Question 1

After entering a market by using market-penetration pricing, a company can easily raise its price and maintain its market share.

Accepted Answer

A) True 
 B)False

Question 2

Why might marketers use market-penetration pricing?

Accepted Answer

Marketers use such pricing whe...

Question 3

When faced with a competitor who has cut its product's price, which of the following is the most cost-effective way for a company to maintain its own price but raise the perceived value of its offer?

Accepted Answer

A)   by improving the quality of the product
B)   by introducing a higher-priced premium brand
C)   by altering the company's marketing communications
D)   by bundling the offer with add-ons
E)   by distributing the product through less costly channels

Question 4

Why is identifying predatory pricing difficult?

Accepted Answer

Selling below cost to unload excess inve...

Question 5

Which of the following companies uses captive product pricing?

Accepted Answer

A)   Photo Genie, which sells inexpensive cameras that run only on their own expensive batteries
B)   Go Zone, which launched a range of tablet models, each priced according to its features
C)   Penguin's Parlor, which offers customers a 20-percent discount on their birthdays
D)   Sportsprint, which prices sports equipment according to customer evaluations
E)   Burger Den, whose combo meals are priced lower than its individual components sold together

Question 6

In response to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor's price cut?

Accepted Answer

A)   raising the perceived value of a product
B)   improving product quality
C)   accepting a reduced market share
D)   launching a "fighter brand"
E)   using high-low pricing

Question 7

When a firm varies its price by the season, it is using ________ pricing.

Accepted Answer

A)   product form
B)   customer-segment
C)   location-based
D)   time-based
E)   value-added

Question 8

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

Accepted Answer

A) True 
 B)False

Question 9

Differentiate between dynamic and fixed pricing.

Accepted Answer

Throughout most of history, prices were ...

Question 10

By definition, ________ pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.

Accepted Answer

A)   segmented
B)   variable
C)   flexible
D)   cost-plus
E)   reference

Question 11

________ allowances are payments or price reductions that reward dealers for participating in advertising and sales support programs.

Accepted Answer

A)   Promotional
B)   Trade-in
C)   Segmented
D)   Functional
E)   Dynamic

Question 12

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?

Accepted Answer

A)   segmented pricing
B)   international pricing
C)   reference pricing
D)   promotional pricing
E)   basing-point pricing

Question 13

Which of the following is NOT true of public policies and pricing?

Accepted Answer

A)   Companies are free to charge whatever prices they wish.
B)   Federal, state, and local laws govern the rules of fair play in pricing.
C)   Deceptive pricing is not permitted.
D)   Companies must consider broader societal pricing concerns.
E)   Regulations exist to control predatory pricing.

Question 14

Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________ pricing.

Accepted Answer

A)   comparative
B)   competitive
C)   market-skimming
D)   market-segmentation
E)   cost-plus

Question 15

Under ________ pricing, different versions of the product are priced differently but not according to differences in their costs.

Accepted Answer

A)   product form
B)   optional product
C)   captive product
D)   by-product
E)   seasonal

Question 16

Reasons sellers go beyond what is required by pricing regulations include all of the following EXCEPT that ________.

Accepted Answer

A)   it is good business to treat customers fairly
B)   customers that fully understand prices and pricing terms are happy customers
C)   word-of-mouth from dissatisfied customers spreads rapidly
D)   building strong and lasting relationships is key to business success
E)   it improves profitability to earn additional revenue due to customer confusion

Question 17

Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production, the company generates a great deal of scrap hardwood. How can using by-product pricing benefit the company?

Accepted Answer

Using by-product pricing, Sensenig can s...

Question 18

What should the price steps of product line pricing take into account?

Accepted Answer

The price steps should take into account...

Question 19

Refer to the scenario below to answer the following question(s) .
Champion, Inc. is a manufacturer of lunch boxes, school bags, and school stationery. Charles Payton, the CEO of Champion, hopes to sell the products at a low price to penetrate the market quickly.
-Which of the following best supports a market-penetration strategy for Champion?

Accepted Answer

A)   Production costs increase as sales volume increases.
B)   It is very difficult for competitors to enter the market.
C)   The cost of producing a smaller volume is negligible.
D)   The quality of the products supports high initial prices.
E)   The market for the products is highly price sensitive.

