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Marketing Final Exam

Trade practices c resale price maintenance d price

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Unformatted text preview: le price maintenance d. Price discrimination e. Predatory pricing ANS: A Pricing 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 119. Refer to E-Books. Consumers purchasing Barnes & Noble’s Nook for $299 receive ten e-books for $19.99. Barnes & Noble is using which pricing tactic? a. Bundling b. Functional discount c. Rebate d. Price lining e. Two-part pricing ANS: A Price bundling is marketing two or more products in a single package for a special price. The consumer is paying $318.99 for the reader and ten books, whereas if purchased separately, these items would cost almost $400. PTS: 1 Thinking REF: 330 OBJ: 20-3 TOP: AACSB Reflective KEY: CB&E Model Pricing MSC: BLOOMS Application 120. Refer to E-Books. It is expected that traditional book clubs, like Doubleday and Book-of-theMonth clubs, will begin offering e-book options to members. Members pay an initial membership fee of $25.00 and $0.99 per e-book purchased. This is an example of: a. two-part pricing b. step pricing c. cumulative pricing d. price lining e. price discounting ANS: A Two-part pricing is a price tactic that charges two separate amounts to consume a single good or service. PTS: 1 REF: 331 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Application Apple iPhone Apple, Inc.’s iPhone went on sale on June 29, 2007. Apple’s loyal and enthusiastic customer base is known for rushing to purchase its new products, and the iPhone enjoyed a tremendous amount of “buzz” before its introduction. As expected, the iPhone entered the market at what many believed to be a high price ($599). However, within weeks, the price was reduced to $399. By the end of 2007, over eight million iPhones had sold in the U.S. marketplace. By most, if not all measures, the original iPhone was a huge success for Apple, and its exclusive U.S. carrier was AT&T. On July 11, 2008, Apple, Inc. released the iPhone 3G, which it advertised as being twice as fast as the original iPhone for half the cost. However, in order to obtain an iPhone at the new price of $199, buyers had to agree to a two-year service contract with AT&T. This contract would allow iPhone users to receive phone calls, receive e-mail, and search the Web on the same device. A single charge of $59.99 from AT&T included 450 minutes of cellular calls, with free nights and weekend minutes, unlimited data, visual voice mail, 200 text messages, rollover minutes, and unlimited mobile-to-mobile service within the AT&T network. This approach succeeded, and over a million iPhone 3Gs were sold during the introductory weekend. 121. Refer to Apple iPhone. When Apple introduced the iPhone at a high price, it was probably using a _____ strategy to maximize profits. a. price bracketing b. penetration pricing c. price lining d. price-fixing e. price sk...
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