Question 1

Neal was considering the use of coupons for canned vegetables at his corner grocery.He knows coupons can encourage customers to try his store,or even help them to purchase additional items as they shop,but he is concerned about:
A) price-sensitive customers avoiding his store
B) the promotion stealing sales of canned vegetables in the future
C) decreasing visits from loyal customers
D) customers forgetting to mail in the proof-of-purchase to the manufacturers
E) variable pricing

Accepted Answer

Coupons can lead to customers stocking up on canned vegetables during the promotion, which might reduce their need to purchase these items in the future, thus potentially decreasing future sales.

Question 2

What was the initial reason for odd pricing?
A) It saved on distribution costs
B) It reduced losses due to employee theft of cash
C) It offered a limited number of predetermined price points making pricing easier
D) It eliminated confusion when a customer shopped in different locations
E) It was used to increase traffic flow

Accepted Answer

Odd pricing was initially used to reduce losses due to employee theft of cash by requiring cashiers to open the cash register to give change, thus recording the sale.

Question 3

Anne Marie made an effort to stop into the Irving convenience store on her way home each Friday to pick up a gallon of milk,because it was priced lower than the local Walmart.In this case,the milk is an example of Irving's use of:
A) stimulus pricing
B) leader pricing
C) follow-up pricing
D) price lining
E) none of these

Accepted Answer

Leader pricing is a strategy where a store offers a product at a lower price than competitors to attract customers. In this case, Irving is using leader pricing by offering the milk at a lower price than Walmart to attract customers like Anne Marie to their store.

Question 4

________________________ include markdowns,discounts to employees and customers,and inventory shrinkage (due to shoplifting,breakage,or loss).

Accepted Answer

The answer of ________________________ include markdowns,discounts to employees and customers,and...

Question 5

Retailers prefer rebates to coupons because:
A) consumers do not view rebates as affecting the price of a product
B) rebates are most often offered on products that are usually considered to be commodities
C) rebates work even when the dollar amount is low
D) rebates have lower handling costs than coupons
E) retailers incur no handling costs with rebates

Accepted Answer

Rebates do affect the final price of a product. They are most often offered on high ticket items. They are not successful when the rebate is small. Retailers have no handling costs with rebates.

Question 6

Charging different prices in different stores,markets or zones is called:
A) line pricing
B) locale pricing
C) price bundling
D) leader pricing
E) zone pricing

Accepted Answer

Zone pricing involves charging different prices in different geographic locations or zones. This strategy is commonly used in retail and allows companies to account for variations in demand and competition across different regions. The other options refer to different pricing strategies, but do not relate specifically to varying prices based on location or zone.

Question 7

At the supermarket today,Nelson noticed all the canned vegetables were priced at $.39,$.49,$.59,or $.69 per can.This type of pricing is:
A) odd pricing
B) unit pricing
C) price unbundling
D) mixed pricing
E) promotional pricing

Accepted Answer

Odd pricing refers to a price that ends in an odd number, typically a nine.

Question 8

A strategy that stresses continuity of retail prices at a level somewhere between the regular nonsale price and the deep-discount sale price of the retailer's competitors is called the ___________________ strategy.

Accepted Answer

The answer of A strategy that stresses continuity of retail...

Question 9

An appliance store wants to get customers who are buying an upright freezer to trade up to the more expensive self-defrosting model.Which of the following practices can be used by the store to achieve this goal?
A) Price bundling
B) Price lining
C) Odd pricing
D) Variable pricing
E) Leader pricing

Accepted Answer

Research indicates that people tend to choose the product in the middle of a price line. With price lining, the store could set up three pricing points for its freezers by adding a model more expensive than the two it already sells.

Question 10

Which of the following would be considered an example of a second-degree price discrimination strategy?
A) Variable pricing
B) Leader pricing
C) Contribution pricing
D) Break-even pricing
E) All of these are examples of a second-degree price discrimination strategy.

Accepted Answer

Variable pricing, also known as peak-load pricing or time-of-day pricing, is an example of second-degree price discrimination where different prices are charged based on the demand at different times of the day or different seasons. This strategy is used to maximize revenue by charging higher prices during peak demand periods and lower prices during off-peak periods. Leader pricing is a form of promotional pricing where a product is sold at a low price to attract customers into a store. Contribution pricing involves pricing a product based on its variable costs to ensure that it generates a minimum contribution towards fixed costs and profits. Break-even pricing involves pricing a product at a level that ensures that total revenue equals total costs. These pricing strategies are not examples of second-degree price discrimination. Therefore, the correct answer is A.

Question 11

Jeff wanted to increase the traffic in his convenience store.Which type of pricing strategy should Jeff consider when posting cigarette prices?
A) Variable pricing
B) Zone pricing
C) Item pricing
D) Leader pricing
E) Price lining

Accepted Answer

Leader pricing involves setting a low price for a popular product to attract customers into the store. Cigarettes are a popular product, and by setting a low price for them, Jeff can bring customers into his convenience store and potentially increase overall traffic and sales.

Question 12

__________________ are given to customers when merchandise is out of stock; they are written promises to sell customers merchandise at the sale price when the merchandise arrives.

