Question 1

In the absence of other cues,price is an important indicator of a product's quality to prospective purchasers.

Accepted Answer

A) True 
 B)False

Question 2

Negotiated pricing policies seek to eliminate the economic waste that would result from obtaining and processing bids for relatively minor purchases.

Accepted Answer

A) True 
 B)False

Question 3

A skimming pricing strategy is commonly used as a market entry price for distinctive goods and services with high initial competition.

Accepted Answer

A) True 
 B)False

Question 4

A private-label product priced below the lower limit can be regarded as too cheap by potential customers.

Accepted Answer

A) True 
 B)False

Question 5

A price quotation system that allows the buyer to deduct shipping expenses from the cost of purchases is known as _____ pricing.

Accepted Answer

A)  uniform-delivered 
B)  basing-point 
C)  freight absorption 
D)  FOB plant 
A)  uniform-delivered 
B)  basing-point 
C)  freight absorption 
D)  FOB plant

Question 6

Firms with high fixed costs often expand their markets,quoting the same prices to all customers regardless of shipping expenses,under the plan called:

Accepted Answer

A)  zone pricing. 
B)  freight absorption pricing. 
C)  uniform-delivered pricing. 
D)  the basing-point system. 
A)  zone pricing. 
B)  freight absorption pricing. 
C)  uniform-delivered pricing. 
D)  the basing-point system.

Question 7

A major problem facing company decision makers when setting transfer prices is:

Accepted Answer

A)  how to determine the product-service attributes of the transfer. 
B)  when to complete the transfer. 
C)  how to assign the controllable costs to the profit centers. 
D)  what price to actually charge the receiving profit center. 
A)  how to determine the product-service attributes of the transfer. 
B)  when to complete the transfer. 
C)  how to assign the controllable costs to the profit centers. 
D)  what price to actually charge the receiving profit center.

Question 8

Which of the following statements best describes allowances?

Accepted Answer

A)  Allowances are used in conjunction with quantity and cash discounts. 
B)  Allowances are the same as transfer prices. 
C)  Allowances are offered only to marketing channel members in order to increase sales. 
D)  Allowances result in reduction of the list price quoted on a product. 
A)  Allowances are used in conjunction with quantity and cash discounts. 
B)  Allowances are the same as transfer prices. 
C)  Allowances are offered only to marketing channel members in order to increase sales. 
D)  Allowances result in reduction of the list price quoted on a product.

Question 9

Exporters often set standard worldwide prices,regardless of their target markets.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a disadvantage associated with product-line pricing?

Accepted Answer

A)  It does not provide flexibility for making price changes on individual items. 
B)  It results in consumers having difficulty in making purchase decisions. 
C)  It is ineffective in differentiating between products. 
D)  It does not allow shoppers to choose desired price ranges. 
A)  It does not provide flexibility for making price changes on individual items. 
B)  It results in consumers having difficulty in making purchase decisions. 
C)  It is ineffective in differentiating between products. 
D)  It does not allow shoppers to choose desired price ranges.

Question 11

The process by which buyers ask a number of potential suppliers to submit price quotes on a proposed purchase or contract,of which the lowest will be accepted,is called:

Accepted Answer

A)  specification. 
B)  competitive bidding. 
C)  noncompetitive bidding. 
D)  competitive pricing. 
A)  specification. 
B)  competitive bidding. 
C)  noncompetitive bidding. 
D)  competitive pricing.

Question 12

The government monitors transfer pricing closely because it is an easy way for companies to avoid taxes on profits.

Accepted Answer

A) True 
 B)False

Question 13

A product offered to consumers at less than cost to attract them to stores in the hope that they will buy other merchandise at regular prices is called a(n)_____.

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 14

A negative cash discount is used by a seller to:

Accepted Answer

A)  reduce prices on a one-time-only basis. 
B)  improve its liquidity position and cut collection expenses. 
C)  return the costs incurred by channel members in performing marketing functions. 
D)  reduce prices in an attempt to integrate promotional strategies within distribution channels. 
A)  reduce prices on a one-time-only basis. 
B)  improve its liquidity position and cut collection expenses. 
C)  return the costs incurred by channel members in performing marketing functions. 
D)  reduce prices in an attempt to integrate promotional strategies within distribution channels.

