Question 1

Skimming pricing refers to

Accepted Answer

A)  setting the lowest initial price possible when introducing a new or innovative product in order to "skim" sales from competitors.
B)  setting the highest initial price that customers who really desire the product are willing to pay.
C)  setting a low initial price on a new product to appeal immediately to the mass market.
D)  the practice of replacing promotional allowances with higher manufacturer list prices.
E)  setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.F) A) and D)
G) A) and E)

Question 2

When using a price lining strategy,a marketer will

Accepted Answer

A)  set the price of a line of products at a number of different specific pricing points.
B)  set the price slightly higher than necessary to protect against losses resulting from adverse environmental forces.
C)  adjust the price of a product so it is "in line" with the price of its largest competitor.
D)  set a low initial price on a new product to appeal immediately to the mass market.
E)  set a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark.F) A) and D)
G) All of the above

Question 3

Several factors indicate that a penetration pricing policy would most likely to be effective when introducing a new product,including situations in which

Accepted Answer

A)  lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost
B)  the high initial price will not attract competitors
C)  customers interpret the high price as signifying high quality
D)  enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
E)  many segments of the market are price sensitiveF) D) and E)
G) C) and E)

Question 4

Price fixing refers to

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 a very low price for a product with the intent of driving competitors out of business.
C)  the practice of charging different prices to different buyers for goods of like grade and quality.
D)  a conspiracy among firms to set prices for a product.
E)  a seller's requirement that the purchaser of one product also buy another product in the line.F) A) and C)
G) A) and E)

Question 5

Consumers buy water and soda from vending machines.Usually the price of each of these products is about $1.50.If a marketer charges a significantly higher price for such products dispensed by vending machines,such as $2.50 per item,sales are likely to decline.Thus,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 pricingF) A) and E)
G) A) and D)

Question 6

Reductions in unit costs for a larger order are referred to as

Accepted Answer

A)  promotional allowances.
B)  economic order discounts.
C)  penetration pricing.
D)  quantity discounts.
E)  case allowances.F) B) and C)
G) C) and D)

Question 7

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.F) D) and E)
G) B) and D)

Question 8

A manufacturer of a portable digital HD camera is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue against using a skimming pricing strategy for the camera?

Accepted Answer

A)  There will be a large potential market,even if the product is sold at a high price.
B)  Technological problems still exist for competitors;their products are not equivalent.
C)  Increasing the volume sold reduces production costs substantially.
D)  Consumers perceive a strong price-quality relationship for this product.
E)  Many consumers in the target market are innovators.F) None of the above
G) C) and D)

Question 9

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

Accepted Answer

The four kinds of delivered pricing meth...

Question 10

Multiple-zone pricing refers to

Accepted Answer

A)  establishing a distribution center in each major geographical region or zone in which a firm's product is sold.
B)  establishing retail outlets in the same vicinity as all the firm's manufacturing plants.
C)  a firm's decision to charge the same price regardless of geographic regions or zones where it operates.
D)  a firm's division of its selling territory into geographic areas or zones.
E)  a firm's decision to divide its business between multiple carriers to provide flexibility should transportation prices rise with one and fall with another.F) B) and D)
G) B) and C)

Question 11

What are the six major steps involved in setting prices?

Accepted Answer

The six major steps involved in setting ...

Question 12

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

Accepted Answer

A)  warehouse inventory carrying and loading costs.
B)  the cost of transportation of the products from seller to buyer.
C)  changes in price due to tariffs the Federal Trade Commission imposes on the transport of goods from the United States.
D)  changes in price due to fuel excise taxes on inefficient diesel trucks.
E)  the need some firms have of recouping the costs of developing different versions of their products for different global markets.F) All of the above
G) A) and E)

Question 13

A method of pricing where the price the seller quotes includes all transportations costs,and the seller is responsible for any damage that may occur because the seller retains title to the goods until delivered to the buyer,is referred to as

Accepted Answer

A)  destination pricing.
B)  FOB origin pricing.
C)  geographical allowance.
D)  uniform delivered pricing.
E)  transportation allowance.F) A) and D)
G) C) and E)

Question 14

Mike Morgan,a sales representative for a major food service distributor of Betty Crocker's Warm Delights,wanted to encourage larger purchases by his grocery customers.Morgan offered a 10 percent discount for buying 1 to 49 cases of Warm Delights within a calendar month,12 percent for 50 to 99 cases,and 15 percent for 100 or more cases.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) B) and C)
G) A) and B)

Question 15

What is the difference between a fixed-price policy and a dynamic pricing policy?

Accepted Answer

A fixed-price policy,also called a one-p...

Question 16

What is the difference between noncumulative and cumulative quantity discounts?

Accepted Answer

Noncumulative quantity discounts are bas...

Question 17

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock and Roll Hall of Fame often use which pricing strategy?

