Question 1

Some consumers make it a point to go shopping the day after Christmas in order to:
A)collect coupons as holiday gifts.
B)enjoy odd pricing benefits.
C)take advantage of everyday low pricing strategies.
D)avoid bait and switch strategies.
E)take advantage of seasonal discounts.

Accepted Answer

The day after Christmas is known for being a big day of sale events known as Boxing Day in countries like Canada and the UK. This is a chance for consumers to take advantage of seasonal discounts on products that did not sell during the holiday season. Therefore, the best choice is E.

Question 2

The advantage of zone pricing to the seller and buyer is the shipping charges typically:
A)are not marked down during the off season.
B)complement the advertising allowances.
C)reflect more closely the cost of delivery.
D)result in a cumulative quantity discount.
E)are the same for all shipments,making it easy to calculate total price.

Accepted Answer

Zone pricing reflects more closely the cost of delivery, benefiting both the seller and buyer by ensuring fair pricing. Option A is not applicable to the advantages of zone pricing. Option B is not related to shipping charges. Option D talks about cumulative quantity discount, which is not a feature specific to zone pricing. Option E is incorrect as zone pricing calculates shipping charges based on the distance between the origin and destination, resulting in different prices for different shipments.

Question 3

The most common form of a quantity discount for consumers is a:
A)cash discount.
B)markdown.
C)size discount.
D)coupon.
E)rebate.

Accepted Answer

A size discount is the most common form of a quantity discount for consumers. This type of discount is applied when a customer purchases a certain amount or quantity of a product, and the price per unit decreases as the quantity purchased increases. This encourages customers to buy more and helps the seller move more inventory.

Question 4

Markdowns and leader pricing tactics help retailers to ____________________,which they view as "half the battle."
A)avoid quantity discounts
B)increase traffic into their store
C)deliver uniform pricing
D)engage in price skimming
E)invoke the experience curve effect

Accepted Answer

Markdowns and leader pricing tactics are used by retailers to increase traffic into their stores, which is viewed as "half the battle" because it can lead to increased sales and profits.

Question 5

Making leasing available to customers may be an attractive option for retailers if:
A)discounts,coupons and rebates are insufficient to bring a price within consumers' reach.
B)the retailer would like to open up new markets.
C)the retailer would like to get the consumer to trade-in or trade-up purchases at the end of the lease period.
D)the retailer can make financing available more easily than the consumer can on his or her own.
E)All of the above.

Accepted Answer

All of the options listed are reasons why leasing may be an attractive option for retailers to offer to customers. Leasing can make a product more affordable for customers who may not be able to purchase it outright, open up new markets for retailers, lead to future trade-in or trade-up purchases, and provide financing options that are more accessible for consumers.

Question 6

Rebates provide manufacturers with greater control than coupons and provide the firm with:
A)valuable customer information.
B)access to wholesalers.
C)a measure of consumers' income elasticity of demand.
D)reference price analysis.
E)all of the above.

Accepted Answer

Rebates require customers to provide personal information, such as their name and address, in order to receive the rebate. This allows manufacturers to gather valuable customer information and build a database of their customers, which can be used for future marketing efforts. Coupons do not require this level of personal information.

Question 7

Retailers use ____________ to get rid of slow moving or obsolete merchandise.
A)markdowns
B)slotting allowances
C)price lining
D)rebates
E)seasonal allowances

Accepted Answer

Markdowns are specifically used to dispose of items that are not selling well or are outdated. Slotting allowances, price lining, rebates, and seasonal allowances are not typically used for this purpose.

Question 8

One of the benefits of offering a size discount to consumers is they will purchase more of a marketer's product and:
A)earn a cash discount.
B)experience the experience curve effect.
C)will not fall prey to predatory pricing.
D)will be less likely to switch brands.
E)will be able to take advantage of zone pricing benefits.

Accepted Answer

The answer of One of the benefits of offering a...

