Question 1

A target return profit pricing objective implies that a company chooses to

Accepted Answer

A)  set targets whose performance can be measured quickly. 
B)  give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. 
C)  set a profit goal that is often determined by its board of directors. 
D)  reduce investment in any further market or product research. 
E)  set prices based on return on sales. 
A)  set targets whose performance can be measured quickly. 
B)  give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. 
C)  set a profit goal that is often determined by its board of directors. 
D)  reduce investment in any further market or product research. 
E)  set prices based on return on sales.

Question 2

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Accepted Answer

A)  We can rely on our reputation for our other products in the line. 
B)  We expect to make a profit of $1.2 million. 
C)  We need to make allowances for large quantity orders. 
D)  We should increase the price during the holiday shopping season. 
E)  We're going to face some aggressive competition. 
A)  We can rely on our reputation for our other products in the line. 
B)  We expect to make a profit of $1.2 million. 
C)  We need to make allowances for large quantity orders. 
D)  We should increase the price during the holiday shopping season. 
E)  We're going to face some aggressive competition.

Question 3

Describe the pricing constraints a firm is likely to face.

Accepted Answer

Pricing constraints are factors that lim

Question 4

All of these are examples of pricing constraints exceptwhich?

Accepted Answer

A)  cost of producing the product 
B)  competitors' prices 
C)  newness of the product 
D)  break-even point 
E)  demand for the product class, product, or brand 
A)  cost of producing the product 
B)  competitors' prices 
C)  newness of the product 
D)  break-even point 
E)  demand for the product class, product, or brand

Question 5

Suppose you are the owner of a picture frame store and you wish to calculate how many frames you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your frames is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). If your picture frame store sold 2,000 picture frames, what would your profit (or loss) be?

Accepted Answer

A)  a loss of $32,000 
B)  $0 
C)  $32,000 profit 
D)  $112,000 profit 
E)  $128,000 profit 
A)  a loss of $32,000 
B)  $0 
C)  $32,000 profit 
D)  $112,000 profit 
E)  $128,000 profit

Question 6

A movement along a demand curve (up or down) for a product occurs ________, assuming that other factors such as consumer tastes, price and availability of substitutes, and consumer incomes remain unchanged.

Accepted Answer

A)  when its price is lowered or increased and the quantity demanded for it correspondingly increases or decreases 
B)  when its demand is lowered or increased and the price offered for it correspondingly increases or decreases 
C)  when its demand and price are lowered 
D)  when its demand and price are increased 
E)  at the break-even point 
A)  when its price is lowered or increased and the quantity demanded for it correspondingly increases or decreases 
B)  when its demand is lowered or increased and the price offered for it correspondingly increases or decreases 
C)  when its demand and price are lowered 
D)  when its demand and price are increased 
E)  at the break-even point

Question 7

The horizontal axis of a demand curve graph represents

Accepted Answer

A)  market growth rate. 
B)  relative market share. 
C)  price per unit. 
D)  potential profit in dollars. 
E)  quantity demanded. 
A)  market growth rate. 
B)  relative market share. 
C)  price per unit. 
D)  potential profit in dollars. 
E)  quantity demanded.

Question 8

Step 1 of the price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Accepted Answer

Pricing objectives involve specifying th

Question 9

Marketing managers often use break-even analysis to analyze the relationship between total revenue and total cost to determine profitability at various levels of output. What is the break-even formula? Use the formula to calculate how many radio-controlled drones a dealer must sell if her fixed costs are $100,000, unit variable costs are $150, and the selling price is $200.

Accepted Answer

The break-even point (BEP) is the quanti

Question 10

Most consumers realize that the quality of diamonds varies, and many believe the higher the price of a diamond, the higher its quality. This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Accepted Answer

A)  acceptable cost 
B)  perceptual investment 
C)  barter potential 
D)  return on investment 
E)  value 
A)  acceptable cost 
B)  perceptual investment 
C)  barter potential 
D)  return on investment 
E)  value

Question 11

Products such as disposable diapers usually have

Accepted Answer

A)  elastic demand. 
B)  null elasticity. 
C)  unitary demand. 
D)  inelastic supply. 
E)  inelastic demand. 
A)  elastic demand. 
B)  null elasticity. 
C)  unitary demand. 
D)  inelastic supply. 
E)  inelastic demand.

Question 12

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

Accepted Answer

A)  break-even analysis. 
B)  marginal analysis. 
C)  sensitivity analysis. 
D)  market analysis. 
E)  tipping point analysis. 
A)  break-even analysis. 
B)  marginal analysis. 
C)  sensitivity analysis. 
D)  market analysis. 
E)  tipping point analysis.

