Question 1

Geographic adjustments are made by manufacturers or wholesalers to cover

Accepted Answer

A) production costs. 
B) administrative costs. 
C) selling costs. 
D) promotional costs. 
E) transportation costs. 
A) production costs. 
B) administrative costs. 
C) selling costs. 
D) promotional costs. 
E) transportation costs.

Question 2

Another name for a fixed-price policy is

Accepted Answer

A) customary pricing. 
B) one-price policy. 
C) dynamic pricing. 
D) standard markup pricing. 
E) uniform pricing. 
A) customary pricing. 
B) one-price policy. 
C) dynamic pricing. 
D) standard markup pricing. 
E) uniform pricing.

Question 3

A company placing an order from the Lab Safety Supply catalog is instructed to add $25.00 to the total cost of the order to pay for shipping regardless of the buyer's location.Which method of shipping does this catalog supplier use?

Accepted Answer

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

Question 4

Target return-on-investment pricing refers to

Accepted Answer

A) setting a price to achieve an annual target ROA. 
B) adding a fixed percentage to the cost of all items in a specific product class. 
C) setting prices to achieve a profit that is a specified percentage of the sales volume. 
D) setting a price to achieve an annual target ROI. 
E) setting a price based on an annual specific dollar target volume of profit. 
A) setting a price to achieve an annual target ROA. 
B) adding a fixed percentage to the cost of all items in a specific product class. 
C) setting prices to achieve a profit that is a specified percentage of the sales volume. 
D) setting a price to achieve an annual target ROI. 
E) setting a price based on an annual specific dollar target volume of profit.

Question 5

Odd-even pricing refers to

Accepted Answer

A) setting prices one way for product lines and another way for individual brands. 
B) setting prices of luxury items at even price points and setting the price of necessities at odd price points. 
C) setting prices a few dollars or cents under an odd number. 
D) adding a fixed percentage to the cost of all items in a specific product class. 
E) setting prices a few dollars or cents under an even number. 
A) setting prices one way for product lines and another way for individual brands. 
B) setting prices of luxury items at even price points and setting the price of necessities at odd price points. 
C) setting prices a few dollars or cents under an odd number. 
D) adding a fixed percentage to the cost of all items in a specific product class. 
E) setting prices a few dollars or cents under an even number.

Question 6

The retail price of fax machines has decreased from over $10,000 in the early 1970s to less than $100 today.This is due in large part to

Accepted Answer

A) skimming pricing. 
B) prestige pricing. 
C) odd-even pricing. 
D) experience curve pricing. 
E) customary pricing. 
A) skimming pricing. 
B) prestige pricing. 
C) odd-even pricing. 
D) experience curve pricing. 
E) customary pricing.

Question 7

What is it called when a manufacturer offers discounts to resellers in the marketing channel on the basis of where they are in the channel?

Accepted Answer

A) seasonal discounts 
B) trade discounts 
C) cash discounts 
D) promotional allowances 
E) trade-in allowances 
A) seasonal discounts 
B) trade discounts 
C) cash discounts 
D) promotional allowances 
E) trade-in allowances

Question 8

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Accepted Answer

A) target return-on-investment pricing 
B) target return-on-sales pricing 
C) standard markup pricing 
D) target pricing 
E) loss-leader pricing 
A) target return-on-investment pricing 
B) target return-on-sales pricing 
C) standard markup pricing 
D) target pricing 
E) loss-leader pricing

Question 9

A glass blowing studio makes fine pieces of art glass.It has decided on a retail list price of $2,000 for one of its vases.They sell only using wholesalers and retailers who receive 50/10 terms.How much will the studio receive from selling this vase?

Accepted Answer

A) $2,000 
B) $1,000 
C) $900 
D) $800 
E) $100 
A) $2,000 
B) $1,000 
C) $900 
D) $800 
E) $100

Question 10

Skimming pricing refers to

Accepted Answer

A) setting the lowest initial price possible when introducing a new or innovative product in order to "skim" sales from competitors. 
B) setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product. 
C) setting a low initial price on a new product to appeal immediately to the mass market. 
D) the practice of replacing promotional allowances with higher manufacturer list prices. 
E) setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it. 
A) setting the lowest initial price possible when introducing a new or innovative product in order to "skim" sales from competitors. 
B) setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product. 
C) setting a low initial price on a new product to appeal immediately to the mass market. 
D) the practice of replacing promotional allowances with higher manufacturer list prices. 
E) setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

Question 11

A skimming pricing policy is likely to be most effective when: (1)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable; (2)__________; (3)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost;and (4)customers interpret the high price as signifying high quality.

Accepted Answer

A) the high initial price will not attract competitors 
B) consumers tend to be price sensitive 
C) it will be easier to set measurable sales unit goals 
D) a lower price will significantly reduce unit costs 
E) consumers perceive your product to be similar to other products on the market 
A) the high initial price will not attract competitors 
B) consumers tend to be price sensitive 
C) it will be easier to set measurable sales unit goals 
D) a lower price will significantly reduce unit costs 
E) consumers perceive your product to be similar to other products on the market

Question 12

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

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 13

A penetration pricing policy is MOST LIKELY to be effective when: (1)__________; (2)a low initial price discourages competitors from entering the market;and (3)unit production and marketing costs fall dramatically as production volumes increase.

