Question 1

When companies set prices, the government and social concerns are ________ factors affecting pricing decisions.

Accepted Answer

A)  external 
B)  internal 
C)  economic 
D)  cultural 
E)  organizational 
A)  external 
B)  internal 
C)  economic 
D)  cultural 
E)  organizational

Question 2

A downward-sloping experience curve is indicative of a company's rapidly increasing production costs.

Accepted Answer

A) True 
 B)False

Question 3

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 4

While lower prices may attract additional customers, it is possible for pricing strategies to result in the product becoming a commodity in the customers' eyes.

Accepted Answer

A) True 
 B)False

Question 5

Department stores such as Kohl's and JCPenney's practice high-low pricing by ________.

Accepted Answer

A)  charging a constant, everyday low price 
B)  providing few or no temporary price discounts 
C)  increasing prices temporarily on select products 
D)  having frequent sale days for store credit-card holders 
E)  underpricing most consumer items 
A)  charging a constant, everyday low price 
B)  providing few or no temporary price discounts 
C)  increasing prices temporarily on select products 
D)  having frequent sale days for store credit-card holders 
E)  underpricing most consumer items

Question 6

Price is the most inflexible of the marketing mix elements.

Accepted Answer

A) True 
 B)False

Question 7

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 8

The movie industry in a country is controlled by six large studios that receive 90 percent of the annual revenues from movies. This is an example of a(n) ________.

Accepted Answer

A)  pure competition 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  pure monopoly 
E)  government monopoly 
A)  pure competition 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  pure monopoly 
E)  government monopoly

Question 9

________ 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 10

Underpriced products ________.

Accepted Answer

A)  produce less revenue than they would if they were priced at the level of perceived value 
B)  sell poorly in the global marketplace 
C)  produce more revenue than they would if they were priced at the level of perceived value 
D)  mostly offer higher value than those with a high markup price 
E)  are characterized by rapidly declining demand 
A)  produce less revenue than they would if they were priced at the level of perceived value 
B)  sell poorly in the global marketplace 
C)  produce more revenue than they would if they were priced at the level of perceived value 
D)  mostly offer higher value than those with a high markup price 
E)  are characterized by rapidly declining demand

Question 11

Target return pricing uses the concept of a(n) ________, which shows the total cost and total revenue expected at different sales volume levels.

Accepted Answer

A)  BCG matrix 
B)  break-even chart 
C)  SWOT analysis 
D)  demand curve 
E)  experience curve 
A)  BCG matrix 
B)  break-even chart 
C)  SWOT analysis 
D)  demand curve 
E)  experience curve

Question 12

If demand changes greatly with a small change in price, the demand is ________.

Accepted Answer

A)  variable 
B)  inelastic 
C)  derived 
D)  elastic 
E)  negative 
A)  variable 
B)  inelastic 
C)  derived 
D)  elastic 
E)  negative

Question 13

What is good-value pricing?

Accepted Answer

Good-value pricing refers to o

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 16

PoolPak produces climate-control systems for large swimming pools. The company's customers are more concerned about service support for maintaining their systems than the initial price of the product. PoolPak specializes in and differentiates itself through both cutting-edge technologies used to build its high-value climate control systems as well as seamless quality service. PoolPak's prices are very high, but demand for its climate-control systems seems to be forever on the rise. This exemplifies ________.

Accepted Answer

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

Question 17

What is usually the first step in cost-based pricing?

Accepted Answer

A)  testing the product concept with potential customers 
B)  determining the marketing mix strategy 
C)  setting a price that covers costs plus a target profit 
D)  designing a good product 
E)  adding up the costs of making the product 
A)  testing the product concept with potential customers 
B)  determining the marketing mix strategy 
C)  setting a price that covers costs plus a target profit 
D)  designing a good product 
E)  adding up the costs of making the product

Question 18

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

Accepted Answer

A)  the company's overall marketing strategy 
B)  the nature of the market 
C)  the organizational objectives of the company 
D)  elements of the company's marketing mix 
E)  the annual advertising budget of rival firms 
A)  the company's overall marketing strategy 
B)  the nature of the market 
C)  the organizational objectives of the company 
D)  elements of the company's marketing mix 
E)  the annual advertising budget of rival firms

Question 19

A company will be at an advantage even if it costs more than its competitors to make and sell a similar product.

Accepted Answer

A) True 
 B)False

Question 20

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

When companies set prices, the government and social concerns are ________ factors affecting pricing decisions.

A downward-sloping experience curve is indicative of a company's rapidly increasing production costs.

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

While lower prices may attract additional customers, it is possible for pricing strategies to result in the product becoming a commodity in the customers' eyes.

Department stores such as Kohl's and JCPenney's practice high-low pricing by ________.

Price is the most inflexible of the marketing mix elements.

The movie industry in a country is controlled by six large studios that receive 90 percent of the annual revenues from movies. This is an example of a(n) ________.

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

Underpriced products ________.

Target return pricing uses the concept of a(n) ________, which shows the total cost and total revenue expected at different sales volume levels.

If demand changes greatly with a small change in price, the demand is ________.

What is good-value pricing?

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

The learning curve is representative of the ________.

What is usually the first step in cost-based pricing?

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

A company will be at an advantage even if it costs more than its competitors to make and sell a similar product.

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?

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

When companies set prices, the government and social concerns are ________ factors affecting pricing decisions.

A downward-sloping experience curve is indicative of a company's rapidly increasing production costs.

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

While lower prices may attract additional customers, it is possible for pricing strategies to result in the product becoming a commodity in the customers' eyes.

Department stores such as Kohl's and JCPenney's practice high-low pricing by ________.

Price is the most inflexible of the marketing mix elements.

The movie industry in a country is controlled by six large studios that receive 90 percent of the annual revenues from movies. This is an example of a(n) ________.

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

Underpriced products ________.

Target return pricing uses the concept of a(n) ________, which shows the total cost and total revenue expected at different sales volume levels.

If demand changes greatly with a small change in price, the demand is ________.

What is good-value pricing?

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

The learning curve is representative of the ________.

What is usually the first step in cost-based pricing?

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

A company will be at an advantage even if it costs more than its competitors to make and sell a similar product.

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?

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