Question 1

Explain why odd-even pricing may be successful.

Accepted Answer

Odd-even pricing presumes that

Question 2

Quantity discounts are

Accepted Answer

A) price reductions in unit costs for placing a larger order. 
B) price reductions for placing long-term pre-scheduled orders. 
C) price reductions to encourage retailers to stock inventory earlier than their normal demand would require. 
D) BOGOs. 
E) reductions in unit costs for taking merchandise that will soon be replaced by new and improved versions of the original product. 
A) price reductions in unit costs for placing a larger order. 
B) price reductions for placing long-term pre-scheduled orders. 
C) price reductions to encourage retailers to stock inventory earlier than their normal demand would require. 
D) BOGOs. 
E) reductions in unit costs for taking merchandise that will soon be replaced by new and improved versions of the original product.

Question 3

Rather than emphasize demand,cost,or profit factors,a price setter can stress what ________ doing.

Accepted Answer

A) the service sector is 
B) the market or competitors 
C) the global economy is 
D) suppliers are 
E) the financial markets are 
A) the service sector is 
B) the market or competitors 
C) the global economy is 
D) suppliers are 
E) the financial markets are

Question 4

Rather than billing clients by the hour,some lawyers and their clients agree on a fixed fee based on expected costs plus an agreed-on level of profit for the law firm.Which pricing approach are they using?

Accepted Answer

A) target pricing 
B) cost-plus pricing 
C) customary pricing 
D) experience curve pricing 
E) bundle pricing 
A) target pricing 
B) cost-plus pricing 
C) customary pricing 
D) experience curve pricing 
E) bundle pricing

Question 5

To reward wholesalers and retailers for marketing functions they will perform in the future,a manufacturer often gives ________ discounts.

Accepted Answer

A) seasonal 
B) cash 
C) trade 
D) quantity 
E) cumulative 
A) seasonal 
B) cash 
C) trade 
D) quantity 
E) cumulative

Question 6

A conspiracy among firms to set prices for a product is referred to as

Accepted Answer

A) price discrimination. 
B) price fixing. 
C) predatory pricing. 
D) tying arrangements. 
E) exclusive dealing. 
A) price discrimination. 
B) price fixing. 
C) predatory pricing. 
D) tying arrangements. 
E) exclusive dealing.

Question 7

A promotional allowance is

Accepted Answer

A) a onetime discount to promote the product that must be used within a certain time frame. 
B) the cash payments or an extra amount of "free goods" awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote the product. 
C) the return of money to promote the product based on proof of purchase. 
D) a short-term price reduction when consumer demand takes a significant and unexpected dip. 
E) an incentive,such as trips,cruises,jewelry,etc. ,presented to brand-loyal customers. 
A) a onetime discount to promote the product that must be used within a certain time frame. 
B) the cash payments or an extra amount of "free goods" awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote the product. 
C) the return of money to promote the product based on proof of purchase. 
D) a short-term price reduction when consumer demand takes a significant and unexpected dip. 
E) an incentive,such as trips,cruises,jewelry,etc. ,presented to brand-loyal customers.

Question 8

Seasonal discounts are used by manufacturers to

Accepted Answer

A) get rid of dated merchandise. 
B) prevent retailers from purchasing competitors' products. 
C) prolong the peak seasonal selling season. 
D) establish an immediate feeling of goodwill between the buyer and seller that hopefully will continue when prices return to normal. 
E) entice dealers to purchase seasonal merchandise earlier in the selling season. 
A) get rid of dated merchandise. 
B) prevent retailers from purchasing competitors' products. 
C) prolong the peak seasonal selling season. 
D) establish an immediate feeling of goodwill between the buyer and seller that hopefully will continue when prices return to normal. 
E) entice dealers to purchase seasonal merchandise earlier in the selling season.

Question 9

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 10

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 11

Which of the following statements about geographical pricing is most accurate?

Accepted Answer

A) Geographical pricing is generally legal and not normally a concern in the U.S.legal system. 
B) Geographical pricing has come under more government scrutiny than any other pricing policy. 
C) FOB freight-allowed pricing practices are illegal. 
D) FOB origin pricing is legal. 
E) Basing-point pricing is the only form of geographical pricing that is not under some type of legal restriction. 
A) Geographical pricing is generally legal and not normally a concern in the U.S.legal system. 
B) Geographical pricing has come under more government scrutiny than any other pricing policy. 
C) FOB freight-allowed pricing practices are illegal. 
D) FOB origin pricing is legal. 
E) Basing-point pricing is the only form of geographical pricing that is not under some type of legal restriction.

Question 12

A manufacturer estimates that consumers will accept a price of $275 for a snowboard.If the manufacturer expects to offer trade discounts of 35/15/5 to retailers,wholesalers,and jobbers,respectively,what price will the manufacturer receive for the snowboard?

Accepted Answer

A) $275.00 
B) $178.75 
C) $151.94 
D) $144.34 
E) $100.00 
A) $275.00 
B) $178.75 
C) $151.94 
D) $144.34 
E) $100.00

Question 13

Loss-leader pricing refers to

Accepted Answer

A) a pricing method where the price the seller charges is below the actual cost to make the product. 
B) setting a low initial price and gradually but consistently increasing that price so as not to antagonize the consumer. 
C) 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. 
D) a method of pricing based on a product's tradition,standardized channel of distribution,or other competitive factors. 
E) pricing a product between 8 and 10% lower than nationally branded competitive products. 
A) a pricing method where the price the seller charges is below the actual cost to make the product. 
B) setting a low initial price and gradually but consistently increasing that price so as not to antagonize the consumer. 
C) 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. 
D) a method of pricing based on a product's tradition,standardized channel of distribution,or other competitive factors. 
E) pricing a product between 8 and 10% lower than nationally branded competitive products.

