Marketing Final Exam

And promotional allowances are examples of rebates

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Unformatted text preview: 17. Functional discounts, noncumulative quantity discounts, and promotional allowances are examples of rebates given to the trade customer. ANS: F Rebates involve a cash refund for the purchase of a product during a specific period. PTS: 1 REF: 325 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Comprehension 18. A markdown allowance is a payment to a dealer for promoting the manufacturer’s product. ANS: F This is the definition of a promotional (or trade) allowance. PTS: 1 REF: 325 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Knowledge 19. The basic assumption with price skimming is that the firm is customer driven, seeking to understand the attributes customers want in goods and services they buy and the value of that bundle of attributes to customers. ANS: F This is the basic assumption for value pricing. PTS: 1 REF: 325-326 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Knowledge 20. Evergreen Lighting, a manufacturer of decorative, energy-efficient lighting products, requires its buyers to pay for the cost of transportation from the manufacturing site to their place of businesses. Evergreen Lighting uses FOB origin pricing. ANS: T PTS: 1 TOP: AACSB Reflective Thinking MSC: BLOOMS Application REF: 327 OBJ: 20-3 KEY: CB&E Model Pricing 21. Uniform delivered pricing is illegal because it discriminates against buyers who are located close to the point of shipping because they pay the same amount as buyers located far from the point of shipping pay. ANS: F This geographic pricing practice is not illegal. PTS: 1 REF: 327 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Comprehension 22. A retail store implements a single-pricing tactic as a way to remove price comparisons from the buyer’s decision-making process. ANS: T PTS: 1 TOP: AACSB Reflective Thinking MSC: BLOOMS Comprehension REF: 328 OBJ: 20-3 KEY: CB&E Model Pricing 23. A catalog retailer offers three styles of khaki pants at three price levels. The special pricing tactic used by the catalog retailer is best described as variable psychological pricing. ANS: F The catalog retailer is using price lining as a pricing tactic. PTS: 1 REF: 329 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application 24. Loss-leader pricing is a tactic that prices products below cost in an attempt to run competitors out of business. ANS: F Leader pricing, also called loss-leader pricing, is an attempt to attract customers by selling a product near or even below cost in the hope that shoppers will buy other items once they are in the store. PTS: 1 REF: 329 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Knowledge 25. One example of price bundling occurs when Nintendo sells the Wii Fit balance board with the Wii game system at a lower price than the total price of each if bought separately. ANS: T PTS: 1...
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