Pricing Practice Quizzes
A retailer of Degree antiperspirant prices it at $4.00; it costs the retailer $3.50. What is the approximate markup as a percentage of selling price?
12.5%
Which of the following should be accomplished after developing pricing objectives?
Assessing the target market's evaluation of price
Kara Thrace operates a service business that engages in systematically collecting data on brands and prices at competitors' stores. For which stage of the price establishment process would this service be most appropriate?
Evaluating competitors' prices
Which of the following pricing strategies sets the basic product in a product line low, but the price on the items required to operate or enhance it are higher?
captive pricing
The Federal Trade Commission has established guidelines for _______. If the higher price against which the comparison is made is the price formerly charged for the product, the seller must have made the previous price available to customers for a reasonable time period.
comparison discounting
When determining markup as a percentage of cost, divide the markup amount by
cost
Which of the following price bases is mostly likely to be used for commercial construction projects or custom-made equipment?
cost-plus pricing
If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used.
demand-based
During the hot, humid months of July and August, Pinewood Links Golf Course, located in Georgia, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of
demand-based pricing
Amtrak is considering two pricing strategies for its service. One is to price its train tickets so that it is less expensive to travel on weekends than during the week when there is heavy business travel, which illustrates _____ pricing. The second is to price its train tickets so that the further away the travel date, the greater the discount, which is best described as _____.
demand-based; differential pricing
In the absence of government controls, pricing is a(n) _______ and _______ way to adjust the marketing mix.
flexible; convenient
Adidas is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.
market share
Which of the following bases for pricing is most commonly used by retailers?
markup pricing
All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except
penetration pricing
If Kashi wants to gain a large market share quickly with its new line of reduced-fat snack crackers, it should use
penetration pricing
Chevrolet's Presidents' Day sales are an example of _______.
periodic
If Albertsons Market advertise 2-liter bottles of Coca-Cola for 89 cents to generate store traffic so that shoppers will purchase other items at regular prices, the grocer is using
price leader
Which pricing strategy provides the most flexible introductory base price?
price skimming
_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.
reference pricing
Euan is planning three sales during the third quarter of the year at Party City. The first is at a week before Easter, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be
special-event pricing
Maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability are all associated with a ____ pricing objective.
status quo
Which of the following pricing objectives can reduce a firm's risks by helping to stabilize demand for its products?
status quo
Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?
status quo
Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price?
25%
Which of the following is often used by producers of relatively homogeneous products, especially when the target market considers price to be an important purchase consideration?
Competition-based pricing
Which of the following product-line pricing strategies is NOT generally used for business products?
Psychological pricing
Which of the following pricing objectives sets prices to recover cash as quickly as possible?
cash flow
Glenn is shopping for a new coat at Marshalls and finds a North Face down jacket that he really likes. He knows that the North Face brand is considered to be high quality and that it's usually very expensive. He's pleasantly surprised to see the price—the "suggested retail price" is $199 and Marshalls' price is $99. Glenn decides to purchase the coat even though it's a little more expensive than he originally thought he'd spend on the jacket. What type of pricing strategy is Marshalls using to price the North Face jacket and other merchandise?
comparison discounting
When a seller's costs are usually determined during or after a product is made and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using ____ pricing.
cost-plus
The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ____ pricing.
differential
A product is a price leader when
it is sold at less than cost in the hope that sales of other products will increase.
ACME Corp. has a pricing objective to increase its primary product's sales relative to total industry sales. This is best described as a(n) _______.
market share objective
Which of the following pricing strategies often results in a retailer losing money on the product?
price leader
When Texas Instruments first introduced its line of graphing calculators, it set the price quite high; it has lowered the price as competitors have entered the market. The pricing strategy initially used by Texas Instruments is called
price skimming
Reference pricing is
pricing a product at a moderate level and displaying it next to a more expensive model or brand
Which of the following objectives is likely to be more expensive for a firm as the cost of materials and research and development may be greater?
product quality
Services that are performed by lawyers, dentists, or doctors are typically priced using ____; sometimes these prices are not based on the amount of time that is spent in each situation, but are based on a flat fee regardless of the difficulty involved.
professional pricing
A price-skimming strategy assumes that
the initial demand is highly inelastic.
Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _______.
yield management
Scenario 20.1 Use the following to answer the questions. Suppose that Maui Jim is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical sunglasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Maui Jim lines that are sold through specialty stores. In determining the price for this sunglass line, Maui Jim wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. Refer to Scenario 20.1. Given Maui Jim's plan for positioning the new sunglass line, it should use a ____ strategy when introducing its new product.
price-skimming