Marketing Final Exam

Lining a valuable tactic for marketing managers a

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Unformatted text preview: lining a valuable tactic for marketing managers? a. Price lining results in a greater inventory carrying charge. b. It reduces confusion for its customers. c. A company that uses price lining has more price markdowns and greater markup. d. The price lining strategy allows the company to gain brand loyalty from its targeted segments. e. Price lining tends to confuse customers and requires them to listen closely to the salesperson’s pitch. ANS: B It reduces confusion for both the salesperson and the consumer. PTS: 1 REF: 329 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Comprehension 76. The owner of a neighborhood hardware store has decided to sell a set of three padlocks for $5. He hopes the below-cost price for the locks will attract current and new customers who will also buy regularly priced items. The owner is encouraging store patronage through: a. deceptive pricing b. incentive pricing c. pricing lining d. cumulative pricing e. leader pricing ANS: E Leader pricing involves selling a product near or even below cost to attract business. PTS: 1 REF: 329 OBJ: 20-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Pricing 77. Leader pricing is used to: a. b. c. d. e. MSC: BLOOMS Application attract customers to a store so they can be persuaded to buy a more expensive product instead bundle products together for sale attract customers to the store so they will buy other products in addition to the leader product price products at odd-numbered amounts to stimulate demand maintain a status quo pricing strategy ANS: C Leader pricing involves 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 Comprehension 78. The Good Earth nursery is selling potting soil at a below-market price to lure customers into the store in hope that while they are in the store to buy potting soil, they will also buy other gardening items that have a much higher markup. The nursery is using: a. price lowballing b. price maintenance c. price lining d. leader pricing e. functional pricing ANS: D Leader pricing involves 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 Application 79. _____ tries to get customers into the store with misleading advertising and then uses highpressure selling to persuade the consumer to buy something else more expensive. a. Functional pricing b. Bait pricing c. Sales-oriented pricing d. Production-oriented pricing e. Decoy pricing ANS: B The Federal Trade Commission considers bait pricing a deceptive act and has banned its use in interstate commerce. Most states also ban bait pricing, but sometimes enforcement is lax. PTS: 1 REF: 329-330 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AA...
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