Question 1

What are slotting allowances? Why do some marketers consider them unfair?

Accepted Answer

Slotting allowances are payments made by...

Question 2

Value-based pricing can be difficult to implement because

Accepted Answer

A)   the way consumers perceive value constantly changes.
B)   this method requires all costs be identified and calculated on a per-unit basis.
C)   value depends on variable costs and not fixed costs.
D)   everyday low pricing has neutralized the impact of price on consumers' purchase decisions.
E)   it is difficult to determine how competitors will price their products.

Question 3

Price advertisements should never

Accepted Answer

A)   include "puffery."
B)   deceive customers to the point of doing harm.
C)   include the MSRP.
D)   use advertising allowances to increase sales promotion.
E)   use price skimming after using price penetration.

Question 4

When Burroughs Wellcome introduced the first anti-AIDS drugs,it initially set the price at $10,000 for a year's supply.Burroughs Wellcome was probably pursuing a(n) __________ pricing strategy.

Accepted Answer

A)   skimming
B)   introductory
C)   slotting allowance
D)   market penetration
E)   cost-based

Question 5

Price skimming focuses on selling products to __________ and __________ in the consumer adoption process model.

Accepted Answer

A)   innovators; early adopters
B)   early adopters; the early majority
C)   the early majority; the late majority
D)   the late majority; laggards
E)   laggards; innovators

Question 6

When Apple Computer Company introduced the iPhone-a combination phone,MP3 player,and Internet access device-in 2007,it was priced at $499,considerably higher than either the iPod or competing cell phones.Hoping to attract innovators and early adopters,Apple was most likely pursuing a __________ pricing strategy.

Accepted Answer

A)   market penetration
B)   slotting allowance
C)   price fixing
D)   reference price
E)   price skimming

Question 7

Slotting allowances are used to get retailers to feature a manufacturer's product in their advertising and promotional efforts.

Accepted Answer

A) True 
 B)False

Question 8

B2B quantity discounts are legal if

Accepted Answer

A)   the discounts are available to all customers.
B)   they do not exceed 25 percent of the regular price.
C)   they are not short term.
D)   new customers can "buy up" to reach the minimum quantity.
E)   cumulative discounts do not run for more than a calendar year.

Question 9

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

Accepted Answer

In many markets,and particularly for new...

Question 10

Dan is especially price sensitive.He has been known to line up on "Black Friday" (the day after Thanksgiving) at 4 a.m.to be among the first to buy sale items.Dan would likely respond to a _______ pricing strategy.

Accepted Answer

A)   high / low
B)   premium
C)   price skimming
D)   slotting
E)   uniform

Question 11

The improvement value method and the cost of ownership method are both cost-based pricing methods.

Accepted Answer

A) True 
 B)False

Question 12

In determining the price of his company's new small-business accounting software,Raymond is assessing how much better his company's software is as compared to alternative products available in the market.Raymond is using _______ pricing.

Accepted Answer

A)   cost-based
B)   improvement value
C)   reference-based
D)   cost of ownership
E)   market-based

Question 13

Harry's Industrial Supply Company has always used cost-based pricing.Harry's son-in-law is joining the business and recommends they change.Harry enumerates the advantages of cost-based pricing,while his son-in-law points out the disadvantages.What will each of them say?

Accepted Answer

Harry will point out that cost-based pri...

Question 14

It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.

Accepted Answer

A)   the Better Business Bureau
B)   federal regulators
C)   the American Marketing Association
D)   marketers themselves
E)   industry standards boards

Question 15

A pricing tactic is

Accepted Answer

A)   a long-term and broad-based approach to pricing.
B)   an integrative pricing approach based on the five Cs.
C)   an approach that can be used only with consumers.
D)   a short-term approach that is often in response to a competitive threat.
E)   an approach that can be used only in a business-to-business setting.

Question 16

Marketers know that coupons might not result in a net increase in sales,yet they continue to issue them.Why do marketers continue to use coupons?

Accepted Answer

Marketers use coupons because they can i...

Question 17

What is the advantage to a business of price bundling? What is the advantage to a consumer?

Accepted Answer

A business may find this a useful tool t...

Question 18

At Ben's college,the local Dunkin' Donuts gives a 10 percent discount to students.Is this price discrimination? Why or why not?

Accepted Answer

When firms sell the same product to diff...

Question 19

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.

Accepted Answer

A)   pricing strategy
B)   reference price
C)   high / low strategy
D)   loss leader price
E)   pricing tactic

Question 20

Manufacturers use cash discounts primarily because it allows them to benefit from

Accepted Answer

A)   uniformed delivered pricing.
B)   seasonal slotting allowances.
C)   price skimming.
D)   the time value of money.
E)   high / low pricing.

Exam 15: Strategic Pricing Methods

What are slotting allowances? Why do some marketers consider them unfair?

Correct Answer
verified
Slotting allowances are payments made by...
View Answer

The improvement value method and the cost of ownership method are both cost-based pricing methods.

Correct Answer
verified

Price skimming focuses on selling products to and in the consumer adoption process model.

