Question 1

Which of the following is a form of dynamic pricing?

Accepted Answer

A) odd-even pricing 
B) yield management pricing 
C) above-, at-, and below-market pricing 
D) target pricing 
E) cost-plus pricing 
A) odd-even pricing 
B) yield management pricing 
C) above-, at-, and below-market pricing 
D) target pricing 
E) cost-plus pricing

Question 2

Why do manufacturers offer seasonal discounts to channel members? Provide an example of how one would work.

Accepted Answer

To encourage buyers to stock inventory e

Question 3

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

Accepted Answer

A) warehouse inventory carrying and loading costs. 
B) the cost of transportation of the products from seller to buyer. 
C) changes in price due to tariffs the Federal Trade Commission imposes on the transport of goods from the United States. 
D) changes in price due to fuel excise taxes on inefficient diesel trucks. 
E) the need some firms have of recouping the costs of developing different versions of their products for different global markets. 
A) warehouse inventory carrying and loading costs. 
B) the cost of transportation of the products from seller to buyer. 
C) changes in price due to tariffs the Federal Trade Commission imposes on the transport of goods from the United States. 
D) changes in price due to fuel excise taxes on inefficient diesel trucks. 
E) the need some firms have of recouping the costs of developing different versions of their products for different global markets.

Question 4

A penetration pricing policy is most likely to be effective when (1) many segments of the market are price-sensitive; (2) __________; and (3) unit production and marketing costs fall dramatically as production volumes increase.

Accepted Answer

A) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost 
B) the high initial price will not attract competitors 
C) customers interpret the high price as signifying high quality 
D) a low initial price discourages competitors from entering the market 
E) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable 
A) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost 
B) the high initial price will not attract competitors 
C) customers interpret the high price as signifying high quality 
D) a low initial price discourages competitors from entering the market 
E) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable

Question 5

Which of the following statements about geographical adjustments to price is most accurate?

Accepted Answer

A) In FOB origin pricing, the seller selects the mode of transportation. 
B) In FOB with freight-allowed pricing, the seller must pay for all transportation costs. 
C) Multiple-zone pricing is sometimes referred to as "spider web" pricing. 
D) Basing-point pricing methods have been used in industries where freight expenses are a significant part of the total cost to the buyer. 
E) Geographical adjustments can be subject to government regulation if the firm cannot supply objective data (lists of mountains, rivers, weather conditions, etc.) explaining why those adjustments need to be made. 
A) In FOB origin pricing, the seller selects the mode of transportation. 
B) In FOB with freight-allowed pricing, the seller must pay for all transportation costs. 
C) Multiple-zone pricing is sometimes referred to as "spider web" pricing. 
D) Basing-point pricing methods have been used in industries where freight expenses are a significant part of the total cost to the buyer. 
E) Geographical adjustments can be subject to government regulation if the firm cannot supply objective data (lists of mountains, rivers, weather conditions, etc.) explaining why those adjustments need to be made.

Question 6

Price fixing refers to

Accepted Answer

A) an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor. 
B) the practice of charging a very low price for a product with the intent of driving competitors out of business. 
C) the practice of charging different prices to different buyers for goods of like grade and quality. 
D) a conspiracy among firms to set prices for a product. 
E) a seller's requirement that the purchaser of one product also buy another product in the line. 
A) an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor. 
B) the practice of charging a very low price for a product with the intent of driving competitors out of business. 
C) the practice of charging different prices to different buyers for goods of like grade and quality. 
D) a conspiracy among firms to set prices for a product. 
E) a seller's requirement that the purchaser of one product also buy another product in the line.

Question 7

Two of the three types of adjustments to list or quoted price are

Accepted Answer

A) profit-oriented and marginal adjustments. 
B) fixed-price and dynamic price adjustments. 
C) discounts and marginal adjustments. 
D) discounts and allowances. 
E) incremental costs and incremental revenues. 
A) profit-oriented and marginal adjustments. 
B) fixed-price and dynamic price adjustments. 
C) discounts and marginal adjustments. 
D) discounts and allowances. 
E) incremental costs and incremental revenues.

Question 8

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 9

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.

Question 10

Which of the following is a profit-oriented pricing method?

Accepted Answer

A) target return-on-sales pricing 
B) loss-leader pricing 
C) above-, at-, or below-market pricing 
D) price lining 
E) penetration pricing 
A) target return-on-sales pricing 
B) loss-leader pricing 
C) above-, at-, or below-market pricing 
D) price lining 
E) penetration pricing

Question 11

Which of the following statements about geographical adjustments to price is most accurate?

Accepted Answer

A) In FOB origin pricing, the seller selects the mode of transportation. 
B) In FOB with freight-allowed pricing, the buyer subtracts the transportation costs from the list price. 
C) Multiple-zone pricing is sometimes referred to as "spider web" pricing. 
D) Basing-point pricing seems to have been used in industries where freight expenses are only a minor part of the total cost to the buyer. 
E) Geographical adjustments can be subject to government regulation if the firm cannot supply objective data (lists of mountains, rivers, weather conditions, etc.) explaining why those adjustments need to be made. 
A) In FOB origin pricing, the seller selects the mode of transportation. 
B) In FOB with freight-allowed pricing, the buyer subtracts the transportation costs from the list price. 
C) Multiple-zone pricing is sometimes referred to as "spider web" pricing. 
D) Basing-point pricing seems to have been used in industries where freight expenses are only a minor part of the total cost to the buyer. 
E) Geographical adjustments can be subject to government regulation if the firm cannot supply objective data (lists of mountains, rivers, weather conditions, etc.) explaining why those adjustments need to be made.

