Question 1

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) A) and E)
G) A) and B)

Question 2

What type of discount would Toro, a domestic yard machinery company, most likely offer its channel members to carry and sell its riding lawn mowers during the winter?

Accepted Answer

A)  noncumulative discounts
B)  cumulative discounts
C)  functional discounts
D)  seasonal discounts
E)  trade discountsF) A) and E)
G) A) and C)

Question 3

Rolex, a company that takes pride in emphasizing that it makes one of the most expensive watches you can buy, would probably use which competition-oriented pricing approach?

Accepted Answer

A)  customary pricing
B)  above-market pricing
C)  loss-leader pricing
D)  at-market pricing
E)  penetration pricingF) B) and D)
G) A) and B)

Question 4

Amazon customers complained when they discovered that the online retailer was offering different customers different prices for the same product. Company officials admitted that the company was trying to see how much it could charge for an item before buyers balked. No matter what the reasoning behind it, Amazon.com was using

Accepted Answer

A)  horizontal price fixing.
B)  price discrimination.
C)  resale price maintenance.
D)  predatory pricing.
E)  bait and switch pricing.F) A) and B)
G) B) and E)

Question 5

An ad campaign by Suave shampoo asked television viewers to identify the heads of hair of women who used Suave shampoo and conditioner and those that used the much more expensive salon hair-care products. The idea of the ad was that no one could tell which woman used the much cheaper Suave brand. By making price its selling point, Suave is most likely using

Accepted Answer

A)  customary pricing.
B)  loss-leader pricing.
C)  prestige pricing.
D)  skimming pricing.
E)  below-market pricing.F) None of the above
G) B) and C)

Question 6

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 price to consumers.F) A) and E)
G) A) and B)

Question 7

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 8

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point. Four common approaches to selecting an approximate price level are (1)  demand-oriented, (2)  cost-oriented, (3)  profit-oriented, and (4)  __________ approaches.

Accepted Answer

A)  revenue-oriented
B)  distribution-oriented
C)  stakeholder-oriented
D)  competition-oriented
E)  cause-orientedF) A) and E)
G) A) and C)

Question 9

Predatory pricing refers to

Accepted Answer

A)  the practice of charging a very low price for a product with the intent of driving competitors out of business.
B)  a conspiracy among firms to set prices for a product.
C)  using price differentials when charging different prices on the basis of race, religion, or ethnic affiliation.
D)  using price differentials when charging the original price for refurbished goods that have been damaged or used and returned but repaired according to company specifications.
E)  controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price.F) B) and D)
G) B) and C)

Question 10

If the cash discount terms for a $500 purchase are 4/10 net 30, the number $500 refers to

Accepted Answer

A)  the original price owed on the merchandise.
B)  the total amount owed if paid within 10 days.
C)  the total discount in dollars if the bill is paid on time in 30 days.
D)  the manufacturer's suggested wholesale price.
E)  the total penalty in dollars if the bill is paid after 10 days.F) B) and C)
G) B) and D)

Question 11

Which of the following statements regarding quantity discounts is most accurate?

Accepted Answer

A)  Noncumulative quantity discounts encourage large individual purchase orders, not a series of orders.
B)  Noncumulative quantity discounts encourage repeat buying by a single customer to a far greater degree than do cumulative quantity discounts.
C)  Quantity discounts are primarily used to undercut competitors' prices.
D)  Noncumulative quantity discounts encourage smaller long-term repeat purchases rather than less frequent larger short-term purchases.
E)  Quantity discounts can basically be used only once with each reseller or the price will increase.F) C) and D)
G) None of the above

Question 12

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 D)
G) B) and E)

Question 13

Carmex uses all of the following approaches to setting the price of its products except

Accepted Answer

A)  profit-oriented.
B)  competition-oriented.
C)  cost-oriented.
D)  elasticity-oriented.
E)  demand-oriented.F) C) and E)
G) B) and E)

Question 14

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

Accepted Answer

A)  Penetration pricing is a profit-oriented approach to pricing.
B)  Penetration pricing is a cost-oriented pricing method.
C)  Penetration pricing encourages competitors to enter a market.
D)  Penetration pricing is more effective in a marketplace with price-sensitive consumers.
E)  Penetration pricing usually precedes a skimming pricing.F) A) and C)
G) All of the above

Question 15

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Accepted Answer

A)  customary pricing strategy.
B)  fixed-price policy.
C)  uniform pricing policy.
D)  dynamic pricing policy.
E)  dynamic pricing strategy.F) B) and C)
G) A) and D)

Question 16

Another name for freight-absorption pricing is

Accepted Answer

A)  FOB factory pricing.
B)  FOB absorption pricing.
C)  FOB with freight-allowed pricing.
D)  FOB basing-point pricing.
E)  FOB origin pricing.F) A) and C)
G) B) and E)

Question 17

A skimming pricing policy is likely to be most effective when (1)  __________; (2)  the high initial price will not attract competitors; (3)  lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost; and (4)  customers interpret the high price as signifying high quality.

