Question 1

Cumulative quantity discounts refer to

Accepted Answer

A)   reductions in unit costs for a larger order.
B)   cash payments or extra amounts of "free goods" awarded sellers in the channel of distribution for undertaking certain advertising or selling activities to promote a product.
C)   discounts offered to sellers for first-time purchases of a new product as incentives for providing shelf space.
D)   a series of discounts for every additional rebuy in which the discount becomes incrementally higher.
E)   discounts that apply to the accumulation of purchases of a product over a given time period, typically a year.F) B) and C)
G) None of the above

Question 2

two general methods for quoting prices related to transportation costs are FOB origin pricing and __________.

Accepted Answer

A)   uniform delivered pricing
B)   mode of transportation pricing
C)   regional pricing
D)   flexible pricing
E)   FOB destination pricingF) A) and D)
G) All of the above

Question 3

Which of the following statements about the price-setting process is most accurate?

Accepted Answer

A)   When selecting a strategy for setting an initial price, it doesn't matter which one you use as long as you stick with it.
B)   Sometimes pricing strategies overlap, and a seasoned marketer will consider several strategies when choosing an approximate price level.
C)   Demand-oriented pricing approaches rely heavily on competitors' prices.
D)   Skimming pricing is a competition-oriented pricing strategy.
E)   Penetration pricing is the best pricing strategy for companies trying to meet the goals of a profit-oriented pricing approach.F) All of the above
G) A) and B)

Question 4

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)   customers are willing to buy immediately at the high initial price
C)   lowering the price has only a minor effect on increasing sales volume and reducing unit costs
D)   when the high initial prices do not attract competitors
E)   when customers interpret high prices as signifying high qualityF) A) and B)
G) A) and C)

Question 5

Figure 14-1
-Figure 14-1 above represents the six steps in the price-setting process.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) None of the above
G) C) and E)

Question 6

pricing strategy that is almost the exact opposite of skimming pricing is

Accepted Answer

A)   target pricing.
B)   penetration pricing.
C)   price lining.
D)   odd-even pricing.
E)   prestige pricing.F) D) and E)
G) A) and D)

Question 7

Which of the following statements about a flexible-price policy is most accurate?

Accepted Answer

A)   A flexible-price policy is especially suited to low cost items where profit margins are slim.
B)   A flexible-price policy should not be used with large ticket items such as cars or real estate.
C)   When using a flexible-price policy, the seller may risk violating the Robinson-Patman Act.
D)   Flexible pricing is not a form of yield management pricing.
E)   Flexible pricing is rarely used for online purchases because of the high cost to develop information technology and data warehouses.F) C) and D)
G) All of the above

Question 8

Figure 14-1
-Figure 14-1 above represents the six steps in the price-setting process.Which letter represents the step where a firm would consider a demand-,cost-,profit-,or competition-oriented approach?

Accepted Answer

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

Question 9

of the following are competition-oriented approaches to selecting an approximate price level EXCEPT:

Accepted Answer

A)   below-market pricing.
B)   customary pricing.
C)   above-market pricing.
D)   price lining.
E)   at-market pricing.F) A) and B)
G) B) and C)

Question 10

Skimming pricing is a strategy that introduces a new or innovative product by

Accepted Answer

A)   following a price elastic strategy.
B)   creating multiple price points.
C)   setting a high initial price.
D)   setting a low initial price.
E)   setting the price at the average of competitors' prices.F) A) and B)
G) A) and C)

Question 11

Basing-point pricing refers to

Accepted Answer

A)   selecting a single geographical location from which the list price for products plus freight expenses are charged to the seller.
B)   selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the seller.
C)   having all buyers pay the same delivered price for the products, regardless of their distance from the seller.
D)   a firm dividing a selling territory into geographic areas or zones and charging the same delivered price to all buyers within the same zone, but charging different prices in different zones depending on distance from the factory or warehouse.
E)   selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer.F) C) and D)
G) A) and E)

