Question 1

Given a product or service designed for a specific target market, the pricing process normally begins with a clear statement of the

Accepted Answer

A)  vision of the company. 
B)  mission of the company. 
C)  pricing objective. 
D)  consumer wants. 
A)  vision of the company. 
B)  mission of the company. 
C)  pricing objective. 
D)  consumer wants.

Question 2

According to the general pricing model, the first step for setting the price of a swimsuit made from chlorine-resistant fabric, designed for a specific target market, would be to

Accepted Answer

A)  setting initial price structure. 
B)  set pricing objectives for the new product. 
C)  evaluate possible product-price relationships. 
D)  estimate cost and other price limitations. 
A)  setting initial price structure. 
B)  set pricing objectives for the new product. 
C)  evaluate possible product-price relationships. 
D)  estimate cost and other price limitations.

Question 3

In Canada, Home Depot shows it is serious about always having the lowest prices by using an animated hammer that is shown in its ads smashing prices to make them even lower. In the United States, Wal-Mart uses a smiley face in its ads because it has low prices. Both stores are promoting their use of _____ pricing strategy.

Accepted Answer

A)  everyday low 
B)  target-return 
C)  rate-of-return 
D)  high/low 
A)  everyday low 
B)  target-return 
C)  rate-of-return 
D)  high/low

Question 4

Ned buys old lawn mowers, reconditions them, and sells them for $225. His average variable cost per lawn mower is $125. He knows he needs to sell 64 mowers to break even. Calculate Ned's fixed costs.

Accepted Answer

A)  $7,500 
B)  $6,400 
C)  $1,800 
D)  $5,540 
A)  $7,500 
B)  $6,400 
C)  $1,800 
D)  $5,540

Question 5

Which of the following observations is true?

Accepted Answer

A)  Only demographic factors affect price elasticity. 
B)  Only psychological factors affect price elasticity. 
C)  Price elasticity is a measure of consumers' price sensitivity. 
D)  Price elasticity can be estimated from historical data. 
A)  Only demographic factors affect price elasticity. 
B)  Only psychological factors affect price elasticity. 
C)  Price elasticity is a measure of consumers' price sensitivity. 
D)  Price elasticity can be estimated from historical data.

Question 6

_____ can be estimated by sampling a group of consumers from the target market.

Accepted Answer

A)  Shelf optimization 
B)  Inventory management 
C)  Promotion analyses 
D)  Price elasticity 
A)  Shelf optimization 
B)  Inventory management 
C)  Promotion analyses 
D)  Price elasticity

Question 7

The fixed costs for the manufacture of hand-made ceramic planters are $21,000. The variable costs to manufacture 10 planters are $800. If the potter has to sell 700 units to break even, what is the selling price of the planters?

Accepted Answer

A)  21 
B)  30 
C)  80 
D)  110 
A)  21 
B)  30 
C)  80 
D)  110

Question 8

Which of the following is a factor pertaining to the expected consumption rate of potential buyers, location of potential buyers, and position of potential buyers and is particularly important for pricing decisions?

Accepted Answer

A)  Psychological 
B)  Political 
C)  Demographic 
D)  Price elasticity 
A)  Psychological 
B)  Political 
C)  Demographic 
D)  Price elasticity

Question 9

General Electric Company and DeBeers Company AG were charged for conspiring to keep the end user price for industrial diamonds, used in cutting tools for construction, mining and oil well drilling etc. artificially high. In other words, the two companies were charged for

Accepted Answer

A)  price discrimination. 
B)  price fixing. 
C)  setting illegal price differentials. 
D)  deceptive pricing. 
A)  price discrimination. 
B)  price fixing. 
C)  setting illegal price differentials. 
D)  deceptive pricing.

Question 10

Which of the following is a psychological factor that might be important to pricing decisions?

Accepted Answer

A)  How many loaves of bread will a potential buyer consume every month? 
B)  Are the consumers organizational buyers or final consumers? 
C)  Will a low price indicate inferior quality to the potential buyer? 
D)  How many potential buyers for bread mixes are there? 
A)  How many loaves of bread will a potential buyer consume every month? 
B)  Are the consumers organizational buyers or final consumers? 
C)  Will a low price indicate inferior quality to the potential buyer? 
D)  How many potential buyers for bread mixes are there?

Question 11

_____ are often in the form of pricing reductions in exchange for the channel member performing various promotional activities.

Accepted Answer

A)  Quantity discounts 
B)  Slotting allowances 
C)  Promotional allowances 
D)  Rebates discounts 
A)  Quantity discounts 
B)  Slotting allowances 
C)  Promotional allowances 
D)  Rebates discounts

Question 12

Which of the following statements about perishable products is incorrect?

