mkt ch 19

All of the following are geographic pricing methods EXCEPT: a. latitude pricing b. FOB origin pricing c. zone pricing d. freight absorption pricing e. basing-point pricing

a

All of the following are strategies to make the demand for a good or service more inelastic EXCEPT: a. reduce consumer awareness b. cultivate selected demand c. change the package design d. make strong promotional claims and avoid discounting e. heighten buyer dependence

a

Costs that are shared in the manufacturing and marketing of several products in a product line are called: a. joint costs b. integrated costs c. fixed costs d. variable costs e. combined costs

a

For over 100 years, resale price maintenance has been illegal under the: a. Sherman Act b. Federal Trade Commission Act c. Food and Drug Administration Act d. Anti-Discrimination Act e. Robinson-Patman Act

a

If the seller pays all or part of the actual freight charges and does not pass them on to the buyer, the seller is using _____ pricing. a. freight absorption b. uniform delivered c. zone d. FOB origin

a

Marketing two or more products in a single package for a special price is known as: a. price bundling b. two-part pricing c. psychological pricing d. price lining e. family pricing

a

Often a seller will establish a series of prices for a family of merchandise items. There may be several different models at specific price points but no prices in between. This policy is called: a. price lining b. price bracketing c. family pricing d. variable pricing

a

Post makes several varieties of cereals. In promoting this product line, Post offers a 50-cents-off coupon that can be used to purchase any of its cereals. Therefore, Post must consider _____ when pricing its cereals. a. joint costs b. differential costs c. bundling costs d. potential (or basing) costs e. factorial costs

a

Price lining presents certain drawbacks to sellers, especially if: a. costs are continually rising b. competition suddenly increases c. profit margins are lowered

a

State laws that put a lower limit on wholesale and retail prices are called _____. In states that have these laws, selling below cost is illegal. a. unfair trade practice acts b. price floor laws c. protectionism acts d. transparency laws e. price edicts

a

The term FOB is an acronym for: a. free on board b. fee on buyer c. first on board d. freight on board e. freight origin buyer

a

With _____, the seller pays the actual freight charges and bills every purchase with an identical, flat freight charge. a. uniform delivered pricing b. zone pricing c. FOB origin pricing d. freight absorption pricing e. basing-point pricing

a

_____ occurs when a firm is customer-driven and seeks to understand the attributes customers want in the goods and services they buy and the value of those attributes to customers. Thus, the price of the product is set at a level that seems to the customer to be a good price compared with the prices of other options. a. Value-based pricing b. Noncumulative pricing c. CRM pricing d. Market concept pricing e. Price bundling

a

A penetration strategy tends to be effective in a price-sensitive market. Thus, one of the purposes of penetration pricing is to: a. recoup product development costs quickly b. discourage competitors from entering the market c. produce a large margin of profit per unit d. develop exclusive distribution e. attract the price-insensitive buyer who demands the latest in technology

b

After establishing pricing goals, managers should estimate total revenue at a variety of prices. Next, they should _____. Only after performing this task are they are ready to estimate how much profit and how much market share can be earned at each possible price. a. choose the ROI target b. determine corresponding costs for each price c. estimate industry supply d. implement pricing segmentation e. establish geographic pricing heuristics

b

Delayed-quotation pricing: a. requires the seller to place a later date on the product invoice to help accounts receivable in recording transactions b. allows the final selling price to reflect cost increases incurred between the time the order is placed and the final delivery takes place c. prevents the competitor from submitting an earlier bid

b

Escalator pricing is: a. a demand-oriented pricing tactic b. similar to delayed-quotation pricing c. similar to price shading d. a form of market penetration pricing e. also called postage stamp pricing

b

Redline Editorial Services sent a $1,000 invoice to a customer for copyediting a booklet. According to the terms of the invoice, the customer would receive a 3 percent discount on the invoice price if the invoice was paid within 15 days. This is an example of a: a. quantity discount b. cash discount c. rebate d. functional discount e. promotional allowance

