Principles of Marketing Ch.14 - SmartBook

Select the three special adjustments that are often made to the list or quoted price. [-] Allowances [-] Price fixing [-] Warranties and rebates [-] Geographical adjustments [-] Discounts

[-] Allowances [-] Geographical adjustments [-] Discounts

-oriented approaches to pricing set the price to reflect the way the marketer wants consumers to interpret prices relative to competitor's offerings.

[-] Competition

Common approaches to pricing are oriented around which four elements? [-] Competition [-] Cost [-] Service [-] Demand [-] Profit [-] Production

[-] Competition [-] Cost [-] Demand [-] Profit

Select all of the benefits of a penetration pricing strategy. [-] Added perceptions of quality [-] Discourages competitors [-] Potential to gain market share [-] Production costs drop with increased volume

[-] Discourages competitors [-] Potential to gain market share [-] Production costs drop with increased volume

What are the two options when choosing a price policy? [-] Regional-price [-] Permanent-price [-] Fixed-price [-] Dynamic-price

[-] Fixed-price [-] Dynamic-price

are made by manufacturers to list prices to reflect the cost of transportation of the products from seller to buyer.

[-] Geographical adjustments

How is target pricing executed?

[-] Manufacturers deliberately adjust the composition of a product to achieve the estimated price that consumers are willing to pay for it.

Which pricing approach is seen as the exact opposite of skimming pricing when introducing a new product?

[-] Penetration

How does a skimming pricing strategy approach price setting?

[-] Prices are set high initially and then lowered in a series of steps

Cost-oriented approaches to pricing consider which three things in the setting of a product's price? [-] Production costs [-] Product quality [-] Overhead [-] Profit [-] Market share [-] Consumer preferences

[-] Production costs [-] Overhead [-] Profit

What are four important types of discounts used in marketing strategy? [-] Seasonal discounts [-] Quantity discounts [-] Functional [-] Cash discounts [-] Uniform discounts

[-] Seasonal discounts [-] Quantity discounts [-] Functional [-] Cash discounts

Price fixing is made illegal by the .

[-] Sherman Antitrust Act

What are two profit-oriented approaches to setting a price? [-] Target return pricing [-] Skimming pricing [-] Cost-plus pricing [-] Target profit pricing [-] Customary pricing

[-] Target return pricing [-] Target return pricing

Organizations can be most effective using skimming pricing under which two conditions? [-] Customers are very price sensitive. [-] The product is protected by patent. [-] Production costs are increasing over time. [-] The customer understands and highly values the product.

[-] The product is protected by patent. [-] The customer understands and highly values the product.

In what way does the demand curve for prestige pricing differ from the typical demand curve?

[-] There is a point below which a reduced price reduces sales volume, resulting in a backwards C-shaped curve.

True or false: A "manufacturer's suggested retail price" is illegal only when a manufacturer enforces the practice by coercion.

[-] True

What are two general methods for quoting prices related to transportation costs? [-] Uniform delivered pricing [-] FOB origin pricing [-] Functional pricing [-] Everyday low pricing

[-] Uniform delivered pricing [-] FOB origin pricing

Which is an example of deceptive pricing?

[-] a bait and switch to lure customers into the store to sell them a higher priced product

Yield management pricing is .

[-] a complex approach that continually matches demand and supply to customize the price for a service

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is referred to as .

[-] a discount

Vertical price fixing might occur between .

[-] a manufacturer and a retailer in the same channel

Standard markup pricing entails .

[-] adding a fixed percentage to the cost of all items in a specific product class

Demand-oriented, cost-oriented, profit-oriented, and competition-oriented are four approaches used to set .

[-] approximate price levels

A characteristic feature of a prestige demand curve is that as price is lowered, the curve turns back to the left toward its initial level. Why is this so?

[-] because of reduced demand

The marketing of two or more products in a single package price is known as pricing.

[-] bundle

Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are approaches.

[-] cost-oriented

For some products where tradition, a standardized channel of distribution, or other competitive factors dictate the price, pricing is used.

[-] customary

Hershey changes the amount of chocolate in its candy bars depending on the price of raw chocolate rather than changing the price of the product because this product is sold with pricing.

[-] customary

-oriented approaches to pricing regard expected customer tastes and preferences as the most important factors in the decision.

