Question 1

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.F) A) and E)
G) B) and C)

Question 2

The manager of a small gasoline station observes that while gasoline sales have been steady,the service side of the business has fallen off,and mechanics are often idle.He decides to offer a promotion-a $20 off coupon for an oil change that is to be mailed to 800 households within a 2-mile radius from the gas station.The cost of printing and mailing is $1,000.The normal cost of an oil change is $40.Materials and labor per oil change cost is $15.How many additional maintenance service jobs must result for the promotion to break even?

Accepted Answer

A)  25 jobs
B)  40 jobs
C)  50 jobs
D)  67 jobs
E)  200 jobsF) A) and B)
G) None of the above

Question 3

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

Accepted Answer

A)  the size of the order.
B)  the frequency of the order.
C)  when orders are placed during the year.
D)  the length of the relationship with the manufacturer.
E)  the marketing activities they are expected to perform in the future.F) None of the above
G) All of the above

Question 4

A penetration pricing policy is MOST LIKELY to be effective when: (1) many segments of the market are price sensitive; (2) a low initial price discourages competitors from entering the market;and (3) _________.

Accepted Answer

A)  unit production and marketing costs fall dramatically as production volumes increase
B)  enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
C)  lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost
D)  the high initial price will not attract competitors
E)  customers interpret the high price as signifying high qualityF) B) and C)
G) A) and E)

Question 5

A dynamic pricing 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 authorityF) B) and C)
G) A) and C)

Question 6

Yield management pricing refers to

Accepted Answer

A)  controlling the production of products based upon seasonal demand.
B)  deliberately selling a product below its customary price,not to increase sales,but to attract customers' attention in hopes that they will buy other products as well.
C)  charging the same prices during different times of the day or days of the week to reflect variations in supply for the service.
D)  offering significant price discounts to wholesalers who agree to purchase products in advance for a period of a year or more at a time.
E)  charging different prices to maximize revenue for a set amount of capacity at any given time.F) B) and D)
G) A) and B)

Question 7

Penetration pricing refers to

Accepted Answer

A)  charging different prices to different buyers for goods of like grade and quality.
B)  setting the highest initial price that customers really desiring the product are willing to pay.
C)  setting a low initial price on a new product to appeal immediately to the mass market.
D)  setting a market price for a product or product class based on a subjective feel for the competitors' prices or market price.
E)  setting prices a few dollars or cents under an even number.F) C) and D)
G) B) and D)

Question 8

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price to attract the mass market.Was Energizer's pricing strategy to take market share from Duracell a success?

Accepted Answer

A)  No,because consumers are price-insensitive when it comes to batteries.
B)  Yes,because of the positive association with the "Energizer Bunny" marketing campaign.
C)  No,because consumers were unable to perceive the improved quality due to the low price.
D)  Yes,because consumers typically respond positively to cost-plus pricing.
E)  Yes,because the demand for batteries has unitary elasticity.F) All of the above
G) A) and B)

Question 9

Mike Morgan,a sales representative for a major food service distributor of Betty Crocker's Warm Delights,wanted to encourage repeat purchases by his grocery customers-supermarkets,mass merchandisers,etc.In order to accomplish this objective,Morgan offered the following discounts to his customers: a 10 percent discount for buying 1-49 cases of Warm Delights within a calendar month.The discount increases to 12 percent if 50-99 cases of Warm Delights are purchased and to 15 percent if 100 or more cases of Warm Delights are purchased within the same calendar month.What type of discount was Morgan offering his customers?

Accepted Answer

A)  a seasonal discount
B)  a quantity discount
C)  a cash discount
D)  a trade discount
E)  a case allowance discountF) C) and D)
G) B) and C)

Question 10

FOB origin pricing refers to

Accepted Answer

A)  a method of "free on board" pricing where the price the seller sets includes all transportation costs.
B)  a method of pricing where taxes and tariffs are adjusted based upon the city,state,or country of origin of a product and not its destination.
C)  the "free on board" (FO
B)  price the seller quotes that includes only the cost of loading the product onto or into a vehicle and specifies the name of the location where the loading is to occur (seller's factory or warehouse) .
D)  a method of pricing where taxes and tariffs are adjusted based upon the city,state,or country destination of a product and not its place of origin.
E)  the buyer's naming the location of this loading as the seller's factory or warehouse.F) None of the above
G) B) and D)

Question 11

While __________ often changes price based upon color or style,__________ often changes prices based on time,day,week,or season.

Accepted Answer

A)  prestige pricing;skimming pricing
B)  yield management pricing;bundle pricing
C)  price lining;yield management pricing
D)  target pricing;target return on investment pricing
E)  bundle pricing;standard markup pricingF) A) and D)
G) A) and E)

Question 12

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would offer discounts?

Accepted Answer

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

Question 13

The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line,not necessarily for each item,is referred to as

Accepted Answer

A)  line item pricing.
B)  product-line pricing.
C)  price lining.
D)  customary pricing.
E)  discretionary pricing.F) All of the above
G) D) and E)

Question 14

Within the channel of distribution for certain types of imported furniture,the typical trade terms are 40/15/10.If a dining room table has a list price of $1,000,how much would the manufacturer sell the table to a jobber for?

Accepted Answer

A)  $1,000
B)  $600
C)  $510
D)  $459
E)  $400F) D) and E)
G) C) and D)

Question 15

For which of the following products is its manufacturer most likely to use basing-point pricing?

