Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Western New Mexico University BSAD 340 Chapter 20 1)The marketing manager of Icruise

Western New Mexico University BSAD 340 Chapter 20 1)The marketing manager of Icruise

Business

Western New Mexico University

BSAD 340

Chapter 20

1)The marketing manager of Icruise.com (a travel Web site targeted to consumers who want a luxury vacation) finds that the firm can gain market share and become the industry leader if it slashes prices by 50 percent during the month of December. However, the VP of finance is committed to reporting a 25 percent return on investment at all times. This conflict illustrates:

a.            a need to eliminate low-profit products.

 

b.            a lack of corporate concentration on the marketing concept.

c.             how pricing operates in a mature marketplace. d. the need for trade-offs in pricing objectives.

e. how target markets can be ignored.

 

 

 

 

 

2.            After establishing pricing goals, managers should estimate total revenue at a variety of prices. Next, they should  . Only after performing this task are they are ready to estimate how much profit and how much market share can be earned at each possible price.

a.            choose the ROI target

b.            determine corresponding costs for each price

c.             estimate industry supply

d.            implement pricing segmentation

e.            establish geographic pricing heuristics

 

3.            Which of the following is a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion?

a. Penetration pricing b. Price skimming

c.             Price capping

d.            Profit pricing

e.            Price maximization

 

4.            A 16-ounce bottle of Prairie Herb vinegar sells for $4.95, and a 16-ounce bottle of Heinz vinegar costs $1.05. Prairie Herb vinegar is new to the market, perceived to be of higher quality, and provides a unique flavor to foods even though it is used in the same way as Heinz vinegar. Prairie Herb vinegar is most likely using a            policy.

a.            penetration pricing

b.            status quo pricing c. price skimming

d. bundling cost pricing

e. geodemographic pricing

 

5.            In which of the following countries is Procter & Gamble MOST likely to sell razor blades using a penetration pricing strategy?

a.            the United States

b.            France

c.             Bangladesh

d.            Japan

e.            Canada

 

6.            A shortage of blood for transfusions for injured animals has resulted in the introduction of a synthesized product called Oxyglobin, which can be used effectively as a blood replacement. The

 

manufacturer of the product has put a high price on the product in order to recoup its research and development costs. The manufacturer of Oxyglobin is using a policy.

a.            price banding

b.            penetration pricing

c.             price lining

d.            bundling costs e. price skimming

 

 

7.            The price skimming strategy is sometimes called a “marketplus” approach to pricing because it denotes a high price relative to the prices of competing products. This strategy works best when:

a.            competition is abundant.

b.            revenues are equal to expenses.

c.             supply is greater than demand.

d.            production capacity is large and flexible.

e.            The product is perceived as having unique advantages.

 

8.            When the Mosquito Magnet was introduced, it was designed to rid the immediate area of mosquitoes and other annoying insects. The technology for the Mosquito Magnet had taken years to develop. It is a patented grill-like apparatus that emits carbon dioxide to attract bugs to a fan that draws them into the device where they die. What type of pricing policy would you recommend the company use to introduce this product to the market?

a.            Status quo pricing

b.            Penetration pricing c. Price skimming

d. Flexible pricing

e. Leader pricing

 

9.            For which of the following situations would a price skimming strategy be most appropriate?

a.            The addition of a new comic book series with a gay protagonist

b.            The introduction of a new brand of bottled water

c.             The elimination of demand for low-wattage light bulbs

d.            The introduction of a unique, roomy automobile model that has extremely low energy and fuel costs

e.            The introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee

 

10.          The DCS Stainless Steel Gas Grill for outside cooking costs $3,995. The market for a grill that could easily replace a kitchen range is limited even though a lot of people have seen articles about this grill in cooking magazines and in the cooking section of newspapers. There is no potential competitor for this grill. The       strategy is probably best.

a.            price skimming

b.            penetration pricing

c.             status quo

d.            cost bundling

e.            price lining

 

 

11.          When a firm introduces a new product at a relatively low price because it hopes to reach the mass market, it is following a      strategy. The low price is designed to capture a large share of a substantial market and produce lower production costs.

a.            penetration pricing

b.            price-insensitive demand

c.             price skimming

d.            price elasticity

e.            cost bundling

12.          Marketers must take care when using   since a lower price often signals to consumers that product quality is also low.

a.            price skimming

b.            status quo pricing c. penetration pricing

d. unbundling

e. cost sharing

 

13.          The market for turkey products is large. If a major producer of turkeys were to introduce a boneless fresh turkey wrapped around savory dressing, most of the large market for this new product would be aware of its existence. The market is price sensitive, and there is some potential competition. The appropriate strategy would be:

a.            price skimming.

b.            penetration pricing.

c.             status quo.

d.            cost bundling.

e.            price lining.

