Question 1

What are three special adjustments to the list or quoted price?

Accepted Answer

Three special adjustments to t

Question 2

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product.Which of the following conditions would argue AGAINST using a penetration pricing strategy for the tasty dessert treat?

Accepted Answer

A) The ice cream market is highly conservative. 
B) Economies of scale in production would be substantial. 
C) Retailers are not willing to carry new brands of ice cream in the already overcrowded category. 
D) Once the initial price is set,it is nearly impossible to lower the price without alienating early buyers. 
E) The ice cream market exhibits inelastic demand over a fairly broad range of prices. 
A) The ice cream market is highly conservative. 
B) Economies of scale in production would be substantial. 
C) Retailers are not willing to carry new brands of ice cream in the already overcrowded category. 
D) Once the initial price is set,it is nearly impossible to lower the price without alienating early buyers. 
E) The ice cream market exhibits inelastic demand over a fairly broad range of prices.

Question 3

To be successful,odd-even pricing depends on

Accepted Answer

A) a retailers' ranges of prices. 
B) the wholesalers' markups. 
C) a manufacturer's costs. 
D) competitors' price assumptions. 
E) customers' perceptions of price. 
A) a retailers' ranges of prices. 
B) the wholesalers' markups. 
C) a manufacturer's costs. 
D) competitors' price assumptions. 
E) customers' perceptions of price.

Question 4

Bob Biltmore owns dozens of very successful print shops throughout the Midwest.Biltmore's shops specialize in low-cost black-and-white copies and feature user-friendly machines consumers can easily operate.In recent months,Biltmore has noticed many more competitors in the areas where his stores are located.In an attempt to eliminate the competition,Biltmore has decided to charge a very low price for his black-and-white copies,a price so low his competitors will be forced out of business.After the competition has been driven out,Biltmore plans to raise the price of his copies.Biltmore is planning to engage in the illegal and unethical practice of

Accepted Answer

A) price fixing. 
B) price inflation. 
C) deceptive pricing. 
D) competitive pricing. 
E) predatory pricing. 
A) price fixing. 
B) price inflation. 
C) deceptive pricing. 
D) competitive pricing. 
E) predatory pricing.

Question 5

Wrigley recently introduced a new flavor of Orbit brand sugar free chewing gum-mint mojito.The introductory price was low so that it quickly created loyal customers for the flavor.In this example,Wrigley used

Accepted Answer

A) skimming pricing. 
B) penetration pricing. 
C) price lining. 
D) odd-even pricing. 
E) loss-leader pricing. 
A) skimming pricing. 
B) penetration pricing. 
C) price lining. 
D) odd-even pricing. 
E) loss-leader pricing.

Question 6

The acronym "EDLP" stands for __________.

Accepted Answer

A) estimated discount leveling policy. 
B) extended discounts for loss-leader products. 
C) everyday low pricing. 
D) either (free)delivery or lower prices. 
E) extended discounts in lieu of lower pricing. 
A) estimated discount leveling policy. 
B) extended discounts for loss-leader products. 
C) everyday low pricing. 
D) either (free)delivery or lower prices. 
E) extended discounts in lieu of lower pricing.

Question 7

Frito-Lay is considering whether to buy the Cracker Jack brand of caramel popcorn from Borden,Inc.Frito-Lay research shows that Cracker Jack has a strong brand equity.But,Cracker Jack's dollar sales market share and pound (a surrogate for unit)volume market share have declined recently and trailed the Crunch 'n Munch brand as shown in the Figure 14-A marketing dashboard above.Borden's management used an above-market,premium pricing strategy for Cracker Jack.As a Frito-Lay marketer studying Cracker Jack,calculate Cracker Jack's price premium.What position in Figure 14-A above represents the price premium of Cracker Jack?

Accepted Answer

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

Question 8

Seasonal discounts are used by manufacturers to

Accepted Answer

A) get rid of dated merchandise. 
B) prevent retailers from purchasing competitors' products. 
C) prolong the peak seasonal selling season. 
D) establish an immediate feeling of goodwill between the buyer and seller that hopefully will continue when prices return to normal. 
E) entice dealers to purchase seasonal merchandise earlier in the selling season. 
A) get rid of dated merchandise. 
B) prevent retailers from purchasing competitors' products. 
C) prolong the peak seasonal selling season. 
D) establish an immediate feeling of goodwill between the buyer and seller that hopefully will continue when prices return to normal. 
E) entice dealers to purchase seasonal merchandise earlier in the selling season.

Question 9

Which of the following statements regarding price lining is most accurate?

