Question 1

The learning curve is representative of the ________.

Accepted Answer

A)  per unit cost of output in the long run 
B)  drop in the average per-unit production cost that comes with accumulated production experience 
C)  number of units the market will buy in a given time period, at different prices that might be charged 
D)  total market demand resulting from different prices 
E)  per unit cost of output in the short run 
A)  per unit cost of output in the long run 
B)  drop in the average per-unit production cost that comes with accumulated production experience 
C)  number of units the market will buy in a given time period, at different prices that might be charged 
D)  total market demand resulting from different prices 
E)  per unit cost of output in the short run

Question 2

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 says that his line workers "know each product like the back of their hands," and that this knowledge helps the company keep its prices low. This indicates that Alden Manufacturing most likely benefits from the ________.

Accepted Answer

A)  cost-plus pricing 
B)  value-added pricing 
C)  experience curve 
D)  inelastic demand in the market 
E)  derived demand in the market 
A)  cost-plus pricing 
B)  value-added pricing 
C)  experience curve 
D)  inelastic demand in the market 
E)  derived demand in the market

Question 3

Buyers are more price sensitive when the product they are buying is unique or when it is high in quality, prestige, or exclusiveness.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is true with regard to value-added pricing?

Accepted Answer

A)  Companies that practice value-added pricing typically match the competition by cutting prices. 
B)  Companies practicing value-added pricing differentiate their offers by attaching value-added features to offerings that, in turn, justify higher prices. 
C)  The intrinsic value of products sold by companies practicing value-added pricing is far less than their actual selling price. 
D)  Companies practicing value-added pricing primarily rely on cost differentiation. 
E)  Value-added pricing is the most suitable pricing strategy in pure monopolies. 
A)  Companies that practice value-added pricing typically match the competition by cutting prices. 
B)  Companies practicing value-added pricing differentiate their offers by attaching value-added features to offerings that, in turn, justify higher prices. 
C)  The intrinsic value of products sold by companies practicing value-added pricing is far less than their actual selling price. 
D)  Companies practicing value-added pricing primarily rely on cost differentiation. 
E)  Value-added pricing is the most suitable pricing strategy in pure monopolies.

Question 5

Bon Vivant offers an assortment of exclusive French wines at incredibly low prices. These prices are neither limited-time offers nor special discounts, but represent the daily prices of products sold by Bon Vivant. This reflects Bon Vivant's ________ strategy.

Accepted Answer

A)  everyday low pricing 
B)  markup pricing 
C)  penetration pricing 
D)  break-even pricing 
E)  cost-based pricing 
A)  everyday low pricing 
B)  markup pricing 
C)  penetration pricing 
D)  break-even pricing 
E)  cost-based pricing

Question 6

In an effort to differentiate its offerings from its competitors, Pegasus Computers decided to add an extra USB port in all its laptops besides providing a free pair of Delphi power bass headphones with every Pegasus laptop. Although the additional features increased the price of the laptops by $500, Pegasus was confident that the strategy would help boost demand for its laptops substantially. This is an example of ________.

Accepted Answer

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

Question 7

Internal factors affecting pricing include the company's overall marketing strategy, objectives, and marketing mix.

Accepted Answer

A) True 
 B)False

Question 8

Cost-plus pricing ________.

Accepted Answer

A)  is a complex pricing method 
B)  involves pricing that accurately reflects production costs 
C)  involves adding a standard markup for profit 
D)  aims at breaking even on the costs of making and marketing a product 
E)  is a value-based pricing method 
A)  is a complex pricing method 
B)  involves pricing that accurately reflects production costs 
C)  involves adding a standard markup for profit 
D)  aims at breaking even on the costs of making and marketing a product 
E)  is a value-based pricing method

Question 9

Compare and contrast pure competition and oligopolistic competition.

Accepted Answer

Under pure competition, the market consi

Question 10

With accumulated production experience and a higher volume of production, companies not only become more efficient but also ________.

Accepted Answer

A)  gain economies of scale 
B)  incur higher overhead costs 
C)  create derived demand in the market 
D)  spend more per unit of produced output 
E)  tend to routinely spend less on inputs 
A)  gain economies of scale 
B)  incur higher overhead costs 
C)  create derived demand in the market 
D)  spend more per unit of produced output 
E)  tend to routinely spend less on inputs

Question 11

Briefly discuss monopolistic competition.

Accepted Answer

Under monopolistic competition, the mark

Question 12

Department stores such as Kohl's and Macy's practice high-low pricing by ________.

Accepted Answer

A)  charging a constant, everyday low price 
B)  providing few or no temporary price discounts 
C)  increasing prices temporarily on select products 
D)  having frequent sale days for store credit-card holders 
E)  underpricing most consumer items 
A)  charging a constant, everyday low price 
B)  providing few or no temporary price discounts 
C)  increasing prices temporarily on select products 
D)  having frequent sale days for store credit-card holders 
E)  underpricing most consumer items

Question 13

Explain the concept of price ceiling.

Accepted Answer

Price ceiling repres

Question 14

What are the different internal factors that affect a firm's pricing decisions?

Accepted Answer

Beyond customer value perceptions, costs

Question 15

A decision to position the product on high-performance quality will mean that the ________.

