Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 3

Good-value pricing usually is used by premium brands, and rarely by less-expensive brands.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Developing an effective integrated marketing mix program involves coordinating price decisions with product design, promotion, and ________ decisions.

Accepted Answer

A)  distribution 
B)  production 
C)  assembly 
D)  warranty 
E)  competition 
A)  distribution 
B)  production 
C)  assembly 
D)  warranty 
E)  competition

Question 6

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 7

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 8

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 9

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 10

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 11

A cell phone manufacturing firm produced 1,000 cell phones a day but believed that it could reasonably step up production to 2,000 cell phones a day. Consequently, it built a larger plant and installed efficient machinery and work arrangements to realize the projected output. Which of the following can most likely be inferred from this information?

Accepted Answer

A)  The unit cost of producing 2,000 cell phones per day would be twice that of the unit cost of producing 1,000 units per day. 
B)  A production plant with the capacity of producing 5,000 cell phones a day would be most efficient. 
C)  The unit cost of producing 2,000 cell phones per day would be lower than the unit cost of producing 1,000 units per day. 
D)  A 2,000-capacity production plant would be less efficient because of increasing diseconomies of scale. 
E)  The fixed costs of the firm are more likely to increase with the increase in output. 
A)  The unit cost of producing 2,000 cell phones per day would be twice that of the unit cost of producing 1,000 units per day. 
B)  A production plant with the capacity of producing 5,000 cell phones a day would be most efficient. 
C)  The unit cost of producing 2,000 cell phones per day would be lower than the unit cost of producing 1,000 units per day. 
D)  A 2,000-capacity production plant would be less efficient because of increasing diseconomies of scale. 
E)  The fixed costs of the firm are more likely to increase with the increase in output.

Question 12

Markup pricing is popular because when all firms in the industry use this pricing method, prices tend to be similar, so price competition is minimized.

Accepted Answer

A) True 
 B)False

Question 13

Cost-based pricing involves setting prices based on consumer perception of value.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Prices have a direct impact on a firm's bottom line.

Accepted Answer

A) True 
 B)False

Question 16

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

Question 17

Under ________, the market consists of many buyers and sellers trading in a uniform commodity.

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 18

The Great Recession of 2008 to 2009 triggered a shift in consumer attitudes toward ________.

Accepted Answer

A)  variety and price 
B)  perceptions of value 
C)  locations of stores 
D)  price and quality 
E)  economic data 
A)  variety and price 
B)  perceptions of value 
C)  locations of stores 
D)  price and quality 
E)  economic data

Question 19

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Accepted Answer

A)  break-even 
B)  target profit 
C)  good-value 
D)  cost-plus 
E)  target return 
A)  break-even 
B)  target profit 
C)  good-value 
D)  cost-plus 
E)  target return

Question 20

Effective ________ pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value.

Accepted Answer

A)  competition-oriented 
B)  cost-based 
C)  time-based 
D)  customer-oriented 
E)  marketer-oriented 
A)  competition-oriented 
B)  cost-based 
C)  time-based 
D)  customer-oriented 
E)  marketer-oriented

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

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

Good-value pricing usually is used by premium brands, and rarely by less-expensive brands.

Overhead costs ________ as the number of units produced increases.

Developing an effective integrated marketing mix program involves coordinating price decisions with product design, promotion, and ________ decisions.

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

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

Underpriced products ________.

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?

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 .

Markup pricing is popular because when all firms in the industry use this pricing method, prices tend to be similar, so price competition is minimized.

Cost-based pricing involves setting prices based on consumer perception of value.

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

Prices have a direct impact on a firm's bottom line.

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

Under ________, the market consists of many buyers and sellers trading in a uniform commodity.

The Great Recession of 2008 to 2009 triggered a shift in consumer attitudes toward ________.

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Effective ________ pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value.

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

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

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

Good-value pricing usually is used by premium brands, and rarely by less-expensive brands.

Overhead costs ________ as the number of units produced increases.

Developing an effective integrated marketing mix program involves coordinating price decisions with product design, promotion, and ________ decisions.

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

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

Underpriced products ________.

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?

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 ________.

Markup pricing is popular because when all firms in the industry use this pricing method, prices tend to be similar, so price competition is minimized.

Cost-based pricing involves setting prices based on consumer perception of value.

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

Prices have a direct impact on a firm's bottom line.

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

Under ________, the market consists of many buyers and sellers trading in a uniform commodity.

The Great Recession of 2008 to 2009 triggered a shift in consumer attitudes toward ________.

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Effective ________ pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value.

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 .