Exam 13: Pricing Products and Services

Rather than billing clients by the hour, some lawyers and their clients agree on a fixed fee based on expected costs plus a profit for the law firm. Which pricing method are they using?

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Question 1

Correct Answer:

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Explain why price elasticity is important to marketing managers.

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Question 2

Correct Answer:

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Price elasticity of demand is important to marketing managers because of its relationship to total revenue. With elastic demand, total revenue increases when price decreases, but decreases when price increases. With inelastic demand, total revenue increases when price increases and decreases when price decreases. With unitary demand, total revenue is unaffected by a slight price change. Because of this relationship between price elasticity and a firm's total revenue, it is important that marketing managers recognize price elasticity of demand is not the same over all possible prices of a product.

Bijan's in New York City has offered a five-piece set of crocodile luggage for $55,000. This is an example of________ pricing.

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Question 3

Correct Answer:

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At a local coffee shop, where you frequent, you are enrolled in their frequent-buyer program, where, for every ten coffees you purchase, you get one for free. Essentially, the coffee shop is engaged in offering a(n):

(Multiple Choice)

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Question 4

Price elasticity of demand is determined by a number of factors. Which of the following is NOT one of those factors?

(Multiple Choice)

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Question 5

You can buy a General Electric dishwasher for $399, or you can buy a similar sized under-the-counter Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a product image, it is most likely using__________ pricing.

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Question 6

When the New York Times switched to an online-paid access model for reading articles on their website, they initially felt that customers would pay $45.00 a month for unlimited access. From here, they worked backwards to ensure they were going to be profitable after paying all of the necessary IT, reporters, and administrative costs. The New York Times engaged in:

(Multiple Choice)

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Question 7

Which term describes factors that affect price and include: newness of the product, whether it is part of a product line, and cost of changing a price?

(Multiple Choice)

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Question 8

Carmex Lip balm, a product of Carma Labs, is estimated to hold___________ of the lip balm market.

(Multiple Choice)

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Question 9

What are the six major steps involved in setting prices?

(Essay)

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Question 10

Pepsi has found that consumers will purchase ten cases of Pepsi One at $5.00 a case, twelve cases at $4.00 a case, and fifteen cases at $2.50 a case. The next logical step for Pepsi is to generate a(n)_______based on this data.

(Multiple Choice)

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Question 11

GE made $50 billion in revenue in 2013 with total expenses of $35 billion, what was their total profit?

(Multiple Choice)

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Question 12

The pricing model in the text has six distinct steps in the pricing process. In the second step a firm would:

(Multiple Choice)

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Question 13

A firm's profit equation demonstrates that its profit equals:

(Multiple Choice)

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Question 14

If competitive market circumstances are such that there are a lot of sellers who use some price competition, some product differentiation, and the purpose of advertising is to differentiate the firm's products from competitors, then __________must exist in the industry.

(Multiple Choice)

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Question 15

An ad campaign by Suave shampoo asked television viewers to identify the hair that was shampooed and conditioned with Suave products and the hair on which expensive salon hair-care products were used. The idea of the ad was that a person could not tell by looking that a woman was using the much cheaper Suave brand. By making price its selling point, Suave is most likely using:

(Multiple Choice)

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Question 16

Ships Ahoy is a small company that makes model sailboat kits priced at $120 each. (There is no quantity discount.)The cost of the materials that go into each kit is $45. It costs $5 in labour to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $3,500 for the monthly salary of its owner. Last month the company sold 150 kits. Ships Ahoy's total revenue for the month was:

(Multiple Choice)

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Question 17

Target profit pricing is:

(Multiple Choice)

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Question 18

An established provider of high-definition television service does not like the new startup that has decided to offer HD television in the same market area. As such, the established provider lowers their prices to half of what the new startup is charging, in hopes of forcing them into bankruptcy. This activity is known as:

(Multiple Choice)

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Question 19

Florida Power & Light, an electric power company, is the only source of electricity for consumers in most parts of the Florida panhandle. As a(n)________, the company receives approval from the state utility commission for the rates it can charge.

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Question 20

Showing 1 - 20 of 280

Rather than billing clients by the hour, some lawyers and their clients agree on a fixed fee based on expected costs plus a profit for the law firm. Which pricing method are they using?

Explain why price elasticity is important to marketing managers.

Bijan's in New York City has offered a five-piece set of crocodile luggage for $55,000. This is an example of________ pricing.

At a local coffee shop, where you frequent, you are enrolled in their frequent-buyer program, where, for every ten coffees you purchase, you get one for free. Essentially, the coffee shop is engaged in offering a(n):

Price elasticity of demand is determined by a number of factors. Which of the following is NOT one of those factors?

You can buy a General Electric dishwasher for $399, or you can buy a similar sized under-the-counter Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a product image, it is most likely using__________ pricing.

Which term describes factors that affect price and include: newness of the product, whether it is part of a product line, and cost of changing a price?

Carmex Lip balm, a product of Carma Labs, is estimated to hold___________ of the lip balm market.

What are the six major steps involved in setting prices?

Pepsi has found that consumers will purchase ten cases of Pepsi One at $5.00 a case, twelve cases at $4.00 a case, and fifteen cases at $2.50 a case. The next logical step for Pepsi is to generate a(n)_______based on this data.

GE made $50 billion in revenue in 2013 with total expenses of $35 billion, what was their total profit?

The pricing model in the text has six distinct steps in the pricing process. In the second step a firm would:

A firm's profit equation demonstrates that its profit equals:

If competitive market circumstances are such that there are a lot of sellers who use some price competition, some product differentiation, and the purpose of advertising is to differentiate the firm's products from competitors, then __________must exist in the industry.

Target profit pricing is:

Florida Power & Light, an electric power company, is the only source of electricity for consumers in most parts of the Florida panhandle. As a(n)________, the company receives approval from the state utility commission for the rates it can charge.

Creating Customer Value, Relationships, and Experiences Through Marketing

Developing Successful Marketing Strategies

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Ethics and Social Responsibility for Sustainable Marketing

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Understanding Organizations As Customers

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Marketing Research: From Information to Action

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Pulling It All Together: the Strategic Marketing Process

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