Question 1

Basing-point pricing refers to

Accepted Answer

A)  selecting a single geographical location from which the list price for products plus freight expenses are charged to the seller. 
B)  selecting two or more geographical locations from which the list price for products plus freight expenses are charged to the seller. 
C)  having all buyers pay the same delivered price for the products, regardless of their distance from the seller. 
D)  a firm dividing a selling territory into geographic areas or zones and charging the same delivered price to all buyers within the same zone, but charging different prices in for different zones depending on distance from the factory or warehouse. 
E)  selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer. 
A)  selecting a single geographical location from which the list price for products plus freight expenses are charged to the seller. 
B)  selecting two or more geographical locations from which the list price for products plus freight expenses are charged to the seller. 
C)  having all buyers pay the same delivered price for the products, regardless of their distance from the seller. 
D)  a firm dividing a selling territory into geographic areas or zones and charging the same delivered price to all buyers within the same zone, but charging different prices in for different zones depending on distance from the factory or warehouse. 
E)  selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer.

Question 2

What type of discount to resellers is based in part on where they are in the channel?

Accepted Answer

A)  seasonal discounts 
B)  trade discounts 
C)  cash discounts 
D)  promotional allowances 
E)  trade-in allowances 
A)  seasonal discounts 
B)  trade discounts 
C)  cash discounts 
D)  promotional allowances 
E)  trade-in allowances

Question 3

Which of these is a cost-oriented approach to pricing?

Accepted Answer

A)  skimming pricing 
B)  prestige pricing 
C)  loss-leader pricing 
D)  experience-curve pricing 
E)  bundle pricing 
A)  skimming pricing 
B)  prestige pricing 
C)  loss-leader pricing 
D)  experience-curve pricing 
E)  bundle pricing

Question 4

Another name for freight-absorption pricing is

Accepted Answer

A)  factory pricing. 
B)  FOB absorption pricing. 
C)  FOB with freight-allowed pricing. 
D)  basing-point pricing. 
E)  FOB origin pricing. 
A)  factory pricing. 
B)  FOB absorption pricing. 
C)  FOB with freight-allowed pricing. 
D)  basing-point pricing. 
E)  FOB origin pricing.

Question 5

When using a price lining strategy, a marketer will

Accepted Answer

A)  set the price of a line of products at a number of different specific pricing points. 
B)  set the price slightly higher than necessary to protect against losses resulting from adverse environmental forces. 
C)  adjust the price of a product so it is "in line" with the price of its largest competitor. 
D)  set a low initial price on a new product to appeal immediately to the mass market. 
E)  set a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark. 
A)  set the price of a line of products at a number of different specific pricing points. 
B)  set the price slightly higher than necessary to protect against losses resulting from adverse environmental forces. 
C)  adjust the price of a product so it is "in line" with the price of its largest competitor. 
D)  set a low initial price on a new product to appeal immediately to the mass market. 
E)  set a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark.

Question 6

Hormel offers its food distributors a discount of 15% for payment within 10 days on orders of all Jiffy brand products. Hormel is giving its customers a

Accepted Answer

A)  functional discount. 
B)  trade-in allowance. 
C)  promotional allowance. 
D)  cash discount. 
E)  everyday low price. 
A)  functional discount. 
B)  trade-in allowance. 
C)  promotional allowance. 
D)  cash discount. 
E)  everyday low price.

Question 7

Price fixing is illegal under the

Accepted Answer

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

Question 8

Figure 14-7
-Figure 14-7 above shows the three major types of special adjustments to the list or quoted price. Box B represents

Accepted Answer

A)  demand-oriented price adjustments. 
B)  allowances. 
C)  geographical adjustments. 
D)  discounts. 
E)  customary pricing adjustments. 
A)  demand-oriented price adjustments. 
B)  allowances. 
C)  geographical adjustments. 
D)  discounts. 
E)  customary pricing adjustments.

Question 9

Five pricing practices are scrutinized because of potential unethical or illegal actions, including which of these?

