When a company charges the same rate to ship a product anywhere in the United States, it is using which form of geographic pricing?

46) When a company charges the same rate to ship a product anywhere in the United States, it is using which form of geographic pricing?

A) FOB delivered

B) FOB factory

C) FOB origin

D) uniform-delivered

E) basing-point

Answer:  D

Diff: 1        Page Ref: 322

Skill:  Concept

Objective:  11-3

47) The Internet offers ________, where the price can easily be adjusted to meet changes in demand.

A) captive pricing

B) dynamic pricing

C) basing-point pricing

D) price bundling

E) cost-plus pricing

Answer:  B

Diff: 2        Page Ref: 323

AACSB:  Use of Information Technology

Skill:  Concept

Objective:  11-3

48) Some companies are reversing the fixed pricing trend and using ________.

A) captive pricing

B) segmented pricing

C) promotional pricing

D) dynamic pricing

E) geographical pricing

Answer:  D

Diff: 2        Page Ref: 323

Skill:  Concept

Objective:  11-3

49) Most companies that conduct international business ________ to ________.

A) adjust their prices; take local market conditions into consideration

B) use promotional pricing; create excitement in new markets

C) use geographical pricing; reduce delivery costs

D) set a uniform price; maintain a consistent product image

E) initiate price cuts; compensate for import tariffs and taxes

Answer:  A

Diff: 3        Page Ref: 324

AACSB:  Dynamics of the Global Economy

Skill:  Concept

Objective:  11-3

50) Price escalation in international markets may result from differences in market conditions or ________.

A) cultural preferences

B) selling strategies

C) regional tastes

D) customer perceptions

E) language barriers

Answer:  B

Diff: 2        Page Ref: 324

AACSB:  Dynamics of the Global Economy

Skill:  Concept

Objective:  11-4

51) Which of the following is LEAST likely to cause price escalation in foreign markets?

A) the additional costs of product modifications

B) the additional costs of shipping and insurance

C) the additional costs of import tariffs and taxes

D) the additional costs of improving a country's infrastructure

E) exchange rate fluctuations

Answer:  D

Diff: 2        Page Ref: 324

AACSB:  Dynamics of the Global Economy

Skill:  Concept

Objective:  11-3

52) Price escalation in international markets may result from four of these five marketing conditions. Which one will have the LEAST effect?

A) the additional cost of physical distribution

B) exchange-rate fluctuations

C) market instability

D) higher costs of selling

E) language barriers

Answer:  E

Diff: 2        Page Ref: 324

AACSB:  Dynamics of the Global Economy

Skill:  Concept

Objective:  11-3

53) There are many reasons why a firm might consider cutting its price. All of the following are among them EXCEPT ________.

A) excess capacity

B) falling demand in the face of strong price competition

C) a drive to dominate the market through lower costs

D) a drive to reduce market share

E) a drive to gain market share and cut costs through volume

Answer:  D

Diff: 2        Page Ref: 325

Skill:  Concept

Objective:  11-4

54) Which of the following is a reason for a company to raise its prices?

A) to address the issue of overdemand for a product

B) to win a larger share of the market

C) to use excess capacity

D) to boost sales volume

E) to balance out decreasing costs

Answer:  A

Diff: 2        Page Ref: 325

Skill:  Concept

Objective:  11-4

55) Which of the following is a major factor that influences price increases?

A) cost inflation

B) surplus of raw materials

C) government intervention

D) foreign competition

E) excess capacity

Answer:  A

Diff: 2        Page Ref: 325

Skill:  Concept

Objective:  11-4

56) A company that raises its prices is most at risk of being accused of which of the following?

A) high-low pricing

B) price gouging

C) predatory pricing

D) price discrimination

E) retail price maintenance

Answer:  B

Diff: 2        Page Ref: 325

Skill:  Concept

Objective:  11-4

57) Competitors are most likely to react to a price change when ________.

A) a large number of competitors are involved

B) the product is uniform

C) the buyers are not well informed about product features

D) buyers are not well informed about price differences

E) the market has a pure monopoly

Answer:  B

Diff: 2        Page Ref: 326

Skill:  Concept

Objective:  11-4

58) When a competitor cuts its price, a company is most likely to decide to ________ if it believes it will not lose much market share or would lose too much profit by cutting its own price.

A) stabilize its production costs

B) reduce its marketing costs

C) maintain its current prices and profit margin

D) increase its marketing budget to raise the perceived value of the product

E) increase its production costs to improve the quality of the product

Answer:  C

Diff: 2        Page Ref: 327

Skill:  Concept

Objective:  11-4

59) When faced with a competitor who has cut its product's price, which of the following is typically the most cost-effective way for a company to maintain its own price but raise the perceived value of its offer?

A) improving the quality of the product

B) introducing a higher-priced premium brand

C) altering the company's marketing communications

D) bundling the offer with add-ons

E) distributing the product through less costly channels

Answer:  C

Diff: 3        Page Ref: 327

Skill:  Concept

Objective:  11-4

60) Which of the following is NOT an effective action that a company can take to combat a competitor's price cut on a product?

A) reduce price

B) raise perceived value

C) improve quality and increase price

D) improve quality and decrease price

E) launch a low-price "fighter brand"

Answer:  D

Diff: 2        Page Ref: 327-328

Skill:  Concept

Objective:  11-4