Question 1

Another name for freight-absorption pricing is

Accepted Answer

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

Question 2

A company in Virginia that manufactures and sells peanut brittle to retailers charges higher shipping costs for orders sent to customers living west of the Mississippi River.This Virginia company is using

Accepted Answer

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

Question 3

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 4

Basing-point pricing refers to

Accepted Answer

A) selecting a single geographical location from which the list price for products plus freight expenses are charged to the seller. 
B) selecting two or more geographical locations from which the list price for products plus freight expenses are charged to the seller. 
C) having all buyers pay the same delivered price for the products,regardless of their distance from the seller. 
D) a firm dividing a selling territory into geographic areas or zones and charging the same delivered price to all buyers within the same zone,but charging different prices in for different zones depending on distance from the factory or warehouse. 
E) selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer. 
A) selecting a single geographical location from which the list price for products plus freight expenses are charged to the seller. 
B) selecting two or more geographical locations from which the list price for products plus freight expenses are charged to the seller. 
C) having all buyers pay the same delivered price for the products,regardless of their distance from the seller. 
D) a firm dividing a selling territory into geographic areas or zones and charging the same delivered price to all buyers within the same zone,but charging different prices in for different zones depending on distance from the factory or warehouse. 
E) selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer.

Question 5

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)__________;and (4)customers interpret the high price as signifying high quality.

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) it will be easier to set measurable sales unit goals 
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) it will be easier to set measurable sales unit goals 
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 6

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would use a competition-oriented approach to setting price?

Accepted Answer

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

Question 7

According to Figure 14-1 above,"B" represents which step in the price-setting process?

Accepted Answer

A) estimate demand and revenue 
B) identify pricing objectives and constraints 
C) scan competitors for prices of similar products or services 
D) select the appropriate pricing formula 
E) determine cost,volume,and profit relationships 
A) estimate demand and revenue 
B) identify pricing objectives and constraints 
C) scan competitors for prices of similar products or services 
D) select the appropriate pricing formula 
E) determine cost,volume,and profit relationships

Question 8

Figure 14-7 above shows the three major types of special adjustments to list or quoted price."C" represents

Accepted Answer

A) demand-oriented price adjustments. 
B) allowances. 
C) discounts. 
D) customary pricing adjustments. 
E) geographical adjustments. 
A) demand-oriented price adjustments. 
B) allowances. 
C) discounts. 
D) customary pricing adjustments. 
E) geographical adjustments.

Question 9

Trade discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

Accepted Answer

A) the marketing activities they are expected to perform in the future. 
B) the frequency of the order. 
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 marketing activities they are expected to perform in the future. 
B) the frequency of the order. 
C) when orders are placed during the year. 
D) the length of the relationship with the manufacturer. 
E) the size of the order.

Question 10

Individuals can choose to purchase Microsoft stand-alone software packages,such as the Microsoft Office 2013 Home and Student versions of Word,Excel,and PowerPoint for $109.99 each.However,they may choose to purchase the Microsoft Office 2013 Home and Student suite,which has these three applications plus OneNote in the same package for a price of $139.99.Microsoft is using a __________ pricing strategy.

Accepted Answer

A) penetration 
B) prestige 
C) bundle 
D) odd-even 
E) standard mark-up 
A) penetration 
B) prestige 
C) bundle 
D) odd-even 
E) standard mark-up

Question 11

When is skimming pricing an effective strategy?

Accepted Answer

Skimming pricing is an effective strateg

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 "C?"

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

What 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 14

Setting different prices for products and services in real time in response to supply and demand conditions is referred to as

Accepted Answer

A) price lining. 
B) a dynamic pricing policy. 
C) customary pricing. 
D) price fixing. 
E) discretionary pricing. 
A) price lining. 
B) a dynamic pricing policy. 
C) customary pricing. 
D) price fixing. 
E) discretionary pricing.

Question 15

Which of the following statements about the price-setting process is most accurate?

Accepted Answer

A) When selecting a strategy for setting an initial price,it doesn't matter which one you use as long as you stick with it. 
B) Sometimes pricing strategies overlap,and a seasoned marketer will consider several strategies when choosing an approximate price level. 
C) Demand-oriented pricing approaches rely heavily on competitors' prices. 
D) Skimming pricing is a competition-oriented pricing strategy. 
E) Penetration pricing is the best pricing strategy for companies trying to meet the goals of a profit-oriented pricing approach. 
A) When selecting a strategy for setting an initial price,it doesn't matter which one you use as long as you stick with it. 
B) Sometimes pricing strategies overlap,and a seasoned marketer will consider several strategies when choosing an approximate price level. 
C) Demand-oriented pricing approaches rely heavily on competitors' prices. 
D) Skimming pricing is a competition-oriented pricing strategy. 
E) Penetration pricing is the best pricing strategy for companies trying to meet the goals of a profit-oriented pricing approach.

