Question 1

Market skimming pricing makes sense under all the following conditions,EXCEPT ________.

Accepted Answer

A) if a sufficient number of buyers have a high current demand 
B) if the unit costs of producing a small volume are high enough to cancel the advantage of charging what the traffic will bear 
C) if the high initial price does not attract more competitors to the market 
D) if consumers are likely to delay buying the product until its price drops 
E) if the high price communicates the image of a superior product 
A) if a sufficient number of buyers have a high current demand 
B) if the unit costs of producing a small volume are high enough to cancel the advantage of charging what the traffic will bear 
C) if the high initial price does not attract more competitors to the market 
D) if consumers are likely to delay buying the product until its price drops 
E) if the high price communicates the image of a superior product

Question 2

A firm that is plagued with overcapacity,intense competition,or changing wants would do better if it pursues ________ as its major objective.

Accepted Answer

A) market skimming 
B) product-quality leadership 
C) survival 
D) profit maximization 
E) market penetration 
A) market skimming 
B) product-quality leadership 
C) survival 
D) profit maximization 
E) market penetration

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Competitors are most likely to react to a price change,when ________.

Accepted Answer

A) the firm has a weak value proposition 
B) the firm enjoys a monopoly 
C) there are few competing firms 
D) the product is heterogeneous 
E) buyers have limited information 
A) the firm has a weak value proposition 
B) the firm enjoys a monopoly 
C) there are few competing firms 
D) the product is heterogeneous 
E) buyers have limited information

Question 5

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 6

When Gina's company printed the ad for their Perfume in the newspapers,the caption read,"WAS $100,NOW $75".What kind of a promotional pricing did her company use?

Accepted Answer

Gina's company used psychologi

Question 7

Trade-in allowances reward dealers for participating in advertising and sales support programs.

Accepted Answer

A) True 
 B)False

Question 8

While shopping at the mall,Jane was asked by one of the sales representatives at the cosmetics counter to try out a new lipstick that her company was test marketing.The company representative asks her how much she would be willing to pay for the lipstick.After trying it out,Jane is of the opinion that $5 is just the right price for it.What type of a reference price is Jane using?

Accepted Answer

A) usual discounted price 
B) fair price 
C) maximum retail price 
D) last price paid 
E) historical competitor price 
A) usual discounted price 
B) fair price 
C) maximum retail price 
D) last price paid 
E) historical competitor price

Question 9

A low price buys market share but not market loyalty.The same customers will shift to any lower-priced product that may come along.This is called the ________.

Accepted Answer

A) low-price trap 
B) relative-market-share trap 
C) shallow-pockets trap 
D) target-market-share trap 
E) fragile-market-share trap 
A) low-price trap 
B) relative-market-share trap 
C) shallow-pockets trap 
D) target-market-share trap 
E) fragile-market-share trap

Question 10

When Carl's company introduced its new product in the market,it introduced it at the lowest possible price assuming that the demand for the product is going to be highly responsive to the price it is being introduced at.It also believes that a higher sales volume will lead to lower unit costs and higher long-run profit.What can be said about the company's objective?

Accepted Answer

The company's object

Question 11

Movie matinees are priced lower than the evening shows;television advertising costs less when run after midnight.These are examples of what type of price discrimination?

Accepted Answer

These are examples o

Question 12

A market-penetration pricing strategy is most suitable when _______.

Accepted Answer

A) a low price slows down market growth 
B) production and distribution costs fall with accumulated production experience 
C) a high price dissuades potential competitors from entering the market 
D) the market is characterized by inelastic demand 
E) a low price encourages actual competition 
A) a low price slows down market growth 
B) production and distribution costs fall with accumulated production experience 
C) a high price dissuades potential competitors from entering the market 
D) the market is characterized by inelastic demand 
E) a low price encourages actual competition

Question 13

Dutch auctions (descending bids)feature many sellers and many buyers,or one buyer and many sellers.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

Which of the following is true regarding price elasticity?