Accepted Answer

A)  High fashion products, fads, and seasonal products are perishable. 
B)  Perishable products are typically discounted as they approach being no longer fit for sale. 
C)  High fashion and fad products lose most of their value when they go out of style. 
D)  Perishable products will always have a high degree of distinctiveness. 
A)  High fashion products, fads, and seasonal products are perishable. 
B)  Perishable products are typically discounted as they approach being no longer fit for sale. 
C)  High fashion and fad products lose most of their value when they go out of style. 
D)  Perishable products will always have a high degree of distinctiveness.

Question 13

Which of the following describes an advantage associated with cost-oriented approaches to pricing?

Accepted Answer

A)  Its methods have direct relationship to what people will be willing to pay for the product. 
B)  They clearly and adequately reflect competition. 
C)  They give adequate consideration to both supply and demand factors. 
D)  They are very simple to use and generally yield a good price decision. 
A)  Its methods have direct relationship to what people will be willing to pay for the product. 
B)  They clearly and adequately reflect competition. 
C)  They give adequate consideration to both supply and demand factors. 
D)  They are very simple to use and generally yield a good price decision.

Question 14

Gillette introduced its Mach 3 razor at a very low price to encourage more consumers to purchase it and to discourage competition. This is an example of _____ pricing.

Accepted Answer

A)  penetration 
B)  cost-plus 
C)  going-rate 
D)  break-even 
A)  penetration 
B)  cost-plus 
C)  going-rate 
D)  break-even

Question 15

Why would a firm price above competition?

Accepted Answer

A)  Because the firm has a superior product. 
B)  Because it is a price follower in the industry. 
C)  Because the firm aims to be a price leader in the industry. 
D)  Because this approach represents the collective wisdom of the industry. 
A)  Because the firm has a superior product. 
B)  Because it is a price follower in the industry. 
C)  Because the firm aims to be a price leader in the industry. 
D)  Because this approach represents the collective wisdom of the industry.

Question 16

Discounting products as they approach being no longer fit for a sale is associated with which product consideration in pricing?

Accepted Answer

A)  Distinctiveness 
B)  Perishability 
C)  Elasticity 
D)  Stage in product life cycle 
A)  Distinctiveness 
B)  Perishability 
C)  Elasticity 
D)  Stage in product life cycle

Question 17

All of the following are basic value positions, except

Accepted Answer

A)  a product could be priced relatively high for a product class because it offers value in the form of high quality. 
B)  a product could be priced at about average for the product class because it offers value in the form of good quality for a reasonable price. 
C)  a product could be priced relatively low for a product class because it offers value in the form of acceptable quality at a low price. 
D)  a product could be priced low for a product class because it offers substandard quality at a very low price. 
A)  a product could be priced relatively high for a product class because it offers value in the form of high quality. 
B)  a product could be priced at about average for the product class because it offers value in the form of good quality for a reasonable price. 
C)  a product could be priced relatively low for a product class because it offers value in the form of acceptable quality at a low price. 
D)  a product could be priced low for a product class because it offers substandard quality at a very low price.

Question 18

Travel agencies offer vacation packages that include travel, accommodations, and entertainment at a single price to connote value and convenience for customers. This is an example of

Accepted Answer

A)  odd pricing. 
B)  prestige pricing. 
C)  bundle pricing. 
D)  rate of return pricing. 
A)  odd pricing. 
B)  prestige pricing. 
C)  bundle pricing. 
D)  rate of return pricing.

Question 19

Some retailers augment low prices and advertising with special in-store activities like product demonstrations, giveaways, and celebrity appearances. Which advantage associated with high/low pricing does this illustrate?

Accepted Answer

A)  High/low pricing reduces advertising and operating expenses. 
B)  High/low pricing increases profits through price discrimination. 
C)  High/low pricing creates excitement. 
D)  High/low pricing reduces stockouts and improves inventory management. 
A)  High/low pricing reduces advertising and operating expenses. 
B)  High/low pricing increases profits through price discrimination. 
C)  High/low pricing creates excitement. 
D)  High/low pricing reduces stockouts and improves inventory management.

Question 20

Which of the following is a type of psychological pricing strategy?

Accepted Answer

A)  Cost plus pricing 
B)  Reference rate pricing 
C)  Portfolio pricing 
D)  Bundle pricing 
A)  Cost plus pricing 
B)  Reference rate pricing 
C)  Portfolio pricing 
D)  Bundle pricing

Given a product or service designed for a specific target market, the pricing process normally begins with a clear statement of the

According to the general pricing model, the first step for setting the price of a swimsuit made from chlorine-resistant fabric, designed for a specific target market, would be to

Ned buys old lawn mowers, reconditions them, and sells them for $225. His average variable cost per lawn mower is $125. He knows he needs to sell 64 mowers to break even. Calculate Ned's fixed costs.

