Question 1

A reference price might be considered deceptive if

Accepted Answer

A reference price can be considered deceptive if it has been inflated or is fictitious, as it misleads consumers into thinking they are getting a better deal than they actually are. A and C are not necessarily indicative of deceptive pricing practices, and D and E are not universal criteria for determining deceptive reference prices.

Question 2

Supermarkets often offer great deals on milk,beef,or eggs to get customers into their stores,knowing that many customers will also purchase items that have higher markups for the store.These supermarkets are using a __________ pricing tactic.

Accepted Answer

The pricing tactic being used here is known as leader pricing. This involves offering a few products at a very low price to attract customers into the store, with the expectation that they will also purchase other items with higher markups.

Question 3

One important reason manufacturers like rebates is that

Accepted Answer

The answer of One important reason manufacturers like rebates is...

Question 4

Mona is selling her artwork at a local festival.Her art is selling well,but t-shirts she had made up with her artwork are not selling.She decides to offer a package price for her art with a t-shirt included.Mona is using

Accepted Answer

Mona is using price bundling by creating a package price that includes both her artwork and a t-shirt. This strategy aims to increase the sales of the t-shirt by offering it at a discounted price when purchased with the artwork.

Question 5

For marketers to advertise a price as their __________,the Better Business Bureau recommends that at least 50 percent of the sales of a product occur at that price.

Accepted Answer

The answer of For marketers to advertise a price as...

Question 6

One of the benefits of offering a size discount to consumers is they will purchase more of a marketer's product and

Accepted Answer

Offering a size discount encourages consumers to buy larger quantities, which can increase brand loyalty and make them less likely to switch to competing brands.

Question 7

__________ lowers the price below the store's cost.

Accepted Answer

Loss leader pricing is a strategy where a retailer offers a product at a price lower than its cost to attract customers into the store. The idea is that once the customer is in the store, they will likely purchase other items as well, making up for the loss on the discounted item.

Question 8

Marketers advertising an artificially high "regular price" are unethically attempting to influence consumers'__________ perceptions.

Accepted Answer

Marketers advertising an artificially high "regular price" are trying to influence consumers' reference price perceptions. They want consumers to believe that they are getting a better deal when they purchase the product at the discounted price, compared to what they would have paid if they had bought it at the regular price. This tactic is often used to create a sense of urgency and increase sales.

Question 9

Retailers use __________ because they believe the use will induce customers to try new products,convert first-time users to regular users,increase purchases,and protect market share.

Accepted Answer

Retailers use coupons as a promotional tool because they provide customers with an immediate incentive to purchase a product. Coupons can be distributed through various channels, such as newspapers, magazines, websites, email, and mobile apps. They are often used to encourage customers to try new products or to purchase additional items. Coupons can also help retailers protect their market share by providing a competitive advantage over other retailers.

Question 10

In a __________ pricing tactic,sellers advertise low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

Accepted Answer

This tactic is known as bait and switch. It involves luring customers in with a low-priced item and then trying to sell them a more expensive version of the product or something completely different. It is a deceptive pricing tactic and is generally illegal.

Question 11

Retailers use ____________ to get rid of slow moving or obsolete merchandise.

Accepted Answer

Markdowns are used by retailers to lower the price of slow-moving or obsolete merchandise in order to clear inventory and make room for new products. Slotting allowances, price lining, rebates, and seasonal allowances are all types of pricing strategies or incentives used by retailers, but they are not specifically aimed at getting rid of slow-moving or obsolete merchandise.

Question 12

B2B quantity discounts are legal if

Accepted Answer

B2B quantity discounts are legal if they are available to all customers, regardless of their size or status. Discriminatory pricing practices are prohibited by antitrust laws. The other options listed (B, C, D, and E) are not necessarily requirements for legal quantity discounts.

Question 13

Bill desperately needed tires for his car,and he found an ad with an incredibly low price.When he got there,he found out that those had been sold out,and he was pressured into buying tires that were more expensive than he wanted.Bill found out later that Marcelo had had the same experience at the store a few weeks earlier.It's quite possible that both Bill and Marcelo had become the victim of a deceptive pricing tactic known as

Accepted Answer

The scenario describes a classic case of bait and switch, where the store lures customers in with an ad for low-priced items, only to pressure them into purchasing more expensive options when they arrive.

Question 14

If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors,the company could be charged with

Accepted Answer

Predatory pricing refers to the act of setting low prices with the intention of driving competitors out of business. It is considered anti-competitive behavior and is illegal under antitrust laws. If a telecommunications company drastically cuts the price of its cellular phone service to eliminate local competitors, it could be charged with predatory pricing.

Question 15

Rebates provide manufacturers with greater control than coupons and provide the firm with

Accepted Answer

Rebates require consumers to provide personal information, such as their name and address, in order to redeem the rebate, which manufacturers can use for targeted marketing and customer loyalty programs. Therefore, rebates provide manufacturers with valuable customer information.

Question 16

Price advertisements should never

Accepted Answer

Deceiving customers to the point of doing harm is unethical and can lead to legal repercussions for the company. All other options may be valid in certain circumstances, such as including the price or using sales promotions, as long as they are not misleading or deceptive. "Puffery," or exaggerated claims that are not meant to be taken literally, is a common marketing tactic but should not be used to deceive customers. Price skimming and penetration are pricing strategies that may be used in certain industries or markets.

Question 17

The most common form of a quantity discount for consumers is a

Accepted Answer

A size discount is a form of quantity discount where the price per unit decreases as the quantity purchased increases. This is the most common form of quantity discount for consumers. Cash discounts are typically offered for early payment of bills by businesses, markdowns are temporary price reductions, coupons and rebates are promotional offers to incentivize purchases.

Question 18

The difference between a coupon and a rebate is that

Accepted Answer

Coupons are typically handled by the retailer, who offers discounts to customers for purchasing certain products. On the other hand, rebates are usually offered by the manufacturers themselves, and customers must mail in proof of purchase to receive a refund on a portion of the purchase price.

Question 19

Some consumers make it a point to go shopping the day after Christmas in order to

Accepted Answer

The day after Christmas often marks the beginning of seasonal sales, as retailers look to clear out inventory and make room for new products. This presents an opportunity for consumers to take advantage of discounts and save money on their purchases. Therefore, the best choice is E, "take advantage of seasonal discounts."

Question 20

__________ pricing tactics lower the price of a product below cost.

Accepted Answer

Loss leader pricing tactics involve lowering the price of a product below cost to attract customers to a store or website. The idea is that customers will purchase other items as well, making up for the loss on the discounted product.

Quiz 15: Strategic Pricing Methods