Question 1

There are a lot of talented people.Many singers who have not been discovered are as talented or more so than some of the best-known musical artists.For instance, pricing a musical act at $20,000 when a small community arts center can get just as great an entertainment experience for its audience for $5,000 is an example of:
A)price lining
B)snob pricing
C)prestige pricing
D)over-value pricing
E)demand-based pricing

Accepted Answer

Prestige pricing refers to setting a high price to convey the idea of exclusivity or superior quality, which can attract customers even when lower-priced alternatives offer a similar value. In this scenario, pricing a musical act at $20,000, despite the availability of equally talented acts for $5,000, is an example of using a high price to suggest a higher level of prestige or quality.

Question 2

_____ occurs when no money is involved in the exchange of goods or services.
A)Image pricing
B)Negotiated pricing
C)Gray marketing
D)Bartering
E)Black marketing

Accepted Answer

Bartering is the exchange of goods or services between parties without the use of money.

Question 3

A strategy of charging a high introductory price for a new product that invites eventual competition is called price:
A)escalation
B)kiting
C)skimming
D)penetration
E)enhancement

Accepted Answer

Price skimming involves setting a high price for a new product to skim maximum revenues layer by layer from segments willing to pay the high price. It makes sense when a product is novel and the market is less price sensitive.

Question 4

The two new-product pricing strategies most often used by marketers are:
A)value pricing and cost-plus pricing
B)targeted return pricing and profit maximization pricing
C)psychological pricing and physiological pricing
D)price skimming and penetration pricing
E)price shaving and price grooming

Accepted Answer

Price skimming involves setting a high price before other competitors come into the market. Penetration pricing involves setting a low price to enter a competitive market and gain market share quickly.

Question 5

Price is:
A)always expressed in the United States in dollars and cents
B)based on the expected value you will receive from your purchase
C)based on the actual perception you will receive from your product
D)also called revenue
E)accurately described by none of the above

Accepted Answer

Price is often based on the expected value a consumer perceives they will receive from a purchase, which influences their willingness to pay.

Question 6

With a _____ policy, a company offers new products at a low price in the hope of achieving a large sales volume.
A)price skimming
B)penetration pricing
C)market share pricing
D)limited value pricing
E)low-ball pricing

Accepted Answer

Penetration pricing is the strategy where a company introduces a new product at a low price to gain a large market share quickly. This approach is used to attract customers and establish a foothold in the market.

Question 7

The Springwood Inn offers a package of room, breakfast, and parking for $225.00.This strategy is called:
A)combining
B)grouping
C)bundling
D)aggregated pricing
E)psychological pricing

Accepted Answer

This strategy is called "bundling," where multiple products or services are packaged together and sold for a single price. In this case, the room, breakfast, and parking are bundled together.

Question 8

_____ pricing is the strategy of increasing the price of a product so that consumers will perceive it being of higher value.
A)Psychological
B)Leader
C)Bait
D)Prestige
E)Specialty

Accepted Answer

Prestige pricing is the strategy where prices are set higher than normal because the higher price is thought to indicate higher value or quality, appealing to consumers' perceptions of prestige or luxury.

Question 9

The pricing strategy of marking products below normal markup or even below cost to attract customers to a store where they would not otherwise shop is called _____ pricing.
A)economy
B)rebate
C)leader
D)skimming
E)psychological

Accepted Answer

Leader pricing is a strategy where products are sold at a low price to draw customers into the store, with the hope that they will purchase other items at regular prices.

Question 10

Pricing a product at $399.99 instead of $400 to make the customer view the price as in the $300 range instead of the $400 range is an example of:
A)price lining
B)deception pricing
C)minimized pricing
D)red-line pricing
E)psychological pricing

Accepted Answer

This is an example of psychological pricing, a strategy that leverages human psychology to encourage purchases. Pricing a product at $399.99 instead of $400 makes it seem cheaper to customers, as they perceive it to be in the $300 range, thus making it more appealing.

Question 11

Jay Pontiac, an auto dealer, wanted to develop a service reminder program in the form of brochures that could be sent to individual customers.On the cover of each individualized brochure was an image of the customer's vehicle, the customer's name, and vehicle model name.Inside was the vehicle's estimated current mileage at the time of the mailing.Recommended services for that vehicle based on the estimated mileage were also included.Detailed service information was provided in the service history section of the brochure.On the back of the brochure were four coupons directly related to the service recommendations.Jay Pontiac used:
A)macromarketing
B)mass production
C)one-to-one marketing
D)aggregated marketing
E)a decision support management system

Accepted Answer

Jay Pontiac used one-to-one marketing by personalizing the brochures for each customer, including specific details like the customer's name, vehicle model, estimated current mileage, and recommended services based on that mileage. This approach targets individual customers directly, making it a clear example of one-to-one marketing.

Question 12

The craft store marked skeins of embroidery thread down to a quarter apiece to attract more customers into the store.This was below the store's cost.The skeins of thread was intended to be a _____ to increase store traffic:
A)markdown
B)loss leader
C)differentiated product
D)bargain leader
E)customer-targeted product

Accepted Answer

A loss leader is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. In this case, selling skeins of embroidery thread below cost to increase store traffic is a classic example of a loss leader strategy.