Which of the following observations is true?

_____ can be estimated by sampling a group of consumers from the target market.

The fixed costs for the manufacture of hand-made ceramic planters are $21,000. The variable costs to manufacture 10 planters are $800. If the potter has to sell 700 units to break even, what is the selling price of the planters?

Which of the following is a factor pertaining to the expected consumption rate of potential buyers, location of potential buyers, and position of potential buyers and is particularly important for pricing decisions?

General Electric Company and DeBeers Company AG were charged for conspiring to keep the end user price for industrial diamonds, used in cutting tools for construction, mining and oil well drilling etc. artificially high. In other words, the two companies were charged for

Which of the following is a psychological factor that might be important to pricing decisions?

_____ are often in the form of pricing reductions in exchange for the channel member performing various promotional activities.

Which of the following statements about perishable products is incorrect?

Which of the following describes an advantage associated with cost-oriented approaches to pricing?

Gillette introduced its Mach 3 razor at a very low price to encourage more consumers to purchase it and to discourage competition. This is an example of _____ pricing.

Why would a firm price above competition?

Discounting products as they approach being no longer fit for a sale is associated with which product consideration in pricing?

All of the following are basic value positions, except

Travel agencies offer vacation packages that include travel, accommodations, and entertainment at a single price to connote value and convenience for customers. This is an example of

Some retailers augment low prices and advertising with special in-store activities like product demonstrations, giveaways, and celebrity appearances. Which advantage associated with high/low pricing does this illustrate?

Which of the following is a type of psychological pricing strategy?

Strategic Planning and the Marketing Management Process

Marketing Research : Process and Systems for Decision Making

Consumer Behavior

Business, Government, and Institutional Buying

Market Segmentation

Product and Brand Strategy

New Product Planning and Development

Integrated Marketing Communications : Advertising, Sales Promotion, Public Relations, and Direct Marketing

Personal Selling, Relationship Building, and Sales Management

Distribution Strategy

The Marketing of Services

Global Marketing

Filters

Exam 11: Pricing Strategy

Given a product or service designed for a specific target market, the pricing process normally begins with a clear statement of the

According to the general pricing model, the first step for setting the price of a swimsuit made from chlorine-resistant fabric, designed for a specific target market, would be to

Ned buys old lawn mowers, reconditions them, and sells them for $225. His average variable cost per lawn mower is $125. He knows he needs to sell 64 mowers to break even. Calculate Ned's fixed costs.

Which of the following observations is true?

_____ can be estimated by sampling a group of consumers from the target market.

The fixed costs for the manufacture of hand-made ceramic planters are $21,000. The variable costs to manufacture 10 planters are $800. If the potter has to sell 700 units to break even, what is the selling price of the planters?

Which of the following is a factor pertaining to the expected consumption rate of potential buyers, location of potential buyers, and position of potential buyers and is particularly important for pricing decisions?

General Electric Company and DeBeers Company AG were charged for conspiring to keep the end user price for industrial diamonds, used in cutting tools for construction, mining and oil well drilling etc. artificially high. In other words, the two companies were charged for

Which of the following is a psychological factor that might be important to pricing decisions?

_____ are often in the form of pricing reductions in exchange for the channel member performing various promotional activities.

Which of the following statements about perishable products is incorrect?

Which of the following describes an advantage associated with cost-oriented approaches to pricing?

Gillette introduced its Mach 3 razor at a very low price to encourage more consumers to purchase it and to discourage competition. This is an example of _____ pricing.

Why would a firm price above competition?

Discounting products as they approach being no longer fit for a sale is associated with which product consideration in pricing?

All of the following are basic value positions, except

Travel agencies offer vacation packages that include travel, accommodations, and entertainment at a single price to connote value and convenience for customers. This is an example of

Some retailers augment low prices and advertising with special in-store activities like product demonstrations, giveaways, and celebrity appearances. Which advantage associated with high/low pricing does this illustrate?

Which of the following is a type of psychological pricing strategy?

Strategic Planning and the Marketing Management Process

Marketing Research : Process and Systems for Decision Making

Consumer Behavior

Business, Government, and Institutional Buying

Market Segmentation

Product and Brand Strategy

New Product Planning and Development

Integrated Marketing Communications : Advertising, Sales Promotion, Public Relations, and Direct Marketing

Personal Selling, Relationship Building, and Sales Management

Distribution Strategy

The Marketing of Services

Global Marketing

Filters