Question 1

In order to stand apart,the airline Fly High Air offers low airfares and heavy seasonal discounts.However,it charges its passengers for in-flight meals,water,and baggage service as opposed to its competitors who offer these services for free.Fly High Air is following a(n)_____ pricing strategy.
A) odd-even
B) unbundled
C) negotiated
D) bid
E) markup

Accepted Answer

Fly High Air is using an unbundled pricing strategy. It successfully differentiates its offering from other airlines by unbundling the services most airlines offer. Fly High Air sells deeply discounted airfares, and then charges customers for water, in-flight meals, and baggage service-all extras fliers usually receive for "free" on other airlines.

Question 2

When Walgreens Drugstore advertises one price for the cost of a roll of film and the cost of processing it,it is using ______.
A) complementary product pricing
B) flexible pricing
C) product-bundle pricing
D) a one-price policy
E) bait pricing

Accepted Answer

Product-bundle pricing is setting one price for a set of products.

Question 3

Regarding "full-line pricing," which of the following statements is TRUE?
A) A good marketing manager usually tries to price products in a line so that the prices will seem logically related and make sense to target customers.
B) The marketing manager should try to cover all costs on the whole product line.
C) Most customers seem to feel that prices in a product line should be somewhat related to cost.
D) Not all companies that make a line of products must use full-line pricing.
E) All of these statements about "full-line pricing" are TRUE.

Accepted Answer

Full-line pricing is setting prices for a whole line of products. All of the above given statements about full-line pricing are true.

Question 4

With regard to bid pricing,a marketing manager should be aware that ______.
A) the same overhead charges and profit rates usually apply to all bids
B) bids are usually based on inspection
C) a big problem is estimating all the costs-including the variable and fixed costs that apply to a particular job
D) e-commerce is of little use in bid pricing
E) a company should always submit the lowest possible bid price

Accepted Answer

A big problem in bid pricing on a complicated job is estimating all the costs that will apply.

Question 5

When consumers decide to purchase a music CD from Amazon.com,the company's website often suggests that consumers purchase an additional CD by the same artist for a combined price that is lower than the two CDs would sell for separately.Amazon.com is using ______.
A) Product-bundle pricing
B) Complementary product pricing
C) Full-line pricing
D) Bid pricing
E) Demand-backward pricing

Accepted Answer

Product-bundle pricing is setting one price for a set of products.

Question 6

Which of the following statements concerning "negotiated price" is FALSE?
A) The negotiated price is set by bargaining between the buyer and the seller.
B) Negotiated pricing is not a demand-oriented approach.
C) Bargaining may involve the whole marketing mix, not just the price level.
D) Sellers must know their costs to negotiate effectively.
E) None of these statements about "negotiated price" is FALSE.

Accepted Answer

Negotiated pricing is a demand-oriented approach.

Question 7

Setting relatively high prices to suggest high-quality or high-status is ______.
A) odd-even pricing
B) price lining
C) leader pricing
D) psychological pricing
E) prestige pricing

Accepted Answer

Prestige pricing is setting a rather high price to suggest high quality or high status.

Question 8

Some consumers maintain a "price-quality association," meaning that if a product has a high price,they assume the product must have high quality.This "price-quality association" is the basis for the use of ______.
A) Odd-even pricing
B) Prestige pricing
C) Leader pricing
D) Reference pricing
E) Price lining

Accepted Answer

Prestige pricing is setting a rather high price to suggest high quality or high status.

Question 9

Identify the type of pricing that offers a specific price for each possible job rather than setting a price that applies for all customers.
A) Price lining
B) Odd-even pricing
C) Product bundle pricing
D) Bid pricing
E) Price leading

Accepted Answer

Bid pricing means offering a specific price for each possible job rather than setting a price that applies for all customers.

Question 10

Identify the type of pricing that involves setting one price for a set of products.
A) Price lining
B) Odd-even pricing
C) Product bundle pricing
D) Bait pricing
E) Price leading

Accepted Answer

Product-bundle pricing is setting one price for a set of products. The overall price is usually set so that it's cheaper for the customer to buy the products at the same time than separately.

Question 11

If a service firm sets a specific price for each possible job-rather than setting a standard price for all potential customers-it is most likely using:
A) product-bundle pricing.
B) a one-price policy.
C) price lining.
D) average-cost pricing.
E) bid pricing.

Accepted Answer

Bid pricing means offering a specific price for each possible job rather than setting a price that applies for all customers.

Question 12

The idea that people will pay extra for "quality" and status is the idea behind ______.
A) price lining
B) average cost approaches to pricing
C) penetration skimming
D) prestige pricing
E) psychological pricing

Accepted Answer

Prestige pricing is setting a rather high price to suggest high quality or high status.

Question 13

Regarding bid pricing:
A) the same overhead charges and profit rates should apply to all bids-to avoid legal problems.
B) most firms should try to bid for as many jobs as possible-to spread risk.
C) all business buyers are legally required to accept the lowest bid-if they ask for bids.
D) the big problem for sellers is estimating all the costs-including the variable and fixed costs-that apply to a particular job.
E) All of these alternatives are correct.

Accepted Answer

A big problem in bid pricing on a complicated job is estimating all the costs that will apply.

