Question 1

_____ pricing occurs when a company offers two or more complementary products and sells them for a single price.

Accepted Answer

A)  Psychological 
B)  Bundle 
C)  Protective 
D)  Combination 
A)  Psychological 
B)  Bundle 
C)  Protective 
D)  Combination B

Question 2

A low price is a sure sell because the demand for many goods is highly elastic.

Accepted Answer

A) True 
 B)False  False

Question 3

Discuss the practice of promotional pricing and the role played by loss leaders and leader pricing.

Accepted Answer

In promotional pricing,a lower-than-normal price is used as a temporary ingredient in a firm's selling strategy.In some cases,promotional prices are recurrent,such as an annual "buy one pair,get the second pair free" sale at a shoe store.Another example is an opening special to attract customers to a new store.
Most promotional pricing occurs at the retail level.One type is the use of loss leaders: goods priced below cost to attract customers who will then buy other,regularly priced merchandise.However,this practice is not permitted in states with unfair-trade acts,though an alternative called "leader" pricing is used in which products are sold with the lowest markup allowed by the unfair-trade laws.
Supermarkets and mass merchandisers often use private-label products (sold under the retailer's brand name)and sell them below the price of comparable national brands.The lower price is likely to be offset by increased volume which leads to increased revenues for the firm.

Question 4

A cosmetics company offers incentives to its retailers for advertising its new shampoo by placing it in a special display unit near the billing counters.This incentive offered by the manufacturer is an example of a _____.

Accepted Answer

A)  rebate 
B)  promotional allowance 
C)  cash discount 
D)  trade-in 
A)  rebate 
B)  promotional allowance 
C)  cash discount 
D)  trade-in

Question 5

What is leader pricing? What type of retailers use this strategy?

Accepted Answer

Leader pricing is a variant of loss-lead

Question 6

Offering a printer along with a personal computer at a single price is an example of _____.

Accepted Answer

A) competitive bidding 
B) penetration pricing strategy 
C) list price 
D) trade discount 
E) price flexibility
F)promotional pricing
G)loss leader
H)cannibalization
I)bundle pricing
J)odd pricing
K)transfer price
L)profit center
M)skimming pricing strategy
N)competitive pricing strategy
O)pricing policy
P)market price
Q)noncumulative quantity discount
R)step out
S)bot
T)cash discount 
A) competitive bidding 
B) penetration pricing strategy 
C) list price 
D) trade discount 
E) price flexibility
F)promotional pricing
G)loss leader
H)cannibalization
I)bundle pricing
J)odd pricing
K)transfer price
L)profit center
M)skimming pricing strategy
N)competitive pricing strategy
O)pricing policy
P)market price
Q)noncumulative quantity discount
R)step out
S)bot
T)cash discount

Question 7

Everyday low pricing strategies are an attempt to remove pricing as a significant part of the marketing mix.

Accepted Answer

A) True 
 B)False

Question 8

How do buyers and sellers handle transportation costs? What are the alternative policies that sellers implement for handling transportation costs in their pricing policies?

Accepted Answer

Buyers and sellers can handle transporta

Question 9

A Swedish telephone maker transfers phones costing $10 to produce to its U.S.subsidiary for a transfer price of $20.The U.S.subsidiary sells the phones to retailers for $25 each and spends $5 per phone in promotion and distribution expense.The U.S.subsidiary:

Accepted Answer

A)  makes $10, on which it pays U.S. taxes. 
B)  makes $15, all of which is taxable in the United States. 
C)  breaks even on the deal because it spends all its revenues. 
D)  makes a total of $25 on the deal because the phones are effectively free. 
A)  makes $10, on which it pays U.S. taxes. 
B)  makes $15, all of which is taxable in the United States. 
C)  breaks even on the deal because it spends all its revenues. 
D)  makes a total of $25 on the deal because the phones are effectively free.

Question 10

Which of the following pricing strategies tries to reduce the emphasis on price as a competitive weapon?

