Chapter 11 Quiz Questions

Krista goes to a store to buy a new liquid soap dispenser. When she purchases a new dispenser from the store she gets two liquid soap refill packets for free, as part of a promotional offer, but she will need to purchase refills later. In this scenario, the pricing strategy used for the soap dispenser is ________ pricing.

Captive

________ require that a certain percentage markup be applied to all products

Minimum markup laws

Amelia is the marketing manager at a cafe in Charleston, and is responsible for deciding the price of dishes included on the cafe's menu. The chef of the cafe introduced a new dish, which was initially priced at $20 by Amelia, but she increased its price slowly over a period of 6 months. In this scenario, Amelia utilized a ________ strategy.

Penetration Pricing

With ________ pricing, customers are allowed—even encouraged—to haggle about prices

Variable

________ remit monies to purchasers after the fact

Allowances

The Internet created a rise in ________ as more and more people decided to meet online to sell products to the highest bidder.

Auction Pricing

To better take into account the differential impact of fixed and variable costs, marketing managers can use ________ pricing.

Average- cost pricing (?)

________ could lead the marketing manager to decide to price at some market average price, or perhaps above or below it in the context of penetration or skimming objectives.

Competitor- based pricing

________ is used by firms that rely on periodic heavy promotional pricing, primarily communicated through advertising and sales promotion, to build traffic and sales volume

High/low pricing

James is trying to determine the best price for his new fishing poles and thus uses the sales price as a basis of calculating the markup percentage. He is using a ________ approach.

Markup on Sales Price

________ could result in overall higher prices for consumers since various competitors are all pricing the same to maximize their profits.

Price-Fixing

Bella is a discount furniture store. Most of the items in the store are overstock and hence tend to be more inexpensive than other furniture. Recently Bella started to display the manufacturers' suggested retail price next to the price it charges to show the savings. Bella is using a ________ strategy.

Reference Pricing

Pricing objectives very frequently are designed to maximize profit, which necessitates a ________ pricing strategy

Target Return on Investment (ROI)

________ costs are the sum of the fixed and variable costs

Total

________ provide an incentive to a channel member for performing some function in the channel that benefits the seller, such as stocking a product or performing a product service

Trade Discounts

Giovanni's Gems is a high-quality Italian leather goods store in Manhattan. Giovanni also runs an Internet site where people can buy his products and he will charge the same delivery fee to any location within the 48 contiguous states. Giovanni utilizes ________ pricing.

Uniform Delivered

________ refers to products sold at prices below cost to attract shoppers to a store.

Loss Leader

________ is a critical component that plays into a customer's assessment of the value afforded by a firm and its offerings.

Price

Bright House wants Madhukar to buy the full gamut of entertainment products, and the more he buys—digital television, premium channels, downloadable movies, local and long-distance phone service, cellular service, high-speed Internet—the better the deal becomes compared to the total of the individual prices of each product. Bright House is using a ________ strategy.

Price Bundling

Veggie Vitality will send retailers a check if the retailer successfully includes its vegetable-based smoothies in promotional efforts. Veggie Vitality uses ________ to incentivize retailers

Promotional Allowances

Creating a perception about price merely from the image the numbers provide the customer demonstrates ________ pricing.

Psychological

When a seller advertises an item at an unbelievably low price to lure customers into a store, and then refuses to sell the advertised item and instead pushes a similar item with a much higher price and higher margin, the seller is participating in the illegal practice of ________

Bait and Switch

The fundamental philosophy behind ________ is to reduce investment in promotion and transfer part of the savings to lower price.

Everyday Low Pricing

The rise of Walmart as one of the world's largest corporations has brought the concept of ________ to the forefront of global consumer consciousness.

Everyday Low Pricing

One rationale for establishing a price skimming objective is that ________ lends status to a product or brand by virtue of a price relatively higher than the competition.

Prestige Pricing

Marriott has branded its entire family of accommodations based on different value propositions, supported by clearly delineated pricing strategies. Its offerings include Ritz-Carlton and JW Marriott for the most discriminating patron, Marriott and Renaissance at the next level of full service, and an array of differentially positioned brands such Courtyard and Residence Inn. This is an example where ________ can occur at a level much broader in scope than individual products

Pricing Lining

Priceline.com is a firm that serves as a clearinghouse for extra capacity from airlines, hotels, and cruise lines. It is an example of a firm that uses a(n) ________ strategy.

Reverse Auction

Besides the standard auction approach where buyers bid for a seller's offering, it is now very common for sellers to utilize ________ to bid prices to capture a buyer's business.

Reverse Auctions

When shipping prices are dependent on geographic areas based on the distance from the shipping location, it is considered ________ pricing.

Zone

________ are typically expressed as greatly extended invoice due dates.

Seasonal Discounts