Question 1

Explain the concept of the price floor.

Accepted Answer

Price floor represen

Question 2

Define total costs.

Accepted Answer

Total costs are the

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

________ 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 5

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 6

The simplest pricing method is cost-plus pricing, which involves adding a standard markup to the cost of the product.

Accepted Answer

A) True 
 B)False

Question 7

In 2011, the fixed costs of a company were $500,000, and its variable costs equaled $150,000. In 2010, the company made an annual profit of $200,000. It has been predicted that, despite a steady growth, the company's variable costs will likely equal $300,000 by 2013. The total costs of the company in 2011 were ________.

Accepted Answer

A)  $350,000 
B)  $450,000 
C)  $650,000 
D)  $800,000 
E)  $950,000 
A)  $350,000 
B)  $450,000 
C)  $650,000 
D)  $800,000 
E)  $950,000

Question 8

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 9

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 10

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 11

Department stores that practice everyday low pricing typically provide frequent sale days, early-bird savings, and bonus earnings for store credit-card holders.

Accepted Answer

A) True 
 B)False

Question 12

What is a demand curve? Explain its importance in the context of pricing decisions.

Accepted Answer

A demand curve shows the number of units

Question 13

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 14

Price setting is usually determined by ________ in small companies.

Accepted Answer

A)  the top managers 
B)  the marketing department 
C)  the sales department 
D)  divisional managers 
E)  product managers 
A)  the top managers 
B)  the marketing department 
C)  the sales department 
D)  divisional managers 
E)  product managers

Question 15

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

Accepted Answer

Beyond customer value perceptions, costs

Question 16

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 17

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

Accepted Answer

A)  demand curve 
B)  supply curve 
C)  learning curve 
D)  break-even pricing 
E)  target costing 
A)  demand curve 
B)  supply curve 
C)  learning curve 
D)  break-even pricing 
E)  target costing

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 20

Which of the following exemplifies a pure competitive market?

Accepted Answer

A)  a market where many buyers and sellers trade over a range of prices rather than a single market price 
B)  a market where a single firm controls the larger fraction of the market share 
C)  a market where a few powerful firms control the larger fraction of the market share 
D)  a market characterized by only a few large sellers 
E)  a market where many buyers and sellers trade in a uniform commodity 
A)  a market where many buyers and sellers trade over a range of prices rather than a single market price 
B)  a market where a single firm controls the larger fraction of the market share 
C)  a market where a few powerful firms control the larger fraction of the market share 
D)  a market characterized by only a few large sellers 
E)  a market where many buyers and sellers trade in a uniform commodity

Explain the concept of the price floor.

Define total costs.

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

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

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?

The simplest pricing method is cost-plus pricing, which involves adding a standard markup to the cost of the product.

Companies can legitimately charge a higher price if ________.

The learning curve is representative of the ________.

Department stores that practice everyday low pricing typically provide frequent sale days, early-bird savings, and bonus earnings for store credit-card holders.

What is a demand curve? Explain its importance in the context of pricing decisions.

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

Price setting is usually determined by ________ in small companies.

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

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

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

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

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

Which of the following exemplifies a pure competitive market?

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

Explain the concept of the price floor.

Define total costs.

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

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

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?

The simplest pricing method is cost-plus pricing, which involves adding a standard markup to the cost of the product.

Companies can legitimately charge a higher price if ________.

The learning curve is representative of the ________.

Department stores that practice everyday low pricing typically provide frequent sale days, early-bird savings, and bonus earnings for store credit-card holders.

What is a demand curve? Explain its importance in the context of pricing decisions.

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

Price setting is usually determined by ________ in small companies.

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

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

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

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

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

Which of the following exemplifies a pure competitive market?

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