Question 1

__________ of a product is what customers are generally willing to pay.

Accepted Answer

A)   customary price
B)   asking price
C)   target price
D)   discount price
E)   market priceF) B) and E)
G) B) and C)

Question 2

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Accepted Answer

A)   the frequency of the order.
B)   where they are in the channel.
C)   when orders are placed during the year.
D)   the length of the relationship with the manufacturer.
E)   the size of the order.F) D) and E)
G) A) and E)

Question 3

pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Accepted Answer

A)   target return-on-investment pricing
B)   target return-on-sales pricing
C)   standard markup pricing
D)   target pricing
E)   loss-leader pricingF) B) and C)
G) A) and D)

Question 4

price war refers to

Accepted Answer

A)   competition between sellers and resellers to maintain or attain the largest market share of potential customers.
B)   conflicts between manufacturers and distributors regarding acceptable percentages they each may charge relative to one another.
C)   when one channel member believes another channel member is engaged in pricing behavior that prevents it from achieving its profitability goals.
D)   the successive price cutting by competitors to increase or maintain their unit sales or market share.
E)   the practice of replacing promotional allowances with lower manufacturer list prices.F) D) and E)
G) A) and E)

Question 5

a seller represents a price as reduced,the item must have been offered in good faith at a higher price for a substantial previous period.Former price comparisons are deceptive if

Accepted Answer

A)   the high price tags were from a previous owner or retailer and were purchased that way from the reseller, even though that price didn't originate at the store.
B)   the items for sale were part of a manufacturer's promotional allowance.
C)   a high price was set for the purpose of establishing a reference for a price reduction.
D)   the items for sale were available at the higher price for less than 30 days.
E)   the items were purchased from the manufacturer at a higher price and the sale was part of a loss-leader promotion.F) B) and D)
G) C) and D)

Question 6

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.F) A) and E)
G) B) and E)

Question 7

Penetration pricing is considered to be a __________ approach to pricing.

Accepted Answer

A)   demand-oriented
B)   cost-oriented
C)   profit-oriented
D)   competition-oriented
E)   service-orientedF) A) and D)
G) D) and E)

Question 8

Target return-on-investment (ROI) is frequently used by

Accepted Answer

A)   contractors.
B)   public utilities.
C)   business-to-business markets.
D)   supermarkets.
E)   small privately owned firms.F) B) and C)
G) C) and D)

Question 9

manager of a small gasoline station observes that while gasoline sales have been steady,the service side of the business has fallen off,and mechanics are often idle.He decides to offer a promotion-a $20 off coupon for an oil change that is to be mailed to 800 households within a two-mile radius from the gas station.The cost of printing and mailing is $1,000.The normal cost of an oil change is $40.Materials and labor per oil change cost $15.How many additional maintenance service jobs must result for the promotion to break even?

Accepted Answer

A)   25 jobs
B)   40 jobs
C)   50 jobs
D)   67 jobs
E)   200 jobsF) B) and C)
G) A) and E)

Question 10

Prestige pricing is considered to be a __________ approach to pricing.

Accepted Answer

A)   demand-oriented
B)   cost-oriented
C)   profit-oriented
D)   competition-oriented
E)   service-orientedF) C) and D)
G) A) and C)

Question 11

Cost-plus pricing refers to

Accepted Answer

A)   summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price.
B)   setting the price of a line of products at a number of different price points.
C)   adding a fixed percentage to the cost of all items in a specific product class.
D)   setting prices to achieve a profit that is a specified percentage of the sales volume.
E)   increasing the price slightly to protect against undue profit losses from unforeseen environmental factors.F) A) and D)
G) A) and B)

Question 12

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

Accepted Answer

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

Question 13

Price fixing is illegal per se under the Sherman Act.What does "per se" mean?

Accepted Answer

A)   "according to"
B)   "in lieu of"
C)   "in regard to"
D)   "in and of itself"
E)   "without exception"F) D) and E)
G) B) and C)

Question 14

Rather than emphasize demand,cost,or profit factors,a price setter can stress what __________ is (are) doing.

Accepted Answer

A)   the service sector
B)   "the market" or competitors
C)   the global economy
D)   suppliers
E)   the financial marketsF) All of the above
G) B) and D)

Question 15

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.F) A) and B)
G) C) and D)

Question 16

Which of the following statements regarding cost-oriented approaches is most accurate?

