Question 1

Which of the following is a cost-oriented pricing method?

Accepted Answer

A) loss leader pricing 
B) standard markup pricing 
C) at-,above-,or below-market pricing 
D) price lining 
E) penetration pricing 
A) loss leader pricing 
B) standard markup pricing 
C) at-,above-,or below-market pricing 
D) price lining 
E) penetration pricing

Question 2

The movement from point B to point C in Figure 14-3 above shows

Accepted Answer

A) an increased demand for the product at a lower price. 
B) derived demand. 
C) that buyers see the product as a bargain and buy more. 
D) that buyers become dubious about the quality and prestige and buy less. 
E) a downturn in the economy. 
A) an increased demand for the product at a lower price. 
B) derived demand. 
C) that buyers see the product as a bargain and buy more. 
D) that buyers become dubious about the quality and prestige and buy less. 
E) a downturn in the economy.

Question 3

Consider Figure 14-9 above."B" represents which of the following legislative acts?

Accepted Answer

A) The Robinson-Patman Act 
B) The Clayton Act 
C) The Sherman Act 
D) The Federal Trade Commission Act 
E) The Consumer Goods Pricing Act 
A) The Robinson-Patman Act 
B) The Clayton Act 
C) The Sherman Act 
D) The Federal Trade Commission Act 
E) The Consumer Goods Pricing Act

Question 4

Suppose a firm selects its plant in St.Louis as the location from where it will ship its products to all of the identified cities shown in Geographical Pricing Map C above.The MSRP of the product is $100 but the firm adds a freight surcharge to cover transportation/freight.This surcharge will vary according to the distance between the origin of the shipment-in this case St.Louis-and the destination or customer's location.What is the most likely pricing method this firm is using?

Accepted Answer

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

Question 5

As the brand manager for Red Bull,what would you conclude from the information provided in the UMD14: Price Premium Marketing Dashboard above?

Accepted Answer

A) Red Bull has a price premium relative to Monster. 
B) Rockstar has a price premium relative to Monster. 
C) Red Bull engaged in price discounting relative to both Monster and Rockstar from 2009 to 2010. 
D) Rockstar sold more product than Monster in 2010. 
E) In terms of dollar market share,Red Bull has a lower share than the "Other Brands" category. 
A) Red Bull has a price premium relative to Monster. 
B) Rockstar has a price premium relative to Monster. 
C) Red Bull engaged in price discounting relative to both Monster and Rockstar from 2009 to 2010. 
D) Rockstar sold more product than Monster in 2010. 
E) In terms of dollar market share,Red Bull has a lower share than the "Other Brands" category.

Question 6

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

Accepted Answer

A) revenue;profit 
B) tangible goods;services 
C) cost;revenue 
D) demand;supply 
E) cost;demand 
A) revenue;profit 
B) tangible goods;services 
C) cost;revenue 
D) demand;supply 
E) cost;demand

Question 7

In one of its least favorite actions,Amazon.com was caught fiddling with its price tags.Avid DVD buyers,buying in quantity for resale,found that the online retailer was offering different customers different prices for the same DVD,and complained vociferously.Amazon was caught red-handed.Company officials admitted that the company was trying to see how much it could charge for an item before buyers balked.No matter what the reasoning behind it,Amazon.com was using

Accepted Answer

A) horizontal price-fixing. 
B) price discrimination. 
C) resale price maintenance. 
D) predatory pricing. 
E) bait and switch pricing. 
A) horizontal price-fixing. 
B) price discrimination. 
C) resale price maintenance. 
D) predatory pricing. 
E) bait and switch pricing.

Question 8

The Consumer Goods Pricing Act,the Sherman Act,the Federal Trade Commission Act,and the Robinson-Patman Act all address different aspects of deceptive pricing.Select one example for each act and explain which aspects of the practice would be considered illegal.

Accepted Answer

The Consumer Goods Pricing Act considers

Question 9

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Accepted Answer

A) experience curve pricing 
B) loss-leader pricing 
C) a quantity discount 
D) a promotional discount 
E) everyday low pricing 
A) experience curve pricing 
B) loss-leader pricing 
C) a quantity discount 
D) a promotional discount 
E) everyday low pricing

Question 10

A pricing strategy where the buyer is allowed to deduct freight expenses from the list price of the goods so the seller pays the transportation costs is referred to as

Accepted Answer

A) FOB factory pricing. 
B) FOB absorption pricing. 
C) FOB origin pricing. 
D) basing-point pricing. 
E) FOB with freight-allowed pricing. 
A) FOB factory pricing. 
B) FOB absorption pricing. 
C) FOB origin pricing. 
D) basing-point pricing. 
E) FOB with freight-allowed pricing.

Question 11

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1)predatory pricing; (2)price discrimination; (3)deceptive pricing; (4)geographical pricing;and (5)__________.

Accepted Answer

A) price discounting 
B) lateral price fixing 
C) price fixing 
D) delayed payment penalties 
E) price discrimination 
A) price discounting 
B) lateral price fixing 
C) price fixing 
D) delayed payment penalties 
E) price discrimination

Question 12

Consider the dynamic pricing chart above,which shows the results of a National Bureau of Economic Research study of 750,000 car purchases.The data indicate that some groups of car buyers,on average,paid roughly $105,$423,and $483 respectively for a new car in the $21,000 range than the typical purchaser.Who are the car buyers in "B?"