Question 9

The goal of coupons is to:
A)get consumers to try a product.
B)save consumers money,adding value to the product.
C)reward loyal customers.
D)encourage repurchases.
E)all of the above.

Accepted Answer

Coupons serve multiple purposes, including getting consumers to try a product, offering savings to increase the value of the product, rewarding loyal customers, and encouraging repeat purchases. Therefore, option E, which includes all of the above, is the best choice.

Question 10

The difference between a coupon and a rebate is that:
A)the retailer handles coupons while manufacturers handle most rebates.
B)coupons are always for greater amounts off than rebates.
C)coupons are for cents or dollars off while rebates are for percentages off the listed price.
D)there is no difference.
E)the manufacturer handles coupons while retailers handle rebates.

Accepted Answer

Coupons are usually offered by manufacturers, but retailers handle their distribution and redemption. Rebates, on the other hand, are usually handled directly by the manufacturer.

Question 11

Supermarkets often offer great deals on milk,beef or eggs to get customers into their stores,knowing that many customers will also purchase items that have higher markups for the store.These supermarkets are using a ________________ pricing tactic.
A)leader
B)bundling
C)price lining
D)cumulative quantity discount
E)seasonal allowance

Accepted Answer

The pricing tactic being used here is the leader pricing tactic, where the store offers a low price on a popular item to attract customers into the store and potentially increase sales of higher margin items.

Question 12

When a marketer establishes a price floor and a price ceiling for an entire line of similar products and then sets price points in between for differences in quality among the products,he or she is using a _______________ pricing approach.
A)market penetration
B)zone
C)price lining
D)loss leader
E)noncumulative quantity discount

Accepted Answer

The marketer is using the price lining approach, which establishes a range of prices for products of similar quality/features and sets specific price points in between. This allows customers to choose the product that best fits their needs and budget.

Question 13

Price advertisements should never:
A)include "puffery."
B)deceive customers to the point of doing harm.
C)include the price.
D)use advertising allowances to increase sales promotion.
E)use price skimming after using price penetration.

Accepted Answer

Deceiving customers to the point of doing harm is unethical and can lead to legal consequences. All price advertisements should be truthful and not misleading to protect consumers and maintain trust in the business. The other choices may be acceptable in certain circumstances. Puffery can be used in advertising as long as it does not mislead consumers, including by omission of important information. Including the price is necessary for price advertisements. Advertising allowances can be used to increase sales promotion, but it must be done in a fair and non-discriminatory manner. Price skimming and price penetration are both legitimate pricing strategies that may be applied depending on business goals and market conditions.

Question 14

Cosmetic retailers often have one price for each item but another price for three or four similar items with the same brand,all attractively packaged together.These retailers are using:
A)price lining.
B)slotting allowances.
C)cumulative quantity discounts.
D)loss leaders.
E)price bundling.

Accepted Answer

The retailers are using price bundling by offering a package deal for multiple similar items with the same brand.

Question 15

Dan and Ken were discussing the use of coupons as a sales promotion for their paper products store.They knew that coupons would increase immediate sales,but they were concerned that:
A)the additional cost of handling the coupons might be a hidden cost.
B)customers might stock up on inventory and hurt future sales.
C)customers might hold off on future purchases hoping for additional coupons later on.
D)they might not generate sales on other merchandise to cover lost profits.
E)All of the above

Accepted Answer

All of the concerns mentioned (hidden cost of handling coupons, stockpiling, delayed future purchases, and lost profits on other merchandise) are legitimate risks associated with using coupons as a sales promotion, so the best choice is E, all of the above.

Question 16

Retailers use __________________ because they believe the use will induce customers to try new products,convert first-time users to regular users,increase purchases,and protect market share.
A)seasonal discounts
B)rebates
C)cumulative quantity discounts
D)noncumulative quantity discounts
E)coupons

Accepted Answer

Retailers use coupons to induce customers to try new products, convert first-time users to regular users, increase purchases, and protect market share. Coupons offer an immediate incentive for customers to try a product, and they can also encourage repeat purchases if customers are satisfied with the product. Additionally, coupons can be targeted to specific customers or demographic groups, allowing retailers to focus their marketing efforts and maximize their return on investment.

