Question 1

A reference price is

Accepted Answer

A)  the total price including tax. 
B)  the price against which buyers compare the actual selling price. 
C)  the manufacturer's cost. 
D)  a cumulative quantity discount price. 
E)  the external horizontal fixed price.

Question 2

The advantage of zone pricing to the seller is the shipping charges typically

Accepted Answer

A)  are not marked down during the off season. 
B)  complement the advertising allowances. 
C)  reflect more closely the cost of delivery. 
D)  result in a cumulative quantity discount. 
E)  are the same for all shipments, making it easy to calculate total price.

Question 3

When Burroughs Wellcome introduced the first anti-AIDS drugs,it initially set the price at $10,000 for a year's supply.Burroughs Wellcome was probably pursuing a(n)__________ pricing strategy.

Accepted Answer

A)  skimming 
B)  introductory 
C)  slotting allowance 
D)  market penetration 
E)  cost-based

Question 4

One of the benefits of offering a size discount to consumers is they will purchase more of a marketer's product and

Accepted Answer

A)  earn a cash discount. 
B)  capitalize on the experience curve effect. 
C)  will not fall prey to predatory pricing. 
D)  will be less likely to switch brands. 
E)  will be able to take advantage of zone pricing benefits.

Question 5

Wilbur sells homemade hot dogs from his stand next to campus.Students flock to his stand to buy his hot dogs,but rarely anything else.What type of pricing strategy could Wilbur use to improve his sales? Create an example.

Accepted Answer

The answer of Wilbur sells homemade hot dogs from his...

Question 6

Describe when each of the following five business-to-business pricing tactics would be most appropriate:
 seasonal discounts
 cash discounts
allowances
 quantity discounts
 uniform delivered versus zone pricing

Accepted Answer

The answer of Describe when each of the following five...

Question 7

Ryan is the only retailer in his market selling a new,ergonomically designed pen.What are the objectives of using a penetration pricing strategy? Why would Ryan consider using a market penetration pricing strategy?

Accepted Answer

The answer of Ryan is the only retailer in his...

Question 8

Most automobile manufacturers appear to use price lining.What is price lining and how does it relate to value-based pricing for automobile manufacturers?

Accepted Answer

The answer of Most automobile manufacturers appear to use price...

Question 9

What is predatory pricing? What federal acts make it illegal? How are consumers hurt by predatory pricing?

Accepted Answer

The answer of What is predatory pricing? What federal acts...

Question 10

Cost-based methods do not recognize the role that consumers' or competitors' prices play in the marketplace.

Accepted Answer

A) True 
 B)False

Question 11

If all three grocery stores in town decide to charge the same price for a gallon of milk,what type of pricing tactic is being used?

Accepted Answer

A)  horizontal price fixing 
B)  vertical price fixing 
C)  horizontal price discrimination 
D)  vertical price discrimination 
E)  loss-leader pricing

Question 12

A noncumulative quantity discount usually involves several transactions.

Accepted Answer

A) True 
 B)False

Question 13

Firms using a(n)_______ pricing method set their prices relative to what other firms are charging.

Accepted Answer

A)  improvement value 
B)  value-based 
C)  cost-based 
D)  competition-based 
E)  reference-based

Question 14

The primary reasons manufacturers offer seasonal discounts to retailers are to more easily plan production schedules and to

Accepted Answer

A)  reduce advertising allowances. 
B)  increase price skimming. 
C)  control vertical pricing. 
D)  lessen inventories of finished goods. 
E)  alter consumers' perceived reference price.

Question 15

Retailers use _______ to get rid of slow-moving or obsolete merchandise.

Accepted Answer

A)  markdowns 
B)  slotting allowances 
C)  price lining 
D)  rebates 
E)  seasonal allowances

Question 16

What makes a high/low pricing strategy appealing to sellers?

Accepted Answer

A)  It attracts two distinct market segments. 
B)  It allows the seller to market itself as an "everyday low price leader." 
C)  It doesn't require the seller to continually offer sales or deep discounts. 
D)  It allows sellers to capture the most profit from a new product or service. 
E)  It reduces the need for slotting and advertising allowances.

Question 17

Production of the DeLorean car,made famous in the film Back to the Future,never got above 25,000 units during its lifetime.Automobile industry analysts estimate that production of this car needed to reach around 300,000 units to achieve the __________,which refers to a decrease in unit cost as product volume increases.

Accepted Answer

A)  slotting allowance benefit 
B)  price fixing return 
C)  improvement value effect 
D)  experience curve effect 
E)  cumulative bundling benefit

Question 18

Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering

Accepted Answer

A)  as recognized by competitors. 
B)  as perceived by the consumer. 
C)  relative to production costs. 
D)  in relationship to fixed and variable costs. 
E)  in order to minimize bundling charges.

Question 19

Marketers know that coupons might not result in a net increase in sales,yet they continue to issue them.Why do marketers continue to use coupons?

Accepted Answer

The answer of Marketers know that coupons might not result...

Question 20

When Greenbelt Construction Company began building houses in a large subdivision with many other builders,the company priced its homes slightly higher than its competitors and promoted the added quality features found in Greenbelt's homes.Greenbelt was using a(n)_______ pricing strategy.

Accepted Answer

A)  competition-based 
B)  value-based 
C)  improvement-based 
D)  premium 
E)  reference-based

Exam 15: Supply Chain and Channel Management