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Exam 18: Setting the Right Price

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Question 21

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SCENARIOS Art Supplies It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school.In her Sunday newspaper was a flyer from Michael's,an arts and crafts retailer.As she looked through the newspaper insert,she noticed that if she purchased three or more bottles of Alene's Tacky Glue,the regular price of $1.50 each was reduced to $1.15 each.She also saw that the store priced its plastic storage boxes at $1.99,$3.99,and $5.99.She thought they would be useful for storing each individual child's projects.On the front page of the flyer was an ad for Funky Girls Gel Pens,something she knew her daughter would love to use.The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens.She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michael's had a scrapbook starter kit,which includes scissors,book,pages,and stickers for only $15.The items could be purchased separately for $19.99.The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent. -Refer to Mrs.K's Premium Wisconsin cheese.The introductory pricing policy chosen by Mrs.K's is exemplifies a _____ policy.

A) price-bracketing
B) penetration pricing
C) price-lining
D) price-fixing
E) price-skimming

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Question 22

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_____ are extra fees paid by consumers for violating the terms of purchase agreements.

A) Decoy fees
B) Misuse discounts
C) Punitive fees
D) Consumer penalties
E) Financial judgments

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Question 23

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An advantage associated with a flexible pricing policy is how it:

The office supply store was selling two-drawer file cabinets for $20,which is a below-market price,to lure customers into the store in hopes that while they are in the store to buy a file cabinet,they will also buy other items that have a much higher markup.The office supply store is utilizing:

If an item purchased under FOB origin terms is damaged in transit,against whom can the purchaser file its damage claim?

At the Hagarty & Adolph funeral home,there are coffins priced at $1,200,$2,000,$3,500,and $5,000,the owners of the funeral home,have chosen price lining because it will:

States developed unfair trade practice acts to

A(n) _____ allows for price increases based on the cost-of-living index or some other formula.

Lee Valley,Inc.is a catalog retailer of woodworking tools used by craftsmen.It uses two different shipping prices.All customers west of the Mississippi river pay $6.99 shipping and handling costs per order,while all east of the Mississippi River pay $8.99.This is an example of _____ pricing.

Shipping fresh-cut flowers to international buyers can be risky because of price changes during the time required for shipment,expense incurred over long distances,and quality of product delivered.To minimize risks and costs,a seller would likely employ:

Some pricing decisions are subject to government regulation.Name and define three pricing practices that are illegal.

SCENARIOS Art Supplies It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school.In her Sunday newspaper was a flyer from Michael's,an arts and crafts retailer.As she looked through the newspaper insert,she noticed that if she purchased three or more bottles of Alene's Tacky Glue,the regular price of $1.50 each was reduced to $1.15 each.She also saw that the store priced its plastic storage boxes at $1.99,$3.99,and $5.99.She thought they would be useful for storing each individual child's projects.On the front page of the flyer was an ad for Funky Girls Gel Pens,something she knew her daughter would love to use.The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens.She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michael's had a scrapbook starter kit,which includes scissors,book,pages,and stickers for only $15.The items could be purchased separately for $19.99.The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent. -Refer to Mrs.K's Premium Wisconsin cheese.The money offered by Mrs.K's to retailers to advertise the company's products is called a:

Describe three tactics used during recessions to make demand for a good or service more inelastic and to create buyer dependency.

The Terra Vista Airport is a small airport frequently used by people who love the sport of skydiving.To help keep costs in line,the airport now charges its customers a small parking fee.At one time,the cost of parking at the airport was included in the price of the jump.Terra Vista Airport uses:

A 16-ounce bottle of Prairie Herb vinegar sells for $4.95,and a 16-ounce bottle of Heinz vinegar costs $1.05.Prairie Herb vinegar is new to the market,perceived to be of higher quality and provides a unique flavor to foods even though it is used in the same way as Heinz vinegar.Prairie Herb vinegar is most likely using a _____ policy.

One order of over $500 from The Baker's Catalog earns a five percent discount,and one order of $1,000 and over earns a 10 percent merchandise discount.These discounts are examples of:

General Electric Co.was accused of conspiring with De Beers Centenary AG to set a price for industrial diamonds,which are used on industrial cutting tools.As a result,the two companies were charged with:

A national manufacturer of lighting fixtures has six warehouses and has a pricing policy of charging freight from the closest warehouse to the customer,regardless of where parts are shipped.For instance,if the customer is in Vancouver,British Columbia,the closest warehouse to the customer is in Seattle,Washington.If the ordered car part actually comes from the Alabama warehouse,the customer still pays freight from Seattle.The manufacturer uses _____ pricing.

How do value-based pricing,unbundling,and bundling help marketers hold onto market share during a recession?

Delayed-quotation pricing: