Question 1

Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

Accepted Answer

The four kinds of delivered pricing meth

Question 2

Manufacturers of private brands use which method of competition-oriented pricing?

Accepted Answer

A)  penetration pricing 
B)  below-market pricing 
C)  loss-leader pricing 
D)  prestige pricing 
E)  skimming pricing 
A)  penetration pricing 
B)  below-market pricing 
C)  loss-leader pricing 
D)  prestige pricing 
E)  skimming pricing

Question 3

A single jar of original formula Carmex has different prices for the product depending upon where it is sold, but each price will end in a nine ($0.99 at mass merchandisers like Walmart or Target, and between $1.59 and $1.79 in drug and food retailers such as Walgreens and Kroger). This pricing strategy is called

Accepted Answer

A)  standard pricing. 
B)  odd-even pricing. 
C)  customary pricing. 
D)  everyday lower pricing. 
E)  at-market pricing. 
A)  standard pricing. 
B)  odd-even pricing. 
C)  customary pricing. 
D)  everyday lower pricing. 
E)  at-market pricing.

Question 4

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. This practice is also called

Accepted Answer

A)  price discrimination. 
B)  predatory pricing. 
C)  a tying arrangement. 
D)  resale price maintenance. 
E)  exclusive dealing. 
A)  price discrimination. 
B)  predatory pricing. 
C)  a tying arrangement. 
D)  resale price maintenance. 
E)  exclusive dealing.

Question 5

Consumers buy water and soda from vending machines. Usually the price of each of these products is about $1.50. If a marketer charges a significantly higher price for such products dispensed by vending machines, such as $2.50 per item, sales are likely to decline. Thus, marketers tend to be very consistent in the prices they charge for vending machine products. This is an example of marketers employing a ________ strategy.

Accepted Answer

A)  below-market pricing 
B)  skimming pricing 
C)  penetration pricing 
D)  loss-leader pricing 
E)  customary pricing 
A)  below-market pricing 
B)  skimming pricing 
C)  penetration pricing 
D)  loss-leader pricing 
E)  customary pricing

Question 6

If the terms of the trade discount are listed 20/10/5, the number "5" represents

Accepted Answer

A)  5 percent of the suggested retail price that is available to the retailer to cover costs and provide a profit. 
B)  5 percent of the suggested retail price that is available to the consumer as a rebate after purchase. 
C)  5 percent of the suggested retail price that is available to the wholesaler or jobber to cover costs and provide a profit. 
D)  5 percent of the suggested retail price that is available to the ultimate consumer if purchasing restrictions are met. 
E)  5 percent of the suggested retail price that is the profit margin to the manufacturer. 
A)  5 percent of the suggested retail price that is available to the retailer to cover costs and provide a profit. 
B)  5 percent of the suggested retail price that is available to the consumer as a rebate after purchase. 
C)  5 percent of the suggested retail price that is available to the wholesaler or jobber to cover costs and provide a profit. 
D)  5 percent of the suggested retail price that is available to the ultimate consumer if purchasing restrictions are met. 
E)  5 percent of the suggested retail price that is the profit margin to the manufacturer.

Question 7

Which of the four approaches does Carmex use to set prices for its products?

Accepted Answer

Carmex uses each of the four perspective

Question 8

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Accepted Answer

A)  customary pricing strategy. 
B)  fixed-price policy. 
C)  uniform pricing policy. 
D)  dynamic pricing policy. 
E)  dynamic pricing strategy. 
A)  customary pricing strategy. 
B)  fixed-price policy. 
C)  uniform pricing policy. 
D)  dynamic pricing policy. 
E)  dynamic pricing strategy.

Question 9

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Accepted Answer

A)  cost-plus-fixed-percentage fee pricing. 
B)  target pricing. 
C)  cost-plus-percentage-of-cost pricing. 
D)  experience-curve percentage pricing. 
E)  target return on investment pricing. 
A)  cost-plus-fixed-percentage fee pricing. 
B)  target pricing. 
C)  cost-plus-percentage-of-cost pricing. 
D)  experience-curve percentage pricing. 
E)  target return on investment pricing.

Question 10

A price war refers to

Accepted Answer

A)  competition between sellers and resellers to maintain or attain the largest market share of potential customers. 
B)  conflicts between manufacturers and distributors regarding acceptable percentages they each charge relative to one another. 
C)  when one channel member believes another channel member is engaged in pricing behavior that prevents it from achieving its profitability goals. 
D)  the successive price cutting by competitors to increase or maintain their unit sales or market share. 
E)  the practice of replacing promotional allowances with lower manufacturer list prices. 
A)  competition between sellers and resellers to maintain or attain the largest market share of potential customers. 
B)  conflicts between manufacturers and distributors regarding acceptable percentages they each charge relative to one another. 
C)  when one channel member believes another channel member is engaged in pricing behavior that prevents it from achieving its profitability goals. 
D)  the successive price cutting by competitors to increase or maintain their unit sales or market share. 
E)  the practice of replacing promotional allowances with lower manufacturer list prices.

Question 11

Target return-on-sales pricing refers to

Accepted Answer

A)  adjusting the price of a product so it is "in line" with that of its largest competitor. 
B)  setting the price of a line of products at a number of different price points. 
C)  adding a fixed percentage to the cost of all items in a specific product class. 
D)  setting prices to achieve a profit that is a specified percentage of the sales volume. 
E)  setting a price based on a specific annual dollar target profit volume. 
A)  adjusting the price of a product so it is "in line" with that of its largest competitor. 
B)  setting the price of a line of products at a number of different price points. 
C)  adding a fixed percentage to the cost of all items in a specific product class. 
D)  setting prices to achieve a profit that is a specified percentage of the sales volume. 
E)  setting a price based on a specific annual dollar target profit volume.

