mktg 361: exam 3 chpt 15 – Flashcards

Cost-based pricing assumes that costs A. will vary with the level of prices. B. are used to estimate value. C. are calculated based on historical consumer perceptions of what things should cost. D. will continue to decrease as production increases. E. will not vary much for different levels of production.

Yvonne estimates the average cost of her floral arrangements is $14 regardless of whether she is making 5 or 20 arrangements that day. She adds a standard markup to the $14 estimate to determine her price. Yvonne is using a(n) _______ pricing method. A. improvement value B. value-based C. cost-based D. EDLP E. reference-based

In determining the price for his company's new personal computer photography printer, Raymond is assessing the total cost of owning his printer as compared to alternative products available in the market. Raymond is using _______ pricing. A. improvement value B. EDLP C. reference-based D. cost of ownership E. premium

When Greenbelt Construction Company began building houses in a large subdivision with many other builders, the company priced its homes slightly higher than its competitors and promoted the added quality features found in Greenbelt's homes. Greenbelt was using a(n) _______ pricing strategy. A. competitor-based B. value-based C. improvement-based D. premium E. reference-based

The improvement value method and the cost of ownership method are two approaches for setting prices that are _______ methods. A. cost-based B. competitor-based C. production-based D. value-based E. market-based

The pricing method that considers what consumers may be willing to pay for a particular product based on the value received over the product's entire lifetime is the _______ pricing method. A. cost-based B. cost of ownership C. reference-based D. improvement value E. market-based

Milton owns a lawncare business. From experience, Milton has found that John Deere equipment lasts almost twice as long as competitors' machines. For John Deere, Milton's perception about its products makes _______ pricing a logical choice. A. cost of ownership B. cost-based C. reference-based D. improvement value E. market-based

Everyday low pricing (EDLP) provides value to consumers by A. continually offering items on sale. B. minimizing the number of options a consumer can evaluate. C. offering noncumulative quantity discounts. D. reducing their search costs. E. creative use of reference pricing.

When Walmart communicates to consumers that, for any given group of often-purchased items, its prices will tend to be lower than that of any other competitor, Walmart is exhibiting what type of pricing strategy? A. high/low B. EDLP C. price skimming D. uniform delivered pricing E. bait and switch

It is important to Joanne to get value for her money, but she does not want to spend time comparison shopping. Joanne will likely respond to _______ pricing, but not to _______ pricing. A. high/low; EDLP B. premium; high/low C. high/low; premium D. price skimming; high/low E. EDLP; high/low

In determining the price for his company's new pocket digital camera, Matt determines what consumers consider the regular or original price for similar cameras available in the market. Matt is assessing the influence of __________ on pricing strategy. A. improvement value B. odd-even prices C. everyday low pricing D. reference prices E. cost of ownership

Charging a relatively high price for new and innovative products to those consumers most willing and able to pay the high price is called price A. penetration. B. bundling. C. fixing. D. referencing. E. skimming.

Mario is the first retailer in town to sell games for Sony's new PlayStation 4 machine. Mario wants to quickly capture as much of the market for the new games as possible. Mario will likely use a __________ pricing strategy. A. market penetration B. bundling C. price fixing D. reference E. skimming

The major objectives associated with a market penetration pricing strategy are to A. capture the high end of the market demand curve and lower introduction costs. B. quickly build sales and market share. C. minimize customer dissatisfaction and maximize reference price value. D. provide an incentive to purchase a less desirable product to obtain a more desirable product. E. match competitors' prices and communicate high quality.

The __________ occurs when unit cost drops as the quantity sold increases. A. slotting allowance benefit B. price fixing return C. improvement value effect D. experience curve effect E. cumulative bundling benefit

Production of the DeLorean car, made famous in the film Back to the Future, never got above 25,000 units during its lifetime. Automobile industry analysts estimate that production of this car needed to reach around 300,000 units to achieve the __________, which refers to a decrease in unit cost as product volume increases. A. slotting allowance benefit B. price fixing return C. improvement value effect D. experience curve effect E. cumulative bundling benefit

The saying "leaving money on the table" is associated with A. a price skimming strategy that forces consumers to choose between products. B. a market penetration strategy when there is an opportunity for price skimming. C. vertical price fixing in markets where horizontal price fixing would be more appropriate. D. a predatory pricing strategy that results in excessive seasonal discounts. E. loss leader pricing that drives consumers to competitors' products.