b

South Africa's Competition Commission accused South African Airways of conspiring with its partner, Germany's Lufthansa, to set prices on flights between Cape Town, Johannesburg, and Frankfurt. As a result, the two airlines were charged with: a. price discrimination b. price fixing c. bait pricing d. unfair trade practices e. channel control pricing tactics

b

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market is called: a. price discrimination b. predatory pricing c. price fixing d. price manipulation e. anti-competitive pricing

b

Which of the following is a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion? a. Penetration pricing b. Price skimming c. Price capping d. Profit pricing e. Price maximization

b

A 16-ounce bottle of Prairie Herb vinegar sells for $4.95, and a 16-ounce bottle of Heinz vinegar costs $1.05. Prairie Herb vinegar is new to the market, perceived to be of higher quality, and provides a unique flavor to foods even though it is used in the same way as Heinz vinegar. Prairie Herb vinegar is most likely using a _____ policy. a. penetration pricing b. status quo pricing c. price-skimming d. bundling cost pricing e. geodemographic pricing

c

Acme Lawnmowers sells its mowers to retailers at different prices, depending on whether they are independent stores or members of a national chain. It uses _____. a. unfair trade practices b. price fixing c. price discrimination d. predatory pricing e. bait pricing

c

Trade-ins often go hand-in-hand with: a. price skimming b. professional services pricing c. flexible pricing

c

Uniform delivered pricing enables a firm to: a. charge each customer the actual cost of shipping its products b. stir up price competition between buyers c. maintain a nationally advertised price d. discriminate in favor of buyers that are geographically closer to the seller

c

What can a marketing manager do to make demand for his or her product more inelastic? a. Eliminate brand equity b. Eliminate any unique products from the product line c. Cultivate selected demand d. Avoid making any product changes e. Implement escalator pricing

c

When the Mosquito Magnet was introduced, it was designed to rid the immediate area of mosquitoes and other annoying insects. The technology for the Mosquito Magnet had taken years to develop. It is a patented grill-like apparatus that emits carbon dioxide to attract bugs to a fan that draws them into the device where they die. What type of pricing policy would you recommend the company use to introduce this product to the market? a. Status quo pricing b. Penetration pricing c. Price-skimming d. Flexible pricing e. Leader pricing

c

When the salesperson from Affiliated Food Inc., a grocery distributor, calls on a grocery store, she is authorized to offer a 15 percent discount from the list price in recognition of activities (such as unpacking items and stocking shelves) that retailers perform for the distributor. This 15 percent discount is a: a. quantity discount b. promotional allowance c. functional discount d. seasonal discount e. channel allowance

c

When using _____, price is not set on the product until the item is either finished or delivered. a. price shading b. escalator pricing c. delayed-quotation pricing d. bid pricing e. two-part pricing

c

Which of the following is a price tactic that offers all goods and services at the same price (or perhaps two or three prices)? a. Primary pricing b. Uniform-price tactic c. Single-price tactic d. Constant-pricing e. EDLP

c

Which type of quantity discount is a deduction from the list price that applies to a single order? a. Base discount b. Cumulative discount c. Noncumulative discount d. Cash discount e. Functional discount

c

A(n) _____ allows for price increases based on the cost-of-living index or some other formula. a. consumer penalty b. price shade c. price allowance d. escalator price clause e. elasticity quotient

d

All of the following are tactics for fine-tuning the base price EXCEPT: a. functional discounts b. markdown money c. rebates d. quality discounts e. quantity discounts

d

Business-to-business salespeople often use _____ to heighten the demand for certain items in a product line. It is a discounting practice that is often done routinely without much forethought. a. decremental pricing b. price lining c. devaluation d. price shading e. consumer discounts

d

The marketing manager of icruise.com (a travel Web site targeted to consumers who want a luxury vacation) finds that the firm can gain market share and become the industry leader if it slashes prices by 50 percent during the month of December. However, the vice president of finance is committed to reporting a 25 percent return on investment at all times. This conflict illustrates: a. a need to eliminate low-profit products b. a lack of corporate concentration on the marketing concept c. how pricing operates in a mature marketplace d. the need for trade-offs in pricing objectives e. how target markets can be ignored

