Question 1

In markets that are characterized by products that are highly homogeneous, how should a firm react to a competitor's reduction in price?

Accepted Answer

A)  shrink the amount of the product available 
B)  substitute expensive materials or ingredients 
C)  reduce product features 
D)  reduce product services 
E)  augment the product 
A)  shrink the amount of the product available 
B)  substitute expensive materials or ingredients 
C)  reduce product features 
D)  reduce product services 
E)  augment the product

Question 2

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 3

Cost inflation provokes price increases.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Price discrimination in all forms is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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

Accepted Answer

A) True 
 B)False

Question 8

Customers usually have a lower price threshold below which prices signal inferior or unacceptable
quality, as well as an upper price threshold above which prices are prohibitive and the product appears not worth the money.

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 11

A company has developed the prototype of a mobile phone which 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, it 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 found out about the 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 12

Value pricing requires a company to reengineer its operations to become a low-cost producer.

Accepted Answer

A) True 
 B)False

Question 13

If demand changes considerably, with a small change in price, the demand is said to be ________.

Accepted Answer

A)  unit elastic 
B)  elastic 
C)  inelastic 
D)  marginal 
E)  strained 
A)  unit elastic 
B)  elastic 
C)  inelastic 
D)  marginal 
E)  strained

Question 14

When Sony introduced the world's first high-definition television to the Japanese market in 1990, it was priced at $43,000. This helped Sony to scoop the maximum amount of revenue from the various segments of the market. The price dropped steadily through the years-a 28-inch Sony HDTV cost just over $6,000 in 1993, but a 40-inch Sony HDTV cost only $600 in 2010. What pricing strategy did Sony use here?

Accepted Answer

Sony used a market-skimming pricing stra

Question 15

What are the different types of price discounts and allowances?

Accepted Answer

The different types of price discounts a

Question 16

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 17

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 18

Escalator clauses are found in contracts for major industrial projects, such as aircraft construction and bridge building.

Accepted Answer

A) True 
 B)False

Question 19

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 20

If firms wish to maximize their market share, they should opt for market-skimming pricing.

Accepted Answer

A) True 
 B)False

In markets that are characterized by products that are highly homogeneous, how should a firm react to a competitor's reduction in price?

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

Cost inflation provokes price increases.

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

Price discrimination in all forms is illegal in the United States.

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?

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

Customers usually have a lower price threshold below which prices signal inferior or unacceptable quality, as well as an upper price threshold above which prices are prohibitive and the product appears not worth the money.

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

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

Value pricing requires a company to reengineer its operations to become a low-cost producer.

If demand changes considerably, with a small change in price, the demand is said to be ________.

What are the different types of price discounts and allowances?

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?

Escalator clauses are found in contracts for major industrial projects, such as aircraft construction and bridge building.

Which of the following is true regarding price elasticity?

If firms wish to maximize their market share, they should opt for market-skimming pricing.

Defining Marketing for the 21st Century

Developing Marketing Strategies and Plans

Collecting Information and Forecasting Demand

Conducting Marketing Research

Creating Long-Term Loyalty Relationships

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 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 Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling

Introducing New Market Offerings

Tapping into Global Markets

Managing a Holistic Marketing Organization for the Long Run

Filters

Exam 14: Developing Pricing Strategies and Programs

In markets that are characterized by products that are highly homogeneous, how should a firm react to a competitor's reduction in price?

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

Cost inflation provokes price increases.

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

Price discrimination in all forms is illegal in the United States.

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?

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

Customers usually have a lower price threshold below which prices signal inferior or unacceptable quality, as well as an upper price threshold above which prices are prohibitive and the product appears not worth the money.

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

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

Value pricing requires a company to reengineer its operations to become a low-cost producer.

If demand changes considerably, with a small change in price, the demand is said to be ________.

What are the different types of price discounts and allowances?

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?

Escalator clauses are found in contracts for major industrial projects, such as aircraft construction and bridge building.

Which of the following is true regarding price elasticity?

If firms wish to maximize their market share, they should opt for market-skimming pricing.

Defining Marketing for the 21st Century

Developing Marketing Strategies and Plans

Collecting Information and Forecasting Demand

Conducting Marketing Research

Creating Long-Term Loyalty Relationships

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 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 Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling

Introducing New Market Offerings

Tapping into Global Markets

Managing a Holistic Marketing Organization for the Long Run

Filters