 

14.          Jones Soda Company and Big Sky Brands have introduced Jones Soda Carbonated Candy, a candy that delivers a blast of the most popular Jones Soda flavors along with an oddly enjoyable tongue- tingling sensation. Which pricing strategy would be appropriate if the company wants to convince price-sensitive consumers to try it and not buy some other brand?

a.            Price lining

b.            Price fixing

c.             Status quo pricing d. Penetration pricing

e. Price skimming

 

15.          Pharmacies are a new addition to Sam’s Clubs. They could exert a greater influence on the marketplace for prescription drugs than their newness indicates. Sam’s has a stated philosophy of marking up merchandise a maximum of 14 percent. When that philosophy is applied to prescription drugs, especially generics, warehouse club prices can be dramatically lower than those of conventional drugstores, supermarkets, or discount store pharmacies. Sam’s is using a                  strategy to convince consumers to use its pharmacies rather than its competitors.

a.            penetration pricing

b.            price-insensitive demand

c.             price skimming

 

d.            price elasticity

e.            cost bundling

 

 

 

 

 

 

16.          A penetration strategy tends to be effective in a price-sensitive market. Thus, one of the purposes of penetration pricing is to:

a.            recoup product development costs quickly.

b.            discourage competitors from entering the market.

c.             produce a large margin of profit per unit.

d.            develop exclusive distribution.

e.            attract the price-insensitive buyer who demands the latest in technology.

 

17.          A penetration pricing strategy tends to be most effective:

a.            when demand is relatively inelastic.

b.            under unitary conditions. c. in price-sensitive markets.

d. when the company can only perform small production runs.

e. if unit costs are high.

 

18.          Penetration pricing means charging a relatively low price for a product as a way to reach the mass market. The low price is designed to capture a large share of a substantial market. Thus, penetration pricing:

a.            tends to be more effective in a less price-sensitive market.

b.            tempts competitors to enter the market.

c.             provides a large profit per unit sold.

d.            recoups product development costs quickly. e. tends to lower production costs.

 

19.          A firm charging a price identical to or very close to the competition’s price is using a        

strategy.

a.            differentiation pricing

b.            penetration pricing

c.             preemptive pricing d. status quo pricing

e. leader pricing

 

20.          JCPenney sends representatives to shop at similar retailers to make sure it is charging comparable prices for its products. JCPenney probably uses a strategy.

a.            leader pricing

b.            preemptive pricing c. status quo pricing

d. flexible pricing

 

e. functional pricing

 

21.          State laws that put a lower limit on wholesale and retail prices are called               . In states that have these laws, selling below cost is illegal.

a.            unfair trade practice acts

b.            price floor laws

c.             protectionism acts

d.            transparency laws

22.          States developed unfair trade practice acts to:

a.            enforce the Sherman Act that makes bait pricing illegal.

b.            prevent oligopoly leaders from getting together and fixing prices at the highest the market will bear.

c.             establish penalties for companies that break the Clayton Act by engaging in predatory pricing.

d.            make sure that all pricing policies are equitable.

e.            protect small local firms from giant companies that operate efficiently on razor-thin profit margins.

 

23.          In 2008, United Airlines and American Airlines disclosed settlements in a class-action lawsuit over allegations of airfreight price fixing. This means the companies:

a.            tried to charge fees for airfreight that were below costs.

b.            charged customers different amounts for the same shipments. c. agreed on the price they would charge customers for airfreight.

d. used uniform geographic pricing.

e. created an artificial demand for shipping.

 

24.          South Africa’s Competition Commission accused South African Airways of conspiring with its partner, Germany’s Lufthansa, to set prices on flights between Cape Town, Johannesburg, and Frankfurt. As a result, the two airlines were charged with:

a. price discrimination. b. price fixing.

c.             bait pricing.

d.            unfair trade practices.

e.            channel control pricing tactics.

