Question 1

Marketers using a flexible-price policy should take care to avoid

Accepted Answer

A)  requests for allowances.
B)  price discrimination.
C)  contradictory promotions.
D)  changes in market segmentation.
E)  support from government agencies.

Question 2

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

Accepted Answer

A)  the size of the order.
B)  the frequency of the order.
C)  when orders are placed during the year.
D)  the length of the relationship with the manufacturer.
E)  the marketing activities they are expected to perform in the future.

Question 3

Explain why price elasticity is important to marketing managers.

Accepted Answer

Price elasticity of demand is important ...

Question 4

Netflix used to charge $14.99 per month for its movie rental service.However,when Blockbuster introduced the same service at $13.99,Netflix then dropped its price to $13.99.Netflix most likely made this price reduction in an attempt to

Accepted Answer

A)  decrease revenue but increase profit.
B)  increase profit by decreasing revenue.
C)  maintain market share.
D)  decrease market share.
E)  increase efficiency.

Question 5

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product.Which of the following conditions would argue AGAINST using a penetration pricing strategy for the tasty dessert treat?

Accepted Answer

A)  The ice cream market is highly conservative.
B)  Economies of scale in production would be substantial.
C)  Retailers are not willing to carry new brands of ice cream in the already overcrowded category.
D)  Once the initial price is set,it is nearly impossible to lower the price without alienating early buyers.
E)  The ice cream market exhibits inelastic demand over a fairly broad range of prices.

Question 6

When microwave ovens were in the introduction stage of their product life cycle,some consumers were willing to pay exorbitant prices for these innovative ovens.Taking advantage of this strong consumer desire,marketers set the price for microwave ovens at the highest initial price possible.Marketers of microwave ovens used a __________ pricing strategy.

Accepted Answer

A)  skimming
B)  penetration
C)  prestige
D)  price lining
E)  bundle

Question 7

Four pricing practices are closely scrutinized because of potentially unethical or illegal actions.They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; and (4) __________.

Accepted Answer

A)  price discounting
B)  segmentation
C)  price fixing
D)  delayed payment penalties
E)  price positioning

Question 8

Which of the following statements regarding odd-even pricing is most accurate?

Accepted Answer

A)  Odd-even pricing is designed to give the consumer a better set of pricing alternatives.
B)  Odd-even pricing can be used in conjunction with a skimming strategy,but should not be used with a penetration strategy.
C)  Odd-even pricing does not work if the product is healthcare-related.
D)  Overuse of odd-ending prices tends to mute its effect on demand.
E)  Odd-ending prices are best used with large ticket items; it loses its effectiveness with moderate- to low-ticket items.

Question 9

Hallmark was the official supplier of flowers at the last Winter Olympics.Hallmark presented each Olympic winner with a special bouquet of roses designed to resemble the Olympic torch.Consumers were able to buy a smaller version of this same bouquet at the Hallmark website for $74.95.The Olympic bouquet that consumers could buy contained two dozen yellow roses,yet you could buy the same two dozen yellow roses for less than $35 at most supermarkets.If Hallmark is treating the Olympic bouquet as an innovative product,then it is using which demand-oriented pricing approach?

Accepted Answer

A)  bundle pricing
B)  yield management pricing
C)  skimming pricing
D)  target return-on-sales pricing
E)  penetration pricing

Question 10

UMD11: Price Premium Marketing Dashboard
-The UMD11: Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks.What is the price premium for Red Bull in 2009?

Accepted Answer

A)  12.1%
B)  0%
C)  -5.0%
D)  -5.6%
E)  -11.1%

Question 11

The vertical axis of a demand curve graph represents __________.

Accepted Answer

A)  market growth rate
B)  relative market share
C)  price per unit
D)  potential profit in dollars
E)  quantity demanded

Question 12

When Dell sells various laptops,it also pre-installs Microsoft Office and other software customers order at a discount before a laptop is shipped.This is an example of

Accepted Answer

A)  price lining.
B)  product line pricing.
C)  bundle pricing.
D)  customary pricing.
E)  prestige pricing.

Question 13

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Accepted Answer

A)  there is a large number of products and estimating the demand for each would be difficult and time consuming.
B)  there is a large number of product lines,all with basically the same product attributes.
C)  there is a specific profit goal that needs to be achieved.
D)  there is a policy of selling every item in a product line at the same price regardless of the product class.
E)  the products are perishable or seasonal.

Question 14

Three different objectives relate to a firm's profit,which have different implications for pricing strategy.The three profit-oriented objectives include managing for long-run profits,maximizing current profit objectives,and __________.

Accepted Answer

A)  accumulating profits
B)  reinvesting profits
C)  redistributing profits
D)  maximizing gross margin
E)  achieving a target return

Question 15

In one of its least favorite actions,Amazon.com was caught fiddling with its price tags.Avid DVD buyers,buying in quantity for resale,found that the online retailer was offering different customers different prices for the same DVD,and complained vociferously.Amazon was caught red-handed.Company officials admitted that the company was trying to see how much it could charge for an item before buyers balked.No matter what the reasoning behind it,Amazon.com was using

Accepted Answer

A)  horizontal price-fixing.
B)  price discrimination.
C)  resale price maintenance.
D)  predatory pricing.
E)  bait and switch pricing.

