Question 1

________ is the only element in the marketing mix that produces revenue.

Accepted Answer

A)  Price 
B)  Product 
C)  Place 
D)  Fixed costs 
E)  Variable costs 
A)  Price 
B)  Product 
C)  Place 
D)  Fixed costs 
E)  Variable costs A

Question 2

Customer perceptions of the product's value set the floor for prices.

Accepted Answer

A) True 
 B)False  False

Question 3

Under oligopolistic competition ________.

Accepted Answer

A)  the market consists of a single dominant seller 
B)  the market consists of numerous small sellers 
C)  the market consists of many buyers and sellers who trade over a range of prices rather than a single market price 
D)  sellers are typically unresponsive to competitors' pricing strategies and marketing moves 
E)  the market consists of only a few large sellers 
A)  the market consists of a single dominant seller 
B)  the market consists of numerous small sellers 
C)  the market consists of many buyers and sellers who trade over a range of prices rather than a single market price 
D)  sellers are typically unresponsive to competitors' pricing strategies and marketing moves 
E)  the market consists of only a few large sellers E

Question 4

Price decisions must be coordinated with product design, distribution, and promotion decisions to form a consistent and effective integrated marketing mix program.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following involves introducing less-expensive versions of established, brand-name products?

Accepted Answer

A)  markup pricing 
B)  good-value pricing 
C)  time-based pricing 
D)  cost-based pricing 
E)  target profit pricing 
A)  markup pricing 
B)  good-value pricing 
C)  time-based pricing 
D)  cost-based pricing 
E)  target profit pricing

Question 6

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

Accepted Answer

A)  20,000 
B)  25,000 
C)  30,000 
D)  35,000 
E)  40,000 
A)  20,000 
B)  25,000 
C)  30,000 
D)  35,000 
E)  40,000

Question 7

Define price. Discuss its importance.

Accepted Answer

In the narrowest sense, price is the amo

Question 8

Costs that change with the level of production are referred to as ________.

Accepted Answer

A)  fixed costs 
B)  variable costs 
C)  target costs 
D)  total costs 
E)  overhead costs 
A)  fixed costs 
B)  variable costs 
C)  target costs 
D)  total costs 
E)  overhead costs

Question 9

A downward-sloping experience curve is indicative of a company's rapidly increasing production costs.

Accepted Answer

A) True 
 B)False

Question 10

Explain break-even pricing.

Accepted Answer

Break-even pricing (target return pricin

Question 11

John assured his venture capitalists an earning of 25 percent return on equity when he began his IT start-up. In order to achieve this result, he will most likely use which of the following pricing approaches?

Accepted Answer

A)  value-based pricing 
B)  markup pricing 
C)  EDLP 
D)  customer-based pricing 
E)  target return pricing 
A)  value-based pricing 
B)  markup pricing 
C)  EDLP 
D)  customer-based pricing 
E)  target return pricing

Question 12

What is competition-based pricing?

Accepted Answer

Competition-based pricing refe

Question 13

Which of the following is an external factor that affects pricing decisions in a company?

Accepted Answer

A)  the company's overall marketing strategy 
B)  the nature of the market 
C)  the organizational objectives of the company 
D)  elements of the company's marketing mix 
E)  the annual advertising budget of rival firms 
A)  the company's overall marketing strategy 
B)  the nature of the market 
C)  the organizational objectives of the company 
D)  elements of the company's marketing mix 
E)  the annual advertising budget of rival firms

Question 14

________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

Accepted Answer

A)  Value-based pricing 
B)  Competition-based pricing 
C)  Cost-based pricing 
D)  Penetration pricing 
E)  Break-even pricing 
A)  Value-based pricing 
B)  Competition-based pricing 
C)  Cost-based pricing 
D)  Penetration pricing 
E)  Break-even pricing

Question 15

Dips in the economy and the instant price comparisons made possible by the Internet have contributed to ________.

Accepted Answer

A)  decreased consumer price sensitivity 
B)  increased consumer price sensitivity 
C)  a less direct relationship between supply and demand 
D)  low brand equity for luxury goods 
E)  decreased brand loyalty 
A)  decreased consumer price sensitivity 
B)  increased consumer price sensitivity 
C)  a less direct relationship between supply and demand 
D)  low brand equity for luxury goods 
E)  decreased brand loyalty

Question 16

Prices have a direct impact on a firm's bottom line.

