Question 1

What is the difference between an EDLP retailer and a high-low retailer? Why does Carmex charge them a different price?

Accepted Answer

Everyday low price (EDLP) retailers, suc...

Question 2

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

Question 3

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) C) and D)
G) B) and E)

Question 4

The successive price cutting by competitors to increase or maintain their unit sales or market share is referred to as

Accepted Answer

A)   everyday even lower pricing.
B)   a price war.
C)   fair trade pricing.
D)   a market war.
E)   a price reduction.F) B) and C)
G) A) and C)

Question 5

It is relatively easy to measure the incremental cost of a new advertising campaign; what is not as easy is

Accepted Answer

A)   measuring the extra fixed cost involved.
B)   measuring the extra variable cost involved.
C)   measuring the incremental revenue generated by the new advertising campaign.
D)   determining whether customers who stop buying the product are reacting negatively to the advertisement or to some other aspect of the product itself.
E)   determining what percentage of the ad-generated revenue should be reinvested into additional advertisements of the same form.F) A) and E)
G) C) and E)

Question 6

The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item, is referred to as

Accepted Answer

A)   line item pricing.
B)   product-line pricing.
C)   price lining.
D)   customary pricing.
E)   discretionary pricing.F) D) and E)
G) B) and C)

Question 7

Figure 14-3
-The movement from point B to point C in Figure 14-3 above shows

Accepted Answer

A)   skimming demand.
B)   penetration demand.
C)   that buyers see the product as a bargain and buy more.
D)   that buyers become dubious about the quality and prestige and buy less.
E)   a downturn in the economy.F) C) and E)
G) C) and D)

Question 8

A hardware store advertises a ⅜-inch Black and Decker Power Drill for $29.95. You enter the store intending to purchase the drill. The salesperson informs you that they are all sold out. She tells you that the "sale" drills were factory seconds and that if you are going to be doing any kind of serious woodworking, you should buy the Model 3309, which sells for $49.99. This scenario is which type of illegal pricing practice?

Accepted Answer

A)   predatory pricing
B)   price discrimination
C)   price fixing
D)   bait and switch
E)   conditional bargainsF) A) and B)
G) B) and E)

Question 9

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) B) and C)
G) C) and E)

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 D)
G) C) and D)

Question 11

Explain why odd-even pricing may be successful.

Accepted Answer

Odd-even pricing presumes that...

Question 12

Carmex uses all of these approaches to setting the price of its products except which?

Accepted Answer

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

Question 13

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

Accepted Answer

Discounts are reductions from list price...

Question 14

When Kroger, a national supermarket chain, uses a special promotion to price a six-pack of soda at $2.09 (which is below its customary price level of $4.29) , it is attempting to

Accepted Answer

A)   drive its competition out of business.
B)   attract customers in hopes they will buy other products as well.
C)   fill its parking lot so its store will look successful.
D)   work with the local bottler to move products that are close to their expiration dates.
E)   help stimulate the local economy and generate good will with its customers.F) A) and E)
G) D) and E)

Question 15

After offering a promotional allowance, the price of a product returns to its regular price level. When this happens, the retail store's gross margin on that product ________ on those items that were bought with the allowance but not sold during the price special promotion.

Accepted Answer

A)   decreases, though minimally
B)   increases substantially
C)   remains the same
D)   fluctuates wildly
E)   vanishesF) None of the above
G) A) and E)

Question 16

Explain predatory pricing.

Accepted Answer

Predatory pricing is the practice of cha...

Question 17

Rather than emphasize demand, cost, or profit factors, a price setter can stress what ________ doing.

Accepted Answer

A)   the service sector is
B)   the market or competitors
C)   the global economy is
D)   suppliers are
E)   the financial markets areF) A) and D)
G) A) and E)

Question 18

Which of these 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) A) and D)
G) All of the above

Question 19

A dynamic pricing policy allows marketers to respond to

Accepted Answer

A)   requests for allowances.
B)   threats of discrimination.
C)   success measures for the firm's previous promotions.
D)   changes in demand, cost, and competitive factors.
E)   inquiries by government agencies.F) A) and B)
G) None of the above

Question 20

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

Exam 14: Arriving at the Final Price

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

The successive price cutting by competitors to increase or maintain their unit sales or market share is referred to as

Correct Answer
verified

Rather than emphasize demand, cost, or profit factors, a price setter can stress what ________ doing.

Correct Answer
verified

Correct Answer
verified

The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item, is referred to as

Correct Answer
verified

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

Correct Answer
verified
Discounts are reductions from list price...
View Answer

Carmex uses all of these approaches to setting the price of its products except which?

Correct Answer
verified

Explain why odd-even pricing may be successful.

Correct Answer
verified
Odd-even pricing presumes that...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

It is relatively easy to measure the incremental cost of a new advertising campaign; what is not as easy is

Correct Answer
verified

Figure 14-3 -The movement from point B to point C in Figure 14-3 above shows

Correct Answer
verified

Explain predatory pricing.

Correct Answer
verified
Predatory pricing is the practice of cha...
View Answer

After offering a promotional allowance, the price of a product returns to its regular price level. When this happens, the retail store's gross margin on that product ________ on those items that were bought with the allowance but not sold during the price special promotion.

Correct Answer
verified

What is the difference between an EDLP retailer and a high-low retailer? Why does Carmex charge them a different price?

Correct Answer
verified
Everyday low price (EDLP) retailers, suc...
View Answer

Correct Answer
verified

A dynamic pricing policy allows marketers to respond to

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

When Kroger, a national supermarket chain, uses a special promotion to price a six-pack of soda at $2.09 (which is below its customary price level of $4.29) , it is attempting to

Correct Answer
verified

Exam 14: Arriving at the Final Price

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

The successive price cutting by competitors to increase or maintain their unit sales or market share is referred to as

Correct AnswerverifiedShow Answer

Rather than emphasize demand, cost, or profit factors, a price setter can stress what ________ doing.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item, is referred to as

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

Carmex uses all of these approaches to setting the price of its products except which?

Correct AnswerverifiedShow Answer

Explain why odd-even pricing may be successful.

Correct AnswerverifiedOdd-even pricing presumes that...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

It is relatively easy to measure the incremental cost of a new advertising campaign; what is not as easy is

Correct AnswerverifiedShow Answer

Figure 14-3 -The movement from point B to point C in Figure 14-3 above shows

Correct AnswerverifiedShow Answer

Explain predatory pricing.

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

After offering a promotional allowance, the price of a product returns to its regular price level. When this happens, the retail store's gross margin on that product ________ on those items that were bought with the allowance but not sold during the price special promotion.

Correct AnswerverifiedShow Answer

What is the difference between an EDLP retailer and a high-low retailer? Why does Carmex charge them a different price?

Correct AnswerverifiedEveryday low price (EDLP) retailers, suc...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A dynamic pricing policy allows marketers to respond to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When Kroger, a national supermarket chain, uses a special promotion to price a six-pack of soda at $2.09 (which is below its customary price level of $4.29) , it is attempting to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Discounts are reductions from list price...
View Answer

Correct Answer
verified

Correct Answer
verified
Odd-even pricing presumes that...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Predatory pricing is the practice of cha...
View Answer

Correct Answer
verified

Correct Answer
verified
Everyday low price (EDLP) retailers, suc...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified