marketing chapter 11

One form of​ __________ is when movie theaters charge one price for adults and a different price for senior citizens. A. ​customer-segment pricing B. product form pricing C. psychological pricing D. promotional allowances E. ​location-based pricing

A: customer-segment pricing

Which of the following statements is true concerning new product pricing​ strategies? A. If competitors can easily enter the​ market, a​ market-skimming strategy should be used. B. For a​ market-skimming strategy to be​ successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. C. A​ market-penetration strategy should be used if the market is not highly price sensitive. D. For a​ market-penetration strategy to​ work, production and distribution costs must increase as sales volume increases. E. When using a​ market-skimming strategy, marketers do not need to focus on the​ product's quality and image.

B: For a​ market-skimming strategy to be​ successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more.

Cheese makers in Wisconsin sell their leftover brine to local city and county highway​ departments, which use it in conjunction with salt to melt icy roads. Which product mix pricing strategy does this​ represent? A. Product-bundle pricing B. Product line pricing C. ​Optional-product pricing D. ​By-product pricing E. ​Two-part pricing

D: By-product pricing

Which of the following statements is true regarding initiating price​ cuts? A. Cutting prices in an industry with excess capacity may lead to price wars. B. If faced with excess capacity a firm should not cut its price. C. Cutting price has no effect on costs. D. Firms never cut​ prices, they only raise them. E. When faced with falling​ demand, firms should not cut prices.

A: Cutting prices in an industry with excess capacity may lead to price wars.

When would a competitor most likely react to a​ firm's price​ change? A. When the number of firms involved is small B. When buyers are not well informed about the product C. When the product is differentiated D. When the number of firms involved is large E. When buyers are not well informed about prices

A: When the number of firms involved is small

Assume a competitor has cut prices and a company determines they should respond. Effective actions that the company could initiate include​ __________. A. launch a​ low-price fighter brand B. improve quality and decrease prices C. raising prices D. reducing perceived value E. decrease quality and increase prices

A: launch a​ low-price fighter brand

When Apple Computer Company introduced their​ iPhone, they priced the new product at​ $599, considerably higher than either their iPod or competing cellular phones. Apple Computer was pursuing​ a(n) __________ pricing strategy. A. market-skimming B. ​optional-product C. ​by-product D. ​market-penetration E. ​captive-product

A: market-skimming

Whirlpool washers and dryers are offered in many different models. Whirlpool will use​ __________ pricing to determine the price steps between the different models. A. product line B. ​two-part pricing C. ​product-bundle D. ​optional-product E. ​captive-product

A: product line

Many personal care companies combine toothpaste with a toothbrush at a reduced price. This is an example of​ __________ pricing. A. product-bundle B. ​two-part C. ​by-product D. ​captive-product E. product line

A: product-bundle

A soda pop company offers a discount to a grocer. In​ exchange, the grocer agrees to provide​ in-store advertising for the soda pop and additional​ sales-support. This is an example of​ __________. A. promotional allowances B. cash discounts C. ​trade-in allowances D. segment discounts E. discounts

A: promotional allowances

__________ occurs when retailers set an artificially high​ "regular price" and then advertise a​ "sale price" which is actually close to their everyday price. A. Price discrimination B. Deceptive pricing C. Predatory pricing D. Retail price maintenance E. Price fixing

B: Deceptive pricing

Gillette charges a fairly low price for their razors​ (relative to​ costs) and a high price for razor blades. They are using a strategy of​ __________ pricing. A. two-part pricing B. captive-product C. ​by-product D. product line E. ​product-bundle

B: captive-product

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Because she does not know much about​ wine, she will likely use the price of the wines as​ a(n) __________. A. indicator of the cost of production B. indicator of quality C. indicator of geographic pricing D. limited time offer E. type of segmented pricing

B: indicator of quality

Many amusement parks charge a daily ticket or season pass charge plus additional fees for food and other​ in-park features. This is called​ __________. A. by-product pricing B. ​two-part pricing C. ​product-bundle pricing D. product line pricing E. ​optional-product pricing

B: two-part pricing

Which of the following is a concern when using​ optional-product pricing? A. How to price products that must be used with the main product B. Which products should be bundled at a lower price C. Which products to include in the base price and which to offer as options D. How to determine the price steps between different products in a product line E. Whether to set a fixed fee or a variable usage rate

C: Which products to include in the base price and which to offer as options

Basic price adjustments known as​ __________ are used to reward customers for certain responses. A. psychological prices B. discounts and allocations C. discounts and allowances D. segmented prices E. ​location-based pricing

C: discounts and allowances

Which of the following statements regarding public policy and pricing is​ correct? A. It is legal in some industries for sellers to collude with competitors when setting prices. B. Companies are usually free to charge whatever prices they wish. C. Sellers are allowed to punish dealers who do not price a product at the​ manufacturer's suggested retail price​ (MSRP). D. Companies​ can, under some​ circumstances, price items below cost. E. Federal statutes apply to both interstate and intrastate commerce.

D: Companies​ can, under some​ circumstances, price items below cost.

Which of the following statements regarding dynamic pricing is​ correct? A. The dynamic pricing tactic of surge pricing is legally questionable. B. Dynamic pricing is only effective when used online. C. Because of dynamic​ pricing, online consumers no longer compare prices. D. Dynamic pricing could cause consumer resentment and damage customer relationships. E. Dynamic pricing benefits only consumers.

D: Dynamic pricing could cause consumer resentment and damage customer relationships.

Which of the following statements regarding initiating price increases is​ correct? A. Companies do not need to communicate reasons for price increases. B. Prices should be increased when there is a lack of demand. C. Price increases do not impact profits. D. The company should consider ways to meet higher costs or demand without raising prices. E. Cost inflation is not a factor in price increases.

D: The company should consider ways to meet higher costs or demand without raising prices.

What is the purpose of the​ Robinson-Patman Act? A. To prevent deceptive pricing B. To prevent predatory pricing C. To prevent scanner fraud D. To prevent unfair price discrimination E. To prevent price fixing

D: To prevent unfair price discrimination

​Recently, Amazon.com has been accused of​ __________, which is the practice of selling products below cost to harm competitors. A. deceptive pricing B. retail price maintenance C. price fixing D. predatory pricing E. price discrimination

D: predatory pricing

One major objective of a​ market-penetration pricing strategy is to​ __________. A. set a high price to gain profits B. attract buyers willing to pay a higher price C. skim off small but profitable segments D. win a large market share E. prevent customer dissatisfaction

D: win a large market share

A company has set a low price on a new product it introduced. They want to maximize their market share and attract a large number of buyers quickly. Which new product pricing strategy should the company​ use? A. Optional product pricing B. Psychological pricing C. Captive-product pricing D. Market-skimming pricing E. Market-penetration pricing

E: Market-penetration pricing

Which of the following statements regarding segmented pricing is​ correct? A. Perceived value does not have to be considered when using segmented pricing. B. Segmented pricing is not used to price different versions of a product. C. For segmented pricing to be​ effective, the segments should have the same degree of demand. D. Different locations are not used as a basis for segmented pricing. E. Segmented pricing practices can cause consumer resentment.

E: Segmented pricing practices can cause consumer resentment.

Promotional pricing tactics include​ __________. A. functional​ discounts, limited time​ offers, and​ location-based pricing B. ​customer-segment pricing,​ location-based pricing, and​ time-based pricing C. ​discounts, geographical​ pricing, and​ special-event pricing D. ​discounts, limited time​ offers, and reference prices E. ​discounts, special-event​ pricing, and limited time offers

E: discounts, special-event​ pricing, and limited time offers