14 Aug 1) A company sets not a single price, but rather a ________ that covers differen

1)
A company sets not a single price, but rather a ________ that covers different
items in its line that change over time as products move through their life
cycles.
A)
pricing by-product
B)
pricing structure
C)
pricing loop
D)
pricing cycle
E)
pricing bundle

2)
Companies facing the challenge of setting prices for the first time can choose
between two broad strategies: market-penetration pricing and ________.
A)
market-level pricing
B)
market-competitive pricing
C)
market-skimming pricing
D)
market-price lining
E)
market-price filling
1

3)
Of the following, which statement would NOT support a market-skimming policy
for a new product?
A)
The product’s quality and image support its higher price.
B)
Enough buyers want the products at that price.
C)
Competitors are not able to undercut the high price.
D)
Competitors can enter the market easily.
E)
C and D
4)
HiPoint Telephone Company uses two-part pricing for its long-distance call
charges. Because this is a service, the price is broken into a fixed rate plus
a ________.
A)
fixed rate usage
B)
variable usage rate
C)
standard usage rate
D)
market usage rate
E)
none of the above
5)
Companies involved in deciding which items to include in the base price and
which to offer as options are engaged in ________ pricing.
A)
product bundle
B)
optional-product
C)
captive-product
D)
by-product
E)
skimming

6)
Keeping in mind that a seller must sell by-products at a price that covers more
than the cost of storing and delivering them, which of the following will
by-product pricing permit a seller to do?
A)
increase the main product’s price
B)
make extra profit
C)
reduce the main product’s price
D)
none of the above
E)
B and C

7)
With product bundle pricing, sellers can combine several products and offer the
bundle ________.
A)
as a working unit
B)
at a reduced price
C)
as a complete self-service package
D)
as a reward to loyal customers
E)
as segmented pricing

8)
What is a major advantage of product bundle pricing?
A)
It can promote the sales of products consumers might not otherwise buy.
B)
It offers consumers more value for the money.
C)
It combines the benefits of the other pricing strategies.
D)
It provides a more complete product experience for consumers.
E)
All of the above.

9)
Which of the following is NOT a price adjustment strategy?
A)
segmented pricing
B) promotional pricing
C) free samples
D) geographical pricing
E) seasonal pricing

10) Service Industries, Inc., plans to
offer a price-adjustment strategy in the near future. They could consider each
of the following EXCEPT ________.
A)
discount and allowance pricing
B)
segmented pricing
C)
physiological pricing
D)
promotional pricing
E)
location pricing
11) Consumer use price less to judge the
quality of a product when they ________.
A)
lack information
B)
lack skills to use the product
C)
have experience with the product
D)
are shopping for a specialty item
E)
cannot physically examine the product
12) Michael and John both own leather
jackets and are currently shopping for two new ones. They both have prices in
mind and refer to them when shopping. These prices are termed ________.
A)
psychological prices
B)
reference prices
C)
comparison prices
D)
price points
E)
skimmed prices

13) Which of the following refers to the
prices that a buyer carries in his or her mind and refers to when looking at a
given product?
A)
target prices
B)
reference prices
C)
promotional prices
D)
geographical prices
E)
dynamic prices
14) Price escalation in international
markets may result from four of these five marketing conditions. Which one will
have the LEAST effect?
A)
the additional cost of physical distribution
B)
exchange-rate fluctuations
C)
market stability
D)
higher costs of selling
E)
language barriers

15) There are many reasons why a firm
might consider cutting its price. All of the following are among them EXCEPT
________.
A)
excess capacity
B)
falling demand in the face of strong price competition
C)
a drive to dominate the market through lower costs
D)
monopolistic competition
E)
a drive to gain market share and cut costs through volume

16) Which of the following is a reason for
a company to raise its prices?
A)
to address the issue of overdemand for a product
B)
to win a larger share of the market
C)
to use excess capacity
D)
to boost sales volume
E)
to balance out decreasing costs

17) Which of the following is a major
factor that influence price increases?
A)
cost inflation
B)
surplus of raw materials
C)
government intervention
D)
foreign competition
E)
B and C
18) Competitors are most likely to react
to a price change when ________.
A)
the number of firms involved is small
B)
the purchase is uniform
C)
the buyers are not well informed
D)
A and B
E)
all of the above
19) Price discrimination is legal under
which of the following conditions?
A)
when a manufacturer and reseller have agreed upon a specified retail price for
a product
B)
when a manufacturer sells to retailers in different markets
C)
when a seller can prove its costs are different when selling to different
retailers
D)
when a seller advertises prices that are not actually available to consumers
E)
when a seller has not communicated with competitors before announcing prices

20) Price discrimination may be used to
match competition as long as the strategy is temporary, localized, and
________.
A)
defensive
B)
offensive
C)
published
D)
private
E)
used in all channels

21) 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.
22) When using product bundle pricing,
sellers combine several of their products and offer the bundle at an increased
price for increased profit.

23) Most companies adjust their basic
prices to account for various customer differences and changing situations.
24) A seasonal discount is a price
reduction to buyers who buy merchandise or services while they are in season.

25) Manufacturers may offer functional
discounts within trade channels for channel members who store inventory.

26) The basic difference between
customer-segment pricing and product-form pricing is that the latter offers
alternative versions of the product that are priced differently but not
according to differences in their costs.

27) Segmented pricing is known by other
names; two of the most common are revenue management and yield management.
28) A company considering a price change
should be more concerned about consumers’ reactions than competitors’
reactions.

