Question 1

What are three special adjustments to the list or quoted price?

Accepted Answer

Three special adjustments to t

Question 2

The owner of a store that sells custom kitchen cabinets wishes to use a target return-on-sales pricing approach to establish a price for a typical section of cabinets.Assume that variable costs total $200 per unit,fixed cost is $44,000,and the storeowner desires a target profit of 20 percent return on sales at an annual volume of 400 cabinets.What price should be charged for a typical cabinet section?

Accepted Answer

A) $263.50 
B) $311.00 
C) $387.50 
D) $445.50 
E) $775.00 
A) $263.50 
B) $311.00 
C) $387.50 
D) $445.50 
E) $775.00

Question 3

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

Accepted Answer

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

Question 4

To encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use

Accepted Answer

A) noncumulative discounts. 
B) cumulative discounts. 
C) seasonal discounts. 
D) trade discounts. 
E) functional discounts. 
A) noncumulative discounts. 
B) cumulative discounts. 
C) seasonal discounts. 
D) trade discounts. 
E) functional discounts.

Question 5

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

Accepted Answer

A) predatory pricing 
B) discount pricing 
C) lateral price fixing 
D) regional rollback pricing 
E) delayed payment pricing 
A) predatory pricing 
B) discount pricing 
C) lateral price fixing 
D) regional rollback pricing 
E) delayed payment pricing

Question 6

Product-line pricing involves determining the lowest-priced product and price,the highest-priced product and price,and

Accepted Answer

A) the single most popular item in the line. 
B) the least vulnerable product in the line. 
C) the most frequently sold product in the line. 
D) the most price-insensitive product in the line. 
E) the price differentials for all other products in the line. 
A) the single most popular item in the line. 
B) the least vulnerable product in the line. 
C) the most frequently sold product in the line. 
D) the most price-insensitive product in the line. 
E) the price differentials for all other products in the line.

Question 7

Which of the following statements regarding odd-even pricing is most accurate?

Accepted Answer

A) Odd-even pricing is designed to give the consumer a better set of pricing alternatives. 
B) Odd-even pricing can be used in conjunction with a skimming pricing strategy,but should not be used with a penetration pricing strategy. 
C) Odd-even pricing does not work if the product is health care-related. 
D) Overuse of odd-ending prices tends to mute its effect on demand. 
E) Odd-ending prices are best used with large ticket items;it loses its effectiveness with moderate- to low-ticket items. 
A) Odd-even pricing is designed to give the consumer a better set of pricing alternatives. 
B) Odd-even pricing can be used in conjunction with a skimming pricing strategy,but should not be used with a penetration pricing strategy. 
C) Odd-even pricing does not work if the product is health care-related. 
D) Overuse of odd-ending prices tends to mute its effect on demand. 
E) Odd-ending prices are best used with large ticket items;it loses its effectiveness with moderate- to low-ticket items.

Question 8

Penetration pricing refers to

Accepted Answer

A) charging different prices to different buyers for goods of like grade and quality. 
B) setting the highest initial price that customers really desiring the product are willing to pay. 
C) setting a low initial price on a new product to appeal immediately to the mass market. 
D) setting a market price for a product or product class based on a subjective feel for the competitors' prices or market price. 
E) setting prices a few dollars or cents under an even number. 
A) charging different prices to different buyers for goods of like grade and quality. 
B) setting the highest initial price that customers really desiring the product are willing to pay. 
C) setting a low initial price on a new product to appeal immediately to the mass market. 
D) setting a market price for a product or product class based on a subjective feel for the competitors' prices or market price. 
E) setting prices a few dollars or cents under an even number.

Question 9

Incremental analysis might take the form of such questions as,"Should we extend our hours to include Sundays?" or "What if we put more apples in the pie?" The basic principle is that

Accepted Answer

A) as long as a marketing action breaks even,the action is worth taking. 
B) expected incremental revenues from pricing and other marketing actions must more than offset incremental costs. 
C) you "don't rock the boat" if your program is making a profit;"leave well enough alone." 
D) if you are not willing to take risks,even if the numbers tell you otherwise,your business will ultimately fail. 
E) marketing and finance are two different animals: "If it feels right in your gut-go for it." 
A) as long as a marketing action breaks even,the action is worth taking. 
B) expected incremental revenues from pricing and other marketing actions must more than offset incremental costs. 
C) you "don't rock the boat" if your program is making a profit;"leave well enough alone." 
D) if you are not willing to take risks,even if the numbers tell you otherwise,your business will ultimately fail. 
E) marketing and finance are two different animals: "If it feels right in your gut-go for it."

Question 10

A trade-in allowance is

Accepted Answer

A) a noncash exchange of one product for another of equal or greater value. 
B) a cash-back payment when a more expensive item is replaced with a less expensive item. 
C) the return of money based on proof of purchase. 
D) a cash payment to a retailer for extra in-store support or special featuring of the brand. 
E) a price reduction given when a used product is part of the payment on a new product. 
A) a noncash exchange of one product for another of equal or greater value. 
B) a cash-back payment when a more expensive item is replaced with a less expensive item. 
C) the return of money based on proof of purchase. 
D) a cash payment to a retailer for extra in-store support or special featuring of the brand. 
E) a price reduction given when a used product is part of the payment on a new product.

