Question 1

Figure 14-1
-Figure 14-1 above represents the six steps in the price-setting process.Which letter represents the step where a firm would offer allowances?

Accepted Answer

A)  "F" 
B)  "E" 
C)  "D" 
D)  "C" 
E)  "B" 
A)  "F" 
B)  "E" 
C)  "D" 
D)  "C" 
E)  "B"

Question 2

skimming pricing policy is likely to be most effective when: (1)enough customers are willing to buy immediately at the high initial price; (2)lowering the price has only a minor effect on increasing sales volume and reducing unit costs; (3)when the initial high prices do not attract competitors; and (4)__________.

Accepted Answer

A)  consumers perceive your product to be similar to other products on the market 
B)  a lower price will significantly reduce unit costs 
C)  when customers interpret the high price as signifying high quality 
D)  consumers tend to be price sensitive 
E)  it will be easier to set measurable sales unit goals 
A)  consumers perceive your product to be similar to other products on the market 
B)  a lower price will significantly reduce unit costs 
C)  when customers interpret the high price as signifying high quality 
D)  consumers tend to be price sensitive 
E)  it will be easier to set measurable sales unit goals

Question 3

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product is referred to as a

Accepted Answer

A)  skimming strategy. 
B)  penetration strategy. 
C)  price-lining strategy. 
D)  experience-curve pricing strategy. 
E)  prestige pricing strategy. 
A)  skimming strategy. 
B)  penetration strategy. 
C)  price-lining strategy. 
D)  experience-curve pricing strategy. 
E)  prestige pricing strategy.

Question 4

Companies use a "__________" to assess whether its products and brands are above,at,or below the market.

Accepted Answer

A)  customary price 
B)  prestige price 
C)  price premium 
D)  price lining 
E)  benchmark 
A)  customary price 
B)  prestige price 
C)  price premium 
D)  price lining 
E)  benchmark

Question 5

is the critical assumption when using target profit pricing?

Accepted Answer

A)  a higher average price will usually cause the demand to fall 
B)  a higher average price will always cause the demand to fall 
C)  profit is relative to the current value of the dollar so this form of pricing is extremely risky 
D)  a higher average price will not cause the demand to fall 
E)  if the average price is increased, all of a firm's competitors will do the same 
A)  a higher average price will usually cause the demand to fall 
B)  a higher average price will always cause the demand to fall 
C)  profit is relative to the current value of the dollar so this form of pricing is extremely risky 
D)  a higher average price will not cause the demand to fall 
E)  if the average price is increased, all of a firm's competitors will do the same

Question 6

Which of the following statements regarding odd-even pricing is most accurate?

Accepted Answer

A)  Odd-even pricing is designed to give the consumer a better set of pricing alternatives. 
B)  Odd-even pricing can be used in conjunction with a skimming strategy, but should not be used with a penetration strategy. 
C)  Odd-even pricing does not work if the product is healthcare-related. 
D)  Overuse of odd-ending prices tends to mute its effect on demand. 
E)  Odd-ending prices are best used with large ticket items; it loses its effectiveness with moderate- to low-ticket items. 
A)  Odd-even pricing is designed to give the consumer a better set of pricing alternatives. 
B)  Odd-even pricing can be used in conjunction with a skimming strategy, but should not be used with a penetration strategy. 
C)  Odd-even pricing does not work if the product is healthcare-related. 
D)  Overuse of odd-ending prices tends to mute its effect on demand. 
E)  Odd-ending prices are best used with large ticket items; it loses its effectiveness with moderate- to low-ticket items.

Question 7

Which of the following statements about everyday low pricing (EDLP)is most accurate?

Accepted Answer

A)  For supermarkets, EDLP means "everyday low profits!" 
B)  Supermarkets have hailed EDLP as value pricing at its most effective. 
C)  EDLP allows supermarkets to use deeply discounted price specials. 
D)  EDLP can increase average retail prices by as much as 10 percent. 
E)  If retailers pass on their allowances to customers, they cannot make a profit. 
A)  For supermarkets, EDLP means "everyday low profits!" 
B)  Supermarkets have hailed EDLP as value pricing at its most effective. 
C)  EDLP allows supermarkets to use deeply discounted price specials. 
D)  EDLP can increase average retail prices by as much as 10 percent. 
E)  If retailers pass on their allowances to customers, they cannot make a profit.

Question 8

Toro Ad
-Consider the Toro ad above.What type of discount does Toro offer its channel members to carry and sell its riding lawn mowers during the winter months?

Accepted Answer

A)  noncumulative discounts 
B)  cumulative discounts 
C)  functional discounts 
D)  seasonal discounts 
E)  trade discounts 
A)  noncumulative discounts 
B)  cumulative discounts 
C)  functional discounts 
D)  seasonal discounts 
E)  trade discounts

Question 9

Apple iPhone was introduced at an initial price of $600.People waited in line overnight so they could be one of the first to own this unique smartphone.Which pricing strategy did Apple use to help recoup its research and development costs for the smartphone?

