Question 1

A retailer dealing in air conditioners has to sell a certain number of air conditioners in a year.If the retailer does so, the manufacturer offers him a discount on every air conditioner bought by the retailer during that year.The discount is in the form of a rebate cheque.This is an example of a(n):

Accepted Answer

A)  seasonal discount.
B)  cumulative quantity discount.
C)  odd price.
D)  noncumulative quantity discount.
E)  cash discount. B

Question 2

A laptop manufacturer introduces a new model in the market.The company is aiming to market the model to students and has therefore given it a low price.The main objective of the company is to build sales, market share, and profits quickly.This is an example of:

Accepted Answer

A)  everyday low pricing.
B)  external reference price.
C)  high/low pricing.
D)  market penetration pricing.
E)  internal reference price. D

Question 3

Ramsons manufactures military binoculars.Although the binoculars are priced unreasonably high, Ramsons manages to sell a large number of units each year because Ramsons is the sole supplier of military binoculars in the market.This is an example of:

Accepted Answer

A)  a monopoly.
B)  an oligopoly.
C)  monopolistic competition.
D)  pure competition.
E)  more price competition. A

Question 4

You want to open a restaurant in your hometown.What would be the fixed and variable costs that you would need to take care of while setting up the restaurant?

Accepted Answer

The answer of You want to open a restaurant in...

Question 5

Price is the only element of the marketing mix that generates revenue.

Accepted Answer

A) True 
 B)False

Question 6

When a market legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer, it is called a market.

Accepted Answer

A)  black
B)  brown
C)  white
D)  grey
E)  green

Question 7

A supermarket offers a 1-litre milk carton, a 2-litre milk carton, and a 3-litre milk jug at $3.50, $6.00, and $9.00, respectively.Thus, the larger the quantity bought, the lower the cost.This is an example of a:

Accepted Answer

A)  rebate.
B)  size discount.
C)  markdown.
D)  coupon.
E)  quality discount.

Question 8

A company sells shoes at a price somewhere between the regular, nonsale price and the deep-discount sale prices that its competitors may offer.This is an example of:

Accepted Answer

A)  everyday low pricing.
B)  external reference price.
C)  high/low pricing.
D)  market penetration pricing.
E)  internal reference price.

Question 9

Which of the following refers to a pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments?

Accepted Answer

A)  maximizing profits strategy
B)  target return pricing strategy
C)  customer orientation strategy
D)  competitive parity strategy
E)  target profit pricing strategy

Question 10

Adopting a market share objective does not always imply setting low prices.

Accepted Answer

A) True 
 B)False

Question 11

Those expenses that remain essentially at the same level, regardless of any changes in the volume of production, are called the:

Accepted Answer

A)  break-even point.
B)  variable costs.
C)  contribution per unit.
D)  demand curve.
E)  fixed costs.

Question 12

All the gyms collude and decide to control the enrolment and monthly fee payable by members.This is an example of:

Accepted Answer

A)  predatory pricing.
B)  vertical price fixing.
C)  horizontal price fixing.
D)  price discrimination.
E)  bait and switch.

Question 13

A confectionery company pays a fee to a retailer to place its products near the checkout counter.By doing so, the confectionery company hopes to tempt customers to make impulse purchases.The fee paid to the retailer is an example of a(n):

Accepted Answer

A)  seasonal discount.
B)  advertising allowance.
C)  odd price.
D)  listing allowance.
E)  cash discount.

Question 14

Those products for which changes in demand are negatively related are called:

Accepted Answer

A)  substitute products
B)  complementary products
C)  shopping products
D)  convenience products
E)  standard products

Question 15

Explain the difference between predatory pricing and price discrimination.

Accepted Answer

The answer of Explain the difference between predatory pricing and...

Question 16

Laws against bait- and-switch practices are difficult to enforce because salespeople, simply as a function of their jobs, are always trying to get customers to trade up to a higher priced model without necessarily deliberately baiting them.

Accepted Answer

A) True 
 B)False

Question 17

A company selling air conditioners finds that sales begin to decrease at the end of summer.The company then reduces the price of air conditioners to get rid of the slow-moving merchandise.This is an example of a:

Accepted Answer

A)  rebate.
B)  size discount.
C)  markdown.
D)  coupon.
E)  quality discount.

Question 18

A store advertises a pair of shoes at $79.99 with a cash back offer of $20.The refund is made by the manufacturer.This is an example of a:

Accepted Answer

A)  rebate.
B)  size discount.
C)  markdown.
D)  coupon.
E)  quality discount.

Question 19

A department store offers a discount if a shirt is purchased with a pair of trousers.The combined purchase would cost less than what it would cost the customer to purchase the two individually.This is an example of:

Accepted Answer

A)  price fixing.
B)  price bundling.
C)  price discrimination.
D)  leader pricing.
E)  price lining.

Question 20

Explain how the economic environment influences pricing.

Accepted Answer

The answer of Explain how the economic environment influences pricing....

Exam 11: Value Delivery : Designing the Distribution Channel and Supply Chain Marketing Channels

A laptop manufacturer introduces a new model in the market.The company is aiming to market the model to students and has therefore given it a low price.The main objective of the company is to build sales, market share, and profits quickly.This is an example of:

Ramsons manufactures military binoculars.Although the binoculars are priced unreasonably high, Ramsons manages to sell a large number of units each year because Ramsons is the sole supplier of military binoculars in the market.This is an example of:

You want to open a restaurant in your hometown.What would be the fixed and variable costs that you would need to take care of while setting up the restaurant?

Price is the only element of the marketing mix that generates revenue.

When a market legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer, it is called a market.

A supermarket offers a 1-litre milk carton, a 2-litre milk carton, and a 3-litre milk jug at $3.50, $6.00, and $9.00, respectively.Thus, the larger the quantity bought, the lower the cost.This is an example of a:

A company sells shoes at a price somewhere between the regular, nonsale price and the deep-discount sale prices that its competitors may offer.This is an example of:

Which of the following refers to a pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments?

Adopting a market share objective does not always imply setting low prices.

Those expenses that remain essentially at the same level, regardless of any changes in the volume of production, are called the:

All the gyms collude and decide to control the enrolment and monthly fee payable by members.This is an example of:

A confectionery company pays a fee to a retailer to place its products near the checkout counter.By doing so, the confectionery company hopes to tempt customers to make impulse purchases.The fee paid to the retailer is an example of a(n) :

Those products for which changes in demand are negatively related are called:

Explain the difference between predatory pricing and price discrimination.

Laws against bait- and-switch practices are difficult to enforce because salespeople, simply as a function of their jobs, are always trying to get customers to trade up to a higher priced model without necessarily deliberately baiting them.

A company selling air conditioners finds that sales begin to decrease at the end of summer.The company then reduces the price of air conditioners to get rid of the slow-moving merchandise.This is an example of a:

A store advertises a pair of shoes at $79.99 with a cash back offer of $20.The refund is made by the manufacturer.This is an example of a:

A department store offers a discount if a shirt is purchased with a pair of trousers.The combined purchase would cost less than what it would cost the customer to purchase the two individually.This is an example of:

Explain how the economic environment influences pricing.