Question 1

Bundle pricing refers to

Accepted Answer

A) an extra amount of "free goods" awarded sellers in the channel of distribution for promoting a product. 
B) marketing two or more products in a single package price. 
C) using BOGOs-requiring customers to "buy one to get one free" as a strategy to increase sales and profits. 
D) setting the price of a line of products at two specific pricing points. 
E) the practice of charging two or more prices depending upon the outlet carrying the product. 
A) an extra amount of "free goods" awarded sellers in the channel of distribution for promoting a product. 
B) marketing two or more products in a single package price. 
C) using BOGOs-requiring customers to "buy one to get one free" as a strategy to increase sales and profits. 
D) setting the price of a line of products at two specific pricing points. 
E) the practice of charging two or more prices depending upon the outlet carrying the product.

Question 2

A manufacturer offers a suggested list price for a cashmere sweater of $250. The trade discount is 40/20/10. What amount does the manufacturer expect to receive for the sweater?

Accepted Answer

A) $175.00 
B) $225.00 
C) $108.00 
D) $125.00 
E) $100.00 
A) $175.00 
B) $225.00 
C) $108.00 
D) $125.00 
E) $100.00

Question 3

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

Accepted Answer

A) horizontal price fixing. 
B) resale price maintenance. 
C) price discrimination. 
D) predatory pricing. 
E) bait and switch pricing. 
A) horizontal price fixing. 
B) resale price maintenance. 
C) price discrimination. 
D) predatory pricing. 
E) bait and switch pricing.

Question 4

A company in Virginia that manufactures and sells peanut brittle to retailers charges higher shipping costs for orders sent to customers living west of the Mississippi River. This Virginia company is using

Accepted Answer

A) single-zone pricing. 
B) FOB origin pricing. 
C) freight absorption pricing. 
D) multiple-zone pricing. 
E) basing-point pricing. 
A) single-zone pricing. 
B) FOB origin pricing. 
C) freight absorption pricing. 
D) multiple-zone pricing. 
E) basing-point pricing.

Question 5

The Swedish manufacturer of Asko dishwashers concluded that consumers would be willing to pay approximately $989 for a dishwasher that was quieter than any other dishwasher on the market. Based on this price, Asko determined the margins that would have to be given to wholesalers and retailers to arrive at the $989 retail price. Asko used

Accepted Answer

A) prestige pricing. 
B) price lining. 
C) cost-plus pricing. 
D) target pricing. 
E) customary pricing. 
A) prestige pricing. 
B) price lining. 
C) cost-plus pricing. 
D) target pricing. 
E) customary pricing.

Question 6

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock Hall of Fame often use which pricing strategy?

Accepted Answer

A) cost-plus pricing 
B) experience curve pricing 
C) standard markup pricing 
D) yield management pricing 
E) price lining 
A) cost-plus pricing 
B) experience curve pricing 
C) standard markup pricing 
D) yield management pricing 
E) price lining

Question 7

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

Accepted Answer

A) the pretax price. 
B) the list price. 
C) the manufacturer's suggested retail price (MSRP). 
D) a discount. 
E) a trade-in allowance. 
A) the pretax price. 
B) the list price. 
C) the manufacturer's suggested retail price (MSRP). 
D) a discount. 
E) a trade-in allowance.

Question 8

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 9

A manufacturer using __________ is setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

Accepted Answer

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

Question 10

Yield management pricing is most consistent with services trying to deal with

Accepted Answer

A) perceived risk. 
B) capacity management. 
C) cognitive dissonance. 
D) inelasticity of demand. 
E) new product strategy development. 
A) perceived risk. 
B) capacity management. 
C) cognitive dissonance. 
D) inelasticity of demand. 
E) new product strategy development.

Question 11

Five pricing practices are scrutinized because of potential unethical or illegal actions. They are (1) price fixing, (2) price discrimination, (3) deceptive pricing, (4) predatory pricing, and (5) __________.

Accepted Answer

A) geographical pricing 
B) price discounting 
C) lateral price fixing 
D) delayed payment penalties 
E) price discrimination 
A) geographical pricing 
B) price discounting 
C) lateral price fixing 
D) delayed payment penalties 
E) price discrimination

Question 12

Trade discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

Accepted Answer

A) the marketing activities they are expected to perform in the future. 
B) the frequency of the order. 
C) when orders are placed during the year. 
D) the length of the relationship with the manufacturer. 
E) the size of the order. 
A) the marketing activities they are expected to perform in the future. 
B) the frequency of the order. 
C) when orders are placed during the year. 
D) the length of the relationship with the manufacturer. 
E) the size of the order.

Question 13

A method of pricing where the price the seller quotes includes all transportations costs, and the seller is responsible for any damage that may occur because the seller retains title to the goods until delivered to the buyer, is referred to as

Accepted Answer

A) FOB destination pricing. 
B) FOB origin pricing. 
C) geographical allowance. 
D) uniform delivered pricing. 
E) transportation allowance. 
A) FOB destination pricing. 
B) FOB origin pricing. 
C) geographical allowance. 
D) uniform delivered pricing. 
E) transportation allowance.