Accepted Answer

A) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost 
B) the high initial price will not attract competitors 
C) customers interpret the high price as signifying high quality 
D) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable 
E) many segments of the market are price sensitive 
A) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost 
B) the high initial price will not attract competitors 
C) customers interpret the high price as signifying high quality 
D) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable 
E) many segments of the market are price sensitive

Question 14

When 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 15

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Accepted Answer

A) the frequency of the order. 
B) where they are in the channel. 
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 frequency of the order. 
B) where they are in the channel. 
C) when orders are placed during the year. 
D) the length of the relationship with the manufacturer. 
E) the size of the order.

Question 16

With uniform delivered pricing,the price the seller quotes

Accepted Answer

A) includes all transportation costs. 
B) excludes all transportation costs. 
C) includes a fixed allowance whereby the buyer pays any costs above that allowance. 
D) includes a fixed percentage of transportation costs for which the seller will be responsible. 
E) will guarantee that a retailer will be charged the same transportation fee for all of their outlets regardless of where they are located. 
A) includes all transportation costs. 
B) excludes all transportation costs. 
C) includes a fixed allowance whereby the buyer pays any costs above that allowance. 
D) includes a fixed percentage of transportation costs for which the seller will be responsible. 
E) will guarantee that a retailer will be charged the same transportation fee for all of their outlets regardless of where they are located.

Question 17

When buying a car,__________ may result in discriminatory practices.

Accepted Answer

A) dual pricing 
B) a fixed-price policy 
C) a dynamic pricing policy 
D) target return-on-sales pricing 
E) "no haggle" pricing 
A) dual pricing 
B) a fixed-price policy 
C) a dynamic pricing policy 
D) target return-on-sales pricing 
E) "no haggle" pricing

Question 18

Figure 14-2 above represents the four approaches to selecting an appropriate price level."D" includes customary and loss leader so it represents which approach?

Accepted Answer

A) competition-oriented approach 
B) cost-oriented approach 
C) profit-oriented approach 
D) results-oriented approach 
E) demand-oriented approach 
A) competition-oriented approach 
B) cost-oriented approach 
C) profit-oriented approach 
D) results-oriented approach 
E) demand-oriented approach

Question 19

The practice of offering a bargain that is conditional on the purchase of other products may exist when a buyer is offered the "1-Cent Sales," the "Buy 1,Get 1 Free," or the "Get 2 for the Price of 1" deal.Such pricing is legal only if

Accepted Answer

A) the seller is using bundle pricing. 
B) there is a reasonable amount of inventory to satisfy the needs of the retailers normal traffic flow. 
C) the first items are sold at the regular price,not a price inflated for the offer. 
D) the product is not outdated. 
E) the quantity available to the customer is not limited. 
A) the seller is using bundle pricing. 
B) there is a reasonable amount of inventory to satisfy the needs of the retailers normal traffic flow. 
C) the first items are sold at the regular price,not a price inflated for the offer. 
D) the product is not outdated. 
E) the quantity available to the customer is not limited.

Question 20

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

Exam 14: Arriving at the Final Price

Geographic adjustments are made by manufacturers or wholesalers to cover

Another name for a fixed-price policy is

A company placing an order from the Lab Safety Supply catalog is instructed to add $25.00 to the total cost of the order to pay for shipping regardless of the buyer's location.Which method of shipping does this catalog supplier use?

Target return-on-investment pricing refers to

Odd-even pricing refers to

The retail price of fax machines has decreased from over $10,000 in the early 1970s to less than $100 today.This is due in large part to

What is it called when a manufacturer offers discounts to resellers in the marketing channel on the basis of where they are in the channel?

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

A glass blowing studio makes fine pieces of art glass.It has decided on a retail list price of $2,000 for one of its vases.They sell only using wholesalers and retailers who receive 50/10 terms.How much will the studio receive from selling this vase?

Skimming pricing refers to

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

A penetration pricing policy is MOST LIKELY to be effective when: (1)__________; (2)a low initial price discourages competitors from entering the market;and (3)unit production and marketing costs fall dramatically as production volumes increase.

When a firm divides its selling territory into geographic areas,it is referred to as

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

With uniform delivered pricing,the price the seller quotes

When buying a car,__________ may result in discriminatory practices.

Figure 14-2 above represents the four approaches to selecting an appropriate price level."D" includes customary and loss leader so it represents which approach?

The practice of offering a bargain that is conditional on the purchase of other products may exist when a buyer is offered the "1-Cent Sales," the "Buy 1,Get 1 Free," or the "Get 2 for the Price of 1" deal.Such pricing is legal only if

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

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility in 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 to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Pulling It All Together: the Strategic Marketing Process

Building an Effective Marketing Plan

Financial Aspects of Marketing

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