151) In 2016, Red Bull had a 38% dollar sales market share and a 33% unit volume market
share. Its price premium for that year equaled
A) −12.5%.
B) −7.5%.
C) −5.3%.
D) 0%.
E) 15.2%.
152) Loss-leader pricing refers to
A) a pricing method where the price the seller charges is below the actual cost to make the
product.
B) setting a low initial price and gradually but consistently increasing that price so as not to
antagonize the consumer.
C) deliberately selling a product below its customary price, not to increase sales, but to attract
customers’ attention in hopes that they will buy other products as well.
D) a method of pricing based on a product’s tradition, standardized channel of distribution, or
other competitive factors.
E) pricing a product between 8 and 10% lower than nationally branded competitive products.
153) Deliberately selling a product below its customary price, not to increase sales, but to attract
customers’ attention in hopes that they will buy other products as well, is referred to as
A) loss-leader pricing.
B) bundle pricing.
C) magnet pricing.
D) predatory pricing.
E) below-market pricing.
154) When Kroger, a national supermarket chain, uses a special promotion to price a six-pack of
soda at $2.09 (which is below its customary price level of $4.29), it is attempting to
A) drive its competition out of business.
B) attract customers in hopes they will buy other products as well.
C) fill its parking lot so its store will look successful.
D) work with the local bottler to move products that are close to their expiration dates.
E) help stimulate the local economy and generate good will with its customers.
155) Setting one price for all buyers of a product or service is referred to as
A) customary pricing.
B) a fixed-price policy.
C) a dynamic pricing policy.
D) standard markup pricing.
E) uniform pricing.
156) A fixed-price policy refers to
A) setting different prices for products and services in real time in response to supply and
demand conditions.
B) setting the price of an entire line of products at a single specific pricing point.
C) simultaneously setting prices for all items in a product line to cover the total cost and produce
a profit for the complete line, not necessarily for each item.
D) adding a fixed percentage to the cost of all items in a specific product class.
E) setting one price for all buyers of a product or service.
157) Another name for a fixed-price policy is
A) customary pricing.
B) a one-price policy.
C) dynamic pricing.
D) standard markup pricing.
E) uniform pricing.
158) When you buy a used car from a CarMax dealership, you are offered the car at a “no
haggle” price. You can buy it or not, but there is no negotiating the published price because of
the seller’s
A) customary pricing strategy.
B) fixed-price policy.
C) uniform pricing policy.
D) dynamic pricing policy.
E) dynamic pricing strategy.
159) Family Dollar Stores, like Dollar Value Stores and 99¢ Only Stores, use what type of
pricing policy?
A) dynamic pricing
B) customary pricing
C) flexible pricing
D) fixed-price
E) at-market pricing
160) Tendollars.com offers thousands of gifts, all priced at $10. This is an example of a(n)
A) skimming pricing approach.
B) loss-leader pricing approach.
C) fixed-price policy.
D) penetration pricing approach.
E) everyday low pricing approach.
161) Setting different prices for products and services in real time in response to supply and
demand conditions is referred to as
A) price lining.
B) a dynamic pricing policy.
C) customary pricing.
D) price fixing.
E) discretionary pricing.
162) A dynamic pricing policy refers to
A) setting the price of a line of products at a number of different specific pricing points.
B) setting the prices for all items in a product line to cover the total cost and produce a profit for
the complete line, not necessarily for each item.
C) deliberately selling a product below its customary price, not to increase sales, but to attract
customers’ attention in hopes that they will buy other products as well.
D) setting different prices for products and services in real time in response to supply and
demand conditions.
E) adding a fixed percentage to the cost of all items in a specific product class.
163) Another name for a dynamic pricing policy is
A) target pricing.
B) fluid pricing.
C) price lining.
D) market-based pricing.
E) a flexible-price policy.
164) A dynamic pricing policy allows marketers to respond to
A) requests for allowances.
B) threats of discrimination.
C) success measures for the firm’s previous promotions.
D) changes in demand, cost, and competitive factors.
