49) Marriott has branded its entire family of accommodations based on different value
propositions, supported by clearly delineated pricing strategies. Its offerings include Ritz-Carlton
and JW Marriott for the most discriminating patron, Marriott and Renaissance at the next level of
full service, and an array of differentially positioned brands such Courtyard and Residence Inn.
This is an example where ________ can occur at a level much broader in scope than individual
products.
A) captive pricing
B) auction pricing
C) price lining
D) reference pricing
E) variable pricing
50) HP sells an inexpensive printer for an entry-level user, but the printer cartridges that need
continual replacement are fairly expensive. This demonstrates the concept of ________.
A) product line pricing
B) captive pricing
C) price bundling
D) reference pricing
E) prestige pricing
51) Krista goes to a store to buy a new liquid soap dispenser. When she purchases a new
dispenser from the store she gets two liquid soap refill packets for free, as part of a promotional
offer, but she will need to purchase refills later. In this scenario, the pricing strategy used for the
soap dispenser is ________ pricing.
A) product line
B) captive
C) variable
D) reference
E) prestige
52) When Claire purchased her new cell phone, she was offered an opportunity to purchase a car
charger and a cover together at a reduced price. The cell phone provider was using a ________
strategy.
A) product line pricing
B) captive pricing
C) price bundling
D) reference pricing
E) prestige pricing
53) Bright House wants Madhukar to buy the full gamut of entertainment products, and the more
he buys—digital television, premium channels, downloadable movies, local and long-distance
phone service, cellular service, high-speed Internet—the better the deal becomes compared to the
total of the individual prices of each product. Bright House is using a ________ strategy.
A) product line pricing
B) captive pricing
C) price bundling
D) reference pricing
E) prestige pricing
54) It can be useful for customers to have some type of comparative price when considering a
product purchase. Such a comparison is referred to as ________ pricing, which in the case of
price bundling is the total price of the components of the bundle if purchased separately versus
the bundled price.
A) product line
B) captive
C) odd/even
D) reference
E) prestige
55) Bella is a discount furniture store. Most of the items in the store are overstock and hence tend
to be more inexpensive than other furniture. Recently Bella started to display the manufacturers’
suggested retail price next to the price it charges to show the savings. Bella is using a ________
strategy.
A) product line pricing
B) captive pricing
C) price bundling
D) reference pricing
E) prestige pricing
56) One rationale for establishing a price skimming objective is that ________ lends status to a
product or brand by virtue of a price relatively higher than the competition.
A) product line pricing
B) captive pricing
C) price bundling
D) reference pricing
E) prestige pricing
57) Edvard works at a ski shop. He has just gotten a shipment of new snowboards and realizes
that the company has priced its snowboards higher than the rest of the boards in his shop. Since
Edvard took a marketing class in college, he knows that the company is most likely using
________.
A) product line pricing
B) captive pricing
C) price bundling
D) reference pricing
E) prestige pricing
58) Creating a perception about price merely from the image the numbers provide the customer
demonstrates ________ pricing.
A) psychological
B) stability
C) variable
D) everyday low
E) high/low
59) Dag runs a hardware store. He learned that customers process the price of $9.99 as
significantly lower than the price of $10.00 because of the reduced digit count in the price point.
Accordingly, he follows this rule to set up the prices for all products. Dag uses a ________
strategy.
A) psychological pricing
B) one-price strategy
C) variable pricing
D) everyday low pricing (EDLP)
E) high/low pricing
60) With ________ pricing, customers are allowed—even encouraged—to haggle about prices.
A) psychological
B) captive
C) variable
D) odd/even
E) high/low
61) The fundamental philosophy behind ________ is to reduce investment in promotion and
transfer part of the savings to lower price.
A) price bundling
B) target return on investment pricing
C) variable pricing
D) everyday low pricing
E) reverse auctions
62) The rise of Walmart as one of the world’s largest corporations has brought the concept of
________ to the forefront of global consumer consciousness.
A) reverse auctions
B) target return on investment pricing
C) price points
D) everyday low pricing
E) high/low pricing
63) ________ is used by firms that rely on periodic heavy promotional pricing, primarily
communicated through advertising and sales promotion, to build traffic and sales volume.
A) Psychological pricing
B) One-price strategy
C) Variable pricing
D) Everyday low pricing (EDLP)
E) High/low pricing
64) Dyani runs Cute Cakes, a gourmet cupcake bakery. To set prices for her cupcakes, Dyani
looks at the cost of making each cupcake and then adds an additional amount on top of that to
arrive at her price. Dyani is using ________.
A) cost-plus pricing
B) high/low pricing
C) markup on sales price
D) average-cost pricing
E) target return pricing
65) The Internet created a rise in ________ as more and more people decided to meet online to
sell products to the highest bidder.
A) price elasticity of demand
B) stability pricing
C) prestige pricing
D) auction pricing
E) trade discounts
66) Besides the standard auction approach where buyers bid for a seller’s offering, it is now very
common for sellers to utilize ________ to bid prices to capture a buyer’s business.
A) price elasticity of demand
B) stability pricing
C) online promotion
D) channel discounts
E) reverse auctions
67) Priceline.com is a firm that serves as a clearinghouse for extra capacity from airlines, hotels,
and cruise lines. It is an example of a firm that uses a(n) ________ strategy.
A) cost-plus pricing
B) price war
C) reverse auction
D) average-cost pricing
E) target return pricing
68) You should be careful when using ________ pricing, as it is always possible that the quantity
demanded will not match the marketing manager’s forecast.
A) cost-plus
B) psychological
C) value
D) average-cost
E) prestige
69) James is trying to determine the best price for his new fishing poles and thus uses the sales
price as a basis of calculating the markup percentage. He is using a ________ approach.
A) markup on cost
B) value price
C) average-cost pricing
D) markup on sales price
E) cost-plus
70) To better take into account the differential impact of fixed and variable costs, marketing
managers can use ________ pricing.
A) cost-plus
B) psychological
C) odd/even
D) average-cost
E) target return
71) As with average-cost pricing, the effectiveness of ________ pricing is highly dependent on
the accuracy of the forecast.
A) cost-plus
B) psychological
C) reference
D) average-cost
E) target return
72) ________ costs are incurred over time, regardless of volume, whereas ________ costs
fluctuate with volume.
A) Fixed; variable
B) Variable; fixed
C) Total; variable
D) Variable; total
E) Marginal; total
73) ________ costs are the sum of the fixed and variable costs.
A) Marginal
B) Total
C) Average
D) Minimum
E) Reduced
74) To use target return pricing, one must first calculate total ________ costs.
A) fixed
B) variable
C) marginal
D) minimum
E) average