Marketing Chapter 11

________ involves constantly updating prices to reflect changes in supply, demand, or market conditions.

Dynamic pricing

The ________ is a law passed in 1914 that seeks to prevent practices that may cause injury to customers, that cannot be reasonably avoided by customers, and that cannot be justified by other outcomes that may benefit the consumer or the idea of free competition.

Federal Trade Commission Act

Which statement is true of gray markets?

Gray market goods can be a boon for consumers.

Which statement is true of markup pricing?

It is not very effective at maximizing profits.

________ is a pricing strategy that involves pricing a product higher than competitors to signal that it is of higher quality.

Prestige pricing

Which statement is true regarding the influence of technology on pricing?

Technology has helped to shift the balance of power from companies to customers.

Nadine, the marketing manager at Prime Inc., is in the process of setting prices. She has finished analyzing the competitive price environment. According to the price-setting process, what should be Nadine's immediate next step?

choose a price

Sam's Ski Shop advertised a popular line of skis stating that the skis were "originally priced at $625" and that they are now on sale for $249. However, the manufacturer's suggested retail price of the skis is only $515. Sam's Ski Shop could be accused of

deceptive pricing

What is the first step in the price-setting process?

define the pricing objectives

Lincoln's landlord has included a clause in the rental contract that makes it possible for him to increase Lincoln's monthly rent if taxes on the property go up. Which clause was included in the contract?

escalator clause

Predatory pricing is considered illegal because it

is considered an attempt to create a monopoly.

The owner of a home furnishings store has decided to price the three types of clocks it sells at $24.99, $49.99, and $69.99. From this information, we can say that the owner is pursuing a(n) ________ pricing strategy.

odd

Comfort Scents, a manufacturer of scented products, has decided to sell a combination package of three fall-inspired candles: autumn breeze, falling leaves, and crackling fire. This package is priced marginally higher than the individual candles alone. Given this information, we can come to the conclusion that the marketers of Comfort Scents have applied the ________ strategy.

price bundling

Decisions regarding ________ are one of the most important strategic decisions a firm faces because this element reflects the value the product delivers to consumers as well as the value the product captures for the firm.

pricing

The objective of strategic pricing is

profitability

Which calculation correctly determines the profits of a firm?

profits = (units sold * price) − costs

The prices that consumers consider reasonable and fair for a product are termed ________ prices.

reference

Arctic Treats is an ice-cream shop. Its marketing strategy from the month of November to February is "buy one get one free." Which of the following best describes the strategy applied by Arctic Treats?

seasonal discounts

Tariffs are ________ on imports and exports between countries.

taxes

The term black market is best described as

the illegal buying and selling of products outside of sanctioned channels.