Question 14

A firm is looking to construct a new office.It puts out a request for proposals from contractors inviting their price quotations given certain defined specifications.This is an example of ______.
A) bid pricing
B) odd-even pricing
C) psychological pricing
D) leader pricing
E) price lining

Accepted Answer

Bid pricing involves offering a specific price for each possible job rather than setting a price that applies for all customers. Bids are usually based on purchase specifications provided by the customer.

Question 15

Which of the following pricing approaches should be used by a profit-oriented retailer if its demand curve is down-sloping to the right for a while-but then actually bends back to the left at lower prices?
A) Psychological pricing
B) Prestige pricing
C) Average-cost pricing
D) Bait pricing
E) Penetration pricing

Accepted Answer

Target customers who respond to prestige pricing give the marketing manager an unusual demand curve. Instead of a normal down-sloping curve, the curve goes down for a while and then bends back to the left again.

Question 16

When CenturyLink attracts residential customers by setting one monthly fee for high-speed Internet,cable TV,and long-distance phone services that is $40 less than the price of purchasing these three services separately,this is an example of ______.
A) Reference price
B) Price line
C) Bundle price
D) Leader price
E) Demand-backward price

Accepted Answer

Product-bundle pricing is setting one price for a set of products.

Question 17

Which of the following observations is false?
A) Competition needs to be considered when adding in overhead and profit for a bid price.
B) Some sellers fake their records to make costs seem higher than they really are.
C) Negotiated price is a price set based on bargaining between the buyer and seller.
D) Negotiated pricing is rare in situations where the marketing mix is adjusted for each customer.
E) Negotiated pricing is a demand-oriented approach.

Accepted Answer

Negotiated pricing is most common in situations where the marketing mix is adjusted for each customer.

Question 18

A paving contractor wants to work on road construction contracts administered and paid for by the state government.The contractor submits a sealed proposal to the state department of transportation for each construction job.The proposal contains a description of how the contractor will fulfill the specifications for the job at a specified price.The contractor is engaging in:
A) odd-even pricing.
B) prestige pricing.
C) leader pricing.
D) bid pricing.
E) price lining.

Accepted Answer

Bid pricing means offering a specific price for each possible job rather than setting a price that applies for all customers.

Question 19

When Nintendo sets a relatively low price on its game units to stimulate more demand for its game cartridges,it is using ______.
A) complementary product pricing
B) product-bundle pricing
C) price lining
D) bait pricing
E) cost plus pricing

Accepted Answer

Complementary product pricing is setting prices on several products as a group. This may lead to one product being priced very low so that the profits from another product will increase, thus increasing the product group's total profits.

Question 20

Fly-Right Travel Agency arranges vacation packages to Disney World in Florida.The price includes airfare,a rental car,deluxe accommodations,and tickets to Disney World and other attractions.Fly-Right is using:
A) Product-bundle pricing.
B) Complementary product pricing.
C) Full-line pricing.
D) Bid pricing.
E) Demand-backward pricing.

Accepted Answer

Product-bundle pricing is setting one price for a set of products.

Quiz 20: Price Setting in the Business World

In order to stand apart,the airline Fly High Air offers low airfares and heavy seasonal discounts.However,it charges its passengers for in-flight meals,water,and baggage service as opposed to its competitors who offer these services for free.Fly High Air is following a(n) _____ pricing strategy.

When Walgreens Drugstore advertises one price for the cost of a roll of film and the cost of processing it,it is using ______.

Regarding "full-line pricing," which of the following statements is TRUE?

With regard to bid pricing,a marketing manager should be aware that ______.

When consumers decide to purchase a music CD from Amazon.com,the company's website often suggests that consumers purchase an additional CD by the same artist for a combined price that is lower than the two CDs would sell for separately.Amazon.com is using ______.

Which of the following statements concerning "negotiated price" is FALSE?

Setting relatively high prices to suggest high-quality or high-status is ______.

Some consumers maintain a "price-quality association," meaning that if a product has a high price,they assume the product must have high quality.This "price-quality association" is the basis for the use of ______.

Identify the type of pricing that offers a specific price for each possible job rather than setting a price that applies for all customers.

Identify the type of pricing that involves setting one price for a set of products.

If a service firm sets a specific price for each possible job-rather than setting a standard price for all potential customers-it is most likely using:

The idea that people will pay extra for "quality" and status is the idea behind ______.

Regarding bid pricing:

A firm is looking to construct a new office.It puts out a request for proposals from contractors inviting their price quotations given certain defined specifications.This is an example of ______.

Which of the following pricing approaches should be used by a profit-oriented retailer if its demand curve is down-sloping to the right for a while-but then actually bends back to the left at lower prices?

When CenturyLink attracts residential customers by setting one monthly fee for high-speed Internet,cable TV,and long-distance phone services that is $40 less than the price of purchasing these three services separately,this is an example of ______.

Which of the following observations is false?

When Nintendo sets a relatively low price on its game units to stimulate more demand for its game cartridges,it is using ______.

Fly-Right Travel Agency arranges vacation packages to Disney World in Florida.The price includes airfare,a rental car,deluxe accommodations,and tickets to Disney World and other attractions.Fly-Right is using: