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A company has set a low price on a new product it introduced. They want to maximize their market share and attract a large number of buyers quickly. Which new product pricing strategy should the company use?
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Part 1
A.
Psychological pricing
B.
Market-skimming pricing
C.
Market-penetration pricing
D.
Captive-product pricing
E.
Optional product pricing
C.
Market-penetration pricing
Which of the following would NOT be a condition that supports a market-skimming pricing strategy?
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Part 1
A.
The costs of producing a smaller volume cannot be so high they cancel the higher price.
B.
Production and distribution costs must decrease as sales volume increases.
C.
The product's image must support the higher price.
D.
The product should be differentiated so competitors cannot undercut the higher price.
E.
The brand must be sufficiently strong with price-conscious consumers who will wait for the price to drop.
Your answer is not correct.
B.
Production and distribution costs must decrease as sales volume increases.
Which of the following statements is true concerning new product pricing strategies?
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Part 1
A.
A market-penetration strategy should be used if the market is not highly price sensitive.
B.
For a market-penetration strategy to work, production and distribution costs must increase as sales volume increases.
C.
For a market-skimming strategy to be successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more.
D.
If competitors can easily enter the market, a market-skimming strategy should be used.
E.
When using a market-skimming strategy, marketers do not need to focus on the product's quality and image.
C.
For a market-skimming strategy to be successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more.
One major objective of a market-penetration pricing strategy is to __________.
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Part 1
A.
attract buyers willing to pay a higher price
B.
prevent customer dissatisfaction
C.
skim off small but profitable segments
D.
set a high price to gain profits
E.
win a large market share
E.
win a large market share
Whirlpool washers and dryers are offered in many different models. Whirlpool will use __________ pricing to determine the price steps between the different models.
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Part 1
A.
product line
B.
two-part pricing
C.
captive-product
D.
product-bundle
E.
optional-product
A.
product line
Purdue Farms has found a lucrative market in China for chicken feet, which are not typically consumed by Americans. Which type of pricing would Purdue Farms use in this case?
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Part 1
A.
By-product pricing
B.
Captive-product pricing
C.
Product bundle pricing
D.
Two-part pricing
E.
Product line pricing
A.
By-product pricing
What is the overall goal of product mix pricing strategies?
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Part 1
A.
The firm looks for a set of prices to sell its by-products.
B.
The firm looks for a set of prices that will maximize profits on the total product mix.
C.
The firm looks for a set of prices that minimize costs.
D.
The firm looks for a set of prices that will maximize profits for each item in the mix.
E.
The firm looks for a set of prices to minimize the price steps between the product versions.
B.
The firm looks for a set of prices that will maximize profits on the total product mix.
Which of the following is NOT a product mix pricing strategy?
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Part 1
A.
Dynamic pricing
B.
Product bundle pricing
C.
Captive-product pricing
D.
By-product pricing
E.
Optional-product pricing
A.
Dynamic pricing
Poultry processors such as Perdue Farms once couldn't give chicken feet away and even had to pay to dispose of them. However, they have now discovered a huge demand in China for the chicken feet. What pricing strategy are these poultry producers using?
Question content area bottom
Part 1
A.
Product-bundle pricing
B.
Two-part pricing
C.
By-product pricing
D.
Product line pricing
E.
Optional-product pricing
C.
By-product pricing
Many personal care companies combine toothpaste with a toothbrush at a reduced price. This is an example of __________ pricing.
Question content area bottom
Part 1
A.
captive-product
B.
two-part
C.
product line
D.
by-product
E.
product bundle
E.
product bundle
When a college or university charges more for out-of-state students than in-state students, it is practicing ________ pricing.
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Part 1
A.
time-based
B.
product form
C.
location-based
D.
promotional
E.
customer-segment
C.
location-based
UPS charges different prices for shipping depending on which region of the United States the item is being shipped to. The more distant the city the package is being shipped to, the higher the price UPS charges. Which geographic pricing method is UPS using?
Question content area bottom
Part 1
A.
FOB origin
B.
Zone pricing
C.
Uniform-delivered pricing
D.