Accepted Answer

A) In order for price lining to be effective,there should be at least five specified price points. 
B) Price lining assumes that demand is inelastic at each price point but elastic between price points. 
C) Price lining assumes that demand is elastic at each price point but inelastic between price points. 
D) Price lining is the preferred pricing strategy for governmental contracts. 
E) Price lining is the same as above-,at-,or below-market pricing. 
A) In order for price lining to be effective,there should be at least five specified price points. 
B) Price lining assumes that demand is inelastic at each price point but elastic between price points. 
C) Price lining assumes that demand is elastic at each price point but inelastic between price points. 
D) Price lining is the preferred pricing strategy for governmental contracts. 
E) Price lining is the same as above-,at-,or below-market pricing.

Question 10

Using __________,many retailers deliberately sell products below their normal prices (and sometimes below cost)to attract attention and additional store traffic.

Accepted Answer

A) customary pricing 
B) below-market pricing 
C) prestige pricing 
D) penetration pricing 
E) loss-leader pricing 
A) customary pricing 
B) below-market pricing 
C) prestige pricing 
D) penetration pricing 
E) loss-leader pricing

Question 11

Which of the following statements about everyday low pricing (EDLP)is most accurate?

Accepted Answer

A) For supermarkets,EDLP means "everyday low profits!" 
B) Supermarkets have hailed EDLP as value pricing at its most effective. 
C) EDLP allows supermarkets to use deeply discounted price specials. 
D) EDLP can increase average retail prices by as much as 10 percent. 
E) If retailers pass on their allowances to customers,they cannot make a profit. 
A) For supermarkets,EDLP means "everyday low profits!" 
B) Supermarkets have hailed EDLP as value pricing at its most effective. 
C) EDLP allows supermarkets to use deeply discounted price specials. 
D) EDLP can increase average retail prices by as much as 10 percent. 
E) If retailers pass on their allowances to customers,they cannot make a profit.

Question 12

With cost-oriented approaches to pricing,a price setter stresses the __________ side of the pricing problem,not the __________ side.

Accepted Answer

A) cost;revenue 
B) cost;demand 
C) cost;profit 
D) cost;supply 
E) cost;service 
A) cost;revenue 
B) cost;demand 
C) cost;profit 
D) cost;supply 
E) cost;service

Question 13

Consumers buy water and soda from vending machines.Traditionally,the price of each of these products is about $1.25.If a marketer charges a significantly higher price for such products dispensed by vending machines,such as $2.00 per item,sales are likely to decline.In order to avoid declines in sales,marketers tend to be very consistent in the prices they charge for vending machine products.This is an example of marketers employing a __________ strategy.

Accepted Answer

A) below-market pricing 
B) skimming pricing 
C) penetration pricing 
D) loss-leader pricing 
E) customary pricing 
A) below-market pricing 
B) skimming pricing 
C) penetration pricing 
D) loss-leader pricing 
E) customary pricing

Question 14

A trade-in allowance refers to

Accepted Answer

A) a noncash exchange of one product for another of equal or greater value. 
B) a cash-back payment when a more expensive item is replaced with a less expensive item. 
C) the return of money based on proof of purchase. 
D) a cash payment to a retailer for extra in-store support or special featuring of the brand. 
E) a price reduction given when a used product is part of the payment on a new product. 
A) a noncash exchange of one product for another of equal or greater value. 
B) a cash-back payment when a more expensive item is replaced with a less expensive item. 
C) the return of money based on proof of purchase. 
D) a cash payment to a retailer for extra in-store support or special featuring of the brand. 
E) a price reduction given when a used product is part of the payment on a new product.

Question 15

When a firm offers a very low price on a product to attract customers to a store,and once in the store,the customer is persuaded to purchase a higher-priced item,the practice is referred to as

Accepted Answer

A) predatory pricing. 
B) deceptive pricing. 
C) price discrimination. 
D) caveat emptor. 
E) bait and switch. 
A) predatory pricing. 
B) deceptive pricing. 
C) price discrimination. 
D) caveat emptor. 
E) bait and switch.

Question 16

As explained in "Marketing inSite" box in Chapter 14,the Federal Trade Commission (FTC)is especially concerned about the

Accepted Answer

A) overuse of FOB origin pricing. 
B) misuse of quantity discounting. 
C) elimination of seasonal discounts. 
D) children under 18 making online purchases. 
E) misuse of the word "free" in promotions. 
A) overuse of FOB origin pricing. 
B) misuse of quantity discounting. 
C) elimination of seasonal discounts. 
D) children under 18 making online purchases. 
E) misuse of the word "free" in promotions.

