Chapter 9 Quiz
Which of the following reverses the usual process of first designing a new product, determining its cost, and then asking, "Can we sell it for that?" A. target return pricing B. cost-plus pricing C. target costing D. EDLP E. value-added pricing
c
Which of the following is true regarding the price-demand relationship? A. A demand curve shows the number of units a company will produce in a given time period at different prices that might be charged. B. Demand and price are directly related—the higher the price, the greater the demand. C. If demand is inelastic, a small change in price will result in a large change in demand. D. If demand is elastic, sellers will consider lowering their prices. E. Price elasticity measures how responsive price will be to a change in demand.
d
If the company has selected its target market and positioning carefully, then its marketing mix strategy, including price, will be fairly straightforward. Of the following, which is NOT one of the common pricing objectives? A. Preventing competition B. Avoiding government intervention C. Supporting resellers and gaining their support D. Customer retention and building profitable customer relationships E. Grabbing international market share
e
Internal factors that affect pricing include _________________. A. The company's overall marketing strategy, the nature of the market, and demand B. The company's overall marketing strategy, objectives, and the nature of the market C. The company's overall marketing strategy, objectives, and demand D. The nature of the market, demand, and the economy E. The company's overall marketing strategy, objectives, and marketing mix
e
When a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store, it is practicing ___________________ pricing. A. promotional B. segmented C. psychological D. optional-product E. geographical
a
When sellers set prices in conjunction or collaboration with one another, this illegal practice is known as _______________. A. price-fixing B. deceptive pricing C. retail price maintenance D. predatory pricing E. price discrimination
a
When Apple introduced its iPhone X, it priced the new product at nearly $1,000, considerably higher than competing smart phones. Apple was pursuing a ___________________ new product pricing strategy. A. optional-product B. premium pricing C. captive-product D. by-product E. market-penetration
b
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-skimming pricing B. psychological pricing C. market-penetration pricing D. captive-product pricing E. product bundle pricing
c
Sadie's Restaurant has listened to its customers over the years and is now able to offer the right combination of quality and good service at a fair price. Which pricing strategy is Sadie's using? A. High-low pricing B. Break-even pricing C. Good-value pricing D. Value-added pricing E. Cost-based pricing
c
New, premium movie theaters offer features such as online reserved seating, high-backed leather executive chairs with armrests and footrests, the latest in digital sound, super-wide screens, and other amenities for which they charge a higher price. This is an example of which type of pricing? A. EDLP B. Breakeven pricing C. Cost-plus pricing D. High-low pricing E. Value-added pricing
e
________________________ is one major objective associated with a market-penetration pricing strategy. A. Preventing customer dissatisfaction B. Skimming off small but profitable market segments C. Avoiding everyday low pricing D. Attracting buyers willing to pay a higher price E. Winning large market share
e
When, if ever, is price discrimination allowed? A. If the seller is selling via the Internet as its main channel, then it is legal. B. If the seller can prove that it is allowable in certain states and local retailing areas, then it is legal. C. If the seller can substantiate that it is distributing internationally, then it is legal. D. If the seller can prove that its costs are different when selling to different retailers, then it is legal. E. If the seller can prove that its revenue is affected when selling to similar retailers, then it is legal.
d
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. optional-product B. captive-product C. product line D. product bundle E. by-product
a
A variation of break-even pricing is ____________________, which uses the concept of a break-even chart that shows the total cost and total revenue expected at different sales volume levels. A. Target return pricing B. Competition-based pricing C. Value-added pricing D. High-low pricing E. Everyday low pricing (EDLP)
a
The Ford Mustang is offered in several different models. Ford uses __________ pricing to determine the price steps between the different models. A. product line B. optional-product C. captive-product D. product bundle E. two-part
a
Of the following, which is true about pricing? A. Companies usually are free to charge whatever prices they wish. B. Price competition is a core element of our free-market economy. C. Federal law is the overriding authority on pricing. D. Companies have no obligation to consider broader societal pricing concerns. E. Companies do not need to communicate reasons for price increases to customers.
b
Roshika has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as ________. A. an indicator of the cost of production B. an indicator of quality C. an indicator of geographic pricing D. a limited-time offer E. a type of segmented pricing
b
The illegal practice of ______________________ is selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business. A. price maintenance B. predatory pricing C. price-fixing D. price discrimination E. deceptive pricing
b
Continually adjusting prices to meet the characteristics and needs of individual customers and situations is known as _______________________. A. cash rebates B. psychological pricing C. dynamic pricing D. segmented pricing E. promotional pricing
c
Bath & Body Works uses _____________ pricing when the company offers "three-fer" deals on its products (such as soaps, lotions, and moisturizers). A. product line B. by-product C. two-part D. product bundle E. captive-product
d
The Robinson-Patman Act seeks to ensure that sellers offer the same price terms to customers at a given level of trade to prevent ______________________. A. predatory pricing B. price-fixing C. deceptive pricing D. price discrimination E. retail price maintenance
d
UPS uses _________________, which charges different prices for shipping depending on an item's destination. The more distant the city where the package is being shipped, the higher the price UPS charges. A. free on board (FOB) origin B. base-point pricing C. uniform-delivered pricing D. zone pricing E. freight-absorption pricing
d
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. product bundle E. captive-product
e
When a college or university charges more for out-of-state students than in-state students, it is practicing ______________________. A. customer-segment pricing B. product form pricing C. promotional pricing D. time-based pricing E. location-based pricing
e
Which of the following refers to setting prices based on buyers' perception of value rather than on the seller's cost? A. Good-value pricing B. Value-added pricing C. Cost-based pricing D. Cost-plus pricing E. Customer value-based pricing
e
