Question 1

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

Accepted Answer

A) Cumulative quantity discounts encourage repeat buying by a single customer to a far greater degree than do noncumulative quantity discounts. 
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 large quantity purchases. 
E) Quantity discounts are designed to reward wholesalers and retailers for marketing functions they will perform in the future. 
A) Cumulative quantity discounts encourage repeat buying by a single customer to a far greater degree than do noncumulative quantity discounts. 
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 large quantity purchases. 
E) Quantity discounts are designed to reward wholesalers and retailers for marketing functions they will perform in the future.

Question 2

Setting an annual target of a specific dollar volume of profit is referred to as

Accepted Answer

A) target profit pricing. 
B) target return-on-investment pricing. 
C) loss-leader pricing. 
D) at-,above-,or below-market pricing. 
E) yield management pricing. 
A) target profit pricing. 
B) target return-on-investment pricing. 
C) loss-leader pricing. 
D) at-,above-,or below-market pricing. 
E) yield management pricing.

Question 3

The way that a person navigates through an online marketer's website is called

Accepted Answer

A) surf-shopping behavior. 
B) cross-channel shopping. 
C) the clickstream. 
D) one-click shopping. 
E) the shopper pathway. 
A) surf-shopping behavior. 
B) cross-channel shopping. 
C) the clickstream. 
D) one-click shopping. 
E) the shopper pathway.

Question 4

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 5

There are several factors that predict when a skimming pricing policy is likely to be most effective,including situations in which

Accepted Answer

A) consumers tend to be price-sensitive. 
B) enough prospective customers are willing to buy immediately at a high initial price to make these sales profitable. 
C) it will be easier to set measurable sales unit goals. 
D) a lower price will significantly reduce unit costs. 
E) consumers perceive your product to be similar to other products in the market. 
A) consumers tend to be price-sensitive. 
B) enough prospective customers are willing to buy immediately at a high initial price to make these sales profitable. 
C) it will be easier to set measurable sales unit goals. 
D) a lower price will significantly reduce unit costs. 
E) consumers perceive your product to be similar to other products in the market.

Question 6

A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

Accepted Answer

A) free on board (FO
B) origin pricing. 
B) free on board (FO
B) destination pricing. 
C) mode of transportation pricing. 
D) uniform delivered pricing. 
E) free on board (FO
B) geographical pricing. 
A) free on board (FO
B) origin pricing. 
B) free on board (FO
B) destination pricing. 
C) mode of transportation pricing. 
D) uniform delivered pricing. 
E) free on board (FO
B) geographical pricing.

Question 7

The retail price of DVD players has decreased from $900 in the mid-1990s to about $50 today.This is due in large part to

Accepted Answer

A) skimming pricing. 
B) prestige pricing. 
C) odd-even pricing. 
D) customary pricing. 
E) experience curve pricing. 
A) skimming pricing. 
B) prestige pricing. 
C) odd-even pricing. 
D) customary pricing. 
E) experience curve pricing.

Question 8

It costs Lady Marion Seafood,Inc. ,$30 to catch,process,freeze,package,and ship five-pound packages of Alaskan salmon.The firm adds 60 percent to the cost of its salmon products and charges customers a total of $48 for a postage-paid vacuum-sealed package.What type of pricing does Lady Marion Seafood use?

Accepted Answer

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

Question 9

Setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark is referred to as

Accepted Answer

A) customary pricing. 
B) above-,at-,or below-market pricing. 
C) standard markup pricing. 
D) competitive margin pricing. 
E) experience curve pricing. 
A) customary pricing. 
B) above-,at-,or below-market pricing. 
C) standard markup pricing. 
D) competitive margin pricing. 
E) experience curve pricing.

Question 10

Which one of the following statements regarding bundle pricing is most accurate?

Accepted Answer

A) Bundle pricing is intended to benefit the consumer,not the seller. 
B) Bundle pricing is really "bundle packaging" since the price charged is for two or more of the same products that are shrink-wrapped together. 
C) Bundle pricing is often associated with a skimming strategy. 
D) Bundle pricing often provides a lower total cost to buyers and lower marketing costs to sellers. 
E) Bundle pricing is based on the idea that consumers value the individual items more than they value the group contained in the package. 
A) Bundle pricing is intended to benefit the consumer,not the seller. 
B) Bundle pricing is really "bundle packaging" since the price charged is for two or more of the same products that are shrink-wrapped together. 
C) Bundle pricing is often associated with a skimming strategy. 
D) Bundle pricing often provides a lower total cost to buyers and lower marketing costs to sellers. 
E) Bundle pricing is based on the idea that consumers value the individual items more than they value the group contained in the package.