Question 12

of the following statements regarding the legal and regulatory aspects of pricing are true EXCEPT:

Accepted Answer

A)   there has been a movement towards a "rule of reason" in both horizontal and vertical price fixing cases.
B)   the Robinson-Patman Act allows for price differentials to different customers under the "cost justification defense."
C)   a manufacturer's MSRP has been declared illegal per se by a recent U.S. Supreme Court decision.
D)   The "rule of reason" perspective is the direct opposite of the per se rule.
E)   wholesalers can fix the maximum retail price for their products provided the price agreement does not create an "unreasonable restraint of trade."F) A) and B)
G) None of the above

Question 13

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

Accepted Answer

A)   skimming pricing.
B)   status pricing.
C)   price lining.
D)   value pricing.
E)   prestige pricing.F) None of the above
G) C) and D)

Question 14

Odd-even pricing refers to

Accepted Answer

A)   setting prices one way for product lines and another way for individual brands.
B)   setting prices of luxury items at even price points and setting the price of necessities at odd price points.
C)   setting prices a few dollars or cents under an odd number.
D)   adding a fixed percentage to the cost of all items in a specific product class.
E)   setting prices a few dollars or cents under an even number.F) A) and B)
G) A) and D)

Question 15

There are four common approaches to selecting an approximate price level.List and provide a brief description for each one.

Accepted Answer

Four common approaches to helping find t...

Question 16

Explain predatory pricing.

Accepted Answer

Predatory pricing is the practice of cha...

Question 17

conspiracy among firms to set prices for a product is referred to as

Accepted Answer

A)   price discrimination.
B)   price fixing.
C)   predatory pricing.
D)   tying arrangements.
E)   exclusive dealing.F) A) and B)
G) A) and C)

Question 18

Talbot's sells women's clothes.A T-shirt with the Talbot's label costs $25.By comparison,you can buy a T-shirt for $5 at a Family Dollar Store,but it won't have the 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) C) and D)
G) B) and E)

Question 19

which of the following products is a 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 B)
G) A) and C)

Question 20

Which of the following is a profit-oriented pricing method?

Accepted Answer

A)   target return-on-sales pricing
B)   loss leader pricing
C)   above-, at-, or below-market pricing
D)   price lining
E)   penetration pricingF) A) and B)
G) B) and D)

Exam 14: Arriving at the Final Price

Skimming pricing is a strategy that introduces a new or innovative product by

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Which of the following statements about the price-setting process is most accurate?

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Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

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Cumulative quantity discounts refer to

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two general methods for quoting prices related to transportation costs are FOB origin pricing and __________.

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There are four common approaches to selecting an approximate price level.List and provide a brief description for each one.

Correct AnswerverifiedFour common approaches to helping find t...View AnswerShow Answer

Basing-point pricing refers to

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Which of the following statements about a flexible-price policy is most accurate?

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Explain predatory pricing.

Correct AnswerverifiedPredatory pricing is the practice of cha...View AnswerShow Answer

of the following are competition-oriented approaches to selecting an approximate price level EXCEPT:

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

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pricing strategy that is almost the exact opposite of skimming pricing is

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of the following statements regarding the legal and regulatory aspects of pricing are true EXCEPT:

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conspiracy among firms to set prices for a product is referred to as

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Odd-even pricing refers to

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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) _________.

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Talbot's sells women's clothes.A T-shirt with the Talbot's label costs $25.By comparison,you can buy a T-shirt for $5 at a Family Dollar Store,but it won't have the Talbot's label or quality.What kind of demand-oriented approach to pricing does Talbot's use?

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

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Which of the following is a profit-oriented pricing method?

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Figure 14-1 -Figure 14-1 above represents the six steps in the price-setting process.Which letter represents the step where a firm would consider a demand-,cost-,profit-,or competition-oriented approach?

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Four common approaches to helping find t...
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Predatory pricing is the practice of cha...
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