Question 1

Companies use a __________ to assess whether its products and brands are above, at, or below the market.

Accepted Answer

A)  customary price
B)  prestige price
C)  price premium
D)  price lining
E)  benchmarkF) A) and B)
G) All of the above

Question 2

When Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) , the greeting card company was trying to appeal to a mass market that was price-sensitive. Hallmark was using a(n)  __________ pricing strategy.

Accepted Answer

A)  prestige
B)  skimming
C)  target ROI
D)  penetration
E)  experience-curveF) A) and E)
G) A) and B)

Question 3

The three major types of special adjustments to list or quoted price are

Accepted Answer

A)  demand-oriented, cost-oriented, and profit-oriented adjustments.
B)  one price, flexible price, and discounts.
C)  discounts, allowances, and marginal adjustments.
D)  discounts, allowances, and geographical adjustments.
E)  discounts, incremental costs and revenues, and geographical adjustments.F) A) and C)
G) A) and E)

Question 4

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Accepted Answer

A)  using price differentials when price differences are given on the basis of other family businesses
B)  using price differentials when charging different prices to different buyers for goods of like grade or quality
C)  using price differentials when price differences are quoted to selected buyers in good faith to meet competitors' prices and are not intended to injure competition
D)  using price differentials when charging different prices on the basis of religious affiliation
E)  using price differentials when price differences result from changing market conditions, avoiding obsolescence of seasonal merchandise, including perishables, or closing out salesF) A) and C)
G) A) and B)

Question 5

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

Accepted Answer

A)  the percentage discounted if the bill is paid within 30 days.
B)  the percentage increase in price if the bill is not paid within 10 days.
C)  the number of days for which the discount is valid.
D)  the discount in dollars per unit if the order is paid on time within 30 days.
E)  the penalty in dollars if the bill is not paid within 10 days.F) A) and E)
G) A) and B)

Question 6

Consumers buy water and soda from vending machines. Traditionally, the price of each of these products is about $1.25. If a marketer charges a significantly higher price for such products dispensed by vending machines, such as $2.00 per item, sales are likely to decline. In order to avoid declines in sales, marketers tend to be very consistent in the prices they charge for vending machine products. This is an example of marketers employing a __________ strategy.

Accepted Answer

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

Question 7

Seasonal discounts are used by manufacturers to

Accepted Answer

A)  get rid of dated merchandise.
B)  prevent retailers from purchasing competitors' products.
C)  prolong the peak seasonal selling season.
D)  establish an immediate feeling of goodwill between the buyer and seller that hopefully will continue when prices return to normal.
E)  entice dealers to purchase seasonal merchandise earlier in the selling season.F) B) and E)
G) A) and B)

Question 8

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) All of the above

Question 9

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Accepted Answer

A)  target return-on-sales pricing
B)  flexible pricing
C)  cost-plus pricing
D)  standard markup pricing
E)  customary pricingF) B) and E)
G) A) and B)

Question 10

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

Accepted Answer

A)  predatory pricing
B)  discount pricing
C)  lateral price fixing
D)  regional rollback pricing
E)  delayed payment pricingF) B) and E)
G) A) and C)

Question 11

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

Question 12

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Accepted Answer

A)  experience curve pricing
B)  loss-leader pricing
C)  a quantity discount
D)  a promotional discount
E)  everyday low pricingF) D) and E)
G) A) and B)

Question 13

A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

Accepted Answer

A)  free on board (FO
B)   origin pricing.
B)  free on board (FO
B)   destination pricing.
C)  mode of transportation pricing.
D)  uniform delivered pricing.
E)  free on board (FO
B)   geographical pricing.F) A) and D)
G) C) and E) A

Question 14

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

Question 15

The way that a person navigates through an online marketer's website is called

Accepted Answer

A)  surf-shopping behavior.
B)  cross-channel shopping.
C)  the clickstream.
D)  one-click shopping.
E)  the shopper pathway.F) B) and E)
G) B) and D)

Question 16

Manufacturers use seasonal discounts to

Accepted Answer

A)  get rid of expired merchandise.
B)  prevent retailers from purchasing competitors' products.
C)  extend the peak seasonal selling season.
D)  encourage buyers to stock inventory earlier than their normal demand would require.
E)  temporarily spur primary demand during periods of soft sales, such as the beginning of a month, after which prices will return to normal when selective demand picks up.F) C) and D)
G) A) and B)

