Question 1

What is free to the buyer in FOB origin pricing?

Accepted Answer

A)   customer invoicing
B)   insurance against product liability
C)   any method of transportation
D)   cost of loading the product onto the vehicle used to transport it
E)   all shipping and handlingF) None of the above
G) All of the above

Question 2

Everyday low pricing refers to

Accepted Answer

A)   the pricing strategy of "extreme value" stores to maintain high price-quality images for the products they sell.
B)   the pricing strategy of starting a product at standard list price and then lowering the price by a certain percentage until it is sold.
C)   short-term price reductions when consumer demand takes a significant and unexpected dip.
D)   the practice of replacing promotional allowances with lower manufacturer list prices.
E)   a form of predatory pricing used solely for the purpose of undercutting competitors' prices.F) A) and B)
G) A) and C)

Question 3

Which of these statements about geographical adjustments to price is most accurate?

Accepted Answer

A)   In FOB origin pricing, the seller selects the mode of transportation.
B)   In FOB with freight-allowed pricing, the buyer subtracts the transportation costs from the list price.
C)   Multiple-zone pricing is sometimes referred to as "spider web" pricing.
D)   Basing-point pricing seems to have been used in industries where freight expenses are only a minor part of the total cost to the buyer.
E)   Geographical adjustments can be subject to government regulation if the firm cannot supply objective data (lists of mountains, rivers, weather conditions, etc.)  explaining why those adjustments need to be made.F) C) and D)
G) A) and C)

Question 4

Predatory pricing is

Accepted Answer

A)   an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor.
B)   the practice of charging different prices to different buyers for goods of like grade and quality.
C)   the practice of charging a very low price for a product with the intent of driving competitors out of business.
D)   a conspiracy among firms to set prices for a product or service.
E)   a seller's requirement that the purchaser of one product must also buy another product in the line.F) C) and D)
G) A) and B)

Question 5

Figure 14-3
-Figure 14-3 above shows a demand curve depicting which pricing approach?

Accepted Answer

A)   prestige pricing
B)   skimming pricing
C)   penetration pricing
D)   price lining
E)   reflexive pricingF) None of the above
G) C) and E)

Question 6

The most commonly used pricing method for business products is

Accepted Answer

A)   target return on investment.
B)   customary.
C)   standard markup.
D)   target profit.
E)   cost-plus pricing.F) B) and C)
G) A) and E)

Question 7

Which of these pricing techniques is most sensitive to customers' responses to price?

Accepted Answer

A)   cost-plus percentage-of-cost pricing
B)   target pricing
C)   experience-curve pricing
D)   cost-plus fixed-fee pricing
E)   standard markup pricingF) A) and C)
G) A) and B)

Question 8

Prestige pricing refers to

Accepted Answer

A)   charging different prices to different buyers for goods of like grade and quality.
B)   setting a low initial price on a new product to appeal immediately to the mass market odd-even pricing.
C)   setting a market price for a product or product class based on a subjective feel for the competitors' price or market price.
D)   setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.
E)   setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors.F) A) and B)
G) A) and C)

Question 9

A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

Accepted Answer

A)   free on board (FO
B)   origin pricing.
B)   free on board (FO
B)   destination pricing.
C)   mode of transportation pricing.
D)   uniform delivered pricing.
E)   free on board (FO
B)   geographical pricing.F) C) and D)
G) C) and E)

Question 10

When a firm offers a very low price on a product to attract customers to a store and once in the store the customer is persuaded to purchase a higher-priced item, the practice is referred to as

Accepted Answer

A)   predatory pricing.
B)   deceptive pricing.
C)   price discrimination.
D)   caveat emptor.
E)   bait and switch.F) A) and D)
G) A) and E)

Question 11

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Accepted Answer

A)   noncumulative discounts.
B)   cumulative discounts.
C)   seasonal discounts.
D)   trade discounts.
E)   functional discounts.F) C) and D)
G) B) and C)

Question 12

All of these statements about standard markup pricing are true except which?

Accepted Answer

A)   High-volume products usually have smaller markups than do low-volume products.
B)   The percentage markup depends on the type of retail store and the product involved.
C)   Markups must cover all expenses of the store, pay for overhead costs, and contribute something to profits.
D)   A price is achieved by summing the total unit cost of providing a product or service and adding a specific amount to the cost.
E)   Supermarket managers have such a large number of products that estimating the demand for each product as a means of setting price is impossible.F) A) and C)
G) C) and D) D

Question 13

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Accepted Answer

A)   there is a large number of products and estimating the demand for each would be difficult and time consuming.
B)   there is a large number of product lines, all with basically the same product attributes.
C)   there is a specific profit goal that needs to be achieved.
D)   there is a policy of selling every item in a product line at the same price regardless of the product class.
E)   the products are perishable or seasonal.F) A) and C)
G) A) and B)

Question 14

A pricing method where all buyers pay the same delivered price for the products, regardless of their distance from the seller, is referred to as

Accepted Answer

A)   single-zone pricing.
B)   multiple-zone pricing.
C)   freight-absorption pricing.
D)   FOB origin pricing.
E)   basing-point pricing.F) A) and B)
G) B) and E) A

Question 15

According to the text, clothing manufacturer Christian Dior and retailer Neiman Marcus use ________ pricing.