Accepted Answer

The answer of __________________ are given to customers when merchandise...

Question 13

Which of the following is a benefit of price lining?
A) Confusion from multiple price choices is eliminated
B) The merchandising task is simplified
C) Price lining gives buyers greater flexibility
D) It can be used to get customers to "trade up" to a more expensive model
E) All of these are benefits of price lining

Accepted Answer

Price lining simplifies the merchandising task, reduces confusion from multiple price choices, gives buyers flexibility within set price points, and can encourage customers to trade up to more expensive models.

Question 14

___________ is the relationship of what you get to what you have to pay for it.

Accepted Answer

The answer of ___________ is the relationship of what you...

Question 15

A ___________ is money returned to the buyer based on a portion of the purchase price.
A) coupon
B) rebate
C) price bundle
D) multiple-unit price
E) zone price

Accepted Answer

A rebate is a form of discount or refund that is returned to the buyer based on a portion of the purchase price. It is usually given in the form of cash, check or credit to be used towards future purchases. Coupons, price bundles, multiple-unit prices and zone prices are all different types of discounts, but they do not involve returning money to the buyer after the purchase has been made.

Question 16

Search engines or ________________________ are computer programs that search for and provide a list of all Internet sites selling a product category or price of specific brands offered.

Accepted Answer

The answer of Search engines or ________________________ are computer programs...

Question 17

As Jerome was leaving Ed's Electric,he noticed a bulletin board that featured small applications that he can send to the manufacturer with his receipt and receive a portion of what he spent on his digital TV back in the mail.What is this returned money called?
A) A coupon
B) A rebate
C) A price bundle
D) A multiple-unit price
E) A zone price

Accepted Answer

The money that Jerome will receive back is called a rebate. It is a type of promotion where the customer is offered a return of a portion of what they spent on the product.

Question 18

___________ is the practice of offering two or more different products or services for sale at one price.
A) Conjoint pricing
B) Psychological pricing
C) Price grouping
D) Price bundling
E) Price lining

Accepted Answer

Price bundling is the practice of offering two or more different products or services for sale at one price. This strategy aims to increase the perceived value of the bundle and encourage customers to purchase more items in one transaction. It can also lead to cost savings for the seller by reducing the cost of selling multiple items separately. Price bundling can be done by combining complementary products or by offering a discount when a certain number of items are purchased together.

Question 19

Instead of relying on rules developed from averages,a retailer can benefit significantly from _______________________________________,a set of algorithms that monitors merchandise sales,promotions,competitors' actions,and other factors to determine the optimal (most profitable)price and timing for merchandising activities,especially markdowns.

Accepted Answer

The answer of Instead of relying on rules developed from...

Question 20

Target offered 2 six-packs of any Pepsi product for $5 last week,and the price for a single carton was $2.69.What pricing strategy was Target using?
A) Conjoint pricing
B) Psychological pricing
C) Multiple-unit pricing
D) Price bundling
E) Price lining

Accepted Answer

Multiple-unit pricing is similar to price bundling, except the products or services are similar rather than different.

Quiz 12: Retail Pricing

Neal was considering the use of coupons for canned vegetables at his corner grocery.He knows coupons can encourage customers to try his store,or even help them to purchase additional items as they shop,but he is concerned about:

What was the initial reason for odd pricing?

Anne Marie made an effort to stop into the Irving convenience store on her way home each Friday to pick up a gallon of milk,because it was priced lower than the local Walmart.In this case,the milk is an example of Irving's use of:

________________________ include markdowns,discounts to employees and customers,and inventory shrinkage (due to shoplifting,breakage,or loss).

Retailers prefer rebates to coupons because:

Charging different prices in different stores,markets or zones is called:

At the supermarket today,Nelson noticed all the canned vegetables were priced at $.39,$.49,$.59,or $.69 per can.This type of pricing is:

A strategy that stresses continuity of retail prices at a level somewhere between the regular nonsale price and the deep-discount sale price of the retailer's competitors is called the ___________________ strategy.

An appliance store wants to get customers who are buying an upright freezer to trade up to the more expensive self-defrosting model.Which of the following practices can be used by the store to achieve this goal?

Which of the following would be considered an example of a second-degree price discrimination strategy?

Jeff wanted to increase the traffic in his convenience store.Which type of pricing strategy should Jeff consider when posting cigarette prices?

__________________ are given to customers when merchandise is out of stock; they are written promises to sell customers merchandise at the sale price when the merchandise arrives.

Which of the following is a benefit of price lining?

___________ is the relationship of what you get to what you have to pay for it.

A ___________ is money returned to the buyer based on a portion of the purchase price.

Search engines or ________________________ are computer programs that search for and provide a list of all Internet sites selling a product category or price of specific brands offered.

As Jerome was leaving Ed's Electric,he noticed a bulletin board that featured small applications that he can send to the manufacturer with his receipt and receive a portion of what he spent on his digital TV back in the mail.What is this returned money called?

___________ is the practice of offering two or more different products or services for sale at one price.

Target offered 2 six-packs of any Pepsi product for $5 last week,and the price for a single carton was $2.69.What pricing strategy was Target using?