Marketing Chapter 9

________ pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

Deceptive

Which of the following conditions is most likely essential for implementing a successful market-skimming pricing strategy for a product?

The product's quality and image support its high price.

How do firms that use captive-product pricing make up for the low prices of their main products?

They set high markups on the captive products.

________ costs refer to the sum of the fixed and variable costs for any given level of production.

Total

Under ________, the market consists of many buyers and sellers trading over a range of prices rather than a single market price.

monopolistic competition

Under ________, the market consists of a few large sellers who are highly sensitive to each other's pricing and marketing strategies.

oligopolistic competition

Selling accessory products along with the main product is referred to as ________ pricing.

optional-product

Penny Bank, a discount store, is highly competitive. When entering a new market, Penny Bank often cuts prices so deeply that it sells below costs, effectively pushing smaller retail stores with less purchasing power out of the market. In this case, Penny Bank is using ________.

predatory pricing

Which of the following is an economic factor that affects the pricing decisions of a company?

interest rates

The Sherman Act, Clayton Act, and Robinson-Patman Act are all federal laws that were initially adopted to curb the formation of ________.

monopolies

The strategy of setting a low initial price to attract a large number of buyers quickly and win a large market share is referred to as ________.

market-penetration pricing

________ pricing involves setting prices based on the expenses involved in producing, distributing, and selling a product plus a fair rate of return for a company's effort and risk.

Cost-based

________ uses buyers' perceptions of what a product is worth as the key to pricing.

Customer value-based pricing

________ pricing involves charging a constant low price with few or no temporary price discounts.

Everyday low

________ costs are also known as overhead.

Fixed

Which of the following statements about break-even analysis is most likely true?

It fails to consider customer value and the relationship between price and demand.

________ pricing refers to selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business.

Predatory

________ is the only element in the marketing mix that produces revenue.

Price

________ refers to the amount of money charged for a product or service.

Price

________ pricing is when a firm tries to determine the price at which it will break even or make the profit it is seeking.

Target return

Which of the following conditions is most likely essential for implementing a successful market-penetration pricing strategy for a product?

The market for the product is highly price sensitive.

A value-based pricing strategy most likely begins with ________.

assessing customer needs

A firm uses ________ when it charges a high, premium price for a new product with the intention of reducing the price in the future.

market-skimming pricing

Wilkinson & Company sells plumbing supplies across the United States. Wilkinson uses Chicago as its central location for determining freight costs regardless of the city from which products are actually shipped. For example, a Dallas customer pays the freight cost from Chicago to Dallas even if the goods are shipped from Dallas. Wilkinson most likely uses ________ pricing.

basing-point

Busch Stadium in St. Louis charges different prices for seats in different areas of the ball park, even though each seat costs the same for the owners of the stadium. What is this form of pricing called?

location-based pricing

Setting a price for products that must be used along with a main product is known as ________ pricing.

captive-product

When a manufacturer offers a ________, a customer buys a product from a manufacturer's dealer within a specified time period, and the manufacturer sends the customer a check.

cash rebate

Which of the following is an external factor that affects pricing decisions?

competition

Which of the following sets the upper limit for a product's pricing?

consumer perceptions of value

Which of the following would most likely trigger a price increase?

cost inflation

Value-based pricing is the reverse process of ________ pricing.

cost-based

A company designs what it considers to be a good product, calculates the expenses of making the product, and sets a price that adds a standard markup to the cost of the product. This approach to pricing is called ________ pricing.

cost-plus

Metro Museum has different admission prices for students, adults, and seniors. All three groups are entitled to the same services. This form of pricing is called ________ pricing.

customer-segment

Qriosity Inc. released a new antivirus program at half-price to attract buyers. This is most likely an example of ________.

market-penetration pricing

The relationship between the price charged for a product and the resulting demand level can be shown in a ________.

demand curve

Chef Brown's Health Food Store sells nutritional, energy-producing foods. Product prices are adjusted frequently to meet the needs of individual customers and situations. For example, long-time customers receive discounts. This strategy is most likely an example of ________ pricing.

dynamic

Rent, electricity, and executive salaries that do not vary with production level are referred to as ________ costs.

fixed

Consumers rely less on price to judge the quality of a product when they ________.

have prior experience with the product

When demand hardly changes with a small change in the price of a product, then the demand for the product is best described as ________.

inelastic

Combining several products and offering the collection at a reduced price is referred to as ________ pricing.

product bundle

Which of the following sets the lower limit for a product's pricing?

product costs

NerdHerd Electronics sells three different sizes of televisions at three different prices. In this case, the company's pricing strategy is referred to as ________ pricing.

product line

When Luxury Motors gives price reductions to its new car dealers to reward them for participating in advertising and sales support programs, the firm is granting ________.

promotional allowances

What type of pricing is being used when a company temporarily prices its products below the list price to create buying excitement and urgency?

promotional pricing

Pricing a product based on consumers' reference prices is referred to as ________ pricing.

psychological

In ________, the market consists of many buyers and sellers trading in a uniform commodity, such as wheat, copper, or financial securities.

pure competition

There are more than 20 stores on a street in Sao Paulo that specialize in selling the same quality and brand of wheat products. An individual seller cannot charge more than the going market price without the risk of losing business to the other stores. What type of market does this example represent?

pure competition

Glow, a gift card store, offers a price reduction to customers who buy Christmas cards the week after Christmas. In this case, the store offers a ________.

seasonal discount

Radox, a luxury watch brand, identifies a market segment that is willing to pay premium prices for its watches, and Radox managers select an ideal selling price. Managers then determine the costs to create watches that meet the ideal selling price. The company's pricing approach is referred to as ________.

target costing

The Fashion Store, a new startup, sets product prices so that revenues will equal manufacturing and marketing costs. The pricing strategy used by the company is referred to as ________ pricing.

target return

When a firm varies the price of a product by the season, month, day, or even hour, without changing product features, it is using ________ pricing.

time-based

Which group is most likely offered functional discounts by manufacturers?

trade-channel members that perform sales tasks

Vac "N" Sew, a consumer electronics outlet, offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine. This is an example of a ________.

trade-in allowance

Netcorp, an Internet service provider, charges its users a fixed rental fee for its basic package, which has a download limit. If a user exceeds this download limit, an additional fee is charged for every download. In this case, the firm's pricing strategy is referred to as ________ pricing.

two-part

Which of the following pricing strategies charges the same price plus freight to all customers, regardless of their location?

uniform-delivered pricing

Which of the following pricing strategies is the opposite of FOB-origin pricing?

uniform-delivered pricing

Providing extra amenities to differentiate and support high-priced products is referred to as ________ pricing.

value-added

Costs that change directly with the level of production are referred to as ________ costs.

variable

Computer Works is a computer accessories manufacturer based in Brazil. All customers in South America pay the same freight charge, $20, when they order products from the company. All customers in North America pay a freight charge of $50. The company's pricing strategy is referred to as ________ pricing.

zone