Freight-absorption pricing
E.
Base-point pricing
B.
Zone pricing
Roshika has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as a(n) ________.
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Part 1
A.
type of segmented pricing
B.
indicator of the cost of production
C.
indicator of quality
D.
indicator of geographic pricing
E.
limited-time offer
C.
indicator of quality
________ pricing is the opposite of free onboard pricing. Here, the company charges the same price plus freight to all customers, regardless of their location.
Question content area bottom
Part 1
A.
Freight-absorption
B.
Uniform-delivered
C.
Destination-based
D.
Origin-based
E.
Zone
B.
Uniform-delivered
When a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store, it is practicing ________ pricing.
Question content area bottom
Part 1
A.
promotional
B.
segmented
C.
geographical
D.
optional-product
E.
psychological
A.
promotional
Which of the following statements is true regarding initiating price cuts?
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Part 1
A.
Cutting price has no effect on costs.
B.
Firms never cut prices, they only raise them.
C.
Cutting prices in an industry with excess capacity may lead to price wars.
D.
If faced with excess capacity a firm should not cut its price.
E.
When faced with falling demand, firms should not cut prices.
C.
Cutting prices in an industry with excess capacity may lead to price wars.
In which of the following circumstances should a company NOT consider lowering prices?
Question content area bottom
Part 1
A.
A strong economy
B.
Excess inventory
C.
To boost sales
D.
Falling demand with strong price competition
E.
To gain market share
A strong economy
When would a competitor most likely react to a firm's price change?
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Part 1
A.
When buyers are not well informed about prices
B.
When the product is differentiated
C.
When buyers are not well informed about the product
D.
When the number of firms involved is large
E.
When the number of firms involved is small
E.
When the number of firms involved is small
Which of the following statements regarding initiating price increases is correct?
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Part 1
A.
Companies do not need to communicate reasons for price increases.
B.
Price increases do not impact profits.
C.
The company should consider ways to meet higher costs or demand without raising prices.
D.
Prices should be increased when there is a lack of demand.
E.
Cost inflation is not a factor in price increases.
C.
The company should consider ways to meet higher costs or demand without raising prices.
Of the following, which is true about pricing?
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Part 1
A.
Price competition is a core element of our free-market economy.
B.
Federal law is the overriding authority on pricing.
C.
Companies do not need to communicate reasons for price increases to customers.
D.
Companies usually are free to charge whatever prices they wish.
E.
Companies have no obligation to consider broader societal pricing concerns.
A.
Price competition is a core element of our free-market economy.
Four major U.S.
airlineslong dash—United,
Delta, Southwest, and
Americanlong dash—agreed
to pay $60 million in fines to settle a class action lawsuit, and they remain under investigation by the Justice Department for conspiring to artificially inflate air fares to "reap huge profits." These airlines are accused of ________.
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Part 1
A.
price-fixing
B.
deceptive pricing
C.
retail price maintenance
D.
predatory pricing
E.
price discrimination
A.
price-fixing
________ is the practice of pricing products below cost to harm competitors.
Question content area bottom
Part 1
A.
Retail price maintenance
B.
Predatory pricing
C.
Price discrimination
D.
Deceptive pricing
E.
Price-fixing
B.
Predatory pricing
What is the purpose of the Robinson-Patman Act?
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Part 1
A.
To prevent predatory pricing
B.
To prevent price-fixing
C.
To prevent unfair price discrimination
D.
To prevent scanner fraud
E.
To prevent deceptive pricing
C.
To prevent unfair price discrimination
When, if ever, is price discrimination allowed?
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Part 1
A.
If the seller is selling via the Internet as its main channel, then it is legal.
B.
If the seller can prove that it is allowable in certain states and local retailing areas, then it is legal.
C.
If the seller can substantiate that it is distributing internationally, then it is legal.
D.
If the seller can prove that its costs are different when selling to different retailers, then it is legal.
E.
If the seller can prove that its revenue is affected when selling to similar retailers, then it is legal.
D.
If the seller can prove that its costs are different when selling to different retailers, then it is legal.D.
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