Question 20

Constantly reduced prices can erode a brand's value in the eyes of customers.

Accepted Answer

A) True 
 B)False

Exam 11: Pricing Strategies: Additional Considerations

Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________ pricing.

Correct Answer
verified

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?

Correct Answer
verified

When a firm varies its price by the season, it is using ________ pricing.

Correct Answer
verified

Under ________ pricing, different versions of the product are priced differently but not according to differences in their costs.

Correct Answer
verified

Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production, the company generates a great deal of scrap hardwood. How can using by-product pricing benefit the company?

Correct Answer
verified
Using by-product pricing, Sensenig can s...
View Answer

When faced with a competitor who has cut its product's price, which of the following is the most cost-effective way for a company to maintain its own price but raise the perceived value of its offer?

Correct Answer
verified

Reasons sellers go beyond what is required by pricing regulations include all of the following EXCEPT that ________.

Correct Answer
verified

Correct Answer
verified

Why might marketers use market-penetration pricing?

Correct Answer
verified
Marketers use such pricing whe...
View Answer

In response to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor's price cut?

Correct Answer
verified

After entering a market by using market-penetration pricing, a company can easily raise its price and maintain its market share.

Correct Answer
verified

________ allowances are payments or price reductions that reward dealers for participating in advertising and sales support programs.

Correct Answer
verified

Which of the following companies uses captive product pricing?

Correct Answer
verified

Why is identifying predatory pricing difficult?

Correct Answer
verified
Selling below cost to unload excess inve...
View Answer

Constantly reduced prices can erode a brand's value in the eyes of customers.

Correct Answer
verified

Which of the following is NOT true of public policies and pricing?

Correct Answer
verified

What should the price steps of product line pricing take into account?

Correct Answer
verified
The price steps should take into account...
View Answer

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

Correct Answer
verified

Differentiate between dynamic and fixed pricing.

Correct Answer
verified
Throughout most of history, prices were ...
View Answer

By definition, ________ pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.

Correct Answer
verified

Exam 11: Pricing Strategies: Additional Considerations

Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________ pricing.

Correct AnswerverifiedShow Answer

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?

Correct AnswerverifiedShow Answer

When a firm varies its price by the season, it is using ________ pricing.

Correct AnswerverifiedShow Answer

Under ________ pricing, different versions of the product are priced differently but not according to differences in their costs.

Correct AnswerverifiedShow Answer

Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production, the company generates a great deal of scrap hardwood. How can using by-product pricing benefit the company?

Correct AnswerverifiedUsing by-product pricing, Sensenig can s...View AnswerShow Answer

When faced with a competitor who has cut its product's price, which of the following is the most cost-effective way for a company to maintain its own price but raise the perceived value of its offer?

Correct AnswerverifiedShow Answer

Reasons sellers go beyond what is required by pricing regulations include all of the following EXCEPT that ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Why might marketers use market-penetration pricing?

Correct AnswerverifiedMarketers use such pricing whe...View AnswerShow Answer

In response to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor's price cut?

Correct AnswerverifiedShow Answer

After entering a market by using market-penetration pricing, a company can easily raise its price and maintain its market share.

Correct AnswerverifiedShow Answer

________ allowances are payments or price reductions that reward dealers for participating in advertising and sales support programs.

Correct AnswerverifiedShow Answer

Which of the following companies uses captive product pricing?

Correct AnswerverifiedShow Answer

Why is identifying predatory pricing difficult?

Correct AnswerverifiedSelling below cost to unload excess inve...View AnswerShow Answer

Constantly reduced prices can erode a brand's value in the eyes of customers.

Correct AnswerverifiedShow Answer

Which of the following is NOT true of public policies and pricing?

Correct AnswerverifiedShow Answer

What should the price steps of product line pricing take into account?

Correct AnswerverifiedThe price steps should take into account...View AnswerShow Answer

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

Correct AnswerverifiedShow Answer

Differentiate between dynamic and fixed pricing.

Correct AnswerverifiedThroughout most of history, prices were ...View AnswerShow Answer

By definition, ________ pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Using by-product pricing, Sensenig can s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Marketers use such pricing whe...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Selling below cost to unload excess inve...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The price steps should take into account...
View Answer

Correct Answer
verified

Correct Answer
verified
Throughout most of history, prices were ...
View Answer

Correct Answer
verified