Accepted Answer

A) women 
B) the elderly 
C) Hispanics 
D) African Americans 
E) Asian Americans 
A) women 
B) the elderly 
C) Hispanics 
D) African Americans 
E) Asian Americans

Question 13

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)the high initial price will not attract competitors; (3)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost;and (4)__________.

Accepted Answer

A) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable 
B) consumers tend to be price sensitive 
C) customers interpret the high price as signifying high quality 
D) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost 
E) consumers perceive your product to be similar to other products on the market 
A) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable 
B) consumers tend to be price sensitive 
C) customers interpret the high price as signifying high quality 
D) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost 
E) consumers perceive your product to be similar to other products on the market

Question 14

Bundle pricing is considered to be a __________ pricing practice.

Accepted Answer

A) demand-oriented 
B) cost-oriented 
C) profit-oriented 
D) competition-oriented 
E) product line-oriented 
A) demand-oriented 
B) cost-oriented 
C) profit-oriented 
D) competition-oriented 
E) product line-oriented

Question 15

All of the following statements about standard markup pricing are true EXCEPT:

Accepted Answer

A) high-volume products usually have smaller markups than do low-volume products. 
B) The percentage markup depends on the type of retail store and the product involved. 
C) markups must cover all expenses of the store,pay for overhead costs,and contribute something to profits. 
D) summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price. 
E) supermarket managers have such a large number of products that estimating the demand for each product as a means of setting price is impossible. 
A) high-volume products usually have smaller markups than do low-volume products. 
B) The percentage markup depends on the type of retail store and the product involved. 
C) markups must cover all expenses of the store,pay for overhead costs,and contribute something to profits. 
D) summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price. 
E) supermarket managers have such a large number of products that estimating the demand for each product as a means of setting price is impossible.

Question 16

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would consider discounts,allowances,and geographical adjustments to arrive at the final price?

Accepted Answer

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

Question 17

What is the difference between noncumulative and cumulative quantity discounts?

Accepted Answer

Noncumulative quantity discounts are bas

Question 18

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

Accepted Answer

A) the pretax price. 
B) the list price. 
C) the manufacturer's suggested retail price (MSRP). 
D) a discount. 
E) a trade-in allowance. 
A) the pretax price. 
B) the list price. 
C) the manufacturer's suggested retail price (MSRP). 
D) a discount. 
E) a trade-in allowance.

Question 19

According to the Geographical Pricing Map B above,if the plant in Denver ships its products to all the identified cities in the U.S.at different prices based on distance as indicated by the color-coded regions,it is most likely using which type of pricing?

Accepted Answer

A) FOB zone pricing 
B) multiple-zone pricing 
C) single-zone pricing 
D) FOB destination pricing 
E) basing-point pricing 
A) FOB zone pricing 
B) multiple-zone pricing 
C) single-zone pricing 
D) FOB destination pricing 
E) basing-point pricing

Question 20

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.

Which of the following is a cost-oriented pricing method?

The movement from point B to point C in Figure 14-3 above shows

Consider Figure 14-9 above."B" represents which of the following legislative acts?

As the brand manager for Red Bull,what would you conclude from the information provided in the UMD14: Price Premium Marketing Dashboard above?

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

The Consumer Goods Pricing Act,the Sherman Act,the Federal Trade Commission Act,and the Robinson-Patman Act all address different aspects of deceptive pricing.Select one example for each act and explain which aspects of the practice would be considered illegal.

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

A pricing strategy where the buyer is allowed to deduct freight expenses from the list price of the goods so the seller pays the transportation costs is referred to as

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1)predatory pricing; (2)price discrimination; (3)deceptive pricing; (4)geographical pricing;and (5)__________.

Bundle pricing is considered to be a __________ pricing practice.

All of the following statements about standard markup pricing are true EXCEPT:

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would consider discounts,allowances,and geographical adjustments to arrive at the final price?

What is the difference between noncumulative and cumulative quantity discounts?

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

According to the Geographical Pricing Map B above,if the plant in Denver ships its products to all the identified cities in the U.S.at different prices based on distance as indicated by the color-coded regions,it is most likely using which type of pricing?

Predatory pricing refers to

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

Filters

Exam 14: Arriving at the Final Price

Which of the following is a cost-oriented pricing method?

The movement from point B to point C in Figure 14-3 above shows

Consider Figure 14-9 above."B" represents which of the following legislative acts?

As the brand manager for Red Bull,what would you conclude from the information provided in the UMD14: Price Premium Marketing Dashboard above?

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

The Consumer Goods Pricing Act,the Sherman Act,the Federal Trade Commission Act,and the Robinson-Patman Act all address different aspects of deceptive pricing.Select one example for each act and explain which aspects of the practice would be considered illegal.

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

A pricing strategy where the buyer is allowed to deduct freight expenses from the list price of the goods so the seller pays the transportation costs is referred to as

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1)predatory pricing; (2)price discrimination; (3)deceptive pricing; (4)geographical pricing;and (5)__________.

Bundle pricing is considered to be a __________ pricing practice.

All of the following statements about standard markup pricing are true EXCEPT:

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would consider discounts,allowances,and geographical adjustments to arrive at the final price?

What is the difference between noncumulative and cumulative quantity discounts?

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

According to the Geographical Pricing Map B above,if the plant in Denver ships its products to all the identified cities in the U.S.at different prices based on distance as indicated by the color-coded regions,it is most likely using which type of pricing?

Predatory pricing refers to

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

Filters

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