Question 1

Johnson Boats wants to introduce a new model of boat into mature markets in highly developed countries with the goal of quickly gaining mass-market share.As a consultant, you should recommend a ________ pricing strategy.
market-skimming
market-penetration
zone
discount
captive-product

Accepted Answer

The answer of Johnson Boats wants to introduce a new...

Question 2

Savings for You, a discount retail chain, is highly competitive.When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market.Savings for You is most at risk of being accused of ________.
market skimming
price-fixing
predatory pricing
deceptive pricing
price confusion

Accepted Answer

The answer of Savings for You, a discount retail chain,...

Question 3

Product costs set a floor to a product's price; consumer perceptions of the product's value set the ceiling.

Accepted Answer

This statement is true, as product costs (such as materials, labor, and overhead) determine the minimum price that a product must be sold for in order to cover the expenses incurred in producing it. However, consumers' perceptions of the product's value, based on factors such as quality, features, and branding, will ultimately determine the highest price they are willing to pay for the product. This creates a range between the floor set by product costs and the ceiling set by consumer perceptions of value.

Question 4

The fact that a hot dog costs five times more at Disneyland than at Costco is an example of ________.
allowance pricing
captive-product pricing
penetration pricing
segmented pricing
promotional pricing

Accepted Answer

The answer of The fact that a hot dog costs...

Question 5

With an understanding of price elasticity, sellers should know that the less elastic the demand for their product is, the more advantageous it is for them to ________.
drop the price
raise the price
leave the price where it is
discontinue the item
bundle the product with another product

Accepted Answer

The answer of With an understanding of price elasticity, sellers...

Question 6

The Winnipeg Goldeyes ballpark charges different prices for seats in different areas of the ballpark, even though their costs are the same.What is this form of pricing called?
location-based
skimming
product-form
time-based
penetration

Accepted Answer

The answer of The Winnipeg Goldeyes ballpark charges different prices...

Question 7

Prices have a direct impact on a company's bottom line.

Accepted Answer

Prices directly affect the revenue a company brings in, which in turn affects the profits and ultimately the bottom line. Higher prices typically lead to higher profits, while lower prices can result in lower profits. Therefore, pricing strategy is an important factor in a company's success.

Question 8

Vac 'N' Sew will give customers $100 for a used vacuum cleaner, regardless of condition, when they purchase a new vacuum or sewing machine.This essentially reduces the price by $100.What is this type of discount called?
functional discount
captive-product discount
seasonal discount
trade-in allowance
by-product allowance

Accepted Answer

The answer of Vac 'N' Sew will give customers $100...

Question 9

When Whallans Gift Card Shop offers a price reduction to customers who buy Christmas cards the week after Christmas, Whallans is giving a(n) ________ discount.
functional
seasonal
annual
allowance
credit

Accepted Answer

The answer of When Whallans Gift Card Shop offers a...

Question 10

Mach 3 razor blades must be used in the Mach 3 razor.Which type of pricing is most likely used?
product line pricing
optional-product pricing
captive-product pricing
by-product pricing
allowance pricing

Accepted Answer

The answer of Mach 3 razor blades must be used...

Question 11

Big Mike's Health Food Store sells nutritional energy-producing foods.The price of the products sold varies according to individual customer accounts and situations.For example, long-time customers receive discounts.This strategy is an example of ________.
promotional pricing
cost-plus pricing
dynamic pricing
value pricing
penetration pricing

Accepted Answer

The answer of Big Mike's Health Food Store sells nutritional...

Question 12

If Canon Camera Company follows a high-price, high-margin strategy, what will competitors most likely do?
They will go out of business.
They will want to compete by undercutting Canon's price.
They will advertise less.
They will unbundle their products.
They will use market-skimming pricing.

Accepted Answer

The answer of If Canon Camera Company follows a high-price,...

Question 13

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________.
product line pricing
market-skimming pricing
market-penetration pricing
break-even pricing
target return pricing

Accepted Answer

The answer of When Circuit Town Electronics sets its televisions...

Question 14

To offset the pricing of its main product, the Toronto Zoo has partnered with a waste management company to turn animal waste into methane gas to be used to produce power.This is an example of __________.
product line pricing
optional-product pricing
captive-product pricing
by-product pricing
allowance pricing

Accepted Answer

The answer of To offset the pricing of its main...

Question 15

Demand and consumer value perceptions set the floor for prices.

Accepted Answer

The answer of Demand and consumer value perceptions set the...

Question 16

When Pepsi came out with Pepsi Blue and priced it at half price to attract buyers, Pepsi was using ________.
marketing-skimming pricing
market-penetration pricing
new-product pricing
discount pricing
promotional allowances

Accepted Answer

The answer of When Pepsi came out with Pepsi Blue...

Question 17

Value-based pricing is being used when costs vary directly with the level of product.

Accepted Answer

Value-based pricing focuses on the value perceived by the customer, not on the costs of the product. Costs may or may not vary directly with the level of product, but they are not the main factor in determining the price.

Question 18

If Northwest Awnings charges the same price for delivery of their product to any customer that is located within the Great Lakes states, the company is using ________.
psychological pricing
promotional pricing
reference pricing
zone pricing
uniform-delivered pricing

Accepted Answer

The answer of If Northwest Awnings charges the same price...

Question 19

Market-skimming pricing would likely be most effective in selling ________.
any convenience item
an electronic device for which research and development must be recouped
shampoo and bath soap
anything easily copied by competitors
most items at EDLP retailers such as Wal-Mart

Accepted Answer

The answer of Market-skimming pricing would likely be most effective...

