66) ________ refers to charging different prices for different stores, markets, or regions.
A) Zone pricing
B) Geofencing
C) Price lining
D) Price optimization
E) Odd pricing
67) ________ is the practice of pricing certain items lower than normal to increase customers’
traffic flow or boost sales of complementary products.
A) Stimulus pricing
B) Leader pricing
C) Follow-up pricing
D) Price lining
E) Odd pricing
68) Dream Homes is an appliance store. It recently launched its own brand of freezers in order to
build customer loyalty. The store launched three different models to cater to low-, middle-, and
high-income groups. The freezers are also priced accordingly. These freezers are exclusive to
Dream Homes and cater to all customer segments. This pricing strategy involving price points
within a merchandise category is known as
A) price lining.
B) price bundling.
C) odd pricing,
D) zone pricing.
E) leader pricing.
69) Why was odd pricing used in the early twentieth century?
A) Odd pricing saved on distribution costs.
B) It was used to increase traffic flow into stores.
C) It offered a limited number of predetermined price points making pricing easier.
D) It eliminated confusion when a customer shopped in different locations.
E) It reduced losses due to employee theft.
70) At the new toy store that opened near his home, Ryan noticed all the products were priced at
$.49, $.79, or $.99 endings. What type of pricing is the store following?
A) Odd pricing
B) Unit pricing
C) Horizontal pricing
D) Mixed pricing
E) Promotional pricing
71) Which of the following is set by vendors by withholding benefits such as cooperative
advertising or even refusing to deliver merchandise to noncomplying retailers?
A) Predatory pricing
B) Horizontal pricing
C) Bait and switch
D) Vertical pricing
E) MSRP pricing
72) ________ is an unlawful, deceptive practice that lures customers into a store by advertising a
product at a lower-than-normal price and then, once they are in the store, induces them to purchase
a higher-priced model.
A) Predatory pricing
B) Horizontal price fixing
C) Bait and switch
D) Scanned pricing
E) Dynamic pricing
73) Why do vendors encourage retailers to sell at MSRP?
A) To secure a profit
B) To reduce retail price competition among retailers
C) To avoid markdowns
D) To promote national brands as quality brands
E) To drive competitive retailers out of business
74) A ________ is a promise to customers to sell currently out-of-stock merchandise at the
advertised price when it arrives.
A) rain check
B) price audit
C) bona fide reference price
D) maintained markup
E) dynamic pricing policy
75) Which of the following pricing practices employs tactics such as inadequate inventory for
advertised products?
A) Bait and switch
B) Deceptive reference pricing
C) MSRP pricing
D) Predatory pricing
E) Horizontal price fixing
76) An agreement between retailers that are in direct competition with each other to set the same
prices is called
A) horizontal price fixing.
B) vertical price fixing.
C) MSRP pricing.
D) predatory pricing.
E) price elasticity.
77) A ________ is the price against which buyers compare the actual selling price of the product,
and thus it facilitates their evaluation process.
A) MSRP price
B) break-even price
C) markup price
D) reference price
E) maintained markup
78) Periodic price audits are completed at retail stores to ensure that the
A) prices are high enough to cover costs.
B) prices are lower than the competition.
C) extent and cause of scanning errors are identified.
D) product is priced consistent with the company’s pricing policy.
E) retailer is not engaging in horizontal price fixing.
79) What are the strengths of operating with a high/low pricing strategy?
80) What are five factors retailers consider in setting retail prices?
81) Describe the difference between initial markup and maintained markup.
82) What are the limits of the rule-based approach of taking markdowns?
83) How can working with vendors reduce the number of markdowns?
84) What are the ways markdown merchandise can be consolidated?
85) Describe geofencing.
86) What legal and ethical pricing issues need to be considered when retailers set their prices?
87) How are retailers affected by scanning errors? What are the measures taken to minimize these
errors?