Question 1

In which of the following situations are consumers most likely to feel the effect of resale price maintenance?

Accepted Answer

A)  Armstrong flooring gives the Home Center a trade discount. 
B)  A group of people who suffer from allergies launch a boycott against perfume manufacturers who place their scents in magazine ads. 
C)  The manufacturer of a product that prevents algae from growing in swimming pools bypasses the middlemen and sells directly to pool owners. 
D)  The Home Center buys Solarian brand flooring from Armstrong to sell to its customers. 
E)  Andi returns defective computer software to her local computer store. 
A)  Armstrong flooring gives the Home Center a trade discount. 
B)  A group of people who suffer from allergies launch a boycott against perfume manufacturers who place their scents in magazine ads. 
C)  The manufacturer of a product that prevents algae from growing in swimming pools bypasses the middlemen and sells directly to pool owners. 
D)  The Home Center buys Solarian brand flooring from Armstrong to sell to its customers. 
E)  Andi returns defective computer software to her local computer store.

Question 2

When Warren Peace learned of the difficulty of capturing a near-perfect round for ballistics matching to weapons used in crimes, he decided to develop a system for testing bullets and firearms. After much trial-and-error and several costly prototypes that were ineffective, he developed a ballistic testing unit. He priced each individual unit at $12,000, and very few law enforcement agencies can afford to spend that much. Peace is using a _____ strategy.

Accepted Answer

A)  cost-plus 
B)  marketing-skimming 
C)  market-absorption 
D)  marginal-cost 
E)  market-penetration 
A)  cost-plus 
B)  marketing-skimming 
C)  market-absorption 
D)  marginal-cost 
E)  market-penetration

Question 3

Market-skimming pricing is most often used in product categories in the maturity stage of the product life cycle, such as dessert mixes, deodorants, and dog food.

Accepted Answer

A) True 
 B)False

Question 4

A manufacturer of leather sandals offers the reseller of the shoes a 10 percent discount in return for the retailer agreeing to be responsible for promoting the sandals. The manufacturer's 10 percent discount off the sales price is a form of ______ discount.

Accepted Answer

A)  functional 
B)  relational 
C)  reseller 
D)  manufacturer's 
E)  barter 
A)  functional 
B)  relational 
C)  reseller 
D)  manufacturer's 
E)  barter

Question 5

Domestications, a catalog retailer of items for the home, sells comforter sets (a comforter, dust ruffle, and 2 pillow shams) for $49.99, $79.99, or $99.99. These are the only comforter sets the retailer carries. This is an example of:

Accepted Answer

A)  unit pricing. 
B)  price lining. 
C)  cost-plus pricing. 
D)  quantity discounts. 
E)  zone pricing. 
A)  unit pricing. 
B)  price lining. 
C)  cost-plus pricing. 
D)  quantity discounts. 
E)  zone pricing.

Question 6

Due to a number of layoffs in the technology industry, there are many technology experts who are unemployed. Some saw an opportunity to become a third-party suppliers of tech support, especially after they became aware that even handling a small problem for a major company can cost $20. One of the new services is called GeekHelp. When the service was introduced to the market, the entrepreneur who started the company announced it has the cheapest per-minute rate of any of the tech support companies. Another one called Ask Dr. Tech charges a fee of $299 per year to provide tech support for a small business. Because some consumers cannot explain what is wrong with their computers beyond the fact it will not work, GeekXpress will make house calls to organization members who pay a fee of $35 per month. When it added house calls to its services, it did not raise its prices.
-The decision on what to charge would be part of these companies':

Accepted Answer

A)  tactics. 
B)  rules and regulations. 
C)  organizational policies. 
D)  operating tenets. 
E)  strategies. 
A)  tactics. 
B)  rules and regulations. 
C)  organizational policies. 
D)  operating tenets. 
E)  strategies.

Question 7

The strategy of market-skimming pricing is especially suited for new products because:

Accepted Answer

A)  it provides the firm with pricing flexibility. 
B)  high prices can be used to connote quality. 
C)  it is an excellent way to recoup research and development costs. 
D)  high initial prices can keep demand from outdistancing supply. 
E)  all of the above are True. 
A)  it provides the firm with pricing flexibility. 
B)  high prices can be used to connote quality. 
C)  it is an excellent way to recoup research and development costs. 
D)  high initial prices can keep demand from outdistancing supply. 
E)  all of the above are True.

Question 8

Under _____ pricing, a manufacturer will quote to the customer a delivered price equal to its factory price  plus the freight costs that would be charged by a competitive seller located near that customer.

Accepted Answer

The answer of Under _____ pricing, a manufacturer will quote...

Question 9

_____ _____ _____ occurs when manufacturers seek to control the prices at which middlemen resell their  products.

Accepted Answer

Resale pri

Question 10

Noncumulative quantity discounts are primarily offered by a seller in order to:

Accepted Answer

A)  encourage the buyer to make all of his or her purchases from this seller over an extended period of time. 
B)  avoid having to offer promotional allowances. 
C)  encourage large individual orders. 
D)  give preferential treatment to certain customers. 
E)  comply with the Robinson-Patman Act. 
A)  encourage the buyer to make all of his or her purchases from this seller over an extended period of time. 
B)  avoid having to offer promotional allowances. 
C)  encourage large individual orders. 
D)  give preferential treatment to certain customers. 
E)  comply with the Robinson-Patman Act.

