Marketing Pearson Q ch 11
(C) product bundle
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. A. product line B. by-product C. product bundle D. two-part E. captive-product
(A) price-fixing
Federal legislation on __________ states that sellers must set prices without talking to competitors. A. price-fixing B. interstate commerce C. trade-restrain D. deceptive pricing E. discriminatory pricing
(A) psychological pricing
Some sellers use 00-cent endings on regularly priced items and 99-cent endings on discount merchandise. This is an example of pricing referred to as __________. A. psychological pricing B. segmented pricing C. promotional pricing D. dynamic pricing E. geographical pricing
(C) Selling below cost with the intention of punishing a competitor
What is predatory pricing? A. Sellers offering the same price terms to customers at a given level of trade B. Selling below cost to unload excess inventory C. Selling below cost with the intention of punishing a competitor D. Setting prices without talking to competitors E. A manufacturer requiring dealers to charge a specified retail price for its product
(D) To prevent unfair price discrimination
What is the purpose of the Robinson-Putnam Act? A. To prevent predatory pricing B. To prevent scanner fraud C. To prevent deceptive pricing D. To prevent unfair price discrimination E. To prevent price-fixing
(E) market-skimming
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. A. optional-product B. by-product C. market-penetration D. captive-product E. market-skimming
(C) Predatory pricing
______ is the practice of pricing products below cost to harm competitors. A. Price-fixing B. Price discrimination C. Predatory pricing D. Deceptive pricing E. Retail price maintenance
(A) deceptive pricing
______ occurs when retailers set an artificially high "regular price" and then advertise a "sale price," which is actually close to their everyday price. A. Deceptive pricing B. Price-fixing C. Retail price maintenance D. Price discrimination E. Predatory pricing
(A) price-fixing
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 ________. A. price-fixing B. price discrimination C. deceptive pricing D. predatory pricing E. retail price maintenance
(D) reducing price, raising perceived value, improving quality and increasing price, and launching a low-price "fighter brand"
Assume a competitor has cut prices and a company determines it should respond. Potential actions that the company could initiate include ________. A. reducing price, raising perceived value, improving quality and decreasing price, and launching a low-price "fighter brand" B. reducing price, raising perceived value, decreasing quality and increasing price, and launching a low-price "fighter brand" C. raising price, raising perceived value, improving quality and increasing price, and launching a low-price "fighter brand" D. reducing price, raising perceived value, improving quality and increasing price, and launching a low-price "fighter brand" E. reducing price, reducing perceived value, improving quality and increasing price, and launching a low-price "fighter brand"
(D) captive-product pricing
Companies that make products that must be used along with a main product are using __________. A. product line pricing B. optional-product pricing C. by-product pricing D. captive-product pricing E. product bundle pricing
(C) dynamic pricing
Companies that use ________ continually adjust prices to meet the characteristics and needs of individual customers and situations. A. promotional pricing B. cash rebates C. dynamic pricing D. segmented pricing E. psychological pricing
(A) segmented
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. A. segmented B. dynamic C. discount and allowance D. promotional E. psychological
(D) Location-based pricing
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? A. Promotional pricing B. Customer-segment pricing C. Time-based pricing D. Location-based pricing E. Product-form pricing
(A) an indicator of quality
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. an indicator of quality B. an indicator of geographic pricing C. a type of segmented pricing D. an indicator of the cost of production E. a limited time offer
(A) enough buyers must want the product at a higher price
Market penetration prices are preferred in all of the following conditions except __________. A. enough buyers must want the product at a higher price B. the production and distribution costs must decrease as sales volume increases C. the market must be highly price sensitive so that a low price produces more market growth D. the low price must help keep out the competition E. the penetration price must maintain its low-price position
(A) an initial low price is set by the companies
Market skimming prices are preferred in all of the following conditions except __________. A. an initial low price is set by the companies B. competitors should not be able to enter the market easily and undercut the high price C. the product's quality and image must support its higher price D. enough buyers must want the product at that price E. the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more
(D) win a large market share
One major objective associated with a market-penetration pricing strategy is to ________. A. skim off small, but profitable, market segments B. avoid everyday low pricing C. attract buyers willing to pay a higher price D. win a large market share E. prevent customer dissatisfaction
(D) low-price fighter items
Techniques that can be used by sellers for avoiding customers' perception of price gouging includes all of the following except __________. A. increase prices B. improve perceived value C. adjust quality D. low-price fighter items E. reduce prices
(C) rationing products to customers
Techniques that can be used by sellers for avoiding customers' perception of price gouging includes all of the following except __________. A. price increases should be supported by company communications telling customers why prices B. the company should consider ways to meet higher costs or demand without raising prices C. rationing products to customers D. maintaining a sense of fairness surrounding any price increase E. the company can shrink the product or substitute less-expensive ingredients instead of raising the price
(B) product line
The Ford Mustang is offered in several different models. Ford will use ________ pricing to determine the price steps between the different models. A. captive-product B. product line C. product bundle D. optional-product E. two-part
(A) product bundle pricing
The pricing method in which sellers combine several products and offer a reduced price is known as __________. A. product bundle pricing B. captive-product pricing C. optional-product pricing D. by-product pricing E. product line pricing
(B) Reduce the price
Which of the following is a potentially effective action a company could take in response to a competitor's price cut? A. Reduce both the price and quality. B. Reduce the price. C. Launch a high-price "fighter brand." D. Raise the price. E. Decrease the perceived value.
(A) 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
Which of the following statements is true concerning new product pricing strategies? A. 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. B. A market-penetration strategy should be used if the market is not highly price sensitive. C. If competitors can easily enter the market, a market-skimming strategy should be used. D. When using a market-skimming strategy, marketers do not need to focus on the product's quality and image. E. For a market penetration strategy to work, production and distribution costs must increase as sales volume increases.
(D) Cutting prices in an industry loaded with excess capacity might lead to price wars
Which of the following statements is true regarding initiating price cuts? A. Cutting price has no effect on costs. B. When faced with falling demand, firms should not cut prices. C. Firms never cut prices; they only raise them. D. Cutting prices in an industry loaded with excess capacity might lead to price wars. E. If faced with excess capacity, a firm should not cut its price.
(A) Wherever possible, the company should consider ways to meet higher costs or demand without raising prices
Which of the following statements is true regarding initiating price increases? A. Wherever possible, the company should consider ways to meet higher costs or demand without raising prices. B. Companies do not need to communicate to customers reasons for price increases. C. Price increases do not impact profits. D. Prices should be increased when there is a lack of demand. E. Cost inflation is not a factor in price increases.
(D) optional-product
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. A. product line B. captive-product C. by-product D. optional-product E. product bundle
(A) Market-penetration pricing
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? A. Market-penetration pricing B. Captive-product pricing C. Psychological pricing D. Product bundle pricing E. Market-skimming pricing
(D) captive-product
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. A. by-product B. two-part C. product line D. captive-product E. product bundle
(C) zone pricing
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? A. Base-point pricing B. Uniform-delivered pricing C. Zone pricing D. FOB origin E. Freight-absorption pricing