Reference no: EM132214498

1. A local eye doctor is seeking to expand its practice and entice new customers to visit for their annual eye exam and purchase glasses or contacts if prescribed. The office is offering 2 pairs of glasses for $69 with the goal of attracting a large number of new patients. What type of pricing objective is utilized by the office??

a. ?meeting competition

b. ?volume

c. ?profitability

d. ?prestige

2. A manufacturer of tablet computers has designed a unique new product that can network with satellites to access streaming video and television channels. This device does not need a Wi-Fi connection and can be accessed anywhere in the world by logging onto the site. Besides serving as a portable computer, this device bypasses the need for a consumer to purchase cable or personal satellite dish access. Which approach to pricing makes the most sense for the company to use first?

?a. ?set the price extremely high until competing products are developed

b. ?set the price extremely low in order for consumers to purchase it without needing a coupon

c. ?set the price to match the manufacturing of the device under a private label

d. ?set the price to match other computer and television devices sold by competitors

e. ?set the price extremely low in order to capture more of the current market share

3. A newly opened seafood restaurant advertises various deals on meal packages and special prices on dinner packages to attract customers. This is an example of _____ pricing.

a. promotional

b. competitive

c. list

d. leader

4. A promotional allowance is an incentive offered by manufacturers to retailers to:

a. refund the shipping costs paid by the retailer for home-delivery of products.

b. reward a retailer for not advertising a product below a certain price.

c. return a certain amount spent by the retailers on advertising and providing sales support.

d. provide one-time reductions in the list price of products for purchasers of large quantities.

5. A skimming pricing strategy is more commonly used by firms to:

a. set stable wholesale prices that undercut offers competitors make to retailers.

b. set a relatively low price for a product when they enter new markets characterized by dozens of competing brands.

c. reduce the raised prices of products to the original level.

d. set a market-entry price for distinctive goods or services with little or no initial competition.

6. ADS stores, a supermarket chain, receives discounts from its suppliers for the bulk purchases of the merchandise at its stores. This is an example of a _____ discount.

a. quantity

b. trade

c. cash

d. functional

7. Burlan Paints, manufacturer of paints for both interiors and exteriors, prices its products differently in various international markets to suit the requirements of local customers. Burlan Paints is implementing the _____ pricing strategy for pricing products.

a. dual

b. market-differentiated

c. standard

d. zone

8. Firms that adopt volume objectives believe that:

a. companies should offer huge discounts even at the cost of running into losses with their products.

b. companies should focus on maximizing profits rather than maximizing sales.

c. companies should continue to expand sales as long as their total profits do not drop below a specified minimum return.

d. companies should focus on the image and prestige associated with their products.

9. Jennifer is looking for a wedding present for her fiance and is considering buying him a watch. She likes luxury items and is willing to spend between $4,000 and $10,000 on the gift. She visits several jewelry stores and realizes that the prices are the same for Rolex and Philippe Patek brand watches and each store tells her these brands are never discounted. What type of pricing objective is utilized by Rolex and Philippe Patek??

a. ?prestige

b. ?volume

c. ?profit

d. ?meeting competitors

10. Komatsu is a global firm known for its earth moving equipment utilized in construction. Since its products are sold around the globe, Komatsu has developed a unique approach to pricing where prices are set according to the market conditions within each geographic region. For example, an excavator might be significantly less expensive in India than in the United States in order to reflect the local marketplace conditions. What type of pricing strategy is Komatsu utilizing??

a. ?dual pricing

b. ?market-differentiated pricing

c. ?standard worldwide pricing

d. ?competitive pricing

11. Online marketers run the risk of cannibalization when they:

a. differently price the same products sold in their retail outlets to be sold online.

b. compete with off-price houses on the Internet.

c. construct new stores alongside their websites.

d. hold on to tradition in the face of new technology.

12. Paisley Lane Soaps recently contracted with a chain of grocery stores to provide organic bar soap to the chain. These volume orders are the company's first commercial venture as they have primarily sold directly to consumers. Typically, Paisley Lane Soaps charges $6 per bar of soap but has contracted with the grocery store chain for $3.50 per bar. In addition, Paisley Lane Soaps has negotiated a 2% discount on the order if the grocery store chain pays in full within 10 days of product delivery. This practice is called: ?

a. ?trade discounts

b. ?promotional allowances

c. ?noncumulative quantity discounts

d. ?cash discounts

13. Penetration pricing works best for goods or services:

a. that involve high production and operational costs.

b. that offer a unique advantage over competitors’ brands.

c. that face little or no competition in the market place.

d. that are characterized by highly elastic demand.

14. Psychological pricing is based on the premise that:

a. one-price policies appeal to most people and suit mass-marketing programs.

b. setting a limited number of prices for a selection of merchandise has a certain appeal.

c. lower-than-normal prices as part of recurring marketing initiatives creates demand.

d. certain prices or price ranges make products more appealing to buyers than others.

15. The Robinson-Patman Act specifically prohibits:

a. price discrimination in sales to wholesalers, retailers, and other producers.

b. imposing taxes on the products that are being exported to other countries.

c. charging the same price to everyone for everything you sell.

d. earning excess profits, that is, more than the average for an industry.

16. The breakeven point is the point at which:

a. marginal cost runs above the marginal revenue curve.

b. total revenue from sales equals total cost.

c. revenue from sales equals the variable cost of the product.

d. the supply curve intersects the demand curve.

17. Under which of the following conditions is a product most likely to have an elastic demand?

a. A large portion of a person’s budget is spent on the product.

b. The fixed costs associated with producing the product are higher than the variable costs associated with it.

c. The marginal cost of producing the product is equal to its marginal revenue.

d. Consumers can easily find close substitutes for the product.

18. Which of the following is employed by theatrical productions when they charge higher prices for their weekend shows than for the shows on weekdays even though the cost of producing the show remains the same on all days?

a. Incremental pricing

b. Yield management

c. Marginal pricing

d. Modified breakeven analysis

19. Which of the following products would most likely have an inelastic demand curve??

a. ?pencils

b. paper towels?

c. ?HP genuine ink for an HP printer

d. ?photocopier paper

20. You are head of sales and marketing for your cowboy boots manufacturing firm. It has been a chaotic product year, with a great deal of input from many stakeholders: consumer advocacy groups, employees, competitors, and shareholders. You are meeting with the CEO to establish pricing objectives for the upcoming product year.

?Required:

Which of the following factors will you consider as you establish your firm’s pricing objectives?

a. ?consumer advocacy groups’ concerns

b. ?competitors’ complaints

c. ?dissident shareholders’ complaints

d. ?sales reps’ compensation packages

e. ?the firm’s survival