Question 1

Pricing methods narrow the range from which the company selects its final price.In selecting that price,the company must consider additional factors,including the impact of other marketing activities,company pricing policies,gain-and-risk-sharing pricing,and the impact of price on ________.
A)other parties
B)channels of distribution
C)channel partners
D)marketing activities
E)none of the above

Accepted Answer

Pricing decisions can have an impact on other parties involved in the marketing process, such as customers, competitors, suppliers, and distributors. The company must consider these parties and the potential impact on them when selecting a final price.

Question 2

Companies often adjust their basic price to accommodate differences in customers,products,locations,and so forth.Examples of these differentiated prices include all of the following EXCEPT ________.
A)new-product pricing
B)customer-segment pricing
C)product-form pricing
D)channel pricing
E)none of the above

Accepted Answer

The answer of Companies often adjust their basic price to...

Question 3

In markets that are characterized by products that are highly homogenous,how should a firm react to a competitor's price decline?
A)Reduce product performance levels.
B)Enhance services.
C)Reduce services.
D)Reduce product characteristics.
E)Augment the product.

Accepted Answer

The answer of In markets that are characterized by products...

Question 4

A major circumstance provoking price increases is ________.
A)market demand
B)profitability versus target
C)cost inflation
D)price versus competition
E)stock price versus target price

Accepted Answer

Cost inflation refers to the rise in the cost of production inputs such as labor, materials, and energy. If these costs increase, businesses need to increase their prices to maintain their profit margins. This often leads to price increases for the end consumer.

Question 5

________ occurs when a company sells a product or service at two or more prices that do not reflect a proportional difference in costs.
A)Psychological pricing
B)Loss-leader pricing
C)Product-form pricing
D)Customer-segment pricing
E)Price discrimination

Accepted Answer

Price discrimination occurs when a company charges different prices for the same product or service to different customers based on their willingness to pay or other characteristics such as location, age or income. This pricing strategy can increase revenue and profit as it captures the maximum amount customers are willing to pay, but it may also create ethical concerns and may be illegal in some circumstances.

Question 6

When different customer groups are charged different prices for the same product or service,it is called ________.
A)price discrimination
B)customer-segment pricing
C)illegal
D)product-form pricing
E)channel pricing

Accepted Answer

The answer of When different customer groups are charged different...

Question 7

In ________ pricing,the company decides how to price its products to different customers in different locations and countries.
A)specialty
B)geographical
C)offset
D)regional
E)none of the above

Accepted Answer

Geographical pricing involves setting different prices for the same product in different locations or countries based on factors such as local market conditions, competition, and currency exchange rates. This pricing strategy allows companies to respond to local market demand while maximizing revenue and profit margins.

Question 8

A British aircraft manufacturer sold planes to Brazil for 70% cash and the rest in coffee.This is an example of ________.
A)bartering
B)a compensation deal
C)a buyback arrangement
D)an offset
E)a price allowance

Accepted Answer

The answer of A British aircraft manufacturer sold planes to...

Question 9

Generally,consumers prefer ________ price increases on a regular basis to sudden,sharp increases.
A)large
B)consistent
C)small
D)reciprocal
E)trade

Accepted Answer

Consumers prefer small price increases on a regular basis because it allows them to adjust their budget and plan accordingly. Sudden, sharp increases can lead to unexpected and inconvenient expenses, which can create negative feelings towards the product or service.

Question 10

Varying prices by time of the day,the season of the year,or the day of the week is called ________.
A)discounting
B)time pricing
C)price discrimination
D)product-form pricing
E)channel pricing

Accepted Answer

The answer of Varying prices by time of the day,the...

Question 11

A(n)________ is offered by a manufacturer to trade-channel members if they will perform certain functions,such as selling,storing,and record keeping.
A)functional discount
B)quantity discount
C)allowance
D)cash discount
E)none of the above

Accepted Answer

A functional discount is offered to trade-channel members if they perform certain functions such as selling, storing, and record-keeping. This discount is based on the value of services that the trade-channel members provide and can vary according to the level of services performed.

Question 12

Most companies will ________ their list price and give discounts and allowances for early payments,volume purchases,and off-season buying.
A)raise
B)increase
C)reduce
D)adjust
E)none of the above

Accepted Answer

Companies typically do not raise or increase their list price as it may deter customers from purchasing their products. Instead, they may adjust their prices by offering discounts and allowances for various factors such as early payments, volume purchases, and off-season buying. Therefore, the best choice is D, adjust.

Question 13

________ is the direct exchange of goods,with no money and no third party involved.
A)Co-optation
B)Buyback
C)Barter
D)Offset
E)Compensation

Accepted Answer

Barter is the direct exchange of goods or services without the involvement of money or a third party. Co-optation involves bringing someone into a group or organization, buyback refers to a company buying back their own stock, offset involves compensating for emissions, while compensation typically involves paying someone for their services.

Question 14

One of the traps of instituting a price decrease is when that low price buys market share in the short term.The same customers will shift to any lower-priced product that may come along.This trap is called ________.
A)low-price trap
B)market-loyalty trap
C)shallow-pockets trap
D)low-quality trap
E)fragile-market-share trap

Accepted Answer

The trap described in the question is commonly known as the fragile-market-share trap. This trap occurs when a company decreases its prices to gain market share in the short term, but the customers who were attracted by the low price will switch to other lower-priced products in the future. This makes the market share that the company gained fragile and unsustainable in the long term.