Correct Answer
verified

Harry's Industrial Supply Company has always used cost-based pricing.Harry's son-in-law is joining the business and recommends they change.Harry enumerates the advantages of cost-based pricing,while his son-in-law points out the disadvantages.What will each of them say?

Correct Answer
verified
Harry will point out that cost-based pri...
View Answer

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.

Correct Answer
verified

When Burroughs Wellcome introduced the first anti-AIDS drugs,it initially set the price at $10,000 for a year's supply.Burroughs Wellcome was probably pursuing a(n) __________ pricing strategy.

Correct Answer
verified

Dan is especially price sensitive.He has been known to line up on "Black Friday" (the day after Thanksgiving) at 4 a.m.to be among the first to buy sale items.Dan would likely respond to a _______ pricing strategy.

Correct Answer
verified

Correct Answer
verified

Price advertisements should never

Correct Answer
verified

A pricing tactic is

Correct Answer
verified

Marketers know that coupons might not result in a net increase in sales,yet they continue to issue them.Why do marketers continue to use coupons?

Correct Answer
verified
Marketers use coupons because they can i...
View Answer

What is the advantage to a business of price bundling? What is the advantage to a consumer?

Correct Answer
verified
A business may find this a useful tool t...
View Answer

Value-based pricing can be difficult to implement because

Correct Answer
verified

B2B quantity discounts are legal if

Correct Answer
verified

Manufacturers use cash discounts primarily because it allows them to benefit from

Correct Answer
verified

It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.

Correct Answer
verified

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

Correct Answer
verified
In many markets,and particularly for new...
View Answer

In determining the price of his company's new small-business accounting software,Raymond is assessing how much better his company's software is as compared to alternative products available in the market.Raymond is using _______ pricing.

Correct Answer
verified

Slotting allowances are used to get retailers to feature a manufacturer's product in their advertising and promotional efforts.

Correct Answer
verified

At Ben's college,the local Dunkin' Donuts gives a 10 percent discount to students.Is this price discrimination? Why or why not?

Correct Answer
verified
When firms sell the same product to diff...
View Answer

Exam 15: Strategic Pricing Methods

What are slotting allowances? Why do some marketers consider them unfair?

Correct AnswerverifiedSlotting allowances are payments made by...View AnswerShow Answer

The improvement value method and the cost of ownership method are both cost-based pricing methods.

Correct AnswerverifiedShow Answer

Price skimming focuses on selling products to __________ and __________ in the consumer adoption process model.

Correct AnswerverifiedShow Answer

Harry's Industrial Supply Company has always used cost-based pricing.Harry's son-in-law is joining the business and recommends they change.Harry enumerates the advantages of cost-based pricing,while his son-in-law points out the disadvantages.What will each of them say?

Correct AnswerverifiedHarry will point out that cost-based pri...View AnswerShow Answer

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.

Correct AnswerverifiedShow Answer

When Burroughs Wellcome introduced the first anti-AIDS drugs,it initially set the price at $10,000 for a year's supply.Burroughs Wellcome was probably pursuing a(n) __________ pricing strategy.

Correct AnswerverifiedShow Answer

Dan is especially price sensitive.He has been known to line up on "Black Friday" (the day after Thanksgiving) at 4 a.m.to be among the first to buy sale items.Dan would likely respond to a _______ pricing strategy.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Price advertisements should never

Correct AnswerverifiedShow Answer

A pricing tactic is

Correct AnswerverifiedShow Answer

Marketers know that coupons might not result in a net increase in sales,yet they continue to issue them.Why do marketers continue to use coupons?

Correct AnswerverifiedMarketers use coupons because they can i...View AnswerShow Answer

What is the advantage to a business of price bundling? What is the advantage to a consumer?

Correct AnswerverifiedA business may find this a useful tool t...View AnswerShow Answer

Value-based pricing can be difficult to implement because

Correct AnswerverifiedShow Answer

B2B quantity discounts are legal if

Correct AnswerverifiedShow Answer

Manufacturers use cash discounts primarily because it allows them to benefit from

Correct AnswerverifiedShow Answer

It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.

Correct AnswerverifiedShow Answer

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

Correct AnswerverifiedIn many markets,and particularly for new...View AnswerShow Answer

In determining the price of his company's new small-business accounting software,Raymond is assessing how much better his company's software is as compared to alternative products available in the market.Raymond is using _______ pricing.

Correct AnswerverifiedShow Answer

Slotting allowances are used to get retailers to feature a manufacturer's product in their advertising and promotional efforts.

Correct AnswerverifiedShow Answer

At Ben's college,the local Dunkin' Donuts gives a 10 percent discount to students.Is this price discrimination? Why or why not?

Correct AnswerverifiedWhen firms sell the same product to diff...View AnswerShow Answer

Correct Answer
verified
Slotting allowances are payments made by...
View Answer

Correct Answer
verified

Price skimming focuses on selling products to and in the consumer adoption process model.

Correct Answer
verified

Correct Answer
verified
Harry will point out that cost-based pri...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Marketers use coupons because they can i...
View Answer

Correct Answer
verified
A business may find this a useful tool t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In many markets,and particularly for new...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When firms sell the same product to diff...
View Answer