Marketing Final Exam

Shown as they shop and adjusted as the quantity of

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Unformatted text preview: purchased. The discount is shown as they shop and adjusted as the quantity of frames purchased increases. What common form of purchase discount is the frame manufacturer using? a. Rebate b. Cash discount c. Quantity discount d. Promotional allowance e. Functional discount ANS: C Quantity discounts offer lower prices for buying in multiple units or above a specified dollar amount. PTS: 1 REF: 325 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application 40. A discount off the base price to customers who pay immediately, or within a specified time period, is called a: a. functional discount b. quantity discount c. base discount d. cash discount e. promotional allowance ANS: D Prompt payment saves the seller carrying charges and billing expenses and allows the seller to avoid bad debt. PTS: 1 REF: 325 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Knowledge 41. When a channel intermediary is compensated for the ordinary services and tasks performed within the channel of distribution, the compensation usually comes in the form of a discount from base price. This discount is called a: a. seasonal discount b. promotional allowance c. cumulative or noncumulative quantity discount d. functional (or trade) discount e. rebate or refund ANS: D A functional, or trade, discount is a discount to wholesalers and retailers for performing channel functions. PTS: 1 REF: 325 OBJ: 20-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Pricing MSC: BLOOMS Knowledge 42. A _____ is a price reduction that shifts the storage function forward to the purchaser and enables manufacturers to maintain steady production year-round. a. functional discount b. base allowance c. promotional allowance d. quantity discount e. seasonal discount ANS: E A seasonal discount is a price reduction for buying merchandise out of season. PTS: 1 REF: 325 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Knowledge 43. Apple’s “Back to School” program offered students who purchased an iMac computer and an iPod Touch MP3 player a $250 refund. The $250 check was essentially a: a. rebate b. reciprocal allowance c. cash discount d. functional discount e. trade promotion ANS: A Rebates are cash refunds. PTS: 1 REF: 325 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application 44. Hunter’s Alley is a chain of stores targeted to people who are proud of their National Rifle Association membership. It has agreed to set up a special display of Swartklip ammunition near its rifle and shotgun aisles and also to run an advertisement in newspapers in communities where its stores are located. Swartklip has agreed to supply the display material free and to pay for half the cost of the advertisement. This is an example of a: a. bundled pricing tactic b. functional discount c. promotional allowance d. quantity discount e. direct allowance ANS: C A promotional allowance may be u...
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