Question 12

Geographic adjustments are made by manufacturers or wholesalers to cover

Accepted Answer

A)  production costs. 
B)  administrative costs. 
C)  selling costs. 
D)  promotional costs. 
E)  transportation costs. 
A)  production costs. 
B)  administrative costs. 
C)  selling costs. 
D)  promotional costs. 
E)  transportation costs.

Question 13

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using ________ pricing.

Accepted Answer

A)  bundle 
B)  standard markup 
C)  prestige 
D)  penetration 
E)  cost plus fixed-fee 
A)  bundle 
B)  standard markup 
C)  prestige 
D)  penetration 
E)  cost plus fixed-fee

Question 14

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

Accepted Answer

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

Question 15

When establishing product-line pricing, the highest-priced item is typically positioned as

Accepted Answer

A)  the oldest product item in the line. 
B)  the premium item in the line in terms of quality and features. 
C)  the largest selling product item in the line. 
D)  the loss-leader item for the rest of the product line. 
E)  the most price-insensitive product item in the line. 
A)  the oldest product item in the line. 
B)  the premium item in the line in terms of quality and features. 
C)  the largest selling product item in the line. 
D)  the loss-leader item for the rest of the product line. 
E)  the most price-insensitive product item in the line.

Question 16

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Accepted Answer

A)  everyday low pricing. 
B)  everyday fair pricing. 
C)  trade-in allowances. 
D)  markdown pricing. 
E)  everyday value pricing. 
A)  everyday low pricing. 
B)  everyday fair pricing. 
C)  trade-in allowances. 
D)  markdown pricing. 
E)  everyday value pricing.

Question 17

Price discrimination is illegal under the

Accepted Answer

A)  Sherman Act. 
B)  Consumer Goods Pricing Act. 
C)  Robinson-Patman Act. 
D)  Federal Trade Commission Act. 
E)  Anti-Competitive Act. 
A)  Sherman Act. 
B)  Consumer Goods Pricing Act. 
C)  Robinson-Patman Act. 
D)  Federal Trade Commission Act. 
E)  Anti-Competitive Act.

Question 18

Which of the following statements regarding quantity discounts is most accurate?

Accepted Answer

A)  Noncumulative quantity discounts encourage large individual purchase orders, not a series of orders. 
B)  Noncumulative quantity discounts encourage repeat buying by a single customer to a far greater degree than do cumulative quantity discounts. 
C)  Quantity discounts are primarily used to undercut competitors' prices. 
D)  Noncumulative quantity discounts encourage smaller long-term repeat purchases rather than less frequent larger short-term purchases. 
E)  Quantity discounts can basically be used only once with each reseller or the price will increase. 
A)  Noncumulative quantity discounts encourage large individual purchase orders, not a series of orders. 
B)  Noncumulative quantity discounts encourage repeat buying by a single customer to a far greater degree than do cumulative quantity discounts. 
C)  Quantity discounts are primarily used to undercut competitors' prices. 
D)  Noncumulative quantity discounts encourage smaller long-term repeat purchases rather than less frequent larger short-term purchases. 
E)  Quantity discounts can basically be used only once with each reseller or the price will increase.

Question 19

With uniform delivered pricing, the price the seller quotes

Accepted Answer

A)  includes all transportation costs. 
B)  excludes all transportation costs. 
C)  includes a fixed allowance whereby the buyer pays any costs above that allowance. 
D)  includes a fixed percentage of transportation costs for which the seller will be responsible. 
E)  will guarantee that a retailer will be charged the same transportation fee for all its outlets regardless of where they are located. 
A)  includes all transportation costs. 
B)  excludes all transportation costs. 
C)  includes a fixed allowance whereby the buyer pays any costs above that allowance. 
D)  includes a fixed percentage of transportation costs for which the seller will be responsible. 
E)  will guarantee that a retailer will be charged the same transportation fee for all its outlets regardless of where they are located.

Question 20

If the cash discount terms for a $500 purchase are 4/10 net 30, the number 10 refers to

Accepted Answer

A)  the percentage discounted if the bill is paid within 30 days. 
B)  the percentage increase in price if the bill is not paid within 10 days. 
C)  the number of days for which the discount is valid. 
D)  the discount in dollars per unit if the order is paid on time within 30 days. 
E)  the penalty in dollars if the bill is not paid within 10 days. 
A)  the percentage discounted if the bill is paid within 30 days. 
B)  the percentage increase in price if the bill is not paid within 10 days. 
C)  the number of days for which the discount is valid. 
D)  the discount in dollars per unit if the order is paid on time within 30 days. 
E)  the penalty in dollars if the bill is not paid within 10 days.

Exam 14: Arriving at the Final Price

Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

Manufacturers of private brands use which method of competition-oriented pricing?

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. This practice is also called

If the terms of the trade discount are listed 20/10/5, the number "5" represents

Which of the four approaches does Carmex use to set prices for its products?

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

A price war refers to

Target return-on-sales pricing refers to

Geographic adjustments are made by manufacturers or wholesalers to cover

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using ________ pricing.

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

When establishing product-line pricing, the highest-priced item is typically positioned as

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Price discrimination is illegal under the

Which of the following statements regarding quantity discounts is most accurate?

With uniform delivered pricing, the price the seller quotes

If the cash discount terms for a $500 purchase are 4/10 net 30, the number 10 refers to

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation, Targeting, and Positioning

Developing New Products and Services

Managing Successful Products, Services, and Brands

Services Marketing

Building the Price Foundation

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Using Social Media and Mobile Marketing to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multi-Channel Marketing

Pulling It All Together: the Strategic Marketing Proces

Building an Effective Marketing Plan

Financial Aspects of Marketing

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