Question 16

Price lining refers to

Accepted Answer

A) charging different prices to different buyers for goods of like grade and quality. 
B) setting a low initial price on a new product to appeal immediately to the mass market. 
C) setting a market price for product or product class based on a subjective feel for the competitors' price or market price as the benchmark. 
D) setting prices a few dollars or cents under an even number. 
E) setting the price of a line of products at a number of different specific pricing points. 
A) charging different prices to different buyers for goods of like grade and quality. 
B) setting a low initial price on a new product to appeal immediately to the mass market. 
C) setting a market price for product or product class based on a subjective feel for the competitors' price or market price as the benchmark. 
D) setting prices a few dollars or cents under an even number. 
E) setting the price of a line of products at a number of different specific pricing points.

Question 17

Figure 14-2 above represents the four approaches to selecting an appropriate price level."B" includes standard markup and cost-plus so it represents which approach?

Accepted Answer

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

Question 18

Cost-plus percentage-of-cost pricing refers to

Accepted Answer

A) summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price. 
B) adding a fixed percentage to the cost of all items in a specific product class. 
C) setting a price that is dictated by tradition,a standardized channel of distribution,or other competitive factors. 
D) setting the price of a product or service by adding a fixed percentage to the total unit cost. 
E) charging different prices to different buyers for goods of like grade and quality. 
A) summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price. 
B) adding a fixed percentage to the cost of all items in a specific product class. 
C) setting a price that is dictated by tradition,a standardized channel of distribution,or other competitive factors. 
D) setting the price of a product or service by adding a fixed percentage to the total unit cost. 
E) charging different prices to different buyers for goods of like grade and quality.

Question 19

A unique feature of the Robinson-Patman Act is that it allows for price differentials to different customers under several conditions.Which of the following practices would be permitted?

Accepted Answer

A) Using price differentials when price differences charged to different customers do not exceed the differences in the cost of manufacture,sale,or delivery resulting from different methods or quantities in which such goods are sold or delivered to buyers. 
B) Using price differentials when price differences are given on the basis of other family businesses. 
C) Using price differentials when charging different prices to different buyers for goods of like grade or quality. 
D) Using price differentials when charging different prices on the basis of religious affiliation. 
E) 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. 
A) Using price differentials when price differences charged to different customers do not exceed the differences in the cost of manufacture,sale,or delivery resulting from different methods or quantities in which such goods are sold or delivered to buyers. 
B) Using price differentials when price differences are given on the basis of other family businesses. 
C) Using price differentials when charging different prices to different buyers for goods of like grade or quality. 
D) Using price differentials when charging different prices on the basis of religious affiliation. 
E) 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.

Question 20

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a __________ of $1,000 for your 1998 Nissan Altima.

Accepted Answer

A) cash discount 
B) functional discount 
C) seasonal discount 
D) trade-in allowance 
E) promotional allowance 
A) cash discount 
B) functional discount 
C) seasonal discount 
D) trade-in allowance 
E) promotional allowance

Exam 14: Arriving at the Final Price

Another name for freight-absorption pricing is

A company in Virginia that manufactures and sells peanut brittle to retailers charges higher shipping costs for orders sent to customers living west of the Mississippi River.This Virginia company is using

Loss-leader pricing refers to

Basing-point pricing refers to

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would use a competition-oriented approach to setting price?

According to Figure 14-1 above,"B" represents which step in the price-setting process?

Figure 14-7 above shows the three major types of special adjustments to list or quoted price."C" represents

Trade discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

When is skimming pricing an effective strategy?

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

Setting different prices for products and services in real time in response to supply and demand conditions is referred to as

Which of the following statements about the price-setting process is most accurate?

Price lining refers to

Figure 14-2 above represents the four approaches to selecting an appropriate price level."B" includes standard markup and cost-plus so it represents which approach?

Cost-plus percentage-of-cost pricing refers to

A unique feature of the Robinson-Patman Act is that it allows for price differentials to different customers under several conditions.Which of the following practices would be permitted?

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a __________ of $1,000 for your 1998 Nissan Altima.

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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