Question 1

Charging different prices to maximize revenue for a set amount of capacity at any given time is referred to as

Accepted Answer

A) demand backward pricing. 
B) target pricing. 
C) skimming pricing. 
D) yield management pricing. 
E) penetration pricing. 
A) demand backward pricing. 
B) target pricing. 
C) skimming pricing. 
D) yield management pricing. 
E) penetration pricing.

Question 2

Rather than emphasize demand, cost, or profit factors, a price setter can stress what __________ doing.

Accepted Answer

A) the service sector is 
B) competitors are 
C) the global economy is 
D) suppliers are 
E) the financial markets are 
A) the service sector is 
B) competitors are 
C) the global economy is 
D) suppliers are 
E) the financial markets are

Question 3

The price for Nintendo's Wii video game console was likely insufficient to cover its fixed and variable costs. However, the price of its video games was set high enough to cover its video game console's loss and deliver a handsome profit for all Nintendo products. This example illustrates Nintendo's use of

Accepted Answer

A) bundle pricing. 
B) product-line pricing. 
C) price lining. 
D) customary pricing. 
E) loss-leader pricing. 
A) bundle pricing. 
B) product-line pricing. 
C) price lining. 
D) customary pricing. 
E) loss-leader pricing.

Question 4

The Brazilian government wants to build a global positioning satellite (GPS) system. The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

Accepted Answer

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

Question 5

Resale price maintenance was declared illegal in 1975 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 6

The assumption that demand is elastic at a number of price points but is inelastic between these price points leads to which pricing approach?

Accepted Answer

A) product-line pricing 
B) skimming pricing 
C) penetration pricing 
D) price lining 
E) odd-even pricing 
A) product-line pricing 
B) skimming pricing 
C) penetration pricing 
D) price lining 
E) odd-even pricing

Question 7

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 8

The most commonly used pricing method for business products is

Accepted Answer

A) target return on investment. 
B) customary. 
C) standard markup. 
D) target profit. 
E) cost-plus pricing. 
A) target return on investment. 
B) customary. 
C) standard markup. 
D) target profit. 
E) cost-plus pricing.

Question 9

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

Accepted Answer

A) cost-plus pricing 
B) skimming pricing 
C) prestige pricing 
D) loss-leader pricing 
E) bundle pricing 
A) cost-plus pricing 
B) skimming pricing 
C) prestige pricing 
D) loss-leader pricing 
E) bundle pricing

Question 10

The word Free in relation to the acronym FOB signals the point or location where the seller is

Accepted Answer

A) free of responsibility for customer invoicing. 
B) free of product liability. 
C) free to choose method of transportation. 
D) free to choose the point of loading. 
E) free to choose the method of payment. 
A) free of responsibility for customer invoicing. 
B) free of product liability. 
C) free to choose method of transportation. 
D) free to choose the point of loading. 
E) free to choose the method of payment.

Question 11

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 12

Which of the following statements about geographical pricing is most accurate?

Accepted Answer

A) Geographical pricing is generally legal and not normally a concern in the U.S. legal system. 
B) Geographical pricing has come under more government scrutiny than any other pricing policy. 
C) FOB freight-allowed pricing practices are illegal. 
D) FOB origin pricing is legal. 
E) Basing-point pricing is the only form of geographical pricing that is not under some type of legal restriction. 
A) Geographical pricing is generally legal and not normally a concern in the U.S. legal system. 
B) Geographical pricing has come under more government scrutiny than any other pricing policy. 
C) FOB freight-allowed pricing practices are illegal. 
D) FOB origin pricing is legal. 
E) Basing-point pricing is the only form of geographical pricing that is not under some type of legal restriction.

Question 13

Product-line pricing refers to

Accepted Answer

A) setting the price of a line of products at a number of different specific pricing points. 
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) adding a fixed percentage to the cost of all items in a specific product class. 
D) setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item. 
E) the marketing of two or more products in a single package. 
A) setting the price of a line of products at a number of different specific pricing points. 
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) adding a fixed percentage to the cost of all items in a specific product class. 
D) setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item. 
E) the marketing of two or more products in a single package.

Question 14

The Robinson-Patman Act covers promotional allowances as well as discounts. To legally offer promotional allowances to buyers, the seller must do so on __________ basis to all buyers distributing the seller's products.