Accepted Answer

A)  consumers tend to be price-sensitive
B)  enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
C)  it will be easier to set measurable sales unit goals
D)  a lower price will significantly reduce unit costs
E)  consumers perceive your product to be similar to other products in the marketF) B) and D)
G) B) and C)

Question 18

The reward a manufacturer gives to wholesalers and retailers for marketing functions they will perform in the future is referred to as

Accepted Answer

A)  seasonal discounts.
B)  cash discounts.
C)  promotional allowances.
D)  trade discounts.
E)  trade-in allowances.F) B) and C)
G) A) and B)

Question 19

In the early 1980s, typical round-trip coach airfares from the East Coast to London were more than $500. Then Freddie Laker introduced the People's Express, a competing service into Newark at $350. Major airlines matched his price-and continued to do so until they drove People's Express out of business. Then prices shot back up to over $500. A lawsuit filed under the Sherman Act resulted in the judgment that the major airlines had explicitly tried to destroy a competitor. The experience of People's Express is an example of __________ on the part of the major airlines.

Accepted Answer

A)  price fixing
B)  price discrimination
C)  deceptive pricing
D)  predatory pricing
E)  pricing constraintsF) A) and E)
G) None of the above

Question 20

In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help __________ and the penetration pricing would help __________.

Accepted Answer

A)  increase market share; attract price-insensitive customers
B)  attract price-sensitive customers; increase market share
C)  recoup initial research and development costs; increase market share
D)  recoup initial research and development costs; improve firm reputation
E)  increase market share; attract price insensitive customersF) B) and E)
G) C) and D)

Exam 14: Arriving at the Final Price

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

Correct Answer
verified

In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help and the penetration pricing would help .

Correct Answer
verified

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

Correct Answer
verified

Another name for freight-absorption pricing is

Correct Answer
verified

Correct Answer
verified

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Correct Answer
verified

Correct Answer
verified

Target pricing refers to

Correct Answer
verified

Predatory pricing refers to

Correct Answer
verified

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point. Four common approaches to selecting an approximate price level are (1) demand-oriented, (2) cost-oriented, (3) profit-oriented, and (4) __________ approaches.

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

Correct Answer
verified

What type of discount would Toro, a domestic yard machinery company, most likely offer its channel members to carry and sell its riding lawn mowers during the winter?

Correct Answer
verified

Which of the following statements regarding quantity discounts is most accurate?

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

Carmex uses all of the following approaches to setting the price of its products except

Correct Answer
verified

If the cash discount terms for a $500 purchase are 4/10 net 30, the number $500 refers to

Correct Answer
verified

Rolex, a company that takes pride in emphasizing that it makes one of the most expensive watches you can buy, would probably use which competition-oriented pricing approach?

Correct Answer
verified

The reward a manufacturer gives to wholesalers and retailers for marketing functions they will perform in the future is referred to as

Correct Answer
verified

Exam 14: Arriving at the Final Price

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

Correct AnswerverifiedShow Answer

In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help __________ and the penetration pricing would help __________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Another name for freight-absorption pricing is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Target pricing refers to

Correct AnswerverifiedShow Answer

Predatory pricing refers to

Correct AnswerverifiedShow Answer

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point. Four common approaches to selecting an approximate price level are (1) demand-oriented, (2) cost-oriented, (3) profit-oriented, and (4) __________ approaches.

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

Correct AnswerverifiedShow Answer

What type of discount would Toro, a domestic yard machinery company, most likely offer its channel members to carry and sell its riding lawn mowers during the winter?

Correct AnswerverifiedShow Answer

Which of the following statements regarding quantity discounts is most accurate?

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

Carmex uses all of the following approaches to setting the price of its products except

Correct AnswerverifiedShow Answer

If the cash discount terms for a $500 purchase are 4/10 net 30, the number $500 refers to

Correct AnswerverifiedShow Answer

Rolex, a company that takes pride in emphasizing that it makes one of the most expensive watches you can buy, would probably use which competition-oriented pricing approach?

Correct AnswerverifiedShow Answer

The reward a manufacturer gives to wholesalers and retailers for marketing functions they will perform in the future is referred to as

Correct AnswerverifiedShow Answer

Correct Answer
verified

In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help and the penetration pricing would help .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified