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Exam 14: Arriving at the Final Price

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Question 121

Multiple Choice

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According to the text, Revlon cosmetics uses ________ pricing.

A) above-market
B) at-market
C) below-market
D) prestige pricing
E) everyday low pricing

F) A) and B)
G) A) and E)

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Question 122

Multiple Choice

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The pricing approach that results in the manufacturer deliberately adjusting the composition and features of the product to achieve the desired price for consumers is referred to as

A) cost-benefit pricing.
B) cost-plus percentage-of-cost pricing.
C) target pricing.
D) cost-plus fixed-fee pricing.
E) product feature pricing.

F) A) and C)
G) C) and E)

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Question 123

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A Patek Philippe Sky Moon Tourbillon men's wristwatch is among the most expensive in the world, costing more than $1.5 million. This is an example of a ________ strategy.

Bob Biltmore owns dozens of very successful print shops throughout the Midwest. Biltmore's shops specialize in low-cost black-and-white copies and feature user-friendly machines consumers can easily operate. In recent months, Biltmore has noticed many more competitors in the areas where his stores are located. In an attempt to eliminate the competition, Biltmore has decided to charge a very low price for his black-and-white copies, a price so low his competitors will be forced out of business. After the competition has been driven out, Biltmore plans to raise the price of his copies. Biltmore is planning to engage in the illegal and unethical practice of

Assume that Nike Variety tennis shoes have variable costs of $6 and sell for $24. Also assume that Nike Wimbledon tennis shoes have variable costs of $38 and sell for $48, but when fixed overhead is added, the shoe is unprofitable by $2 per pair. Which statement is most accurate regarding Nike's pricing approach with these two products?

A trade-in allowance is

Setting an annual target of a specific dollar volume of profit is referred to as

A price reduction given when a used product is part of the payment on a new product is referred to as a

In 2016, Red Bull had a 38% dollar sales market share and a 33% unit volume market share. Its price premium for that year equaled

Which cost-oriented pricing method is based on the recognition that a product's unit costs predictably decline by 10 to 30 percent each time its production volume doubles?

The manager of a small gas station observes that while gasoline sales have been steady, the service side of the business has declined, and mechanics are often idle. He decides to offer a promotion-a $20 off coupon for an oil change that is to be mailed to 800 households within a two-mile radius from the gas station. The cost of printing and mailing is $1,000. The normal cost of an oil change is $40. Materials and labor per oil change cost is $15. How many additional maintenance service jobs must result for the promotion to break even?

Which of these statements about geographical pricing is most accurate?

Southern gardeners normally pay $5 for a two-cubic-foot bag of pine bark mulch that they buy at their local gardening-supply and home-improvement stores to keep the weeds down in their gardens. If the price being charged by a retailer is not within a narrow range that gardeners feel is appropriate, they will use substitutions-newspaper, grass clippings, or some other kind of covering. When pricing pine bark mulch, a garden-supply or home-improvement retailer should use

A manufacturer offers a suggested list price for a cashmere sweater of $250. The trade discount is 40/20/10. What amount does the manufacturer expect to receive for the sweater?

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

Marketers using a dynamic price policy should take care to avoid

Within the channel of distribution for certain types of imported furniture, the typical trade terms are 40/15/10. If a dining room table has a list price of $1,000, how much would the manufacturer sell the table to a jobber for?

When buying highly technical, few-of-a-kind products such as hydroelectric power plants, governments have found that general contractors are reluctant to specify a formal, fixed price for the procurement. Therefore, these contractors use ________ to compensate them for any cost overruns.

Swedish company Asko, which prides itself on manufacturing and marketing some of the best-built and most prestigious appliances in the world, would most likely use which competition-oriented pricing approach?

Why do manufacturers offer seasonal discounts to channel members? Provide an example of how one would work.