Chp. 15 SmartBook

Which of the following are true of price bundling? (Choose every correct answer.) Multiple select question. Different prices are charged to different people for the same bundle of products or services. Each item within the bundle must have about the same value as others within that bundle. A less popular item is sometimes bundled with a more desirable item. Price bundling helps customers stock up on a product. Several popular items are frequently sold together for a lower combined price.

A less popular item is sometimes bundled with a more desirable item. Price bundling helps customers stock up on a product. Several popular items are frequently sold together for a lower combined price.

______-based pricing encourages consumers to see how a company's prices compare to those of business rivals. Multiple choice question. Value Competition Discount EDLP

Competition

Which of the following belong to the five Cs of pricing? (Select all that apply.) Multiple select question. Corporations Consistency Costs Company objectives Channel members

Costs Company objectives Channel members

Which of the following is NOT a pricing tactic aimed at consumers? Multiple choice question. Coupons Cumulative discounts Price bundling Price lining

Cumulative discounts

True or False: Cash discounts are reductions retailers take in the initial selling price of the product or service.

False

Which of the following are characteristics of leader pricing? (Choose every correct answer.) Multiple select question. It sets a low price on items that customers often buy. It is rarely advertised. It sets a price on items at or below the store's cost. It involves aggressive advertising.

It sets a low price on items that customers often buy. It involves aggressive advertising.

What is NOT a pricing tactic? Multiple choice question. Coupons Markdowns Price skimming Seasonal discounts

Price skimming

Which of the following are pricing tactics used in B2B pricing? (Choose every correct answer.) Multiple select question. Seasonal discounts Price bundling Allowances Rebates Price lining

Seasonal discounts Allowances

Which of the following is NOT a common base for pricing strategies? Multiple choice question. Cost Competitor Value Service

Service

Which of the following are pricing tactics and discounts that businesses often use when selling to other businesses? (Choose every correct answer.) Multiple select question. Two-for-one coupons Slotting allowances Zone pricing Price lines Advertising allowances

Slotting allowances Zone pricing Advertising allowances

In reference to cash discounts offered between two businesses, what does "6/10, n/30" mean? (Choose every correct answer.) Multiple select question. The discount varies and could be 6% or 10%, but not 30%. The buyer gets a discount of 6% if the invoice is paid within 10 days. If the buyer does not take the discount, the full amount must be paid within 30 days. The price is 6/10 (or 60%) of the full amount if paid immediately, or the full amount if it takes longer.

The buyer gets a discount of 6% if the invoice is paid within 10 days. If the buyer does not take the discount, the full amount must be paid within 30 days.

The improvement value method of pricing assigns a price based on how much more or less the product is perceived to be worth in comparison to comparable products. Who estimates what that price should be? Multiple choice question. The firm The manufacturer The customer The wholesaler

The customer

The improvement value method of pricing assigns a price based on how much more or less the product is perceived to be worth in comparison to comparable products. Who estimates what that price should be? Multiple choice question. The customer The firm The manufacturer The wholesaler

The firm

Which of the following is true of quantity discounts? Multiple choice question. The more a buyer purchases, the lower the discount. They are usually offered only by the largest companies. They are implemented at the end of the selling season. The more a buyer purchases, the higher the discount.

The more a buyer purchases, the higher the discount.

Which of the following are true of leader pricing, price lining, and price bundling? (Choose every correct answer.) Multiple select question. They are illegal and unethical. They are aimed at consumers. They are aimed at other businesses. They are pricing tactics.

They are aimed at consumers. They are pricing tactics.

Which of the following are true of pricing tactics? (Choose every correct answer.) Multiple select question. They represent long-term responses to competitive threats. They are widely accepted methods of setting short-term prices. They are independent of the five Cs of pricing. They can be used to counter a competitor's temporary sale prices.

They are widely accepted methods of setting short-term prices. They can be used to counter a competitor's temporary sale prices.

Why do retailers use markdowns as a pricing tactic? (Choose every correct answer.) Multiple select question. To offer a special price to customers who purchase large quantities of merchandise To dispose of products that have not been selling well To match low prices offered by competitors To sell products out of season

To dispose of products that have not been selling well To match low prices offered by competitors To sell products out of season

True or False: Businesses can offer other businesses seasonal discounts.

