Question 1

Products such as light bulbs,canned soft drinks,and ice cream sandwiches are usually priced using

Accepted Answer

A)  multiple-unit pricing. 
B)  reference pricing. 
C)  price lining. 
D)  bundle pricing. 
E)  odd-even pricing. 
A)  multiple-unit pricing. 
B)  reference pricing. 
C)  price lining. 
D)  bundle pricing. 
E)  odd-even pricing. A

Question 2

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is

Accepted Answer

A)  status quo. 
B)  profit. 
C)  survival. 
D)  market share. 
E)  recovery. 
A)  status quo. 
B)  profit. 
C)  survival. 
D)  market share. 
E)  recovery. C

Question 3

J.C.Penney's pays $16.50 for a six-ounce bottle of cologne and sells it for $25.95.Its markup as a percentage of cost is approximately ____ percent for this product.

Accepted Answer

A)  64 
B)  36 
C)  18 
D)  57 
E)  45 
A)  64 
B)  36 
C)  18 
D)  57 
E)  45 D

Question 4

Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition.

Accepted Answer

A) True 
 B)False

Question 5

What type of pricing strategy is used in a situation where demand for a product is price inelastic and the seller has an ethical responsibility not to overcharge the client?

Accepted Answer

A)  Price lining 
B)  Prestige pricing 
C)  Professional pricing 
D)  Customary pricing 
E)  Price skimming 
A)  Price lining 
B)  Prestige pricing 
C)  Professional pricing 
D)  Customary pricing 
E)  Price skimming

Question 6

If a business decides to reduce its prices once in a while on an unsystematic basis,it is using

Accepted Answer

A)  price reduction planning. 
B)  random discounting. 
C)  bait pricing. 
D)  periodic discounting. 
E)  penetration pricing. 
A)  price reduction planning. 
B)  random discounting. 
C)  bait pricing. 
D)  periodic discounting. 
E)  penetration pricing.

Question 7

Use the following to answer the questions.
Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services.After reviewing the previous three years' revenue,Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill.Glenwood's objective is to generate more income per customer on an annual basis.The hospital has previously priced its services by charging a flat fee for the office visit,a fee for each vaccine,and a fee for each type of examination beyond the basic office visit.Most customers pay the flat office fee and a fee for a rabies vaccine.Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit,the required rabies vaccine,and additional vaccines that prevent heartworm,kennel-cough,and fleas.Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program,rather than a one-time annual visit.
-Refer to Scenario 20.2.Glenwood's closest competitor,The Hearthstone Pet Hospital,currently charges $60 for each basic office visit.If Glenwood were to price its basic office visit at $45,it would most likely be employing which of the following?

Accepted Answer

A)  customary pricing. 
B)  penetration pricing. 
C)  prestige pricing. 
D)  price skimming. 
E)  cost-based pricing. 
A)  customary pricing. 
B)  penetration pricing. 
C)  prestige pricing. 
D)  price skimming. 
E)  cost-based pricing.

Question 8

When Sharp first introduced its line of graphing calculators,it set the price quite high; it has lowered the price as competitors have entered the market.The pricing strategy initially used by Sharp is called

Accepted Answer

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

Question 9

A Macy's manager designs the casual clothing department such that one of Macy's private label pairs of jeans,priced at $24.99,is positioned next to a national brand of jeans,such as Levis,priced at $39.99.What is the manager attempting to accomplish?

Accepted Answer

A)  Everyday low prices strategy 
B)  Odd-even pricing strategy 
C)  Prestige pricing strategy 
D)  Special-event pricing strategy 
E)  Reference pricing strategy 
A)  Everyday low prices strategy 
B)  Odd-even pricing strategy 
C)  Prestige pricing strategy 
D)  Special-event pricing strategy 
E)  Reference pricing strategy

Question 10

The manager at Best Buy puts a sign up next to a Pioneer audio system that reads,"Only $199.99! $60 less than Circuit City." This is an example of what type of pricing strategy?

Accepted Answer

A)  Random discounting 
B)  Periodic discounting 
C)  Comparison discounting 
D)  Penetration pricing 
E)  Everyday low prices 
A)  Random discounting 
B)  Periodic discounting 
C)  Comparison discounting 
D)  Penetration pricing 
E)  Everyday low prices

Question 11

When consumers are making do with less expensive products and shopping more selectively,manufacturers and retailers must focus on the ____ of their products.

Accepted Answer

A)  price 
B)  quality 
C)  availability 
D)  value 
E)  image 
A)  price 
B)  quality 
C)  availability 
D)  value 
E)  image

Question 12

A sale that advertised prices "up to 65 percent off" the original price uses

Accepted Answer

A)  tensile pricing. 
B)  random discounting. 
C)  periodic discounting. 
D)  bait pricing. 
E)  psychological pricing. 
A)  tensile pricing. 
B)  random discounting. 
C)  periodic discounting. 
D)  bait pricing. 
E)  psychological pricing.