Accepted Answer

A) The higher the elasticity,the lesser is the volume growth resulting from a 1 percent price reduction. 
B) Within the price indifference band,price changes have little or no effect on demand. 
C) If demand is elastic,sellers will consider increasing the price. 
D) Price elasticity does not depend on magnitude and direction of the contemplated price change. 
E) When demand is inelastic,sellers should lower prices in order to increase total revenue. 
A) The higher the elasticity,the lesser is the volume growth resulting from a 1 percent price reduction. 
B) Within the price indifference band,price changes have little or no effect on demand. 
C) If demand is elastic,sellers will consider increasing the price. 
D) Price elasticity does not depend on magnitude and direction of the contemplated price change. 
E) When demand is inelastic,sellers should lower prices in order to increase total revenue.

Question 17

________ is the cost per unit at that level of production.

Accepted Answer

A) Target cost 
B) Average cost 
C) Marginal cost 
D) Opportunity cost 
E) Fixed cost 
A) Target cost 
B) Average cost 
C) Marginal cost 
D) Opportunity cost 
E) Fixed cost

Question 18

Fred's company has recently sold its resin-producing plant to a local concern in India.As part of the sales price,his company agrees to accept as partial payment the production of the resin at an agreed upon price for six years.This is an example of what type of countertrade?

Accepted Answer

This is an example of a buyback arrangem

Question 19

The price of tickets to the opera vary depending on where the person would like to be seated-in the gallery or in the stalls.This is an example of ________.

Accepted Answer

A) channel pricing 
B) time pricing 
C) image pricing 
D) product-form pricing 
E) location pricing 
A) channel pricing 
B) time pricing 
C) image pricing 
D) product-form pricing 
E) location pricing

Question 20

Which of the following is the most elementary pricing method?

Accepted Answer

A) value pricing 
B) going-rate pricing 
C) markup pricing 
D) target-return pricing 
E) perceived-value pricing 
A) value pricing 
B) going-rate pricing 
C) markup pricing 
D) target-return pricing 
E) perceived-value pricing

Exam 14: Developing Pricing Strategies and Programs

Market skimming pricing makes sense under all the following conditions,EXCEPT ________.

A firm that is plagued with overcapacity,intense competition,or changing wants would do better if it pursues ________ as its major objective.

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

Competitors are most likely to react to a price change,when ________.

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

When Gina's company printed the ad for their Perfume in the newspapers,the caption read,"WAS $100,NOW $75".What kind of a promotional pricing did her company use?

Trade-in allowances reward dealers for participating in advertising and sales support programs.

A low price buys market share but not market loyalty.The same customers will shift to any lower-priced product that may come along.This is called the ________.

Movie matinees are priced lower than the evening shows;television advertising costs less when run after midnight.These are examples of what type of price discrimination?

A market-penetration pricing strategy is most suitable when _______.

Dutch auctions (descending bids)feature many sellers and many buyers,or one buyer and many sellers.

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

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

Which of the following is true regarding price elasticity?

________ is the cost per unit at that level of production.

Fred's company has recently sold its resin-producing plant to a local concern in India.As part of the sales price,his company agrees to accept as partial payment the production of the resin at an agreed upon price for six years.This is an example of what type of countertrade?

The price of tickets to the opera vary depending on where the person would like to be seated-in the gallery or in the stalls.This is an example of ________.

Which of the following is the most elementary pricing method?

Defining Marketing for the New Realities

Developing Marketing Strategies and Plans

Gathering Information and Forecasting Demand

Conducting Marketing Research

Creating Customer Value,satisfaction,and Loyalty

Analyzing Consumer Markets

Analyzing Business Markets

Identifying Market Segments and Targets

Creating Brand Equity

Crafting the Brand Positioning

Competitive Dynamics

Setting Product Strategy

Designing and Managing Services

Designing and Managing Marketing Channels and Value Networks

Managing Retailing,wholesaling,and Logistics

Designing and Managing Integrated Marketing Communications

Managing Mass Communications: Advertising, sales Promotions, events, and Public Relations

Managing Digital Communications: Online, social Media, and Mobile

Managing Personal Communications: Direct and Database Marketing and Personal Selling

Introducing New Market Offerings

Tapping Into Global Markets

Managing a Holistic Marketing Organization

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