Question 1

In customer value-based pricing, price is considered along with all other marketing mix variables before the marketing program is set.

Accepted Answer

A) True 
 B)False

Question 2

DivetheBlue, a company marketing deep-sea diving equipment, charges very high prices for its products. Despite the availability of many low-priced products in the market, customers seem to prefer DivetheBlue, which has earned a reputation for selling high-quality products. This exemplifies ________.

Accepted Answer

A)  a pure monopoly 
B)  an oligopoly 
C)  a nonprice position 
D)  break-even pricing 
E)  target costing 
A)  a pure monopoly 
B)  an oligopoly 
C)  a nonprice position 
D)  break-even pricing 
E)  target costing

Question 3

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 4

Companies with lower costs ________.

Accepted Answer

A)  specialize in selling products with value-added features 
B)  usually market products with inferior quality, thereby justifying the low selling price 
C)  can set lower prices that result in smaller margins but greater sales and profits 
D)  tend to overprice products owing to their monopolistic advantage 
E)  usually set higher prices that result in higher margins 
A)  specialize in selling products with value-added features 
B)  usually market products with inferior quality, thereby justifying the low selling price 
C)  can set lower prices that result in smaller margins but greater sales and profits 
D)  tend to overprice products owing to their monopolistic advantage 
E)  usually set higher prices that result in higher margins

Question 5

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

Accepted Answer

A)  cost-plus pricing 
B)  break-even pricing 
C)  markup pricing 
D)  value-based pricing 
E)  fixed cost pricing 
A)  cost-plus pricing 
B)  break-even pricing 
C)  markup pricing 
D)  value-based pricing 
E)  fixed cost pricing

Question 6

Price is important to managers ________.

Accepted Answer

A)  because prices cannot be changed quickly, so must be correctly determined 
B)  because a small percentage improvement in price can generate a large percentage increase in profitability 
C)  but other marketing mix elements create customer value and build relationships 
D)  but product features can be changed more quickly 
E)  but has little impact on a firm's market share 
A)  because prices cannot be changed quickly, so must be correctly determined 
B)  because a small percentage improvement in price can generate a large percentage increase in profitability 
C)  but other marketing mix elements create customer value and build relationships 
D)  but product features can be changed more quickly 
E)  but has little impact on a firm's market share

Question 7

What is a pure monopoly?

Accepted Answer

In a pure monopoly, the market is domina

Question 8

Value-based pricing uses the sellers' perception of value as the key to pricing.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Which of the following is true with regard to monopolistic competition?

Accepted Answer

A)  Under monopolistic competition, the market consists of many buyers and sellers who trade at a single market price. 
B)  Under monopolistic competition, the market consists of only a few large sellers. 
C)  In a monopolistic market, little time is spent on marketing strategy. 
D)  Sellers can differentiate their products to buyers. 
E)  In a monopolistic market, price becomes a major competitive tool. 
A)  Under monopolistic competition, the market consists of many buyers and sellers who trade at a single market price. 
B)  Under monopolistic competition, the market consists of only a few large sellers. 
C)  In a monopolistic market, little time is spent on marketing strategy. 
D)  Sellers can differentiate their products to buyers. 
E)  In a monopolistic market, price becomes a major competitive tool.

Question 11

If a company faces competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Companies that adopt value-added pricing ________.

Accepted Answer

A)  consider value-added features as a fitting substitute for aggressive cost cutting 
B)  set incredibly low prices to meet competition 
C)  attach value-added features and services to differentiate their offers and support their higher prices 
D)  overprice their products without any apparent justification 
E)  underprice their products and lower quality to boost demand in the short-run 
A)  consider value-added features as a fitting substitute for aggressive cost cutting 
B)  set incredibly low prices to meet competition 
C)  attach value-added features and services to differentiate their offers and support their higher prices 
D)  overprice their products without any apparent justification 
E)  underprice their products and lower quality to boost demand in the short-run

Question 14

The more elastic the demand, the more it pays for the seller to raise the price.

Accepted Answer

A) True 
 B)False

Question 15

A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will ________ because ________.

Accepted Answer

A)  decrease; the plant becomes more efficient 
B)  stay the same; the plant becomes more efficient 
C)  decrease; the plant becomes inefficient 
D)  increase; the plant becomes more efficient 
E)  increase; the plant becomes inefficient 
A)  decrease; the plant becomes more efficient 
B)  stay the same; the plant becomes more efficient 
C)  decrease; the plant becomes inefficient 
D)  increase; the plant becomes more efficient 
E)  increase; the plant becomes inefficient

Question 16

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

Question 17

Product costs set the ceiling for prices.

Accepted Answer

A) True 
 B)False

Question 18

Define price. Discuss its importance.

Accepted Answer

In the narrowest sense, price is the amo

Question 19

A demand curve shows the number of units the market will buy in a given time period at different prices that could be charged.

Accepted Answer

A) True 
 B)False

Question 20

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.
-Which of these is NOT a way in which pricing can accomplish company objectives?

Accepted Answer

A)  set prices to attract new customers and retain existing customers 
B)  raise prices to create excitement for a brand 
C)  set prices low to hinder competition from entering the market 
D)  price one product to help sales of other products in the company's line 
E)  set price to keep the loyalty of resellers 
A)  set prices to attract new customers and retain existing customers 
B)  raise prices to create excitement for a brand 
C)  set prices low to hinder competition from entering the market 
D)  price one product to help sales of other products in the company's line 
E)  set price to keep the loyalty of resellers

In customer value-based pricing, price is considered along with all other marketing mix variables before the marketing program is set.

DivetheBlue, a company marketing deep-sea diving equipment, charges very high prices for its products. Despite the availability of many low-priced products in the market, customers seem to prefer DivetheBlue, which has earned a reputation for selling high-quality products. This exemplifies ________.

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

Companies with lower costs ________.

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

Price is important to managers ________.

What is a pure monopoly?

Value-based pricing uses the sellers' perception of value as the key to pricing.

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

Which of the following is true with regard to monopolistic competition?

If a company faces competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices.

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

Companies that adopt value-added pricing ________.

The more elastic the demand, the more it pays for the seller to raise the price.

A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will because .

Which of the following exemplifies a pure competitive market?

Product costs set the ceiling for prices.

Define price. Discuss its importance.

A demand curve shows the number of units the market will buy in a given time period at different prices that could be charged.

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

In customer value-based pricing, price is considered along with all other marketing mix variables before the marketing program is set.

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

Companies with lower costs ________.

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

Price is important to managers ________.

What is a pure monopoly?

Value-based pricing uses the sellers' perception of value as the key to pricing.

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

Which of the following is true with regard to monopolistic competition?

If a company faces competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices.

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

Companies that adopt value-added pricing ________.

The more elastic the demand, the more it pays for the seller to raise the price.

A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will ________ because ________.

Which of the following exemplifies a pure competitive market?

Product costs set the ceiling for prices.

Define price. Discuss its importance.

A demand curve shows the number of units the market will buy in a given time period at different prices that could be charged.

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

A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will because .