Question 16

Loss-leader pricing refers to

Accepted Answer

A)  a pricing method where the price the seller charges is below the actual cost to make the product.
B)  setting a low initial price and gradually but consistently increasing that price so as not to antagonize the consumer.
C)  deliberately selling a product below its customary price,not to increase sales,but to attract customers' attention in hopes that they will buy other products as well.
D)  a method of pricing based on a product's tradition,standardized channel of distribution,or other competitive factors.
E)  pricing a product between 8 and 10 percent lower than nationally branded competitive products.

Question 17

Reductions in unit costs for a larger order are referred to as

Accepted Answer

A)  promotional allowances.
B)  quantity discounts.
C)  economic order discounts.
D)  penetration pricing.
E)  case allowances.

Question 18

In order to deliver a product that the average consumer can afford,Vizio

Accepted Answer

A)  handles product design and marketing in the United States and relies on contract manufacturers in Taiwan to build the product.
B)  uses mass customization in Taiwan and then ships the HDTVs to the United States.
C)  purchased a small company in China to distribute its products under the Vizio name.
D)  purchased a small company in Japan to distribute its products under the Vizio name.
E)  relies solely on recycled materials to build high quality,no-frills products.

Question 19

Marketing managers often use break-even analysis to analyze the relationship between total revenue and total cost to determine profitability at various levels of output.What is the break-even formula? Use the formula to calculate how many DVD players a dealer must sell if her fixed costs are $100,000,unit variable costs are $150,and the selling price is $200.

Accepted Answer

The break-even point (BEP)is the quantit...

Question 20

The average price Washburn charges for a guitar is $349.This price must cover its variable costs of $25 for direct materials and $120 in direct labor.It must also cover fixed expenses of $38,000.Assuming everything else stays the same,the company's planned move to Nashville,Tennessee,will reduce its fixed costs by $4,800.This would cause total costs to __________ and the break-even quantity to __________.

Accepted Answer

A)  decrease; stay the same
B)  decrease; increase
C)  increase; increase
D)  stay the same; increase
E)  decrease; decrease

Exam 11: Pricing Products and Services

Correct Answer
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The break-even point (BEP)is the quantit...
View Answer

Correct Answer
verified

Correct Answer
verified

Explain why price elasticity is important to marketing managers.

Correct Answer
verified
Price elasticity of demand is important ...
View Answer

Correct Answer
verified

UMD11: Price Premium Marketing Dashboard -The UMD11: Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks.What is the price premium for Red Bull in 2009?

Correct Answer
verified

The vertical axis of a demand curve graph represents __________.

Correct Answer
verified

Four pricing practices are closely scrutinized because of potentially unethical or illegal actions.They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; and (4) __________.

Correct Answer
verified

Which of the following statements regarding odd-even pricing is most accurate?

Correct Answer
verified

Loss-leader pricing refers to

Correct Answer
verified

Three different objectives relate to a firm's profit,which have different implications for pricing strategy.The three profit-oriented objectives include managing for long-run profits,maximizing current profit objectives,and __________.

Correct Answer
verified

Reductions in unit costs for a larger order are referred to as

Correct Answer
verified

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

Correct Answer
verified

In order to deliver a product that the average consumer can afford,Vizio

Correct Answer
verified

Marketers using a flexible-price policy should take care to avoid

Correct Answer
verified

Netflix used to charge $14.99 per month for its movie rental service.However,when Blockbuster introduced the same service at $13.99,Netflix then dropped its price to $13.99.Netflix most likely made this price reduction in an attempt to

Correct Answer
verified

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Correct Answer
verified

When Dell sells various laptops,it also pre-installs Microsoft Office and other software customers order at a discount before a laptop is shipped.This is an example of

Correct Answer
verified

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product.Which of the following conditions would argue AGAINST using a penetration pricing strategy for the tasty dessert treat?

Correct Answer
verified

Correct Answer
verified

Exam 11: Pricing Products and Services

Correct AnswerverifiedThe break-even point (BEP)is the quantit...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain why price elasticity is important to marketing managers.

Correct AnswerverifiedPrice elasticity of demand is important ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

UMD11: Price Premium Marketing Dashboard -The UMD11: Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks.What is the price premium for Red Bull in 2009?

Correct AnswerverifiedShow Answer

The vertical axis of a demand curve graph represents __________.

Correct AnswerverifiedShow Answer

Four pricing practices are closely scrutinized because of potentially unethical or illegal actions.They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; and (4) __________.

Correct AnswerverifiedShow Answer

Which of the following statements regarding odd-even pricing is most accurate?

Correct AnswerverifiedShow Answer

Loss-leader pricing refers to

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit,which have different implications for pricing strategy.The three profit-oriented objectives include managing for long-run profits,maximizing current profit objectives,and __________.

Correct AnswerverifiedShow Answer

Reductions in unit costs for a larger order are referred to as

Correct AnswerverifiedShow Answer

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

Correct AnswerverifiedShow Answer

In order to deliver a product that the average consumer can afford,Vizio

Correct AnswerverifiedShow Answer

Marketers using a flexible-price policy should take care to avoid

Correct AnswerverifiedShow Answer

Netflix used to charge $14.99 per month for its movie rental service.However,when Blockbuster introduced the same service at $13.99,Netflix then dropped its price to $13.99.Netflix most likely made this price reduction in an attempt to

Correct AnswerverifiedShow Answer

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Correct AnswerverifiedShow Answer

When Dell sells various laptops,it also pre-installs Microsoft Office and other software customers order at a discount before a laptop is shipped.This is an example of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
The break-even point (BEP)is the quantit...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Price elasticity of demand is important ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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