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Core: Marketing, 8e (Kerin)
Chapter 11 Pricing Products and Services
1) The largest US-based TV maker is
A) Sharp.
B) Panasonic.
C) LG.
D) Sony.
E) VIZIO.
2) VIZIO is the market leader in the North American ________ market.
A) designer eyewear
B) virtual media
C) smart TV
D) 3-D video game
E) exotic travel
3) VIZIO's HDTVs are sold through all of the following types of retailers except which?
A) Amazon.com
B) mass merchandisers, such as Target
C) its own brick and mortar stores
D) wholesale club stores such as Sam's Club
E) electronics stores such as Best Buy
4) In order to deliver a product that the average consumer can afford, VIZIO
A) handles product design and marketing in the United States and relies on contract manufacturers
in other countries to build the product.
B) uses mass customization in other countries and then ships the HDTVs to the United States.
C) purchased a small company in China to distribute its products under the VIZIO name.
D) purchased a small company in Japan to distribute its products under the VIZIO name.
E) relies solely on recycled materials to build high-quality, no-frills products.
5) The ________ paid for products and services goes by many names, like tuition for your
education, rent for an apartment, interest on a bank credit card, and a premium for car insurance.
A) fee
B) value
C) cost
D) price
E) exchange rate
6) All of the following are alternate names for the price you pay on goods and services except
which?
A) rent
B) interest
C) tuition
D) a premium
E) profit
7) Which of the following is an example of a price?
A) tuition
B) operating costs
C) liquidity
D) value
E) brand equity
8) Insurance premiums, entrance fees, train fares, and organization dues are all examples of
A) charges.
B) countertrade.
C) profit.
D) price.
E) currency.
9) All of the following statements about price are true except which?
A) Small changes in price can have big effects on both the number of units sold and company
profit.
B) The price for a product or service must earn a profit for the company.
C) For most products and services, there is an agreed-upon price range set by makers.
D) The price must be right—in the sense that customers must be willing to pay it.
E) The price must generate enough sales dollars to pay for the cost of developing, producing, and
marketing the product.
10) Susan hired an attorney to represent her in a court case involving an auto accident. The
attorney charged her a $2,000 retainer fee for the services. Terry needed a haircut; the local stylist
charged him $22 for his services. Aaron mowed his neighbor's lawn; in exchange, the neighbor
repaired his gutters. The attorney fees, the $12 charged by the hair stylist, and the exchange of
lawn mowing for gutter repair are all examples of
A) premiums.
B) barter.
C) the profit motive.
D) price.
E) outlays.
11) Price is
A) the value assigned to the exchange of products and services for other products and services.
B) the value judgment made by both the buyer and seller regarding an item's worth.
C) the money or other considerations (including other products and services) exchanged for the
ownership or use of a product or service.
D) the value assessed for the benefits of using a product or service.
E) the highest monetary value a customer is willing to pay for a product or service.
12) From a marketing viewpoint, ________ is the money or other considerations (including other
products and services) exchanged for the ownership or use of a product or service.
A) value
B) price
C) barter
D) currency
E) a tariff
13) The practice of exchanging products and services for other products and services rather than
for money is referred to as
A) barter.
B) reciprocal pricing.
C) virtual pricing.
D) balance of payments.
E) value-pricing.
14) Barter is
A) a reciprocity agreement stipulating that if company A purchases services from company B, then
company B must purchase similar services from company A.
B) a tying agreement stipulating that if company A purchases a product from company B, it must
also purchase one of its services.
C) the practice of exchanging products and services for other products and services rather than for
money.
D) the practice of exchanging services for products of equal or greater value.
E) the practice of exchanging products and services for money.
15) Barter is the practice of exchanging products and services for other products and services
rather than for
A) value.
B) ideas.
C) promises.
D) tariffs.
E) money.
16) A common pricing tactic today is the use of special fees and surcharges that add to a list price,
a response to consumers' zeal for ________ combined with the ease of making price comparisons
on the Internet.
A) readily accessible information
B) low prices
C) quality
D) value
E) warranties
17) According to the price equation, final price equals list price minus ________ plus extra fees.
A) profits
B) commissions
C) trade-ins
D) taxes
E) allowances
18) According to the price equation, final price equals ________ minus allowances plus extra fees.
A) salaries
B) the list price
C) profits
D) trade-ins
E) taxes
19) According to the price equation, a product's or service's final price equals its list price minus
allowances plus
A) profits.
B) commissions.
C) trade-ins.
D) extra fees.
E) taxes.
20) A company that manages apartments decides to buy 15 new dishwashers at a list price of $550
each as replacements for old dishwashers in a small apartment complex it owns. Because the
company is buying more than 10 dishwashers, it is eligible for a $150-per-unit quantity discount.
Financing charges total $20 per unit. The company gets $10 per dishwasher for the 15 dishwashers
traded in. What is the final price the company will pay for each dishwasher?
A) $390
B) $400
C) $410
D) $430
E) $730
21) Tara is enrolled for spring semester at college. The tuition is $6,000, but she has a scholarship
for $1,000 as well as a work-study grant of $1,500. The health fees and student activity fees are
$150 for the semester. What is the final price that Tara will pay for the spring semester?
