Question 1

Product costs set the ceiling for prices.

Accepted Answer

A) True 
 B)False

Question 2

What is good-value pricing?

Accepted Answer

Good-value pricing refers to o

Question 3

________ involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

Accepted Answer

A)  High-low pricing 
B)  Everyday low pricing 
C)  Cost-plus pricing 
D)  Break-even pricing 
E)  Penetration pricing 
A)  High-low pricing 
B)  Everyday low pricing 
C)  Cost-plus pricing 
D)  Break-even pricing 
E)  Penetration pricing

Question 4

Which of the following is true with regard to price?

Accepted Answer

A)  Historically, price has had the least perceptible impact on buyer choice. 
B)  Price is the least flexible element in the marketing mix. 
C)  Unike product features and channel commitments, prices cannot be changed quickly. 
D)  Price is the sum of all the values that customers give up to gain the benefits of having a product. 
E)  Prices only have an indirect impact on a firm's bottom line. 
A)  Historically, price has had the least perceptible impact on buyer choice. 
B)  Price is the least flexible element in the marketing mix. 
C)  Unike product features and channel commitments, prices cannot be changed quickly. 
D)  Price is the sum of all the values that customers give up to gain the benefits of having a product. 
E)  Prices only have an indirect impact on a firm's bottom line.

Question 5

Which of the following is most likely a risk associated with experience-curve pricing?

Accepted Answer

A)  High-volume production facilities are unable to meet demand. 
B)  New technology often leads to productivity problems. 
C)  Demand for the product fluctuates unpredictably. 
D)  Consumers tend to prefer new brands over established ones. 
E)  Aggressive pricing often gives a product a cheap image. 
A)  High-volume production facilities are unable to meet demand. 
B)  New technology often leads to productivity problems. 
C)  Demand for the product fluctuates unpredictably. 
D)  Consumers tend to prefer new brands over established ones. 
E)  Aggressive pricing often gives a product a cheap image.

Question 6

________ pricing uses buyers' perceptions of value as the key to pricing.

Accepted Answer

A)  Customer value-based 
B)  Cost-based 
C)  Time-based 
D)  Markup 
E)  Target return 
A)  Customer value-based 
B)  Cost-based 
C)  Time-based 
D)  Markup 
E)  Target return

Question 7

Which of the following processes does value-based pricing reverse?

Accepted Answer

A)  high-low pricing 
B)  everyday low pricing 
C)  cost-based pricing 
D)  good-value pricing 
E)  value-added pricing 
A)  high-low pricing 
B)  everyday low pricing 
C)  cost-based pricing 
D)  good-value pricing 
E)  value-added pricing

Question 8

Why is price considered one of the most flexible elements of the marketing mix?

Accepted Answer

Unlike product featu

Question 9

As a manufacturer increases the price, ________.

Accepted Answer

A)  efficiency drops 
B)  the break-even volume drops 
C)  competition is minimized 
D)  the total costs increase 
E)  the profit margin shrinks 
A)  efficiency drops 
B)  the break-even volume drops 
C)  competition is minimized 
D)  the total costs increase 
E)  the profit margin shrinks

Question 10

The experience curve reveals that ________.

Accepted Answer

A)  repetition in production has no visible impact on production costs 
B)  repetition in production enhances efficiency 
C)  the average cost of production remains the same with accumulated production experience 
D)  repetition in production adds to the costs and thereby increases the prices of outputs 
E)  the average cost of production increases with accumulated production experience 
A)  repetition in production has no visible impact on production costs 
B)  repetition in production enhances efficiency 
C)  the average cost of production remains the same with accumulated production experience 
D)  repetition in production adds to the costs and thereby increases the prices of outputs 
E)  the average cost of production increases with accumulated production experience

Question 11

A manufacturer has fixed costs of $100,000, a variable cost of $10 per unit of output, and break-even volume of 50,000 units. What should the manufacturer's unit cost be in order to break even?

Accepted Answer

A)  $10 
B)  $12 
C)  $14 
D)  $16 
E)  $20 
A)  $10 
B)  $12 
C)  $14 
D)  $16 
E)  $20

Question 12

Companies can legitimately charge a higher price if ________.

