Question 1

Multiple-zone pricing refers to

Accepted Answer

A) establishing a distribution center in each major geographical region or zone in which a firm's product is sold. 
B) establishing retail outlets in the same vicinity as all the firm's manufacturing plants. 
C) a firm's decision to charge the same price regardless of geographic regions or zones where it operates. 
D) a firm's division of its selling territory into geographic areas or zones. 
E) a firm's decision to divide its business between multiple carriers to provide flexibility should transportation prices rise with one and fall with another. 
A) establishing a distribution center in each major geographical region or zone in which a firm's product is sold. 
B) establishing retail outlets in the same vicinity as all the firm's manufacturing plants. 
C) a firm's decision to charge the same price regardless of geographic regions or zones where it operates. 
D) a firm's division of its selling territory into geographic areas or zones. 
E) a firm's decision to divide its business between multiple carriers to provide flexibility should transportation prices rise with one and fall with another.

Question 2

With a __________ pricing strategy,a price setter stresses the __________ side of the pricing problem.

Accepted Answer

A) demand-oriented;cost 
B) supply-oriented;target ROI 
C) competition-oriented;marketing channel 
D) cost-oriented;cost 
E) profit-oriented;revenue 
A) demand-oriented;cost 
B) supply-oriented;target ROI 
C) competition-oriented;marketing channel 
D) cost-oriented;cost 
E) profit-oriented;revenue

Question 3

The purpose of a cash discount is to

Accepted Answer

A) reward retailers for making large quantity purchases. 
B) encourage purchasing items during periods of low demand. 
C) prevent competitors from obtaining shelf space. 
D) counteract the introduction of a new product by a competitor. 
E) encourage retailers to pay their bills promptly. 
A) reward retailers for making large quantity purchases. 
B) encourage purchasing items during periods of low demand. 
C) prevent competitors from obtaining shelf space. 
D) counteract the introduction of a new product by a competitor. 
E) encourage retailers to pay their bills promptly.

Question 4

Explain predatory pricing.

Accepted Answer

Predatory pricing is the practice of cha

Question 5

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1)demand-oriented; (2)__________; (3)profit-oriented;and (4)competition-oriented approaches.

Accepted Answer

A) cost-oriented 
B) cause-oriented 
C) revenue-oriented 
D) stakeholder-oriented 
E) distribution-oriented 
A) cost-oriented 
B) cause-oriented 
C) revenue-oriented 
D) stakeholder-oriented 
E) distribution-oriented

Question 6

Yield management is considered to be a __________ approach to pricing.

Accepted Answer

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

Question 7

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would assess company,customer,and competitive effects on price?

Accepted Answer

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

Question 8

A __________ approach often changes prices based on time,day,week,or season.

Accepted Answer

A) skimming pricing 
B) bundle pricing 
C) yield management pricing 
D) target return on investment pricing 
E) standard markup pricing 
A) skimming pricing 
B) bundle pricing 
C) yield management pricing 
D) target return on investment pricing 
E) standard markup pricing

Question 9

Different brands within a company's product line generally have different profit margins;for example,items with higher price lines have higher profit margins.Assume that Nike Variety tennis shoes have variable costs of $6 and sell for $24.Also assume that Nike Wimbledon tennis shoes have variable costs of $38 and sell for $48,but when fixed overhead is added,the shoe is unprofitable by $2 per pair.Which statement is most accurate regarding Nike's pricing approach with these two product lines?

Accepted Answer

A) Demand for each shoe line is unrelated to price. 
B) Nike is using a cost-plus percentage-of-cost pricing strategy. 
C) Nike is using a product-line pricing strategy. 
D) Demand for each shoe line is unrelated to product quality. 
E) Consumers do not use price as an indication of quality. 
A) Demand for each shoe line is unrelated to price. 
B) Nike is using a cost-plus percentage-of-cost pricing strategy. 
C) Nike is using a product-line pricing strategy. 
D) Demand for each shoe line is unrelated to product quality. 
E) Consumers do not use price as an indication of quality.

Question 10

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price.This practice is also called __________.

Accepted Answer

A) price discrimination 
B) predatory pricing 
C) a tying arrangement 
D) resale price maintenance 
E) exclusive dealing 
A) price discrimination 
B) predatory pricing 
C) a tying arrangement 
D) resale price maintenance 
E) exclusive dealing

Question 11

Which of the following statements about a dynamic pricing policy is most accurate?

Accepted Answer

A) A dynamic pricing policy is especially suited to low cost items where profit margins are slim. 
B) A dynamic pricing policy should not be used with large ticket items such as cars or real estate. 
C) When using a dynamic pricing policy,the seller may risk violating the Robinson-Patman Act. 
D) Dynamic pricing is not a form of yield management pricing. 
E) Dynamic pricing is rarely used for online purchases because of the high cost to develop information technology and data warehouses. 
A) A dynamic pricing policy is especially suited to low cost items where profit margins are slim. 
B) A dynamic pricing policy should not be used with large ticket items such as cars or real estate. 
C) When using a dynamic pricing policy,the seller may risk violating the Robinson-Patman Act. 
D) Dynamic pricing is not a form of yield management pricing. 
E) Dynamic pricing is rarely used for online purchases because of the high cost to develop information technology and data warehouses.