Accepted Answer

A)  seller must charge a higher price to cover higher costs 
B)  seller must charge a lower price to attract more customers 
C)  producer must step down production 
D)  marketer must boost derived demand in the market 
E)  break-even volume will be fairly low 
A)  seller must charge a higher price to cover higher costs 
B)  seller must charge a lower price to attract more customers 
C)  producer must step down production 
D)  marketer must boost derived demand in the market 
E)  break-even volume will be fairly low

Question 16

Buyers are less price sensitive when ________.

Accepted Answer

A)  the product they are buying is of inferior quality 
B)  the product they are buying is low in prestige 
C)  substitute products are easy to find 
D)  the product they are buying is unique 
E)  the product they are buying is non-exclusive 
A)  the product they are buying is of inferior quality 
B)  the product they are buying is low in prestige 
C)  substitute products are easy to find 
D)  the product they are buying is unique 
E)  the product they are buying is non-exclusive

Question 17

There was a 35 percent increase in demand for a product after the seller decreased its price by 14 percent. Therefore, the price elasticity of demand is ________.

Accepted Answer

A)  0.25 
B)  0.4 
C)  -2.5 
D)  2.5 
E)  -25 
A)  0.25 
B)  0.4 
C)  -2.5 
D)  2.5 
E)  -25

Question 18

If demand falls by 15 percent when a seller raises its price by 3 percent, what will be the price elasticity of demand? Is the demand elastic or inelastic?

Accepted Answer

The price elasticity of demand

Question 19

In industrial markets, ________ typically has the final say in setting the pricing objectives and policies of a company.

Accepted Answer

A)  the sales manager 
B)  top management 
C)  the production manager 
D)  the HR department 
E)  the sales staff 
A)  the sales manager 
B)  top management 
C)  the production manager 
D)  the HR department 
E)  the sales staff

Question 20

Why is markup pricing most likely impractical?

Accepted Answer

A)  Calculating costs is complicated due to fluctuations. 
B)  By tying the price to cost, sellers oversimplify pricing. 
C)  When all firms in the industry use this pricing method, prices tend to be similar. 
D)  The method ignores demand and competitor prices. 
E)  With a standard markup, consumers know when they are being overcharged. 
A)  Calculating costs is complicated due to fluctuations. 
B)  By tying the price to cost, sellers oversimplify pricing. 
C)  When all firms in the industry use this pricing method, prices tend to be similar. 
D)  The method ignores demand and competitor prices. 
E)  With a standard markup, consumers know when they are being overcharged.

The learning curve is representative of the ________.

Buyers are more price sensitive when the product they are buying is unique or when it is high in quality, prestige, or exclusiveness.

Which of the following is true with regard to value-added pricing?

Bon Vivant offers an assortment of exclusive French wines at incredibly low prices. These prices are neither limited-time offers nor special discounts, but represent the daily prices of products sold by Bon Vivant. This reflects Bon Vivant's ________ strategy.

Internal factors affecting pricing include the company's overall marketing strategy, objectives, and marketing mix.

Cost-plus pricing ________.

Compare and contrast pure competition and oligopolistic competition.

With accumulated production experience and a higher volume of production, companies not only become more efficient but also ________.

Briefly discuss monopolistic competition.

Department stores such as Kohl's and Macy's practice high-low pricing by ________.

Explain the concept of price ceiling.

What are the different internal factors that affect a firm's pricing decisions?

A decision to position the product on high-performance quality will mean that the ________.

Buyers are less price sensitive when ________.

There was a 35 percent increase in demand for a product after the seller decreased its price by 14 percent. Therefore, the price elasticity of demand is ________.

If demand falls by 15 percent when a seller raises its price by 3 percent, what will be the price elasticity of demand? Is the demand elastic or inelastic?

In industrial markets, ________ typically has the final say in setting the pricing objectives and policies of a company.

Why is markup pricing most likely impractical?

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

The learning curve is representative of the ________.

Buyers are more price sensitive when the product they are buying is unique or when it is high in quality, prestige, or exclusiveness.

Which of the following is true with regard to value-added pricing?

Bon Vivant offers an assortment of exclusive French wines at incredibly low prices. These prices are neither limited-time offers nor special discounts, but represent the daily prices of products sold by Bon Vivant. This reflects Bon Vivant's ________ strategy.

Internal factors affecting pricing include the company's overall marketing strategy, objectives, and marketing mix.

Cost-plus pricing ________.

Compare and contrast pure competition and oligopolistic competition.

With accumulated production experience and a higher volume of production, companies not only become more efficient but also ________.

Briefly discuss monopolistic competition.

Department stores such as Kohl's and Macy's practice high-low pricing by ________.

Explain the concept of price ceiling.

What are the different internal factors that affect a firm's pricing decisions?

A decision to position the product on high-performance quality will mean that the ________.

Buyers are less price sensitive when ________.

There was a 35 percent increase in demand for a product after the seller decreased its price by 14 percent. Therefore, the price elasticity of demand is ________.

If demand falls by 15 percent when a seller raises its price by 3 percent, what will be the price elasticity of demand? Is the demand elastic or inelastic?

In industrial markets, ________ typically has the final say in setting the pricing objectives and policies of a company.

Why is markup pricing most likely impractical?

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