Question 20

A manufacturer offers 3/10, net 30, terms to a wholesaler for a recent purchase.Under these terms, the wholesaler may deduct ________ percent if the bill is paid within ________ days.
10; 30
10; 3
3; 30
3; 10
7; 10

Accepted Answer

The answer of A manufacturer offers 3/10, net 30, terms...

Quiz 10: Pricing: Understanding and Capturing Customer Value

Johnson Boats wants to introduce a new model of boat into mature markets in highly developed countries with the goal of quickly gaining mass-market share.As a consultant, you should recommend a ________ pricing strategy. market-skimming market-penetration zone discount captive-product

Product costs set a floor to a product's price; consumer perceptions of the product's value set the ceiling.

The fact that a hot dog costs five times more at Disneyland than at Costco is an example of ________. allowance pricing captive-product pricing penetration pricing segmented pricing promotional pricing

With an understanding of price elasticity, sellers should know that the less elastic the demand for their product is, the more advantageous it is for them to ________. drop the price raise the price leave the price where it is discontinue the item bundle the product with another product

The Winnipeg Goldeyes ballpark charges different prices for seats in different areas of the ballpark, even though their costs are the same.What is this form of pricing called? location-based skimming product-form time-based penetration

Prices have a direct impact on a company's bottom line.

When Whallans Gift Card Shop offers a price reduction to customers who buy Christmas cards the week after Christmas, Whallans is giving a(n) ________ discount. functional seasonal annual allowance credit

Mach 3 razor blades must be used in the Mach 3 razor.Which type of pricing is most likely used? product line pricing optional-product pricing captive-product pricing by-product pricing allowance pricing

If Canon Camera Company follows a high-price, high-margin strategy, what will competitors most likely do? They will go out of business. They will want to compete by undercutting Canon's price. They will advertise less. They will unbundle their products. They will use market-skimming pricing.

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________. product line pricing market-skimming pricing market-penetration pricing break-even pricing target return pricing

Demand and consumer value perceptions set the floor for prices.

When Pepsi came out with Pepsi Blue and priced it at half price to attract buyers, Pepsi was using ________. marketing-skimming pricing market-penetration pricing new-product pricing discount pricing promotional allowances

Value-based pricing is being used when costs vary directly with the level of product.

If Northwest Awnings charges the same price for delivery of their product to any customer that is located within the Great Lakes states, the company is using ________. psychological pricing promotional pricing reference pricing zone pricing uniform-delivered pricing

Market-skimming pricing would likely be most effective in selling ________. any convenience item an electronic device for which research and development must be recouped shampoo and bath soap anything easily copied by competitors most items at EDLP retailers such as Wal-Mart

A manufacturer offers 3/10, net 30, terms to a wholesaler for a recent purchase.Under these terms, the wholesaler may deduct percent if the bill is paid within days. 10; 30 10; 3 3; 30 3; 10 7; 10

Quiz 10: Pricing: Understanding and Capturing Customer Value

Johnson Boats wants to introduce a new model of boat into mature markets in highly developed countries with the goal of quickly gaining mass-market share.As a consultant, you should recommend a ________ pricing strategy. market-skimming market-penetration zone discount captive-product

Product costs set a floor to a product's price; consumer perceptions of the product's value set the ceiling.

The fact that a hot dog costs five times more at Disneyland than at Costco is an example of ________. allowance pricing captive-product pricing penetration pricing segmented pricing promotional pricing

With an understanding of price elasticity, sellers should know that the less elastic the demand for their product is, the more advantageous it is for them to ________. drop the price raise the price leave the price where it is discontinue the item bundle the product with another product

The Winnipeg Goldeyes ballpark charges different prices for seats in different areas of the ballpark, even though their costs are the same.What is this form of pricing called? location-based skimming product-form time-based penetration

Prices have a direct impact on a company's bottom line.

When Whallans Gift Card Shop offers a price reduction to customers who buy Christmas cards the week after Christmas, Whallans is giving a(n) ________ discount. functional seasonal annual allowance credit

Mach 3 razor blades must be used in the Mach 3 razor.Which type of pricing is most likely used? product line pricing optional-product pricing captive-product pricing by-product pricing allowance pricing

If Canon Camera Company follows a high-price, high-margin strategy, what will competitors most likely do? They will go out of business. They will want to compete by undercutting Canon's price. They will advertise less. They will unbundle their products. They will use market-skimming pricing.

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________. product line pricing market-skimming pricing market-penetration pricing break-even pricing target return pricing

Demand and consumer value perceptions set the floor for prices.

When Pepsi came out with Pepsi Blue and priced it at half price to attract buyers, Pepsi was using ________. marketing-skimming pricing market-penetration pricing new-product pricing discount pricing promotional allowances

Value-based pricing is being used when costs vary directly with the level of product.

If Northwest Awnings charges the same price for delivery of their product to any customer that is located within the Great Lakes states, the company is using ________. psychological pricing promotional pricing reference pricing zone pricing uniform-delivered pricing

Market-skimming pricing would likely be most effective in selling ________. any convenience item an electronic device for which research and development must be recouped shampoo and bath soap anything easily copied by competitors most items at EDLP retailers such as Wal-Mart

A manufacturer offers 3/10, net 30, terms to a wholesaler for a recent purchase.Under these terms, the wholesaler may deduct ________ percent if the bill is paid within ________ days. 10; 30 10; 3 3; 30 3; 10 7; 10

A manufacturer offers 3/10, net 30, terms to a wholesaler for a recent purchase.Under these terms, the wholesaler may deduct percent if the bill is paid within days. 10; 30 10; 3 3; 30 3; 10 7; 10