Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 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

Question 4

Elmo Inc., a global conglomerate, designed the ElBrush, an electric toothbrush. Sensing market demand for the electric toothbrush, Elmo started with an ideal selling price of $13 based on customer value considerations and then targeted costs to ensure that the price was met. This exemplifies ________.

Accepted Answer

A)  competition-based pricing 
B)  cost-plus pricing 
C)  target costing 
D)  everyday low pricing 
E)  high-low pricing 
A)  competition-based pricing 
B)  cost-plus pricing 
C)  target costing 
D)  everyday low pricing 
E)  high-low pricing

Question 5

Under oligopolistic competition ________.

Accepted Answer

A)  the market consists of a single dominant seller 
B)  the market consists of numerous small sellers 
C)  the market consists of many buyers and sellers who trade over a range of prices rather than a single market price 
D)  sellers are typically unresponsive to competitors' pricing strategies and marketing moves 
E)  the market consists of only a few large sellers 
A)  the market consists of a single dominant seller 
B)  the market consists of numerous small sellers 
C)  the market consists of many buyers and sellers who trade over a range of prices rather than a single market price 
D)  sellers are typically unresponsive to competitors' pricing strategies and marketing moves 
E)  the market consists of only a few large sellers

Question 6

When performing a break-even analysis, the manufacturer should consider all of the following EXCEPT ________.

Accepted Answer

A)  probable demand 
B)  likely profits 
C)  competitors' pricing 
D)  estimated break-even volumes 
E)  different prices 
A)  probable demand 
B)  likely profits 
C)  competitors' pricing 
D)  estimated break-even volumes 
E)  different prices

Question 7

Cost-based pricing is often product driven.

Accepted Answer

A) True 
 B)False

Question 8

Price setting is usually determined by ________ in large companies.

Accepted Answer

A)  top managers 
B)  external stakeholders 
C)  product managers 
D)  non-executive employees 
E)  the sales department 
A)  top managers 
B)  external stakeholders 
C)  product managers 
D)  non-executive employees 
E)  the sales department

Question 9

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 10

Ways companies have avoided relying on price cuts in the new value-conscious era include all of the following EXCEPT ________.

Accepted Answer

A)  by adding more affordable product lines for the cost-conscious consumer 
B)  by redefining the "value" in their value propositions 
C)  by adding premium product lines for the higher end consumer 
D)  by offering deep discounts 
E)  by creating price tiers 
A)  by adding more affordable product lines for the cost-conscious consumer 
B)  by redefining the "value" in their value propositions 
C)  by adding premium product lines for the higher end consumer 
D)  by offering deep discounts 
E)  by creating price tiers

Question 11

Briefly discuss monopolistic competition.

Accepted Answer

Under monopolistic competition, the mark

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

Accepted Answer

A)  20,000 
B)  25,000 
C)  30,000 
D)  35,000 
E)  40,000 
A)  20,000 
B)  25,000 
C)  30,000 
D)  35,000 
E)  40,000

Question 14

Overhead costs ________ as the number of units produced increases.

Accepted Answer

A)  decrease 
B)  increase steadily 
C)  fluctuate 
D)  remain the same 
E)  increase rapidly 
A)  decrease 
B)  increase steadily 
C)  fluctuate 
D)  remain the same 
E)  increase rapidly

Question 15

Which of the following is true of a pure competitive market?

Accepted Answer

A)  A single seller has a major effect on the current and future market price. 
B)  Companies spend significantly on marketing research and product development. 
C)  The advertising budget of companies is usually huge. 
D)  Sellers try to develop differentiated offers for different customer segments. 
E)  Sellers spend little time on marketing strategy. 
A)  A single seller has a major effect on the current and future market price. 
B)  Companies spend significantly on marketing research and product development. 
C)  The advertising budget of companies is usually huge. 
D)  Sellers try to develop differentiated offers for different customer segments. 
E)  Sellers spend little time on marketing strategy.

Question 16

What sets the ceiling for product prices?

Accepted Answer

A)  product manufacturing costs 
B)  sellers' perceptions of the product's value 
C)  customer perceptions of the product's value 
D)  variable costs 
E)  break-even volume 
A)  product manufacturing costs 
B)  sellers' perceptions of the product's value 
C)  customer perceptions of the product's value 
D)  variable costs 
E)  break-even volume

Question 17

Briefly describe the process of value-based pricing.

Accepted Answer

The company first assesses customer need

Question 18

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

Accepted Answer

Beyond customer value perceptions, costs

Question 19

Costs that change with the level of production are referred to as ________.

Accepted Answer

A)  fixed costs 
B)  variable costs 
C)  target costs 
D)  total costs 
E)  overhead costs 
A)  fixed costs 
B)  variable costs 
C)  target costs 
D)  total costs 
E)  overhead costs

Question 20

Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?

Accepted Answer

A)  target return pricing 
B)  good-value pricing 
C)  competitor value-added pricing 
D)  market-based pricing 
E)  competition-based pricing 
A)  target return pricing 
B)  good-value pricing 
C)  competitor value-added pricing 
D)  market-based pricing 
E)  competition-based pricing

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

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

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

Under oligopolistic competition ________.

When performing a break-even analysis, the manufacturer should consider all of the following EXCEPT ________.

Cost-based pricing is often product driven.

Price setting is usually determined by ________ in large companies.

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.

Ways companies have avoided relying on price cuts in the new value-conscious era include all of the following EXCEPT ________.

Briefly discuss monopolistic competition.

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

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

Overhead costs ________ as the number of units produced increases.

Which of the following is true of a pure competitive market?

What sets the ceiling for product prices?

Briefly describe the process of value-based pricing.

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

Costs that change with the level of production are referred to as ________.

Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?

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

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

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

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

Under oligopolistic competition ________.

When performing a break-even analysis, the manufacturer should consider all of the following EXCEPT ________.

Cost-based pricing is often product driven.

Price setting is usually determined by ________ in large companies.

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.

Ways companies have avoided relying on price cuts in the new value-conscious era include all of the following EXCEPT ________.

Briefly discuss monopolistic competition.

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

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

Overhead costs ________ as the number of units produced increases.

Which of the following is true of a pure competitive market?

What sets the ceiling for product prices?

Briefly describe the process of value-based pricing.

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

Costs that change with the level of production are referred to as ________.

Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?

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