Accepted Answer

A)  Penetration pricing 
B)  Everyday low pricing 
C)  Skimming pricing 
D)  Competitive pricing 
A)  Penetration pricing 
B)  Everyday low pricing 
C)  Skimming pricing 
D)  Competitive pricing

Question 11

Penetration pricing is likely to be utilized when demand for a good or service is highly inelastic.

Accepted Answer

A) True 
 B)False

Question 12

Zone pricing helps sellers compete in distant markets.

Accepted Answer

A) True 
 B)False

Question 13

Tiffany,Rolex,Gucci,and Prada represent exclusivity,meaning their prices are mostly inelastic.

Accepted Answer

A) True 
 B)False

Question 14

A newly opened seafood restaurant advertises various deals on meal packages and special prices on dinner packages to attract customers.This is an example of _____ pricing.

Accepted Answer

A)  leader 
B)  promotional 
C)  competitive 
D)  list 
A)  leader 
B)  promotional 
C)  competitive 
D)  list

Question 15

Buyers of a particular new car model are being offered zero-percent financing.This is an example of a promotional allowance.

Accepted Answer

A) True 
 B)False

Question 16

Setting prices is a one-time decision for most products in most companies.

Accepted Answer

A) True 
 B)False

Question 17

For the purpose of transfer pricing,any part of the organization to which revenue and controllable costs can be assigned,such as a department,is referred to as a:

Accepted Answer

A)  sales department. 
B)  revenue center. 
C)  controllable costs center. 
D)  profit center. 
A)  sales department. 
B)  revenue center. 
C)  controllable costs center. 
D)  profit center.

Question 18

A credit allowance given for a used item when a customer purchases a new item is known as a _____.

Accepted Answer

A)  rebate 
B)  trade-in 
C)  functional discount 
D)  cash discount 
A)  rebate 
B)  trade-in 
C)  functional discount 
D)  cash discount

Question 19

Rebates are usually granted to customers by retailers.

Accepted Answer

A) True 
 B)False

Question 20

Auctions are the most complicated form of negotiated pricing.

Accepted Answer

A) True 
 B)False

Exam 19: Pricing Strategies

_____ pricing occurs when a company offers two or more complementary products and sells them for a single price.

A low price is a sure sell because the demand for many goods is highly elastic.

Discuss the practice of promotional pricing and the role played by loss leaders and leader pricing.

A cosmetics company offers incentives to its retailers for advertising its new shampoo by placing it in a special display unit near the billing counters.This incentive offered by the manufacturer is an example of a _____.

What is leader pricing? What type of retailers use this strategy?

Offering a printer along with a personal computer at a single price is an example of _____.

Everyday low pricing strategies are an attempt to remove pricing as a significant part of the marketing mix.

How do buyers and sellers handle transportation costs? What are the alternative policies that sellers implement for handling transportation costs in their pricing policies?

A Swedish telephone maker transfers phones costing $10 to produce to its U.S.subsidiary for a transfer price of $20.The U.S.subsidiary sells the phones to retailers for $25 each and spends $5 per phone in promotion and distribution expense.The U.S.subsidiary:

Which of the following pricing strategies tries to reduce the emphasis on price as a competitive weapon?

Penetration pricing is likely to be utilized when demand for a good or service is highly inelastic.

Zone pricing helps sellers compete in distant markets.

Tiffany,Rolex,Gucci,and Prada represent exclusivity,meaning their prices are mostly inelastic.

A newly opened seafood restaurant advertises various deals on meal packages and special prices on dinner packages to attract customers.This is an example of _____ pricing.

Buyers of a particular new car model are being offered zero-percent financing.This is an example of a promotional allowance.

Setting prices is a one-time decision for most products in most companies.

For the purpose of transfer pricing,any part of the organization to which revenue and controllable costs can be assigned,such as a department,is referred to as a:

A credit allowance given for a used item when a customer purchases a new item is known as a _____.

Rebates are usually granted to customers by retailers.

Auctions are the most complicated form of negotiated pricing.

Marketing: The Art and Science of Satisfying Customers

Strategic Planning in Contemporary Marketing

The Marketing Environment, Ethics, and Social Responsibility

Social Media: Living in the Connected World

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