Accepted Answer

A)   above-market
B)   at-market
C)   below-market
D)   prestige pricing
E)   everyday low pricingF) B) and E)
G) C) and E)

Question 16

It costs Lady Marion Seafood, Inc., $30 to catch, process, freeze, package, and ship five-pound packages of Alaskan salmon. The firm adds 60 percent to the cost of its salmon products and charges customers a total of $48 for a postage-paid vacuum-sealed package. What type of pricing does Lady Marion Seafood use?

Accepted Answer

A)   target return-on-sales pricing
B)   bundle pricing
C)   standard markup pricing
D)   target profit pricing
E)   customary pricingF) B) and C)
G) B) and E)

Question 17

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Accepted Answer

A)   target profit pricing.
B)   standard markup pricing.
C)   target return-on-investment pricing.
D)   customary pricing.
E)   everyday low pricing.F) B) and E)
G) A) and C)

Question 18

The way that a person navigates through an online marketer's website is called

Accepted Answer

A)   surf-shopping behavior.
B)   cross-channel shopping.
C)   the clickstream.
D)   one-click shopping.
E)   the shopper pathway.F) A) and C)
G) D) and E) C

Question 19

With profit-oriented approaches to pricing, a price setter may choose to balance both ________ and ________ to set price.

Accepted Answer

A)   revenue; profit
B)   tangible goods; services
C)   costs; revenue
D)   demand; supply
E)   costs; demandF) C) and E)
G) A) and B)

Question 20

With a cost-oriented pricing strategy, a price setter stresses the ________ side of the pricing problem, and the price is set by looking at

Accepted Answer

A)   demand; revenue.
B)   production and marketing; profit.
C)   demand; target sales.
D)   cost; production and marketing expenses.
E)   cost; consumer tastes.F) None of the above
G) C) and E)

Exam 14: Arriving at the Final Price

What is free to the buyer in FOB origin pricing?

Correct Answer
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Everyday low pricing refers to

Correct Answer
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Which of these statements about geographical adjustments to price is most accurate?

Correct Answer
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Predatory pricing is

Correct Answer
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Figure 14-3 -Figure 14-3 above shows a demand curve depicting which pricing approach?

Correct Answer
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The most commonly used pricing method for business products is

Correct Answer
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Which of these pricing techniques is most sensitive to customers' responses to price?

Correct Answer
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Prestige pricing refers to

Correct Answer
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A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

Correct Answer
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When a firm offers a very low price on a product to attract customers to a store and once in the store the customer is persuaded to purchase a higher-priced item, the practice is referred to as

Correct Answer
verified

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Correct Answer
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All of these statements about standard markup pricing are true except which?

Correct Answer
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D

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Correct Answer
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A pricing method where all buyers pay the same delivered price for the products, regardless of their distance from the seller, is referred to as

Correct Answer
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A

According to the text, clothing manufacturer Christian Dior and retailer Neiman Marcus use ________ pricing.

Correct Answer
verified

Correct Answer
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Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Correct Answer
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The way that a person navigates through an online marketer's website is called

Correct Answer
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C

With profit-oriented approaches to pricing, a price setter may choose to balance both and to set price.

Correct Answer
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With a cost-oriented pricing strategy, a price setter stresses the ________ side of the pricing problem, and the price is set by looking at

Correct Answer
verified

Exam 14: Arriving at the Final Price

What is free to the buyer in FOB origin pricing?

Correct AnswerverifiedShow Answer

Everyday low pricing refers to

Correct AnswerverifiedShow Answer

Which of these statements about geographical adjustments to price is most accurate?

Correct AnswerverifiedShow Answer

Predatory pricing is

Correct AnswerverifiedShow Answer

Figure 14-3 -Figure 14-3 above shows a demand curve depicting which pricing approach?

Correct AnswerverifiedShow Answer

The most commonly used pricing method for business products is

Correct AnswerverifiedShow Answer

Which of these pricing techniques is most sensitive to customers' responses to price?

Correct AnswerverifiedShow Answer

Prestige pricing refers to

Correct AnswerverifiedShow Answer

A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

Correct AnswerverifiedShow Answer

When a firm offers a very low price on a product to attract customers to a store and once in the store the customer is persuaded to purchase a higher-priced item, the practice is referred to as

Correct AnswerverifiedShow Answer

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Correct AnswerverifiedShow Answer

All of these statements about standard markup pricing are true except which?

Correct AnswerverifiedD

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Correct AnswerverifiedShow Answer

A pricing method where all buyers pay the same delivered price for the products, regardless of their distance from the seller, is referred to as

Correct AnswerverifiedA

According to the text, clothing manufacturer Christian Dior and retailer Neiman Marcus use ________ pricing.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Correct AnswerverifiedShow Answer

The way that a person navigates through an online marketer's website is called

Correct AnswerverifiedC

With profit-oriented approaches to pricing, a price setter may choose to balance both ________ and ________ to set price.

Correct AnswerverifiedShow Answer

With a cost-oriented pricing strategy, a price setter stresses the ________ side of the pricing problem, and the price is set by looking at

Correct AnswerverifiedShow Answer

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D

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A

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C

With profit-oriented approaches to pricing, a price setter may choose to balance both and to set price.

Correct Answer
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