Question 1

Which of the following statements best describes allowances?

Accepted Answer

A) Allowances are used in conjunction with quantity and cash discounts. 
B) Allowances are the same as transfer prices. 
C) Allowances are offered only to marketing channel members in order to increase sales. 
D) Allowances result in reduction of the list price quoted on a product. 
A) Allowances are used in conjunction with quantity and cash discounts. 
B) Allowances are the same as transfer prices. 
C) Allowances are offered only to marketing channel members in order to increase sales. 
D) Allowances result in reduction of the list price quoted on a product.

Question 2

Match each item with the correct statement below.
-A product offered to consumers at less than cost to attract them to stores in the hope that they will buy other merchandise at regular prices is called a(n)_____.

Accepted Answer

A) competitive bidding 
B) penetration pricing strategy 
C) list price 
D) trade discount 
E) price flexibility
F)promotional pricing
G)loss leader
H)cannibalization
I)bundle pricing
J)odd pricing
K)transfer price
L)profit center
M)skimming pricing strategy
N)competitive pricing strategy
O)pricing policy
P)market price
Q)noncumulative quantity discount
R)step out
S)bot
T)cash discount 
A) competitive bidding 
B) penetration pricing strategy 
C) list price 
D) trade discount 
E) price flexibility
F)promotional pricing
G)loss leader
H)cannibalization
I)bundle pricing
J)odd pricing
K)transfer price
L)profit center
M)skimming pricing strategy
N)competitive pricing strategy
O)pricing policy
P)market price
Q)noncumulative quantity discount
R)step out
S)bot
T)cash discount

Question 3

A _____ pricing strategy helps manufacturers to distinguish their high-end products from similar products of their competitors.

Accepted Answer

A) skimming 
B) market share 
C) competitive 
D) penetration 
A) skimming 
B) market share 
C) competitive 
D) penetration

Question 4

Maintaining an artificially low price for a period of time leads consumers to expect it as a customary feature of the product.

Accepted Answer

A) True 
 B)False

Question 5

Price is an important indicator of quality for many consumers.​

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true of products priced as "FOB origin"?

Accepted Answer

A) The purchase of these products permits the buyers to subtract transportation expenses from their bills. 
B) The transportation costs of these products are uniformly distributed among all channel members including the final purchaser. 
C) The legal title and responsibility of these products lies with the seller until it is delivered to the buyer. 
D) The buyer pays all the freight charges to transport the product from the manufacturer's loading dock. 
A) The purchase of these products permits the buyers to subtract transportation expenses from their bills. 
B) The transportation costs of these products are uniformly distributed among all channel members including the final purchaser. 
C) The legal title and responsibility of these products lies with the seller until it is delivered to the buyer. 
D) The buyer pays all the freight charges to transport the product from the manufacturer's loading dock.

Question 7

The demand for private-label goods will be low in a tough economy.

Accepted Answer

A) True 
 B)False

Question 8

Tiffany,Rolex,Gucci,and Prada represent exclusivity,meaning their prices are mostly inelastic.

Accepted Answer

A) True 
 B)False

Question 9

Odd pricing originated as a way to force clerks to make change,thus serving as a cash-control device.

Accepted Answer

A) True 
 B)False

Question 10

Exporters often set standard worldwide prices,regardless of their target markets.

Accepted Answer

A) True 
 B)False

Question 11

Retailers achieve opening price point by pricing a quality private-label product above those of manufacturer's brands.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following pricing systems is sometimes referred to as postage-stamp pricing since it resembles the pricing structure for mail service?

Accepted Answer

A) Zone pricing 
B) Freight absorption pricing 
C) Uniform-delivered pricing 
D) The basing-point system 
A) Zone pricing 
B) Freight absorption pricing 
C) Uniform-delivered pricing 
D) The basing-point system

Question 13

Every online marketer is inherently a global marketer who must understand the internal and external conditions that affect global pricing strategies.

Accepted Answer

A) True 
 B)False

Question 14

A leader merchandise is a product offered by retailers to customers at less than cost to attract them to stores.

Accepted Answer

A) True 
 B)False

Question 15

A cosmetics company offers incentives to its retailers for advertising its new shampoo by placing it in a special display unit near the billing counters.This incentive offered by the manufacturer is an example of a _____.

Accepted Answer

A) rebate 
B) promotional allowance 
C) cash discount 
D) trade-in 
A) rebate 
B) promotional allowance 
C) cash discount 
D) trade-in

Question 16

Which of the following is true of promotional pricing?

Accepted Answer

A) It promotes goods and services at specific price ranges based on the belief that certain prices are more appealing to consumers. 
B) It uses lower-than-normal price as a temporary component in the selling strategy. 
C) It sets a high price for products that offer unique potential ability. 
D) It uses extensive promotional allowances to get channel members to promote the product. 
A) It promotes goods and services at specific price ranges based on the belief that certain prices are more appealing to consumers. 
B) It uses lower-than-normal price as a temporary component in the selling strategy. 
C) It sets a high price for products that offer unique potential ability. 
D) It uses extensive promotional allowances to get channel members to promote the product.

