Question 1

A major airline sells an aggressively low priced ticket compared to a new low-fare airline,which is trying to enter the market.The airline may be accused of engaging in the unethical practice of:

Accepted Answer

A)  predatory pricing.
B)  price fixing.
C)  leader pricing.
D)  price skimming.
E)  deceptive reference prices.

Question 2

Pricing ________________ products is especially challenging because little or nothing is known about consumers' perceptions of value.

Accepted Answer

A)  cost-based
B)  seasonal
C)  large-quantity
D)  new-to-the-world
E)  zone pricing

Question 3

Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering:

Accepted Answer

A)  when the product is produced.
B)  as recognized by competitors.
C)  as perceived by the consumer.
D)  in order to minimize bundling charges.
E)  relative to production costs.

Question 4

A company can win a price war and capture market share from competitors if:

Accepted Answer

A)  the competitor doesn't notice.
B)  the market actually shrinks,so that if the firm simply maintains its volume its market share will increase.
C)  the company has a strong cost advantage and can lower prices without sustaining a loss.
D)  the company doesn't actually lower its prices but only appears to.
E)  None of the above.A company cannot win a price war.

Question 5

What type of pricing tactic is being used when several airlines agree to charge the same fare for a single route?

Accepted Answer

A)  Horizontal price fixing
B)  Vertical price fixing
C)  Horizontal price discrimination
D)  Vertical price discrimination
E)  Loss leader pricing

Question 6

The goal of coupons is to:

Accepted Answer

A)  get consumers to try a product.
B)  save consumers money,adding value to the product.
C)  reward loyal customers.
D)  encourage repurchases.
E)  all of the above.

Question 7

Rebates provide manufacturers with greater control than coupons and provide the firm with:

Accepted Answer

A)  valuable customer information.
B)  access to wholesalers.
C)  a measure of consumers' income elasticity of demand.
D)  reference price analysis.
E)  all of the above.

Question 8

Retailers use __________________ because they believe the use will induce customers to try new products,convert first-time users to regular users,increase purchases,and protect market share.

Accepted Answer

A)  seasonal discounts
B)  rebates
C)  cumulative quantity discounts
D)  noncumulative quantity discounts
E)  coupons

Question 9

Because market and operating conditions are different in each target market:

Accepted Answer

A)  all consumers will react similarly to the firm's pricing strategy.
B)  the choice of a pricing strategy is specific to the target market.
C)  prices need to be held constant because everything else is changing.
D)  only horizontal price fixing should be used.
E)  external reference prices will always be the best strategy.

Question 10

When a marketer establishes a price floor and a price ceiling for an entire line of similar products and then sets price points in between for differences in quality among the products,he or she is using a _______________ pricing approach.

Accepted Answer

A)  market penetration
B)  zone
C)  price lining
D)  loss leader
E)  noncumulative quantity discount

Question 11

When a retail store rarely sells deeply discounted or sale products,it is known as "everyday low pricing."

Accepted Answer

A) True 
 B)False

Question 12

Manufacturers like rebates because it provides them with information they can use in developing new products.

Accepted Answer

A) True 
 B)False

Question 13

Despite the economic downturn,Alban-Turner Advertising Agency has a reputation for developing campaigns that increase sales at least 10%.In sales presentations,Alban-Turner emphasizes its track record in order to demonstrate that its services are worth the cost.This is an example of which pricing strategy?

Accepted Answer

A)  Value-based pricing
B)  Competitor-based pricing
C)  Cost-based pricing
D)  Everyday low pricing
E)  High / low pricing

Question 14

Making leasing available to customers may be an attractive option for retailers if:

Accepted Answer

A)  discounts,coupons and rebates are insufficient to bring a price within consumers' reach.
B)  the retailer would like to open up new markets.
C)  the retailer would like to get the consumer to trade-in or trade-up purchases at the end of the lease period.
D)  the retailer can make financing available more easily than the consumer can on his or her own.
E)  All of the above.

Question 15

Betty's Bird Seed Company charges $50 for 10 pounds of bird feed,including shipping.Betty is using ________ to determine shipping costs.

Accepted Answer

A)  uniform delivered pricing
B)  zone pricing
C)  advertising allowances
D)  predatory pricing
E)  vertical price fixing

Question 16

The ____________ occurs when unit cost drops as the quantity sold increases.

Accepted Answer

A)  slotting allowance benefit
B)  price fixing return
C)  improvement value effect
D)  experience curve effect
E)  cumulative bundling benefit

Question 17

One of the difficulties associated with value-based pricing is that:

Accepted Answer

A)  costs are impossible to compute.
B)  only the creator of a new product can fully understand its value to consumers.
C)  value depends on variable costs and not fixed costs.
D)  everyday low pricing has neutralized the impact of price on consumers' purchase decisions.
E)  it necessitates a great deal of consumer research to be implemented successfully.

Question 18

The Robinson-Patman Act does NOT apply to end consumers,at which point many forms of price discrimination occur.