Generally, a _______ represents either a short-term response to a competitive threat or a broadly accepted method of calculating a final price for the customer that is short term in nature. A. pricing strategy B. reference price C. high/low strategy D. loss leader price E. pricing tactic

Retailers use _______ to get rid of slow-moving or obsolete merchandise. A. markdowns B. slotting allowances C. price lining D. rebates E. seasonal allowances

The most common form of a quantity discount for consumers is a A. cash discount. B. markdown. C. size discount. D. coupon. E. rebate.

One of the benefits of offering a size discount to consumers is they will purchase more of a marketer's product and A. earn a cash discount. B. capitalize on the experience curve effect. C. will not fall prey to predatory pricing. D. will be less likely to switch brands. E. will be able to take advantage of zone pricing benefits.

Retailers use _____ because they believe their use will induce customers to try new products, convert first-time users to regular users, increase purchases, and protect market share. A. seasonal discounts B. coupons C. rebates D. cumulative quantity discounts E. noncumulative quantity discounts

What is the difference between a coupon and a rebate? A. The retailer handles coupons while manufacturers handle most rebates. B. Coupons are issued for products and rebates are issued for services. C. Coupons are for "cents/dollars off" while rebates are for "percentages off" the listed price. D. There is no difference between coupons and rebates. E. The manufacturer handles coupons while retailers handle rebates.

One important reason manufacturers like rebates is that A. the transaction costs are the responsibility of the retailer. B. their redemption rates are low. C. rebates expire faster than coupons do. D. there are fewer price discrimination issues. E. they build strong brand recognition.

Supermarkets often offer great deals on milk 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. A. leader B. bundling C. price lining D. cumulative quantity discount E. slotting

When Toyota introduced its Scion line of cars, the lowest-price model was listed for $15,000 while the highest-priced model was listed for $21,000, with two other list prices in between. Each price point represented distinct differences in the features and quality of the cars. Toyota used a ______ pricing approach. A. market penetration B. zone C. price lining D. loss leader E. slotting

When marketers establish a price floor and a price ceiling for an entire line of similar products and then set price points in between for differences in quality among the products, they are using a _______ pricing approach. A. loss leader B. zone C. price bundling D. price skimming E. price lining

Which of the following is not a common business-to-business pricing tactic? A. seasonal discounts B. slotting allowances C. quantity discounts D. loss leader pricing E. advertising allowances

The expression "3/10, n/30" means A. a 10 percent discount if paid in full within 3 days, or the net amount is due in 30 days. B. a 3 percent discount if paid in full within 10 days, or the net amount is due in 30 days. C. a 3 percent discount if paid in full within 3 days, or the net amount is due in 10 days. D. a 3 percent discount if paid in full within 30 days, or the net amount is due in 10 days. E. no discount is available on this order; the net amount is due between 10 and 30 days.

Manufacturers use cash discounts primarily because it allows them to benefit from A. uniformed delivered pricing. B. seasonal slotting allowances. C. price skimming. D. the time value of money. E. high/low pricing.

__________ pricing tactics lower the price of a product below the store's cost. A. Fixed B. Zone C. Regular D. Loss leader E. Cost-based

If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors, the company could be charged with A. loss leader pricing. B. bait-and-switch pricing. C. price fixing. D. unfair slotting. E. predatory pricing.

The Clayton Act and the Robinson-Patman Act forbid certain types of A. price discrimination. B. bait-and-switch pricing. C. predatory pricing. D. everyday low pricing strategies. E. loss leader pricing.

__________ price fixing occurs when competitors collude to control prices, and __________ price fixing occurs within a marketing channel to control prices passed on to consumers. A. Industry; supply chain B. General; specific C. Widespread; integrated D. Strategic; tactical E. Horizontal; vertical

It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit. A. the Better Business Bureau B. federal regulators C. the American Marketing Association D. marketers themselves E. industry standards boards