Accepted Answer

A) a proportionally equal 
B) a limited 
C) a disproportionally equal 
D) a geographical 
E) an across-the-board 
A) a proportionally equal 
B) a limited 
C) a disproportionally equal 
D) a geographical 
E) an across-the-board

Question 15

All of the following statements about standard markup pricing are true except

Accepted Answer

A) high-volume products usually have smaller markups than do low-volume products. 
B) the percentage markup depends on the type of retail store and the product involved. 
C) markups must cover all expenses of the store, pay for overhead costs, and contribute something to profits. 
D) summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price. 
E) supermarket managers have such a large number of products that estimating the demand for each product as a means of setting price is impossible. 
A) high-volume products usually have smaller markups than do low-volume products. 
B) the percentage markup depends on the type of retail store and the product involved. 
C) markups must cover all expenses of the store, pay for overhead costs, and contribute something to profits. 
D) summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price. 
E) supermarket managers have such a large number of products that estimating the demand for each product as a means of setting price is impossible.

Question 16

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as

Accepted Answer

A) target return-on-investment pricing. 
B) target return-on-sales pricing. 
C) loss-leader pricing. 
D) target pricing. 
E) standard markup pricing. 
A) target return-on-investment pricing. 
B) target return-on-sales pricing. 
C) loss-leader pricing. 
D) target pricing. 
E) standard markup pricing.

Question 17

Hallmark was the official supplier of flowers at the last Winter Olympics. Hallmark presented each Olympic winner with a special bouquet of roses designed to resemble the Olympic torch. Consumers were able to buy a smaller version of this same bouquet at the Hallmark website for $74.95. The Olympic bouquet that consumers could buy contained two dozen yellow roses, yet you could buy the same two dozen yellow roses for less than $35 at most supermarkets. If Hallmark is treating the Olympic bouquet as an innovative product, then it is using which demand-oriented pricing approach?

Accepted Answer

A) bundle pricing 
B) yield management pricing 
C) skimming pricing 
D) target return-on-sales pricing 
E) penetration pricing 
A) bundle pricing 
B) yield management pricing 
C) skimming pricing 
D) target return-on-sales pricing 
E) penetration pricing

Question 18

All of the following are profit-oriented approaches to select an approximate price level except

Accepted Answer

A) target ROI pricing. 
B) target profit pricing. 
C) target return-on-sales pricing. 
D) target return-on-investment pricing. 
E) cost-plus-percentage-of-cost pricing. 
A) target ROI pricing. 
B) target profit pricing. 
C) target return-on-sales pricing. 
D) target return-on-investment pricing. 
E) cost-plus-percentage-of-cost pricing.

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

A penetration pricing policy is most likely to be effective when (1) many segments of the market are price-sensitive; (2) a low initial price discourages competitors from entering the market; and (3) _________.

Accepted Answer

A) unit production and marketing costs fall dramatically as production volumes increase 
B) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable 
C) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost 
D) the high initial price will not attract competitors 
E) customers interpret the high price as signifying high quality 
A) unit production and marketing costs fall dramatically as production volumes increase 
B) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable 
C) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost 
D) the high initial price will not attract competitors 
E) customers interpret the high price as signifying high quality

Exam 14: Arriving at the Final Price

Charging different prices to maximize revenue for a set amount of capacity at any given time is referred to as

Rather than emphasize demand, cost, or profit factors, a price setter can stress what __________ doing.

The Brazilian government wants to build a global positioning satellite (GPS) system. The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

Resale price maintenance was declared illegal in 1975 under the

The assumption that demand is elastic at a number of price points but is inelastic between these price points leads to which pricing approach?

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

The most commonly used pricing method for business products is

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

The word Free in relation to the acronym FOB signals the point or location where the seller is

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

Which of the following statements about geographical pricing is most accurate?

Product-line pricing refers to

The Robinson-Patman Act covers promotional allowances as well as discounts. To legally offer promotional allowances to buyers, the seller must do so on __________ basis to all buyers distributing the seller's products.

All of the following statements about standard markup pricing are true except

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as

All of the following are profit-oriented approaches to select an approximate price level except

The acronym FOB stands for

A penetration pricing policy is most likely to be effective when (1) many segments of the market are price-sensitive; (2) a low initial price discourages competitors from entering the market; and (3) _________.

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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