Accepted Answer

A)  pet food
B)  furniture
C)  crystal glass bowls
D)  coal
E)  cut flowersF) A) and C)
G) All of the above

Question 16

Talbot's sells women's clothes.A longsleeve scoopneck t-shirt with the Talbot's label costs $45.By comparison,you can buy a t-shirt for $5 at a Family Dollar Store,but it won't have the prestigious Talbot's label or quality.What kind of demand-oriented approach to pricing does Talbot's use?

Accepted Answer

A)  experience curve pricing
B)  skimming pricing
C)  demand-backward pricing
D)  prestige pricing
E)  flexible pricingF) B) and D)
G) B) and E)

Question 17

While the most commonly used pricing method for business products is cost-plus pricing,this method is becoming more and more popular among __________ in the service sector.

Accepted Answer

A)  e-businesses
B)  business-to-consumer firms
C)  business-to-government sellers
D)  nonprofit organizations
E)  business-to-business marketersF) D) and E)
G) A) and B)

Question 18

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would use a demand-oriented approach to setting price?

Accepted Answer

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

Question 19

Yield management pricing is a form of

Accepted Answer

A)  target pricing.
B)  loss-leader pricing.
C)  dynamic pricing.
D)  customary pricing.
E)  price lining.F) B) and C)
G) None of the above

Question 20

The movement from point A to point B in Figure 14-3 above shows

Accepted Answer

A)  skimming demand.
B)  penetration demand.
C)  that buyers see the product as a bargain and buy more.
D)  that buyers become dubious about the quality and prestige and buy less.
E)  a downturn in the economy.F) A) and E)
G) B) and C)

Exam 14: Arriving at the Final Price

While often changes price based upon color or style, often changes prices based on time,day,week,or season.

Correct Answer
verified

Talbot's sells women's clothes.A longsleeve scoopneck t-shirt with the Talbot's label costs $45.By comparison,you can buy a t-shirt for $5 at a Family Dollar Store,but it won't have the prestigious Talbot's label or quality.What kind of demand-oriented approach to pricing does Talbot's use?

Correct Answer
verified

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

Correct Answer
verified

Within the channel of distribution for certain types of imported furniture,the typical trade terms are 40/15/10.If a dining room table has a list price of $1,000,how much would the manufacturer sell the table to a jobber for?

Correct Answer
verified

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would use a demand-oriented approach to setting price?

Correct Answer
verified

The movement from point A to point B in Figure 14-3 above shows

Correct Answer
verified

While the most commonly used pricing method for business products is cost-plus pricing,this method is becoming more and more popular among __________ in the service sector.

Correct Answer
verified

A penetration pricing policy is MOST LIKELY to be effective when: (1) many segments of the market are price sensitive; (2) a low initial price discourages competitors from entering the market;and (3) _________.

Correct Answer
verified

A dynamic pricing policy gives marketers __________ in setting the final price in light of demand,cost,and competitive factors.

Correct Answer
verified

Correct Answer
verified

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price to attract the mass market.Was Energizer's pricing strategy to take market share from Duracell a success?

Correct Answer
verified

The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line,not necessarily for each item,is referred to as

Correct Answer
verified

Correct Answer
verified

For which of the following products is its manufacturer most likely to use basing-point pricing?

Correct Answer
verified

Yield management pricing is a form of

Correct Answer
verified

Penetration pricing refers to

Correct Answer
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Price deals that mislead consumers fall into the category of

Correct Answer
verified

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would offer discounts?

Correct Answer
verified

FOB origin pricing refers to

Correct Answer
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Yield management pricing refers to

Correct Answer
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Exam 14: Arriving at the Final Price

While __________ often changes price based upon color or style,__________ often changes prices based on time,day,week,or season.

Correct AnswerverifiedShow Answer

Talbot's sells women's clothes.A longsleeve scoopneck t-shirt with the Talbot's label costs $45.By comparison,you can buy a t-shirt for $5 at a Family Dollar Store,but it won't have the prestigious Talbot's label or quality.What kind of demand-oriented approach to pricing does Talbot's use?

Correct AnswerverifiedShow Answer

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

Correct AnswerverifiedShow Answer

Within the channel of distribution for certain types of imported furniture,the typical trade terms are 40/15/10.If a dining room table has a list price of $1,000,how much would the manufacturer sell the table to a jobber for?

Correct AnswerverifiedShow Answer

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would use a demand-oriented approach to setting price?

Correct AnswerverifiedShow Answer

The movement from point A to point B in Figure 14-3 above shows

Correct AnswerverifiedShow Answer

While the most commonly used pricing method for business products is cost-plus pricing,this method is becoming more and more popular among __________ in the service sector.

Correct AnswerverifiedShow Answer

A penetration pricing policy is MOST LIKELY to be effective when: (1) many segments of the market are price sensitive; (2) a low initial price discourages competitors from entering the market;and (3) _________.

Correct AnswerverifiedShow Answer

A dynamic pricing policy gives marketers __________ in setting the final price in light of demand,cost,and competitive factors.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price to attract the mass market.Was Energizer's pricing strategy to take market share from Duracell a success?

Correct AnswerverifiedShow Answer

The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line,not necessarily for each item,is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For which of the following products is its manufacturer most likely to use basing-point pricing?

Correct AnswerverifiedShow Answer

Yield management pricing is a form of

Correct AnswerverifiedShow Answer

Penetration pricing refers to

Correct AnswerverifiedShow Answer

Price deals that mislead consumers fall into the category of

Correct AnswerverifiedShow Answer

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would offer discounts?

Correct AnswerverifiedShow Answer

FOB origin pricing refers to

Correct AnswerverifiedShow Answer

Yield management pricing refers to

Correct AnswerverifiedShow Answer

While often changes price based upon color or style, often changes prices based on time,day,week,or season.

Correct Answer
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