Question 11

Cash payments or an extra amount of "free goods" awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

Accepted Answer

A) promotional allowance. 
B) promotional quantity discount. 
C) seasonal discount. 
D) promotional purchase inducement. 
E) dynamic pricing policy. 
A) promotional allowance. 
B) promotional quantity discount. 
C) seasonal discount. 
D) promotional purchase inducement. 
E) dynamic pricing policy.

Question 12

Which cost-oriented pricing method is based on the recognition that a product's unit costs predictably decline by 10 to 30 percent each time its production volume doubles?

Accepted Answer

A) experience curve pricing 
B) cost-plus-percentage-of-cost pricing 
C) capacity management pricing 
D) standard markup pricing 
E) derived demand pricing 
A) experience curve pricing 
B) cost-plus-percentage-of-cost pricing 
C) capacity management pricing 
D) standard markup pricing 
E) derived demand pricing

Question 13

A dynamic pricing policy allows marketers to respond to

Accepted Answer

A) requests for allowances. 
B) threats of discrimination. 
C) success measures for the firm's previous promotions. 
D) changes in demand,cost,and competitive factors. 
E) inquiries by government agencies. 
A) requests for allowances. 
B) threats of discrimination. 
C) success measures for the firm's previous promotions. 
D) changes in demand,cost,and competitive factors. 
E) inquiries by government agencies.

Question 14

When Sherman bought gas,he noticed the convenience store offered him a 2 percent reduction in price if he paid cash rather than if he used his credit card to pay for his purchase.The convenience store was offering him a

Accepted Answer

A) trade discount. 
B) cash discount. 
C) promotional allowance. 
D) rebate. 
E) functional discount. 
A) trade discount. 
B) cash discount. 
C) promotional allowance. 
D) rebate. 
E) functional discount.

Question 15

What are the five most common deceptive pricing practices? Give an example of each one.

Accepted Answer

The five most common deceptive pricing p

Question 16

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Which of the following is one of four common approaches to selecting an approximate price level?

Accepted Answer

A) demand-oriented 
B) cause-oriented 
C) revenue-oriented 
D) stakeholder-oriented 
E) distribution-oriented 
A) demand-oriented 
B) cause-oriented 
C) revenue-oriented 
D) stakeholder-oriented 
E) distribution-oriented

Question 17

Vertical price fixing refers to

Accepted Answer

A) two or more competitors explicitly or implicitly setting prices. 
B) the practice of charging different prices to different buyers for goods of like grade and quality. 
C) controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. 
D) a conspiracy among firms to set prices for a product or service. 
E) a seller's requirement that the purchaser of one product also buy another product in the line. 
A) two or more competitors explicitly or implicitly setting prices. 
B) the practice of charging different prices to different buyers for goods of like grade and quality. 
C) controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. 
D) a conspiracy among firms to set prices for a product or service. 
E) a seller's requirement that the purchaser of one product also buy another product in the line.

Question 18

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a ________ of $1,000 for your 2006 Nissan Altima.

Accepted Answer

A) cash discount 
B) functional discount 
C) seasonal discount 
D) trade-in allowance 
E) promotional allowance 
A) cash discount 
B) functional discount 
C) seasonal discount 
D) trade-in allowance 
E) promotional allowance

Question 19

Price deals that mislead consumers fall into the category of

Accepted Answer

A) predatory pricing. 
B) deceptive pricing. 
C) price discrimination. 
D) caveat emptor. 
E) resale price maintenance. 
A) predatory pricing. 
B) deceptive pricing. 
C) price discrimination. 
D) caveat emptor. 
E) resale price maintenance.

Question 20

Amazon wanted lower retail prices for e-books to

Accepted Answer

A) lower royalties to authors. 
B) eliminate distributors. 
C) raise prices overall for printed books. 
D) undermine its rival,Nook. 
E) build its e-book business. 
A) lower royalties to authors. 
B) eliminate distributors. 
C) raise prices overall for printed books. 
D) undermine its rival,Nook. 
E) build its e-book business.

Exam 14: Arriving at the Final Price

What are three special adjustments to the list or quoted price?

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

To encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use

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

Product-line pricing involves determining the lowest-priced product and price,the highest-priced product and price,and

Which of the following statements regarding odd-even pricing is most accurate?

Penetration pricing refers to

Incremental analysis might take the form of such questions as,"Should we extend our hours to include Sundays?" or "What if we put more apples in the pie?" The basic principle is that

A trade-in allowance is

Cash payments or an extra amount of "free goods" awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

Which cost-oriented pricing method is based on the recognition that a product's unit costs predictably decline by 10 to 30 percent each time its production volume doubles?

A dynamic pricing policy allows marketers to respond to

When Sherman bought gas,he noticed the convenience store offered him a 2 percent reduction in price if he paid cash rather than if he used his credit card to pay for his purchase.The convenience store was offering him a

What are the five most common deceptive pricing practices? Give an example of each one.

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Which of the following is one of four common approaches to selecting an approximate price level?

Vertical price fixing refers to

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a ________ of $1,000 for your 2006 Nissan Altima.

Price deals that mislead consumers fall into the category of

Amazon wanted lower retail prices for e-books 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 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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