d

Two effective pricing tactics, which can be used during a recession, to hold or build market share are: a. flexible pricing and price shading b. price shading and price lining c. unbundling and price shading d. value-based pricing and bundling e. price lining and escalator pricing

d

Which of the following pricing methods can be used to build market share during a recession? a. Price lining b. Resale price maintenance c. Psychological pricing d. Bundling e. Variable pricing

d

Which type of pricing means pricing at odd-numbered prices to connote a bargain and pricing at even-numbered prices to imply quality? a. Bait pricing b. Price bundling c. 1-2 pricing d. Odd-even pricing e. Two-part pricing

d

A _____ is a price reduction that shifts the storage function forward to the purchaser and enables manufacturers to maintain steady production year-round. a. functional discount b. base allowance c. promotional allowance d. quantity discount e. seasonal discount

e

A price tactic that requires the purchaser to absorb the freight costs from the shipping point is called _____. In this case, the farther buyers are from sellers, the more they pay because transportation costs generally increase with the distance merchandise is shipped. a. basing-point pricing b. zone pricing c. uniform delivered pricing d. freight absorption pricing e. FOB origin pricing

e

Dancing Pigs Bar-B-Que Sauce is a product of the Bar-B-Q Shop located in Memphis, Tennessee. It's also sold online for $88 a case, including shipping and handling. The Bar-B-Q shop covers the cost of shipping and uses _____ pricing policy. a. penetration b. skimming c. zone d. basing point e. freight absorption

e

During a recent recession, many manufacturers determined that their suppliers were an excellent source of cost savings. Specific cost-reduction strategies manufacturers have used with their suppliers include: a. offer help in boosting productivity of suppliers b. renegotiate contracts c. set annual across-the-board cost reduction targets for suppliers d. improve economies of scale by cutting number of suppliers e. all of the choices

e

If a manufacturer designates a shipping point from which to calculate all freight charges and charges customers the freight costs from that point (even if the goods were shipped from another location), the manufacturer is using _____ pricing. a. freight absorption b. uniform delivered c. zone d. FOB origin e. basing-point

e

If a marketer decides to price goods at odd-numbered dollar amounts to denote bargains, and at even-numbered amounts to denote quality, he or she is using: a. two-part pricing b. price lining c. price bracketing d. decoy pricing e. psychological pricing

e

L.L. Bean charges all customers the same flat freight rate. It uses: a. FOB origin pricing b. zone pricing c. freight absorption pricing d. basing-point pricing e. uniform delivered pricing

e

Louisiana State University football season ticket holders have to pay a fee (also known as a "donation") to the LSU Foundation every January, which is not deemed to be part of the ticket price. They pay for their tickets later in the year for the next football season. The Foundation fee must be paid in order to retain the rights to purchase a season ticket. LSU is using: a. multiple unit pricing b. professional services pricing c. price lining d. price bundling e. two-part pricing

e

One form of extreme penetration pricing that has dramatically increased sales during the recent economic downturn is _____ grocers. a. black market b. scratch-and-dent c. elastic d. break-even e. salvage

e

Reducing the services that come with the basic product is called: a. demarketing b. contraction c. two-part pricing d. retroactive pricing e. unbundling

e

The owner of a neighborhood hardware store has decided to sell a set of three padlocks for $5. He hopes the below-cost price for the locks will attract current and new customers who will also buy regularly priced items. The owner is encouraging store patronage through: a. deceptive pricing b. incentive pricing c. pricing lining d. cumulative pricing e. leader pricing

e

The price skimming strategy is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products. This strategy works best when: a. competition is abundant b. revenues are equal to expenses c. supply is greater than demand d. production capacity is large and flexible e. demand is greater than supply

e

Which of the following prohibits any firm from selling to two or more different buyers, within a reasonably short time, commodities (not services) of like grade and quality at different prices where the result would be to substantially lessen competition? a. Sherman Act b. Federal Trade Commission Act c. Food and Drug Administration Act d. Anti-Discrimination Act e. Robinson-Patman Act

e