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Contemporary Marketing Study Set 3

Business

Quiz 14 :

Pricing Strategies

Quiz 14 :

Pricing Strategies

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Since many firms begin penetration pricing with the intention of increasing prices in the future, success depends on generating numerous trial purchases.
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True False
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True

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Citibank offers an opportunity for credit card customers to transfer balances from competitive cards and pay low financing for a six-month period. After the introductory period is over, the rate will increase to the normal interest rate. Citibank's strategy is to penetrate the market and obtain increased market share.
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True False
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True

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Product line pricing is the practice of marketing merchandise at variable prices negotiated between buyer and seller.
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True False
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False

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Most companies set prices using competitive pricing as their primary pricing strategy.
True False
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Tiffany, Rolex, Gucci, and Prada represent exclusivity, meaning their prices are mostly inelastic.
True False
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A leader merchandise is a product offered by retailers to customers at less than cost to attract them to stores.
True False
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A skimming pricing strategy is commonly used as a market entry price for distinctive goods and services with high initial competition.
True False
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Skimming is an effective strategy to use when products are distinctive or have little competition.
True False
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Skimming pricing strategies are also known as "market-plus pricing."
True False
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Firms using a competitive pricing strategy try to reduce the emphasis on price competition by matching other firms' prices and concentrating their own marketing efforts on the product, distribution, and promotion elements of the marketing mix.
True False
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Penetration pricing is often used in a market in which a new product is likely to face strong competition when introduced.
True False
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In the absence of other cues, price is an important indicator of a product's quality to prospective purchasers.
True False
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A low price is a sure sell because the demand for many goods is highly elastic.
True False
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Setting prices is a one-time decision for most products in most companies.
True False
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Lysol sanitizing wipes entered the market at a low sales price and was supported by heavy couponing. As the initial trial period passed, the pricing slowly rose and the couponing became more infrequent. This activity is an example of penetration pricing.
True False
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A skimming pricing strategy is ineffective in marketing higher-end goods.
True False
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A private-label product priced below the lower limit can be regarded as too cheap by potential customers.
True False
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While price offers a dramatic means of achieving competitive advantage, it is the most difficult marketing variable for competitors to match.
True False
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Marketers who have adopted a product-line pricing strategy have one major advantage in that they have no difficulty making price changes on individual items.
True False
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A price of $ 9.97 is less likely to appeal to customers than $ 9.95 or $ 9.99.
True False
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