Chap 09 test bank PDF

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) ________ is the sum of all the values that customers exchange for the benefits of having or using a product or service. A) Payroll B) Cost C) Salary D) Price E) Profit

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2) Costs that change directly with the level of production are referred to as ________ costs. A) capital B) payroll C) variable D) fixed E) target

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3) Salon Du Jour offers special combination packages at a reduced price. Separately, a haircut is $30 and a conditioning treatment is $35. But the combo price is $50. This is referred to as ________ pricing. A) product line B) optional-product C) by-product D) captive -product E) product bundle

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4) Los Amigos, a new Mexican restaurant, has set up shop across the street from Hot Tamales and More. Which of the following pricing strategies will Los Amigos likely use? A) break-even B) cost-plus C) good-value D) competition-based E) target costing

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5) Lovely Skin is establishing a pricing strategy for a new moisturizer. The total cost to produce each unit is $3.50. The company has decided to add a $1.50 markup, so the unit price to distributors will be $5. Lovely Skin is using a ________ approach to price the new moisturizer. A) value -added B) cost-plus C) good-value D) competitor-based E) break-even

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6) The Royal Ontario Museum has different admission prices for students, adults, and seniors. All three groups are entitled to the same services. This form of pricing is called ________ pricing. A) product form B) by-product C) location-based D) customer-segment E) time -based

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7) Which of the following sets the price floor lower limit for a product's pricing? A) elements of the product mix B) competition C) profits D) consumer perceptions of value E) product costs

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8) Retailers like Winners and Marshalls carry less -expensive versions of established brand name products or new lower-price lines. They have adopted a ________ pricing strategy. A) target return B) good-value C) market-skimming D) high-low E) cost-plus

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9) The first Canadian Tire store opened in 1922. Since the early 21st century, its strategy has been updated to capture a larger market share by offering lower everyday prices to attract a large number of buyers and win a large market share. This is referred to as ________. A) deceptive pricing B) value -added pricing C) market-penetration pricing D) market-skimming pricing E) target costing

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10) Vac "N" Sew, a consumer electronics outlet, offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine. This is an example of a ________. A) trade -in allowance B) seasonal discount C) cash discount D) by-product allowance E) functional discount

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11) How do firms that use captive -product pricing make up for the low prices of their main products? A) They provide the captive products as freebies. B) They set high markups on the captive products. C) They increase the price of the main products. D) They reduce the cost of the captive products. E) They offer the captive products and main products together at a reasonable price.

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12) ________ pricing involves setting prices based on the expenses involved in producing, distributing, and selling a product plus a fair rate of return for a company's effort and risk. A) Cost-based B) Demand-based C) Value -added D) Competition-based E) Good-value

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13) ________ pricing refers to selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business. A) Oligopolistic B) Zone C) Captive D) Dynamic E) Predatory

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14) NerdHerd Electronics sells three different sizes of televisions at three different prices. In this case, the company's pricing strategy is referred to as ________ pricing. A) captive -product B) product line C) by-product D) product bundle E) optional-product

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15) When establishing prices, it's important for a manager to understand that "good value" is not the same as ________. A) "low price" B) "bargain basement" C) "everyday value" D) "perceived value" E) "high price"

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16) In Canada, the Competition Act is a federal law that was created to curb the formation of ________. A) international markets B) oligopolies C) limited partnerships D) competitive markets E) monopolies

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17) Under ________, the market consists of a few large sellers who are highly sensitive to each other's pricing and marketing strategies. A) a pure monopoly B) pure competition C) pure monopsony D) oligopolistic competition E) monopolistic competition

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18) BC Place, home of the Vancouver Whitecaps FC charges different prices for seats in different areas of the stadium, even though each seat costs the same for the owners of the stadium. What is this form of pricing called? A) location-based pricing B) market-skimming pricing C) market-penetration pricing D) product-form pricing E) time -based pricing

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19) With each new generation of Apple iPhone, iPad, or Mac computer, new models start at a high price then work their way down as newer models are introduced. Apple initially uses a ________ strategy. A) market-penetration B) predatory C) target costing D) deceptive E) market-skimming

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20) Consumers rely less on price to judge the quality of a product when they ________. A) have prior experience with the product B) are unable to research the product C) are unable to judge the quality of the product D) lack information about the product E) rely on cues from sellers to differentiate a high or low price

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21) The Fashion Store, a new startup, sets product prices so that revenues will equal manufacturing and marketing costs. The pricing strategy used by the company is referred to as ________ pricing. A) value -added B) competition-based C) cost-plus D) good-value E) target return

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22) The relationship between the price charged for a product and the resulting demand level can be shown in a(n) ________. A) elastic demand slope B) break-even chart C) demand curve D) supply curve E) inelastic demand slope