E) inquiries by government agencies.
165) Marketers using a dynamic price policy should take care to avoid
A) requests for allowances.
B) price gouging.
C) contradictory promotions.
D) changes in market segmentation.
E) reliance on government agencies.
166) Which of the following is a form of dynamic pricing?
A) odd-even pricing
B) yield management pricing
C) above-, at-, and below-market pricing
D) target pricing
E) cost-plus pricing
167) Yield management pricing is a form of
A) target pricing.
B) loss-leader pricing.
C) dynamic pricing.
D) customary pricing.
E) price lining.
168) The way that a person navigates through an online marketer’s website is called
A) surf-shopping behavior.
B) cross-channel shopping.
C) the clickstream.
D) one-click shopping.
E) the shopper pathway.
169) The setting of prices for all items in a product line to cover the total cost and produce a
profit for the complete line, not necessarily for each item, is referred to as
A) line item pricing.
B) product-line pricing.
C) price lining.
D) customary pricing.
E) discretionary pricing.
170) Product-line pricing refers to
A) setting the price of a line of products at a number of different specific pricing points.
B) deliberately selling a product below its customary price, not to increase sales, but to attract
customers’ attention in hopes that they will buy other products as well.
C) adding a fixed percentage to the cost of all items in a specific product class.
D) setting of prices for all items in a product line to cover the total cost and produce a profit for
the complete line, not necessarily for each item.
E) the marketing of two or more products in a single package.
171) Product-line pricing involves determining the lowest-priced product and price, the highest-
priced product and price, and
A) the single most popular item in the line.
B) the least vulnerable product in the line.
C) the most frequently sold product in the line.
D) the most price-insensitive product in the line.
E) the price differentials for all other products in the line.
172) When establishing product-line pricing, the highest priced item is typically positioned as
A) the oldest product item in the line.
B) the premium item in the line in terms of quality and features.
C) the largest selling product item in the line.
D) the loss-leader item for the rest of the product line.
E) the most price-insensitive product item in the line.
173) When establishing product-line pricing, the lowest-priced item is typically positioned as
A) the youngest product item in the line.
B) the smallest selling product item in the line.
C) the lost-cost item in the line in terms of quality and features.
D) the profit leader for the rest of the product line.
E) the traffic builder designed to capture the attention of first-time buyers.
174) When establishing product-line pricing, the price differentials between items in the line
should make sense to customers and reflect differences in terms of the
A) perceived value of the products offered.
B) actual costs of the features offered.
C) perceived risk.
D) quantity discounts and price allowances offered.
E) market segments targeted.
175) Assume that Nike Variety tennis shoes have variable costs of $6 and sell for $24. Also
assume that Nike Wimbledon tennis shoes have variable costs of $38 and sell for $48, but when
fixed overhead is added, the shoe is unprofitable by $2 per pair. Which statement is most
accurate regarding Nike’s pricing approach with these two products?
A) Demand for each shoe is unrelated to price.
B) Nike is using a cost-plus-percentage-of-cost pricing strategy.
C) Nike is using a product-line pricing strategy.
D) Demand for each shoe is unrelated to product quality.
E) Consumers do not use price as an indication of quality.
176) The price for Nintendo’s Wii video game console was likely insufficient to cover its fixed
and variable costs. However, the price of its video games was set high enough to cover its video
game console’s loss and deliver a handsome profit for all Nintendo products. This example
illustrates Nintendo’s use of
A) bundle pricing.
B) product-line pricing.
C) price lining.
D) customary pricing.
E) loss-leader pricing.
177) Frito-Lay recognizes that its tortilla chip products are partial substitutes for one another. Its
bean and cheese dips and salsa sauces complement its tortilla chips. Frito-Lay uses this
knowledge to set prices for each item in order to ensure that the entire line is profitable. This
pricing strategy is known as
A) bundle pricing.
B) price lining.
C) customary pricing.
D) product-line pricing.
E) loss-leader pricing.