Question 11

Fair-trade laws:

Accepted Answer

A)  allowed manufacturers to set minimum retail prices for their products. 
B)  prohibited the establishment of monopolies. 
C)  allowed retailers to offer lower prices to their more profitable customers. 
D)  established a ceiling on markups. 
E)  controlled how retailers use local advertising. 
A)  allowed manufacturers to set minimum retail prices for their products. 
B)  prohibited the establishment of monopolies. 
C)  allowed retailers to offer lower prices to their more profitable customers. 
D)  established a ceiling on markups. 
E)  controlled how retailers use local advertising.

Question 12

Which of the following is a price reduction granted by a seller in payment for promotional services provided by buyers?

Accepted Answer

A)  a promotional allowance 
B)  a price differential 
C)  a cumulative discount 
D)  price lining 
E)  a chain discount 
A)  a promotional allowance 
B)  a price differential 
C)  a cumulative discount 
D)  price lining 
E)  a chain discount

Question 13

Yesterday Civil War Press in Virginia shipped 112 paperback books to a retailer in East Tennessee, 54 paperback books to a retailer in Florida, and 9 paperback books to a customer in North Carolina, yet Civil War Press paid no freight charges. Each of the book purchasers paid the freight on their orders. Which geographic pricing strategy did Civil War Press use?

Accepted Answer

A)  freight-absorption pricing 
B)  uniform delivered pricing 
C)  FOB factory pricing 
D)  regional pricing 
E)  zone-delivered pricing 
A)  freight-absorption pricing 
B)  uniform delivered pricing 
C)  FOB factory pricing 
D)  regional pricing 
E)  zone-delivered pricing

Question 14

One set of tangle proof jumper cables costs a retailer $2.76 if purchased separately. If a lot of five is purchased, the individual price is reduced to $2.52. This is an example of a _____ strategy.

Accepted Answer

A)  cumulative pricing 
B)  price lining 
C)  quantity discount 
D)  promotional discount 
E)  full-service retailing 
A)  cumulative pricing 
B)  price lining 
C)  quantity discount 
D)  promotional discount 
E)  full-service retailing

Question 15

According to the text, which of the following types of retailer is most likely to use price lining?

Accepted Answer

A)  a hardware store 
B)  an antique store 
C)  a store that features hunting equipment 
D)  a children's clothing shop 
E)  an appliance store 
A)  a hardware store 
B)  an antique store 
C)  a store that features hunting equipment 
D)  a children's clothing shop 
E)  an appliance store

Question 16

_____ is an extreme case of penetration pricing.

Accepted Answer

A)  Trading down 
B)  Cost-plus pricing 
C)  Contribution costing 
D)  Predatory pricing 
E)  Value-pricing 
A)  Trading down 
B)  Cost-plus pricing 
C)  Contribution costing 
D)  Predatory pricing 
E)  Value-pricing

Question 17

Critics of FOB factory pricing are usually in favor of:

Accepted Answer

A)  point-of-production pricing. 
B)  zone-delivered pricing. 
C)  promotional allowance pricing. 
D)  uniform delivered pricing. 
E)  geographic pricing. 
A)  point-of-production pricing. 
B)  zone-delivered pricing. 
C)  promotional allowance pricing. 
D)  uniform delivered pricing. 
E)  geographic pricing.

Question 18

Freight-absorption pricing is especially useful to a firm that:

Accepted Answer

A)  has high variable costs per unit of product. 
B)  has excess capacity. 
C)  wants to avoid head-on competition. 
D)  has low fixed costs. 
E)  wants to engage in collusion with other firms. 
A)  has high variable costs per unit of product. 
B)  has excess capacity. 
C)  wants to avoid head-on competition. 
D)  has low fixed costs. 
E)  wants to engage in collusion with other firms.

Question 19

Stores like Dollar Bills, where everything is priced at one dollar, and Just $8, where all clothing is priced at $8, are examples of retailers that use the _____ strategy.

Accepted Answer

The answer of Stores like Dollar Bills, where everything is...

Question 20

This week's Kroger supermarket ad offered 2 one-half gallon cartons of Mayfield ice cream (normally $3.99 a carton) for $5 for a limited time only. The supermarket chain is using which of the following strategies for pricing its ice cream?

Accepted Answer

A)  a single-price strategy 
B)  cost-plus pricing 
C)  price lining 
D)  leader pricing 
E)  penetration pricing 
A)  a single-price strategy 
B)  cost-plus pricing 
C)  price lining 
D)  leader pricing 
E)  penetration pricing

In which of the following situations are consumers most likely to feel the effect of resale price maintenance?

Market-skimming pricing is most often used in product categories in the maturity stage of the product life cycle, such as dessert mixes, deodorants, and dog food.