True

Business-to-business seasonal discounts are price reductions offered to stimulate purchases ______. Multiple choice question. before the normal buying season for products begins throughout the year, regardless of the season during the buying season for products after the buying season for products has ended

before the normal buying season for products begins

A(n) ____________ discount is applied only if the buyer pays the invoice within a certain number of days.

cash

Pricing strategies are most often based on cost, value, or ______. Multiple choice question. inventory competition warehousing locations seniority

competition

Cost-based pricing does NOT consider the influence of ______ on the marketplace. Multiple choice question. overhead consumers manufacturing shipping

consumers

Quantity discounts, rebates, and coupons are examples of price reductions aimed at ______. Multiple choice question. channel partners consumers businesses retailers

consumers

A company prices all of its products at twice what it costs to produce them. The company is using a ______-based pricing method. Multiple choice question. cost customer value competition

cost

Consumers typically compare a firm's products and prices with those offered by ______. Multiple choice question. distributors importers direct competitors catalog publishers

direct competitors

With the ______ pricing strategy, a company adopts retail prices that are typically somewhere between the product's regular price and the sharply discounted sale prices that competitors occasionally offer. Multiple choice question. odd high/low everyday low reference

everyday low

The strategy of ______ appeals to consumers because it reduces their need to spend time comparing prices at various stores. Multiple choice question. odd/even pricing image pricing loss leader pricing benchmark reference pricing everyday low pricing (EDLP)

everyday low pricing (EDLP)

In price bundling, two products or services are sold as a single package ______. Multiple choice question. for more than what they would cost individually for the same price as what they could cost individually under a lease agreement for less than what they would cost individually

for less than what they would cost individually

The ______ pricing strategy features frequent sales, during which prices are lowered for a short time. Multiple choice question. everyday low high/low reference odd

high/low

When consumers relish the challenge of getting the lowest price and are willing to expend the time and effort to seek out the lowest price every time, retailers should use the ______ pricing strategy. Multiple choice question. high/low everyday low reference predatory

high/low

When evaluating a new product, customers decide that they are willing to pay a certain amount, either more or less, than they would for similar products offered by competitors. This difference in perceived worth is called ______ value. Multiple choice question. wholesale improvement retail market

improvement

The ______ pricing tactic lures customers into the store through aggressive advertising coupled with a very low price on something that customers often buy. Multiple choice question. leader quantity discount price skimming bait and switch

leader

After the holidays, a national retailer reduces the prices of popular holiday gift items to attract consumers who were unwilling to brave long lines or pay higher prices before the holiday. This pricing tactic is called a ______. Multiple choice question. gift sale fair market price cost assessment markdown

markdown

When a retailer reduces the initial selling price of a product or service, the pricing tactic is called a ______. Multiple choice question. bait and switch quantity discount seasonal discount loss leader markdown

markdown

The goal of a(n) ______ strategy is to generate profit and establish a new product or service in the market as quickly as possible. Multiple choice question. price skimming improvement-value market penetration reference point

market penetration

When a new product or service is launched, companies that use a ______ strategy will attempt to attract customers quickly by offering a very low price at first. Multiple choice question. penetration pricing reference point value-based price skimming

penetration pricing

When a price is reduced because a large amount of a product is being purchased, it is called a ______ discount. Multiple choice question. functional seasonal loss leader quantity cash

quantity

A(n) ______ discount is when large quantities or packages cost only a little more than smaller ones. Multiple choice question. allowance seasonal cumulative size

size

Warehouse club stores like Sam's Club or Costco offer customers low prices on a variety of merchandise, but often the merchandise is sold in large-quantity packaging. This is an example of a(n) ______ discount. Multiple choice question. size allowance seasonal cumulative

size

The five Cs of pricing are examples of pricing ______. Multiple choice question. strategies tactics errors ethics

strategies

Pricing ______ are short-term ways of concentrating on specific aspects of company objectives, costs, customers, competition, and channel members. Multiple choice question. constraints tactics strategies benchmarks

tactics