Question 11

For most products,it is difficult to identify a specific market price for a product or product class.Still,marketing managers often have a subjective feel for the competitors' price or market price.Using this benchmark,they then may deliberately choose a strategy of

Accepted Answer

A) above-,at-,or below-market pricing. 
B) loss-leader pricing. 
C) penetration pricing. 
D) standard markup pricing. 
E) experience curve pricing. 
A) above-,at-,or below-market pricing. 
B) loss-leader pricing. 
C) penetration pricing. 
D) standard markup pricing. 
E) experience curve pricing.

Question 12

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.

Question 13

Two or more competitors explicitly or implicitly setting prices is referred to as

Accepted Answer

A) competitive collusion. 
B) vertical price fixing. 
C) horizontal price fixing. 
D) lateral price fixing. 
E) price cooperation. 
A) competitive collusion. 
B) vertical price fixing. 
C) horizontal price fixing. 
D) lateral price fixing. 
E) price cooperation.

Question 14

Noncumulative quantity discounts are

Accepted Answer

A) discounts that are based on a series of orders rather than on the size of an individual order. 
B) onetime discounts per customer or household. 
C) onetime discounts that must be used within a certain time frame or they will become null and void. 
D) discounts used to place new products on supermarket shelves. 
E) discounts that are based on the size of an individual purchase order rather than a series of orders. 
A) discounts that are based on a series of orders rather than on the size of an individual order. 
B) onetime discounts per customer or household. 
C) onetime discounts that must be used within a certain time frame or they will become null and void. 
D) discounts used to place new products on supermarket shelves. 
E) discounts that are based on the size of an individual purchase order rather than a series of orders.

Question 15

Setting the price of a line of products at a number of different specific price points is referred to as

Accepted Answer

A) odd-even pricing. 
B) bundle pricing. 
C) cost-plus pricing. 
D) price lining. 
E) prestige pricing. 
A) odd-even pricing. 
B) bundle pricing. 
C) cost-plus pricing. 
D) price lining. 
E) prestige pricing.

Question 16

Odd-even pricing is based on

Accepted Answer

A) a retailers' ranges of prices. 
B) the wholesalers' markups. 
C) a manufacturer's costs. 
D) competitors' price assumptions. 
E) customers' perceptions of price. 
A) a retailers' ranges of prices. 
B) the wholesalers' markups. 
C) a manufacturer's costs. 
D) competitors' price assumptions. 
E) customers' perceptions of price.

Question 17

Marketers using a dynamic price policy should take care to avoid

Accepted Answer

A) requests for allowances. 
B) price gouging. 
C) contradictory promotions. 
D) changes in market segmentation. 
E) reliance on government agencies. 
A) requests for allowances. 
B) price gouging. 
C) contradictory promotions. 
D) changes in market segmentation. 
E) reliance on government agencies.

Question 18

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 19

The acronym FOB stands for

Accepted Answer

A) freight on board. 
B) free on board. 
C) freight of buyer. 
D) forward onto buyer. 
E) freight owner bonus. 
A) freight on board. 
B) free on board. 
C) freight of buyer. 
D) forward onto buyer. 
E) freight owner bonus.

Question 20

The first Apple iPhone was introduced in 2007 at an initial price of $600.People waited in line overnight so they could be one of the first to own this unique smartphone.Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

Accepted Answer

A) penetration pricing 
B) experience curve pricing 
C) customary pricing 
D) skimming pricing 
E) target pricing 
A) penetration pricing 
B) experience curve pricing 
C) customary pricing 
D) skimming pricing 
E) target pricing

Exam 14: Arriving at the Final Price

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

Setting an annual target of a specific dollar volume of profit is referred to as

The way that a person navigates through an online marketer's website is called

There are several factors that predict when a skimming pricing policy is likely to be most effective,including situations in which

A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

The retail price of DVD players has decreased from $900 in the mid-1990s to about $50 today.This is due in large part to

Setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark is referred to as

Which one of the following statements regarding bundle pricing is most accurate?

For most products,it is difficult to identify a specific market price for a product or product class.Still,marketing managers often have a subjective feel for the competitors' price or market price.Using this benchmark,they then may deliberately choose a strategy of

Yield management pricing refers to

Two or more competitors explicitly or implicitly setting prices is referred to as

Noncumulative quantity discounts are

Setting the price of a line of products at a number of different specific price points is referred to as

Odd-even pricing is based on

Marketers using a dynamic price policy should take care to avoid

A price war refers to

The acronym FOB stands for

The first Apple iPhone was introduced in 2007 at an initial price of $600.People waited in line overnight so they could be one of the first to own this unique smartphone.Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

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Ethical and Social Responsibility for Sustainable Marketing

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Understanding and Reaching Global Consumers and Markets

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