Accepted Answer

A) True 
 B)False

Question 19

A pricing tactic is:

Accepted Answer

A)  a short-term approach to pricing.
B)  a response to a competitive threat.
C)  an approach that can be used with intermediaries or consumers.
D)  a broadly accepted method of calculating a final price for consumers that is short term in nature.
E)  All of the above.

Question 20

The manufacturers of the early electric cars are charging relatively high prices to consumers who are willing to pay the price.They need to use a price skimming strategy because of:

Accepted Answer

A)  the relatively high emissions produced by electric cars.
B)  the potential benefits of price bundling.
C)  the high costs associated with producing a small volume of cars.
D)  the slotting allowances needed to gain greater distribution.
E)  a vertical price fixing arrangement among vendors supplying the needed components.

Exam 14: Strategic Pricing Methods

Correct Answer
verified

Betty's Bird Seed Company charges $50 for 10 pounds of bird feed,including shipping.Betty is using ________ to determine shipping costs.

Correct Answer
verified

Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering:

Correct Answer
verified

A pricing tactic is:

Correct Answer
verified

When a retail store rarely sells deeply discounted or sale products,it is known as "everyday low pricing."

Correct Answer
verified

Because market and operating conditions are different in each target market:

Correct Answer
verified

Pricing ________________ products is especially challenging because little or nothing is known about consumers' perceptions of value.

Correct Answer
verified

When a marketer establishes a price floor and a price ceiling for an entire line of similar products and then sets price points in between for differences in quality among the products,he or she is using a _______________ pricing approach.

Correct Answer
verified

Retailers use __________________ because they believe the use will induce customers to try new products,convert first-time users to regular users,increase purchases,and protect market share.

Correct Answer
verified

Making leasing available to customers may be an attractive option for retailers if:

Correct Answer
verified

One of the difficulties associated with value-based pricing is that:

Correct Answer
verified

The Robinson-Patman Act does NOT apply to end consumers,at which point many forms of price discrimination occur.

Correct Answer
verified

Rebates provide manufacturers with greater control than coupons and provide the firm with:

Correct Answer
verified

The ____________ occurs when unit cost drops as the quantity sold increases.

Correct Answer
verified

Manufacturers like rebates because it provides them with information they can use in developing new products.

Correct Answer
verified

A company can win a price war and capture market share from competitors if:

Correct Answer
verified

What type of pricing tactic is being used when several airlines agree to charge the same fare for a single route?

Correct Answer
verified

A major airline sells an aggressively low priced ticket compared to a new low-fare airline,which is trying to enter the market.The airline may be accused of engaging in the unethical practice of:

Correct Answer
verified

The manufacturers of the early electric cars are charging relatively high prices to consumers who are willing to pay the price.They need to use a price skimming strategy because of:

Correct Answer
verified

The goal of coupons is to:

Correct Answer
verified

Exam 14: Strategic Pricing Methods

Correct AnswerverifiedShow Answer

Betty's Bird Seed Company charges $50 for 10 pounds of bird feed,including shipping.Betty is using ________ to determine shipping costs.

Correct AnswerverifiedShow Answer

Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering:

Correct AnswerverifiedShow Answer

A pricing tactic is:

Correct AnswerverifiedShow Answer

When a retail store rarely sells deeply discounted or sale products,it is known as "everyday low pricing."

Correct AnswerverifiedShow Answer

Because market and operating conditions are different in each target market:

Correct AnswerverifiedShow Answer

Pricing ________________ products is especially challenging because little or nothing is known about consumers' perceptions of value.

Correct AnswerverifiedShow Answer

When a marketer establishes a price floor and a price ceiling for an entire line of similar products and then sets price points in between for differences in quality among the products,he or she is using a _______________ pricing approach.

Correct AnswerverifiedShow Answer

Retailers use __________________ because they believe the use will induce customers to try new products,convert first-time users to regular users,increase purchases,and protect market share.

Correct AnswerverifiedShow Answer

Making leasing available to customers may be an attractive option for retailers if:

Correct AnswerverifiedShow Answer

One of the difficulties associated with value-based pricing is that:

Correct AnswerverifiedShow Answer

The Robinson-Patman Act does NOT apply to end consumers,at which point many forms of price discrimination occur.

Correct AnswerverifiedShow Answer

Rebates provide manufacturers with greater control than coupons and provide the firm with:

Correct AnswerverifiedShow Answer

The ____________ occurs when unit cost drops as the quantity sold increases.

Correct AnswerverifiedShow Answer

Manufacturers like rebates because it provides them with information they can use in developing new products.

Correct AnswerverifiedShow Answer

A company can win a price war and capture market share from competitors if:

Correct AnswerverifiedShow Answer

What type of pricing tactic is being used when several airlines agree to charge the same fare for a single route?

Correct AnswerverifiedShow Answer

A major airline sells an aggressively low priced ticket compared to a new low-fare airline,which is trying to enter the market.The airline may be accused of engaging in the unethical practice of:

Correct AnswerverifiedShow Answer

The manufacturers of the early electric cars are charging relatively high prices to consumers who are willing to pay the price.They need to use a price skimming strategy because of:

Correct AnswerverifiedShow Answer

The goal of coupons is to:

Correct AnswerverifiedShow Answer

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