Question 1

Scenario 20.1 Use the following to answer the questions.Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands.
-Refer to Scenario 20.1. Given Ray-Ban's plan for positioning the new sunglass line, they should use a ____ strategy when introducing their new product.

Accepted Answer

A)  promotional
B)  penetration
C)  price-skimming
D)  reference
E)  secondary-market

Question 2

Marketers that evaluate competitors' prices do so to set their own prices slightly below those of competitors.

Accepted Answer

A) True 
 B)False

Question 3

The management at Allied Electronics is having difficulty in raising the introductory price on system components to cover the increased costs of producing the sensing devices for home security systems. Apparently, Allied used a(n)  ____ strategy in pricing these components.

Accepted Answer

A)  odd-even
B)  skimming
C)  lining
D)  penetration
E)  psychological

Question 4

The three primary bases for developing prices are

Accepted Answer

A)  profit, demand, and competition.
B)  supply, demand, and marketing objectives.
C)  demand, competition, and cost.
D)  markup, cost, and cost-plus.
E)  negotiation, periodicity, and randomness.

Question 5

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

Accepted Answer

A)  Markup
B)  Competition-based
C)  Cost-plus
D)  Demand-based
E)  Secondary-market

Question 6

Differential pricing means different buyers pay different prices for the same quality and quantity of product.

Accepted Answer

A) True 
 B)False

Question 7

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

Accepted Answer

A)  Reference pricing
B)  Odd-even pricing
C)  Customary pricing
D)  Prestige pricing
E)  Professional pricing

Question 8

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

Accepted Answer

A) True 
 B)False

Question 9

A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy.

Accepted Answer

A) True 
 B)False

Question 10

Markup is measured either as a percentage of ____ or a percentage of ____.

Accepted Answer

A)  selling price; cost
B)  cost; profit
C)  revenue; contribution margin
D)  resources used; cost
E)  demand; competition

Question 11

Bundle pricing may be perceived to be of value by customers because

Accepted Answer

A)  they always pay a lower price per item than they would have if they bought each item separately.
B)  they prefer buying a combination of bundled products in a single transaction, which saves time, effort, and perhaps money.
C)  the companies selling the products can sell them at a lower price because their costs of packaging are lower.
D)  they are purchasing complementary products, which is convenient for them.
E)  they can purchase items that are consumed frequently in larger quantities.

Question 12

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?

Accepted Answer

A)  Status quo
B)  Market share
C)  Survival
D)  Cash flow
E)  Return on investment

Question 13

Compare and contrast price skimming and penetration pricing.

Accepted Answer

Price skimming is the strategy of chargi...

Question 14

Under what conditions would a marketer most likely use a price leader strategy?

Accepted Answer

Sometimes a firm prices a few products b...

Question 15

Which of the following is a requirement for setting pricing objectives?

Accepted Answer

A)  The objectives should be short-term oriented.
B)  There should be only one pricing objective.
C)  An evaluation of competitors' prices should be made.
D)  The cost structure should be identified.
E)  The objectives should be explicitly stated.

Question 16

Describe, compare, and contrast the three major bases for setting prices.

Accepted Answer

The three major dimensions on which pric...

Question 17

Pricing objectives should be considered overall goals to aid the organization in its long-range plans.

Accepted Answer

A) True 
 B)False

Question 18

The newest version of a product like Bose headphones is likely to use _____, while the new version of Red Bull is likely to use _____ .

Accepted Answer

A)  penetration pricing; price skimming.
B)  price skimming; psychological pricing.
C)  psychological pricing; penetration pricing
D)  price skimming; penetration pricing
E)  price skimming; promotional pricing.

Question 19

Breyer's produces a variety of ice cream flavors and lines of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using ____ to price its ice cream.

Accepted Answer

A)  captive pricing
B)  price baiting
C)  premium pricing
D)  bait pricing
E)  differential pricing

Question 20

When establishing prices, a marketer's first step is to

Accepted Answer

A)  determine demand.
B)  develop pricing objectives.
C)  select a pricing policy.
D)  evaluate competitors' prices.
E)  determine a pricing method.