Question 13

Which of the following products would be correctly described as being in the decline stage of their product life cycle?
A)candles
B)exercise equipment
C)golfing magazines
D)manual typewriters
E)fire extinguishers

Accepted Answer

Manual typewriters are in the decline stage as they have been largely replaced by modern technology like computers and digital devices.

Question 14

______ is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges.

Accepted Answer

The answer of ______ is the process of planning and...

Question 15

When Gene O'Hare went online to plan his vacation to Australia, he learned that he could buy plane tickets, rent a car, and pay for a hotel in a reduced-price tourist package, which made it very convenient for him to book his trip.The Web site O'Hare visited used _____ to make trip planning easier and more economical.
A)price structuring
B)price grouping
C)bundling
D)aggregated pricing
E)psychological pricing

Accepted Answer

Bundling is the practice of offering multiple products or services together as a package deal, often at a reduced price, which is what the website offered to Gene O'Hare for his trip planning.

Question 16

When Top-Flite introduced its Strata golf balls with a new design for better flight with hit by metal clubs, it charged three times the price of golf balls currently on the market.This high introductory pricing is an example of:
A)price skimming
B)penetration pricing
C)market share pricing
D)limited value pricing
E)low-ball pricing

Accepted Answer

Price skimming involves setting a high price when a product is introduced to the market to maximize profits from segments willing to pay the high price, before adjusting the price to attract more price-sensitive customers. Top-Flite's strategy of charging three times the price of current golf balls fits this description.

Question 17

The Library is a new bar in town.Unlike the other bars in town, it charges no cover charge.The new bar has also priced its beer at $3 less per pitcher than its competition.Given what you know about pricing strategies, which pricing strategy is the owner of the new bar using?
A)price skimming
B)penetration pricing
C)market share pricing
D)limited value pricing
E)low-ball pricing

Accepted Answer

The owner is using penetration pricing by setting lower prices than competitors to attract customers and gain market share. Charging no cover charge and pricing beer at $3 less per pitcher than the competition are strategies to penetrate the market by offering more attractive prices to consumers.

Question 18

_____ involves creating a unique marketing mix for every consumer.
A)Niche marketing
B)One-to-one marketing
C)Aggregated marketing
D)Macromarketing
E)Flexible marketing

Accepted Answer

One-to-one marketing involves tailoring a product or service to each individual customer's preferences, essentially creating a unique marketing mix for every consumer.

Question 19

An _____ takes place when the consumer trades money for desired goods and services.

Accepted Answer

The answer of An _____ takes place when the consumer...

Question 20

Chewy candy manufacturers are coming out with more true-to-fruit flavors, with some companies even fortifying their confections with vitamin C to make them more fruit-like.From this information, you can surmise that the chewy candy industry is in the _____ stage of the product life cycle.
A)introduction
B)development
C)maturity
D)growth
E)decline

Accepted Answer

The introduction of more true-to-fruit flavors and fortification with vitamin C to make chewy candies more fruit-like indicates that manufacturers are trying to differentiate their products and add value to retain or grow their market share. This is characteristic of the maturity stage of the product life cycle, where growth has slowed, and companies focus on differentiation and value addition to compete.

Quiz 11: Creating Products and Pricing Strategies to Meet Customers Needs

_____ occurs when no money is involved in the exchange of goods or services.

A strategy of charging a high introductory price for a new product that invites eventual competition is called price:

The two new-product pricing strategies most often used by marketers are:

Price is:

With a _____ policy, a company offers new products at a low price in the hope of achieving a large sales volume.

The Springwood Inn offers a package of room, breakfast, and parking for $225.00.This strategy is called:

_____ pricing is the strategy of increasing the price of a product so that consumers will perceive it being of higher value.

The pricing strategy of marking products below normal markup or even below cost to attract customers to a store where they would not otherwise shop is called _____ pricing.

Pricing a product at $399.99 instead of $400 to make the customer view the price as in the $300 range instead of the $400 range is an example of:

The craft store marked skeins of embroidery thread down to a quarter apiece to attract more customers into the store.This was below the store's cost.The skeins of thread was intended to be a _____ to increase store traffic:

Which of the following products would be correctly described as being in the decline stage of their product life cycle?

______ is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges.

When Top-Flite introduced its Strata golf balls with a new design for better flight with hit by metal clubs, it charged three times the price of golf balls currently on the market.This high introductory pricing is an example of:

The Library is a new bar in town.Unlike the other bars in town, it charges no cover charge.The new bar has also priced its beer at $3 less per pitcher than its competition.Given what you know about pricing strategies, which pricing strategy is the owner of the new bar using?

_____ involves creating a unique marketing mix for every consumer.

An _____ takes place when the consumer trades money for desired goods and services.

Chewy candy manufacturers are coming out with more true-to-fruit flavors, with some companies even fortifying their confections with vitamin C to make them more fruit-like.From this information, you can surmise that the chewy candy industry is in the _____ stage of the product life cycle.