Marketing Final Exam

Pricing ans c price lining is the practice of

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Unformatted text preview: is the practice of offering a product line with several items at specific price points. PTS: 1 REF: 329 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application 115. Refer to Art Supplies. Michaels was trying to get consumers into the store with the Funky Girls Gel Pens promotion in hope that they will purchase other, higher-margin items. This is an example of: a. seasonal pricing b. psychological pricing c. price lining d. price bundling e. leader pricing ANS: E Leader pricing is an attempt by the marketing manager 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 Application 116. Refer to Art Supplies. What pricing practice was used with the scrapbook starter kit? a. Seasonal pricing b. Psychological pricing c. Price lining d. Price bundling e. Leader pricing ANS: D Price bundling is marketing two or more products in a single package for a special price. PTS: 1 REF: 330 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application E-Books With the explosive growth of electronic book, or e-book, readers like Amazon’s Kindle and Barnes & Noble’s Nook and even Smartphones like the iPhone and BlackBerry devices, book pricing is becoming a significant concern for publishers. Digital book sales have grown exponentially from almost nonexistent in 2002 to more than $120 million in 2009. While these sales are still small compared to industry sales, they are expected to grow even more in the coming years due to the plethora of e-book readers coming on the market. This creates a dilemma for publishers, though, because the average price of a hardcover book, which is the bread-andbutter of publishers’ profits, is $27.00, whereas the price of an e-book is $9.99. To protect profits, some publishers, like Simon & Schuster, are delaying the electronic editions by four months. Other publishers are following suit, claiming consumers will not buy the hardcover at $27.00 if they can purchase it at a much lower price electronically. 117. Refer to E-Books. Prices for new releases average $27.00. Publishers price books this high to maximize profits. This an example of which pricing strategy? a. Penetration pricing b. Price skimming c. Profit pricing d. Promotional pricing e. Price stability ANS: B Price skimming is a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion. PTS: 1 REF: 320 Thinking KEY: CB&E Model Pricing OBJ: 20-1 TOP: AACSB Reflective MSC: BLOOMS Application 118. Refer to E-Books. If the $27.00 price of a new release came about because two or more publishers agreed on the same price they charge book resellers for the books, they would be participating in which type of illegal pricing activity? a. Price fixing b. Unfair trade practices c. Resa...
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