A manufacturer of leather sandals offers the reseller of the shoes a 10 percent discount in return for the retailer agreeing to be responsible for promoting the sandals. The manufacturer's 10 percent discount off the sales price is a form of ______ discount.

Domestications, a catalog retailer of items for the home, sells comforter sets (a comforter, dust ruffle, and 2 pillow shams) for $49.99, $79.99, or $99.99. These are the only comforter sets the retailer carries. This is an example of:

The strategy of market-skimming pricing is especially suited for new products because:

Under _____ pricing, a manufacturer will quote to the customer a delivered price equal to its factory price plus the freight costs that would be charged by a competitive seller located near that customer.

___ _ ___ occurs when manufacturers seek to control the prices at which middlemen resell their products.

Noncumulative quantity discounts are primarily offered by a seller in order to:

Fair-trade laws:

Which of the following is a price reduction granted by a seller in payment for promotional services provided by buyers?

One set of tangle proof jumper cables costs a retailer $2.76 if purchased separately. If a lot of five is purchased, the individual price is reduced to $2.52. This is an example of a _____ strategy.

According to the text, which of the following types of retailer is most likely to use price lining?

_____ is an extreme case of penetration pricing.

Critics of FOB factory pricing are usually in favor of:

Freight-absorption pricing is especially useful to a firm that:

Stores like Dollar Bills, where everything is priced at one dollar, and Just $8, where all clothing is priced at $8, are examples of retailers that use the _____ strategy.

This week's Kroger supermarket ad offered 2 one-half gallon cartons of Mayfield ice cream (normally $3.99 a carton) for $5 for a limited time only. The supermarket chain is using which of the following strategies for pricing its ice cream?

The Field of Marketing

The Dynamic Marketing Environment

Global Markets and Marketing

Consumer Markets and Buying Behavior

Business Markets and Buying Behavior

Marketing Research and Market Information

Product Planning and Development

Product-Mix Strategies

Brands, Packaging, and Other Product Features

Services Marketing

Price Determination

Channels of Distribution

Retailing

Wholesaling and Physical Distribution

Integrated Marketing Communications

Personal Selling and Sales Management

Advertising, Sales Promotion, and Public Relations

Strategic Marketing Planning

Marketing Implementation and Evaluation

Marketing and the Information Economy

Market Segmentation Targeting and Positioning

Filters

Exam 13: Pricing Strategies

In which of the following situations are consumers most likely to feel the effect of resale price maintenance?

Market-skimming pricing is most often used in product categories in the maturity stage of the product life cycle, such as dessert mixes, deodorants, and dog food.

A manufacturer of leather sandals offers the reseller of the shoes a 10 percent discount in return for the retailer agreeing to be responsible for promoting the sandals. The manufacturer's 10 percent discount off the sales price is a form of ______ discount.

Domestications, a catalog retailer of items for the home, sells comforter sets (a comforter, dust ruffle, and 2 pillow shams) for $49.99, $79.99, or $99.99. These are the only comforter sets the retailer carries. This is an example of:

The strategy of market-skimming pricing is especially suited for new products because:

Under _____ pricing, a manufacturer will quote to the customer a delivered price equal to its factory price plus the freight costs that would be charged by a competitive seller located near that customer.

_____ _____ _____ occurs when manufacturers seek to control the prices at which middlemen resell their products.

Noncumulative quantity discounts are primarily offered by a seller in order to:

Fair-trade laws:

Which of the following is a price reduction granted by a seller in payment for promotional services provided by buyers?

One set of tangle proof jumper cables costs a retailer $2.76 if purchased separately. If a lot of five is purchased, the individual price is reduced to $2.52. This is an example of a _____ strategy.

According to the text, which of the following types of retailer is most likely to use price lining?

_____ is an extreme case of penetration pricing.

Critics of FOB factory pricing are usually in favor of:

Freight-absorption pricing is especially useful to a firm that:

Stores like Dollar Bills, where everything is priced at one dollar, and Just $8, where all clothing is priced at $8, are examples of retailers that use the _____ strategy.

This week's Kroger supermarket ad offered 2 one-half gallon cartons of Mayfield ice cream (normally $3.99 a carton) for $5 for a limited time only. The supermarket chain is using which of the following strategies for pricing its ice cream?

The Field of Marketing

The Dynamic Marketing Environment

Global Markets and Marketing

Consumer Markets and Buying Behavior

Business Markets and Buying Behavior

Marketing Research and Market Information

Product Planning and Development

Product-Mix Strategies

Brands, Packaging, and Other Product Features

Services Marketing

Price Determination

Channels of Distribution

Retailing

Wholesaling and Physical Distribution

Integrated Marketing Communications

Personal Selling and Sales Management

Advertising, Sales Promotion, and Public Relations

Strategic Marketing Planning

Marketing Implementation and Evaluation

Marketing and the Information Economy

Market Segmentation Targeting and Positioning

Filters

___ _ ___ occurs when manufacturers seek to control the prices at which middlemen resell their products.