Chapter 20: Setting Prices
Which of the following pricing objectives can reduce a firm's risks by helping to stabilize demand for its products? a. Status quo b. Market share c. Profit d. Product quality e. Cash flow
a. Status quo
The Federal Trade Commission has established guidelines for _______. If the higher price against which the comparison is made is the price formerly charged for the product, the seller must have made the previous price available to customers for a reasonable time period. a. comparison discounting b. reference pricing c. bait pricing d. special-event pricing e. price leaders
a. comparison discounting
Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price? a. 50% b. 25% c. 33% d. 5% e. 100%
b. 25%
Which of the following pricing strategies sets the basic product in a product line low, but the price on the items required to operate or enhance it are higher? a. Premium pricing b. Captive pricing c. Price lining d. Bait pricing e. Reference pricing
b. Captive pricing
Which of the following is most likely Warby Parker's pricing objective? a.Survival b.Market share c.Cash flow d.Product quality e.Status quo
b.Market share
Most of Warby Parker's eyeglass frames are priced at $95, including sunglasses frames, while wire-frame eyeglass frames are priced at $145. Which of the following strategies does this best describe? a.Customary pricing b.Price lining c.Everyday low pricing d.Reference pricing e.Premium pricing
b.Price lining
Which of the following objectives is likely to be more expensive for a firm as the cost of materials and research and development may be greater? a. Status quo b. Cash flow c. Product quality d. Profit e. Market share
c. Product quality
In the absence of government controls, pricing is a(n) _______ and _______ way to adjust the marketing mix. a. flexible; challenging b. ethical; convenient c. flexible; convenient d. flexible; ill-timed e. rigid; convenient
c. flexible; convenient
Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _______. a. markup pricing b. competition-based pricing c. yield management d. cost-plus pricing e. cost-based pricing
c. yield management
Which of the following should be accomplished after developing pricing objectives? a. Selecting a pricing strategy b. Selecting a basis for pricing c. Evaluating competitors' prices d. Assessing the target market's evaluation of price e. Determining a specific price
d. Assessing the target market's evaluation of price
Kara Thrace operates a service business that engages in systematically collecting data on brands and prices at competitors' stores. For which stage of the price establishment process would this service be most appropriate? a. Assessing the target market's evaluation of price b. Developing pricing objectives c. Selecting a pricing strategy d. Evaluating competitors' prices e. Selecting a basis for pricing
d. Evaluating competitors' prices
ACME Corp. has a pricing objective to increase its primary product's sales relative to total industry sales. This is best described as a(n) _______. a. return-on-investment objective b. status quo objective c. cash flow objective d. market share objective e. product quality objective
d. market share objective
Which of the following pricing bases does Warby Parker seem to be using? a.Negotiated pricing b.Cost-based pricing c.Everyday low pricing d.Competition-based pricing e.Demand-based pricing
d.Competition-based pricing
When Warby Parker began selling eyeglasses online, they were priced significantly lower than traditional "brick & mortar" eyeglass stores, and still are today. Which of the following pricing strategies did the company initially use when introducing its eyewear? a.Product-line pricing b.Professional pricing c.Price skimming d.Penetration pricing e.Differential pricing Skip
d.Penetration pricing
Which of the following is often used by producers of relatively homogeneous products, especially when the target market considers price to be an important purchase consideration? a. Cost-plus pricing b. Markup pricing c. Demand-based pricing d. Cost-based pricing e. Competition-based pricing
e. Competition-based pricing
Which of the following price bases is mostly likely to be used for commercial construction projects or custom-made equipment? a. Competition-based pricing b. Yield management c. Markup pricing d. Demand-based pricing e. Cost-plus pricing
e. Cost-plus pricing
Which pricing strategy provides the most flexible introductory base price? a. Periodic discounting b. Penetration pricing c. Premium pricing d. Captive pricing e. Price skimming
e. Price skimming
Which of the following product-line pricing strategies is NOT generally used for business products? a. Premium pricing b. Bait pricing c. Price lining d. Captive pricing e. Psychological pricing
e. Psychological pricing
Chevrolet's Presidents' Day sales are an example of _______. a. penetration pricing b. negotiated pricing c. secondary-market pricing d. price skimming e. periodic discounting
e. periodic discounting
The video says only a handful of companies make eyeglasses and they mark them up 10 or 20 or more times. Markup pricing is best defined as deriving a price by _______. a.charging a higher price when demand is strong b.adding a flat dollar amount or percentage to the cost of the product c.balancing supply and demand d.determining the costs and then adding specified dollar amount or percentage of the cost to the seller's cost e.adding a predetermined percentage of the cost to the cost of the product
e.adding a predetermined percentage of the cost to the cost of the product Skip
