Question 1

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?

Accepted Answer

A)  segmented pricing 
B)  international pricing 
C)  reference pricing 
D)  promotional pricing 
E)  basing-point pricing

Question 2

In a bid to attract more customers in a market that has several competitors, Barrymore's Bakery slashed the prices of all its products by 50 percent. Managers at the firm reasoned that lower prices would draw in even more customers, making up for the reduction in price several times over. Which of the following pricing strategies are they using?

Accepted Answer

A)  market-skimming pricing 
B)  market-penetration pricing 
C)  captive-product pricing 
D)  cash discount pricing 
E)  by-product pricing

Question 3

Solar Tanning Salon prices tanning sessions at $25 per visit. It also offers seasonal passes for $175 that allow the customer to visit the salon multiple times in a year. This is an example of a ________.

Accepted Answer

A)  sample 
B)  promotional allowance 
C)  product bundle 
D)  discount 
E)  product line

Question 4

Consumers are less likely to use price to judge the quality of a product when they ________.

Accepted Answer

A)  have never tried the product before 
B)  have little knowledge of the brand 
C)  have experience with the product 
D)  are shopping for luxury items 
E)  cannot physically examine the product

Question 5

A quantity discount is a price reduction for buyers who ________.

Accepted Answer

A)  buy merchandise out of season 
B)  buy merchandise in bulk 
C)  pay their bills on time 
D)  buy discontinued products 
E)  return old items while buying new ones

Question 6

Which of the following is true of the bottom of the pyramid?

Accepted Answer

A)  It is a market segment that has been tapped into and depleted. 
B)  It consists of people who have easy access to luxury goods. 
C)  It comprises people who have easy access to the basic amenities of life. 
D)  It is considered a source of fresh growth opportunities. 
E)  It is a market segment that has insignificant purchasing power.

Question 7

Why is identifying predatory pricing difficult?

Accepted Answer

The answer of Why is identifying predatory pricing difficult?...

Question 8

Which of the following is used in an attempt to dominate the market through a pricing strategy?

Accepted Answer

A)  price increase 
B)  match competitors' pricing 
C)  price cuts 
D)  quantity discounts 
E)  custom prices

Question 9

Why is predatory pricing considered illegal?

Accepted Answer

The answer of Why is predatory pricing considered illegal?...

Question 10

When a firm varies its price by the season, it is using ________ pricing.

Accepted Answer

A)  product form 
B)  customer-segment 
C)  location-based 
D)  time-based 
E)  value-added

Question 11

Trade-in allowances are most commonly used in the ________ industry.

Accepted Answer

A)  real estate 
B)  automobile 
C)  dairy products 
D)  financial services 
E)  health care

Question 12

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 13

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 14

Which of the following is a price adjustment strategy that considers how a customer's perception of a product is influenced by its price?

Accepted Answer

A)  captive product pricing 
B)  psychological pricing 
C)  by-product pricing 
D)  promotional pricing 
E)  international pricing

Question 15

The ________ seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given price level.

Accepted Answer

A)  FTC's "Guides against Deceptive Pricing" 
B)  Robinson-Patman Act 
C)  Sherman Act 
D)  Clayton Act 
E)  Automobile Information Disclosure Act

Question 16

Which of the following price adjustment strategies offers a price reduction to buyers who pay their bills promptly?

Accepted Answer

A)  cash discount 
B)  season discount 
C)  quantity discount 
D)  trade discount 
E)  functional discount

Question 17

Online flash sales are used to create buying urgency and make buyers feel lucky to have gotten in on the deal.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following product mix pricing strategies involves pricing multiple products to be sold together?

Accepted Answer

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

Question 19

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 20

When using product bundle pricing, sellers combine several of their products and offer the bundle at an increased price for increased profit.

Accepted Answer