Q3 - CH 10

E. promotional allowances

Veggie Vitality will send retailers a check if they promote its vegetable-based smoothies in the retailer's promotional efforts. Veggie Vitality uses _____. A. cash discounts B. trade discounts c. quantity discounts D. seasonal discounts E. promotional allowances

C. price bundling

When customers are given the opportunity to purchase a package deal at a reduced price compared to what the individual components of the package would cost separately, the firm is using a _____ strategy. A. product line pricing B. captive pricing C. price bundling D. reference pricing E. prestige pricing

A. Product line pricing

_____ affords the marketing manager an opportunity to develop a rational pricing strategy across a complete line of related items. A. Product line pricing B. Captive pricing C. Price bundling D. Reference pricing E. Prestige pricing

D. Competitor-based pricing

_____ could lead the marketing manager to decide to price at some market average price, or perhaps above or below it in the context of penetration or skimming objectives. A. Penetration pricing B. Price skimming C. Target ROI D. Competitor-based pricing E. Value pricing

A. Price

_____ is a critical component that plays into a customer's assessment of the value afforded by a firm and its offerings. A. Price B. Cost C. Value D. Service E. Quality

C. Trade discounts

_____, which are also called functional discounts, provide an incentive to a channel member for performing some function in the channel that benefits the seller. A. Cash discounts B. Quantity discounts C. Trade discounts D. Seasonal discounts E. Promotional allowances

TRUE

Effectively communicating a product's differential advantages is at the heart of positioning strategy, and exposure to these elements spurs the customer to develop perceptions of value and a subsequent understanding of the value proposition.

E. value pricing

Firms that have an objective of utilizing pricing to communicate positioning use a _____ strategy. A. penetration pricing B. price skimming C. target ROI D. competitor-based pricing E. value pricing

FALSE

For the marketing manager, pricing is merely an economic break-even point or a cost-plus accounting calculation.

A. cost-plus pricing

Heather runs Cute Cakes, a gourmet cupcake bakery. To set prices for her cupcakes, Heather looks at the cost of making each cupcake and then adds an additional amount on top of that to arrive at her price. Heather is demonstrating _____. A. cost-plus pricing B. price war C. markup on sales price D. average-cost pricing E. target return pricing

A. penetration pricing

In markets where customers are sensitive to price and where internal efficiencies lead to cost advantages allowing for acceptable margins even with aggressive pricing, a _____ objective can create a powerful barrier to market entry for other firms. A. penetration pricing B. target ROI C. price skimming D. competitor-based pricing E. value pricing

D. markup on sales price

James is trying to determine the best price for his new fishing poles and thus uses the sales price as a basis of calculating the markup percentage. He is using _____. A. cost-plus pricing B. value price C. average-cost pricing D. markup on sales price E. target return pricing

B. price skimming

A strategy of _____ addresses the objective of entering a market at a relatively high price point. A. penetration pricing B. price skimming C. target ROI D. competitor-based pricing E. value pricing

TRUE

Among the marketing mix variables, price is the easiest and quickest to alter, so sometimes firms overrely on price changes to stimulate additional sales or gain market share.

TRUE

Price objectives are the desired or expected result associated with a pricing strategy and must be consistent with other marketing-related objectives such as positioning or branding.