Question 1

Explain the concept of the price floor.

Accepted Answer

Price floor represen

Question 2

"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 3

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

Accepted Answer

A)  the nature of the market 
B)  the degree of inflation in the economy 
C)  the overall marketing strategy of the company 
D)  the forces of demand and supply in the market 
E)  consumers' perception of value 
A)  the nature of the market 
B)  the degree of inflation in the economy 
C)  the overall marketing strategy of the company 
D)  the forces of demand and supply in the market 
E)  consumers' perception of value

Question 4

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 5

A marketer's fixed costs are $400,000, the variable cost is $16 per unit, and the price of the product is $24 per unit. What is the company's break-even point in dollar sales?

Accepted Answer

The break-even point

Question 6

Explain break-even pricing.

Accepted Answer

Break-even pricing (target return pricin

Question 7

As production moves up, the average cost per unit decreases because ________.

Accepted Answer

A)  variable costs decrease 
B)  of increasing diseconomies of scale 
C)  fixed costs are spread over more units 
D)  overhead costs decrease 
E)  revenue increases 
A)  variable costs decrease 
B)  of increasing diseconomies of scale 
C)  fixed costs are spread over more units 
D)  overhead costs decrease 
E)  revenue increases

Question 8

Refer to the scenario below to answer the following question(s).
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.
-If Milt Alden focuses on overall costs of manufacturing plus profit in setting product prices, which strategy would he employ?

Accepted Answer

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

Question 9

Companies with higher costs ________.

Accepted Answer

A)  can drive out competitors through their pricing strategy 
B)  intentionally pay higher costs so that they can add value through higher quality and claim higher prices and margins 
C)  can set lower prices that result in increased sales though with lower margins 
D)  specialize in selling products without value-added features 
E)  are more financially successful 
A)  can drive out competitors through their pricing strategy 
B)  intentionally pay higher costs so that they can add value through higher quality and claim higher prices and margins 
C)  can set lower prices that result in increased sales though with lower margins 
D)  specialize in selling products without value-added features 
E)  are more financially successful

Question 10

As production workers become better organized and more familiar with equipment, the average cost per unit tends to decrease with the ________.

Accepted Answer

A)  increase in the diseconomies of scale 
B)  accumulated production experience 
C)  decrease in the economies of scale 
D)  increase in derived demand 
E)  increase in primary demand 
A)  increase in the diseconomies of scale 
B)  accumulated production experience 
C)  decrease in the economies of scale 
D)  increase in derived demand 
E)  increase in primary demand

Question 11

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 ________ pricing strategy.

Accepted Answer

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

Question 12

________ 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 13

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

Accepted Answer

Unlike product featu

Question 14

In industries in which pricing is a key factor, ________ often set the best prices or help others in setting them.

Accepted Answer

A)  sales departments 
B)  salespeople 
C)  production managers 
D)  line managers 
E)  pricing departments 
A)  sales departments 
B)  salespeople 
C)  production managers 
D)  line managers 
E)  pricing departments

Question 15

Which of the following statements about break-even analysis is true?

Accepted Answer

A)  It is used to determine how much production experience a company must have in order to achieve desired efficiencies. 
B)  It is a technique used to calculate fixed costs. 
C)  It determines the amount of retained earnings a company will have during a given accounting period. 
D)  It is a technique marketers use to determine the relationship between supply and demand. 
E)  It is calculated by using variable costs, the unit price, and fixed costs. 
A)  It is used to determine how much production experience a company must have in order to achieve desired efficiencies. 
B)  It is a technique used to calculate fixed costs. 
C)  It determines the amount of retained earnings a company will have during a given accounting period. 
D)  It is a technique marketers use to determine the relationship between supply and demand. 
E)  It is calculated by using variable costs, the unit price, and fixed costs.

Question 16

What sets the floor for product prices?

Accepted Answer

A)  consumer perceptions of the product's value 
B)  product costs 
C)  competitors' strategies 
D)  advertising budgets 
E)  market competition 
A)  consumer perceptions of the product's value 
B)  product costs 
C)  competitors' strategies 
D)  advertising budgets 
E)  market competition

Question 17

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 18

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 19

Experience-curve pricing assumes that ________.

Accepted Answer

A)  competitors are weak and not willing to match price cuts 
B)  competitors are strong and invincible 
C)  aggressive pricing adversely affects product image 
D)  volume-based production slows down organizational learning 
E)  lower-cost technologies are almost always inferior 
A)  competitors are weak and not willing to match price cuts 
B)  competitors are strong and invincible 
C)  aggressive pricing adversely affects product image 
D)  volume-based production slows down organizational learning 
E)  lower-cost technologies are almost always inferior

Question 20

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)  Unlike 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)  Unlike 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.

Explain the concept of the price floor.

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

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

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

A marketer's fixed costs are $400,000, the variable cost is $16 per unit, and the price of the product is $24 per unit. What is the company's break-even point in dollar sales?

Explain break-even pricing.

As production moves up, the average cost per unit decreases because ________.

Companies with higher costs ________.

As production workers become better organized and more familiar with equipment, the average cost per unit tends to decrease with the ________.

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 ________ pricing strategy.

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

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

In industries in which pricing is a key factor, ________ often set the best prices or help others in setting them.

Which of the following statements about break-even analysis is true?

What sets the floor for product prices?

As a manufacturer increases the price, ________.

Companies can legitimately charge a higher price if ________.

Experience-curve pricing assumes that ________.

Which of the following is true with regard to price?

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers 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.

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

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

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

A marketer's fixed costs are $400,000, the variable cost is $16 per unit, and the price of the product is $24 per unit. What is the company's break-even point in dollar sales?

Explain break-even pricing.

As production moves up, the average cost per unit decreases because ________.

Companies with higher costs ________.

As production workers become better organized and more familiar with equipment, the average cost per unit tends to decrease with the ________.

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 ________ pricing strategy.

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

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

In industries in which pricing is a key factor, ________ often set the best prices or help others in setting them.

Which of the following statements about break-even analysis is true?

What sets the floor for product prices?

As a manufacturer increases the price, ________.

Companies can legitimately charge a higher price if ________.

Experience-curve pricing assumes that ________.

Which of the following is true with regard to price?

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers 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