Question 1

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 2

In target-return pricing, the firm adds a standard markup to the product's cost.

Accepted Answer

A) True 
 B)False

Question 3

Agatha's Inc. is about to introduce a new product in the market, but is not sure as to how it should price the product. The company is facing intense competition from 5 other companies. In the past, it has also failed to keep up with the changing consumer wants. In such a situation, what should be its main objective?

Accepted Answer

The main objective for Agatha's Inc. sho

Question 4

A company must consider the product's stage in the life cycle and its importance in the company's portfolio before responding to a competitor's price cut.

Accepted Answer

A) True 
 B)False

Question 5

In ________, the seller charges a separate price to each customer depending on the intensity of his or her demand.

Accepted Answer

A)  second-degree price discrimination 
B)  third-degree price discrimination 
C)  psychological discounting 
D)  special-customer pricing 
E)  first-degree price discrimination 
A)  second-degree price discrimination 
B)  third-degree price discrimination 
C)  psychological discounting 
D)  special-customer pricing 
E)  first-degree price discrimination

Question 6

Companies sometimes initiate price cuts in an attempt to dominate the market through lower costs.

Accepted Answer

A) True 
 B)False

Question 7

A quantity discount is a price reduction given to those who pay their bills promptly.

Accepted Answer

A) True 
 B)False

Question 8

Companies that aim to ________ strive to be affordable luxuries.

Accepted Answer

A)  survive in the market 
B)  partially recover their costs 
C)  maximize their market share 
D)  pursue value pricing 
E)  be product-quality leaders 
A)  survive in the market 
B)  partially recover their costs 
C)  maximize their market share 
D)  pursue value pricing 
E)  be product-quality leaders

Question 9

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

Question 10

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 11

If consumers were largely indifferent to a $0.5 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 12

When consumers examine products, they often compare an observed price to an internal price they remember. This is known as a(n)________ price.

Accepted Answer

A)  markup 
B)  reference 
C)  market-skimming 
D)  accumulated 
E)  target 
A)  markup 
B)  reference 
C)  market-skimming 
D)  accumulated 
E)  target

Question 13

The key to perceived-value pricing is to ________.

Accepted Answer

A)  reengineer the company's operations 
B)  deliver more unique value than competitors 
C)  adopt subtle marketing tactics compared to competitors 
D)  deliver more value but at a lower cost 
E)  invest heavily in advertising in order to convey superior value 
A)  reengineer the company's operations 
B)  deliver more unique value than competitors 
C)  adopt subtle marketing tactics compared to competitors 
D)  deliver more value but at a lower cost 
E)  invest heavily in advertising in order to convey superior value

Question 14

How does the Internet help sellers discriminate between buyers and vice-versa?

Accepted Answer

The Internet helps buyers to:
• Get inst

Question 15

Psychological discounting involves setting an artificially high price and then offering the product at substantial savings.

Accepted Answer

A) True 
 B)False

Question 16

Experience-curve pricing ________.

Accepted Answer

A)  assumes competitors are weak followers 
B)  allows products to project a high quality image 
C)  is applicable only to manufacturing costs 
D)  focuses on reducing fixed costs 
E)  is generally risk-free 
A)  assumes competitors are weak followers 
B)  allows products to project a high quality image 
C)  is applicable only to manufacturing costs 
D)  focuses on reducing fixed costs 
E)  is generally risk-free

Question 17

In which of the following auctions does the auctioneer first announce a high price for a product and then slowly decreases the price until a bidder accepts?

Accepted Answer

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

Question 18

What are the different forms of countertrade?

Accepted Answer

Countertrade can take the following form

Question 19

Consumers are less price sensitive when ________.

Accepted Answer

A)  price is only a small part of the total cost spent on the product over its lifetime 
B)  they perceive the higher prices to be unjustified 
C)  they change their buying habits regularly 
D)  there are many substitutes and competitors in the market 
E)  they are buying high-cost items 
A)  price is only a small part of the total cost spent on the product over its lifetime 
B)  they perceive the higher prices to be unjustified 
C)  they change their buying habits regularly 
D)  there are many substitutes and competitors in the market 
E)  they are buying high-cost items

Question 20

What are the different price-setting methods? Briefly describe each of them.

Accepted Answer

The six major price-setting methods are:

Exam 14: Developing Pricing Strategies and Programs

For price discrimination to work ________.

In target-return pricing, the firm adds a standard markup to the product's cost.

A company must consider the product's stage in the life cycle and its importance in the company's portfolio before responding to a competitor's price cut.

In ________, the seller charges a separate price to each customer depending on the intensity of his or her demand.

Companies sometimes initiate price cuts in an attempt to dominate the market through lower costs.

A quantity discount is a price reduction given to those who pay their bills promptly.

Companies that aim to ________ strive to be affordable luxuries.

Everyday low pricing is most suitable if ________.

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

If consumers were largely indifferent to a $0.5 increase in the price of a gallon of milk, the price rise is said to fall within customers' ________.

When consumers examine products, they often compare an observed price to an internal price they remember. This is known as a(n)________ price.

The key to perceived-value pricing is to ________.

How does the Internet help sellers discriminate between buyers and vice-versa?

Psychological discounting involves setting an artificially high price and then offering the product at substantial savings.

Experience-curve pricing ________.

In which of the following auctions does the auctioneer first announce a high price for a product and then slowly decreases the price until a bidder accepts?

What are the different forms of countertrade?

Consumers are less price sensitive when ________.

What are the different price-setting methods? Briefly describe each of them.

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

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