Question 1

Price is one of the two elements of the marketing mix that produces revenue.

Accepted Answer

A) True 
 B)False

Question 2

Armac Ltd. is a sluice-box manufacturer based in China. A sluice-box is used for gold prospecting. Armac is interested in selling a few of its machines to an American mining company, but it wants 95 percent of the machines' price in gold and the rest in ores recovered by using the machines. This is an example of a ________.

Accepted Answer

A)  buyback arrangement 
B)  functional discount 
C)  barter deal 
D)  compensation deal 
E)  sealed bid 
A)  buyback arrangement 
B)  functional discount 
C)  barter deal 
D)  compensation deal 
E)  sealed bid

Question 3

An umbrella manufacturing company's fixed costs are $275,000. The variable cost per unit is $5 and each umbrella is sold at $10. How many units should the firm sell in order to break even?

Accepted Answer

A)  1,819 
B)  5,500 
C)  18,000 
D)  27,500 
E)  55,000 
A)  1,819 
B)  5,500 
C)  18,000 
D)  27,500 
E)  55,000

Question 4

A company that is looking to maximize its market share would do well to follow ________ pricing.

Accepted Answer

A)  markup 
B)  market-penetration 
C)  market-skimming 
D)  survival 
E)  target-return 
A)  markup 
B)  market-penetration 
C)  market-skimming 
D)  survival 
E)  target-return

Question 5

What techniques can a firm use to help consumers avoid sticker shock and a hostile reaction when prices rise?

Accepted Answer

One is to maintain a sense of fairness,

Question 6

When firms charge different prices to different customer groups for the same product or service, it is a case of second-degree price discrimination.

Accepted Answer

A) True 
 B)False

Question 7

A company does not set a final price until the product is finished or delivered. This is known as ________.

Accepted Answer

A)  delayed quotation pricing 
B)  an escalator clause 
C)  special-event pricing 
D)  time pricing 
E)  the shallow-pockets trap 
A)  delayed quotation pricing 
B)  an escalator clause 
C)  special-event pricing 
D)  time pricing 
E)  the shallow-pockets trap

Question 8

Ellie's manager has asked her to come up with ways to reduce costs of their new product by utilizing a process called "target costing." What should Ellie do?

Accepted Answer

Ellie will have to ask the marketing res

Question 9

Companies strive to maximize their current profits if they are plagued with overcapacity, intense competition, or changing consumer wants.

Accepted Answer

A) True 
 B)False

Question 10

A Japanese firm is ready to sell its recent technological innovation to the US government. But it has asked for 80 percent in cash and the rest in mica. The Japanese firm is looking to enter into a(n) ________ with the US government.

Accepted Answer

A)  functional discount 
B)  compensation deal 
C)  buyback arrangement 
D)  offset agreement 
E)  barter deal 
A)  functional discount 
B)  compensation deal 
C)  buyback arrangement 
D)  offset agreement 
E)  barter deal

Question 11

Loss leader pricing dilutes a company's brand image.

Accepted Answer

A) True 
 B)False

Question 12

On sites such as eBay and Amazon.com, the seller puts up an item and bidders raise the offer price until the top price is reached. What kind of auctions are these?

Accepted Answer

eBay and Amazon.com are perfec

Question 13

Pricing cues such as sale signs and prices that end in 9 are more influential when ________.

Accepted Answer

A)  customers have substantial knowledge about prices 
B)  customers purchase the particular item regularly 
C)  product quality is standardized 
D)  product designs vary over time 
E)  prices do not vary from time to time 
A)  customers have substantial knowledge about prices 
B)  customers purchase the particular item regularly 
C)  product quality is standardized 
D)  product designs vary over time 
E)  prices do not vary from time to time

Question 14

In a(n) ________, the buyer announces something he or she wants to buy, and potential sellers compete to offer the lowest price.

