Question 1

Figure 14-1
-Figure 14-1 above represents the six steps in the price-setting process.Which letter represents the step where a firm would use a cost-oriented approach to setting price?

Accepted Answer

A)   "B"
B)   "C"
C)   "D"
D)   "E"
E)   "F"F) A) and D)
G) A) and B)

Question 2

Yield management pricing is a form of

Accepted Answer

A)   target pricing.
B)   loss-leader pricing.
C)   dynamic pricing.
D)   customary pricing.
E)   price lining.F) A) and B)
G) B) and E)

Question 3

retail price of DVD players has decreased from $900 in the mid-1990s to less than $100 today.This is due in large part to

Accepted Answer

A)   skimming pricing.
B)   prestige pricing.
C)   odd-even pricing.
D)   customary pricing.
E)   experience curve pricing.F) B) and C)
G) A) and B)

Question 4

Which of the following statements about everyday low pricing (EDLP) is most accurate?

Accepted Answer

A)   EDLP encourages manufacturer allowances.
B)   Supermarkets have hailed EDLP as the most effective form of value pricing.
C)   Some argue that EDLP without price specials is boring for many grocery shoppers.
D)   EDLP allows supermarkets to use deeply discounted price specials.
E)   EDLP can increase average retail prices by as much as 10 percent.F) D) and E)
G) C) and D)

Question 5

Target return-on-investment pricing refers to

Accepted Answer

A)   setting a price to achieve an annual target ROA.
B)   adding a fixed percentage to the cost of all items in a specific product class.
C)   setting prices to achieve a profit that is a specified percentage of the sales volume.
D)   setting a price to achieve an annual target ROI.
E)   setting a price based on an annual specific dollar target volume of profit.F) B) and E)
G) B) and C)

Question 6

Geographical adjustments are made by manufacturers or wholesalers to reflect

Accepted Answer

A)   production costs.
B)   administrative costs.
C)   selling costs.
D)   promotional costs.
E)   transportation costs.F) A) and E)
G) A) and D)

Question 7

Geographical Pricing Map B
-According to the Geographical Pricing Map B above,if products are shipped from Denver,which of the following statements would be most accurate?

Accepted Answer

A)   A firm shipping products from Denver would charge customers in Miami and New York a lower price than customers who live in Dallas or Seattle.
B)   Customers in Minneapolis and Nashville would be charged $60.
C)   Customers in Dallas and Phoenix pay the same price.
D)   Customers in Nashville pay less shipping than customers in Minneapolis.
E)   All customers receiving products from Denver will pay the same shipping fee.F) C) and D)
G) B) and D)

Question 8

Allowances,like discounts,refer to

Accepted Answer

A)   rewards given to retailers to encourage early payment.
B)   payment extensions given to cash-strapped consumers during the current recession.
C)   list price deductions based on surges in consumer demand.
D)   list price deductions based on sudden drops in consumer demand.
E)   reductions from list or quoted prices to buyers for performing some activity.F) B) and E)
G) B) and D)

Question 9

skimming pricing policy is likely to be most effective when

Accepted Answer

A)   consumers tend to be price sensitive.
B)   it will be easier to set measurable sales unit goals.
C)   a lower price will significantly lower fixed costs.
D)   consumers perceive your product to be similar to other products on the market.
E)   lowering the price has only a minor effect on increasing sales volume and reducing unit costs.F) B) and D)
G) A) and E)

Question 10

key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1) demand-oriented; (2) __________; (3) profit-oriented; and (4) competition-oriented approaches.

Accepted Answer

A)   cost-oriented
B)   cause-oriented
C)   revenue-oriented
D)   stakeholder-oriented
E)   distribution-orientedF) B) and E)
G) C) and D)

Question 11

assumption that demand is elastic at a number of price points but is inelastic between these price points leads to which pricing approach?