Accepted Answer

A) True 
 B)False

Question 17

Elmo Inc., a global conglomerate, designed the ElBrush, an electric toothbrush. Sensing market demand for the electric toothbrush, Elmo started with an ideal selling price of $3 based on customer value considerations and then targeted costs to ensure that the price was met. This exemplifies ________.

Accepted Answer

A)  competition-based pricing 
B)  cost-plus pricing 
C)  target costing 
D)  everyday low pricing 
E)  high-low pricing 
A)  competition-based pricing 
B)  cost-plus pricing 
C)  target costing 
D)  everyday low pricing 
E)  high-low pricing

Question 18

The long-run average cost (LRAC) curve indicates the ________.

Accepted Answer

A)  per unit cost of output in the long run 
B)  projected total production costs of competitors 
C)  variable costs incurred by a firm over time 
D)  fixed costs incurred by a firm over the long term 
E)  number of units the market will buy in a given time period, at different prices that might be charged 
A)  per unit cost of output in the long run 
B)  projected total production costs of competitors 
C)  variable costs incurred by a firm over time 
D)  fixed costs incurred by a firm over the long term 
E)  number of units the market will buy in a given time period, at different prices that might be charged

Question 19

A pharmaceutical company in Utah recently released a new and expensive anti-ulcer drug in the market. The company justifies the high price of the drug by claiming that it is highly effective for treating all kinds of ulcers. The company also claims that the new drug will help bring down the need for invasive surgeries, an additional benefit for patients. Which of the following pricing strategies is the pharmaceutical company most likely using in this instance?

Accepted Answer

A)  target pricing 
B)  markup pricing 
C)  cost-based pricing 
D)  value-based pricing 
E)  break-even pricing 
A)  target pricing 
B)  markup pricing 
C)  cost-based pricing 
D)  value-based pricing 
E)  break-even pricing

Question 20

Explain the concept of price floor.

Accepted Answer

Price floor represen

________ is the only element in the marketing mix that produces revenue.

Customer perceptions of the product's value set the floor for prices.

Under oligopolistic competition ________.

Price decisions must be coordinated with product design, distribution, and promotion decisions to form a consistent and effective integrated marketing mix program.

Which of the following involves introducing less-expensive versions of established, brand-name products?

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

Define price. Discuss its importance.

Costs that change with the level of production are referred to as ________.

A downward-sloping experience curve is indicative of a company's rapidly increasing production costs.

Explain break-even pricing.

John assured his venture capitalists an earning of 25 percent return on equity when he began his IT start-up. In order to achieve this result, he will most likely use which of the following pricing approaches?

What is competition-based pricing?

Which of the following is an external factor that affects pricing decisions in a company?

________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

Dips in the economy and the instant price comparisons made possible by the Internet have contributed to ________.

Prices have a direct impact on a firm's bottom line.

The long-run average cost (LRAC) curve indicates the ________.

Explain the concept of price floor.

Marketing: Creating and Capturing Customer Value

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Consumer Buyer Behavior

Business Markets and Business Buyer Behavior

Customer-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

New-Product Development and Product Life Cycle Strategies

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct and Online Marketing: Building Direct Customer Relationships

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters

Exam 10: Pricing: Understanding and Capturing Customer Value

________ is the only element in the marketing mix that produces revenue.

Customer perceptions of the product's value set the floor for prices.

Under oligopolistic competition ________.

Price decisions must be coordinated with product design, distribution, and promotion decisions to form a consistent and effective integrated marketing mix program.

Which of the following involves introducing less-expensive versions of established, brand-name products?

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

Define price. Discuss its importance.

Costs that change with the level of production are referred to as ________.

A downward-sloping experience curve is indicative of a company's rapidly increasing production costs.

Explain break-even pricing.

John assured his venture capitalists an earning of 25 percent return on equity when he began his IT start-up. In order to achieve this result, he will most likely use which of the following pricing approaches?

What is competition-based pricing?

Which of the following is an external factor that affects pricing decisions in a company?

________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

Dips in the economy and the instant price comparisons made possible by the Internet have contributed to ________.

Prices have a direct impact on a firm's bottom line.

The long-run average cost (LRAC) curve indicates the ________.

Explain the concept of price floor.

Marketing: Creating and Capturing Customer Value

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Consumer Buyer Behavior

Business Markets and Business Buyer Behavior

Customer-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

New-Product Development and Product Life Cycle Strategies

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct and Online Marketing: Building Direct Customer Relationships

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters