chapter 11

which of the following product mix pricing strategies involves pricing products that can only be used with the main product?

captive product pricing

which of the following price adjustment strategies offers a price reduction to buyers who pay their bills promptly

cash discount

price discrimination may be used to macth comp as long as the strategy is temporary, localized, and

defensive

which of the following is price adjustment strategy?

discount and allowance pricing

The Internet offers ________, where the price can easily be adjusted to meet changes in demand. A) captive pricing B) dynamic pricing C) basing-point pricing D) price bundling E) cost-plus pricing

dynamic pricing

which of the following would most likely lead to a company intiating a price increase

over demand

which of the following is true of price changes

A drop in price can adversely affect how consumers view the brand.

Electrowhip, a company that manufacturers blenders and electric whisks, has decided to use a market-penetration pricing strategy. Which of the following, if true, proves their decision to be a wise one? A) Electrowhip's competitors utilize social media for marketing their products. B) Electrowhip sells products whose image and quality support high prices. C) Electrowhip operates in a market with many competitors. D) Electrowhip does not operate in a price sensitive market. E) Electrowhip's products are intended to appeal to the elite in society.

C) Electrowhip operates in a market with many competitors.

under which type of geographical pricing strategy does each customer take responsibility for the freight charges for the product from the factory to its destination

FOB origin pricing

which of the following is true of price skimming?

It can be profitably used when the product's quality and image support its price.

a ____ refers to promotional money paid by manufacturers to retailers in return for an agreemnet to feature the manufacturer's product in some way

allowance

which of the following is a geographical pricing strategy?

basing point pricing

when faced with a competitor who has cut its product's price, which of the following is the most cost-effective way for a company to maintain its own price but raise the percieved value of its offer?

by altering the compay's marketing communications

a market skimming pricing strategy should not be used for a new product when _____

competitor's can undercut prices easily

A seller offers a ________ to trade-channel members who perform certain functions, such as selling, storing, and record keeping.

functional discount

which of the following involves adjusting prices to account for the phsycial location of customers?

geographical

Freight-absorption pricing is used for ________ and ________. A) market penetration; higher profit margins B) holding on to increasingly competitive markets; higher profit margins C) market penetration; holding on to increasingly competitive markets D) generating temporary higher profits; discouraging competitors E) services; installations

holding on to increasingly competitive markets

which of the following is true of FOB origin pricing

it is an expensive alternative for customers in distant locations

which of the following is true of the bottom of the pyramid

it is considered a source of fresh growth oppurtunities

which of the following is true of promotional pricing?

it leads to deal prone buyers

which of the following is an adverse effect of using promotional pricing

it makes shopping stressful

which of the following is true of product bundle pricing?

it promotes the sale of products that consumers might otherwise not buy

which of the following is true of market penetration pricing?

it results in drawing in large numbers of buyer quickily, winning a large market share

in repsonse to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower priced option to its product line. This is an exmaple of which of the following responses to a competitor's price cuts?

launchign a fighter brand

When a competitor cuts its price, a company is most likely to decide to ________ if it believes it will not lose much market share or would lose too much profit by cutting its own price. A) stabilize its production costs B) reduce its marketing costs C) maintain its current prices and profit margin D) increase its marketing budget to raise the perceived value of the product E) increase its production costs to improve the quality of the product

maintain its current prices and profit margin

in a bid to attract more customers in a market that has several competitors, Barrymore's Bakery slashed the prices of all its products by 50%. Managers at the firm reasoned that lower prices would draw in even more customers, making up for the reduction in price several times over. Which of the following pricing strategies are they using?

market penetration

when a company sets a high price for a new product with the intention of reducing the price in the future, it is using the ____ pricing strategy

market skimming

Midnight Magic, a perfume manufacturing company, plans to release a new fragrance during the holiday season at $99 per bottle. The company intends to bring the price down to $49 within six months of its release to attract buyers who couldn't afford the initial price. Which of the following pricing strategies is Midnight Magic using?

market skimming pricing

When sellers set prices after talking to competitors and engaging in collusion, they are involved in ________. A) predatory pricing B) discriminatory pricing C) price fixing D) skimming pricing E) penetration pricing

price fixing

Under ________ pricing, different versions of the product are priced differently but not according to differences in their costs. A) product form B) optional product C) captive product D) by-product E) seasonal

product form

which of the following product mix pricing strategies involves setting prices across an entire product range based on cost differences between the products, customer evaluations of different features and competitor's prices?

product line pricing

Low-interest financing and longer warranties are both examples of ________. A) segmented pricing B) promotional pricing C) allowances D) discounts E) product-form pricing

promotional

________ allowances are payments or price reductions that reward dealers for participating in advertising and sales support programs.

promotional

In return for participating in Honda advertising and sales support programs, Honda dealerships are rewarded with payments or price reductions, which are known as ________.

promotional allowances

Hearth and Home, a store which sells household products, has announced a one week sale on its new carpet line. This is an example of ____

promotional pricing

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency? A) segmented pricing B) psychological pricing C) referent pricing D) promotional pricing E) basing-point pricing

promotional pricing

which of the following is a price adjustment strategy that considers how a customer's perception of a product is influenced by its price?

psychological pricing

which term refers to prices that buyers carry in their minds and check with when they look at a given product?

reference price

Mark's Markers, a manufacturer of color markers, has required its dealers to charge a specified retail price for its markers. Mark's is most likely guilty of ________. A) price fixing B) retail price maintenance C) price discrimination D) price collusion E) unfair price skimming

retail price maintenance

the ____ seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given price level

robinson patman act

Failure to enter the current price into a retailer's system may result in charges of ________. A) predatory pricing B) scanner fraud C) retail maintenance pricing D) discriminatory pricing E) price fixing

scanner fraud

by definition, _____ pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost

segmented

price discrimination is legal when a ______

seller can prove its costs are different when selling to different retailers

Companies set not a single price, but a pricing ________ that covers different items in its line and changes over time as products move through their life cycles.

structure

segmented pricing is only effective when ______

the cost of segmenting does not exceed the revenue obtained from the price difference

which of the following is true of product line pricing?

the price steps take cost differences between products in the line into account

Competitors are most likely to react to a price change when ________. A) a large number of competitors are involved B) the product is uniform C) the buyers are not well informed about product features D) buyers are not well informed about price differences E) the market has a pure monopoly

the product is uniform

a market penetration pricing policy should least likely be used for a new product when ______

the product's quality and image supoort a high price

which of the following is true of public policies and pricing?

the robinson patman act governs interstate commerce

In the case of services, captive product pricing is called ________ pricing. A) by-product B) optional product C) two-part D) bundle E) segmented

two part

which form of georgraphic pricing is a company using when it charges the same rate to ship a product anywhere in the US?

uniform delivered pricing

which of the following factors would most likely lead to a company intiating a price cut

weakened economy

federal legislation on price fixing requires that sellers set their prices

without the intention of cutting into competitor's profits

If Detriot DLX charges the same price for the delievery of its products to customers located in the states near the Great Lakes, but a different price to customers elsewhere, the company is using ____

zone pricing

Solar Tanning Salon prices tanning sessions at $25 per visit. It also offers seasonal passes for $175 that allow the customer to visit the salon multiple times in a year. This is an example of a ________.

discount