Accepted Answer

A)   product line pricing
B)   skimming pricing
C)   penetration pricing
D)   price lining
E)   odd-even pricingF) B) and E)
G) A) and B)

Question 12

using a price lining strategy,a marketer will

Accepted Answer

A)   set the price of a line of products at a number of different specific pricing points.
B)   set the price slightly higher than necessary to protect against losses from environmental factors.
C)   adjust the price of a product so it is "in line" with the price of its largest competitor.
D)   set a low initial price on a new product to appeal immediately to the mass market.
E)   set a market price for product or product class based on a subjective feel for the competitors' price or market price.F) A) and C)
G) B) and D)

Question 13

two general methods for quoting prices related to transportation costs are uniformed delivered pricing and __________.

Accepted Answer

A)   regional pricing
B)   flexible pricing
C)   mode of transportation pricing
D)   FOB origin pricing
E)   FOB destination pricingF) A) and B)
G) A) and C)

Question 14

Figure 14-7
-Consider Figure 14-7 above.Suppose a manufacturer quotes price in the following form: List price-$100 less 30/10/5.What does "B" represent?

Accepted Answer

A)   the wholesaler's trade discount
B)   the retailer's trade discount
C)   the jobber's trade discount
D)   the manufacturer's trade discount
E)   the manufacturer's markupF) All of the above
G) C) and D)

Question 15

the early 1980s,typical round-trip coach airfares from the East Coast to London were more than $500.Then Freddie Laker introduced the People's Express,a competing service into Newark at $350.Major airlines matched his price-and continued to do so until they drove People's Express out of business.Then prices shot back up to over $500.A lawsuit filed under the Sherman Act resulted in the judgment that the major airlines had explicitly tried to destroy a competitor.The experience of People's Express is an example of __________ on the part of the major airlines

Accepted Answer

A)   price fixing.
B)   price discrimination.
C)   deceptive pricing.
D)   predatory pricing.
E)   pricing constraints.F) A) and E)
G) A) and D)

Question 16

you buy a used car from a CarMax dealership,you are offered the car at a "no haggle" price.You can buy it or not,but there is no negotiating the published price because of the seller's

Accepted Answer

A)   customary pricing strategy.
B)   one-price policy.
C)   uniform pricing policy.
D)   flexible-price policy.
E)   dynamic pricing strategy.F) B) and D)
G) B) and C)

Question 17

promotional allowance refers to

Accepted Answer

A)   a one-time discount that must be used within a certain time frame or it expires.
B)   the cash payments or an extra amount of "free goods" awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote the product.
C)   the return of money based on proof of purchase.
D)   short-term price reductions when consumer demand takes a significant and unexpected dip.
E)   incentives, such as trips, cruises, jewelry, etc., presented to brand-loyal customers.F) B) and D)
G) All of the above

Question 18

Which of the following statements regarding quantity discounts is most accurate?

Accepted Answer

A)   Cumulative quantity discounts encourage repeat buying by a single customer to a far greater degree than do noncumulative quantity discounts.
B)   Noncumulative quantity discounts encourage repeat buying by a single customer to a far greater degree than do cumulative quantity discounts.
C)   Quantity discounts are primarily used to undercut competitors' prices.
D)   Noncumulative quantity discounts encourage smaller, long-term repeat purchases rather than less-frequent, large-quantity purchases.
E)   Quantity discounts can basically be used only once with each reseller or the price will become too customary.F) A) and B)
G) A) and E)

Question 19

Figure 14-2
-Figure 14-2 above represents the four approaches to selecting an appropriate price level."B" represents which approach?

Accepted Answer

A)   demand-oriented approach
B)   profit-oriented approach
C)   competition-oriented approach
D)   results-oriented approach
E)   cost-oriented approachF) A) and B)
G) A) and C)

Question 20

Morgan,a sales representative for a major food service distributor of General Mill Warm Delights,wanted to encourage repeat purchases by his grocery customers.In order to accomplish this objective,Morgan offered the following discounts to his customers: a 10 percent discount for buying 1-49 cases of Warm Delights within a calendar month; the discount increases to 12 percent if 50-99 cases of Warm Delights are purchased within the same calendar month; and the discount increases to 15 percent if 100 or more cases of Warm Delights are purchased within the same calendar month.What type of discount was Morgan offering his grocery customers?

