MKT_CHAP11

A firm is using ________ when it charges a high, premium price for a new product with the intention of reducing the price in the future. a. price skimming b. trial pricing c. value pricing d. market-penetration pricing e. prestige pricing

a

By definition, ________ is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost. a. segmented pricing b. variable pricing c. flexible pricing d. cost-plus pricing e. reference pricing

a

What is a major advantage of product bundle pricing? a. It can promote the sales of products consumers might not otherwise buy. b. It allows a company to offset the costs of disposing of by-products. c. It combines the benefits of the other pricing strategies. d. It creates a brand experience for consumers. e. It offers consumers less value for the money.

a

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________. a. product line pricing b. market-skimming pricing c. market-penetration pricing d. break-even pricing e. target return pricing

a

Which of the following is an example of a cash discount? a. 2/10, net 30 b. $5.00 with a two-pack c. a free case when you buy 12 d. when you pay cash and take the product with you e. none of the above

a

A quantity discount is a price reduction to buyers who purchase ________. a. frequently b. large volumes c. close outs d. inferior merchandise e. superior merchandise

b

Companies involved in deciding which items to include in the base price and which to offer as options are engaged in ________ pricing. a. product bundle b. optional product c. captive product d. by-product e. skimming

b

Companies usually develop ________ rather than ________. a. single products; product families b. product lines; single products c. product families; product lines d. product brands; product images e. product images; product brands

b

Consumers usually perceive higher-priced products as ________. a. being in the maturity stage of the product life cycle b. having a higher quality c. having low profit margins d. popular brands e. being in the introductory stage of the product life cycle

b

Durango China Company charges all customers within different identified geographical areas a single total price. The more distant the area, the higher the price. This is ________. a. freight-absorption pricing b. zone pricing c. uniform-delivered pricing d. FOB-origin pricing e. bulk rate pricing

b

Price fixing, predatory pricing, retail price maintenance, and deceptive pricing are examples of ________. a. common pricing policies b. major public policy issues in pricing c. ethical pricing strategies d. pricing policies used mostly in the wholesale sector e. pricing used mostly in the retail sector

b

Using product bundle pricing, sellers combine several products and offer the bundle ________. a. as a functional unit b. at a reduced price c. as a complete self-service package d. as a reward to loyal customers e. at a premium price

b

When Pepsi came out with Pepsi Blue and priced it at half price to attract buyers, Pepsi was using ________. a. market-skimming pricing b. market-penetration pricing c. new-product pricing d. discount pricing e. value-added pricing

b

When product managers at Schwinn make decisions about which types of bicycle seats, handle bars, and saddlebags to offer customers on their bikes, they are engaged in ________. a. product line pricing b. optional product pricing c. captive product pricing d. by-product pricing e. cost-based pricing

b

Which of the following refers to the prices that a buyer carries in his or her mind and refers to when looking at a given product? a. target prices b. reference prices c. promotional prices d. geographical prices e. dynamic prices

b

________ pricing is the approach of setting a low initial price in order to attract a large number of buyers quickly and win a large market share. a. Market-skimming b. Market-penetration c. Below-market d. Value-based e. Leader

b

Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________. a. market-level pricing b. market-competitive pricing c. market-skimming pricing d. market-price lining e. market-price filling

c

Consumers are less likely to use price to judge the quality of a product when they ________. a. lack information b. lack skills to use the product c. have experience with the product d. are shopping for a specialty item e. cannot physically examine the product

c

In the case of services, captive product pricing is called ________ pricing. a. by-product b. optional product c. two-part d. bundle e. segmented

c

Mach 3 razor blades must be used in the Mach 3 razor. Which type of pricing is being used? a. product line pricing b. optional product pricing c. captive product pricing d. by-product pricing e. product bundle pricing

c

Promotional pricing can have all of the following adverse effects EXCEPT ________. a. creating deal-prone customers b. eroding the brand's value in the eyes of customers c. giving pricing secrets away to competitors d. becoming addictive to both the customer and business e. delaying the company's focus on long-term strategies

c

Service Industries, Inc. plans to offer a price-adjustment strategy in the near future. It could consider each of the following EXCEPT ________. a. discount and allowance pricing b. segmented pricing c. physiological pricing d. promotional pricing e. location pricing

c

Typically, producers who use captive-product pricing set the price of the main product ________ and set ________ on the supplies necessary to use the product. a. low; low markups b. high; low markups c. low; high markups d. high; high markups e. moderately; moderate markups

c

When sellers set prices after talking to competitors and engaging in collusion, they are involved in ________. a. predatory pricing b. discriminatory pricing c. price fixing d. skimming pricing e. penetration pricing

c

Which of the following is NOT a price adjustment strategy? a. segmented pricing b. promotional pricing c. free samples d. geographical pricing e. seasonal pricing

c

A marketer must be familiar with the five major product mix pricing situations. Which of the following is NOT one of them? a. product line pricing b. optional product pricing c. captive product pricing d. unbundled product pricing e. by-product pricing

d

Using ________, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive. a. product bundle pricing b. optional product pricing c. captive product pricing d. by-product pricing e. skimming

d

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency? a. segmented pricing b. psychological pricing c. referent pricing d. promotional pricing e. basing-point pricing

d

When General Motors provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs, it is granting a ________. a. trade discount b. functional discount c. cash discount d. promotional allowance e. trade credit

d

Which of the following is a reason that a marketer would choose a penetration pricing strategy? a. to ensure the company has the ability to increase prices once demand decreases b. to focus on the rapid achievement of profit objectives c. to appeal to different consumer segments with different levels of price sensitivity d. to create markets for highly technical products e. to discourage competition from entering the market

e