A) $2,500
B) $2,650
C) $3,150
D) $3,650
E) $6,150
22) Suppose you want to buy a Tesla Model S, an all-electric, zero-emission car that has a
265-mile range and can be recharged in three hours. The Tesla Model S Performance model has a
list price of $87,500. However, you want several options (Performance Plus Package, red
multicoat armor paint, Tech Package, Sound Studio Package, home charging station, performance
wheels, and others) that will cost $17,500. An extended warranty will add an additional $5,000.
However, if you put $50,000 down now and finance the balance over the next year, you will
receive a dealer rebate of $5,000 off the list price. The dealer will give you a $7,000 trade-in
allowance for your 2013 Honda Civic DX four-door sedan. In addition, you will have to pay a state
sales tax of $10,000, an auto registration fee of $1,000 to the state, and a $1,000 destination charge
to ship and prep the car. But because the Tesla Model S is an alternative energy vehicle, you
qualify for a $2,500 state rebate and a $7,500 federal tax credit! Finally, your total finance charge
is $7,000. Applying the price equation, what is your final price for the Tesla Model S?
A) $57,000
B) $68,000
C) $87,500
D) $107,000
E) $151,000
23) The ratio of perceived benefits to price is referred to as
A) the price-quality relationship.
B) customer-value pricing.
C) value-added pricing.
D) value analysis.
E) value.
24) The ratio of ________ to price is referred to as value.
A) prestige
B) perceived benefits
C) costs
D) anticipated quality
E) profits
25) The ratio of perceived benefits to ________ is referred to as value.
A) price
B) prestige
C) anticipated quality
D) profits
E) discounts
26) To increase value the most, marketers should
A) decrease benefits.
B) decrease benefits and increase price.
C) decrease price and increase benefits.
D) decrease price and decrease benefits.
E) hold the price steady and let the perceived value of the item increase as it matures in its life
cycle.
27) To increase value, marketers may ________, decrease price, or do both.
A) decrease promotion
B) increase benefits
C) decrease distribution
D) increase advertising
E) allow the perceived value of the item to increase as it matures in the life cycle
28) Which of the following statements is most accurate?
A) For some products, price influences the perception of overall quality, and ultimately value, to
consumers.
B) A consumer's view of a product's value depends almost entirely on external assessments of
quality.
C) A consumer's view of value is a function of his or her education and income.
D) Price plays only a small part in a consumer's perceived value of a product or service.
E) Price plays a large role in assessing value but a very minor role in assessing quality.
29) Most consumers realize that the quality of diamonds varies, and most believe the higher the
price of a diamond, the higher its quality. This is an example of price influencing the perception of
overall quality and therefore ________ to consumers.
A) acceptable cost
B) perceptual investment
C) barter potential
D) return on investment
E) value
30) When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's
line of pizzas without increasing prices, consumers benefitted from an increase in what?
A) cost
B) appearance
C) value
D) price
E) quality
31) Value-pricing is
A) the ratio of perceived benefits to price.
B) the money or other considerations exchanged for the ownership or use of a product or service.
C) the practice of simultaneously increasing product and service benefits while maintaining or
decreasing price.
D) the ratio of price to perceived benefits.
E) the list price minus incentives and allowances plus extra fees.
32) The practice of simultaneously increasing product and service benefits while maintaining or
decreasing price is referred to as
A) value-pricing.
B) customer-value pricing.
C) competitive pricing.
D) cost pricing.
E) demand pricing.
33) Marketers may engage in value-pricing, which is the practice of simultaneously ________
while maintaining or decreasing price.
A) promoting specific product and service benefits
B) increasing product and service benefits
C) decreasing profit
D) analyzing benefits
E) decreasing cost
34) Creative marketers engage in value-pricing, which is the practice of simultaneously increasing
product and service benefits while
A) increasing costs.
B) increasing price.
C) increasing advertising.
D) decreasing costs.
E) maintaining or decreasing price.
35) A major grocery chain pays its baggers a regular hourly wage. The baggers not only pack the
groceries, but they also will take customers' groceries to their car, regardless of the weather. The
baggers are not permitted to accept tips, even if they are offered. The consumer will experience
this shopping experience as
A) pricing enhancement.
B) societal pricing.
C) revenue sharing.
D) value-pricing.
E) cost-plus pricing.
36) Many cosmetology schools allow their advanced students to style hair for "real-world" clients
for a reduced fee. The students benefit from the experience, the clients get a less expensive haircut,
and the school is able to provide students with additional training without costing it anything; in
fact, they even profit from it. This is an example of
A) value-pricing.
B) societal pricing.
C) revenue sharing.
D) barter.
E) cost-assist pricing.
37) If a McDonald's menu board advertises Mini Meals under $3, McDonald's is most likely using
which type of pricing strategy?
A) predatory pricing
B) value-pricing
C) loss-leader pricing
D) odd-even pricing
E) barter
38) A reference value involves comparing the costs and benefits of
A) substitute items.
B) items of equal or greater value.
C) products with which a consumer is familiar and items the consumer has not seen or used before.
D) items from one particular manufacturer or distributor.
E) intangible items.
