CH 9 quiz

__________ refers to setting price based on buyers’ perception of value rather than on the seller’s cost.
a. customer value-based pricing
b. cost-based pricing
c. good-value pricing
d. cost
e. value-added pricing

a

which of the following is a cost-oriented pricing approach?
a. break-even pricing
b. edlp pricing
c. high-low pricing
d. competition-based pricing
e. value added pricing

a

new premium movie theaters offer features such as online reserved seating, high-backed leather executive chairs and armrests and footrests, the latest in digital sound, super-wide screens, and other amenitites for which they charge a higher price. this is an example of which type of pricing?
a. edlp pricing
value-added pricing
c. high-low pricing
e. breakeven pricing

b

sadie’s restaurant has listened to its customers over the years and is now able to offer the right combination of quality and good service at a fair price. which pricing strategy is sadie’s using?
a. high-low pricing
b. cost-based pricing
c. good-value pricing
d. value added pricing
e. break-even pricing

c.

geared2beer, a craft beer brand, identifies a market segment that is willing to pay premium prices for its craft beer, and geared2beer managers select an ideal selling price. managers then determine the costs to create craft beer that meets the ideal selling price. the company’s pricing approach is referred to as __________.
a. value-added pricing
b. edlp
c. target costing
d. cost-plus pricing
e. target return pricing

c

internal factors that affect pricing include _________.
a. the company’s overall marketing strategy, the nature of the market, and demand
b. the company’s overall marketing strategy, objectives and the nature of the market
c. the nature of the market, demand, and the economy
d. the company’s overall marketing strategy, objectives, and marketing mix
e. the company’s overall marketing strategy, objectives and demand

d

which of the following is true regarding the price-demand relationship?
a. demand and price are directly related – the higher the price, the greater the demand
b. if demand is inelastic, a small change in price will result in a large change in demand
c. price elasticity measures how responsive price will be to a change in demand
d. a demand curve shows the number of units a company will produce in a given time period at different prices that might be charged
e. if demand is elastic, sellers will consider lowering their price

e

which of the following statements is true regarding oligopolistic competition?
a. the market consists of many buyers and sellers trading over a range of prices
b. each seller is alert and responsive to competitors’ pricing strategies and marketing moves
c. the market consists of many large sellers
d. the market is dominated by one seller
e. many buyers and sellers trade a uniform commodity

b

one major objective associated with a market-penetration pricing strategy is to ___________.
a. avoid everyday low pricing
b. prevent customer dissatisfaction
c. attract buyers willing to pay a higher price
d. skim off small but profitable market segments
e. win a large market share

e

a company has set a low price on a new product if introduced. it wants to maximize its market share and attract a large number of buyers quickly. which new product pricing strategy should the company use?
a. psychological pricing
b. captive-product pricing
c. market-skimming pricing
d. market-penetration pricing
e. product bundle pricing

d

when apple computer company introducted its iphone, its priced the new product at $599, considerably higher than either their ipod or competing cellular phones. apple computer was pursing a _______________ new product pricing strategy.
a. by-product
b. marketing-skimming
c. market-penetration
d. optional-product
e. captive-product

b

gillette charges a fairly low price for its razors (relative to costs) and a high price for razor blades. it is using a strategy of _________ pricing.
a. by-product
b. captive-product
c. two-part pricing
d. product line
e. product-bundle

b

bath and body works offers three-fer deals on its soaps and lotions. this is an example of ____________ pricing.
a. captive-product
b. two-part pricing
c. product line
d. by-product
e. product-bundle

e

a car buyer can choose a base model at one price, or one with a premium sound and navigation system at a higher price. this is an example of _______ pricing.
a. product line
b. captive-product
c. product-bundle
d. optional-product
e. by-product

d

the ford mustang is offered in several different models. ford will use ___________ pricing to determine the price steps between the different models.
a. two-part pricing
b. product-bundle
c. optional-pricing
d. captive-product
e. product line

e

many state colleges and nuiversities charge one price for its in-state students and a higher price for out of state students. which form of segmented pricing are these schools using.
a. location-based pricing
b. customer-segment pricing
c. time-based pricing
d. product form pricing
e. promotional pricing

a

companies that use __________ continually adjust prices to meet the characteristics and needs of individual customers and situations.
a. psychological pricing
b. promotional pricing
c. segmented pricing
d. cash rebates
e. dynamic pricing

e

margie has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. since she doesn’t know much about wine, she will likely use the price of the wines as a ________.
a. an indicator of geographic pricing
b. an indicator of quality
c. a limited time offer
d. an indicator of the cost of production
e. a type of segmented pricing

b

ups charges different prices for shipping depending on an item’s destination. the more distant the city the package is being shipped to, the higher the price UPS charges. which geographic pricing method is UPS using?
a. freight-absorbing pricing
b. base-point pricing
c. uniform-delivered pricing
d. fob origin
e. zone pricing

e

a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store. this is an example of ________ pricing.
a. psychological
b. segmented
c. optional product
d. geographical
e. promotional

e

which of the following statements is true regarding initiating price cuts?
a. cutting price has no effect on costs.
b. cutting prices in an industry loaded with excess capacity may lead to price wars
c. if faced with excess capacity, a firm should not cut its price
d. firms never cut prices, they only raise them
e. when faced with falling demand, firms should not cut prices

b

which of the following statements is true regarding initiating price increases?
a. companies do not need to communicate reasons for price increases to customers
b. prices should be increased when there is a lack of demand
c. cost inflation is not a factor in price increases
d. price increases do not impact profits
e. wherever possible, the company should consider ways to meet higher costs or demand without raising prices

e.

which of the following is a potentially effective action a company could take in response to a competitor’s price cut?
a. raise price
b. decrease perceived value
c. reduce both price and quality
d. reduce price
e. launch a high-price "fighter brand"

d

over the years, us air carriers have been accused numerous times of collusion when setting prices. this illegal practice is called ___________.
a. a retain price maintenance
b. price fixing
c. price discrimination
d. deceptive pricing
e. predatory pricing

b

selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business is an illegal practice called _________.
a. deceptive pricing
b. price fixing
c. price discrimination
d. price maintenance
e. predatory pricing

e