Exam 20: Setting Prices

Markup is measured either as a percentage of or a percentage of .

Correct Answer
verified

Correct Answer
verified

Compare and contrast price skimming and penetration pricing.

Correct Answer
verified
Price skimming is the strategy of chargi...
View Answer

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?

Correct Answer
verified

Which of the following is a requirement for setting pricing objectives?

Correct Answer
verified

Pricing objectives should be considered overall goals to aid the organization in its long-range plans.

Correct Answer
verified

When establishing prices, a marketer's first step is to

Correct Answer
verified

Breyer's produces a variety of ice cream flavors and lines of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using ____ to price its ice cream.

Correct Answer
verified

The newest version of a product like Bose headphones is likely to use _, while the new version of Red Bull is likely to use _ .

Correct Answer
verified

Under what conditions would a marketer most likely use a price leader strategy?

Correct Answer
verified
Sometimes a firm prices a few products b...
View Answer

Describe, compare, and contrast the three major bases for setting prices.

Correct Answer
verified
The three major dimensions on which pric...
View Answer

Differential pricing means different buyers pay different prices for the same quality and quantity of product.

Correct Answer
verified

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

Correct Answer
verified

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

Correct Answer
verified

The management at Allied Electronics is having difficulty in raising the introductory price on system components to cover the increased costs of producing the sensing devices for home security systems. Apparently, Allied used a(n) ____ strategy in pricing these components.

Correct Answer
verified

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

Correct Answer
verified

The three primary bases for developing prices are

Correct Answer
verified

A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy.

Correct Answer
verified

Bundle pricing may be perceived to be of value by customers because

Correct Answer
verified

Marketers that evaluate competitors' prices do so to set their own prices slightly below those of competitors.

Correct Answer
verified

Exam 20: Setting Prices

Markup is measured either as a percentage of ____ or a percentage of ____.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Compare and contrast price skimming and penetration pricing.

Correct AnswerverifiedPrice skimming is the strategy of chargi...View AnswerShow Answer

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?

Correct AnswerverifiedShow Answer

Which of the following is a requirement for setting pricing objectives?

Correct AnswerverifiedShow Answer

Pricing objectives should be considered overall goals to aid the organization in its long-range plans.

Correct AnswerverifiedShow Answer

When establishing prices, a marketer's first step is to

Correct AnswerverifiedShow Answer

Breyer's produces a variety of ice cream flavors and lines of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using ____ to price its ice cream.

Correct AnswerverifiedShow Answer

The newest version of a product like Bose headphones is likely to use _____, while the new version of Red Bull is likely to use _____ .

Correct AnswerverifiedShow Answer

Under what conditions would a marketer most likely use a price leader strategy?

Correct AnswerverifiedSometimes a firm prices a few products b...View AnswerShow Answer

Describe, compare, and contrast the three major bases for setting prices.

Correct AnswerverifiedThe three major dimensions on which pric...View AnswerShow Answer

Differential pricing means different buyers pay different prices for the same quality and quantity of product.

Correct AnswerverifiedShow Answer

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

Correct AnswerverifiedShow Answer

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

Correct AnswerverifiedShow Answer

The management at Allied Electronics is having difficulty in raising the introductory price on system components to cover the increased costs of producing the sensing devices for home security systems. Apparently, Allied used a(n) ____ strategy in pricing these components.

Correct AnswerverifiedShow Answer

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

Correct AnswerverifiedShow Answer

The three primary bases for developing prices are

Correct AnswerverifiedShow Answer

A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy.

Correct AnswerverifiedShow Answer

Bundle pricing may be perceived to be of value by customers because

Correct AnswerverifiedShow Answer

Marketers that evaluate competitors' prices do so to set their own prices slightly below those of competitors.

Correct AnswerverifiedShow Answer

Markup is measured either as a percentage of or a percentage of .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Price skimming is the strategy of chargi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The newest version of a product like Bose headphones is likely to use _, while the new version of Red Bull is likely to use _ .

Correct Answer
verified

Correct Answer
verified
Sometimes a firm prices a few products b...
View Answer

Correct Answer
verified
The three major dimensions on which pric...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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