Question 1

To attract customers into a store, Safeway advertises its milk at less than cost, hoping that customers will purchase other groceries as well. This pricing strategy is called

Accepted Answer

A)  price lining.
B)  special-event pricing.
C)  differential pricing.
D)  comparison discounting.
E)  price leader pricing.F) A) and B)
G) C) and E)

Question 2

All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except

Accepted Answer

A)  premium pricing.
B)  price lining.
C)  captive pricing.
D)  bait pricing.
E)  penetration pricing.F) C) and D)
G) B) and C)

Question 3

Markup pricing is not used often by marketers because establishing a percentage markup greatly increases the complexity of the decision-making process.

Accepted Answer

A) True 
 B)False

Question 4

Marketers improve their ability to establish prices appropriately when

Accepted Answer

A)  there is nonprice competition.
B)  they know prices charged for competing brands.
C)  their products are of better quality than the competition's.
D)  the main objective is image building.
E)  using psychological pricing.F) A) and D)
G) A) and C)

Question 5

How can a marketer use product quality as a pricing objective to influence purchasing decisions?

Accepted Answer

Some consumers are seeking less-expensiv...

Question 6

All of the following are psychological techniques except

Accepted Answer

A)  customary pricing.
B)  prestige pricing.
C)  reference pricing.
D)  odd-even pricing.
E)  price skimming.F) A) and B)
G) C) and D)

Question 7

Which of the following pricing strategies often results in a retailer losing money on the product?

Accepted Answer

A)  Price leader
B)  Psychological discounting
C)  Penetration pricing
D)  Special-event pricing
E)  Ethical pricingF) None of the above
G) A) and E)

Question 8

If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used.

Accepted Answer

A)  markup
B)  demand-based
C)  competitive
D)  peak
E)  differentialF) B) and E)
G) B) and C)

Question 9

Penetration pricing and price skimming of the market are two types of new-product pricing.

Accepted Answer

A) True 
 B)False

Question 10

If Samsung uses _____ pricing for its newest version of laptops, it is probably most interested in obtaining market share; and it is assuming

Accepted Answer

A)  premium pricing; that no other competitors are likely to enter the market soon.
B)  price skimming; that no other competitors are likely to enter the market soon.
C)  premium pricing; it needs to recoup R & D costs as soon as possible.
D)  penetration pricing; that no other competitors are likely to enter the market soon.
E)  penetration pricing; that other competitors could enter the market easily.F) A) and E)
G) A) and B)

Question 11

Reference pricing is

Accepted Answer

A)  listing the manufacturer's suggested retail price on the price tag along with the store's lower price.
B)  mentioning the price that other retailers charge for the same product on the display for the product.
C)  using a consumer's internal perceptions of what the appropriate price should be to help price a firm's products.
D)  pricing a product at a moderate level and positioning it next to a more expensive model or brand.
E)  using prices in advertising so that customers will have a point of reference when they come to the retail facility.F) A) and B)
G) B) and D)

Question 12

Chris is planning three sales during the third quarter of the year at Toys R' Us. The first is at the beginning of the school year, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be

Accepted Answer

A)  psychological pricing.
B)  calendar discounting.
C)  sales promotion pricing.
D)  special-event pricing.
E)  captive pricing.F) D) and E)
G) A) and E)

Question 13

Marketers must take steps to make sure that the pricing objectives they set are consistent with the organization's ____ objectives and ____ objectives.

Accepted Answer

A)  advertising; marketing
B)  overall; marketing
C)  marketing; promotional
D)  overall; promotional
E)  overall; revenueF) B) and D)
G) B) and C)

Question 14

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

Accepted Answer

A)  price reduction planning.
B)  random discounting.
C)  bait pricing.
D)  periodic discounting.
E)  penetration pricing.F) C) and D)
G) B) and C)

Question 15

Prestige pricing is used when a higher price is consistent with buyers' attitudes toward the quality or image of a product.

Accepted Answer

A) True 
 B)False

Question 16

Random discounting means discounting various products on a systematic basis.

Accepted Answer

A) True 
 B)False

Question 17

A marketer is usually in a better position to establish prices when it knows the prices charged for competing brands.

Accepted Answer

A) True 
 B)False

Question 18

Differential pricing is effective mainly when focusing on only one market segment.

Accepted Answer

A) True 
 B)False

Question 19

A problem associated with ____ is that consumers can predict when prices will be lowered and delay purchases until that time.

Accepted Answer

A)  random discounting
B)  penetration pricing
C)  reference pricing
D)  everyday low pricing
E)  periodic discountingF) B) and C)
G) A) and E)

Question 20

Some grocery stores collect data on competitive prices

Accepted Answer

A)  by calling their competitors.
B)  on a quarterly basis.
C)  through stores' purchase data.
D)  from their resellers.
E)  by using full-time comparison shoppers.F) A) and B)
G) D) and E)

Exam 20: Setting Prices

Random discounting means discounting various products on a systematic basis.

Correct AnswerverifiedShow Answer

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

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All of the following are psychological techniques except

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Penetration pricing and price skimming of the market are two types of new-product pricing.

Correct AnswerverifiedShow Answer

Marketers must take steps to make sure that the pricing objectives they set are consistent with the organization's ____ objectives and ____ objectives.

Correct AnswerverifiedShow Answer

How can a marketer use product quality as a pricing objective to influence purchasing decisions?

Correct AnswerverifiedSome consumers are seeking less-expensiv...View AnswerShow Answer

Marketers improve their ability to establish prices appropriately when

Correct AnswerverifiedShow Answer

Markup pricing is not used often by marketers because establishing a percentage markup greatly increases the complexity of the decision-making process.

Correct AnswerverifiedShow Answer

Which of the following pricing strategies often results in a retailer losing money on the product?

Correct AnswerverifiedShow Answer

Differential pricing is effective mainly when focusing on only one market segment.

Correct AnswerverifiedShow Answer

If Samsung uses _____ pricing for its newest version of laptops, it is probably most interested in obtaining market share; and it is assuming

Correct AnswerverifiedShow Answer

Some grocery stores collect data on competitive prices

Correct AnswerverifiedShow Answer

Prestige pricing is used when a higher price is consistent with buyers' attitudes toward the quality or image of a product.

Correct AnswerverifiedShow Answer

Reference pricing is

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A problem associated with ____ is that consumers can predict when prices will be lowered and delay purchases until that time.

Correct AnswerverifiedShow Answer

To attract customers into a store, Safeway advertises its milk at less than cost, hoping that customers will purchase other groceries as well. This pricing strategy is called

Correct AnswerverifiedShow Answer

All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except

Correct AnswerverifiedShow Answer

If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used.

Correct AnswerverifiedShow Answer

A marketer is usually in a better position to establish prices when it knows the prices charged for competing brands.

Correct AnswerverifiedShow Answer

Chris is planning three sales during the third quarter of the year at Toys R' Us. The first is at the beginning of the school year, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be

Correct AnswerverifiedShow Answer

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Marketers must take steps to make sure that the pricing objectives they set are consistent with the organization's objectives and objectives.

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Some consumers are seeking less-expensiv...
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