Question 1: A leading hard-disk manufacturer introduces a new line of high-capacity disk drivers. After selling to elite customers at a high price point, the company slowly reduces its prices over a period of time. The company is engaging in:
single pricing.
introductory price dealing.
price skimming
penetration pricing.
Question 2: Pioneering advertising:
helps turn potential customers into adopters.
points out product advantages to affect future buying decisions.
tries to keep the product’s name before the public.
tries to develop selective demand for a specific brand.
Question 3: Research to evaluate advertising effectiveness:
should focus on the judgment of creative people and advertising experts.
should focus primarily on measuring increases in sales.
includes experiments such as using split runs on cable TV systems.
is a problem because nothing can be done until after the ad has actually run.
Question 4: The following terms appeared on an invoice dated May 22nd, which was sent by a manufacturer to a retail store: 2/10, net 30. The amount of the invoice was $2,000. Assuming the retailer paid the invoice on June 1 (within 10 days after the products were delivered), how much should he have paid?
$1,900
$1,800
$2,040
$1,960
Question 5: Jackson Motors, Inc. normally sells its electric motors to all buyers for $100. However, a competitor offered to sell similar motors to one of Jackson Motors’ biggest customers for only $80 and Jackson Motors offered that customer–but not its other customers–a $80 selling price. According to the Robinson-Patman Act:
Jackson Motors is breaking the law unless it offers to sell motors to all of its customers for $80.
Jackson Motors cannot lower its $100 selling price.
Jackson Motors has not violated the law–it is just meeting competition.
Jackson Motors and its competitor are both guilty of price fixing.
Question 6: Pricing objectives should flow from, and fit in with:
shareholder expectations and market practices.
company-level and marketing objectives.
regulatory policies.
market price leader actions.
Question 7: Recently, some executives for highway construction companies agreed to stop competing with each other on price and to meet every three months to decide their price for the next quarter. In this situation:
the Robinson-Patman Act has been violated by price discrimination.
the Sherman Act has been violated.
the executives are exercising their right to free trade.
as long as prices don’t increase–the executives have done nothing wrong.
Question 8: When considering the advertising medium of magazine, which of the following advantages and disadvantages apply?
Very targeted, good detail, good “pass along,” but inflexible and long lead times
Flexible, timely, local market, but may be expensive, have short life, and no “pass along”
Flexible, repeat exposure, inexpensive, but “mass market” and very short exposure
Selected audience, flexible, can be personalized, but relatively expensive per contact and hard to retain attention
Question 9: The marketing manager for Aerial Photography, Inc. says his sales reps have gotten in the habit of setting prices for products that do not produce a profit. Aerial Photography apparently is using:
penetration pricing.
introductory price dealing.
administered pricing.
flexible pricing.
Question 10: Which of the following might encourage brand switching more than brand loyalty?
Sales targets
Marketing targets
Marketing strategies
Sales promotions
Question 11: What is the difference between one-price and flexible-price policies? Which is most appropriate for a hardware store? Explain your reasoning in detail with examples or citations from the textbook.
Question 12: What is an example of a marketing mix that has a high price level but you see it as having good value? Explain in detail what makes it a good value.