Question 12

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Accepted Answer

A) using price differentials when price differences are given on the basis of other family businesses 
B) using price differentials when charging different prices to different buyers for goods of like grade or quality 
C) using price differentials when charging different prices on the basis of religious affiliation 
D) using price differentials when charging the original price for refurbished goods that have been damaged or used and returned but repaired according to company specifications 
E) using price differentials when price differences result from changing market conditions, avoiding obsolescence of seasonal merchandise, including perishables, or closing out sales 
A) using price differentials when price differences are given on the basis of other family businesses 
B) using price differentials when charging different prices to different buyers for goods of like grade or quality 
C) using price differentials when charging different prices on the basis of religious affiliation 
D) using price differentials when charging the original price for refurbished goods that have been damaged or used and returned but repaired according to company specifications 
E) using price differentials when price differences result from changing market conditions, avoiding obsolescence of seasonal merchandise, including perishables, or closing out sales

Question 13

A skimming pricing policy is likely to be most effective when

Accepted Answer

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

Question 14

Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. More specifically, a price premium is the percentage by which the actual price charged for a specific brand exceeds or falls short of a benchmark established for a similar product or basket of products. This price premium equals

Accepted Answer

A) unit volume market share for a brand divided by dollar sales market share for a brand, minus one. 
B) dollar sales market share for a brand divided by unit volume market share for a brand, plus one. 
C) dollar sales market share for a brand divided by unit volume market share for a brand, minus one. 
D) dollar sales market share for a brand, divided by unit volume market share for a brand, plus one. 
E) dollar sales market share for a brand, divided by unit volume market share for a brand, minus the number of competitors against which a brand is being measured. 
A) unit volume market share for a brand divided by dollar sales market share for a brand, minus one. 
B) dollar sales market share for a brand divided by unit volume market share for a brand, plus one. 
C) dollar sales market share for a brand divided by unit volume market share for a brand, minus one. 
D) dollar sales market share for a brand, divided by unit volume market share for a brand, plus one. 
E) dollar sales market share for a brand, divided by unit volume market share for a brand, minus the number of competitors against which a brand is being measured.

Question 15

Which of the following type of business is most likely to use cost-plus-percentage-of-cost pricing?

Accepted Answer

A) real estate agency 
B) insurance company 
C) power company 
D) space shuttle contractor 
E) architect 
A) real estate agency 
B) insurance company 
C) power company 
D) space shuttle contractor 
E) architect

Question 16

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

Accepted Answer

A) skimming pricing 
B) target pricing 
C) loss-leader pricing 
D) target profit pricing 
E) standard markup pricing 
A) skimming pricing 
B) target pricing 
C) loss-leader pricing 
D) target profit pricing 
E) standard markup pricing

Question 17

Which of the following pricing techniques results in the manufacturers deliberately adjusting the composition and features of a product to achieve the desired price for consumers?

Accepted Answer

A) cost-plus percentage-of-cost pricing 
B) standard markup pricing 
C) cost-plus fixed-fee pricing 
D) experience curve pricing 
E) target pricing 
A) cost-plus percentage-of-cost pricing 
B) standard markup pricing 
C) cost-plus fixed-fee pricing 
D) experience curve pricing 
E) target pricing

Question 18

Price fixing is illegal under the

Accepted Answer

A) Sherman Act. 
B) Consumer Goods Pricing Act. 
C) Robinson-Patman Act. 
D) Federal Trade Commission Act. 
E) Clayton Act. 
A) Sherman Act. 
B) Consumer Goods Pricing Act. 
C) Robinson-Patman Act. 
D) Federal Trade Commission Act. 
E) Clayton Act.

Question 19

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 percent 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 percent lower than nationally branded competitive products.

Question 20

A price reduction given when a used product is part of the payment on a new product is referred to as a

Accepted Answer

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

Exam 14: Arriving at the Final Price

Which of the following is a form of dynamic pricing?

Why do manufacturers offer seasonal discounts to channel members? Provide an example of how one would work.

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

A penetration pricing policy is most likely to be effective when (1) many segments of the market are price-sensitive; (2) __________; and (3) unit production and marketing costs fall dramatically as production volumes increase.

Which of the following statements about geographical adjustments to price is most accurate?

Price fixing refers to

Two of the three types of adjustments to list or quoted price are

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

Amazon wanted lower retail prices for e-books to

Which of the following is a profit-oriented pricing method?

Which of the following statements about geographical adjustments to price is most accurate?

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

A skimming pricing policy is likely to be most effective when

Which of the following type of business is most likely to use cost-plus-percentage-of-cost pricing?

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

Which of the following pricing techniques results in the manufacturers deliberately adjusting the composition and features of a product to achieve the desired price for consumers?

Price fixing is illegal under the

Loss-leader pricing refers to

A price reduction given when a used product is part of the payment on a new product is referred to as a

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

Financial Aspects of Marketing

Building an Effective Marketing Plan

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