Marketing Chapter 11

XYZ Company has determined that it will charge all customers the freight cost from Dallas to the customer​ location, regardless of the city from which the goods are actually shipped. This simplified geographic pricing tactic is defined as what type of​ pricing?

Basing-point pricing

Amazon developed the Kindle electronic book reader and sells it at a reasonably low margin. The firm uses which pricing strategy to capture additional profits through the sale of easily downloaded online books and​ magazines?

Captive-product pricing

Once a product or service has moved out of the introductory​ stage, the manager might have to make adjustments to the pricing strategy. One way is to offer buyers discounts. If the seller offers the buyer​ 3/10, net​ 30, the buyer is getting what kind of​ discount?

Cash

The Federal Trade Commission warns sellers not to advertise a price reduction unless it is a savings from the usual retail​ price, "factory" or​ "wholesale" prices unless such prices are what they are claimed to​ be, and comparable value prices on imperfect goods. All of these actions and scanner fraud are examples of what illegal pricing​ tactic?

Deceptive pricing

Throughout most of​ history, prices were set by negotiation between buyers and sellers.​ Fixed-price policies are a relatively modern idea that arose with the development of​ large-scale retailing at the end of the nineteenth century.​ However, some companies are now reversing the​ fixed-pricing trend and are using what form of price​ setting?

Dynamic pricing

On a flight to​ Hawaii, the passengers seated next to each other bought their tickets two months​ apart, one online and one from a travel agent. One paid nearly three times what the second one did. What pricing tactic did the airline company​ use?

Product-form segmented pricing

Marketing managers will temporarily price their products below list price and sometimes even below cost to create buying excitement and urgency. Which one of the following pricing tactics relates to geographic pricing instead of promotional​ pricing?

FOB-origin pricing

To combat a​ competitor's price cut or​ lower-priced store​ brands, a national brand such as Luvs disposable diapers was launched along with​ P&G's flagship brand of disposable​ diapers, Pampers. Which type of brand is Luvs considered to be in this​ case?

Fighter brand

There are several situations for which price cutting is warranted and many conditions under which price cutting is not advised. In which of the following situations is the marketing manager advised to maintain the​ price?

If a price war ensues

When two or more firms in an industry meet to discuss prices and agree on certain price​ levels, which of the following statements about this behavior is​ accurate?

It is​ price-fixing, which is illegal.

Companies introducing a new product can choose between two broad strategies. One is​ market-skimming pricing. Which of the following is an alternative​ strategy?

Market-penetration pricing

Entering foreign markets has meant targeting the exploding middle classes in developing countries such as​ China, India,​ Russia, and​ Brazil, whose economies have been growing rapidly. Which factor of the market mix is quite significant as part of the international marketing strategies of companies attempting to enter less affluent emerging​ markets?

Price

In the early periods of the introduction of​ HDTV, the prices were extremely high. The strategy being used is considered to be​ what?

Price skimming

​Typically, a firm does not set a single price but instead uses what concept to determine​ prices?

Pricing structure

When customers purchase cable​ TV, the vendor usually uses what form of pricing by offering the buyer his choice of three different packages of many​ channels, perhaps​ 50, 100, or 125​ channels, each package at a different​ price?

Product bundle pricing

A woman is buying a bottle of cologne as a gift for someone. She prefers the smell of the one that is​ $23.00 but considers the person who will receive the gift knows the second one is​ $50.00 a bottle. She buys the more expensive one responding to what element of​ pricing?

Psychological pricing

There are several ways in which a firm can react when a competitor reduces the price. Of the​ following, which one is an advised strategy for​ reaction?

Reduce the price to match the​ competitor's price cut.

Some of the most important pieces of legislation affecting pricing were initially adopted to curb the formation of monopolies and regulate business practices that might unfairly restrain trade. They have now been adapted to regulate pricing in interstate business and include which​ laws?

Sherman​ Act, the Clayton​ Act, and the​ Robinson-Patman Act

Bill goes to a sporting goods store several times and spends a considerable amount of time checking out golf​ clubs, taking practice swings with​ them, and asking the sales staff questions. He compares​ prices, and then goes home and buys a set online at a lower price.​ Bill's behavior is called​ what?

Showrooming

When a firm initiates a price​ decrease, it must seriously consider how competitors will react. Although not all competitors are​ alike, what is the firm advised to assume about competitor​ reaction?

The firm should expect that some competitors or most will match a price change.

Under which of the following conditions would the marketing manager use a pricing strategy other than​ skimming?

The market must be highly​ price-sensitive so that a low price produces more market growth.

Under which of the following conditions is a firm most likely to be perceived as a price gouger when raising​ prices?

When requesting government regulations

In the case of​ services, captive-product pricing is called​ "two-part pricing." The price of the service is broken into two parts for cell phones and​ services: the​ ________ for the​ phone, which is often sold at a​ loss, and the​ ________ for the ongoing monthly phone and data service that are contracted with the carrier.

fixed​ fee; variable usage rate

When Bic introduced disposable​ razors, the product and market met several criteria for using​ ________ pricing. The market was price​ sensitive, and there were substantial economies of scale in distribution and production.

market-penetration

Perfume manufacturers primarily sell their products in department stores. They do not want to reduce the price of the perfumes or have them be put on sale by the department stores.​ Therefore, the manufacturers lease departments in the store because they are not permitted to insist on a set price. That would be an illegal pricing​ practice, which is called​ ________.

retail price maintenance