Question 13

Use the following to answer the questions.
Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services.After reviewing the previous three years' revenue,Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill.Glenwood's objective is to generate more income per customer on an annual basis.The hospital has previously priced its services by charging a flat fee for the office visit,a fee for each vaccine,and a fee for each type of examination beyond the basic office visit.Most customers pay the flat office fee and a fee for a rabies vaccine.Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit,the required rabies vaccine,and additional vaccines that prevent heartworm,kennel-cough,and fleas.Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program,rather than a one-time annual visit.
-Refer to Scenario 20.2.Glenwood has decided that it is going to offer a special package offer if the prevention plan is purchased within the first 30 days of each year's time for vaccinations.This type of pricing strategy would be an example of

Accepted Answer

A)  customary pricing. 
B)  secondary-market pricing. 
C)  introductory pricing. 
D)  periodic discounting. 
E)  random discounting. 
A)  customary pricing. 
B)  secondary-market pricing. 
C)  introductory pricing. 
D)  periodic discounting. 
E)  random discounting.

Question 14

Demand-based pricing strategies are easy to use.

Accepted Answer

A) True 
 B)False

Question 15

Grocery stores use negotiated pricing strategies.

Accepted Answer

A) True 
 B)False

Question 16

The three primary bases for developing prices are

Accepted Answer

A)  profit,demand,and competition. 
B)  supply,demand,and marketing objectives. 
C)  demand,competition,and cost. 
D)  markup,cost,and cost-plus. 
E)  negotiation,periodicity,and randomness. 
A)  profit,demand,and competition. 
B)  supply,demand,and marketing objectives. 
C)  demand,competition,and cost. 
D)  markup,cost,and cost-plus. 
E)  negotiation,periodicity,and randomness.

Question 17

Compare and contrast price skimming and penetration pricing.

Accepted Answer

The answer of Compare and contrast price skimming and penetration...

Question 18

When determining markup as a percentage of cost,divide the markup amount by

Accepted Answer

A)  price. 
B)  cost. 
C)  quantity. 
D)  revenue. 
E)  100. 
A)  price. 
B)  cost. 
C)  quantity. 
D)  revenue. 
E)  100.

Question 19

A psychological price is designed to encourage purchases on the basis of rational response rather than on the basis of emotional reactions.

Accepted Answer

A) True 
 B)False

Question 20

Reference pricing is

Accepted Answer

A)  listing the manufacturer's suggested retail price on the price tag along with the store's lower price. 
B)  mentioning the price that other retailers charge for the same product on the display for the product. 
C)  using a consumer's internal perceptions of what the appropriate price should be to help price a firm's products. 
D)  pricing a product at a moderate level and positioning it next to a more expensive model or brand. 
E)  using prices in advertising so that customers will have a point of reference when they come to the retail facility. 
A)  listing the manufacturer's suggested retail price on the price tag along with the store's lower price. 
B)  mentioning the price that other retailers charge for the same product on the display for the product. 
C)  using a consumer's internal perceptions of what the appropriate price should be to help price a firm's products. 
D)  pricing a product at a moderate level and positioning it next to a more expensive model or brand. 
E)  using prices in advertising so that customers will have a point of reference when they come to the retail facility.

Exam 20: Pricingdecisions

Products such as light bulbs,canned soft drinks,and ice cream sandwiches are usually priced using

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is

J.C.Penney's pays $16.50 for a six-ounce bottle of cologne and sells it for $25.95.Its markup as a percentage of cost is approximately ____ percent for this product.

Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition.

What type of pricing strategy is used in a situation where demand for a product is price inelastic and the seller has an ethical responsibility not to overcharge the client?

If a business decides to reduce its prices once in a while on an unsystematic basis,it is using

When Sharp first introduced its line of graphing calculators,it set the price quite high; it has lowered the price as competitors have entered the market.The pricing strategy initially used by Sharp is called

A Macy's manager designs the casual clothing department such that one of Macy's private label pairs of jeans,priced at $24.99,is positioned next to a national brand of jeans,such as Levis,priced at $39.99.What is the manager attempting to accomplish?

The manager at Best Buy puts a sign up next to a Pioneer audio system that reads,"Only $199.99! $60 less than Circuit City." This is an example of what type of pricing strategy?

When consumers are making do with less expensive products and shopping more selectively,manufacturers and retailers must focus on the ____ of their products.

A sale that advertised prices "up to 65 percent off" the original price uses

Demand-based pricing strategies are easy to use.

Grocery stores use negotiated pricing strategies.

The three primary bases for developing prices are

Compare and contrast price skimming and penetration pricing.

When determining markup as a percentage of cost,divide the markup amount by

A psychological price is designed to encourage purchases on the basis of rational response rather than on the basis of emotional reactions.

Reference pricing is

Strategic Marketing Management

Developing and Implementing Marketing Strategies

The Global Marketing Environment

Information for Marketing Decisions

Selecting Target Markets

Consumer Behavior

Business Buying Behavior

International Marketing

Digital Marketing and Social Media

Product Decisions

Strategic Product Management

Services Marketing

Strategic Management of Branding and Packaging

A Supply Chain Management and Marketing Channels

B Supply Chain Management and Marketing Channels

A Retailing,wholesaling and Direct Marketing

B Retailing,wholesaling and Direct Marketing

Integrated Marketing Communications

Advertising and Publicrelations

Personal Selling and Sales Promotion

Strategic Pricing Management

Global Issues,social Responsibility and Marketing

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