Question 1

Which of these is a form of dynamic pricing?

Accepted Answer

A)   odd-even pricing
B)   yield management pricing
C)   above-, at-, and below-market pricing
D)   target pricing
E)   cost-plus pricingF) B) and E)
G) All of the above

Question 2

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 comparison with 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) A) and C)
G) C) and E)

Question 3

What is standard markup pricing and when would it be used?

Accepted Answer

Standard markup pricing entails adding a...

Question 4

The Brazilian government wants to build a global positioning satellite (GPS)  system. The satellite manufacturer will receive a mutually agreed-on profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

Accepted Answer

A)   standard markup pricing.
B)   experience-curve pricing.
C)   cost-plus-percentage-of-cost pricing.
D)   cost-plus-fixed-fee pricing.
E)   bundle pricing.F) B) and E)
G) B) and D)

Question 5

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 customers.F) A) and E)
G) A) and D)

Question 6

Selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer is referred to as

Accepted Answer

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

Question 7

Bundle pricing refers to

Accepted Answer

A)   an extra amount of "free goods" awarded sellers in the channel of distribution for promoting a product.
B)   marketing two or more products in a single package price.
C)   using BOGOs-requiring customers to "buy one to get one free" as a strategy to increase sales and profits.
D)   setting the price of a line of products at two specific pricing points.
E)   the practice of charging two or more prices depending upon the outlet carrying the product.F) B) and E)
G) A) and B)

Question 8

Advertising such as "Retail Value $100, Our Price $85" is deceptive if

Accepted Answer

A)   a verified and substantial number of stores in the market area do not price the item at $100.
B)   even one store in that retail chain does not price the item at $100.
C)   a competitor is selling the same item for $75 on sale and the normal price is only $85.
D)   there is not enough product on hand at that price to satisfy the needs of the store's regular customer traffic.
E)   the markup on the original price is more than 200 percent.F) A) and E)
G) B) and C)

Question 9

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 D)
G) None of the above

Question 10

A manufacturer estimates that consumers will accept a price of $275 for a snowboard. If the manufacturer expects to offer trade discounts of 35/15/5 to retailers, wholesalers, and jobbers, respectively, what price will the manufacturer receive for the snowboard?

Accepted Answer

A)   $275.00
B)   $178.75
C)   $151.94
D)   $144.34
E)   $100.00F) A) and C)
G) C) and D)

Question 11

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Accepted Answer

A)   allowances.
B)   subsidies.
C)   remittances.
D)   noncumulative deductions.
E)   list price deductions.F) A) and E)
G) A) and D)

Question 12

What is the difference between noncumulative and cumulative quantity discounts?

Accepted Answer

Noncumulative quantity discounts are bas...

Question 13

The four types of discounts are

Accepted Answer

A)   quantity, trade-in, promotional, and cash.
B)   quantity, seasonal, trade (functional) , and cash.
C)   quantity, seasonal, promotional, and FOB.
D)   cash, trade (functional) , seasonal, and promotional.
E)   trade-in, promotional, geographic, and functional.F) All of the above
G) B) and E)

Question 14

A construction company was offered a 3 percent reduction in price off all invoices from a lumberyard for paying within 10 days of issue. The lumberyard was offering a

Accepted Answer

A)   trade discount.
B)   cash discount.
C)   promotional allowance.
D)   rebate.
E)   flexible price.F) A) and E)
G) B) and D)

Question 15

Which of these 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) C) and D)
G) A) and B)

Question 16

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) A) and C)
G) A) and B)

Question 17

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) C) and D)
G) A) and C)

Question 18

The acronym EDLP stands for

Accepted Answer

A)   estimated discount leveling policy.
B)   extended discounts for loss-leader products.
C)   everyday low pricing.
D)   either (free)  delivery or lower prices.
E)   extended discounts in lieu of lower pricing.F) A) and E)
G) C) and E)

Question 19

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) B) and C)
G) All of the above

Question 20

After extensive analysis, a mail order company has decided to embark on a policy of multiple-zone pricing. In which step of the price-setting process would the mail order firm have made this decision?

Accepted Answer

A)   Step 6: Make special adjustments to the list or quoted price.
B)   Step 4: Select an approximate price level.
C)   Step 2: Estimate demand and revenue.
D)   Step 1: Identify price constraints and objectives.
E)   Step 5: Set list or quoted price.F) All of the above
G) A) and D)

Exam 14: Arriving at the Final Price

Selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer is referred to as

Correct Answer
verified

A manufacturer estimates that consumers will accept a price of $275 for a snowboard. If the manufacturer expects to offer trade discounts of 35/15/5 to retailers, wholesalers, and jobbers, respectively, what price will the manufacturer receive for the snowboard?

Correct Answer
verified

Bundle pricing refers to

Correct Answer
verified

The Brazilian government wants to build a global positioning satellite (GPS) system. The satellite manufacturer will receive a mutually agreed-on profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

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

A construction company was offered a 3 percent reduction in price off all invoices from a lumberyard for paying within 10 days of issue. The lumberyard was offering a

Correct Answer
verified

After extensive analysis, a mail order company has decided to embark on a policy of multiple-zone pricing. In which step of the price-setting process would the mail order firm have made this decision?

Correct Answer
verified

What is standard markup pricing and when would it be used?

Correct Answer
verified
Standard markup pricing entails adding a...
View Answer

What is the difference between noncumulative and cumulative quantity discounts?

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

Which of these is a form of dynamic pricing?

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

Correct Answer
verified

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

Correct Answer
verified

Advertising such as "Retail Value $100, Our Price $85" is deceptive if

Correct Answer
verified

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Correct Answer
verified

Which of these statements regarding price cutting is most accurate?

Correct Answer
verified

The acronym EDLP stands for

Correct Answer
verified

Multiple-zone pricing refers to

Correct Answer
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Yield management pricing is a form of

Correct Answer
verified

The four types of discounts are

Correct Answer
verified

Exam 14: Arriving at the Final Price

Selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer is referred to as

Correct AnswerverifiedShow Answer

A manufacturer estimates that consumers will accept a price of $275 for a snowboard. If the manufacturer expects to offer trade discounts of 35/15/5 to retailers, wholesalers, and jobbers, respectively, what price will the manufacturer receive for the snowboard?

Correct AnswerverifiedShow Answer

Bundle pricing refers to

Correct AnswerverifiedShow Answer

The Brazilian government wants to build a global positioning satellite (GPS) system. The satellite manufacturer will receive a mutually agreed-on profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

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

A construction company was offered a 3 percent reduction in price off all invoices from a lumberyard for paying within 10 days of issue. The lumberyard was offering a

Correct AnswerverifiedShow Answer

After extensive analysis, a mail order company has decided to embark on a policy of multiple-zone pricing. In which step of the price-setting process would the mail order firm have made this decision?

Correct AnswerverifiedShow Answer

What is standard markup pricing and when would it be used?

Correct AnswerverifiedStandard markup pricing entails adding a...View AnswerShow Answer

What is the difference between noncumulative and cumulative quantity discounts?

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

Which of these is a form of dynamic pricing?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Advertising such as "Retail Value $100, Our Price $85" is deceptive if

Correct AnswerverifiedShow Answer

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Correct AnswerverifiedShow Answer

Which of these statements regarding price cutting is most accurate?

Correct AnswerverifiedShow Answer

The acronym EDLP stands for

Correct AnswerverifiedShow Answer

Multiple-zone pricing refers to

Correct AnswerverifiedShow Answer

Yield management pricing is a form of

Correct AnswerverifiedShow Answer

The four types of discounts are

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
verified
Standard markup pricing entails adding a...
View Answer

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

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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