 

25.          Which of the following prohibits any firm from selling to two or more different buyers, within a reasonably short time, commodities (not services) of like grade and quality at different prices where the result would be to substantially lessen competition?

a.            Sherman Act

b.            Federal Trade Commission Act

c.             Food and Drug Administration Act

d.            Anti-Discrimination Act e. Robinson-Patman Act

 

26.          Acme Lawnmowers sells its mowers to retailers at different prices, depending on whether they are independent stores or members of a national chain. It uses:

a.            unfair trade practices.

 

b.            price fixing.

c.             price discrimination.

d.            predatory pricing.

e.            bait pricing.

 

 

 

27.          All of the following elements must be present for a pricing practice to be considered discriminatory under the Robinson-Patman Act EXCEPT:

a.            The seller must charge different prices to different customers for the same product.

b.            The seller must make two or more actual sales within a reasonably short time.

c.             The transaction must occur in interstate commerce. d. The products sold must not be commodities.

e. There must be significant competitive injury.

 

28.          The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market is called:

a. price discrimination. b. predatory pricing.

c.             price fixing.

d.            price manipulation.

e.            anti-competitive pricing.

 

29.          When Microsoft introduced its now-discontinued Zune MP3 player, many people thought it would capture the MP3 player market by pricing its product so low that a smaller competitor, like the Apple iPod, would be unable to compete. If Microsoft had used this approach, it would have been would be guilty of:

a.            predatory pricing.

b.            unfair trade practices.

c.             channel manipulation pricing.

d.            price fixing.

e.            price discrimination.

 

30.          After managers understand both the legal and the marketing consequences of price strategies, they should set a      price––the general level at which a company expects to sell a good or service.

a.            functional

b.            zone

c.             demand

d.            leader e. base

 

31.          Toyota periodically offers customers      , allowing purchasers to borrow money to pay for new cars without incurring an interest charge.

a.            markdown money

b.            zero percent financing

 

c.             promotional allowances

d.            make-up allowances

e.            leader pricing reductions

 

 

 

 

32.          All of the following are tactics for fine-tuning the base price EXCEPT:

a.            functional discounts.

b.            cash discounts.

c.             rebates.

d.            quality discounts.

e.            quantity discounts.

 

33.          Last year, a single infield box ticket for an Atlanta Braves baseball game cost $40, but fans who bought a season pass for the same seat got a reduced price. This $40 price was a price.

a.            base

b.            zone

c.             demand

d.            channel leader

e.            functional

 

34.          When a buyer pays a lower price for buying multiple units or above a specified dollar amount for a single order, the buyer is receiving a    discount.

a. promotional b. quantity

c.             frequent buyer

d.            functional

e.            cumulative

 

35.          Redline Editorial Services sent a $1,000 invoice to a customer for copyediting a booklet. According to the terms of the invoice, the customer would receive a 3 percent discount on the invoice price if the invoice was paid within 15 days. This is an example of a:

a. Quantity discount. b. Cash discount.

c.             Rebate.

d.            Functional discount.

e.            Promotional allowance.

 

36.          When the salesperson from Affiliated Food, Inc., a grocery distributor, calls on a grocery store, she is authorized to offer a 15 percent discount from the list price in recognition of activities (such as unpacking items and stocking shelves) that retailers perform for the distributor. This 15 percent discount is a:

a.            quantity discount.

b.            promotional allowance. c. functional discount.

 

d. seasonal discount.

e. channel allowance.

 

 

 

 

 

37.          Ace Hardware’s spring snow blower sale is an example of which of the following pricing tactics?

a. Quantity discount b. Seasonal discount

c.             Temporal discount

d.            Promotional allowance

e.            Functional discount

 

38.          A(n)       discount is a deduction from list price that applies to the buyer’s total purchases made during a specific period.

a.            cumulative quantity

b.            noncumulative quantitative

c.             functional

d.            cash

e.            integrated

 

39.          Which type of quantity discount is a deduction from the list price that applies to a single order?

a.            Base discount

b.            Cumulative discount

c.             Noncumulative discount

d.            Cash discount

e.            Functional discount

 

40.          Quantity discounts are most often used to:

a. reward the buyer who pays in cash. b. encourage buying in multiple units.

c.             increase supply for a specific raw material.

d.            reward a channel intermediary for performing some service.

e.            shift the storage function backward to the supplier.

 

41.          An Internet picture frame manufacturer offers retailers reduced prices on any combination of size or style frames purchased. The discount is shown as they shop and adjusted as the quantity of frames purchased increases. What common form of purchase discount is the frame manufacturer using?

a.            Rebate

b.            Cash discount

c.             Quantity discount

d.            Promotional allowance

e.            Functional discount

 

42.          A discount off the base price to customers who pay immediately, or within a specified time period, is called a:

a.            functional discount.

b.            quantity discount.

c.             base discount. d. cash discount.

e. promotional allowance.

