Question 1

Which of the following are elements involved in Step 1 of the price-setting process?

Accepted Answer

A)  objectives and constraints 
B)  estimation of demand, sales revenue, and price elasticity 
C)  cost estimation, marginal analysis, and break-even analysis 
D)  demand for the product class and brand, newness of the product, and competition 
E)  market segmentation targeting, and positioning 
A)  objectives and constraints 
B)  estimation of demand, sales revenue, and price elasticity 
C)  cost estimation, marginal analysis, and break-even analysis 
D)  demand for the product class and brand, newness of the product, and competition 
E)  market segmentation targeting, and positioning

Question 2

Washburn Guitars markets its guitars to four distinct market segments. The firm's one-of-kind custom instruments are targeted at

Accepted Answer

A)  first-time buyers. 
B)  professional musicians. 
C)  stars and collectors. 
D)  large institutional buyers such as high school and collegiate band programs. 
E)  intermediate-skill players who may become professional musicians. 
A)  first-time buyers. 
B)  professional musicians. 
C)  stars and collectors. 
D)  large institutional buyers such as high school and collegiate band programs. 
E)  intermediate-skill players who may become professional musicians.

Question 3

Figure 13-4B
-In Figure 13-4B above, the demand curve shifts from D2to D3(B). This most likely represents

Accepted Answer

A)  an increase in demand resulting from competitor or consumer changes. 
B)  an increase in demand that required a decrease in price. 
C)  no change in price and no change in demand. 
D)  no change in demand or price but a greater profit due to economies of scale. 
E)  a decrease in price from $8 to $6 per unit. 
A)  an increase in demand resulting from competitor or consumer changes. 
B)  an increase in demand that required a decrease in price. 
C)  no change in price and no change in demand. 
D)  no change in demand or price but a greater profit due to economies of scale. 
E)  a decrease in price from $8 to $6 per unit.

Question 4

A primary reason for Washburn Guitars' success is

Accepted Answer

A)  underselling competitors by mass-producing fine-quality guitars. 
B)  developing product lines at different price points for different market segments. 
C)  offering significant price breaks to well-known performers in exchange for product endorsements. 
D)  selling traditional American "rock 'n roll" guitars in global markets. 
E)  setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints. 
A)  underselling competitors by mass-producing fine-quality guitars. 
B)  developing product lines at different price points for different market segments. 
C)  offering significant price breaks to well-known performers in exchange for product endorsements. 
D)  selling traditional American "rock 'n roll" guitars in global markets. 
E)  setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints.

Question 5

Which of these is a typical example of a variable cost?

Accepted Answer

A)  shipping costs 
B)  rent on a building 
C)  executive salaries 
D)  insurance premiums 
E)  leases on delivery trucks 
A)  shipping costs 
B)  rent on a building 
C)  executive salaries 
D)  insurance premiums 
E)  leases on delivery trucks

Question 6

What is the difference between fixed costs and variable costs?

Accepted Answer

Fixed cost is the sum of the expenses of

Question 7

Insurance premiums, entrance fees, train fares, and organization dues are all examples of

Accepted Answer

A)  charges. 
B)  countertrade. 
C)  profit. 
D)  price. 
E)  currency. 
A)  charges. 
B)  countertrade. 
C)  profit. 
D)  price. 
E)  currency.

Question 8

All of these are legal or ethical considerations when setting a final price exceptwhich?

Accepted Answer

A)  geographical pricing 
B)  predatory pricing 
C)  price matching 
D)  price fixing 
E)  deceptive pricing 
A)  geographical pricing 
B)  predatory pricing 
C)  price matching 
D)  price fixing 
E)  deceptive pricing

Question 9

All of these are alternate names for the price you pay on goods and services exceptwhich?

Accepted Answer

A)  rent 
B)  interest 
C)  tuition 
D)  dues 
E)  profit 
A)  rent 
B)  interest 
C)  tuition 
D)  dues 
E)  profit

Question 10

The sum of the firm's expenses that change with the quantity of the product that is produced and sold is referred to as

Accepted Answer

A)  fixed cost. 
B)  total cost. 
C)  marginal cost. 
D)  unit cost. 
E)  variable cost. 
A)  fixed cost. 
B)  total cost. 
C)  marginal cost. 
D)  unit cost. 
E)  variable cost.

Question 11

Break-even analysis is

Accepted Answer

A)  a process that investigates the difference between marginal revenue and marginal cost. 
B)  a method of determining just how much a consumer is willing to pay for a product or service. 
C)  a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. 
D)  the process of determining the quantity of product consumers will buy relative to the quantity produced by the firm. 
E)  the graph that shows the maximum number of products consumers will buy at a given price. 
A)  a process that investigates the difference between marginal revenue and marginal cost. 
B)  a method of determining just how much a consumer is willing to pay for a product or service. 
C)  a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. 
D)  the process of determining the quantity of product consumers will buy relative to the quantity produced by the firm. 
E)  the graph that shows the maximum number of products consumers will buy at a given price.

Question 12

Three different objectives relate to a firm's profit, each of which have different implications for pricing strategy. One of these is

Accepted Answer

A)  accumulating profits. 
B)  reinvesting profits. 
C)  redistributing profits. 
D)  maximizing gross margin. 
E)  achieving a target return. 
A)  accumulating profits. 
B)  reinvesting profits. 
C)  redistributing profits. 
D)  maximizing gross margin. 
E)  achieving a target return.