Question 14

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 15

Advertising such as "Retail Value $100,Our Price $85" is deceptive if

Accepted Answer

A) a verified and substantial number of stores in the market area do not price the item at $100. 
B) even one store in that retail chain does not price the item at $100. 
C) a competitor is selling the same item for $75 on sale and the normal price is only $85. 
D) there is not enough product on hand at that price to satisfy the needs of the store's regular customer traffic. 
E) the markup on the original price is more than 200 percent. 
A) a verified and substantial number of stores in the market area do not price the item at $100. 
B) even one store in that retail chain does not price the item at $100. 
C) a competitor is selling the same item for $75 on sale and the normal price is only $85. 
D) there is not enough product on hand at that price to satisfy the needs of the store's regular customer traffic. 
E) the markup on the original price is more than 200 percent.

Question 16

A hardware store advertises a ⅜-inch Black and Decker Power Drill for $29.95.You enter the store intending to purchase the drill.The salesperson informs you that they are all sold out.She tells you that the "sale" drills were factory seconds and that if you are going to be doing any kind of serious woodworking,you should buy the Model 3309,which sells for $49.99.This scenario has elements of which type of illegal pricing practice?

Accepted Answer

A) predatory pricing 
B) price discrimination 
C) price fixing 
D) bait and switch 
E) conditional bargains 
A) predatory pricing 
B) price discrimination 
C) price fixing 
D) bait and switch 
E) conditional bargains

Question 17

Which of the following is a competition-oriented approach to pricing?

Accepted Answer

A) skimming pricing 
B) target pricing 
C) customary pricing 
D) target return-on-sales pricing 
E) standard markup pricing 
A) skimming pricing 
B) target pricing 
C) customary pricing 
D) target return-on-sales pricing 
E) standard markup pricing

Question 18

Cumulative quantity discounts are

Accepted Answer

A) reductions in unit costs for a larger order. 
B) cumulative cash payments or extra amounts of "free goods" awarded sellers in the channel of distribution for undertaking certain advertising or selling activities to promote a product. 
C) discounts offered to sellers for first-time purchases of a new product as incentives for providing shelf space. 
D) an accumulation of discounts for every additional rebuy in which the discount becomes incrementally higher. 
E) discounts that apply to the accumulation of purchases of a product over a given time period,typically a year. 
A) reductions in unit costs for a larger order. 
B) cumulative cash payments or extra amounts of "free goods" awarded sellers in the channel of distribution for undertaking certain advertising or selling activities to promote a product. 
C) discounts offered to sellers for first-time purchases of a new product as incentives for providing shelf space. 
D) an accumulation of discounts for every additional rebuy in which the discount becomes incrementally higher. 
E) discounts that apply to the accumulation of purchases of a product over a given time period,typically a year.

Question 19

With a cost-oriented pricing strategy,a price setter stresses the ________ side of the pricing problem,and the price is set by looking at

Accepted Answer

A) demand;revenue. 
B) production and marketing;profit. 
C) demand;target sales. 
D) cost;production and marketing expenses. 
E) cost;consumer tastes. 
A) demand;revenue. 
B) production and marketing;profit. 
C) demand;target sales. 
D) cost;production and marketing expenses. 
E) cost;consumer tastes.

Question 20

The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line,not necessarily for each item,is referred to as

Accepted Answer

A) line item pricing. 
B) product-line pricing. 
C) price lining. 
D) customary pricing. 
E) discretionary pricing. 
A) line item pricing. 
B) product-line pricing. 
C) price lining. 
D) customary pricing. 
E) discretionary pricing.

Exam 14: Arriving at the Final Price

Explain why odd-even pricing may be successful.

Quantity discounts are

Rather than emphasize demand,cost,or profit factors,a price setter can stress what ________ doing.

Rather than billing clients by the hour,some lawyers and their clients agree on a fixed fee based on expected costs plus an agreed-on level of profit for the law firm.Which pricing approach are they using?

To reward wholesalers and retailers for marketing functions they will perform in the future,a manufacturer often gives ________ discounts.

A conspiracy among firms to set prices for a product is referred to as

A promotional allowance is

Seasonal discounts are used by manufacturers to

Geographic adjustments are made by manufacturers or wholesalers to cover

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

Which of the following statements about geographical pricing is most accurate?

A manufacturer estimates that consumers will accept a price of $275 for a snowboard.If the manufacturer expects to offer trade discounts of 35/15/5 to retailers,wholesalers,and jobbers,respectively,what price will the manufacturer receive for the snowboard?

Loss-leader pricing refers to

Price discrimination is illegal under the

Advertising such as "Retail Value $100,Our Price $85" is deceptive if

Which of the following is a competition-oriented approach to pricing?

Cumulative quantity discounts are

With a cost-oriented pricing strategy,a price setter stresses the ________ side of the pricing problem,and the price is set by looking at

The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line,not necessarily for each item,is referred to as

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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 Multichannel Marketing

Pulling It All Together: the Strategic Marketing Process

Writing Successful Marketing and Business Plans: Tips and Guidelines

Financial Statements and Ratios

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