43.          When a channel intermediary is compensated for the ordinary services and tasks performed within the channel of distribution, the compensation usually comes in the form of a discount from base price. This discount is called a:

a.            seasonal discount.

b.            promotional allowance.

c.             cumulative or noncumulative quantity discount. d. functional (or trade) discount.

e. rebate or refund.

 

44.          A             is a price reduction that shifts the storage function forward to the purchaser and enables manufacturers to maintain steady production year-round.

a.            functional discount

b.            base allowance

c.             promotional allowance

d.            quantity discount e. seasonal discount

 

45.          Apple’s “Back to School” program offered students who purchased an iMac computer and an iPod Touch MP3 player a $250 refund. The $250 check was essentially a:

a.            rebate.

b.            reciprocal allowance.

c.             cash discount.

d.            functional discount.

e.            trade promotion.

 

46.          Hunter’s Alley is a chain of stores targeted to people who are proud of their National Rifle Association memberships. It has agreed to set up a special display of Swartklip ammunition near its rifle and shotgun aisles, and also to run an advertisement in newspapers in communities where its stores are located. Swartklip has agreed to supply the display material free and to pay for half the cost of the advertisement. This is an example of a:

a.            bundled pricing tactic.

b.            functional discount.

c.             promotional allowance.

d.            quantity discount.

e.            direct allowance.

 

47.                         are cash refunds given for the purchase of a product during a specific period. a. Rebates

b.            Loss leaders

 

c.             Reciprocal allowances

d.            Demand discounts

e.            Promotional allowances

 

 

 

48.                         occurs when a firm is customer driven and seeks to understand the attributes customers want in the goods and services they buy and the value of those attributes to customers. Thus, the price of the product is set at a level that seems to the customer to be a good price compared with the prices of other options.

a.            Value-based pricing

b.            Noncumulative pricing

c.             CRM pricing

d.            Market concept pricing

e.            Price bundling

 

49.          With value-based pricing:

a.            the firm is sales driven.

b.            the firm is both customer driven and competitor driven.

c.             increased profitability for wholesalers will increase the number of services they are willing to perform.

d.            consumers are more concerned about price than quality.

e.            additional long-term costs to manufacturers will increase.

 

50.          One pharmaceutical manufacturer did not price a new antiulcer drug by adding up the costs of developing and manufacturing the medication and tacking on the amount of profit it wanted to make. Instead, the company justified a higher price than it might otherwise have been able to get from medical insurers by using studies that showed the new drug could help patients avoid expensive surgery and save the insurance companies money. The pharmaceutical company used: a. value-based pricing.

b.            noncumulative pricing.

c.             CRM pricing.

d.            price bundling.

e.            market concept pricing.

 

51.          Sometimes managers price their products too low, resulting in a loss of company profits. One reason this happens is that:

a.            managers attempt to buy market share through aggressive pricing, but the cuts are quickly met by competitors, which wipe out any gain in market share.

b.            consumers tend to equate lower prices with low-quality goods, and they are never able to regain that lost market share.

c.             price-skimming strategies only work in the short-term, and always eventually result in lower profits.

d.            most managers simply lack good business sense, especially in regard to finances.

e.            all of the above are reasons.

 

 

 

 

 

52.          A price tactic that requires the purchaser to absorb the freight costs from the shipping point is called      . In this case, the farther buyers are from sellers, the more they pay, because transportation costs generally increase with the distance merchandise is shipped.

a.            basing-point pricing

b.            zone pricing

c.             uniform delivered pricing

d.            freight absorption pricing e. FOB origin pricing

 

53.          The term FOB is an acronym for:

a.            free on board.

b.            fee on buyer.

c.             first on board.

d.            freight on board.

e.            freight origin buyer.

 

54.          With      , the seller pays the actual freight charges and bills every purchase with an identical, flat freight charge.

a.            uniform delivered pricing

b.            zone pricing

c.             FOB origin pricing

d.            freight absorption pricing

e.            basing-point pricing

 

55.          Uniform delivered pricing enables a firm to:

a.            charge each customer the actual cost of shipping its products.

b.            stir up price competition between buyers.

c.             offer every purchaser an identical, flat freight charge.

d.            discriminate in favor of buyers that are geographically closer to the seller.

e.            charge each customer its fair share of the cost of shipping.