Question 17

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Accepted Answer

A) there is a large number of products and estimating the demand for each would be difficult and time consuming. 
B) there is a large number of product lines,all with basically the same product attributes. 
C) there is a specific profit goal that needs to be achieved. 
D) there is a policy of selling every item in a product line at the same price regardless of the product class. 
E) the products are perishable or seasonal. 
A) there is a large number of products and estimating the demand for each would be difficult and time consuming. 
B) there is a large number of product lines,all with basically the same product attributes. 
C) there is a specific profit goal that needs to be achieved. 
D) there is a policy of selling every item in a product line at the same price regardless of the product class. 
E) the products are perishable or seasonal.

Question 18

Setting a price to achieve an annual target return-on-investment (ROI)is referred to as

Accepted Answer

A) target return-on-investment pricing. 
B) target return-on-profit pricing. 
C) target return-on-sales pricing. 
D) target profit pricing. 
E) customary pricing. 
A) target return-on-investment pricing. 
B) target return-on-profit pricing. 
C) target return-on-sales pricing. 
D) target profit pricing. 
E) customary pricing.

Question 19

If you were to buy one peach tree and one apple tree from the Stark Bros.fruit trees and landscaping catalog in two separate orders,you would pay a total of $109.99.However,if you order the peach and apple tree together in the same order,you pay only $89.99.When purchasing the two trees together,what pricing strategy does Stark Bros.employ?

Accepted Answer

A) product line pricing 
B) prestige pricing 
C) price lining 
D) discount pricing 
E) bundle pricing 
A) product line pricing 
B) prestige pricing 
C) price lining 
D) discount pricing 
E) bundle pricing

Question 20

Assume it costs Lady Marion Seafood,Inc.$30 to catch,process,freeze,package,and ship 5-pound packages of Alaskan salmon.The firm adds 60 percent to the cost of its salmon products and charges customers a total of $48 for a postage-paid vacuum-sealed package.What type of pricing does Lady Marion Seafood use to arrive at its final price?

Accepted Answer

A) target return-on-sales pricing 
B) bundle pricing 
C) standard markup pricing 
D) target profit pricing 
E) customary pricing 
A) target return-on-sales pricing 
B) bundle pricing 
C) standard markup pricing 
D) target profit pricing 
E) customary pricing

What are three special adjustments to the list or quoted price?

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product.Which of the following conditions would argue AGAINST using a penetration pricing strategy for the tasty dessert treat?

To be successful,odd-even pricing depends on

Wrigley recently introduced a new flavor of Orbit brand sugar free chewing gum-mint mojito.The introductory price was low so that it quickly created loyal customers for the flavor.In this example,Wrigley used

The acronym "EDLP" stands for __________.

Seasonal discounts are used by manufacturers to

Which of the following statements regarding price lining is most accurate?

Using __________,many retailers deliberately sell products below their normal prices (and sometimes below cost)to attract attention and additional store traffic.

Which of the following statements about everyday low pricing (EDLP)is most accurate?

With cost-oriented approaches to pricing,a price setter stresses the side of the pricing problem,not the side.

A trade-in allowance refers to

When a firm offers a very low price on a product to attract customers to a store,and once in the store,the customer is persuaded to purchase a higher-priced item,the practice is referred to as

As explained in "Marketing inSite" box in Chapter 14,the Federal Trade Commission (FTC)is especially concerned about the

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Setting a price to achieve an annual target return-on-investment (ROI)is referred to as

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

What are three special adjustments to the list or quoted price?

To be successful,odd-even pricing depends on

Wrigley recently introduced a new flavor of Orbit brand sugar free chewing gum-mint mojito.The introductory price was low so that it quickly created loyal customers for the flavor.In this example,Wrigley used

The acronym "EDLP" stands for __________.

Seasonal discounts are used by manufacturers to

Which of the following statements regarding price lining is most accurate?

Using __________,many retailers deliberately sell products below their normal prices (and sometimes below cost)to attract attention and additional store traffic.

Which of the following statements about everyday low pricing (EDLP)is most accurate?

With cost-oriented approaches to pricing,a price setter stresses the __________ side of the pricing problem,not the __________ side.

A trade-in allowance refers to

When a firm offers a very low price on a product to attract customers to a store,and once in the store,the customer is persuaded to purchase a higher-priced item,the practice is referred to as

As explained in "Marketing inSite" box in Chapter 14,the Federal Trade Commission (FTC)is especially concerned about the

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Setting a price to achieve an annual target return-on-investment (ROI)is referred to as

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 cost-oriented approaches to pricing,a price setter stresses the side of the pricing problem,not the side.