Question 14

The two forms of cost-plus pricing are

Accepted Answer

A) cost-plus-fixed-fee pricing and cost-plus-variable-fee pricing. 
B) cost-plus-ROI pricing and cost-minus-ROI pricing. 
C) target return on sales pricing and target return on investment pricing. 
D) cost-plus-percentage-of-cost pricing and cost-plus-fixed-fee pricing. 
E) dynamic pricing and flexible pricing. 
A) cost-plus-fixed-fee pricing and cost-plus-variable-fee pricing. 
B) cost-plus-ROI pricing and cost-minus-ROI pricing. 
C) target return on sales pricing and target return on investment pricing. 
D) cost-plus-percentage-of-cost pricing and cost-plus-fixed-fee pricing. 
E) dynamic pricing and flexible pricing.

Question 15

The prices for all furniture sold at American Furniture Warehouse end in $9.99, such as $599.99, $899.99, etc. American Furniture Warehouse uses

Accepted Answer

A) odd-even pricing. 
B) dynamic pricing. 
C) price lining. 
D) bundle pricing. 
E) product-line pricing. 
A) odd-even pricing. 
B) dynamic pricing. 
C) price lining. 
D) bundle pricing. 
E) product-line pricing.

Question 16

When establishing product-line pricing, the lowest-priced item is typically positioned as

Accepted Answer

A) the youngest product item in the line. 
B) the smallest selling product item in the line. 
C) the lost-cost item in the line in terms of quality and features. 
D) the profit leader for the rest of the product line. 
E) the traffic builder designed to capture the attention of first-time buyers. 
A) the youngest product item in the line. 
B) the smallest selling product item in the line. 
C) the lost-cost item in the line in terms of quality and features. 
D) the profit leader for the rest of the product line. 
E) the traffic builder designed to capture the attention of first-time buyers.

Question 17

With cost-oriented approaches to pricing, a price setter stresses the __________ side of the pricing problem, not the __________ side.

Accepted Answer

A) cost; revenue 
B) cost; demand 
C) cost; profit 
D) cost; supply 
E) cost; service 
A) cost; revenue 
B) cost; demand 
C) cost; profit 
D) cost; supply 
E) cost; service

Question 18

Product-line pricing involves determining (1) the lowest-priced product and price; (2) the highest-priced product and price; and (3) __________.

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 19

Prestige pricing refers to

Accepted Answer

A) charging different prices to different buyers for goods of like grade and quality. 
B) setting a low initial price on a new product to appeal immediately to the mass market odd-even pricing. 
C) setting a market price for a product or product class based on a subjective feel for the competitors' price or market price. 
D) setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it. 
E) setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors. 
A) charging different prices to different buyers for goods of like grade and quality. 
B) setting a low initial price on a new product to appeal immediately to the mass market odd-even pricing. 
C) setting a market price for a product or product class based on a subjective feel for the competitors' price or market price. 
D) setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it. 
E) setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors.

Question 20

According to the textbook, clothing manufacturer Christian Dior and retailer Neiman Marcus use __________ pricing.

Accepted Answer

A) above-market 
B) at-market 
C) below-market 
D) prestige pricing 
E) everyday low pricing 
A) above-market 
B) at-market 
C) below-market 
D) prestige pricing 
E) everyday low pricing

Exam 14: Arriving at the Final Price

Bundle pricing refers to

A manufacturer offers a suggested list price for a cashmere sweater of $250. The trade discount is 40/20/10. What amount does the manufacturer expect to receive for the sweater?

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

A company in Virginia that manufactures and sells peanut brittle to retailers charges higher shipping costs for orders sent to customers living west of the Mississippi River. This Virginia company is using

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock Hall of Fame often use which pricing strategy?

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

A trade-in allowance is

A manufacturer using __________ is setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

Yield management pricing is most consistent with services trying to deal with

Five pricing practices are scrutinized because of potential unethical or illegal actions. They are (1) price fixing, (2) price discrimination, (3) deceptive pricing, (4) predatory pricing, and (5) __________.

Trade discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

A method of pricing where the price the seller quotes includes all transportations costs, and the seller is responsible for any damage that may occur because the seller retains title to the goods until delivered to the buyer, is referred to as

The two forms of cost-plus pricing are

The prices for all furniture sold at American Furniture Warehouse end in $9.99, such as $599.99, $899.99, etc. American Furniture Warehouse uses

When establishing product-line pricing, the lowest-priced item is typically positioned as

With cost-oriented approaches to pricing, a price setter stresses the __________ side of the pricing problem, not the __________ side.

Product-line pricing involves determining (1) the lowest-priced product and price; (2) the highest-priced product and price; and (3) __________.

Prestige pricing refers to

According to the textbook, clothing manufacturer Christian Dior and retailer Neiman Marcus use __________ pricing.

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

Filters

With cost-oriented approaches to pricing, a price setter stresses the side of the pricing problem, not the side.