Chapter 14 Marketing

A manufacturer conducts marketing research and estimates that consumers will accept a price of $50 for a pair of sunglasses. If the manufacturer expects to offer trade discounts of 40/10 to retailers and wholesalers, what price will the manufacturer receive for the sunglasses?

$27

Pebble used a skimming pricing strategy to introduce its new Pebble Smartwatch. Which of the following conditions would argue against using a skimming pricing strategy when introducing this new wearable computing device?

Increasing volume substantially reduces production costs.

All of the following are true of above-, at-, or below-market pricing except which?

It sets the price of each item in the line of products at a different price point

_______ involves setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it

Prestige pricing

Expedia sells you a spring break trip that includes airfare and hotel. This is an example of

bundle pricing

To encourage retailers to pay their bills quickly, manufacturers offer them

cash discounts.

Rema and many of her friends pay between $8 and $11 a month for Netflix, Hulu Plus, or Amazon Prime streaming media content. A new streaming service launches with a cost of $17.99 per month, but sees few customers sign up despite improved features. This is an example of

customary pricing.

Best Buy routinely adjusts prices in response to purchase situations and past purchase behaviors of online buyers. This is an example of a ________ pricing policy

dynamic

It is the holiday season and Sprint cuts its price on cell phone service. If a price war ensues, Sprint marketing managers expect all of the following outcomes except which?

fewer FTC complaints

Dollar Value Stores and 99¢ Only Stores sell everything in their stores for $1 or less. These are examples of a ________ policy.

fixed-price

Jaime needs milk from the grocery store. The milk is on sale for $1.50, significantly less than its customary price. Jaime also purchases fresh cut flowers and gourmet pasta sauce. The milk pricing is an example of

loss-leader pricing

A computer manufacturer has a basic model, a business model and a premium model, each with a variety of options. They each have a different base price. This is an example of

price lining

If you buy fewer than 10 pairs of UVex Clear UVExtreme safety eyewear for your employees, the cost is $7.40. But if you buy 10 or more pairs in a single purchase, the price per pair is reduced to $6.85. This is an example of a

quantity discount.

All of the following are methods to approximate a price level except which?

risk-oriented

Atlantic Pool Products is leading manufacturer of above-ground pools. In November, it offers a 15% discount to its dealers for stocking its merchandise for the following summer. This is an example of a

seasonal discount.

Penetration pricing is

setting a low initial price on a new product to appeal immediately to the mass market.

A firm that sets an annual target of a specific dollar volume of profit is using a ________ approach.

target profit pricing

All of the following are cost-oriented approaches except which?

target profit pricing

Functional discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

where they are in the channel.

On short notice you decide to attend a childhood friend's wedding. You find out that other guests paid significantly less for their hotel rooms. This is likely due to __________, charging different prices to maximize revenue for a set amount of capacity at any given time.

yield-management pricing