Question 1

Predatory pricing refers to

Accepted Answer

A)  the practice of charging a very low price for a product with the intent of driving competitors out of business. 
B)  a conspiracy among firms to set prices for a product. 
C)  using price differentials when charging different prices on the basis of race, religion, or ethnic 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)  controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. 
A)  the practice of charging a very low price for a product with the intent of driving competitors out of business. 
B)  a conspiracy among firms to set prices for a product. 
C)  using price differentials when charging different prices on the basis of race, religion, or ethnic 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)  controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price.

Question 2

penetration pricing policy is MOST LIKELY to be effective when

Accepted Answer

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

Question 3

Dell sells various laptops,it also pre-installs Microsoft Office and other software customers order at a discount before a laptop is shipped.This is an example of

Accepted Answer

A)  price lining. 
B)  product line pricing. 
C)  bundle pricing. 
D)  customary pricing. 
E)  prestige pricing. 
A)  price lining. 
B)  product line pricing. 
C)  bundle pricing. 
D)  customary pricing. 
E)  prestige pricing.

Question 4

encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use

Accepted Answer

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

Question 5

Which of the following pricing techniques is most sensitive to customers' responses to price?

Accepted Answer

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

Question 6

discount that is based on the size of an individual purchase order rather than a series of repeat orders is referred to as a(n)

Accepted Answer

A)  cumulative quantity discount. 
B)  bundle pricing. 
C)  economic order discount. 
D)  noncumulative quantity discount. 
E)  promotional allowance. 
A)  cumulative quantity discount. 
B)  bundle pricing. 
C)  economic order discount. 
D)  noncumulative quantity discount. 
E)  promotional allowance.

Question 7

Swedish manufacturer of Asko dishwashers concluded that consumers would be willing to pay approximately $989 for a dishwasher that was quieter than any other machine 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 8

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 assess company,customer,and competitive effects on price?

Accepted Answer

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

Question 9

Price discrimination is illegal under the

Accepted Answer

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

Question 10

are discounts? List the four kinds that are especially important in marketing pricing strategy.

Accepted Answer

Discounts are reductions from list price

Question 11

Vertical price fixing refers to

Accepted Answer

A)  two or more competitors explicitly or implicitly setting prices. 
B)  the practice of charging different prices to different buyers for goods of like grade and quality. 
C)  controlling agreements between independent buyers and sellers whereby sellers are required not to sell products below a minimum retail price. 
D)  a conspiracy among firms to set prices for a product or service. 
E)  a seller's requirement that the purchaser of one product also buy another product in the line. 
A)  two or more competitors explicitly or implicitly setting prices. 
B)  the practice of charging different prices to different buyers for goods of like grade and quality. 
C)  controlling agreements between independent buyers and sellers whereby sellers are required not to sell products below a minimum retail price. 
D)  a conspiracy among firms to set prices for a product or service. 
E)  a seller's requirement that the purchaser of one product also buy another product in the line.

Question 12

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 make geographical adjustments?

Accepted Answer

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

Question 13

Discounts refer to reductions from the __________ that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller.

Accepted Answer

A)  final price 
B)  list price 
C)  manufacturer's suggested retail price 
D)  manufacturer's cost 
E)  retailer's cost 
A)  final price 
B)  list price 
C)  manufacturer's suggested retail price 
D)  manufacturer's cost 
E)  retailer's cost

Question 14

do 60 percent of prospective buyers dread about looking for a new car?

Accepted Answer

A)  selecting the preferred brand 
B)  negotiating the price 
C)  taking a test drive 
D)  experiencing postpurchase dissonance 
E)  searching for cars on the Internet 
A)  selecting the preferred brand 
B)  negotiating the price 
C)  taking a test drive 
D)  experiencing postpurchase dissonance 
E)  searching for cars on the Internet

Question 15

practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Accepted Answer

A)  everyday low pricing. 
B)  everyday fair pricing. 
C)  trade-in allowances. 
D)  markdown pricing. 
E)  everyday value pricing. 
A)  everyday low pricing. 
B)  everyday fair pricing. 
C)  trade-in allowances. 
D)  markdown pricing. 
E)  everyday value pricing.