[-] demand

Penetration, price lining, and bundle pricing are all types of what pricing approach?

[-] demand-oriented

When using predatory pricing, a firm sets a very low price for one or more of its products in order to

[-] drive its competition out of business

Prestige pricing involves setting a price for a product so that consumers will be attracted to the product and buy it.

[-] high; quality-conscious

When two or more competitors explicitly or implicitly set prices, this practice is called price fixing.

[-] horizontal

Despite the Sherman Act and its implications for price fixing, a "manufacturer's suggested retail price" (MSRP) is

[-] illegal only when enforced through coercion.

Price deals that fall into the category of deceptive pricing.

[-] mislead customers

In pricing, an organization sets a price a few dollars or cents under an even number, such as at $3.99.

[-] odd-even

Sears offers a Craftsman radial saw for $499.99 rather than $500, using a(n) pricing approach.

[-] odd-even

Organizations using pricing set the initial price low for the introduction of the new product to appeal immediately to the mass market.

[-] penetration

The ability to attract price sensitive customers and discourage competitors from entering a market make which pricing strategy appealing?

[-] penetration

Fixed-price and dynamic-price are the two options when choosing a price .

[-] policy

Proving the practice of is difficult because it must be shown that there was an explicit attempt to destroy a competitor with the use of a low price.

[-] predatory pricing

Marketers who use to signal the quality of an item, must be careful not to drop the price of the product below the point where customers become skeptical of its quality and refuse to purchase it

[-] prestige pricing

Charging different prices to different buyers for goods of like grade and quality is known as .

[-] price discrimination

If a firm sells the same product to different buyers at different prices, it may be considered .

[-] price discrimination

When a line of products is priced at a number of different specific pricing points, the strategy is being used.

[-] price lining

When Lexmark sells a laser printer for slightly below its cost, but prices its ink-jet printers with a large profit margin that makes up for the loss on the laser printers, it is using .

[-] product-line pricing

By focusing on target profit pricing or target return pricing, a firm is using a pricing approach.

[-] profit-oriented

A price reduction offered to channel members for featuring the manufacturer's product in their advertising or selling activities is called a(n) allowance.

[-] promotional

When a manufacturer offers a grocery retailer an extra amount of free product for including this product in weekly advertising and in-store sales, this is considered a allowance.

[-] promotional

Cumulative and noncumulative are the two general kinds of discounts.

[-] quantity

Customers are encouraged to buy a larger number of a single product when a firm offers .

[-] quantity discounts

A manufacturer that wants to smooth out manufacturing peaks and valleys throughout the year in order to have more efficient production, would most likely use discounts.

[-] seasonal

discounts are price reductions offered on products to stimulate purchasing during times of low consumer demand, allowing a manufacturer to smooth out manufacturing highs and lows.

[-] seasonal

A marketing manager uses price lining when he .

[-] sells several groups of the same type of product, with each group priced at different specific pricing points

Price fixing is the conspiracy among firms to .

[-] set prices for a product

Customary pricing entails .

[-] setting a price at a certain level based on factors like tradition or a standardized channel of distribution

For pricing to be effective, there must be sufficient customers willing to buy the product at a high initial price, they should interpret the high price as signifying high quality, and the high price should not attract competition.

[-] skimming

In what pricing strategy are prices lowered in a series of steps with the demand by those who really desire the product being satisfied at the highest prices?

[-] skimming pricing

Which is an example of a demand-oriented approach to setting an approximate price?

[-] skimming pricing

Discounts, allowances, and geographic adjustments are considered that affect the list or quoted price.

[-] special adjustments

Adding a fixed percentage to the cost of all items in a specific product class is known as Blank______ pricing.

[-] standard markup

Adding a fixed percentage to the cost of all items in a specific product class is known as pricing.

[-] standard markup

In pricing, an organization estimates what consumers are willing to pay for a product, and works backward, accounting for markups by retailers and wholesalers, to determine what it can charge for the product.

[-] target

Bundle pricing refers to .

[-] the marketing of two or more products in a single package price.

When using competition-oriented pricing approaches, price setters stress .

[-] what "the market" is doing

Charging different prices for a product in order to maximize revenue for a set amount of capacity at any given time is known as pricing.

[-] yield management