Question 12

Hallmark was the official supplier of flowers at the last Winter Olympics.Hallmark presented each Olympic winner with a special bouquet of roses designed to resemble the Olympic torch.Consumers were able to buy a smaller version of this same bouquet at the Hallmark website for $74.95.The Olympic bouquet that consumers could buy contained two dozen yellow roses,yet you could buy the same two dozen yellow roses for less than $35 at most supermarkets.If Hallmark is treating the Olympic bouquet as an innovative product,then it is using which demand-oriented pricing approach?

Accepted Answer

A) bundle pricing 
B) yield management pricing 
C) skimming pricing 
D) target return-on-sales pricing 
E) penetration pricing 
A) bundle pricing 
B) yield management pricing 
C) skimming pricing 
D) target return-on-sales pricing 
E) penetration pricing

Question 13

When using a price lining strategy,a marketer will

Accepted Answer

A) set the price of a line of products at a number of different specific pricing points. 
B) set price slightly higher than necessary to protect against losses resulting from adverse environmental forces. 
C) adjust the price of a product so it is "in line" with the price of its largest competitor. 
D) set a low initial price on a new product to appeal immediately to the mass market. 
E) set a market price for product or product class based on a subjective feel for the competitors' price or market price as the benchmark. 
A) set the price of a line of products at a number of different specific pricing points. 
B) set price slightly higher than necessary to protect against losses resulting from adverse environmental forces. 
C) adjust the price of a product so it is "in line" with the price of its largest competitor. 
D) set a low initial price on a new product to appeal immediately to the mass market. 
E) set a market price for product or product class based on a subjective feel for the competitors' price or market price as the benchmark.

Question 14

Figure 14-5 above shows the results of a spreadsheet simulation to select a price to achieve a target return on investment (ROI).What is the ROI for Scenario "C"?

Accepted Answer

A) 0% 
B) 5% 
C) 10% 
D) 14% 
E) 17% 
A) 0% 
B) 5% 
C) 10% 
D) 14% 
E) 17%

Question 15

Standard markup pricing is considered to be a __________ approach to pricing.

Accepted Answer

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

Question 16

Experience curve pricing refers to

Accepted Answer

A) the method of pricing where the price of a product often rises following the expansion of costs associated with the firm's producing and selling an increased volume of the product. 
B) the point at which profits double,then double again,as more consumers buy the product. 
C) a predictive pricing plan based upon the knowledge that the prices will fluctuate in a predictable pattern within a given industry based on the diffusion of innovation. 
D) a method of pricing based on the learning effect,which holds that the unit cost of many products and services declines by 10 percent to 30 percent each time a firm's experience at producing and selling them doubles. 
E) a pricing strategy that uses price estimates based upon the consensus of the salesforce and the firm's top management team. 
A) the method of pricing where the price of a product often rises following the expansion of costs associated with the firm's producing and selling an increased volume of the product. 
B) the point at which profits double,then double again,as more consumers buy the product. 
C) a predictive pricing plan based upon the knowledge that the prices will fluctuate in a predictable pattern within a given industry based on the diffusion of innovation. 
D) a method of pricing based on the learning effect,which holds that the unit cost of many products and services declines by 10 percent to 30 percent each time a firm's experience at producing and selling them doubles. 
E) a pricing strategy that uses price estimates based upon the consensus of the salesforce and the firm's top management team.

Question 17

The three major types of special adjustments to list or quoted price are

Accepted Answer

A) demand-oriented,cost-oriented,and profit-oriented adjustments. 
B) one price,flexible price,and discounts. 
C) discounts,allowances,and marginal adjustments. 
D) discounts,allowances,and geographical adjustments. 
E) discounts,incremental costs and revenues,and geographical adjustments. 
A) demand-oriented,cost-oriented,and profit-oriented adjustments. 
B) one price,flexible price,and discounts. 
C) discounts,allowances,and marginal adjustments. 
D) discounts,allowances,and geographical adjustments. 
E) discounts,incremental costs and revenues,and geographical adjustments.

Question 18

Why do manufacturers offer seasonal discounts to channel members? Provide an example of how one would work.

Accepted Answer

To encourage buyers to stock inventory e

Question 19

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

Accepted Answer

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

Question 20

What are the four kinds of discounts that are especially important in marketing pricing strategy?

Accepted Answer

Discounts are reductions from list price

Exam 14: Arriving at the Final Price

Multiple-zone pricing refers to

With a __________ pricing strategy,a price setter stresses the __________ side of the pricing problem.

The purpose of a cash discount is to

Explain predatory pricing.

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1)demand-oriented; (2)__________; (3)profit-oriented;and (4)competition-oriented approaches.

Yield management is considered to be a __________ approach to pricing.

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would assess company,customer,and competitive effects on price?

A __________ approach often changes prices based on time,day,week,or season.

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price.This practice is also called __________.

Which of the following statements about a dynamic pricing policy is most accurate?

When using a price lining strategy,a marketer will

Figure 14-5 above shows the results of a spreadsheet simulation to select a price to achieve a target return on investment (ROI).What is the ROI for Scenario "C"?

Standard markup pricing is considered to be a __________ approach to pricing.

Experience curve pricing refers to

The three major types of special adjustments to list or quoted price are

Why do manufacturers offer seasonal discounts to channel members? Provide an example of how one would work.

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

What are the four kinds of discounts that are especially important in marketing pricing strategy?

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 a pricing strategy,a price setter stresses the side of the pricing problem.