Accepted Answer

A)  cost-plus pricing
B)  experience curve pricing
C)  standard markup pricing
D)  yield management pricing
E)  price liningF) B) and E)
G) B) and D)

Question 18

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

Accepted Answer

A)  Marketers should only consider price cutting if primary demand for a product class will remain stable.
B)  Marketers should only consider price cutting if the price cut can be made across all items in a product line and all product lines in a product mix.
C)  Marketers should only consider price cutting that is confined to specific products or customers.
D)  Marketers should only consider price cutting if the firm also increases advertising.
E)  Marketers should never consider price cutting unless a product is in the introductory stage of its product life cycle.F) B) and E)
G) A) and B)

Question 19

A company in Virginia that manufactures and sells peanut brittle to retailers charges higher shipping costs for orders sent to customers living west of the Mississippi River.This Virginia company is using

Accepted Answer

A)  single-zone pricing.
B)  FOB origin pricing.
C)  freight absorption pricing.
D)  multiple-zone pricing.
E)  basing-point pricing.F) A) and E)
G) D) and E)

Question 20

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as

Accepted Answer

A)  target return-on-investment pricing.
B)  target return-on-sales pricing.
C)  loss-leader pricing.
D)  target pricing.
E)  standard markup pricing.F) A) and C)
G) B) and E)

Exam 14: Arriving at the Final Price

A method of pricing where the price the seller quotes includes all transportations costs,and the seller is responsible for any damage that may occur because the seller retains title to the goods until delivered to the buyer,is referred to as

Correct Answer
verified

Correct Answer
verified

When using a price lining strategy,a marketer will

Correct Answer
verified

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

Correct Answer
verified

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as

Correct Answer
verified

Price fixing refers to

Correct Answer
verified

What are the six major steps involved in setting prices?

Correct Answer
verified
The six major steps involved in setting ...
View Answer

What is the difference between a fixed-price policy and a dynamic pricing policy?

Correct Answer
verified
A fixed-price policy,also called a one-p...
View Answer

Several factors indicate that a penetration pricing policy would most likely to be effective when introducing a new product,including situations in which

Correct Answer
verified

Multiple-zone pricing refers to

Correct Answer
verified

A company in Virginia that manufactures and sells peanut brittle to retailers charges higher shipping costs for orders sent to customers living west of the Mississippi River.This Virginia company is using

Correct Answer
verified

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

Correct Answer
verified

What is the difference between noncumulative and cumulative quantity discounts?

Correct Answer
verified
Noncumulative quantity discounts are bas...
View Answer

Correct Answer
verified

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

Correct Answer
verified
The four kinds of delivered pricing meth...
View Answer

Reductions in unit costs for a larger order are referred to as

Correct Answer
verified

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock and Roll Hall of Fame often use which pricing strategy?

Correct Answer
verified

A manufacturer of a portable digital HD camera is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue against using a skimming pricing strategy for the camera?

Correct Answer
verified

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

Correct Answer
verified

Skimming pricing refers to

Correct Answer
verified

Exam 14: Arriving at the Final Price

A method of pricing where the price the seller quotes includes all transportations costs,and the seller is responsible for any damage that may occur because the seller retains title to the goods until delivered to the buyer,is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When using a price lining strategy,a marketer will

Correct AnswerverifiedShow Answer

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

Correct AnswerverifiedShow Answer

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as

Correct AnswerverifiedShow Answer

Price fixing refers to

Correct AnswerverifiedShow Answer

What are the six major steps involved in setting prices?

Correct AnswerverifiedThe six major steps involved in setting ...View AnswerShow Answer

What is the difference between a fixed-price policy and a dynamic pricing policy?

Correct AnswerverifiedA fixed-price policy,also called a one-p...View AnswerShow Answer

Several factors indicate that a penetration pricing policy would most likely to be effective when introducing a new product,including situations in which

Correct AnswerverifiedShow Answer

Multiple-zone pricing refers to

Correct AnswerverifiedShow Answer

A company in Virginia that manufactures and sells peanut brittle to retailers charges higher shipping costs for orders sent to customers living west of the Mississippi River.This Virginia company is using

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is the difference between noncumulative and cumulative quantity discounts?

Correct AnswerverifiedNoncumulative quantity discounts are bas...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe four kinds of delivered pricing meth...View AnswerShow Answer

Reductions in unit costs for a larger order are referred to as

Correct AnswerverifiedShow Answer

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock and Roll Hall of Fame often use which pricing strategy?

Correct AnswerverifiedShow Answer

A manufacturer of a portable digital HD camera is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue against using a skimming pricing strategy for the camera?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Skimming pricing refers to

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The six major steps involved in setting ...
View Answer

Correct Answer
verified
A fixed-price policy,also called a one-p...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Noncumulative quantity discounts are bas...
View Answer

Correct Answer
verified

Correct Answer
verified
The four kinds of delivered pricing meth...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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