Question 1

When buying highly technical, few-of-a-kind products such as hydroelectric power plants, governments have found that general contractors are reluctant to specify a formal, fixed price for the procurement. Therefore, these contractors use __________ to compensate them for any cost overruns.

Accepted Answer

A)  cost-plus-percentage-of-cost pricing
B)  experience curve pricing
C)  cost-plus-fixed-fee pricing
D)  standard markup pricing
E)  yield management pricingF) D) and E)
G) B) 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) None of the above
G) D) and E)

Question 3

Five pricing practices are scrutinized because of potential unethical or illegal actions. They are (1)  predatory pricing, (2)  price discrimination, (3)  deceptive pricing, (4)  geographical pricing, and (5)  __________.

Accepted Answer

A)  price discounting
B)  lateral price fixing
C)  price fixing
D)  delayed payment pricing
E)  price discriminationF) A) and E)
G) None of the above

Question 4

What are the four kinds of discounts that are especially important in marketing pricing strategy?

Accepted Answer

Discounts are reductions from list price...

Question 5

The price the seller quotes that includes all transportation costs is referred to as

Accepted Answer

A)  inclusive transport pricing.
B)  geomodal pricing.
C)  uniform delivered pricing.
D)  FOB origin pricing.
E)  FOB destination pricing.F) D) and E)
G) B) 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 that 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) A) and B)
G) A) and E)

Question 7

Price lining is considered to be a __________ approach to pricing.

Accepted Answer

A)  cost-oriented
B)  demand-oriented
C)  profit-oriented
D)  competition-oriented
E)  service-orientedF) A) and B)
G) All of the above

Question 8

Which of the following statements about the legal and regulatory aspect of pricing is most accurate?

Accepted Answer

A)  The Robinson-Patman Act deals with predatory pricing.
B)  The Consumer Goods Pricing Act is the only federal legislation that deals directly with pricing issues.
C)  The Sherman Act deals only with vertical price fixing.
D)  The Federal Trade Commission Act deals with predatory pricing, deceptive pricing, and geographical pricing issues.
E)  The Consumer Goods Pricing Act and the Robinson-Patman Act deal with price discrimination.F) D) and E)
G) A) and C)

Question 9

Standard markup pricing refers to

Accepted Answer

A)  adjusting the price of a product so it is "in line" with that of its largest competitor.
B)  setting the price of a line of products at a number of different price points.
C)  setting prices to achieve a profit that is a specified percentage of the sales volume.
D)  increasing the price slightly to protect against undue profit losses from unforeseen environmental forces.
E)  adding a fixed percentage to the cost of all items in a specific product class.F) A) and E)
G) A) and B)

Question 10

With a __________ pricing strategy, a price setter stresses the __________ side of the pricing problem.

Accepted Answer

A)  demand-oriented; cost
B)  supply-oriented; target ROI
C)  competition-oriented; marketing channel
D)  cost-oriented; cost
E)  profit-oriented; revenueF) A) and B)
G) B) and E)

Question 11

A custom tailor wishes to use target profit pricing to establish a price for a custom-designed business suit. Assume variable cost is $200 per suit, fixed cost is $44,000, and the target profit is $50,000 based on a volume of 50 suits. What price should be charged for a typical custom suit?

Accepted Answer

A)  $520
B)  $1,040
C)  $1,880
D)  $2,080
E)  $10,000F) C) and D)
G) None of the above

Question 12

The first Apple iPad was introduced in 2010 at an initial price of $650 for the 16 GB version. People waited in line overnight so they could be one of the first to own this unique tablet device. Which pricing strategy did Apple use to help recoup its costs for developing the iPad?

