194. Marketers are usually in a better position to establish prices when they know the prices charged for competing
brands.
a. True
b. False
195. It is easy to obtain an accurate price list for a competitor’s products.
a. True
b. False
196. Some stores employ comparative shoppers to learn what prices their competitors are charging.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
197. Costs are a major issue when establishing price.
a. True
b. False
198. Cost-based pricing strategies result in a percentage being added to the cost of the product.
a. True
b. False
199. Cost-based pricing does not necessarily take into account the economic aspects of supply and demand.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
200. Cost-plus pricing is popular in periods of rapid inflation.
a. True
b. False
201. Markup can be stated as a percentage of the cost or as a percentage of the selling price.
a. True
b. False
202. A major reason why retailers use markup pricing is that it is convenient.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
203. The effectiveness of demand-based pricing often depends on a marketer’s ability to determine all the costs
associated with the product.
a. True
b. False
204. A firm that considers costs and revenue secondary to competitors’ prices when setting its own prices is using a
competition-based pricing strategy.
a. True
b. False
205. The government frequently uses competition-based pricing in granting defense contracts.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
206. Competition-based pricing is important if competing products are almost homogeneous or if price is the key variable
in the marketing strategy.
a. True
b. False
207. Ideally, a pricing strategy has little relation to a firm’s marketing objectives.
a. True
b. False
208. A pricing strategy is a course of action designed to achieve pricing and marketing objectives.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
209. Differential pricing means different buyers pay different prices for the same quality and quantity of product.
a. True
b. False
210. Differential pricing is effective mainly when focusing on only one market segment.
a. True
b. False
211. An early-bird special offered by a restaurant during off-peak hours is an example of the secondary-market pricing
strategy.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
212. Periodic discounting is often predictable, and therefore consumers wait to make purchases so that they can benefit
from the price reductions.
a. True
b. False
213. Random discounting means discounting various products on a systematic basis.
a. True
b. False
214. Penetration pricing and price skimming of the market are two types of new-product pricing strategies.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
215. Price skimming is designed to yield maximum unit sales volume.
a. True
b. False
216. The use of price skimming discourages competitors from entering a market.
a. True
b. False
217. Penetration pricing is a new-product pricing approach that provides the most flexible introductory price.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
218. A company wanting to maximize profits from its new product would use product-line pricing.
a. True
b. False
219. Captive pricing, premium pricing, and price lining are all strategies aimed at maximizing the profits of an entire
product line rather than an individual product.
a. True
b. False
220. Grocery stores that position their less expensive, private brands next to more expensive, well-known manufacturer
brands on the shelf are using the concept of reference pricing.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
221. A psychological price is designed to encourage purchases on the basis of rational response rather than on the basis
of emotional reactions.
a. True
b. False
222. In some cases, prices are assigned to goods on the basis of tradition.
a. True
b. False
223. A price-leader approach is a pricing approach most often used in supermarkets to attract consumers by giving them
special low prices on a few items.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
224. The local florist advertises a discount on arrangements during the month of April because the anniversary of the
store’s opening is in April. This is an example of special-event pricing.
a. True
b. False
225. The way that pricing is used in the marketing mix will influence the determination of the final price.
a. True
b. False
226. Setting prices for business products is very similar to setting prices for consumer products.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
227. Producers commonly provide discounts off list prices to intermediaries.
a. True
b. False
228. Seasonal discounts provide price incentives to customers during peak-selling seasons.
a. True
b. False
229. If the price is quoted as F.O.B. origin pricing, then shipping costs are paid by the seller.
a. True
b. False
Chapter 12 – Pricing Concepts and Management
230. Transfer pricing involves the sale of a product to another unit within the same organization.
a. True
b. False
Chapter 12 – Pricing Concepts and Management