Chapter 9 Marketing
Bath & Body Works offers "three-fer" deals on its soaps and lotions (such as three antibacterial soaps for $10). This is an example of _______ pricing. A.two-part pricing B.by-product C.captive-product D.product line E.product-bundle
product bundle
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. by-product B.optional-product C.product line D.product-bundle E.captive-product
optional-product
________ refers to setting price based on buyers' perception of value rather than on the seller's cost. A. Value-added pricing B. Cost C. Customer value-based pricing D. Cost-based pricing E. Good-value pricing
Customer value-based pricing
Which of the following statements is true regarding initiating price cuts? A.Firms never cut prices; they only raise them. B.Cutting price has no effect on costs. C.When faced with falling demand, firms should not cut prices. D.Cutting prices in an industry loaded with excess capacity may lead to price wars. E.If faced with excess capacity, a firm should not cut its price.
Cutting prices in an industry loaded with excess capacity may lead to price wars.
Which of the following statements is true regarding oligopolistic competition? A.Many buyers and sellers trade a uniform commodity. B.The market consists of many large sellers. C.The market is dominated by one seller. D.The market consists of many buyers and sellers trading over a range of prices. E.Each seller is alert and responsive to competitors' pricing strategies and marketing moves
Each seller is alert and responsive to competitors' pricing strategies and marketing moves
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. If demand is inelastic, a small change in price will result in a large change in demand. C. Demand and price are directly related dash- the higher the price, the greater the demand. Your answer is not correct.D. Price elasticity measures how responsive price will be to a change in demand. E. If demand is elastic, sellers will consider lowering their price.
If demand is elastic, sellers will consider lowering their price.
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.captive-product pricing B.product bundle pricing C.market-skimming pricing D.market-penetration pricing E.psychological pricing
Market penetration
Selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business is an illegal practice called _______. A.predatory pricing B.price discrimination C.deceptive pricing D.price fixing E.price maintenance
Predatory pricing
Over the years, U.S. air carriers have been accused numerous times of collusion when setting prices. This illegal practice is called _______. A. predatory pricing B. deceptive pricing C. price discrimination D. retail price maintenance E. price fixing
Price Fixing
The Ford Mustang is offered in several different models. Ford will use __________ pricing to determine the price steps between the different models. A.optional-product B.two-part pricing C.product line D.captive-product E.product-bundle
Product line
Which of the following is a potentially effective action a company could take in response to a competitor's price cut? A. Reduce both price and quality. B. Decrease perceived value C. Launch a high-price "fighter brand" D. Raise price E. Reduce price
Reduce price
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 pricing B.Breakeven pricing C.Cost-plus pricing D.Value-added pricing E.High-low pricing
Value added pricing
Which of the following statements is true regarding initiating price increases? A.Price increases do not impact profits. B.Prices should be increased when there is a lack of demand. C.Wherever possible, the company should consider ways to meet higher costs or demand without raising prices. D.Companies do not need to communicate reasons for price increases to customers. E.Cost inflation is not a factor in price increases.
Wherever possible, the company should consider ways to meet higher costs or demand without raising prices.
UPS charges different prices for shipping depending on an item's destination. The more distant the city the package is being shipped to, the higher the price UPS charges. Which geographic pricing method is UPS using? A.Zone pricing B.FOB origin C.Base-point pricing D.Freight-absorption pricing E.Uniform-delivered pricing
Zone pricing
Margaret 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.a type of segmented pricing B.an indicator of quality C.a limited time offer D.an indicator of geographic pricing E.an indicator of the cost of production
an indicator of quality
Which of the following is a cost-oriented pricing approach? A.Competition-based pricing B.EDLP pricing C.High-low pricing D.Breakeven pricing E.Value added pricing
breakeven pricing
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.product-bundle B.captive-product C.product line D.by-product E.two-part pricing
captive product
Companies that use ________ continually adjust prices to meet the characteristics and needs of individual customers and situations. A.promotional pricing B.dynamic pricing C.cash rebates D.segmented pricing E.psychological pricing
dynamic pricing
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.Value added pricing B.Breakeven pricing C.Good-value pricing D.High-low pricing E.Cost-based pricing
good value pricing
Many state colleges and universities charge one price for in-state students and a higher price for out-of-state students. Which form of segmented pricing are these schools using? A.location-based pricing B.customer-segment pricing C.time-based pricing D.promotional pricing E.product form pricing
location based pricing
When Apple Computer Company introduced its iPhone, its priced the new product at $599, considerably higher than either their iPod or competing cellular phones. Apple Computer was pursuing a ___________________ new product pricing strategy. A.market-skimming B.by-product C.captive-product D.optional-product E.market-penetration
market-skimming
A retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store. This is an example of _________ pricing. A.geographical B.segmented C.promotional D.psychological E.optional product
promotional
Geared2Beer, a craft beer brand, identifies a market segment that is willing to pay premium prices for its craft beer, and Geared2Beer managers select an ideal selling price. Managers then determine the costs to create craft beer that meets the ideal selling price. The company's pricing approach is referred to as ________. A.target return pricing B.cost-plus pricing C.target costing D.EDLP E.value-added pricing
target costing
Internal factors that affect pricing include ________. A.the company's overall marketing strategy, objectives and demand B.The company's overall marketing strategy, objectives and the nature of the market C.The company's overall marketing strategy, the nature of the market, and demand. D.the company's overall marketing strategy, objectives, and marketing mix E.The nature of the market, demand, and the economy.
the company's overall marketing strategy, objectives, and marketing mix
One major objective associated with a market-penetration pricing strategy is to ________. A.win a large market share B.skim off small but profitable market segments C.avoid everyday low pricing D.prevent customer dissatisfaction E.attract buyers willing to pay a higher price
win a large market share