Accepted Answer

A)  price matching 
B)  discount pricing 
C)  price fixing 
D)  regional rollback pricing 
E)  volume discounts 
A)  price matching 
B)  discount pricing 
C)  price fixing 
D)  regional rollback pricing 
E)  volume discounts

Question 10

Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. This price premium equals

Accepted Answer

A)  unit volume market share for a brand divided by dollar sales market share for a brand, minus one. 
B)  dollar sales market share for a brand divided by unit volume market share for a brand, plus one. 
C)  dollar sales market share for a brand divided by unit volume market share for a brand, minus one. 
D)  dollar sales market share for a brand, divided by unit volume market share for a brand, plus one. 
E)  dollar sales market share for a brand, divided by unit volume market share for a brand, minus the number of competitors against which a brand is being measured. 
A)  unit volume market share for a brand divided by dollar sales market share for a brand, minus one. 
B)  dollar sales market share for a brand divided by unit volume market share for a brand, plus one. 
C)  dollar sales market share for a brand divided by unit volume market share for a brand, minus one. 
D)  dollar sales market share for a brand, divided by unit volume market share for a brand, plus one. 
E)  dollar sales market share for a brand, divided by unit volume market share for a brand, minus the number of competitors against which a brand is being measured.

Question 11

Toro decided to augment its traditional hardware retail distribution channel by also selling through mass merchandisers such as Walmart and Target and setting prices for its products substantially below those of its traditional hardware outlets. As a result, many hardware stores abandoned Toro products in favor of other manufacturers. This is an example of a firm failing to consider ________ effects when setting its final list or quoted price.

Accepted Answer

A)  company 
B)  social responsibility 
C)  regulatory 
D)  competitive 
E)  customer 
A)  company 
B)  social responsibility 
C)  regulatory 
D)  competitive 
E)  customer

Question 12

Which of these is a demand-oriented approach to pricing?

Accepted Answer

A)  customary pricing 
B)  target profit pricing 
C)  standard markup pricing 
D)  bundle pricing 
E)  service-oriented pricing 
A)  customary pricing 
B)  target profit pricing 
C)  standard markup pricing 
D)  bundle pricing 
E)  service-oriented pricing

Question 13

Delta Air Lines offers vacation packages that include airfare, car rental, and lodging. Delta Air is using ________ pricing strategy.

Accepted Answer

A)  a penetration 
B)  a prestige 
C)  a bundle 
D)  an odd-even 
E)  a standard markup 
A)  a penetration 
B)  a prestige 
C)  a bundle 
D)  an odd-even 
E)  a standard markup

Question 14

Cost-plus pricing refers to

Accepted Answer

A)  summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price. 
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)  increasing the price slightly to protect against undue profit losses from unforeseen environmental forces. 
A)  summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price. 
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)  increasing the price slightly to protect against undue profit losses from unforeseen environmental forces.

Question 15

Standard markup pricing refers to

Accepted Answer

A)  adjusting the price of a product so it is comparable with that of its largest competitor. 
B)  setting the price of a line of products at a number of different price points. 
C)  setting prices to achieve a profit that is a specified percentage of the sales volume. 
D)  increasing the price slightly to protect against undue profit losses from unforeseen environmental forces. 
E)  adding a fixed percentage to the cost of all items in a specific product class. 
A)  adjusting the price of a product so it is comparable with that of its largest competitor. 
B)  setting the price of a line of products at a number of different price points. 
C)  setting prices to achieve a profit that is a specified percentage of the sales volume. 
D)  increasing the price slightly to protect against undue profit losses from unforeseen environmental forces. 
E)  adding a fixed percentage to the cost of all items in a specific product class.

