Question 1

Everyday low pricing is most suitable if ________.

Accepted Answer

A)  consumers are willing to perform activities such as clip coupons to avail of discounts 
B)  consumers tend to associate price with quality 
C)  customers are insensitive to changes in price 
D)  the cost of conducting frequent sales and promotions is high 
E)  consumers have sufficient time to find the best prices 
A)  consumers are willing to perform activities such as clip coupons to avail of discounts 
B)  consumers tend to associate price with quality 
C)  customers are insensitive to changes in price 
D)  the cost of conducting frequent sales and promotions is high 
E)  consumers have sufficient time to find the best prices D

Question 2

A(n) ________ is an extra payment designed to gain reseller participation in special programs.

Accepted Answer

A)  seasonal discount 
B)  allowance 
C)  discount 
D)  quantity discount 
E)  functional discount 
A)  seasonal discount 
B)  allowance 
C)  discount 
D)  quantity discount 
E)  functional discount B

Question 3

________ are offered by a manufacturer to trade-channel members if they will perform certain functions, such as selling, storing, and recordkeeping.

Accepted Answer

A)  Consumer promotions 
B)  Quantity discounts 
C)  Functional discounts 
D)  Seasonal discounts 
E)  Trade-in allowances 
A)  Consumer promotions 
B)  Quantity discounts 
C)  Functional discounts 
D)  Seasonal discounts 
E)  Trade-in allowances C

Question 4

How can companies initiate price cuts and what are the traps that companies can fall into because of this?

Accepted Answer

Several circumstances prompt a firm to c

Question 5

Pricing cues such as sale signs and prices that end in 9 are more influential when consumers are experienced in the category.

Accepted Answer

A) True 
 B)False

Question 6

A company has developed the prototype of a mobile phone that it plans to launch in the next few months. The phone comes equipped with the most advanced technological features. As part of its test marketing efforts, the company allows customers to examine and use the prototype and also gathers feedback regarding product features and price. The results of this test marketing effort show that customers are willing to pay at least $500, considering the phone's various features. As such, the company has discovered customers' ________.

Accepted Answer

A)  last paid price 
B)  expected future price 
C)  lower-bound price 
D)  upper-bound price 
E)  typical price 
A)  last paid price 
B)  expected future price 
C)  lower-bound price 
D)  upper-bound price 
E)  typical price

Question 7

If consumers were largely indifferent to a $0.05 increase in the price of a gallon of milk, the price rise is said to fall within customers' ________.

Accepted Answer

A)  price indifference band 
B)  experience curve 
C)  arm's-length price 
D)  learning curve 
E)  net price index 
A)  price indifference band 
B)  experience curve 
C)  arm's-length price 
D)  learning curve 
E)  net price index

Question 8

A manufacturer has invested $750,000 in a new product and wants to set a price to earn a 15 percent ROI. The cost per unit is $18 and the company expects to sell 50,000 units in the first year. Calculate the company's target-return price for this product.

Accepted Answer

A)  $18.10 
B)  $18.23 
C)  $20.25 
D)  $20.70 
E)  $25.50 
A)  $18.10 
B)  $18.23 
C)  $20.25 
D)  $20.70 
E)  $25.50

Question 9

A marketer who has unit costs of $16 and wants to earn a 20 percent markup on sales would charge a markup price of $20.

Accepted Answer

A) True 
 B)False

Question 10

Traditionally, price was never a major determinant of buyer choice.

Accepted Answer

A) True 
 B)False

Question 11

What are the different forms of countertrade?

Accepted Answer

Countertrade can take the following form

Question 12

Although consumers may have fairly good knowledge of the range of prices involved, very few can accurately recall specific prices of products.

Accepted Answer

A) True 
 B)False

Question 13

What are three possible responses to low-cost competitors?

Accepted Answer

Three possible responses to lo

Question 14

Deducting the desired profit margin from the price at which a product will sell, given its appeal and competitors' prices, is known as ________.

Accepted Answer

A)  overhead costing 
B)  target costing 
C)  activity-based costing 
D)  benefit analysis 
E)  estimate costing 
A)  overhead costing 
B)  target costing 
C)  activity-based costing 
D)  benefit analysis 
E)  estimate costing

Question 15

What should a company do if its competitor's product contains features that are not available in its own product?

Accepted Answer

In such a situation, the compa

Question 16

In second-degree price discrimination, the seller charges ________.

