Question 1

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) captive-product
B) product bundle
C) product line
D) by-product
E) optional-product

Accepted Answer

Product bundle pricing involves offering several products together at a reduced price compared to purchasing each item separately, as seen with the combo price for the haircut and conditioning treatment.

Question 2

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) functional discount
B) trade-in allowance
C) quantity discount
D) seasonal discount
E) promotional allowance

Accepted Answer

This is a seasonal discount because it offers a price reduction for purchasing items during a specific off-peak time, in this case, July for Christmas trees.

Question 3

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

Accepted Answer

By selling the by-products at a price that covers more than the cost of storing and delivering, the manufacturer can generate extra revenue that can be used to reduce the price of the main product, making it more competitive.

Question 4

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.

Accepted Answer

The statement is true. Universal Appliance prices its refrigerators at clearly defined price levels, which is an example of price steps.

Question 5

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) product-form pricing
B) market-penetration pricing
C) time-based pricing
D) location-based pricing
E) market-skimming pricing

Accepted Answer

Location-based pricing is when different prices are charged for the same product or service based on the location of the customer or the location of the seat in a stadium.

Question 6

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

Accepted Answer

Reference prices are the prices that consumers remember and use as a basis for comparison when evaluating a product's price.

Question 7

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

Accepted Answer

When consumers have prior experience with a product, they can rely on their own knowledge and past interactions to judge its quality, rather than depending on price as an indicator.

Question 8

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

Accepted Answer

This is an example of time-based pricing, where prices vary depending on the time of day, week, or season to maximize sales and profits.

Question 9

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

Accepted Answer

Captive-product pricing involves setting a low price for the main product and higher prices for the accessories or complementary products that are necessary for the main product to function.

Question 10

Dynamic pricing is particularly suitable for Internet-based companies like Amazon who want to be responsive to shoppers' desires and marketplace changes.

Accepted Answer

Dynamic pricing allows companies to adjust prices in real-time based on consumer demand and market conditions, which is well-suited for online businesses like Amazon that can quickly and easily implement these changes on their website.

Question 11

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) seasonal discount
B) cash discount
C) functional discount
D) by-product allowance
E) trade-in allowance

Accepted Answer

This is an example of a trade-in allowance, where a discount is given to customers who bring in an old item in exchange for a new one.

Question 12

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) seasonal discounts
C) cash discounts
D) quantity discounts
E) trade-in allowances

Accepted Answer

Promotional allowances are discounts or payments given by manufacturers to retailers to promote their products, such as covering part of advertising costs.

Question 13

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

Accepted Answer

Functional discounts are typically offered to trade-channel members who perform sales tasks, as they are compensated for their role in the distribution process.

Question 14

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) customer-segment
B) product form
C) time-based
D) by-product
E) location-based

Accepted Answer

This pricing strategy is called customer-segment pricing, where different prices are charged to different groups of customers for the same product or service.

Question 15

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) quantity discount
B) functional discount
C) cash rebate
D) flash sale
E) promotional allowance

Accepted Answer

Rakuten offers a cash rebate, where they pass on a portion of the commission they earn from referring customers to a store back to the customer as a rebate.

Question 16

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) geographical pricing
B) segmented pricing
C) promotional pricing
D) psychological pricing
E) dynamic pricing

Accepted Answer

Promotional pricing involves temporarily reducing prices below the list price to stimulate demand and create excitement and urgency among consumers.

Question 17

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.

Accepted Answer

Price bundling can encourage consumers to purchase products they might not buy individually by offering a combined price that is perceived as a better deal, thus increasing the likelihood of purchase.

Question 18

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

Accepted Answer

Psychological pricing involves setting prices based on the psychological impact on consumers, including their reference prices, which are the prices they expect to pay based on past experiences or perceptions.

Question 19

Which pricing mix strategy should be used in relation to saleable scrap materials? How does this strategy function?

Accepted Answer

The answer of Which pricing mix strategy should be used...

Question 20

Explain product line pricing. Provide an example.

Accepted Answer

The answer of Explain product line pricing. Provide an example....

Quiz 9: Pricing: Understanding and Capturing Customer Value

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.

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 _ .

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

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.

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?

prices are carried in buyers' minds and used when looking at a given product.

Consumers rely less on price to judge the quality of a product when they .

Movie theaters charge matinee pricing during the daytime, and resorts give weekend and seasonal discounts. This is illustrative of a _ pricing strategy.

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

Dynamic pricing is particularly suitable for Internet-based companies like Amazon who want to be responsive to shoppers' desires and marketplace changes.

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 .

When Nabisco offers to cover half the cost of all local advertising for supermarkets that sell Oreo Cookies, the company is granting .

Which group is most likely offered functional discounts by manufacturers?

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.

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 _.

What type of pricing is being used when a company temporarily prices its products below the list price to create buying excitement and urgency?

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.

Pricing a product based on consumers' reference prices is referred to as pricing.

Which pricing mix strategy should be used in relation to saleable scrap materials? How does this strategy function?

Explain product line pricing. Provide an example.