Chapter Quiz 9

Which of the following refers to setting prices based on​ buyers' perception of value rather than on the​ seller's cost? A. Cost-based pricing B. Value-added pricing C. Customer​ value-based pricing D. Good-value pricing E. Cost-plus pricing

C. Customer​ value-based pricing

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. A. product bundle B. two-part C. by-product D. product line E. captive-product

E. captive-product

When, if​ ever, is price discrimination​ allowed? A. If the seller can substantiate that it is distributing​ internationally, then it is legal. B. If the seller is selling via the Internet as its main​ channel, then it is legal. C. If the seller can prove that its costs are different when selling to different​ retailers, then it is legal. D. If the seller can prove that its revenue is affected when selling to similar​ retailers, then it is legal. E. If the seller can prove that it is allowable in certain states and local retailing​ areas, then it is legal.

C. If the seller can prove that its costs are different when selling to different​ retailers, then it is legal.

If the company has selected its target market and positioning​ carefully, then its marketing mix​ strategy, including​ price, will be fairly straightforward. Of the​ following, which is NOT one of the common pricing​ objectives? A. Supporting resellers and gaining their support B. Preventing competition C. Customer retention and building profitable customer relationships D. Grabbing international market share E. Avoiding government intervention

D. Grabbing international market share

Which of the following is true regarding the​ price-demand relationship? A. If demand is​ inelastic, a small change in price will result in a large change in demand. B. A demand curve shows the number of units a company will produce in a given time period at different prices that might be charged. C. Demand and price are directly related long dash—the higher the​ price, the greater the demand. D. If demand is​ elastic, sellers will consider lowering their prices. E. Price elasticity measures how responsive price will be to a change in demand.

D. If demand is​ elastic, sellers will consider lowering their prices.

Internal factors that affect pricing include​ _________________. A. The nature of the​ market, demand, and the economy B. The​ company's overall marketing​ strategy, objectives, and demand C. The​ company's overall marketing​ strategy, the nature of the​ market, and demand D. The​ company's overall marketing​ strategy, objectives, and the nature of the market E. The​ company's overall marketing​ strategy, objectives, and marketing mix

E. The​ company's overall marketing​ strategy, objectives, and marketing mix

Roshika 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​ ________. A. a​ limited-time offer B. a type of segmented pricing C. an indicator of geographic pricing D. an indicator of the cost of production E. an indicator of quality

E. an indicator of quality

​________________________ is one major objective associated with a​ market-penetration pricing strategy. A. Attracting buyers willing to pay a higher price B. Winning large market share C. Skimming off small but profitable market segments D. Avoiding everyday low pricing E. Preventing customer dissatisfaction

B. Winning large market share

When a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the​ store, it is practicing​ ___________________ pricing. A. psychological B. segmented C. optional-product D. promotional E. geographical

D. promotional

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? A. Good-value pricing B. Cost-based pricing C. High-low pricing D. Value-added pricing E. Break-even pricing

A. Good-value pricing

When a college or university charges more for​ out-of-state students than​ in-state students, it is practicing​ ______________________. A. location-based pricing B. product form pricing C. time-based pricing D. customer-segment pricing E. promotional pricing

A. 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? A. market-penetration pricing B. market-skimming pricing C. captive-product pricing D. psychological pricing E. product bundle pricing

A. market-penetration pricing

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. A. optional-product B. captive-product C. by-product D. product bundle E. product line

A. optional-product

Bath​ & Body Works uses​ _____________ pricing when the company offers​ "three-fer" deals on its products​ (such as​ soaps, lotions, and​ moisturizers). A. product bundle B. by-product C. product line D. captive-product E. two-part

A. product bundle

When Apple introduced its iPhone​ X, it priced the new product at nearly​ $1,000, considerably higher than competing smart phones. Apple was pursuing a​ ___________________ new product pricing​ strategy. A. captive-product B. premium pricing C. market-penetration D. optional-product E. by-product

B. premium pricing

UPS uses​ _________________, which charges different prices for shipping depending on an​ item's destination. The more distant the city where the package is being​ shipped, the higher the price UPS charges. A. uniform-delivered pricing B. zone pricing C. base-point pricing D. freight-absorption pricing E. free on board​ (FOB) origin

B. zone pricing

Of the​ following, which is true about​ pricing? A. Federal law is the overriding authority on pricing. B. Companies usually are free to charge whatever prices they wish. C. Price competition is a core element of our​ free-market economy. D. Companies have no obligation to consider broader societal pricing concerns. E. Companies do not need to communicate reasons for price increases to customers.

C. Price competition is a core element of our​ free-market economy.

Continually adjusting prices to meet the characteristics and needs of individual customers and situations is known as​ _______________________. A. promotional pricing B. psychological pricing C. dynamic pricing D. segmented pricing E. cash rebates

C. dynamic pricing

The illegal practice of​ ______________________ is selling below cost with the intention of punishing a competitor or gaining higher​ long-run profits by putting competitors out of business. A. price maintenance B. deceptive pricing C. predatory pricing D. ​price-fixing E. price discrimination

C. predatory pricing

When sellers set prices in conjunction or collaboration with one​ another, this illegal practice is known as​ _______________. A. retail price maintenance B. deceptive pricing C. price-fixing D. price discrimination E. predatory pricing

C. price-fixing

A variation of​ break-even pricing is​ ____________________, which uses the concept of a​ break-even chart that shows the total cost and total revenue expected at different sales volume levels. A. Everyday low pricing​ (EDLP) B. High-low pricing C. Value-added pricing D. Target return pricing E. Competition-based pricing

D. Target return pricing

The​ Robinson-Patman Act seeks to ensure that sellers offer the same price terms to customers at a given level of trade to prevent​ ______________________. A. deceptive pricing B. price-fixing C. predatory pricing D. price discrimination E. retail price maintenance

D. price discrimination

The Ford Mustang is offered in several different models. Ford uses​ __________ pricing to determine the price steps between the different models. A. product bundle B. two-part C. captive-product D. product line E. optional-product

D. product line

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? A. Breakeven pricing B. Cost-plus pricing C. High-low pricing D. EDLP E. Value-added pricing

E. Value-added pricing

Which of the following reverses the usual process of first designing a new​ product, determining its​ cost, and then​ asking, "Can we sell it for​ that?" A. EDLP B. value-added pricing C. ​cost-plus pricing D. target return pricing E. target costing

E. target costing