Question 1

________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.

Accepted Answer

A)  Markup 
B)  Good-value 
C)  Cost-plus 
D)  Target profit 
E)  Break-even 
A)  Markup 
B)  Good-value 
C)  Cost-plus 
D)  Target profit 
E)  Break-even B

Question 2

Product costs set the ceiling for prices.

Accepted Answer

A) True 
 B)False  False

Question 3

Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

Accepted Answer

A)  pure competition 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  a pure monopoly 
E)  the dominant firm model 
A)  pure competition 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  a pure monopoly 
E)  the dominant firm model B

Question 4

In a pure monopoly, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

Accepted Answer

A) True 
 B)False

Question 5

________ 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

Question 6

"Beyond the market and the economy, the company must consider several other factors in its external environment when setting prices." Explain this statement.

Accepted Answer

Beyond the market and the economy, the c

Question 7

Overhead costs are costs that do not vary with production or sales level.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Cost-based pricing is often product driven.

Accepted Answer

A) True 
 B)False

Question 10

________ refers to the amount of money charged for a product or service.

Accepted Answer

A)  Value 
B)  Cost 
C)  Price 
D)  Wage 
E)  Salary 
A)  Value 
B)  Cost 
C)  Price 
D)  Wage 
E)  Salary

Question 11

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

Accepted Answer

Unlike product featu

Question 12

What is good-value pricing?

Accepted Answer

Good-value pricing refers to o

Question 13

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.

Question 14

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

Accepted Answer

Economic conditions can have a strong im

Question 15

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 16

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

Accepted Answer

A)  $15 
B)  $25 
C)  $30 
D)  $50 
E)  $75 
A)  $15 
B)  $25 
C)  $30 
D)  $50 
E)  $75

Question 17

Markup pricing is used when a firm tries to determine the price at which it will break even or make the target return it is seeking.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Which of the following is a cost-based approach to pricing?

Accepted Answer

A)  value-based pricing 
B)  high-low pricing 
C)  target return pricing 
D)  good value pricing 
E)  EDLP 
A)  value-based pricing 
B)  high-low pricing 
C)  target return pricing 
D)  good value pricing 
E)  EDLP

Question 20

Which of the following is true of value-based pricing?

Accepted Answer

A)  The targeted value and price drive decisions about what costs can be incurred and the resulting product design. 
B)  Value-based pricing is mostly product driven. 
C)  Value-based pricing involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for its effort and risk. 
D)  The marketer usually designs a product and marketing program and then sets the price. 
E)  A company using value-based pricing designs what it considers to be a good product, adds up the costs of making the product, and sets a price that covers costs plus a target profit. 
A)  The targeted value and price drive decisions about what costs can be incurred and the resulting product design. 
B)  Value-based pricing is mostly product driven. 
C)  Value-based pricing involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for its effort and risk. 
D)  The marketer usually designs a product and marketing program and then sets the price. 
E)  A company using value-based pricing designs what it considers to be a good product, adds up the costs of making the product, and sets a price that covers costs plus a target profit.

________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.

Product costs set the ceiling for prices.

Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

In a pure monopoly, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

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

"Beyond the market and the economy, the company must consider several other factors in its external environment when setting prices." Explain this statement.

Overhead costs are costs that do not vary with production or sales level.

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

Cost-based pricing is often product driven.

________ refers to the amount of money charged for a product or service.

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

What is good-value pricing?

Why is markup pricing most likely impractical?

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

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

Markup pricing is used when a firm tries to determine the price at which it will break even or make the target return it is seeking.

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 is a cost-based approach to pricing?

Which of the following is true of value-based pricing?

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and 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

Engaging Customers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters

Exam 10: Pricing: Understanding and Capturing Customer Value

________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.

Product costs set the ceiling for prices.

Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

In a pure monopoly, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

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

"Beyond the market and the economy, the company must consider several other factors in its external environment when setting prices." Explain this statement.

Overhead costs are costs that do not vary with production or sales level.

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

Cost-based pricing is often product driven.

________ refers to the amount of money charged for a product or service.

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

What is good-value pricing?

Why is markup pricing most likely impractical?

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

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

Markup pricing is used when a firm tries to determine the price at which it will break even or make the target return it is seeking.

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 is a cost-based approach to pricing?

Which of the following is true of value-based pricing?

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and 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

Engaging Customers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters