Chapter 11 SmartBook 2.0

As a tactic, predatory pricing is aimed mainly at _______.

competitors

As a pricing tactic, a marketer decides to add 10% to the price of the product to arrive at the final selling price. This is an example of _______ pricing

cost-plus

The central focus of determining what pricing tactic to use should be the _______.

customer

The most common examples of _______ pricing involve firms that falsely advertise wholesale pricing or promise a significant price reduction on an artificially high retail price.

deceptive

According to recent research, approximately what percentage of consumers search for and purchase a low-priced product using an in-store shopping app or online search engine?

40%

______ pricing tactics can lead to price confusion, where customers have difficulty discerning what they are actually paying because they have been misled by price promotions.

deceptive

Price _________ is only illegal if it injures the competition.

discrimination

The removal of tariffs due to international agreements has caused countries to enact anti- ______ laws to protect their local industries.

dumping

A Broadway theater production that tries to fill empty seats by lowering the price as the day of the production draws closer is using _______.

dynamic pricing

In addition to technological and economic factors, which of the following are unique challenges related to global pricing for firms seeking to increase their revenue and profits? (Check all that apply.)

The gray market Dumping Tariffs

Which of the following price discrimination scenarios are legal under the Robinson-Patman Act? (Check all that apply.)

Charging different prices as a result of a going-out-of-business sale Promising to match competitor's prices if the consumer produces proof of the lower price Charging different prices if it is part of a quantity discount program

True or false: The World Trade Organization has classified the practice of dumping as illegal.

False Reason: Since the WTO has not declared dumping as illegal, many countries have enacted their own laws to curb the strategy and protect their local industries.

According to your text, what has been the outcome for marketers pricing products now that consumers have access to mobile applications while shopping?

Marketers must aggressively review the prices of online stores when setting the initial price of an item.

When it comes to setting prices, which of the following stakeholders would be most interested in setting prices high across all product lines in order to increase profits for the firm?

Marketing Executives

Websites like eBay and priceline.com are types of _______.

NYOP auctions

Which of the following are ethical issues marketers may face as they seek to set prices for their products? (Check all that apply.)

Price discrimination Predatory pricing Price fixing

Which of the following accurately describes the concept of prestige pricing?

Pricing a product higher than competitors to signal that it is higher in quality

How should pricing strategies be addressed during the product life cycle?

Pricing strategies evolve and should be reevaluated throughout the product life cycle.

If you were willing to pay $10 for a product, but the firm only charges you $8, the firm will most likely see a reduction in _______.

Profit

Your text indicates that there are two factors that influence price that are often overlooked. What are they? (Check all that apply.)

Reference Prices Underpricing

Which of the following are common pricing objectives a firm would seek to utilize? (Check all that apply.)

Survival pricing Profit maximization Volume maximization

What factors have made global pricing more transparent and, in many cases, more competitive in recent times? (Check all that apply.)

Technological advancements Growing Internet access

Which of the following exemplifies the fact that technology has shifted the balance of power from companies to consumers?

The Internet has made it possible for customers to comparison shop for products from companies all over the world.

Technology has helped to shift the balance of power from _______ to _______ .

companies, sellers, businesses, producers, or firms customers, consumers, or buyers

What considerations should marketers take into account when determining which pricing tactic to use? (Check all that apply.)

The value customers perceive the product to have How customers' intend to use the product The customers' ability to pay

What is the most likely reason marketers utilize a price bundling strategy?

They can charge a higher price for the bundle than they could for the items individually.

What is the goal for marketers in determining the cost of a product?

To make sure they will not lose money by pricing the product too low

As a practice, price fixing is _______.

always illegal

The name-your-own-price strategy is best compared to a(n) _______.

auction

Price is a strategy in which two or more products are packaged together and sold at a single price.

bundling

Which pricing tactic has grown explosively due to improving and readily available technological tools that facilitate the ease with which prices can be updated to reflect changes in supply, demand, or market conditions?

dynamic pricing

What are the two most common and effective strategies for raising prices?

escalator clauses unbundling

In a market structure in which there are a large number of buyers and sellers, the pricing impact of any single firm will be _______.

fairly small

Calculating the total cost of a product begins with an understanding of the two major types of costs: _____ and _______ .

fixed or fixed costs variable or variable costs

Every year Walter travels to China where he legally buys large quantities of baseball caps related to MLB sports teams. He imports the caps back into the United States where he sells them for less than the normal market price at his storefront in New York City. The baseball caps are considered to be _______.

gray market goods

If a company prices its products significantly lower in foreign countries than in the domestic market, they may be subject to ________ __________ buyers who will purchase the products internationally and then sell them in the United States for a much lower price than the normal market price.

gray or grey market

Prestige pricing involves pricing a product ____ than competitors.

higher, greater, or more

A pricing tactic that involves selling a product at a price that causes the firm a financial loss is called _______.

loss-leader pricing

Firms using _______ hope that customers will buy other items in the store that are more profitable.

loss-leader pricing

What pricing tactic involves adding a certain amount to the cost of a product to set the final selling price?

markup pricing

In an industry in which a small number of firms compete, firms will typically _______.

match the price of competitors

McDonald's prices its Extra Value Meals at $4.99. McDonald's is most likely using a(n) ________ pricing tactic in this instance.

odd

Callie notices that most items sold in the "As Seen on TV" store are priced a few cents below the next whole dollar amount, i.e., $14.95 instead of $15.00, or $19.95 instead of $20.00. What type of pricing tactic does this represent?

odd pricing

______ _________ could be considered an attempt to create a monopoly and is, therefore, illegal under U.S. law.

predatory pricing

After determining the costs and analyzing the competitive price environment, the next step in the price-setting process is to choose a(n)______

price

Because it directly impacts the financial viability of both organizations and individuals, activities related to which marketing mix element are watched and regulated most closely?

price

As a student, you are sometimes charged a lower price to gain entrance into a sporting event or a movie. By doing so, you are benefiting from the pricing practice known as _____ __________ .

price discrimination

The two major electronic dealers in town conspired together to set the price of new high definition televisions. In doing so, they are engaging in _______.

price fixing

Regardless of the type of product, the ______ of a product typically factors into a consumer's decision on what to purchase and is part of almost every consumer decision a person makes.

price or cost

The Robinson-Patman Act was passed in 1936 and _______.

requires sellers to charge the same price for a product

According to traditional economic theory, setting price is as simple as finding the point at which marginal_________ equals marginal________ .

revenue or revenues cost or costs

After Christmas, when the holidays are over, stores will often reduce the price of remaining Christmas trees and decorations because demand for these products is at its lowest. This is an example of a(n) __________ ________ .

seasonal discount, discounts, or pricing

_______ are price reductions given to customers purchasing goods or services out of season.

seasonal discounts

There are ____ steps in the price-setting process.

six or 6

Similar to a firm's marketing objectives, its pricing objectives should be _______. (check all that apply.)

specific measurable

When determining a pricing strategy for a firm that sells its goods internationally, the firm must take into account the potential taxes on imports and exports that foreign countries will place on its goods. These potential taxes are known as _______.

tariffs

As it relates to evaluating demand, marginal revenue can be defined as _______.

the change in total revenue that results from selling one additional unit of product

For countries involved in a trade agreement, such as the United States, Canada, and Mexico, transactions between these countries are easier if _______.

there is an absence of tariffs between the countries