Marketing SG Ch 11
Many amusement parks charge a daily ticket or season pass charge plus additional fees for food and other in-park features. This is called __________. A. two-part pricing B. product line pricing C. by-product pricing D. optional-product pricing E. product-bundle pricing
A. two-part pricing
Which of the following statements is true concerning new product pricing strategies? A. When using a market-skimming strategy, marketers do not need to focus on the product's quality and image. B. 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. C. For a market-penetration strategy to work, production and distribution costs must increase as sales volume increases. D. A market-penetration strategy should be used if the market is not highly price sensitive. E. If competitors can easily enter the market, a market-skimming strategy should be used.
B. 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.
Cheese makers in Wisconsin sell their leftover brine to local city and county highway departments, which use it in conjunction with salt to melt icy roads. Which product mix pricing strategy does this represent? A. Product line pricing B. Optional-product pricing C. Product-bundle pricing D. By-product pricing E. Two-part pricing
D. By-product pricing
Assume a competitor has cut prices and a company determines they should respond. Effective actions that the company could initiate include __________. A. decrease quality and increase prices B. reducing perceived value C. raising prices D. launch a low-price fighter brand E. improve quality and decrease prices
D. launch a low-price fighter brand
What is the purpose of the Robinson-Patman Act? A. To prevent deceptive pricing B. To prevent unfair price discrimination C. To prevent price fixing D. To prevent predatory pricing E. To prevent scanner fraud
B. To prevent unfair price discrimination
Which of the following is a concern when using optional-product pricing? A. Which products should be bundled at a lower price B. Which products to include in the base price and which to offer as options C. How to price products that must be used with the main product D. Whether to set a fixed fee or a variable usage rate E. How to determine the price steps between different products in a product line
B. Which products to include in the base price and which to offer as options
Recently, Amazon.com has been accused of __________, which is the practice of selling products below cost to harm competitors. A. retail price maintenance B. predatory pricing C. price discrimination D. deceptive pricing E. price fixing
B. predatory pricing
One major objective of a market-penetration pricing strategy is to __________. A. attract buyers willing to pay a higher price B. win a large market share C. set a high price to gain profits D. prevent customer dissatisfaction E. skim off small but profitable segments
B. win a large market share
Which of the following statements regarding initiating price increases is correct? A. Cost inflation is not a factor in price increases. B. Companies do not need to communicate reasons for price increases. C. The company should consider ways to meet higher costs or demand without raising prices. D. Price increases do not impact profits. E. Prices should be increased when there is a lack of demand.
C. The company should consider ways to meet higher costs or demand without raising prices.
Basic price adjustments known as __________ are used to reward customers for certain responses. A. psychological prices B. segmented prices C. discounts and allowances D. location-based pricing E. discounts and allocations
C. discounts and allowances
Which of the following statements regarding public policy and pricing is correct? A. Sellers are allowed to punish dealers who do not price a product at the manufacturer's suggested retail price (MSRP). B. Companies are usually free to charge whatever prices they wish. C. Federal statutes apply to both interstate and intrastate commerce. D. Companies can, under some circumstances, price items below cost. E. It is legal in some industries for sellers to collude with competitors when setting prices.
D. Companies can, under some circumstances, price items below cost.
Which of the following statements regarding segmented pricing is correct? A. For segmented pricing to be effective, the segments should have the same degree of demand. B. Segmented pricing is not used to price different versions of a product. C. Different locations are not used as a basis for segmented pricing. D. Segmented pricing practices can cause consumer resentment. E. Perceived value does not have to be considered when using segmented pricing.
D. Segmented pricing practices can cause consumer resentment.
Which of the following statements regarding dynamic pricing is correct? A. Dynamic pricing could cause consumer resentment and damage customer relationships. B. Because of dynamic pricing, online consumers no longer compare prices. C. Dynamic pricing benefits only consumers. D. The dynamic pricing tactic of surge pricing is legally questionable. E. Dynamic pricing is only effective when used online.
A. Dynamic pricing could cause consumer resentment and damage customer relationships.
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 a(n) __________. A. indicator of quality B. indicator of the cost of production C. type of segmented pricing D. limited time offer E. indicator of geographic pricing
A. indicator of quality
Whirlpool washers and dryers are offered in many different models. Whirlpool will use __________ pricing to determine the price steps between the different models. A. product line B. optional-product C. two-part pricing D. product-bundle E. captive-product
A. product line
A soda pop company offers a discount to a grocer. In exchange, the grocer agrees to provide in-store advertising for the soda pop and additional sales-support. This is an example of __________. A. promotional allowances B. discounts C. cash discounts D. trade-in allowances E. segment discounts
A. promotional allowances
Gillette charges a fairly low price for their razors (relative to costs) and a high price for razor blades. They are using a strategy of __________ pricing. A. captive-product B. product line C. product-bundle D. two-part pricing E. by-product
A. captive-product
Which of the following statements is true regarding initiating price cuts? A. When faced with falling demand, firms should not cut prices. B. Firms never cut prices, they only raise them. C. If faced with excess capacity a firm should not cut its price. D. Cutting price has no effect on costs. E. Cutting prices in an industry with excess capacity may lead to price wars.
E. Cutting prices in an industry with excess capacity may lead to price wars.
__________ occurs when retailers set an artificially high "regular price" and then advertise a "sale price" which is actually close to their everyday price. A. Retail price maintenance B. Price fixing C. Predatory pricing D. Price discrimination E. Deceptive pricing
E. Deceptive pricing
When would a competitor most likely react to a firm's price change? A. When buyers are not well informed about prices B. When buyers are not well informed about the product C. When the number of firms involved is large D. When the product is differentiated E. When the number of firms involved is small
E. When the number of firms involved is small
A company has set a low price on a new product it introduced. They want to maximize their market share and attract a large number of buyers quickly. Which new product pricing strategy should the company use? A. Psychological pricing B. Optional product pricing C. Market-skimming pricing D. Captive-product pricing E. Market-penetration pricing
E. Market-penetration pricing
One form of __________ is when movie theaters charge one price for adults and a different price for senior citizens. A. product form pricing B. promotional allowances C. location-based pricing D. psychological pricing E. customer-segment pricing
E. customer-segment pricing
Promotional pricing tactics include __________. A. discounts, geographical pricing, and special-event pricing B. customer-segment pricing, location-based pricing, and time-based pricing C. functional discounts, limited time offers, and location-based pricing D. discounts, limited time offers, and reference prices E. discounts, special-event pricing, and limited time offers
E. discounts, special-event pricing, and limited time offers
When Apple Computer Company introduced their iPhone, they priced the new product at $599, considerably higher than either their iPod or competing cellular phones. Apple Computer was pursuing a(n) __________ pricing strategy. A. captive-product B. by-product C. market-penetration D. optional-product E. market-skimming
E. market-skimming
Many personal care companies combine toothpaste with a toothbrush at a reduced price. This is an example of __________ pricing. A. two-part B. by-product C. product line D. captive-product E. product-bundle
E. product-bundle