Question 17

Incremental analysis might take the form of such questions as, "Should we extend our hours to include Sundays?" or "What if we put more apples in the pie?" The basic principle is that

Accepted Answer

A)  as long as a marketing action breaks even, the action is worth taking.
B)  expected incremental revenues from pricing and other marketing actions must more than offset incremental costs.
C)  you "don't rock the boat" if your program is making a profit; "leave well enough alone."
D)  if you are not willing to take risks, even if the numbers tell you otherwise, your business will ultimately fail.
E)  marketing and finance are two different animals: "If it feels right in your gut…go for it."F) A) and B)
G) A) and C)

Question 18

Mark Johnson, the manager of a discount consumer electronics store, was approached by the manufacturer's representative on behalf of a marketer of a popular and profitable line of DVD storage racks. The manufacturer's representative implied that if Johnson doesn't raise the retail prices for the storage racks to those paid by the marketer's nondiscount customers, Johnson's supply of racks may be severely curtailed. The manufacturer's representative is guilty of attempting

Accepted Answer

A)  horizontal price fixing.
B)  resale price maintenance.
C)  price discrimination.
D)  predatory pricing.
E)  bait and switch pricing.F) A) and B)
G) None of the above

Question 19

Discounts that are designed to encourage repeat buying by a single customer over a given time period, such as a year, are referred to as

Accepted Answer

A)  promotional allowances.
B)  cumulative quantity discounts.
C)  cash discounts.
D)  functional discounts.
E)  noncumulative quantity discounts.F) A) and B)
G) A) and C)

Question 20

What are the six major steps involved in setting prices?

Accepted Answer

The six major steps involved in setting prices are (1) identify pricing objectives and constraints; (2) estimate demand and revenue; (3) determine cost, volume, and profit relationships; (4) select an approximate price level; (5) set list or quoted price; and (6) make special adjustments to list or quoted price.

Exam 14: Arriving at the Final Price

Companies use a __________ to assess whether its products and brands are above, at, or below the market.

Correct Answer
verified

When Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) , the greeting card company was trying to appeal to a mass market that was price-sensitive. Hallmark was using a(n) __________ pricing strategy.

Correct Answer
verified

The three major types of special adjustments to list or quoted price are

Correct Answer
verified

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
E

Seasonal discounts are used by manufacturers to

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

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Correct Answer
verified

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

Correct Answer
verified

Multiple-zone pricing refers to

Correct Answer
verified

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct Answer
verified

A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

Correct Answer
verified
A

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

Correct Answer
verified

The way that a person navigates through an online marketer's website is called

Correct Answer
verified

Manufacturers use seasonal discounts to

Correct Answer
verified

Incremental analysis might take the form of such questions as, "Should we extend our hours to include Sundays?" or "What if we put more apples in the pie?" The basic principle is that

Correct Answer
verified

Correct Answer
verified

Discounts that are designed to encourage repeat buying by a single customer over a given time period, such as a year, are referred to as

Correct Answer
verified

What are the six major steps involved in setting prices?

Exam 14: Arriving at the Final Price

Companies use a __________ to assess whether its products and brands are above, at, or below the market.

Correct AnswerverifiedShow Answer

When Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) , the greeting card company was trying to appeal to a mass market that was price-sensitive. Hallmark was using a(n) __________ pricing strategy.

Correct AnswerverifiedShow Answer

The three major types of special adjustments to list or quoted price are

Correct AnswerverifiedShow Answer

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedE

Seasonal discounts are used by manufacturers to

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

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Multiple-zone pricing refers to

Correct AnswerverifiedShow Answer

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct AnswerverifiedShow Answer

A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

Correct AnswerverifiedA

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

Correct AnswerverifiedShow Answer

The way that a person navigates through an online marketer's website is called

Correct AnswerverifiedShow Answer

Manufacturers use seasonal discounts to

Correct AnswerverifiedShow Answer

Incremental analysis might take the form of such questions as, "Should we extend our hours to include Sundays?" or "What if we put more apples in the pie?" The basic principle is that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Discounts that are designed to encourage repeat buying by a single customer over a given time period, such as a year, are referred to as

Correct AnswerverifiedShow Answer

What are the six major steps involved in setting prices?

Correct Answer
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E

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A

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