Question 13

In order to deliver a product that the average consumer can afford, VIZIO

Accepted Answer

A)  handles product design and marketing in the United States and relies on contract manufacturers in other countries to build the product. 
B)  uses mass customization in other countries and then ships the HDTVs to the United States. 
C)  purchased a small company in China to distribute its products under the VIZIO name. 
D)  purchased a small company in Japan to distribute its products under the VIZIO name. 
E)  relies solely on recycled materials to build high-quality, no-frills products. 
A)  handles product design and marketing in the United States and relies on contract manufacturers in other countries to build the product. 
B)  uses mass customization in other countries and then ships the HDTVs to the United States. 
C)  purchased a small company in China to distribute its products under the VIZIO name. 
D)  purchased a small company in Japan to distribute its products under the VIZIO name. 
E)  relies solely on recycled materials to build high-quality, no-frills products.

Question 14

Total cost refers to

Accepted Answer

A)  the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. 
B)  the change in expenses that results from producing and marketing one additional unit of a product. 
C)  the average amount of money received for selling one unit of a product or simply the price of that unit. 
D)  the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. 
E)  the total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost. 
A)  the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. 
B)  the change in expenses that results from producing and marketing one additional unit of a product. 
C)  the average amount of money received for selling one unit of a product or simply the price of that unit. 
D)  the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. 
E)  the total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost.

Question 15

Which of these is an example of a price?

Accepted Answer

A)  fare 
B)  operating costs 
C)  liquidity 
D)  value 
E)  brand equity 
A)  fare 
B)  operating costs 
C)  liquidity 
D)  value 
E)  brand equity

Question 16

Companies must know or anticipate what specific prices its present and potential competitors currently charge

Accepted Answer

A)  or may charge in the near future. 
B)  only when these are considered permanent prices. 
C)  primarily if they intend to compete on price rather than a form of differentiation like customer service. 
D)  primarily if they intend to target price-sensitive target markets. 
E)  if there are legal requirements for pricing in their industry. 
A)  or may charge in the near future. 
B)  only when these are considered permanent prices. 
C)  primarily if they intend to compete on price rather than a form of differentiation like customer service. 
D)  primarily if they intend to target price-sensitive target markets. 
E)  if there are legal requirements for pricing in their industry.

Question 17

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops do not need a pricing strategy and do just a little advertising when a crop comes in. The wheat is sold in ________ type of competitive market.

Accepted Answer

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

Question 18

Washburn Guitars recently purchased Parker Guitar, another guitar manufacturer that designs products for professionals and collectors, and will combine the two production facilities into a new location. Washburn expects the acquisition to reduce its rent and tax expenses by 40 percent, and the new skilled employees will reduce the hours of work needed for each unit by 15 percent. This would cause the slope of the total cost curve to ________ and the break-even quantity to

Accepted Answer

A)  decrease; stay the same. 
B)  decrease; increase. 
C)  increase; increase. 
D)  stay the same; increase. 
E)  decrease; decrease. 
A)  decrease; stay the same. 
B)  decrease; increase. 
C)  increase; increase. 
D)  stay the same; increase. 
E)  decrease; decrease.

Question 19

All of the following are demand factors exceptwhich?

Accepted Answer

A)  the price of similar products 
B)  consumer tastes 
C)  consumer income 
D)  the availability of similar products 
E)  the form of promotion 
A)  the price of similar products 
B)  consumer tastes 
C)  consumer income 
D)  the availability of similar products 
E)  the form of promotion

Question 20

Barter is the practice of exchanging products and services for other products and services rather than for

Accepted Answer

A)  value. 
B)  ideas. 
C)  promises. 
D)  tariffs. 
E)  money. 
A)  value. 
B)  ideas. 
C)  promises. 
D)  tariffs. 
E)  money.

Exam 13: Building the Price Foundation

A target return profit pricing objective implies that a company chooses to

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Describe the pricing constraints a firm is likely to face.

All of these are examples of pricing constraints exceptwhich?

A movement along a demand curve (up or down) for a product occurs ________, assuming that other factors such as consumer tastes, price and availability of substitutes, and consumer incomes remain unchanged.

The horizontal axis of a demand curve graph represents

Step 1 of the price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Most consumers realize that the quality of diamonds varies, and many believe the higher the price of a diamond, the higher its quality. This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Products such as disposable diapers usually have

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

In order to deliver a product that the average consumer can afford, VIZIO

Total cost refers to

Which of these is an example of a price?

Companies must know or anticipate what specific prices its present and potential competitors currently charge

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops do not need a pricing strategy and do just a little advertising when a crop comes in. The wheat is sold in ________ type of competitive market.

All of the following are demand factors exceptwhich?

Barter is the practice of exchanging products and services for other products and services rather than for

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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