Exam 14: Pricing Strategies

Companies can avoid penalties under the Robinson-Patman Act as long as they can demonstrate that their price discounts and promotional allowances restrict competition.

Jim plans to rent a car during an upcoming business trip to Dallas. He expects to pay a rental rate similar to what he was charged last year in the same city. However, he could be persuaded to pay more under certain conditions. Which of the following conditions might influence Jim to pay more?

Citibank offers an opportunity for credit card customers to transfer balances from competitive cards and pay low financing for a six-month period. After the introductory period is over, the rate will increase to the normal interest rate. Citibank's strategy is to penetrate the market and obtain increased market share.

Penetration pricing is often used in a market in which a new product is likely to face strong competition when introduced.

Which of the following statements is true about the forecasting technique known as the "test market"?

When a men's clothing store sells suits at four price levels ($295, $455, $525, and $650), the store's retail policy is _____ pricing.

The practice of marketing merchandise at a limited number of prices is called _____ pricing.

Paul and Amanda have six season tickets to the St. Louis Cardinals, a major league baseball team. During the season, they often offer their unused tickets to the highest bidder, especially when the Cardinals play the Chicago Cubs. This practice, known as "scalping," is illegal in all U.S. cities.

A newly opened seafood restaurant advertises various deals on meal packages and special prices on dinner packages to attract customers. This is an example of _____ pricing.

At Brody's Department Store, you're in charge of buying women's clothing. You've noticed a lot of berry-, wine-, and rose-colored items available from several different manufacturers and you're thinking about making these colors the theme for next season's offerings. Would using a jury of executive opinion be a good way to gather some quick feedback on the sales prospects for your idea?

Which of the following terms represents the measure of responsiveness of purchasers and suppliers to a change in price?

When the elasticity of demand is greater than 1.0, then that demand is said to be inelastic.

Charged with preventing anticompetitive, deceptive, or unfair business practices, the ______ oversees enforcement of more than 70 laws, many of which influence pricing practices.

Which of the following is a disadvantage associated with product-line pricing?

Wal-Mart, K-Mart, and Target are all large discount store chains, and they carry many of the same types of products. Yet Target is perceived as being better quality and more prestigious. Why?

In the absence of other cues, price is an important indicator of a product's quality to prospective purchasers.

The Noble GM car dealership has been in your family for three generations. Your biggest competitor is the massive Royal Honda/Toyota/Kia/Mazda dealership across town. For each of the past eight weeks, you've noticed that the team at Royal has been advertising a couple of brand-new vehicles for about half of their retail sticker prices, a tactic that's attracting all of your potential customers to Royal. What can you do about it?

As the marketing manager for Learning4Fun.com, you know you're going to be competing against other, well-established online educators when you initially launch your library of educational videos. Given that you'll be using a penetration pricing strategy, which pricing tactic seems like the best fit for you?

Since it involves the use of a high price relative to prices of competing products or services, the skimming pricing strategy is sometimes referred to as _____ pricing.

A retailer wants to increase the number of customers shopping in her store. Which of the following has the greatest potential for success?