Marketing Exam #3 - Chapter 9
Which of the following is a cost-oriented pricing approach?
Breakeven pricing
________ refers to setting price based on buyers' perception of value rather than on the seller's cost.
Customer value-based pricing
Which of the following statements is true regarding initiating price cuts?
Cutting prices in an industry loaded with excess capacity may lead to price wars.
Which of the following statements is true regarding oligopolistic competition?
Each seller is alert and responsive to competitors' pricing strategies and marketing moves
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?
Good-value pricing
Which of the following is true regarding the price-demand relationship?
If demand is elastic, sellers will consider lowering their price.
Which of the following is a potentially effective action a company could take in response to a competitor's price cut?
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?
Value-added pricing
Which of the following statements is true regarding initiating 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?
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 ________.
an indicator of quality
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.
captive-product
Companies that use ________ continually adjust prices to meet the characteristics and needs of individual customers and situations.
dynamic 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?
location-based pricing
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?
market-penetration 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.
market-skimming
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.
optional-product
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 _______.
predatory pricing
Over the years, U.S. air carriers have been accused numerous times of collusion when setting prices. This illegal practice is called _______.
price fixing
The Ford Mustang is offered in several different models. Ford will use __________ pricing to determine the price steps between the different models.
product line
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.
product-bundle
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.
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 ________.
target costing
Internal factors that affect pricing include ________.
the company's overall marketing strategy, objectives, and marketing mix
One major objective associated with a market-penetration pricing strategy is to ________.
win a large market share