Question 13

Figure 13-7A
-Figure 13-7 above depicts a

Accepted Answer

A)  Gantt chart. 
B)  demand curve. 
C)  break-even chart. 
D)  ROI analysis. 
E)  cross-tabulation. 
A)  Gantt chart. 
B)  demand curve. 
C)  break-even chart. 
D)  ROI analysis. 
E)  cross-tabulation.

Question 14

RadioShack, an electronics retail chain, couldn't compete with the prices offered by other retailers. The company enacted price matching programs and promoted large discounts on its merchandise to raise cash and to try to stave off bankruptcy. The best pricing objective at this point for RadioShack most likely was

Accepted Answer

A)  profit. 
B)  market share. 
C)  unit volume. 
D)  survival. 
E)  social responsibility. 
A)  profit. 
B)  market share. 
C)  unit volume. 
D)  survival. 
E)  social responsibility.

Question 15

Figure 13-7B
-In the break-even chart in Figure 13-7 above, point A identifies the firm's ________ point.

Accepted Answer

A)  loss 
B)  price 
C)  margin 
D)  profit 
E)  break-even 
A)  loss 
B)  price 
C)  margin 
D)  profit 
E)  break-even

Question 16

Market share is the ratio of the ________ to those of the industry, including the firm itself.

Accepted Answer

A)  target return on sales 
B)  marginal profit of the firm 
C)  firm's sales revenues or unit sales 
D)  marketing expenses of the firm 
E)  profits of the firm 
A)  target return on sales 
B)  marginal profit of the firm 
C)  firm's sales revenues or unit sales 
D)  marketing expenses of the firm 
E)  profits of the firm

Question 17

The break-even point (BEP) = [Fixed cost ÷ (Unit price − ________)].

Accepted Answer

A)  Total cost 
B)  Total expense 
C)  Marginal revenue 
D)  Unit variable cost 
E)  Total number of units produced or quantity 
A)  Total cost 
B)  Total expense 
C)  Marginal revenue 
D)  Unit variable cost 
E)  Total number of units produced or quantity

Question 18

The competitive market situation in which many sellers follow the market price for identical, commodity products is referred to as

Accepted Answer

A)  a pure monopoly. 
B)  an oligopoly. 
C)  monopolistic competition. 
D)  pure competition. 
E)  oligopolistic competition. 
A)  a pure monopoly. 
B)  an oligopoly. 
C)  monopolistic competition. 
D)  pure competition. 
E)  oligopolistic competition.

Question 19

There are more than 100 companies that manufacture natural and artificial flavorings used to enhance the taste of food before it is sold to consumers. Some of these manufacturers differentiate themselves from the competition in their advertising by specializing in one or two types of foods for which they provide flavorings. Others use their distribution strategies as a means of differentiating themselves. This industry is most likely an example of

Accepted Answer

A)  pure monopoly. 
B)  oligopoly. 
C)  monopolistic competition. 
D)  bilateral monopoly. 
E)  monopolistic oligopoly. 
A)  pure monopoly. 
B)  oligopoly. 
C)  monopolistic competition. 
D)  bilateral monopoly. 
E)  monopolistic oligopoly.

Question 20

The total money received from the sale of a product is referred to as

Accepted Answer

A)  profit. 
B)  total revenue. 
C)  average revenue. 
D)  marginal revenue. 
E)  derived demand. 
A)  profit. 
B)  total revenue. 
C)  average revenue. 
D)  marginal revenue. 
E)  derived demand.

Exam 13: Building the Price Foundation

Which of the following are elements involved in Step 1 of the price-setting process?

Washburn Guitars markets its guitars to four distinct market segments. The firm's one-of-kind custom instruments are targeted at

Figure 13-4B -In Figure 13-4B above, the demand curve shifts from D2to D3(B). This most likely represents

A primary reason for Washburn Guitars' success is

Which of these is a typical example of a variable cost?

What is the difference between fixed costs and variable costs?

Insurance premiums, entrance fees, train fares, and organization dues are all examples of

All of these are legal or ethical considerations when setting a final price exceptwhich?

All of these are alternate names for the price you pay on goods and services exceptwhich?

The sum of the firm's expenses that change with the quantity of the product that is produced and sold is referred to as

Break-even analysis is

Three different objectives relate to a firm's profit, each of which have different implications for pricing strategy. One of these is

Figure 13-7A -Figure 13-7 above depicts a

Figure 13-7B -In the break-even chart in Figure 13-7 above, point A identifies the firm's ________ point.

Market share is the ratio of the ________ to those of the industry, including the firm itself.

The break-even point (BEP) = [Fixed cost ÷ (Unit price − ________)].

The competitive market situation in which many sellers follow the market price for identical, commodity products is referred to as

The total money received from the sale of a product is referred to as

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation, Targeting, and Positioning

Developing New Products and Services

Managing Successful Products, Services, and Brands

Services Marketing

Arriving at the Final Price

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Using Social Media and Mobile Marketing to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multi-Channel Marketing

Pulling It All Together: the Strategic Marketing Proces

Building an Effective Marketing Plan

Financial Aspects of Marketing

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