Accepted Answer

A)  penetration pricing 
B)  experience curve pricing 
C)  customary pricing 
D)  skimming pricing 
E)  target pricing 
A)  penetration pricing 
B)  experience curve pricing 
C)  customary pricing 
D)  skimming pricing 
E)  target pricing

Question 10

Geographical Pricing Map A
-a firm divides its selling territory into geographic areas,it is referred to as

Accepted Answer

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

Question 11

Everyday low pricing refers to

Accepted Answer

A)  the pricing strategy of "extreme value" stores to maintain high price-quality images for the products they sell. 
B)  the pricing strategy of starting a product at standard list price and then lowering the price by a certain percentage until it is sold. 
C)  short-term price reductions when consumer demand takes a significant and unexpected dip. 
D)  the practice of replacing promotional allowances with lower manufacturer list prices. 
E)  a form of predatory pricing used solely for the purpose of undercutting competitors' prices. 
A)  the pricing strategy of "extreme value" stores to maintain high price-quality images for the products they sell. 
B)  the pricing strategy of starting a product at standard list price and then lowering the price by a certain percentage until it is sold. 
C)  short-term price reductions when consumer demand takes a significant and unexpected dip. 
D)  the practice of replacing promotional allowances with lower manufacturer list prices. 
E)  a form of predatory pricing used solely for the purpose of undercutting competitors' prices.

Question 12

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 13

While the most commonly used pricing method for business products is cost-plus pricing,this method is becoming more and more popular among __________ in the service sector.

Accepted Answer

A)  e-businesses 
B)  business-to-consumer firms 
C)  business-to-government sellers 
D)  nonprofit organizations 
E)  business-to-business marketers 
A)  e-businesses 
B)  business-to-consumer firms 
C)  business-to-government sellers 
D)  nonprofit organizations 
E)  business-to-business marketers

Question 14

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

Accepted Answer

A)  competitive collusion. 
B)  price cooperation. 
C)  horizontal price fixing. 
D)  lateral price fixing. 
E)  vertical price fixing. 
A)  competitive collusion. 
B)  price cooperation. 
C)  horizontal price fixing. 
D)  lateral price fixing. 
E)  vertical price fixing.

Question 15

prices for all furniture sold at American Furniture Warehouse end in $9,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

first Apple iPad was introduced in 2010 at an initial price of $650 for the 16 GB version.People waited in line overnight so they could be one of the first to own this unique tablet device.Which pricing strategy did Apple use to help recoup its research and development costs for the iPad?

Accepted Answer

A)  price lining 
B)  penetration pricing 
C)  customary pricing 
D)  skimming pricing 
E)  target pricing 
A)  price lining 
B)  penetration pricing 
C)  customary pricing 
D)  skimming pricing 
E)  target pricing

Question 17

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

Accepted Answer

A)  Noncumulative quantity discounts encourage large individual purchase orders, not a series of orders. 
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, larger short-term purchases. 
E)  Quantity discounts can basically be used only once with each reseller or the price will increase. 
A)  Noncumulative quantity discounts encourage large individual purchase orders, not a series of orders. 
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, larger short-term purchases. 
E)  Quantity discounts can basically be used only once with each reseller or the price will increase.

Question 18

cruise lines pay the customer's airfare to the point of cruise departure.What type of price adjustment are the cruise lines using?

Accepted Answer

A)  skimming pricing 
B)  promotional pricing 
C)  loss-leader pricing 
D)  prestige pricing 
E)  uniform delivered pricing 
A)  skimming pricing 
B)  promotional pricing 
C)  loss-leader pricing 
D)  prestige pricing 
E)  uniform delivered pricing

Question 19

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 20

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

Accepted Answer

A)  loyalty to the local economy whether it be city, state, or nationally designated. 
B)  changes in price due to tariffs or excise taxes. 
C)  the cost of transportation of the products from seller to buyer. 
D)  the differentiated aspect of the particular product or service. 
E)  simplicity in pricing structures. 
A)  loyalty to the local economy whether it be city, state, or nationally designated. 
B)  changes in price due to tariffs or excise taxes. 
C)  the cost of transportation of the products from seller to buyer. 
D)  the differentiated aspect of the particular product or service. 
E)  simplicity in pricing structures.

Exam 14: Arriving at the Final Price

Figure 14-1 -Figure 14-1 above represents the six steps in the price-setting process.Which letter represents the step where a firm would offer allowances?

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product is referred to as a

Companies use a "__________" to assess whether its products and brands are above,at,or below the market.

is the critical assumption when using target profit pricing?

Which of the following statements regarding odd-even pricing is most accurate?

Which of the following statements about everyday low pricing (EDLP)is most accurate?

Toro Ad -Consider the Toro ad above.What type of discount does Toro offer its channel members to carry and sell its riding lawn mowers during the winter months?

Apple iPhone was introduced at an initial price of $600.People waited in line overnight so they could be one of the first to own this unique smartphone.Which pricing strategy did Apple use to help recoup its research and development costs for the smartphone?

Geographical Pricing Map A -a firm divides its selling territory into geographic areas,it is referred to as

Everyday low pricing refers to

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

While the most commonly used pricing method for business products is cost-plus pricing,this method is becoming more and more popular among __________ in the service sector.

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

prices for all furniture sold at American Furniture Warehouse end in $9,such as $599.99,$899.99,etc.American Furniture Warehouse uses

first Apple iPad was introduced in 2010 at an initial price of $650 for the 16 GB version.People waited in line overnight so they could be one of the first to own this unique tablet device.Which pricing strategy did Apple use to help recoup its research and development costs for the iPad?

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

cruise lines pay the customer's airfare to the point of cruise departure.What type of price adjustment are the cruise lines using?

Resale price maintenance was declared illegal in 1975 under the

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

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 Multi-Channel Marketing

Pulling It All Together: The Strategic Marketing Process

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