178) Toro decided to augment its traditional hardware retail distribution channel by also selling
through mass merchandisers such as Walmart and Target and setting prices for its products
substantially below those of its traditional hardware outlets. As a result, many hardware stores
abandoned Toro products in favor of other manufacturers. This is an example of a firm failing to
consider ________ effects when setting its final list or quoted price.
A) company
B) social responsibility
C) regulatory
D) competitive
E) customer
179) The successive price cutting by competitors to increase or maintain their unit sales or
market share is referred to as
A) everyday even lower pricing.
B) a price war.
C) fair trade pricing.
D) a market war.
E) a price reduction.
180) A price war refers to
A) competition between sellers and resellers to maintain or attain the largest market share of
potential customers.
B) conflicts between manufacturers and distributors regarding acceptable percentages they each
charge relative to one another.
C) when one channel member believes another channel member is engaged in pricing behavior
that prevents it from achieving its profitability goals.
D) the successive price cutting by competitors to increase or maintain their unit sales or market
share.
E) the practice of replacing promotional allowances with lower manufacturer list prices.
181) Which of the following statements regarding price cutting is most accurate?
A) Marketers should only consider price cutting if primary demand for a product class will
remain stable.
B) Marketers should only consider price cutting if the price cut can be made across all items in a
product line and all product lines in a product mix.
C) Marketers should only consider price cutting that is confined to specific products or
customers.
D) Marketers should only consider price cutting if the firm also increases advertising.
E) Marketers should never consider price cutting unless a product is in the introductory stage of
its product life cycle.
182) It is relatively easy to measure the incremental cost of a new advertising campaign; what is
not as easy is
A) measuring the extra fixed cost involved.
B) measuring the extra variable cost involved.
C) measuring the incremental revenue generated by the new advertising campaign.
D) determining whether customers who stop buying the product are reacting negatively to the
advertisement or to some other aspect of the product itself.
E) determining what percentage of the ad-generated revenue should be reinvested into additional
advertisements of the same form.
183) Incremental analysis might take the form of such questions as, “Should we extend our hours
to include Sundays?” or “What if we put more apples in the pie?” The basic principle is that
A) as long as a marketing action breaks even, the action is worth taking.
B) expected incremental revenues from pricing and other marketing actions must more than
offset incremental costs.
C) you “don’t rock the boat” if your program is making a profit; “leave well enough alone.”
D) if you are not willing to take risks, even if the numbers tell you otherwise, your business will
ultimately fail.
E) marketing and finance are two different animals: “If it feels right in your gut—go for it.”
184) The manager of a small gas station observes that while gasoline sales have been steady, the
service side of the business has declined, and mechanics are often idle. He decides to offer a
promotion—a $20 off coupon for an oil change that is to be mailed to 800 households within a
two-mile radius from the gas station. The cost of printing and mailing is $1,000. The normal cost
of an oil change is $40. Materials and labor per oil change cost is $15. How many additional
maintenance service jobs must result for the promotion to break even?
A) 25 jobs
B) 40 jobs
C) 50 jobs
D) 67 jobs
E) 200 jobs
185) The three major types of special adjustments to list or quoted price are
A) demand-oriented, cost-oriented, and profit-oriented adjustments.
B) one price, flexible price, and discounts.
C) discounts, allowances, and marginal adjustments.
D) discounts, allowances, and geographical adjustments.
E) discounts, incremental costs and revenues, and geographical adjustments.
186) Figure 14-7 above shows the three major types of special adjustments to the list or quoted
price. Box A represents
A) demand-oriented price adjustments.
B) allowances.
C) geographical adjustments.
D) discounts.
E) customary pricing adjustments.
187) Figure 14-7 above shows the three major types of special adjustments to the list or quoted
price. Box B represents
A) demand-oriented price adjustments.
B) allowances.
C) geographical adjustments.
D) discounts.
E) customary pricing adjustments.
188) Figure 14-7 above shows the three major types of special adjustments to the list or quoted
price. Box C represents
A) demand-oriented price adjustments.
B) allowances.
C) customary pricing adjustments.
D) discounts.
E) geographical adjustments.