Question 1

Which of the following is a profit-oriented approach to pricing?

Accepted Answer

A)  skimming pricing 
B)  target pricing 
C)  loss-leader pricing 
D)  target return-on-sales pricing 
E)  standard markup pricing

Question 2

Which of the following statements about geographical pricing is most accurate?

Accepted Answer

A)  Geographical pricing is generally legal and not normally a concern in the U.S. legal system. 
B)  Geographical pricing has come under more government scrutiny than any other pricing policy. 
C)  FOB freight-allowed pricing practices are illegal. 
D)  FOB origin pricing is legal. 
E)  Basing-point pricing is the only form of geographical pricing that is not under some type of legal restriction.

Question 3

Figure 14-8
-Consider Figure 14-8 above."D" represents which of the following legislative acts?

Accepted Answer

A)  The Robinson-Patman Act 
B)  The Clayton Act 
C)  The Sherman Act 
D)  The Federal Trade Commission Act 
E)  The Consumer Goods Pricing Act

Question 4

Which of the following is a demand-oriented approach to pricing?

Accepted Answer

A)  customary pricing 
B)  target profit pricing 
C)  standard markup pricing 
D)  bundle pricing 
E)  service-oriented pricing

Question 5

Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

Accepted Answer

The answer of Define the four kinds of uniform delivered...

Question 6

Predatory pricing is

Accepted Answer

A)  an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor. 
B)  the practice of charging different prices to different buyers for goods of like grade and quality. 
C)  the practice of charging a very low price for a product with the intent of driving competitors out of business. 
D)  a conspiracy among firms to set prices for a product or service. 
E)  a seller's requirement that the purchaser of one product must also buy another product in the line.

Question 7

is relatively easy to measure the incremental cost of a new advertising campaign; what is not as easy is

Accepted Answer

A)  measuring the extra fixed cost involved. 
B)  measuring the extra variable cost involved. 
C)  measuring the incremental revenue generated by the new advertising campaign. 
D)  determining whether customers who stop buying the product are reacting negatively to the advertisement or to some other aspect of the product itself. 
E)  determining what percentage of the ad-generated revenue should be reinvested into additional advertisements of the same form.

Question 8

encourage retailers to pay their bills quickly,manufacturers offer them

Accepted Answer

A)  quantity discounts. 
B)  cash discounts. 
C)  flexible pricing policies. 
D)  promotional allowances. 
E)  manufacturer's inducements.

Question 9

Setting the price of a line of products at a number of different specific price points is referred to as __________.

Accepted Answer

A)  odd-even pricing 
B)  bundle pricing 
C)  cost-plus pricing 
D)  price lining 
E)  prestige pricing

Question 10

practice of offering a bargain that is conditional on the purchase of other products may exist when a buyer is offered the "1-Cent Sale," the "Buy 1,Get 1 Free," or the "Get 2 for the Price of 1" deal.Such pricing is legal only if

Accepted Answer

A)  the seller is using bundle pricing. 
B)  there is a reasonable amount of inventory to satisfy the needs of the retailers normal traffic flow. 
C)  the first items are sold at the regular price, not a price inflated for the offer. 
D)  the product is not outdated. 
E)  the quantity available to the customer is not limited.

Question 11

Robinson-Patman Act covers promotional allowances as well as discounts.To legally offer promotional allowances to buyers,the seller must do so on a(n)__________ to all buyers businesses distributing the seller's products.

Accepted Answer

A)  proportionally equal basis 
B)  limited basis 
C)  disproportionally equal basis 
D)  geographical basis 
E)  across the board

Question 12

word "Free" in relation to the acronym "FOB" signals the point or location where the seller is

Accepted Answer

A)  free of responsibility for customer invoicing. 
B)  free of product liability. 
C)  free to choose method of transportation. 
D)  free to choose the point of loading. 
E)  free to choose the method of payment.

Question 13

Mercedes-Benz cars and a Patek Philippe Platinum World Time wristwatch have a common characteristic-they have an element of _________.

Accepted Answer

A)  penetration pricing 
B)  target pricing 
C)  bundle pricing 
D)  yield-management pricing 
E)  prestige pricing

Question 14

Tostitos Photo
-Consider the Tostitos products photo above.Frito-Lay recognizes that its tortilla chip products are partial substitutes for one another.The company's bean and cheese dips and salsa sauces complement its tortilla chips.Frito-Lay uses this knowledge to set prices for each item,which is known as

Accepted Answer

A)  bundle pricing. 
B)  price lining. 
C)  customary pricing. 
D)  product-line pricing. 
E)  loss-leader pricing.

Question 15

Figure 14-7
-According to Figure 14-7 above,how much is the jobber trade discount?

Accepted Answer

A)  $3.15 
B)  $7.00 
C)  $30.00 
D)  $63.00 
E)  $70.00

Question 16

flexible-price policy gives marketers __________ in setting the final price in light of demand,cost,and competitive factors.

Accepted Answer

A)  no leeway 
B)  total freedom 
C)  little discretion 
D)  considerable discretion 
E)  limited competitive authority

Question 17

Price deals that mislead consumers fall into the category of

Accepted Answer

A)  predatory pricing. 
B)  deceptive pricing. 
C)  price discrimination. 
D)  caveat emptor. 
E)  resale price maintenance.

Question 18

establishing product line pricing,the highest priced item is typically positioned as

Accepted Answer

A)  the oldest product item in the line. 
B)  the best-selling product item in the line. 
C)  the premium item in terms of quality and features. 
D)  the loss leader item for the rest of the product line. 
E)  the most price insensitive product item in the line.

Question 19

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. 
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 price points.

Question 20

Target pricing refers to

Accepted Answer

A)  a method of selecting specific prices wholesalers and retailers are willing to pay based upon the elasticity of each given item. 
B)  a method of charging different prices to maximize revenue for a set amount of capacity at any given time. 
C)  the practice of simultaneously increasing product and service benefits while maintaining or decreasing price. 
D)  a method of estimating the price that ultimate consumers would be willing to pay for a product, then working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers.. 
E)  a method of estimating the price that ultimate consumers would be willing to pay for a product, then determining how much wholesalers wish to charge its customers, deliberately adjusting the composition and features of the product to achieve the target price to consumers.

Exam 14: Arriving at the Final Price