Marketing Final Exam

Skimming ans e price skimming is a pricing policy

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Unformatted text preview: imming ANS: E Price skimming is a pricing policy whereby a firm charges a high introductory price, especially for a heavily promoted product. PTS: 1 Thinking REF: 320 OBJ: 20-1 TOP: AACSB Reflective KEY: CB&E Model Pricing MSC: BLOOMS Application 122. Refer to Apple iPhone. When the iPhone 3G was released at half the cost of the current iPhone, it appeared that Apple’s strategic focus had shifted from maximizing profits to gaining market share. Its lowered price was consistent with the _____ approach. a. price bracketing b. penetration pricing c. price lining d. price-fixing e. price skimming ANS: B Penetration pricing uses a relatively low price to build market share. PTS: 1 REF: 321 Thinking KEY: CB&E Model Pricing OBJ: 20-1 TOP: AACSB Reflective MSC: BLOOMS Application 123. Refer to Apple iPhone. Samsung recently introduced its Instinct cellular phone, apparently to compete directly with the iPhone. If Samsung checked the price of the iPhone at the Apple Store and AT&T locations and then set the price of the Instinct to match the iPhone’s price, it would be using a _____ pricing approach. a. bracketing b. penetration c. status quo d. retain maintenance e. skimming ANS: C Status quo pricing is basically meeting the price of competition. PTS: 1 REF: 322 Thinking KEY: CB&E Model Pricing OBJ: 20-1 TOP: AACSB Reflective MSC: BLOOMS Application 124. Refer to Apple iPhone. Best Buy also carries the iPhone. If Best Buy, AT&T, and Apple meet to agree on a price for the iPhone, it could be said that _____ has occurred. a. price fixing b. retail price maintenance c. price discrimination d. penetration pricing e. price skimming ANS: A Price fixing is an agreement between two or more firms on the price they will charge for a product. PTS: 1 REF: 323 Thinking KEY: CB&E Model Pricing OBJ: 20-2 TOP: AACSB Reflective MSC: BLOOMS Application 125. Refer to Apple iPhone. Apple and AT&T have several options available for competing with Samsung and its Instinct phone. If Apple and AT&T choose to compete by pricing their product at a low price to drive Samsung out of the market, this would be considered: a. price fixing b. retail price maintenance c. price discrimination d. predatory pricing e. fair competition ANS: D Predatory pricing means charging a very low price for a product with the intent of driving competitors out of business or out of a market PTS: 1 REF: 324 Thinking KEY: CB&E Model Pricing OBJ: 20-2 TOP: AACSB Reflective MSC: BLOOMS Application 126. Refer to Apple iPhone. HSBC Group is the world’s largest banking group. It is considering switching from BlackBerry handsets to iPhone 3Gs. This would mean ordering 200,000 iPhones, so HSBC would probably receive special pricing incentives, including a: a. functional discount b. cash discount c. seasonal discount d. rebate e. quantity discount ANS: E A quantity discount applies when customers buy in multiple units or spend above a specified dollar amount. PTS: 1 REF: 325 Thin...
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