Question 17

When Toyota introduced its Scion line of cars,the lowest priced model was listed for $15,000 while the highest priced model was listed for $21,000,with two or three other list prices in between.Toyota used a _____________ pricing approach.
A)market penetration
B)zone
C)price lining
D)loss leader
E)noncumulative quantity discount

Accepted Answer

Toyota used price lining, which involves offering a limited number of price points for a product line. In this case, Scion offered a range of models with different features and prices, but each model had a fixed price point within a narrow range, allowing customers to easily compare and choose between different models.

Question 18

For marketers to advertise a price as their ______________,the Better Business Bureau recommends that at least 50 percent of the sales of a product occur at that price.
A)fixed price
B)zone price
C)regular price
D)leader price
E)cost-based price

Accepted Answer

The answer of For marketers to advertise a price as...

Question 19

Mona is selling her artwork at a local festival.Her art is selling well,but t-shirts she had made up with her artwork are not selling.She decides to offer a package price for her art with a t-shirt included.Mona is using:
A)price lining.
B)slotting allowances.
C)cumulative quantity discounts.
D)loss leaders.
E)price bundling.

Accepted Answer

Mona is using price bundling by offering a package price for her art with a t-shirt included, which allows her to increase sales and move inventory that was not selling well on its own. This is a form of bundling as multiple items are being sold together at a discounted price.

Question 20

One important reason manufacturers like rebates is that:
A)the transaction costs are the responsibility of the retailer.
B)their redemption rates are low.
C)rebates expire faster than coupons do.
D)there are fewer price discrimination issues.
E)All of the above

Accepted Answer

Manufacturers favor rebates because they often have low redemption rates, meaning many consumers do not actually claim the rebate, allowing manufacturers to offer discounts without significantly impacting their revenue.

Quiz 14: Strategic Pricing Methods

Some consumers make it a point to go shopping the day after Christmas in order to:

The advantage of zone pricing to the seller and buyer is the shipping charges typically:

The most common form of a quantity discount for consumers is a:

Markdowns and leader pricing tactics help retailers to ____________________,which they view as "half the battle."

Making leasing available to customers may be an attractive option for retailers if:

Rebates provide manufacturers with greater control than coupons and provide the firm with:

Retailers use ____________ to get rid of slow moving or obsolete merchandise.

One of the benefits of offering a size discount to consumers is they will purchase more of a marketer's product and:

The goal of coupons is to:

The difference between a coupon and a rebate is that:

Supermarkets often offer great deals on milk,beef or eggs to get customers into their stores,knowing that many customers will also purchase items that have higher markups for the store.These supermarkets are using a ________________ pricing tactic.

When a marketer establishes a price floor and a price ceiling for an entire line of similar products and then sets price points in between for differences in quality among the products,he or she is using a _______________ pricing approach.

Price advertisements should never:

Cosmetic retailers often have one price for each item but another price for three or four similar items with the same brand,all attractively packaged together.These retailers are using:

Dan and Ken were discussing the use of coupons as a sales promotion for their paper products store.They knew that coupons would increase immediate sales,but they were concerned that:

Retailers use __________________ because they believe the use will induce customers to try new products,convert first-time users to regular users,increase purchases,and protect market share.

When Toyota introduced its Scion line of cars,the lowest priced model was listed for $15,000 while the highest priced model was listed for $21,000,with two or three other list prices in between.Toyota used a _____________ pricing approach.

For marketers to advertise a price as their ______________,the Better Business Bureau recommends that at least 50 percent of the sales of a product occur at that price.

Mona is selling her artwork at a local festival.Her art is selling well,but t-shirts she had made up with her artwork are not selling.She decides to offer a package price for her art with a t-shirt included.Mona is using:

One important reason manufacturers like rebates is that: