16) Companies involved in deciding which items to include in the base price and which to offer as options are engaged in ________ pricing.
A) product bundle
B) optional product
C) captive product
D) by-product
E) skimming
Answer: B
Diff: 1 Page Ref: 316
Skill: Concept
Objective: 11-2
17) Using ________, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive.
A) product bundle pricing
B) optional product pricing
C) captive product pricing
D) by-product pricing
E) skimming
Answer: D
Diff: 2 Page Ref: 316, 318
Skill: Concept
Objective: 11-2
18) Using product bundle pricing, sellers combine several products and offer the bundle ________.
A) as a functional unit
B) at a reduced price
C) as a complete self-service package
D) as a reward to loyal customers
E) at a premium price
Answer: B
Diff: 1 Page Ref: 318
Skill: Concept
Objective: 11-2
19) What is a major advantage of product bundle pricing?
A) It can promote the sales of products consumers might not otherwise buy.
B) It allows a company to offset the costs of disposing of by-products.
C) It combines the benefits of the other pricing strategies.
D) It creates a brand experience for consumers.
E) It offers consumers less value for the money.
Answer: A
Diff: 2 Page Ref: 319
Skill: Concept
Objective: 11-2
20) Which of the following is NOT a price adjustment strategy?
A) segmented pricing
B) promotional pricing
C) free samples
D) geographical pricing
E) seasonal pricing
Answer: C
Diff: 2 Page Ref: 319
Skill: Concept
Objective: 11-3
21) Service Industries, Inc. plans to offer a price-adjustment strategy in the near future. It could consider each of the following EXCEPT ________.
A) discount and allowance pricing
B) segmented pricing
C) physiological pricing
D) promotional pricing
E) location pricing
Answer: C
Diff: 2 Page Ref: 319
Skill: Concept
Objective: 11-3
22) A quantity discount is a price reduction to buyers who purchase ________.
A) frequently
B) large volumes
C) close outs
D) inferior merchandise
E) superior merchandise
Answer: B
Diff: 1 Page Ref: 319
Skill: Concept
Objective: 11-3
23) Trade or functional discounts are offered by manufacturers to ________.
A) channel members who perform tasks that the manufacturer would otherwise have to perform
B) consumers who earn a price reduction for buying in bulk
C) intermediaries such as financing institutions as a cost of doing business with them
D) other channel members that agree to exclusive distribution contracts
E) the government market and other organizations that require bid proposals
Answer: A
Diff: 2 Page Ref: 319
Skill: Concept
Objective: 11-3
24) Which of the following is an example of a cash discount?
A) 2/10, net 30
B) $5.00 with a two-pack
C) a free case when you buy 12
D) when you pay cash and take the product with you
E) none of the above
Answer: A
Diff: 3 Page Ref: 319
Skill: Concept
Objective: 11-3
25) When General Motors provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs, it is granting a ________.
A) trade discount
B) functional discount
C) cash discount
D) promotional allowance
E) trade credit
Answer: D
Diff: 2 Page Ref: 319
Skill: Concept
Objective: 11-3
26) Trade-in allowances are most commonly used in the ________ industry.
A) real estate
B) automobile
C) packaged goods
D) financial services
E) health care
Answer: B
Diff: 2 Page Ref: 319
Skill: Concept
Objective: 11-3
27) By definition, ________ is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.
A) segmented pricing
B) variable pricing
C) flexible pricing
D) cost-plus pricing
E) reference pricing
Answer: A
Diff: 1 Page Ref: 319
Skill: Concept
Objective: 11-3
28) The New Age Gallery has three admission prices for students, adults, and seniors. All three groups are entitled to the same services. This form of pricing is called ________.
A) time pricing
B) location pricing
C) customer-segmented pricing
D) revenue management pricing
E) generational pricing
Answer: C
Diff: 2 Page Ref: 320
Skill: Concept
Objective: 11-3
29) Under product-form pricing, different versions of a product are priced differently, but not according to differences in its ________.
A) costs
B) distribution channels
C) marketing budgets
D) reference prices
E) retail outlets
Answer: A
Diff: 2 Page Ref: 320
Skill: Concept
Objective: 11-3
30) When a firm varies its price by the season, month, day, or even hour, it is using ________ pricing.
A) revenue management
B) penetration
C) variable
D) time-based
E) value-added
Answer: D
Diff: 1 Page Ref: 320
Skill: Concept
Objective: 11-3
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