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Exam 11: Pricing Strategies: Additional Considerations

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Question 1

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In a bid to attract more customers in a market that has several competitors, Barrymore's Bakery slashed the prices of all its products by 50 percent. Managers at the firm reasoned that lower prices would draw in even more customers, making up for the reduction in price several times over. Which of the following pricing strategies are they using?

A) market-skimming pricing
B) market-penetration pricing
C) captive-product pricing
D) cash discount pricing
E) by-product pricing

F) B) and D)
G) A) and D)

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Question 2

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Which of the following is a geographical pricing strategy?

A) basing-point pricing
B) segmented pricing
C) dynamic pricing
D) Internet pricing
E) location-based pricing

F) B) and D)
G) B) and E)

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Question 3

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A(n) ________ refers to promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way.

Electrowhip, a company that manufacturers blenders and electric whisks, has decided to use a market penetration pricing strategy. Which of the following, if true, proves their decision to be a wise one?

Sellers cannot influence or use consumers' reference prices when setting their product prices.

Mark's Markers, a manufacturer of white board markers, has required its dealers to charge a specified retail price for its markers. Mark's is most likely guilty of ________.

Motorzone offers replacement parts for old Volkswagen Beetles. The company calculates shipping charges based on shipping parts from Boston, even though some parts actually ship from St. Louis. Motorzone most likely practices ________ pricing.

A(n) ________ is a straight reduction in price on purchases during a stated period of time or of larger quantities.

Give two examples of by-product pricing.

How might a consumer view a price cut?

A supermarket places its store brand of blackberry jam priced at $5 per jar in the fruit preserves aisle, alongside the jam jars of a better known brand-whose products are priced at $8 apiece. Store managers reason that customers are more likely to choose the store brand instead of the better-known brand when they realize the price difference. What price adjustment strategy is evident in the supermarket's reasoning?

When theaters vary seat prices due to audience preferences for seats in coveted rows, they use ________ pricing.

Which of the following is true of FOB-origin pricing?

Midnight Magic, a perfume manufacturing company, plans to release a new fragrance during the holiday season at $99 per bottle. The company intends to bring the price down to $49 within six months of its release to attract buyers who couldn't afford the initial price. Which of the following pricing strategies is Midnight Magic using?

When The Candy Store sets a low initial price in order to get its "foot in the door" and to quickly attract a large number of buyers, the company is using market-skimming pricing.

When a company sets a high price for a new product with the intention of reducing the price in the future, it is using the ________ pricing strategy.

Casual Comfort sells its catalog items using FOB-origin pricing. Who pays the freight charges?

Which of the following product mix pricing strategies involves pricing products that can only be used with the main product?

Print-Fast Printers prices its printer cartridges at a premium, since customers must buy Print-Fast cartridges to work with their Print-Fast printer. Print-Fast uses optional-product pricing.

Which of the following product mix pricing strategies involves setting prices across an entire product range based on cost differences between the products, customer evaluations of different features, and competitors' prices?