29) Your company may respond to a
competitor’s price reduction by launching a low-price fighting brand. This is
likely necessary if the particular market segment being lost is price sensitive
and will not respond to arguments of higher quality.
30) State and federal governments accept
some reasons for price-fixing when it does not limit competition.1)
A company sets not a single price, but rather a ________ that covers different
items in its line that change over time as products move through their life
cycles.A)
pricing by-productB)
pricing structureC)
pricing loopD)
pricing cycleE)
pricing bundle2)
Companies facing the challenge of setting prices for the first time can choose
between two broad strategies: market-penetration pricing and ________.A)
market-level pricingB)
market-competitive pricingC)
market-skimming pricingD)
market-price liningE)
market-price filling13)
Of the following, which statement would NOT support a market-skimming policy
for a new product?A)
The product’s quality and image support its higher price.B)
Enough buyers want the products at that price.C)
Competitors are not able to undercut the high price.D)
Competitors can enter the market easily.E)
C and D4)
HiPoint Telephone Company uses two-part pricing for its long-distance call
charges. Because this is a service, the price is broken into a fixed rate plus
a ________.A)
fixed rate usageB)
variable usage rateC)
standard usage rateD)
market usage rateE)
none of the above5)
Companies involved in deciding which items to include in the base price and
which to offer as options are engaged in ________ pricing.A)
product bundleB)
optional-productC)
captive-productD)
by-productE)
skimming6)
Keeping in mind that a seller must sell by-products at a price that covers more
than the cost of storing and delivering them, which of the following will
by-product pricing permit a seller to do?A)
increase the main product’s priceB)
make extra profitC)
reduce the main product’s priceD)
none of the aboveE)
B and C7)
With product bundle pricing, sellers can combine several products and offer the
bundle ________.A)
as a working unitB)
at a reduced priceC)
as a complete self-service packageD)
as a reward to loyal customersE)
as segmented pricing8)
What is a major advantage of product bundle pricing?A)
It can promote the sales of products consumers might not otherwise buy.B)
It offers consumers more value for the money.C)
It combines the benefits of the other pricing strategies.D)
It provides a more complete product experience for consumers.E)
All of the above.9)
Which of the following is NOT a price adjustment strategy?A)
segmented pricingB) promotional pricingC) free samplesD) geographical pricingE) seasonal pricing10) Service Industries, Inc., plans to
offer a price-adjustment strategy in the near future. They could consider each
of the following EXCEPT ________.A)
discount and allowance pricingB)
segmented pricingC)
physiological pricingD)
promotional pricingE)
location pricing11) Consumer use price less to judge the
quality of a product when they ________.A)
lack informationB)
lack skills to use the productC)
have experience with the productD)
are shopping for a specialty itemE)
cannot physically examine the product12) Michael and John both own leather
jackets and are currently shopping for two new ones. They both have prices in
mind and refer to them when shopping. These prices are termed ________.A)
psychological pricesB)
reference pricesC)
comparison pricesD)
price pointsE)
skimmed prices13) Which of the following refers to the
prices that a buyer carries in his or her mind and refers to when looking at a
given product?A)
target pricesB)
reference pricesC)
promotional pricesD)
geographical pricesE)
dynamic prices14) Price escalation in international
markets may result from four of these five marketing conditions. Which one will
have the LEAST effect?A)
the additional cost of physical distributionB)
exchange-rate fluctuationsC)
market stabilityD)
higher costs of sellingE)
language barriers15) There are many reasons why a firm
might consider cutting its price. All of the following are among them EXCEPT
________.A)
excess capacityB)
falling demand in the face of strong price competitionC)
a drive to dominate the market through lower costsD)
monopolistic competitionE)
a drive to gain market share and cut costs through volume16) Which of the following is a reason for
a company to raise its prices?A)
to address the issue of overdemand for a productB)
to win a larger share of the marketC)
to use excess capacityD)
to boost sales volumeE)
to balance out decreasing costs 17) Which of the following is a major
factor that influence price increases?A)
cost inflationB)
surplus of raw materialsC)
government interventionD)
foreign competitionE)
B and C18) Competitors are most likely to react
to a price change when ________.A)
the number of firms involved is smallB)
the purchase is uniformC)
the buyers are not well informedD)
A and BE)
all of the above19) Price discrimination is legal under
which of the following conditions?A)
when a manufacturer and reseller have agreed upon a specified retail price for
a productB)
when a manufacturer sells to retailers in different marketsC)
when a seller can prove its costs are different when selling to different
retailersD)
when a seller advertises prices that are not actually available to consumersE)
when a seller has not communicated with competitors before announcing prices20) Price discrimination may be used to
match competition as long as the strategy is temporary, localized, and
________.A)
defensiveB)
offensiveC)
publishedD)
privateE)
used in all channels21) 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.22) When using product bundle pricing,
sellers combine several of their products and offer the bundle at an increased
price for increased profit.23) Most companies adjust their basic
prices to account for various customer differences and changing situations.24) A seasonal discount is a price
reduction to buyers who buy merchandise or services while they are in season.25) Manufacturers may offer functional
discounts within trade channels for channel members who store inventory.26) The basic difference between
customer-segment pricing and product-form pricing is that the latter offers
alternative versions of the product that are priced differently but not
according to differences in their costs.27) Segmented pricing is known by other
names; two of the most common are revenue management and yield management.28) A company considering a price change
should be more concerned about consumers’ reactions than competitors’
reactions. 29) Your company may respond to a
competitor’s price reduction by launching a low-price fighting brand. This is
likely necessary if the particular market segment being lost is price sensitive
and will not respond to arguments of higher quality.30) State and federal governments accept
some reasons for price-fixing when it does not limit competition.

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