Accepted Answer

A)   a seasonal discount
B)   a quantity discount
C)   a cash discount
D)   a trade discount
E)   a case allowance discountF) A) and E)
G) C) and E)

Exam 14: Arriving at the Final Price

Correct Answer
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Figure 14-1 -Figure 14-1 above represents the six steps in the price-setting process.Which letter represents the step where a firm would use a cost-oriented approach to setting price?

Correct Answer
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Figure 14-7 -Consider Figure 14-7 above.Suppose a manufacturer quotes price in the following form: List price-$100 less 30/10/5.What does "B" represent?

Correct Answer
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Geographical adjustments are made by manufacturers or wholesalers to reflect

Correct Answer
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Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level."B" represents which approach?

Correct Answer
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Target return-on-investment pricing refers to

Correct Answer
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skimming pricing policy is likely to be most effective when

Correct Answer
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Correct Answer
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key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1) demand-oriented; (2) __________; (3) profit-oriented; and (4) competition-oriented approaches.

Correct Answer
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promotional allowance refers to

Correct Answer
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assumption that demand is elastic at a number of price points but is inelastic between these price points leads to which pricing approach?

Correct Answer
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Yield management pricing is a form of

Correct Answer
verified

retail price of DVD players has decreased from $900 in the mid-1990s to less than $100 today.This is due in large part to

Correct Answer
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Which of the following statements about everyday low pricing (EDLP) is most accurate?

Correct Answer
verified

Allowances,like discounts,refer to

Correct Answer
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you buy a used car from a CarMax dealership,you are offered the car at a "no haggle" price.You can buy it or not,but there is no negotiating the published price because of the seller's

Correct Answer
verified

two general methods for quoting prices related to transportation costs are uniformed delivered pricing and __________.

Correct Answer
verified

Geographical Pricing Map B -According to the Geographical Pricing Map B above,if products are shipped from Denver,which of the following statements would be most accurate?

Correct Answer
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using a price lining strategy,a marketer will

Correct Answer
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Which of the following statements regarding quantity discounts is most accurate?

Correct Answer
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Exam 14: Arriving at the Final Price

Correct AnswerverifiedShow Answer

Figure 14-1 -Figure 14-1 above represents the six steps in the price-setting process.Which letter represents the step where a firm would use a cost-oriented approach to setting price?

Correct AnswerverifiedShow Answer

Figure 14-7 -Consider Figure 14-7 above.Suppose a manufacturer quotes price in the following form: List price-$100 less 30/10/5.What does "B" represent?

Correct AnswerverifiedShow Answer

Geographical adjustments are made by manufacturers or wholesalers to reflect

Correct AnswerverifiedShow Answer

Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level."B" represents which approach?

Correct AnswerverifiedShow Answer

Target return-on-investment pricing refers to

Correct AnswerverifiedShow Answer

skimming pricing policy is likely to be most effective when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1) demand-oriented; (2) __________; (3) profit-oriented; and (4) competition-oriented approaches.

Correct AnswerverifiedShow Answer

promotional allowance refers to

Correct AnswerverifiedShow Answer

assumption that demand is elastic at a number of price points but is inelastic between these price points leads to which pricing approach?

Correct AnswerverifiedShow Answer

Yield management pricing is a form of

Correct AnswerverifiedShow Answer

retail price of DVD players has decreased from $900 in the mid-1990s to less than $100 today.This is due in large part to

Correct AnswerverifiedShow Answer

Which of the following statements about everyday low pricing (EDLP) is most accurate?

Correct AnswerverifiedShow Answer

Allowances,like discounts,refer to

Correct AnswerverifiedShow Answer

you buy a used car from a CarMax dealership,you are offered the car at a "no haggle" price.You can buy it or not,but there is no negotiating the published price because of the seller's

Correct AnswerverifiedShow Answer

two general methods for quoting prices related to transportation costs are uniformed delivered pricing and __________.

Correct AnswerverifiedShow Answer

Geographical Pricing Map B -According to the Geographical Pricing Map B above,if products are shipped from Denver,which of the following statements would be most accurate?

Correct AnswerverifiedShow Answer

using a price lining strategy,a marketer will

Correct AnswerverifiedShow Answer

Which of the following statements regarding quantity discounts is most accurate?

Correct AnswerverifiedShow Answer

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