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Exam 13: Pricing Products and Services

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Question 31

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The pricing model in the text has six distinct steps in the pricing process. In the sixth or last step a firm would:

A) scan competitors for price lines for similar products or services.
B) set list or quoted price.
C) select an approximate price level.
D) make special adjustments to the list or quoted price.

E) B) and C)
F) None of the above

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Question 32

Multiple Choice

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Many cruise lines pay the customers airfare to the point of cruise departure. What type of price adjustment are the cruise lines using?

A) promotional pricing
B) uniform delivered pricing
C) quantity discount pricing
D) skimming pricing

E) None of the above
F) C) and D)

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Question 33

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Ampro-Mag is a small company that makes materials for safely controlling hazardous spills of all kinds. It sells these items as a neutralizing kit priced at $120. The costs of the materials that go into each kit are $45. It costs $5 in labour to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising in trade journals, and $3,500 for the monthly salary of its owner. What is Ampro-Mag's monthly break-even point in terms of number of neutralizing kits sold?

A computer retailer shrink-wraps Microsoft Office 2013 to his private label Intel v9 Windows 8 ultrabook and sells the ultrabook and software for $2,500.00. This pricing scenario might best be described as:

The Hummer was an attention-getting SUV that sold for $80,000 in a limited number of outlets. Then, General Motors proved the smaller version for $50,000 could be sold in many more outlets. To cover costs and reach the market faster, the Hummer 2 shared some parts with other GM cars. To which customer effects did Hummer marketing managers need to pay particular attention?

If competitive market circumstances are such that there is no price competition, no product differentiation, and the purpose of advertising is to increase demand for the product class, then___________ must exist in the industry.

Predatory pricing is:

Go to any Dominion supermarket and walk to the cereal aisle. You will notice four brands - Kellogg's, Quaker, General Mills, and Post-seem to occupy most of the shelf space. These cereals are all priced about the same. There is a good deal of product differentiation as the result of licensing agreements that have created a line of Disney cereals and through the use of different health claims. Given this information, you should know the cereal industry is an example of:

Mark Johnson, the manager of a discount consumer electronics store, has been approached by the manufacturer of a popular and profitable line of compact disk storage racks regarding the retail price charged for the racks at Johnson's store. The manufacturer's representative has implied that if Johnson doesn't raise the retail prices for the storage racks to those charged by the manufacturer's non-discount customers, Johnson's supply of racks may be severely curtailed. The manufacturer is guilty of attempting:

According to your text, which of the following is NOT one of the steps included in the six-step process for setting price?

Demand factors are factors that determine:

Customary pricing is:

What is the difference between a movement along a demand curve and a shift of a demand curve?

Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is:

Describe the types of competitive markets, and give an example of each.

A manufacturing company that introduces a product must know or anticipate what specific price its currently charge or will charge in the future.

Loss-leader pricing is:

A buying situation can involve comparing the costs and benefits of substitute items - such as real sugar to the sugar substitute Equal which, although more expensive than sugar, is purchased by many consumers because it contains no calories. This situation involves the consumer considering:

All of the major wireless providers in Canada (Bell, Telus, Rogers, Shaw, MTS, and Bell Aliant) decide that beginning next year all smartphone data plans will be $75 per GB, even though their delivery costs are far less. This activity is known as:

The cash payment or extra amount of "free goods" awarded to sellers in the channel of distribution for undertaking certain advertising or selling activities to promote the product is a: