for admission and later for food and beverages, they are following a ________ pricing strategy.

Constantly reduced prices can erode a brand's value in the eyes of customers.

________ occurs when a seller states price savings that are not actually available to consumers.

Which of the following is true of promotional pricing?

Launching a fighter brand is an effective way to deal with a situation in which the market segment being lost is price sensitive and will not respond to arguments of higher quality.

Reasons sellers go beyond what is required by pricing regulations include all of the following EXCEPT that ________.

Under ________ pricing, different versions of the product are priced differently but not according to differences in their costs.

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?

What should the price steps of product line pricing take into account?

Discuss the conditions under which a company might consider using price cuts or price increases.

Pricing strategies tend to change and evolve as the average product passes through its life cycle.

Compare the practices of price fixing and predatory pricing. Explain why each is prohibited by law.

When The Candy Store sets a low initial price in order to get its "foot in the door" and to quickly attract a large number of buyers, the company is using market-skimming pricing.

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

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

Which form of geographic pricing is a company using when it charges the same rate to ship a product anywhere in the United States?

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

Customers located close to a firm are less likely to benefit from FOB-origin pricing than customers located farther away.