Ch 11 questions

7. Companies that make products that must be used along with a main product are using __________.

i. Captive-product pricing

1. Federal legislation on​ __________ states that sellers must set prices without talking to competitors

i. Price-fixing

21. ________ occurs when retailers set an artificially high "regular price" and then advertise a "sale price," which is actually close to their everyday price.

i. Deceptive pricing

12. Companies that use ________ continually adjust prices to meet the characteristics and needs of individual customers and situations.

i. Dynamic pricing

4. Which of the following statements is true concerning new product pricing strategies?

i. For a market-skimming strategy to be successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more.

20. Techniques that can be used by sellers for avoiding customers' perception of price gouging includes all of the following except __________.

i. Low-price fighter items

5. A company has set a low price on a new product it introduced. It wants to maximize its market share and attract a large number of buyers quickly. Which new product pricing strategy should the company use?

i. Market-penetration pricing

3. When Apple introduced its iPhone, it priced the new product at $599, considerably higher than either its iPod or competing cellular phones. Apple Computer was pursuing a(n) ________ new product pricing strategy.

i. Market-skimming

6. A car buyer can choose a base model at one price, or one with a premium sound and navigation system at a higher price. This is an example of _______ pricing.

i. Optional-product

25. Archer Daniels Midland Co is the world's largest processor of soybeans, corn, and wheat. In the 1990s, the Justice Department found it guilty of regularly meeting with competitors when setting prices. ADM was guilty of ________.

i. Price-fixing

15. Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Because she does not know much about wine, she will likely use the price of the wines as ________.

i. An indicator of quality

8. Gillette charges a fairly low price for its razors (relative to costs) and a high price for razor blades. It is using a strategy of ________ pricing.

i. Captive-product

14. Many state colleges and universities charge one price for in-state students and a higher price for out-of-state students. Which form of segmented pricing are these schools using?

i. Location-based pricing

10. Bath & Body Works offers "three-fer" deals on its soaps and lotions (such as three antibacterial soaps for $10). This is an example of _______ pricing.

i. Product bundle

9. The Ford Mustang is offered in several different models. Ford will use ________ pricing to determine the price steps between the different models

i. Product line

17. Which of the following is a potentially effective action a company could take in response to a competitor's price cut?

i. Reduce the price

11. In __________pricing, the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs.

i. Segmented

1. What is predatory​ pricing?

i. Selling below cost with the intention of punishing a competitor

24. What is the purpose of the Robinson-Putnam Act?

i. To prevent unfair price discrimination

16. Which of the following statements is true regarding initiating price increases?

i. Wherever possible, the company should consider ways to meet higher costs or demand without raising prices

1. One major objective associated with a market-penetration pricing strategy is to ________.

i. Win a large market share

13. UPS charges different prices for shipping depending on which region of the United States the item is being shipped to. The more distant the city the package is being shipped to, the higher the price UPS charges. Which geographic pricing method is UPS using?

i. Zone pricing

2. Market skimming prices are preferred in all of the following conditions except __________.

i. an initial low price is set by the companies

19. Techniques that can be used by sellers for avoiding customers' perception of price gouging includes all of the following except __________.

i. rationing products to customers

18. Assume a competitor has cut prices and a company determines it should respond. Potential actions that the company could initiate include ________.

i. reducing price, raising perceived value, improving quality and increasing price, and launching a low-price "fighter brand"