Accepted Answer

A)  price lining
B)  penetration pricing
C)  skimming pricing
D)  customary pricing
E)  target pricingF) D) and E)
G) A) and E)

Question 13

To be successful, odd-even pricing depends on

Accepted Answer

A)  a retailers' ranges of prices.
B)  the wholesalers' markups.
C)  a manufacturer's costs.
D)  competitors' price assumptions.
E)  customers' perceptions of price.F) B) and E)
G) A) and E)

Question 14

A claim that a price is below a manufacturer's suggested or list price may be deceptive if

Accepted Answer

A)  the items for sale had been purchased from another retailer.
B)  the items for sale were part of a manufacturer's promotional allowance.
C)  the items were part of a bulk order.
D)  few or no sales occur at that price in a retailer's market area.
E)  the items were purchased from the manufacturer at a higher price and the sale was part of a loss-leader promotion.F) D) and E)
G) None of the above

Question 15

To accommodate the changes in the book selling market, publishers changed their pricing approach so that

Accepted Answer

A)  rebates could be paid to the bookstores.
B)  readers would pay more so that distributors would continue to profit.
C)  distributors would no longer get a commission on every e-book sold.
D)  distributors would get a commission on every e-book sold.
E)  eventually e-books would be free to distribute.F) All of the above
G) A) and B)

Question 16

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Accepted Answer

A)  the frequency of the order.
B)  where they are in the channel.
C)  when orders are placed during the year.
D)  the length of the relationship with the manufacturer.
E)  the size of the order.F) A) and B)
G) A) and C)

Question 17

Prestige pricing is considered to be a __________ approach to pricing.

Accepted Answer

A)  demand-oriented
B)  cost-oriented
C)  profit-oriented
D)  competition-oriented
E)  service-orientedF) A) and B)
G) A) and D)

Question 18

The __________ of a product is what customers are generally willing to pay.

Accepted Answer

A)  customary price
B)  asking price
C)  target price
D)  discount price
E)  market priceF) B) and C)
G) None of the above

Question 19

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

Question 20

To 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.F) A) and B)
G) None of the above

Exam 14: Arriving at the Final Price

Five pricing practices are scrutinized because of potential unethical or illegal actions. They are (1) predatory pricing, (2) price discrimination, (3) deceptive pricing, (4) geographical pricing, and (5) __________.

Correct AnswerverifiedShow Answer

With a __________ pricing strategy, a price setter stresses the __________ side of the pricing problem.

Correct AnswerverifiedShow Answer

Prestige pricing is considered to be a __________ approach to pricing.

Correct AnswerverifiedShow Answer

When buying highly technical, few-of-a-kind products such as hydroelectric power plants, governments have found that general contractors are reluctant to specify a formal, fixed price for the procurement. Therefore, these contractors use __________ to compensate them for any cost overruns.

Correct AnswerverifiedShow Answer

To accommodate the changes in the book selling market, publishers changed their pricing approach so that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The __________ of a product is what customers are generally willing to pay.

Correct AnswerverifiedShow Answer

To encourage retailers to pay their bills quickly, manufacturers offer them

Correct AnswerverifiedShow Answer

A custom tailor wishes to use target profit pricing to establish a price for a custom-designed business suit. Assume variable cost is $200 per suit, fixed cost is $44,000, and the target profit is $50,000 based on a volume of 50 suits. What price should be charged for a typical custom suit?

Correct AnswerverifiedShow Answer

Standard markup pricing refers to

Correct AnswerverifiedShow Answer

The first Apple iPad was introduced in 2010 at an initial price of $650 for the 16 GB version. People waited in line overnight so they could be one of the first to own this unique tablet device. Which pricing strategy did Apple use to help recoup its costs for developing the iPad?

Correct AnswerverifiedShow Answer

Price lining is considered to be a __________ approach to pricing.

Correct AnswerverifiedShow Answer

A claim that a price is below a manufacturer's suggested or list price may be deceptive if

Correct AnswerverifiedShow Answer

The price the seller quotes that includes all transportation costs is referred to as

Correct AnswerverifiedShow Answer

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Correct AnswerverifiedShow Answer

When using a price lining strategy, a marketer will

Correct AnswerverifiedShow Answer

Which of the following statements about the legal and regulatory aspect of pricing is most accurate?

Correct AnswerverifiedShow Answer

To be successful, odd-even pricing depends on

Correct AnswerverifiedShow Answer

What are the four kinds of discounts that are especially important in marketing pricing strategy?

Correct AnswerverifiedDiscounts are reductions from list price...View AnswerShow Answer

Yield management pricing refers to

Correct AnswerverifiedShow Answer

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With a pricing strategy, a price setter stresses the side of the pricing problem.

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Discounts are reductions from list price...
View Answer

Correct Answer
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