Question 16

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

Accepted Answer

A)  skimming pricing 
B)  prestige pricing 
C)  loss-leader pricing 
D)  experience curve pricing 
E)  bundle pricing 
A)  skimming pricing 
B)  prestige pricing 
C)  loss-leader pricing 
D)  experience curve pricing 
E)  bundle pricing

Question 17

Figure 14-A
-Frito-Lay is considering whether to buy the Cracker Jack brand of caramel popcorn from Borden,Inc.Frito-Lay research shows that Cracker Jack has a strong brand equity.But Cracker Jack's dollar sales market share and pound (a surrogate for unit)volume market share have declined recently and trailed the Crunch 'n Munch brand as shown in the Figure 14-A marketing dashboard above.Borden's management used an above-market,premium pricing strategy for Cracker Jack.As a Frito-Lay marketer studying Cracker Jack,calculate Cracker Jack's price premium.What position in Figure 14-A above represents the price premium of Cracker Jack?

Accepted Answer

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

Question 18

Target profit pricing refers to

Accepted Answer

A)  adjusting the price of a product so it is "in line" with that of its largest competitor. 
B)  setting an annual target of a specific dollar volume of profit. 
C)  setting the price of a line of products at a number of different price points. 
D)  adding a fixed percentage to the cost of all items in a specific product class. 
E)  setting prices to achieve a profit that is a specified percentage of production costs. 
A)  adjusting the price of a product so it is "in line" with that of its largest competitor. 
B)  setting an annual target of a specific dollar volume of profit. 
C)  setting the price of a line of products at a number of different price points. 
D)  adding a fixed percentage to the cost of all items in a specific product class. 
E)  setting prices to achieve a profit that is a specified percentage of production costs.

Question 19

Crunch 'n Munch price premium = [(32% ÷ 32%) - 1] = 0%, which is displayed at position "D."
Cracker Jack price premium = [(26% ÷ 19%) - 1] = 36.8%, which is displayed at position "E."
Fiddle Faddle price premium = [(7% ÷ 8%) - 1] = -12.5%, which is displayed at position "B."
Private Brands price premium = [(4% ÷ 8%) - 1] = -50.0%, which is displayed at position "A."
S, S, R brands price premium = [(31% ÷ 33%) - 1] = -6.1%, which is displayed at position "C."
Positions "A," "B," and "C" fall short of the benchmark established by Crunch 'n Munch ("D") while Cracker Jack ("E") shows a price premium relative to Crunch 'n Munch.
-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

profit-oriented approaches to pricing,a price setter may choose to balance both _________ and _________ to set price.

Accepted Answer

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

Predatory pricing refers to

penetration pricing policy is MOST LIKELY to be effective when

Dell sells various laptops,it also pre-installs Microsoft Office and other software customers order at a discount before a laptop is shipped.This is an example of

encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use

Which of the following pricing techniques is most sensitive to customers' responses to price?

discount that is based on the size of an individual purchase order rather than a series of repeat orders is referred to as a(n)

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 assess company,customer,and competitive effects on price?

Price discrimination is illegal under the

are discounts? List the four kinds that are especially important in marketing pricing strategy.

Vertical price fixing refers to

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 make geographical adjustments?

Discounts refer to reductions from the __________ that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller.

do 60 percent of prospective buyers dread about looking for a new car?

practice of replacing promotional allowances with lower manufacturer list prices is referred to as

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

Target profit pricing refers to

profit-oriented approaches to pricing,a price setter may choose to balance both _ and _ to set price.

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

Filters

Exam 14: Arriving at the Final Price

Predatory pricing refers to

penetration pricing policy is MOST LIKELY to be effective when

Dell sells various laptops,it also pre-installs Microsoft Office and other software customers order at a discount before a laptop is shipped.This is an example of

encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use

Which of the following pricing techniques is most sensitive to customers' responses to price?

discount that is based on the size of an individual purchase order rather than a series of repeat orders is referred to as a(n)

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 assess company,customer,and competitive effects on price?

Price discrimination is illegal under the

are discounts? List the four kinds that are especially important in marketing pricing strategy.

Vertical price fixing refers to

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 make geographical adjustments?

Discounts refer to reductions from the __________ that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller.

do 60 percent of prospective buyers dread about looking for a new car?

practice of replacing promotional allowances with lower manufacturer list prices is referred to as

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

Target profit pricing refers to

profit-oriented approaches to pricing,a price setter may choose to balance both _________ and _________ to set price.

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

Filters

profit-oriented approaches to pricing,a price setter may choose to balance both _ and _ to set price.