Accepted Answer

A)  Dutch auction with one buyer and many sellers 
B)  English auction with one buyer and many sellers 
C)  English auction with one seller and many buyers 
D)  sealed-bid auction 
E)  ascending auction 
A)  Dutch auction with one buyer and many sellers 
B)  English auction with one buyer and many sellers 
C)  English auction with one seller and many buyers 
D)  sealed-bid auction 
E)  ascending auction

Question 15

For price discrimination to work ________.

Accepted Answer

A)  the market must be segmentable and the segments must show similar intensities of demand 
B)  members in the lower-price segment must be able to resell the product to the higher-price segment 
C)  competitors must be able to undersell the firm in the higher-price segment 
D)  the practice must not breed customer resentment and ill will 
E)  the extra revenue derived from price discrimination must not exceed the cost of segmenting and policing the market 
A)  the market must be segmentable and the segments must show similar intensities of demand 
B)  members in the lower-price segment must be able to resell the product to the higher-price segment 
C)  competitors must be able to undersell the firm in the higher-price segment 
D)  the practice must not breed customer resentment and ill will 
E)  the extra revenue derived from price discrimination must not exceed the cost of segmenting and policing the market

Question 16

PepsiCo sold its cola syrup to Russia and agreed to buy Russian vodka at a certain rate for sale in the United States for the next five years. What kind of a countertrade did both the parties indulge in?

Accepted Answer

Both the parties indulged in an offset.

Question 17

________ pricing is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality.

Accepted Answer

A)  Value 
B)  Going-rate 
C)  Auction-type 
D)  Markup 
E)  Perceived-value 
A)  Value 
B)  Going-rate 
C)  Auction-type 
D)  Markup 
E)  Perceived-value

Question 18

Total costs consist of the sum of the fixed and the variable costs for any given level of production.

Accepted Answer

A) True 
 B)False

Question 19

A retailer who utilizes a(n) ________ policy charges a constant low price with little or no price promotions and special sales.

Accepted Answer

A)  everyday low pricing 
B)  high-low pricing 
C)  low cost 
D)  going-rate pricing 
E)  auction-type pricing 
A)  everyday low pricing 
B)  high-low pricing 
C)  low cost 
D)  going-rate pricing 
E)  auction-type pricing

Question 20

Price elasticity depends upon the magnitude and direction of the contemplated price change.

Accepted Answer

A) True 
 B)False

Exam 16: Developing Pricing Strategies and Programs

Price is one of the two elements of the marketing mix that produces revenue.

An umbrella manufacturing company's fixed costs are $275,000. The variable cost per unit is $5 and each umbrella is sold at $10. How many units should the firm sell in order to break even?

A company that is looking to maximize its market share would do well to follow ________ pricing.

What techniques can a firm use to help consumers avoid sticker shock and a hostile reaction when prices rise?

When firms charge different prices to different customer groups for the same product or service, it is a case of second-degree price discrimination.

A company does not set a final price until the product is finished or delivered. This is known as ________.

Ellie's manager has asked her to come up with ways to reduce costs of their new product by utilizing a process called "target costing." What should Ellie do?

Companies strive to maximize their current profits if they are plagued with overcapacity, intense competition, or changing consumer wants.

A Japanese firm is ready to sell its recent technological innovation to the US government. But it has asked for 80 percent in cash and the rest in mica. The Japanese firm is looking to enter into a(n) ________ with the US government.

Loss leader pricing dilutes a company's brand image.

On sites such as eBay and Amazon.com, the seller puts up an item and bidders raise the offer price until the top price is reached. What kind of auctions are these?

Pricing cues such as sale signs and prices that end in 9 are more influential when ________.

In a(n) ________, the buyer announces something he or she wants to buy, and potential sellers compete to offer the lowest price.

For price discrimination to work ________.

PepsiCo sold its cola syrup to Russia and agreed to buy Russian vodka at a certain rate for sale in the United States for the next five years. What kind of a countertrade did both the parties indulge in?

________ pricing is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality.

Total costs consist of the sum of the fixed and the variable costs for any given level of production.

A retailer who utilizes a(n) ________ policy charges a constant low price with little or no price promotions and special sales.

Price elasticity depends upon the magnitude and direction of the contemplated price change.

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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