Question 16

Cost-plus-percentage-of-cost pricing refers to

Accepted Answer

A)  summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price. 
B)  adding a fixed percentage to the cost of all items in a specific product class. 
C)  setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors. 
D)  setting the price of a product or service by adding a fixed percentage to the total unit cost. 
E)  charging different prices to different buyers for goods of like grade and quality. 
A)  summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price. 
B)  adding a fixed percentage to the cost of all items in a specific product class. 
C)  setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors. 
D)  setting the price of a product or service by adding a fixed percentage to the total unit cost. 
E)  charging different prices to different buyers for goods of like grade and quality.

Question 17

Deceptive pricing practices are outlawed by legislation and enforced by which federal agency?

Accepted Answer

A)  Consumer Protection Agency 
B)  U.S. Department of Justice 
C)  Federal Communications Commission 
D)  U.S. Department of Commerce 
E)  Federal Trade Commission 
A)  Consumer Protection Agency 
B)  U.S. Department of Justice 
C)  Federal Communications Commission 
D)  U.S. Department of Commerce 
E)  Federal Trade Commission

Question 18

Explain the deceptive pricing practice known as bait and switch.

Accepted Answer

One common deceptive pricing practice is

Question 19

Which of these statements about geographical adjustments to price is most accurate?

Accepted Answer

A)  In FOB origin pricing, the seller selects the mode of transportation. 
B)  In FOB with freight-allowed pricing, the seller must pay for all transportation costs. 
C)  Multiple-zone pricing is sometimes referred to as "spider web" pricing. 
D)  Basing-point pricing methods have been used in industries where freight expenses are a significant part of the total cost to the buyer. 
E)  Geographical adjustments can be subject to government regulation if the firm cannot supply objective data (lists of mountains, rivers, weather conditions, etc.) explaining why those adjustments need to be made. 
A)  In FOB origin pricing, the seller selects the mode of transportation. 
B)  In FOB with freight-allowed pricing, the seller must pay for all transportation costs. 
C)  Multiple-zone pricing is sometimes referred to as "spider web" pricing. 
D)  Basing-point pricing methods have been used in industries where freight expenses are a significant part of the total cost to the buyer. 
E)  Geographical adjustments can be subject to government regulation if the firm cannot supply objective data (lists of mountains, rivers, weather conditions, etc.) explaining why those adjustments need to be made.

Question 20

Yield management pricing refers to

Accepted Answer

A)  controlling the production of products based upon seasonal demand. 
B)  deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well. 
C)  charging the same prices during different times of the day or days of the week to reflect variations in supply for the service. 
D)  offering significant price discounts to wholesalers that agree to purchase products in advance for a period of a year or more at a time. 
E)  charging different prices to maximize revenue for a set amount of capacity at any given time. 
A)  controlling the production of products based upon seasonal demand. 
B)  deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well. 
C)  charging the same prices during different times of the day or days of the week to reflect variations in supply for the service. 
D)  offering significant price discounts to wholesalers that agree to purchase products in advance for a period of a year or more at a time. 
E)  charging different prices to maximize revenue for a set amount of capacity at any given time.

Exam 14: Arriving at the Final Price

Basing-point pricing refers to

What type of discount to resellers is based in part on where they are in the channel?

Which of these is a cost-oriented approach to pricing?

Another name for freight-absorption pricing is

When using a price lining strategy, a marketer will

Hormel offers its food distributors a discount of 15% for payment within 10 days on orders of all Jiffy brand products. Hormel is giving its customers a

Price fixing is illegal under the

Figure 14-7 -Figure 14-7 above shows the three major types of special adjustments to the list or quoted price. Box B represents

Five pricing practices are scrutinized because of potential unethical or illegal actions, including which of these?

Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. This price premium equals

Which of these is a demand-oriented approach to pricing?

Delta Air Lines offers vacation packages that include airfare, car rental, and lodging. Delta Air is using ________ pricing strategy.

Cost-plus pricing refers to

Standard markup pricing refers to

Cost-plus-percentage-of-cost pricing refers to

Deceptive pricing practices are outlawed by legislation and enforced by which federal agency?

Explain the deceptive pricing practice known as bait and switch.

Which of these statements about geographical adjustments to price is most accurate?

Yield management pricing 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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