Multiple choice questions:
Question 1
1. Razer-Edge makes machines for sharpening the blades used by butchers to slice meat. When Razer-Edge priced its Primary Sharpener, its salespeople were told that it would be sold for $1,700, but that there would be room for discounts and flexibility. The $1,700 price is the _____ price for the Primary Sharpener.
base
zone
demand
channel leader
functional
Question 2
1. 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.
price-skimming
penetration pricing
status quo
cost bundling
price-lining
Question 3
1. One popular cost-oriented pricing tactic is culling low-profit margin products from the product line. Which of the following statements does NOT describe a reason why a marketing manager would want to avoid this tactic?
The low-margin item may be a large volume contributor to profit.
The tactic focuses special attention on the costs of producing each line and their contribution to overhead.
The loss of one item in the line may reduce the economies of scale.
The image of the rest of the product line may suffer if there is a "hole" in the line.
Other items in the line will now have to cover more fixed costs.
Question 4
1. A _____ discount is a deduction from list prices that is aimed at encouraging customer loyalty.
cumulative quantity
noncumulative quantitative
functional
cash
frequent buyer
Question 5
1. 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?
rebate
cash discount
quantity discount
promotional allowance
functional discount
Question 6
1. 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.
penetration pricing
status quo pricing
price-skimming
bundling cost pricing
geodemographic pricing
Question 7
1. Quantity discounts are most often used to:
reward the buyer who pays in cash
encourage large orders
increase supply for a specific raw material
reward a channel intermediary for performing some service
shift the storage function backward to the supplier
Question 8
1. Art SuppliesIt's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school. In her Sunday newspaper was a flyer from Michael's, an arts and crafts retailer. As she looked through the newspaper insert, she noticed that if she purchased three or more bottles of Alene's Tacky Glue, the regular price of $1.50 each was reduced to $1.15 each. She also saw that the store priced its plastic storage boxes at $1.99, $3.99, and $5.99. She thought they would be useful for storing each individual child's projects. On the front page of the flyer was an ad for Funky Girls Gel Pens, something she knew her daughter would love to use. The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens. She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michael's had a scrapbook starter kit, which includes scissors, book, pages, and stickers for only $15. The items could be purchased separately for $19.99. The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.
Refer to Art Supplies. What pricing practice was used to price the plastic storage boxes?
seasonal pricing
price shading
price lining
inelastic pricing
cumulative pricing
Question 9
1. For which of the following situations would a price-skimming strategy be most appropriate?
the addition of a new comic book series with an obviously gay hero
the introduction of a new brand of bottled water
the elimination of demand for low wattage light bulbs
the introduction of a unique, roomy automobile model that has extremely low energy and fuel costs
the introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee
Question 10
1. Mrs. K's Premium Wisconsin CheeseSharyl Kabbes manufactures dairy products on her farm outside of Milwaukee, Wisconsin. Her products carry the brand name Mrs. K's Premium Wisconsin. The company sells milk, cheese, and sausage products. The products are sold individually or in sets that include a variety of cheeses and sausage products for a special price. Currently, the products are sold only in the state of Wisconsin. Mrs. K's products were introduced with a high price relative to competition. Kabbes says that her products are premium and, therefore, justify the high initial price. To get retailers to carry Mrs. K's products, the company offers discounts to buyers who will transport the products from the Kabbes Farm to their warehouses. Kabbes also offers retailers money to run ads for Mrs. K's products.Because Mrs. K's products are perishable, transportation is very important, and some of her customers could not take advantage of the discount offered for picking up the product from the farm. As a result, Kabbes has decided to divide the state of Wisconsin into several segments and base her freight charges on the location of the buyer within these segments.
Refer to Mrs. K's Premium Wisconsin Cheese. The money offered by Mrs. K's to retailers to advertise the company's products is called a:
rebate
quantity discount
promotional allowance
functional discount
cash discount