 

56.          Uniform delivered pricing:

a. creates no geographic price discrimination. b. is sometimes called “postage stamp” pricing.

c.             is prevalent in the steel, cement, corn oil, and lead industries.

d.            is common where freight costs are a large portion of total costs.

e.            is calculated from regional base points.

 

57.          L.L. Bean charges all customers the same flat freight rate. It uses:

a.            FOB origin pricing.

b.            zone pricing.

c.             freight absorption pricing.

 

d.            basing-point pricing.

e.            uniform delivered pricing.

 

 

58.          All of the following are geographic pricing methods EXCEPT:

a.            latitude pricing.

b.            FOB origin pricing.

c.             zone pricing.

d.            freight absorption pricing.

e.            basing-point pricing.

 

59.          Claxton Bakery recently began selling its fruitcakes online. If Claxton wants a simple pricing system that allows for different shipping charges depending on geographic segment or region, the company should use                pricing.

a.            two-part

b.            uniform delivered

c.             freight absorption

d.            flexible e. zone

 

60.          An Alabama-based catalog retailer sells fireplace equipment such as screens and andirons. Its customers in New England are charged one shipping rate, and customers west of the Rocky Mountains are charged a different rate. Customers in the Midwestern states are charged yet another rate. What kind of geographic pricing is the catalog retailer using?

a.            FOB origin pricing

b.            FOB factory c. Zone pricing

d. Freight absorption pricing

e. Uniform delivered pricing

 

61.          If a company decides to divide its market area into segments or regions and charge a flat rate for freight to all customers in a given region, the company is using            pricing.

a.            zone

b.            uniform delivered

c.             freight absorption

d.            FOB origin

e.            basing-point

 

62.          Dancing Pigs BarBQue Sauce is a product of the BarBQ Shop located in Memphis, Tennessee. It’s also sold online for $88 a case, including shipping and handling. The Bar-B-Q shop covers the cost of shipping and uses pricing policy.

a.            penetration

b.            skimming

c.             zone

d.            basing-point

e.            freight absorption

 

 

 

 

 

63.          Trade-ins often go hand-in-hand with:

a.            price skimming.

b.            professional services pricing. c. flexible pricing.

d. single-pricing.

e. penetration pricing.

 

64.          If the seller pays all or part of the actual freight charges and does not pass them on to the buyer, the seller is using     pricing.

a.            freight absorption

b.            uniform delivered

c.             zone

d.            FOB origin

e.            basing-point

 

65.          If a manufacturer designates a shipping point from which to calculate all freight charges and charges customers the freight costs from that point (even if the goods were shipped from another location), the manufacturer is using    pricing.

a.            freight absorption

b.            uniform delivered

c.             zone

d.            FOB origin e. basing-point

 

66.          A national manufacturer of car parts has six warehouses and has a pricing policy of charging freight from the closest warehouse to the customer, regardless of where parts are shipped from. For instance, if the customer is in Vancouver, British Columbia, the closest warehouse to the customer is in Seattle, Washington. If the ordered car part actually comes from the Alabama warehouse, the customer still pays freight from Seattle. The manufacturer uses       pricing.

a.            FOB origin

b.            uniform delivered

c.             zone

d.            basing-point

e.            freight absorption

 

67.          Which of the following is a price tactic that offers all goods and services at the same price (or perhaps two or three prices)?

a.            Primary pricing

b.            Uniform-price tactic c. Single-price tactic

d. Constant-pricing

e. EDLP

 

 

 

 

68.          The 99-Center is a retail store where all of the merchandise is priced at 99 cents. This retailer uses:

a.            a single-price tactic.

b.            flexible pricing.

c.             price lining.

d.            price bundling.

e.            leader pricing.

 

69.          Single-price selling:

a.            removes price comparisons from the buyer’s decision making process.

b.            does not benefit the retailer.

c.             is most effective when used during an inflationary period.

d.            encourages clerical errors.

e.            is accurately described by none of these choices.

 

70.          The Used Car Mall lets salespeople charge different customers different prices for essentially the same automobile depending on how good the customer is at negotiating price. It uses:

a.            two-part pricing.

b.            an illegal pricing policy. c. flexible pricing.

d. bait and switch practices.

e. price maintenance.

 

 

Option 1

Low Cost Option
Download this past answer in few clicks

10.83 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE