Marketing Final Exam

Running shoes he noticed that nike had a new pair of

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Unformatted text preview: likes New Balance running shoes. However, when he stopped by the Foot Locker to buy a new pair of running shoes, he noticed that Nike had a new pair of running shoes that cost $350. To David, the higher price of the Nike shoe indicated that it would be a better pair of running shoes. This is an example of: a. premium pricing b. price lining c. prestige pricing d. exclusive pricing e. selective pricing ANS: C Prestige pricing is charging a high price to help promote a high-quality image. PTS: 1 REF: 316 Thinking KEY: CB&E Model Pricing OBJ: 19-6 TOP: AACSB Reflective MSC: BLOOMS Application 101. When the Apple iPhone 3G was introduced, the Apple iTunes Web site also began selling small program “apps” written by third parties that could be run on the iPhone. One interesting app was the “I Am Rich” application. For a price of $1,000, you could buy this app that did nothing but display a red gem on the iPhone’s screen. The description of the app stated that this red icon would remind you (and others you show it to) “that you were rich enough to afford this.” Six of the applications were sold before Apple, Inc. removed the app from iTunes. At the $1,000 price, the author of the app was using _____ pricing as part of his marketing approach. a. snob appeal b. prestige c. exclusive d. selective e. unique ANS: B Prestige pricing strategy sets high prices to connote high product quality and exclusiveness. PTS: 1 REF: 316 Thinking KEY: CB&E Model Pricing OBJ: 19-6 TOP: AACSB Reflective MSC: BLOOMS Application 102. Marketing managers who attempt to raise the quality image of their product by selling it at high prices are following a(n) _____ strategy. a. profit maximization b. market share c. maintained markup pricing d. prestige pricing e. investment asset ANS: D Prestige pricing strategy sets high prices to connote high product quality. PTS: 1 REF: 316 Thinking KEY: CB&E Model Pricing 103. Prestige pricing: a. b. c. d. e. OBJ: 19-6 TOP: AACSB Reflective MSC: BLOOMS Knowledge equalizes supply and demand uses high prices to promote a high-quality product is the practice of marking up prices by 100 percent is also called leader pricing emphasizes the monetary nature of price ANS: B Actually, prestige pricing emphasizes all the intangible considerations buyers make when purchasing. PTS: 1 REF: 316 Thinking KEY: CB&E Model Pricing OBJ: 19-6 TOP: AACSB Reflective MSC: BLOOMS Knowledge 104. Laurie knows little about cooking and does not want to spend the time to learn how to make a quiche. However, she has been asked to bring a quiche to an office retirement party. Not wanting to make a poor choice, she is likely to: a. intuitively make the right choice b. avoid making a decision by not attending the party c. buy the most expensive pre-made quiche (perhaps paying too much), guessing that the price is related to quality d. research the product and buy the least expensive frozen quiche she can find e. buy the least expensive frozen quiche...
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