Assignment:
Question 1. Department stores such as Kohl's and Macy's practice high-low pricing by __________.
a. charging a constant, everyday low price
b. providing few or no temporary price discounts
c. increasing prices temporarily on select products
d. having frequent sale days for store credit card holders
e. underpricing most consumer items
Question 2. 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 products are not uniform (Page Ref: 326)
Question 3. Most companies are started by individuals who live by their wits. They visualize an opportunity, take risks, and knock on every door to gain attention. Which of the following stages in marketing strategy is being illustrated here?
a. Exponential marketing
b. Formulated marketing
c. Entrepreneurial marketing
d. Affinity marketing
e. Ambush marketing
Question 4. When a competitor cuts its price, a company should __________ if it believes it will not lose much market share or would lose too much profit by cutting its own prices.
a. reduce 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
Question 5. A university enrolled 200 graduate students in the Fall of 2011. However, the enrollment rate was only slightly affected following a 12 percent hike in tuition the following Fall. This illustrates a(n) __________ demand.
a. derived
b. negative
c. highly elastic
d. composite
e. inelastic
Question 6. Canine Couture is launching a new line of hand-stitched doggy duds made from silk, cashmere, and linen. Couture has intentionally limited production and set prices for the new line at about four times the average price for other pet clothes in hopes of creating a prestige line. What pricing strategy is Canine Couture using?
a. Cost-plus
b. Value-added
c. Product line
d. Skimming
e. Segmented
Question 7. What concept does the following formula "percent of change in quantity divided by the percent of change in price" represent?
a. Breakeven
b. Contribution margin
c. Price mark-up
d. Elasticity
e. Marginal analysis
Question 8. Sam was visiting her grandparents during Spring Break and was appalled when they insisted on going to dinner at 5:30 to get the Early Bird Specials. What type of pricing strategy is making Sam insane?
a. Value-added
b. Everyday low prices
c. Skimming
d. Segmented
e. Cost-plus
Question 9. John and Robin run a small, but trendy, craft beer and pizza restaurant in a part of town that has a number of nighttime and dining options. The couple are discussing raising their prices on their "pint and slice" after-work special; however, they are concerned that their customers may decide that the new price is too high and sales will drop. What pricing concept is worrying John and Robin?
a. Consumer constructivism
b. Everyday low prices
c. Elasticity
d. Skimming
e. Cost-plus
f. Psychological pricing
Question 10. Reindeer Games, a new Christmas-themed video, pizza, and ice cream restaurant targeting families with young children, is located in an area that is also home to Chucky Cheese and a bounce activity center. As both of the latter are well established, the owner of Reindeer Games decided to launch her business with pricing on games and pizza parties about 20% lower than her competitors. What pricing strategy is Reindeer Games using for their launch?
a. Value-added
b. Everyday low prices
c. Penetration
d. Skimming
e. Segmented
f. Cost-plus
Question 11. Cats and Rats is a tablet game that allows players to be one or the other and try to outsmart their opponents. In order to win, the players need an occasional energy boost in the form of a nap, which is free, or the player can pay for Cat Treats or Cheese Nibbles for their cat or rat. What form of pricing is this?
a. Penetration
b. Value-added
c. Freemium
d. Skimming
e. Segmented