Accepted Answer

A)  less to buyers of larger volumes 
B)  different prices depending on the season, day, or hour 
C)  a separate price to each customer depending on the intensity of his or her demand 
D)  different prices for different versions of the same product 
E)  different prices for the same product depending on the channel through which it is sold 
A)  less to buyers of larger volumes 
B)  different prices depending on the season, day, or hour 
C)  a separate price to each customer depending on the intensity of his or her demand 
D)  different prices for different versions of the same product 
E)  different prices for the same product depending on the channel through which it is sold

Question 17

Despite its weaknesses, markup pricing remains popular for which of the following reasons?

Accepted Answer

A)  Sellers can determine demand much more easily than they can estimate costs. 
B)  By tying the price to cost, the pricing task becomes more sophisticated. 
C)  When all firms in the industry use markup pricing, price competition flourishes. 
D)  Sellers take advantage of buyers when the latter's demand becomes acute. 
E)  Many people feel that cost-plus pricing is fairer to both buyers and sellers. 
A)  Sellers can determine demand much more easily than they can estimate costs. 
B)  By tying the price to cost, the pricing task becomes more sophisticated. 
C)  When all firms in the industry use markup pricing, price competition flourishes. 
D)  Sellers take advantage of buyers when the latter's demand becomes acute. 
E)  Many people feel that cost-plus pricing is fairer to both buyers and sellers.

Question 18

Which of the following is the first step in setting a pricing policy?

Accepted Answer

A)  selecting a pricing method 
B)  selecting the pricing objective 
C)  determining demand 
D)  estimating cost 
E)  analyzing competitors' costs, prices, and offers 
A)  selecting a pricing method 
B)  selecting the pricing objective 
C)  determining demand 
D)  estimating cost 
E)  analyzing competitors' costs, prices, and offers

Question 19

The decline in the average cost of production with accumulated production experience is called the ________.

Accepted Answer

A)  demand curve 
B)  supply chain 
C)  learning curve 
D)  value chain 
E)  indifference curve 
A)  demand curve 
B)  supply chain 
C)  learning curve 
D)  value chain 
E)  indifference curve

Question 20

Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of pricing is the company depending on?

Accepted Answer

A)  going-rate pricing 
B)  image pricing 
C)  market-skimming pricing 
D)  target pricing 
E)  markup pricing 
A)  going-rate pricing 
B)  image pricing 
C)  market-skimming pricing 
D)  target pricing 
E)  markup pricing

Exam 16: Developing Pricing Strategies and Programs

Everyday low pricing is most suitable if ________.

A(n) ________ is an extra payment designed to gain reseller participation in special programs.

________ are offered by a manufacturer to trade-channel members if they will perform certain functions, such as selling, storing, and recordkeeping.

How can companies initiate price cuts and what are the traps that companies can fall into because of this?

Pricing cues such as sale signs and prices that end in 9 are more influential when consumers are experienced in the category.

If consumers were largely indifferent to a $0.05 increase in the price of a gallon of milk, the price rise is said to fall within customers' ________.

A manufacturer has invested $750,000 in a new product and wants to set a price to earn a 15 percent ROI. The cost per unit is $18 and the company expects to sell 50,000 units in the first year. Calculate the company's target-return price for this product.

A marketer who has unit costs of $16 and wants to earn a 20 percent markup on sales would charge a markup price of $20.

Traditionally, price was never a major determinant of buyer choice.

What are the different forms of countertrade?

Although consumers may have fairly good knowledge of the range of prices involved, very few can accurately recall specific prices of products.

What are three possible responses to low-cost competitors?

Deducting the desired profit margin from the price at which a product will sell, given its appeal and competitors' prices, is known as ________.

What should a company do if its competitor's product contains features that are not available in its own product?

In second-degree price discrimination, the seller charges ________.

Despite its weaknesses, markup pricing remains popular for which of the following reasons?

Which of the following is the first step in setting a pricing policy?

The decline in the average cost of production with accumulated production experience is called the ________.

Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of pricing is the company depending on?

Defining Marketing for the New Realities

Developing Marketing Strategies and Plans

Collecting Information and Forecasting Demand

Conducting Marketing Research

Creating Long-Term Loyalty Relationships

Analyzing Consumer Markets

Analyzing Business Markets

Tapping Into Global Markets

Identifying Market Segments and Targets

Crafting the Brand Positioning

Creating Brand Equity

Addressing Competition and Driving Growth

Setting Product Strategy

Designing and Managing Services

Introducing New Market Offerings

Designing and Managing Integrated Marketing Channels

Managing Retailing, Wholesaling, and Logistics

Designing and Managing Integrated Marketing Communications

Managing Mass Communications: Advertising, Sales Promotions, Events and Experiences, and Public Relations

Managing Digital Communications: Online, Social Media, and Mobile

Managing Personal Communications: Direct and Database Marketing and Personal Selling

Managing a Holistic Marketing Organization for the Long Run

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