309) Tendollars.com offers thousands of gifts, all priced at $10. This is an example of
A) a skimming pricing approach.
B) a loss-leader pricing approach.
C) a one-price policy.
D) a penetration pricing approach.
E) an everyday low pricing approach.
310) Setting different prices for products and services depending on individual buyers and
purchase situations in light of demand, cost, and competitive factors is referred to as
A) price lining.
B) a dynamic price policy.
C) customary pricing.
D) price fixing.
E) discretionary pricing.
311) A dynamic price 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 depending on individual buyers and purchase
situations in light of demand, cost, and competitive factors.
E) adding a fixed percentage to the cost of all items in a specific product class.
312) Another name for a dynamic price policy is
A) target pricing.
B) fluid pricing.
C) price lining.
D) market-based pricing.
E) a flexible-price policy.
313) 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.
314) Marketers using a dynamic price policy should take care to avoid
A) requests for allowances.
B) price discrimination.
C) contradictory promotions.
D) changes in market segmentation.
E) challenges from government agencies.
315) Two types of adjustments to list or quoted price are
A) profit-oriented and marginal adjustments.
B) fixed-price and dynamic price adjustments.
C) discounts and marginal adjustments.
D) discounts and allowances.
E) incremental costs and incremental revenues.
316) A reduction from the list price that a seller gives a buyer as a reward for some activity of the
buyer that is favorable to the seller is called
A) the pretax price.
B) the list price.
C) the manufacturer’s suggested retail price (MSRP).
D) a discount.
E) a trade-in allowance.
317) The four types of discounts are
A) quantity, trade-in, promotional, and cash.
B) quantity, seasonal, trade (functional), and cash.
C) quantity, seasonal, promotional, and FOB.
D) cash, trade-in, seasonal, and promotional.
E) trade-in, promotional, geographic, and functional.
318) Reductions in unit costs for a larger order are referred to as
A) promotional allowances.
B) economic order discounts.
C) penetration pricing.
D) quantity discounts.
E) case allowances.
319) Quantity discounts are
A) price reductions in unit costs for placing a larger order.
B) price reductions for placing long-term prescheduled orders.
C) price reductions to encourage retailers to stock inventory earlier than their normal demand
would require.
D) BOGOs.
E) reductions in unit costs for taking merchandise that will soon be replaced by new and improved
versions of the original product.
320) Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a
copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its
list or quoted price of 10 cents per copy is the photocopying service using?
A) experience curve pricing
B) loss-leader pricing
C) a quantity discount
D) a promotional discount
E) everyday low pricing
321) Mike Morgan, a sales representative for a major food service distributor of Betty Crocker’s
Warm Delights, wanted to encourage larger purchases by his grocery customers. Morgan offered
10 percent discount for buying 1 to 49 cases of Warm Delights within a calendar month, 12 percent
for 50 to 99 cases, and 15 percent for 100 or more cases. What type of discount was Morgan
offering his customers?
A) a seasonal discount
B) a quantity discount
C) a cash discount
D) a trade discount
E) a case allowance discount
322) Manufacturers use seasonal discounts to
A) get rid of expired merchandise.
B) prevent retailers from purchasing competitors’ products.
C) extend the peak seasonal selling season.
D) encourage buyers to stock inventory earlier than their normal demand would require.
E) temporarily spur primary demand during periods of soft sales, such as the beginning of a month,
after which prices will return to normal when selective demand picks up.
323) Seasonal discounts are used by manufacturers to
A) get rid of dated merchandise.
B) prevent retailers from purchasing competitors’ products.
C) prolong the peak seasonal selling season.
D) establish an immediate feeling of goodwill between the buyer and seller that hopefully will
continue when prices return to normal.
E) entice dealers to purchase seasonal merchandise earlier in the selling season.
324) To encourage buyers to stock inventory earlier than their normal demand would require,
manufacturers often use
A) quantity discounts.
B) quarterly discounts.
C) seasonal discounts.
D) trade discounts.
E) functional discounts.
325) What type of discount would Toro, a domestic yard machinery company, most likely offer its
channel members to carry and sell its riding lawn mowers during the winter?
A) quantity discounts
B) distribution discounts
C) trade discounts
D) seasonal discounts
E) functional discounts
326) To reward wholesalers and retailers for marketing functions they will perform in the future, a
manufacturer often gives ________ discounts.
A) seasonal
B) cash
C) promotional
D) trade
E) cumulative
327) What type of discount to resellers is based in part on where they are in the channel?
A) seasonal discounts
B) trade discounts
C) cash discounts
D) promotional allowances
E) trade-in allowances
328) Trade discounts are offered to resellers in the marketing channel on the basis of where they
are in the channel and
A) the marketing activities they are expected to perform in the future.
B) the frequency of the order.
C) when orders are placed during the year.
D) the length of the relationship with the manufacturer.
E) the size of the order.
329) To encourage retailers to pay their bills quickly, manufacturers offer them
A) quantity discounts.
B) cash discounts.
C) flexible pricing policies.
D) promotional allowances.
E) manufacturer’s inducements.
330) The purpose of a cash discount is to
A) reward retailers for making large quantity purchases.
B) encourage purchasing items during periods of low demand.
C) prevent competitors from obtaining shelf space.
D) counteract the introduction of a new product by a competitor.
E) encourage retailers to pay their bills promptly.
331) A construction company was offered a 3 percent reduction in price off all invoices from a
lumberyard for paying within 10 days of issue. The lumberyard was offering a
A) trade discount.
B) cash discount.
C) promotional allowance.
D) rebate.
E) flexible price.
332) Hormel offers its food distributors a discount of 15 percent for payment within 10 days on
orders of all Jiffy brand products. Hormel is giving its customers a
A) trade discount.
B) cash discount.
C) promotional allowance.
D) rebate.
E) functional discount.
333) Allowances, like discounts, are
A) rewards given to retailers to encourage early payment.
B) payment extensions given to cash-strapped consumers during the current recession.
C) list price deductions based on surges in consumer demand.
D) list price deductions based on sudden drops in consumer demand.
E) reductions from list or quoted prices to buyers for performing some activity.
334) Reductions from list or quoted prices to buyers for performing some activity are referred to as
A) allowances.
B) subsidies.
C) remittances.
D) noncumulative deductions.
E) list price deductions.
335) A price reduction given when a used product is part of the payment on a new product is
referred to as a
A) cash discount.
B) seasonal discount.
C) trade-in allowance.
D) promotional allowance.
E) subsidy discount.
336) A trade-in allowance is
A) a noncash exchange of one product for another of equal or greater value.
B) a cash-back payment when a more expensive item is replaced with a less expensive item.
C) the return of money based on proof of purchase.
D) a cash payment to a retailer for extra in-store support or special featuring of the brand.
E) a price reduction given when a used product is part of the payment on a new product.
337) Which of the following statements regarding a trade-in allowance is most accurate?
A) A trade-in allowance is a noncash exchange of one product for another of equal or lesser value.
B) A trade-in allowance is an effective way to lower the price a buyer has to pay without formally
reducing the list price.
C) A trade-in allowance is a cash-back payment when a more expensive item is replaced with a
less expensive one.
D) A trade-in allowance is the return of money based on proof of purchase.
E) A trade-in allowance is a cash payment to a retailer for extra in-store support or special
featuring of the brand.
338) A new car dealer can reduce the price you pay without cutting the list price of a new Ford
F-150 pickup truck by offering you a ________ of $1,000 for your 2006 Nissan Altima.
A) cash discount
B) functional discount
C) seasonal discount
D) trade-in allowance
E) promotional allowance