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23) When Nabisco offers to cover half the cost of all local advertising for supermarkets that sell Oreo Cookies, the company is granting ________. A) promotional allowances B) cash discounts C) seasonal discounts D) trade -in allowances E) quantity discounts

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24) The National Tree Company offers resellers half-price reductions on artificial Christmas trees if they purchase them in July. This is an example of a ________. A) quantity discount B) trade -in allowance C) promotional allowance D) seasonal discount E) functional discount

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25) The Vitamin Shoppe sells natural vitamins and supplements. Product prices are adjusted frequently to meet the needs of individual customers. For example, long-time customers receive discounts. This strategy is most likely an example of ________ pricing. A) basing-point B) zone C) dynamic D) competition-based E) penetration

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26) When demand hardly changes with a small change in the price of a product, the demand for the product is best described as ________. A) flexible B) variable C) inelastic D) cyclical E) elastic

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27) ________ pricing is an approach whereby a firm tries to determine the price at which it will break even or earn the profit it is seeking. A) Competition-based B) Value -added C) Target return D) Good-value E) Cost-plus

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28) Which group is most likely offered functional discounts by manufacturers? A) consumers who buy products in large quantities B) buyers who pay their bills before the due date C) buyers who purchase merchandise out of season D) retailers that participate in advertising programs E) trade -channel members that perform sales tasks

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29) Computer World sells laptops separately from accessory products like docking stations, anti-virus software, and external hard drives. This is referred to as ________ pricing. A) by-product B) product line C) market-penetration D) optional-product E) product bundle

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30) Pricing a product based on consumers' reference prices is referred to as ________ pricing. A) captive -product B) allowance C) by-product D) geographical E) psychological

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31) Which of the following would most likely trigger a price increase? A) reduced expenses B) cheaper alternatives C) overproduction D) reduced demand E) cost inflation

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32) Rent, electricity, and executive salaries that do not vary with production or sales level are referred to as ________ costs. A) target B) break-even C) promotional D) fixed E) variable

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33) ________ is the only element in the marketing mix that produces revenue. A) Profit B) Promotion C) Price D) Product E) Place

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34) Establishing prices for razor blades that must be used with a razor blade system is known as ________ pricing. A) product bundle B) by-product C) product line D) captive -product E) market-penetration

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35) Radox, a luxury watch brand, identifies a market segment that is willing to pay premium prices for its watches, and Radox managers select an ideal selling price. Managers then determine the costs to create watches that meet the ideal selling price. The company's pricing approach is referred to as ________. A) mass production B) target return pricing C) value -added pricing D) target costing E) cost-plus pricing

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36) Which of the following sets the price ceiling for a product's pricing? A) elements of the product mix B) product costs C) profits D) consumer perceptions of value E) competition

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37) Penny Bank, a discount store, is highly competitive. When entering a new market, Penny Bank often cuts prices so deeply that it sells below costs, effectively pushing smaller retail stores with less purchasing power out of the market. In this case, Penny Bank is using ________. A) predatory pricing B) market skimming C) deceptive pricing D) cost-plus pricing E) psychological pricing

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38) Which of the following pricing strategies is the opposite of FOB-origin pricing? A) basing-point pricing B) freight-absorption pricing C) uniform-delivered pricing D) dynamic pricing E) zone pricing

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39) ________ costs refer to the sum of the fixed and variable costs for any given level of production. A) Value -based B) Marginal C) Target D) Total E) Break -even

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40) Movie theaters charge matinee pricing during the daytime, and resorts give weekend and seasonal discounts. This is illustrative of a ________ pricing strategy. A) market-penetration B) value -added C) time -based D) market-skimming E) product form

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41) Rakuten is an example of an e-commerce platform. They refer you to a particular store and the company receives commission if you purchase through their website, which they pass on to you. This is a newer example of a company offering a ________. A) functional discount B) flash sale C) quantity discount D) promotional allowance E) cash rebate

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42) Each PC produced by HP involves a cost of computer chips, wires, plastic, packaging, and other inputs. Although these costs tend to be the same for each unit produced, they are called ________ costs because the total changes based on the number of units produced. A) capital B) payroll C) fixed D) target E) variable

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43) ________ uses buyers' perceptions of what a product is worth as the key to pricing. A) Competition-based pricing B) Target return pricing C) Psychological pricing D) Customer value -based pricing E) Cost-plus pricing

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44) What type of pricing is being used when a company temporarily prices its products below the list price to create buying excitement and urgency? A) psychological pricing B) geographical pricing C) segmented pricing D) dynamic pricing E) promotional pricing

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45) Which of the following conditions is most likely essential for implementing a successful market-penetration pricing strategy for a product? A) The product's quality supports its high price. B) Prices increase incrementally as sales volume increases. C) Alternative products can enter the market easily. D) The market for the product is highly price sensitive. E) Production costs rise with an increase in marketing efforts.