Question 15

Companies sometimes initiate price cuts in a drive to dominate the market through lower costs.One of the possible traps of a price-cutting strategy is ________.
A)secure target market customer
B)consistent high-quality consumer
C)dependence on a firm market
D)loyal customer market
E)shallow pockets

Accepted Answer

A price-cutting strategy can lead to a price war and if a company doesn't have deep enough pockets (i.e., adequate finances) to sustain the pricing strategy for an extended period, they may be forced to forfeit the strategy and ultimately lose customers.

Question 16

Companies often raise their prices by more than the inflationary cost increases as preparation for further inflation or government price controls.This practice is known as ________.
A)anticipatory pricing
B)delayed quotation pricing
C)escalator pricing
D)unbundling
E)discount pricing

Accepted Answer

Anticipatory pricing refers to raising prices in preparation for anticipated future events such as inflation or government price controls. This allows companies to maintain their profit margins and adjust their prices before any external factors can affect them.

Question 17

Given strong consumer resistance to price hikes,marketers go to great lengths to find alternative approaches that will allow them to postpone a price increase.Which of the following is NOT one of these approaches?
A)Reduce or eliminate some product features.
B)Reduce or eliminate some services,such as free delivery.
C)Shrink package sizes.
D)Demand upfront payment before shipping goods.
E)None of the above

Accepted Answer

Demand upfront payment before shipping goods is not an alternative approach to postpone a price increase. It may be a payment policy, but it is not related to the postponement of a price increase.

Question 18

The seller sells a plant,equipment,or technology to another country and agrees to accept as partial payment products manufactured with the supplied equipment in a ________.
A)buyback arrangement
B)co-optation
C)barter
D)offset
E)none of the above

Accepted Answer

This situation describes a buyback arrangement, in which the seller agrees to accept products manufactured with the supplied equipment as partial payment. Co-optation refers to the process of absorbing or assimilating individuals or groups into a larger organization or system. Barter involves the exchange of goods or services without the use of money, and offset refers to a requirement that a certain percentage of the export value be spent on goods or services from the importing country.

Question 19

Some of the considerations that companies face when deciding to match a competitor's price decline include the product's importance in the company's portfolio,the competitor's intentions,and the ________.
A)reaction by the channels of distribution
B)shareholder value
C)market's price and quality sensitivity
D)ordering time frames for the product
E)ordering ease for the product

Accepted Answer

The answer of Some of the considerations that companies face...

Question 20

When supermarkets and department stores drop the price on well-known brands to stimulate store traffic,this is called ________.
A)EDLP
B)loss-leader pricing
C)special-event pricing
D)net pricing
E)none of the above

Accepted Answer

This is a clear example of loss-leader pricing, where a retailer sells a popular product at a heavily discounted price to attract customers to their store.

Quiz 14: Developing Pricing Strategies and Programs

Pricing methods narrow the range from which the company selects its final price.In selecting that price,the company must consider additional factors,including the impact of other marketing activities,company pricing policies,gain-and-risk-sharing pricing,and the impact of price on ________.

Companies often adjust their basic price to accommodate differences in customers,products,locations,and so forth.Examples of these differentiated prices include all of the following EXCEPT ________.

In markets that are characterized by products that are highly homogenous,how should a firm react to a competitor's price decline?

A major circumstance provoking price increases is ________.

________ occurs when a company sells a product or service at two or more prices that do not reflect a proportional difference in costs.

When different customer groups are charged different prices for the same product or service,it is called ________.

In ________ pricing,the company decides how to price its products to different customers in different locations and countries.

A British aircraft manufacturer sold planes to Brazil for 70% cash and the rest in coffee.This is an example of ________.

Generally,consumers prefer ________ price increases on a regular basis to sudden,sharp increases.

Varying prices by time of the day,the season of the year,or the day of the week is called ________.

A(n) ________ is offered by a manufacturer to trade-channel members if they will perform certain functions,such as selling,storing,and record keeping.

Most companies will ________ their list price and give discounts and allowances for early payments,volume purchases,and off-season buying.

________ is the direct exchange of goods,with no money and no third party involved.

One of the traps of instituting a price decrease is when that low price buys market share in the short term.The same customers will shift to any lower-priced product that may come along.This trap is called ________.

Companies sometimes initiate price cuts in a drive to dominate the market through lower costs.One of the possible traps of a price-cutting strategy is ________.

Companies often raise their prices by more than the inflationary cost increases as preparation for further inflation or government price controls.This practice is known as ________.

Given strong consumer resistance to price hikes,marketers go to great lengths to find alternative approaches that will allow them to postpone a price increase.Which of the following is NOT one of these approaches?

The seller sells a plant,equipment,or technology to another country and agrees to accept as partial payment products manufactured with the supplied equipment in a ________.

Some of the considerations that companies face when deciding to match a competitor's price decline include the product's importance in the company's portfolio,the competitor's intentions,and the ________.

When supermarkets and department stores drop the price on well-known brands to stimulate store traffic,this is called ________.