Question 17

Match each item with the correct statement below.
-_____ is the loss of sales of an existing product due to competition from a new product in the same line.

Accepted Answer

A) competitive bidding 
B) penetration pricing strategy 
C) list price 
D) trade discount 
E) price flexibility
F)promotional pricing
G)loss leader
H)cannibalization
I)bundle pricing
J)odd pricing
K)transfer price
L)profit center
M)skimming pricing strategy
N)competitive pricing strategy
O)pricing policy
P)market price
Q)noncumulative quantity discount
R)step out
S)bot
T)cash discount 
A) competitive bidding 
B) penetration pricing strategy 
C) list price 
D) trade discount 
E) price flexibility
F)promotional pricing
G)loss leader
H)cannibalization
I)bundle pricing
J)odd pricing
K)transfer price
L)profit center
M)skimming pricing strategy
N)competitive pricing strategy
O)pricing policy
P)market price
Q)noncumulative quantity discount
R)step out
S)bot
T)cash discount

Question 18

Penetration pricing is often used in a market in which a new product is likely to face strong competition when introduced.

Accepted Answer

A) True 
 B)False

Question 19

Charles Schwab,an equity investment company,will face the risk of cannibalization from its e-tail channel,Schwab.com,if:

Accepted Answer

A) it attempts to lure customers within the Schwab database. 
B) it branches out into mutual funds and tax-deferred investments. 
C) it makes price cuts and creates competition with the parent company. 
D) it allots all its best personnel to work at the online firm. 
A) it attempts to lure customers within the Schwab database. 
B) it branches out into mutual funds and tax-deferred investments. 
C) it makes price cuts and creates competition with the parent company. 
D) it allots all its best personnel to work at the online firm.

Question 20

A manufacturer's list price must incorporate the costs incurred by channel members in performing required marketing functions and expected profit margins for each member.

Accepted Answer

A) True 
 B)False

Exam 19: Pricing Strategies

Which of the following statements best describes allowances?

Match each item with the correct statement below. -A product offered to consumers at less than cost to attract them to stores in the hope that they will buy other merchandise at regular prices is called a(n)_____.

A _____ pricing strategy helps manufacturers to distinguish their high-end products from similar products of their competitors.

Maintaining an artificially low price for a period of time leads consumers to expect it as a customary feature of the product.

Price is an important indicator of quality for many consumers.​

Which of the following is true of products priced as "FOB origin"?

The demand for private-label goods will be low in a tough economy.

Tiffany,Rolex,Gucci,and Prada represent exclusivity,meaning their prices are mostly inelastic.

Odd pricing originated as a way to force clerks to make change,thus serving as a cash-control device.

Exporters often set standard worldwide prices,regardless of their target markets.

Retailers achieve opening price point by pricing a quality private-label product above those of manufacturer's brands.

Which of the following pricing systems is sometimes referred to as postage-stamp pricing since it resembles the pricing structure for mail service?

Every online marketer is inherently a global marketer who must understand the internal and external conditions that affect global pricing strategies.

A leader merchandise is a product offered by retailers to customers at less than cost to attract them to stores.

A cosmetics company offers incentives to its retailers for advertising its new shampoo by placing it in a special display unit near the billing counters.This incentive offered by the manufacturer is an example of a _____.

Which of the following is true of promotional pricing?

Match each item with the correct statement below. -_____ is the loss of sales of an existing product due to competition from a new product in the same line.

Penetration pricing is often used in a market in which a new product is likely to face strong competition when introduced.

Charles Schwab,an equity investment company,will face the risk of cannibalization from its e-tail channel,Schwab.com,if:

A manufacturer's list price must incorporate the costs incurred by channel members in performing required marketing functions and expected profit margins for each member.

Marketing: the Art and Science of Satisfying Customers

Strategic Planning in Contemporary Marketing

The Marketing Environment, ethics, and Social Responsibility

Social Media: Living in the Connected World

E-Business: Managing the Customer Experience

Consumer Behavior

Business-To-Business B2bmarketing

Global Marketing

Market Segmentation, targeting, and Positioning

Marketing Research in the Era of Big Data

Relationship Marketing and Customer Relationship Management Crm

Product and Service Strategies

Developing and Managing Brand and Product Categories

Marketing Channels and Supply Chain Management

Retailers, wholesalers, and Direct Marketers

Integrated Marketing Communications, advertising, and Public Relations

Personal Selling and Sales Promotion

Pricing Concepts

Developing an Effective Marketing Plan

Financial Analysis in Marketing

Filters

Price is an important indicator of quality for many consumers.