Accepted Answer

A)   These methods focus on the demand side of the pricing problem.
B)   These methods focus on production and marketing expenses.
C)   Target return on investment is an example of a cost-oriented method.
D)   Experience curve pricing is simple to use because costs predictably decrease by 25 percent with each doubling of production.
E)   Cost-oriented approaches are subcategories of competition-oriented methods.F) A) and D)
G) A) and C)

Question 17

Quantity discounts refer to

Accepted Answer

A)   price reductions in unit costs for placing a larger order.
B)   price reductions for placing long-term pre-scheduled orders.
C)   price reductions to encourage retailers to stock inventory earlier than their normal demand would require.
D)   reductions in unit costs for purchasing items that are nearing their expiration dates.
E)   reductions in unit costs for taking merchandise that will soon be replaced by new and improved versions of the original product.F) A) and B)
G) None of the above

Question 18

Red Bull price premium = [(37% ÷ 33%)  - 1] = 0.1212 × 100 = 12.1%
Monster price premium = [(17% ÷ 18%)  - 1] = -0.0556 × 100 = (5.6%) 
Rockstar price premium = [(8% ÷ 9%)  - 1] = -0.1111 × 100 = (11.1%) 
Other brands price premium = [(38% ÷ 40%)  - 1] = -0.0500 × 100 = (5.0%) 
-the brand manager for Red Bull,what information does the Price Premium Marketing Dashboard above give you?

Accepted Answer

A)   Red Bull has a price premium relative to Monster.
B)   Rockstar has a price premium relative to Monster.
C)   Red Bull engaged in price discounting relative to both Monster and Rockstar from 2009 to 2010.
D)   Rockstar sold more product than Monster in 2010.
E)   In terms of dollar market share, Red Bull has a lower share than the "Other Brands" category.F) A) and E)
G) A) and B)

Question 19

is the difference between a one-price policy and a flexible-price policy?

Accepted Answer

A one-price policy sets one price for al...

Question 20

cost-oriented approaches,a price setter stresses the cost side of the pricing problem,not the __________ side.

Accepted Answer

A)   shareholder equity
B)   income
C)   service
D)   supply
E)   demandF) All of the above
G) D) and E)

Exam 14: Arriving at the Final Price

Which of the following statements regarding cost-oriented approaches is most accurate?

Correct Answer
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Correct Answer
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__________ of a product is what customers are generally willing to pay.

Correct Answer
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Price fixing is illegal per se under the Sherman Act.What does "per se" mean?

Correct Answer
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Cost-plus pricing refers to

Correct Answer
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cost-oriented approaches,a price setter stresses the cost side of the pricing problem,not the __________ side.

Correct Answer
verified

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Correct Answer
verified

Prestige pricing is considered to be a __________ approach to pricing.

Correct Answer
verified

a seller represents a price as reduced,the item must have been offered in good faith at a higher price for a substantial previous period.Former price comparisons are deceptive if

Correct Answer
verified

is the difference between a one-price policy and a flexible-price policy?

Correct Answer
verified
A one-price policy sets one price for al...
View Answer

Correct Answer
verified

Rather than emphasize demand,cost,or profit factors,a price setter can stress what __________ is (are) doing.

Correct Answer
verified

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

Correct Answer
verified

pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Correct Answer
verified

price war refers to

Correct Answer
verified

Correct Answer
verified

Target return-on-investment (ROI) is frequently used by

Correct Answer
verified

Penetration pricing is considered to be a __________ approach to pricing.

Correct Answer
verified

Quantity discounts refer to

Correct Answer
verified

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

Correct Answer
verified

Exam 14: Arriving at the Final Price

Which of the following statements regarding cost-oriented approaches is most accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

__________ of a product is what customers are generally willing to pay.

Correct AnswerverifiedShow Answer

Price fixing is illegal per se under the Sherman Act.What does "per se" mean?

Correct AnswerverifiedShow Answer

Cost-plus pricing refers to

Correct AnswerverifiedShow Answer

cost-oriented approaches,a price setter stresses the cost side of the pricing problem,not the __________ side.

Correct AnswerverifiedShow Answer

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

Correct AnswerverifiedShow Answer

Prestige pricing is considered to be a __________ approach to pricing.

Correct AnswerverifiedShow Answer

a seller represents a price as reduced,the item must have been offered in good faith at a higher price for a substantial previous period.Former price comparisons are deceptive if

Correct AnswerverifiedShow Answer

is the difference between a one-price policy and a flexible-price policy?

Correct AnswerverifiedA one-price policy sets one price for al...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Rather than emphasize demand,cost,or profit factors,a price setter can stress what __________ is (are) doing.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Correct AnswerverifiedShow Answer

price war refers to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Target return-on-investment (ROI) is frequently used by

Correct AnswerverifiedShow Answer

Penetration pricing is considered to be a __________ approach to pricing.

Correct AnswerverifiedShow Answer

Quantity discounts refer to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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A one-price policy sets one price for al...
View Answer

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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