Question 1 A manufacturer is prepared to introduce a new hair care product for e
ID: 462600 • Letter: Q
Question
Question 1
A manufacturer is prepared to introduce a new hair care product for exclusive use in hair salons and spas. In determining the discount to apply to the product, which strategy indicates that the manufacturer applied a trade discount legally?
owners of female hair salons receive a 10% higher discount
retailers receive an additional case of product for every 100 units purchased the first week
wholesalers of hair care products for barber shops receive the same discount as retail outlets
wholesalers of hair care products for female salons have a 5% cash-back bonus
retailers of hair care products for men and women receive the same discount
2 points
Question 2
A smartphone manufacturer introduced a new device into the marketplace with pricing set according to the skimming approach. The CEO of the company reviews financial reports from the device and notes that the pricing approach used is not cost-effective for the company. How should the CEO adjust the pricing strategy for this device?
drop the price
increase the price
offer an everyday low price option
remarket the device under a private label
match the price to the competitions’ price
2 points
Question 3
Which of the following is a major disadvantage associated with the skimming pricing strategy?
It is not effective for higher-end goods.
It is not effective in recovering the high research and development costs.
It leads to fulfillment problems if the demand for the product outstrips the firm’s production capacity.
It attracts competition as potential competitors enter into the market observing the high financial returns obtained by innovative firms.
2 points
Question 4
The global pricing strategy that allows the greatest flexibility in setting prices to reflect local marketplace conditions is:
everyday low pricing.
standard worldwide pricing.
dual pricing.
market-differentiated pricing.
2 points
Question 5
Which of the following pricing systems is sometimes referred to as postage-stamp pricing since it resembles the pricing structure for mail service?
The basing-point system
Zone pricing
Uniform-delivered pricing
Freight absorption pricing
2 points
Question 6
Which of the following is true of promotional pricing?
It uses extensive promotional allowances to get channel members to promote the product.
It sets a high price for products that offer unique potential ability.
It promotes goods and services at specific price ranges based on the belief that certain prices are more appealing to consumers.
It uses lower-than-normal price as a temporary component in the selling strategy.
2 points
Question 7
A one-time reduction in list price typically offered at the time of sale is referred to as a(n):
cumulative discount.
rebate.
noncumulative discount.
allowance.
2 points
Question 8
The chief financial officer (CFO) of an automotive manufacturer is reviewing the revenue earned from the sale of all-terrain vehicles in South America. Because the selling price of the vehicles has been changed frequently, the CFO wanted to analyze the impact of these changes particularly during the rainy season. Which global pricing strategy is being used to price these vehicles?
dual
transfer
cannibalization
standard
market-differentiated
2 points
Question 9
Aken Laboratories, a chemical manufacturer, exports its products to various countries in Asia. The company does not alter the prices of its products in these countries. Aken is adopting a _____ pricing strategy.
standard worldwide
dual
market-differentiated
variable
2 points
Question 10
A price quotation system that allows the buyer to deduct shipping expenses from the cost of purchases is known as _____ pricing.
basing-point
uniform-delivered
FOB plant
freight absorption
1.owners of female hair salons receive a 10% higher discount
2.retailers receive an additional case of product for every 100 units purchased the first week
3.wholesalers of hair care products for barber shops receive the same discount as retail outlets
4.wholesalers of hair care products for female salons have a 5% cash-back bonus
5.retailers of hair care products for men and women receive the same discount
Explanation / Answer
Q.1: 5. retailers of hair care products for men and women receive the same discount
Q.2: 5.match the price to the competitions’ price
Q.3: 1. It is not effective for higher-end goods.
Q.4: 4. market-differentiated pricing.
Q.5: 3.Uniform-delivered pricing
Q.6:4. It uses lower-than-normal price as a temporary component in the selling strategy.
Q.7: 3. noncumulative discount.
Q.8: 5. market-differentiated
Q.9: 1. standard worldwide
Q.10: 3. FOB plant
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