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Marketing Chapter 11

STUDY
PLAY
Which of the following is the opposite of FOB-origin pricing?
A) zone pricing
B) basing
D
When a company charges the same rate to ship a product anywhere in the US, it is using which form of geographic pricing?
A) F.O.B. origin
B) F.O.B. factory
C) basing-point
D) uniform delivery
E) F.O.B. delivered
D
Which of the following conditions should exist for segmented pricing to be an effective strategy?
A) Market must be able to be segmented
B) segments must show different degrees of demand
C) competitors can't undersell in the segment being charged the higher price
D) all of the above
E) none
D
Using this pricing strategy, the seller takes responsibility for part or all of the actual freight charges in order to get the desired business.
freight-absorption
A company sets not a single price, but rather a _____ that covers different items in its line that change over time as products move through their life cycles.
pricing structure
By definition, this type of pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.
segmented pricing
Freight-absorption pricing is used for _____ and _____.
market penetration; holding on to increasingly competitive markets
Which of the following is a reason that a marketer would choose a penetration pricing strategy?
A) to create markets for highly technical products
B) to appeal to different consumer segements with different levels of price sensitivity
C) to focus on the rapid achievement of profit objects
D) to ensure the company has the ability to increase prices once demand decreases
E) to discourage competition from entering the market
E
Airlines, hotels, and restaurants, call segmented pricing _____.
yield managment
Quantity discounts provide an incentive to the customer to buy _____
more from one given seller, rather than from many different sources
With product bundle pricing, sellers can combine several products and offer the bundle _____
A) as a reward to loyal customers
B) at a reduced price
C) as a complete self-service package
D) as a working unit
E) as segmented pricing
B
A quantity discount is a price reduction to buyers who purchase _____
large volumes
Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and _____
market-skimming pricing
a company sets not a single price, but rather a _____ that covers different items in its line that change over time as products move through their life cycles.
pricing structure
What is a major advantage of product bundle pricing?
A) it can promote the sales of products consumers might not otherwise buy.
B) It offers consumers more value for the money
C) It combines the benefits of the other pricing strategies.
D) It provides a more complete product experience for consumers
E) All of the above
A
Many producers who use captive-product pricing set the price of the main product _____ and set _____ on the supplies necessary to use the product.
low; high markups
Of the following, which statement would NOT support a market-skimming policy for a new product?
A) The Product's quality and image support its high price
B) Enough buyers want the products at that price
C) Competitors are not able to undercut the high price
D) Competitors can enter the market easily
E) C and D
D
When using price steps, the seller must establish perceived _____ that support the price differences
quality differences
When General Motors provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs, it is granting a(n) _____
promotional allowance
Companies involved in deciding which items to include in the base price and which to offer as options are engaged in _____ pricing
optional-product
Companies usually develop _____ rather than single products.
product lines
Service Industries Inc. plans to offer a price-adjustment strategy in the near future. They could consider each of the following EXCEPT _____
A) location pricing
B) discount and allowance pricing
C) segmented pricing
D) physiological pricing
E) promotional pricing
D
A firm using _____ when it charges a high, premium price for a new product with the intention of reducing the price in the future.
price skimming
When amusement parks and movie theaters charge admission plus fees for food and other attractions, they are following a(n) _____ pricing strategy.
captive-product
Accent Software faces the conditions below, all of which support Accent's use of market-penetration pricing strategy EXCEPT that _____.
A) the market is highly price sensitive
B) production and distribution costs will fall as sales volume increases
C) the product's quality and image support a high price
D) a low price would help keep out the competition
E) A and C
C
HiPoint Telephone Co uses two-part pricing for its long-distance call charges. Because this is a service, the price is broken into a fixed rate plus a _____
variable usage rate
A challenge for management in product line pricing is to decide on the price steps between the _____
various products in a line
Keeping in mind that a seller must sell by-products at a price that covers more than the cost of storing and delivering them, which of the following will by-product pricing permit a seller to do?
A) increase main product price
B) make extra profit
C) reduce main product price
D) none of the above
E) B and C
E
_____ pricing is the approach of setting a low initial price in order to attract a large number of buyers quickly and win a large market share
market-penetration
Which of the following is an example of a cash discount?
A) 2/10, net 30
B) $.00 with a two-pack
C) a free case when you buy 12
D) when you pay cash and take the product with you
E) none of the above
A
Trade or functional discounts are offered by manufacturers to which of the following?
A) channel members who perform tasks that manufacturer would otherwise have to perform
B) consumers who earn a price reduction for buying in bulk
C) govt market and other organizations that require bid proposals
D) intermediaries such as financing institutions as a cost of doing business with them
A
A marketer must be familiar with the five major product mix pricing situations. Which of the following is NOT one of them?
A) optional-product pricing
B) by-product pricing
C) unbundled product pricing
D) product line pricing
E) captive- product pricing
C
Which of the following is NOT a price adjustment strategy?
A) free samples
B) geographical pricing
C) segmented pricing
D) seasonal pricing
E) promotional pricing
A