81) When product managers at Schwinn make decisions about which types of bicycle seats, handle bars, and saddlebags to offer customers on their bikes, they are engaged in ________.
A) product line pricing
B) optional product pricing
C) captive product pricing
D) by-product pricing
E) cost-based pricing
Answer: B
Diff: 2 Page Ref: 316
AACSB: Analytic Skills
Skill: Application
Objective: 11-2
82) A car maker’s strategy of advertising a basic vehicle model with few conveniences and comforts at a low price to entice buyers and then convincing customers to buy higher-priced models with more amenities is an example of which of the following?
A) product line pricing
B) optional product pricing
C) captive product pricing
D) allowance pricing
E) segmented pricing
Answer: B
Diff: 2 Page Ref: 316
AACSB: Analytic Skills
Skill: Application
Objective: 11-2
83) When Whallans Gift Card Shop offers a price reduction to customers who buy Christmas cards the week after Christmas, Whallans is giving a(n) ________ discount.
A) functional
B) seasonal
C) annual
D) allowance
E) credit
Answer: B
Diff: 2 Page Ref: 319
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
84) Brown Baby Tanning Salon offers weekly tanning sessions for $15 and season passes with unlimited tanning for $150. Brown Baby Tanning Salon is offering ________ pricing.
A) by-product
B) captive product
C) product bundling
D) discount
E) psychographic
Answer: D
Diff: 2 Page Ref: 319
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
85) Secret Sneaker will give anyone $10 for an old pair of sneakers, regardless of condition, when that person purchases a new pair of sneakers. The end result is essentially reducing the price of the new sneakers by $10. What is this type of price adjustment called?
A) functional discount
B) captive product
C) seasonal discount
D) trade-in allowance
E) by-product
Answer: D
Diff: 2 Page Ref: 319
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
86) Bose prices its most expensive noise reduction earphones at $399.95, which is a full $100.00 more than its next most expensive earphones. It costs Bose only a few dollars more to make the most expensive earphones. Bose is using ________ pricing.
A) customer-segment
B) product-form
C) promotional
D) penetration
E) captive product
Answer: B
Diff: 3 Page Ref: 320
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
87) The Chicago Bears organization charges different prices for seats in different areas of Soldier Field, even though the costs are the same. This form of pricing is called ________.
A) location-based pricing
B) customer-segment
C) product-form pricing
D) flexible pricing
E) penetration pricing
Answer: A
Diff: 2 Page Ref: 320
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
88) Manor Cinemas has announced that seniors over 60 years of age can enter the theater for free prior to 4:00 p.m. when accompanied by a paying customer. This is an example of ________.
A) promotional pricing
B) discounts and allowances
C) by-product pricing
D) product bundle pricing
E) location-based pricing
Answer: A
Diff: 2 Page Ref: 321
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
89) The JC Whitney Company of Chicago offers replacement parts for older Volkswagen Beetles. Parts are often shipped from other locations throughout the United States. However, the company charges for shipping as if every part was shipped from its Chicago headquarters. The company practices ________.
A) FOB-origin pricing
B) uniform-delivered pricing
C) zone pricing
D) basing-point pricing
E) none of the above
Answer: D
Diff: 2 Page Ref: 322
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
90) If Northwest Awnings charges the same price for delivery of its product to any customer that is located within the Great Lakes states, but a different price to customers outside of the Great Lakes states, the company is using ________.
A) psychological pricing
B) promotional pricing
C) reference pricing
D) zone pricing
E) uniform-delivered pricing
Answer: D
Diff: 2 Page Ref: 322
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
91) Big Mike's Health Food Store sells nutritional energy-producing foods. The price of the products sold varies according to individual customer accounts and situations. For example, long-time customers receive discounts. This strategy is an example of ________.
A) price elasticity
B) cost-plus pricing
C) dynamic pricing
D) everyday low pricing
E) penetration pricing
Answer: C
Diff: 3 Page Ref: 323
AACSB: Analytic Skills
Skill: Application
Objective: 11-3
92) In response to price cuts from competitors, a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor’s price cut?
A) raising the perceived value of a product
B) improving product quality
C) accepting a reduced market share
D) launching a "fighter brand"
E) using high-low pricing
Answer: D
Diff: 2 Page Ref: 328
AACSB: Analytic Skills
Skill: Application
Objective: 11-4
93) A number of top fashion-modeling agencies would most likely be charged with ________ for jointly determining what commissions they would charge for models.
A) prestige pricing
B) predatory pricing
C) price bundling
D) dynamic pricing
E) price fixing
Answer: E
Diff: 2 Page Ref: 328
AACSB: Analytic Skills
Skill: Application
Objective: 11-5
94) Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most at risk of being accused of ________.
A) market skimming
B) price fixing
C) deceptive pricing
D) price confusion
E) predatory pricing
Answer: E
Diff: 2 Page Ref: 330
AACSB: Analytic Skills
Skill: Application
Objective: 11-5
95) Market-skimming pricing would likely be most effective in selling ________.
A) any convenience item
B) an electronic device for which research and development must be recouped
C) shampoo and bath soap
D) anything easily copied by competitors
E) most items at EDLP retailers such as Walmart
Answer: B
Diff: 3 Page Ref: 314
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 11-1
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