Question 15

Burlan Paints,manufacturer of paints for both interiors and exteriors,prices its products differently in different international markets to suit the requirements of the local customers.Burlan Paints is implementing the _____ pricing strategy for pricing products.

Accepted Answer

A)  dual 
B)  standard 
C)  zone 
D)  market-differentiated 
A)  dual 
B)  standard 
C)  zone 
D)  market-differentiated

Question 16

A(n)_____ is a price reduction offered to a consumer or a business buyer in return for prompt payment of a bill.

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 17

Perfect Digitals offers a UV lens and a sun protection cover for the camera lens for a wide range of its digital cameras,all at a single price.This strategy used by the company is referred to as:

Accepted Answer

A)  unit pricing. 
B)  price flexibility policy. 
C)  bundle pricing. 
D)  competitive pricing. 
A)  unit pricing. 
B)  price flexibility policy. 
C)  bundle pricing. 
D)  competitive pricing.

Question 18

The price normally quoted to potential buyers is called _____.

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 19

Large companies set up profit centers as a control device in their newly decentralized operation.

Accepted Answer

A) True 
 B)False

Question 20

The price reduction granted on a one-time-only basis is called a(n)_____.

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

Exam 19: Pricing Strategies

In the absence of other cues,price is an important indicator of a product's quality to prospective purchasers.

Negotiated pricing policies seek to eliminate the economic waste that would result from obtaining and processing bids for relatively minor purchases.

A skimming pricing strategy is commonly used as a market entry price for distinctive goods and services with high initial competition.

A private-label product priced below the lower limit can be regarded as too cheap by potential customers.

A price quotation system that allows the buyer to deduct shipping expenses from the cost of purchases is known as _____ pricing.

Firms with high fixed costs often expand their markets,quoting the same prices to all customers regardless of shipping expenses,under the plan called:

A major problem facing company decision makers when setting transfer prices is:

Which of the following statements best describes allowances?

Exporters often set standard worldwide prices,regardless of their target markets.

Which of the following is a disadvantage associated with product-line pricing?

The process by which buyers ask a number of potential suppliers to submit price quotes on a proposed purchase or contract,of which the lowest will be accepted,is called:

The government monitors transfer pricing closely because it is an easy way for companies to avoid taxes on profits.

A product offered to consumers at less than cost to attract them to stores in the hope that they will buy other merchandise at regular prices is called a(n)_____.

A negative cash discount is used by a seller to:

Burlan Paints,manufacturer of paints for both interiors and exteriors,prices its products differently in different international markets to suit the requirements of the local customers.Burlan Paints is implementing the _____ pricing strategy for pricing products.

A(n)_____ is a price reduction offered to a consumer or a business buyer in return for prompt payment of a bill.

Perfect Digitals offers a UV lens and a sun protection cover for the camera lens for a wide range of its digital cameras,all at a single price.This strategy used by the company is referred to as:

The price normally quoted to potential buyers is called _____.

Large companies set up profit centers as a control device in their newly decentralized operation.

The price reduction granted on a one-time-only basis is called a(n)_____.

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

E-Business: Managing the Customer Experience

Consumer Behavior

Business-to-Business (B2B)Marketing

Global Marketing

Market Segmentation, Targeting, and Positioning

Marketing Research and Sales Forecasting

Relationship Marketing and Customer Relationship Management (CRM)

Product and Service Strategies

Developing and Managing Brand and Product Categories

Marketing Channels and Supply Chain Management

Retailers, Wholesalers, and Direct Marketers

Integrated Marketing Communications, Advertising, and Public Relations

Personal Selling and Sales Promotion

Pricing Concepts

Your Career in Marketing

Developing an Effective Marketing Plan

Financial Analysis in Marketing

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