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46) Computer Works is a computer accessories manufacturer based in Brazil. All customers in South America pay the same freight charge, $20, when they order products from the company. All customers in North America pay a freight charge of $50. The company's pricing strategy is referred to as ________ pricing. A) freight-absorption B) FOB-origin C) zone D) uniform -delivered E) basing-point

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47) A ________ pricing strategy for an offering begins with an assessment of customer needs and perceptions. Then a target price is set based on customer perceptions of worth. A) value -based B) cost-based C) value -added D) target costing E) competition-based

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48) Wilkinson & Company sells plumbing supplies across Canada. Wilkinson uses Winnipeg as its central location for determining freight costs regardless of the city from which products are actually shipped. For example, a Vancouver customer pays the freight cost from Winnipeg to Vancouver even if the goods are shipped from Calgary. Wilkinson most likely uses ________ pricing. A) freight-absorption B) reference C) FOB-origin D) basing-point E) zone

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49) Under ________, the market consists of many buyers and sellers trading over a range of prices rather than a single market price. A) a pure monopoly B) monopolistic competition C) pure competition D) a pure monopsony E) oligopolistic competition

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50) In ________, the market consists of many buyers and sellers trading in a uniform commodity, such as wheat, copper, or financial securities. A) oligopolistic competition B) a pure monopsony C) monopolistic competition D) pure competition E) a pure monopoly

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51) Posh Collections introduced a new watch to appeal to upscale consumers. The company will most likely use a(n) ________ strategy. A) market-skimming pricing B) market-penetration pricing C) allowance pricing D) by-product pricing E) optional-product pricing

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52) Providing extra amenities to differentiate and support high-priced products is referred to as ________ pricing. A) cost-plus B) everyday low C) high-low D) target return E) value -added

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53) Which of the following conditions is most likely essential for implementing a successful market-skimming pricing strategy for a product? A) Low prices promote more market growth than high prices. B) The product's quality and image must support its high price. C) A low-price position of the product is maintained. D) Lower -priced alternatives can enter the market easily. E) The product's price matches its manufacturing costs.

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54) Netcorp, an Internet service provider, charges its users a fixed rental fee for its basic package, which has a download limit. If a user exceeds this download limit, an additional fee is charged for every download. In this case, the firm's pricing strategy is referred to as ________ pricing. A) by-product B) promotional C) optional-product D) two -part E) segmented

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55) Which of the following pricing strategies charges the same price plus freight to all customers, regardless of their location? A) basing-point pricing B) zone pricing C) FOB-origin pricing D) freight-absorption pricing E) uniform -delivered pricing

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56) There are more than 200 wild blueberry producers in Nova Scotia. An individual farmer cannot charge more than the going market price per unit without the risk of losing business to the other farmers. This is an example of ________. A) monopolistic competition B) pure competition C) oligopolistic competition D) a black market E) a pure monopoly

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57) ________ pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers. A) Deceptive B) Cost-plus C) Psychological D) Allowance E) Predatory

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58) Which of the following is an economic factor that affects the pricing decisions of a company? A) reseller policies B) interest rates C) market-penetration practices D) top management decisions E) promotional activities

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59) Which of the following statements about break-even analysis is most likely true? A) It fails to consider customer value and the relationship between price and demand. B) It is used to determine the maximum price that can be set on a product. C) It is a tool used to calculate fixed costs. D) It determines how customer-perceived value changes with value -added pricing. E) It is a tool marketers use to examine the relationship between supply and demand.

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60) ________ prices are carried in buyers' minds and used when looking at a given product. A) Reference B) Geographical C) Dynamic D) Captive -product E) Promotional

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TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 61) Break -even pricing involves setting prices based on competitors' strategies, costs, prices, and market offerings.

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62) Universal Appliance prices its refrigerators at five distinct price levels based on finish, style, capacity, and features. They range from $799 to $9,500. This is an illustration of price steps.

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63) If consumers perceive less value relative to competing products, a company should attempt to change customer perceptions to justify a higher price.

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64) Pricing strategies usually remain the same as a product passes through its life cycle.

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65) Price bundling promotes the sales of products consumers might not otherwise buy, but the combined price must be low enough to get them to buy the bundle.

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66) Captive -product pricing refers to setting prices across an entire product line.

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67) Federal legislation on price -fixing states that sellers must set prices after talking to customers and competitors.

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68) The St. Jacobs Farmers' Market in Woolwich Ontario features many vendors often selling the same produce. On any Saturday in the early autumn, 20 or more apple vendors are present. This is an example of an oligopoly.

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69) Under oligopolistic competition, the market consists of only a few large sellers.

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70) A firm considering a price change must worry about the reactions of its competitors as well as those of its customers.

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71) Freight-absorption pricing is used for market skimming and holding on to monopolistic markets.

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72) Unlike the other marketing mix elements, price plays a minor role in creating customer value and build...