Accepted Answer

A)  consumers perceive that the company's product offers greater value 
B)  the demand for products manufactured by a firm is highly elastic 
C)  the cost of advertising is minimal 
D)  derived demand remains constant 
E)  consumers de-emphasize quality 
A)  consumers perceive that the company's product offers greater value 
B)  the demand for products manufactured by a firm is highly elastic 
C)  the cost of advertising is minimal 
D)  derived demand remains constant 
E)  consumers de-emphasize quality

Question 13

Refer to the scenario below to answer the following questions.
Alden Manufacturing produces small kitchen appliances-blenders, hand mixers, and electric skillets-under the brand name First Generation. Alden attempts to target newlyweds and first-time home buyers with this brand.
Considering that most young households have limited financial resources, Alden attempts to engage in target costing. "In doing this," says Milt Alden, the co-founder of Alden Electronics, "we have better control over keeping price right in line with customers."
Alden manufactures a three-speed blender, its top seller, along with a five-speed blender. The hand mixers are manufactured in two variants-a small handheld mixer with two rotating beaters and another that comes with an optional stand and an attached mixing bowl. Alden's temperature-controlled skillets are manufactured in a single style with three color options.
"Our product offerings are narrower," Milt Alden added, "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low.
-Milt Alden uses which of the following strategies for pricing his products?

Accepted Answer

A)  basing company price on competitors' prices 
B)  using everyday low pricing 
C)  initiating an aggressive promotional campaign 
D)  starting with customer-value considerations 
E)  focusing on overall fixed costs of manufacturing 
A)  basing company price on competitors' prices 
B)  using everyday low pricing 
C)  initiating an aggressive promotional campaign 
D)  starting with customer-value considerations 
E)  focusing on overall fixed costs of manufacturing

Question 14

What is high-low pricing?

Accepted Answer

High-low pricing involves char

Question 15

The more elastic the demand, the more it pays for the seller to raise the price.

Accepted Answer

A) True 
 B)False

Question 16

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

Accepted Answer

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

Question 17

The break-even volume is the point at which ________.

Accepted Answer

A)  the total revenue and total cost curves intersect 
B)  demand equals supply 
C)  the production of one more unit will not lead to increase in demand 
D)  the company can pay off all its long-term debt 
E)  a firm exceeds the sales forecast 
A)  the total revenue and total cost curves intersect 
B)  demand equals supply 
C)  the production of one more unit will not lead to increase in demand 
D)  the company can pay off all its long-term debt 
E)  a firm exceeds the sales forecast

Question 18

Lawyers, accountants, and other professionals typically price by adding a standard markup for profit. This exemplifies ________.

Accepted Answer

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

Question 19

The perceived value of different product offers can be reasonably assessed by ________.

Accepted Answer

A)  conducting a SWOT analysis 
B)  conducting a break-even analysis 
C)  conducting surveys and experiments 
D)  collecting data about competitors' offers 
E)  setting a benchmark for product quality 
A)  conducting a SWOT analysis 
B)  conducting a break-even analysis 
C)  conducting surveys and experiments 
D)  collecting data about competitors' offers 
E)  setting a benchmark for product quality

Question 20

Briefly describe how economic conditions impact a firm's pricing strategies.

Accepted Answer

Economic conditions can have a strong im

Product costs set the ceiling for prices.

What is good-value pricing?

________ involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

Which of the following is true with regard to price?

Which of the following is most likely a risk associated with experience-curve pricing?

________ pricing uses buyers' perceptions of value as the key to pricing.

Which of the following processes does value-based pricing reverse?

Why is price considered one of the most flexible elements of the marketing mix?

As a manufacturer increases the price, ________.

The experience curve reveals that ________.

A manufacturer has fixed costs of $100,000, a variable cost of $10 per unit of output, and break-even volume of 50,000 units. What should the manufacturer's unit cost be in order to break even?

Companies can legitimately charge a higher price if ________.

What is high-low pricing?

The more elastic the demand, the more it pays for the seller to raise the price.

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

The break-even volume is the point at which ________.

Lawyers, accountants, and other professionals typically price by adding a standard markup for profit. This exemplifies ________.

The perceived value of different product offers can be reasonably assessed by ________.

Briefly describe how economic conditions impact a firm's pricing strategies.

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

Product costs set the ceiling for prices.

What is good-value pricing?

________ involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

Which of the following is true with regard to price?

Which of the following is most likely a risk associated with experience-curve pricing?

________ pricing uses buyers' perceptions of value as the key to pricing.

Which of the following processes does value-based pricing reverse?

Why is price considered one of the most flexible elements of the marketing mix?

As a manufacturer increases the price, ________.

The experience curve reveals that ________.

A manufacturer has fixed costs of $100,000, a variable cost of $10 per unit of output, and break-even volume of 50,000 units. What should the manufacturer's unit cost be in order to break even?

Companies can legitimately charge a higher price if ________.

What is high-low pricing?

The more elastic the demand, the more it pays for the seller to raise the price.

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

The break-even volume is the point at which ________.

Lawyers, accountants, and other professionals typically price by adding a standard markup for profit. This exemplifies ________.

The perceived value of different product offers can be reasonably assessed by ________.

Briefly describe how economic conditions impact a firm's pricing strategies.

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