Question 1

If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors,the company could be charged with

Accepted Answer

A)  loss-leader pricing. 
B)  bait-and-switch pricing. 
C)  price fixing. 
D)  unfair slotting. 
E)  predatory pricing.

Question 2

When Toyota introduced its Scion line of cars,the lowest-price model was listed for $15,000 while the highest-priced model was listed for $21,000,with two other list prices in between.Each price point represented distinct differences in the features and quality of the cars.Toyota used a ______ pricing approach.

Accepted Answer

A)  market penetration 
B)  zone 
C)  price lining 
D)  loss leader 
E)  slotting

Question 3

A weakness associated with cost-based pricing methods is that they

Accepted Answer

A)  are too difficult to calculate. 
B)  do not consider profit when calculating. 
C)  do not recognize the role consumers or competitors' prices play in the marketplace. 
D)  do not consider fixed or variable costs. 
E)  are structurally inflexible and ignore vertical price-fixing alternatives.

Question 4

Price advertisements should never

Accepted Answer

A)  include "puffery." 
B)  deceive customers to the point of doing harm. 
C)  include the MSRP. 
D)  use advertising allowances to increase sales promotion. 
E)  use price skimming after using price penetration.

Question 5

Compared with other methods used to set prices,_______ pricing is relatively simple.

Accepted Answer

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

Question 6

Because market and operating conditions are different in each target market

Accepted Answer

A)  all consumers will react similarly to the firm's pricing strategy. 
B)  the choice of a pricing strategy should be specific to the target market. 
C)  prices need to be held constant because everything else is changing. 
D)  only horizontal price fixing should be used. 
E)  external reference prices will always be the best strategy.

Question 7

Explain the concept of the high/low strategy.Why is this an attractive strategy to marketers?

Accepted Answer

The answer of Explain the concept of the high/low strategy.Why...

Question 8

The three different methods that can help develop pricing strategies are cost based,competitor based,and profit based.

Accepted Answer

A) True 
 B)False

Question 9

Yvonne estimates the average cost of her floral arrangements is $14 regardless of whether she is making 5 or 20 arrangements that day.She adds a standard markup to the $14 estimate to determine her price.Yvonne is using a(n)_______ pricing method.

Accepted Answer

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

Question 10

The saying "leaving money on the table" is associated with

Accepted Answer

A)  a price skimming strategy that forces consumers to choose between products. 
B)  a market penetration strategy when there is an opportunity for price skimming. 
C)  vertical price fixing in markets where horizontal price fixing would be more appropriate. 
D)  a predatory pricing strategy that results in excessive seasonal discounts. 
E)  loss leader pricing that drives consumers to competitors' products.

Question 11

In a __________ pricing tactic,sellers advertise very low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

Accepted Answer

A)  fixed offer 
B)  reference 
C)  seasonal 
D)  bait-and-switch 
E)  cost-based

Question 12

Some consumers make it a point to go shopping the day after Christmas to stock up on discounted wrapping paper and bows for the following year.These consumers are

Accepted Answer

A)  enjoying the benefits of size discounts. 
B)  taking advantage of everyday low pricing strategies. 
C)  avoiding bait-and-switch strategies. 
D)  taking advantage of zone pricing discounts. 
E)  taking advantage of seasonal discounts.

Question 13

Dan is especially price sensitive.He has been known to line up on "Black Friday" (the day after Thanksgiving)at 4 a.m.to be among the first to buy sale items.Dan would likely respond to a _______ pricing strategy.

Accepted Answer

A)  high/low 
B)  premium 
C)  price skimming 
D)  slotting 
E)  uniform

Question 14

Manufacturers use cash discounts primarily because it allows them to benefit from

Accepted Answer

A)  uniformed delivered pricing. 
B)  seasonal slotting allowances. 
C)  price skimming. 
D)  the time value of money. 
E)  high/low pricing.

Exam 15: Supply Chain and Channel Management