Question 1

Differential pricing is effective mainly when focusing on only one market segment.

Accepted Answer

A) True 
 B)False

Question 2

All of the following are psychological techniques except:

Accepted Answer

A)  customary pricing. 
B)  multiple-unit pricing. 
C)  reference pricing. 
D)  odd-number pricing. 
E)  negotiated pricing. 
A)  customary pricing. 
B)  multiple-unit pricing. 
C)  reference pricing. 
D)  odd-number pricing. 
E)  negotiated pricing.

Question 3

Westin Hotels, Inc. has an objective of achieving a 25 percent return from its overall sales. This is an example of a pricing objective.

Accepted Answer

A)  market share 
B)  cash flow 
C)  return on investment 
D)  profit 
E)  status quo 
A)  market share 
B)  cash flow 
C)  return on investment 
D)  profit 
E)  status quo

Question 4

Bundle pricing is perceived to be of value by customers because:

Accepted Answer

A)  they reduce or eliminate the use of frequent short-term price reductions. 
B)  they prefer buying a combination of products in a single transaction, which saves time, effort, and money. 
C)  the companies selling the products can sell them at a lower price because their costs of packaging are lower. 
D)  the prices are coordinated with advertising or sales promotions. 
E)  they can purchase items that are consumed frequently in larger quantities. 
A)  they reduce or eliminate the use of frequent short-term price reductions. 
B)  they prefer buying a combination of products in a single transaction, which saves time, effort, and money. 
C)  the companies selling the products can sell them at a lower price because their costs of packaging are lower. 
D)  the prices are coordinated with advertising or sales promotions. 
E)  they can purchase items that are consumed frequently in larger quantities.

Question 5

When Mia and Shane are planning their honeymoon, their travel agent tells them that if they buy a special package, their trip to Paris will include meals, tickets to the theater, and a rental car in addition to airfare and a hotel. This is an example of the use of:

Accepted Answer

A)  multiple-unit pricing. 
B)  bundle pricing. 
C)  prestige pricing. 
D)  price lining. 
E)  price packaging. 
A)  multiple-unit pricing. 
B)  bundle pricing. 
C)  prestige pricing. 
D)  price lining. 
E)  price packaging.

Question 6

Managers at Caterpillar have determined the costs associated with producing hay balers are equal to the price that they charge for the hay balers. This indicates that Caterpillar is producing at the point.

Accepted Answer

A)  break-even 
B)  marginal cost 
C)  profit margin 
D)  competitive price 
E)  profit maximizing 
A)  break-even 
B)  marginal cost 
C)  profit margin 
D)  competitive price 
E)  profit maximizing

Question 7

At what point does a firm maximize profit?

Accepted Answer

A)  The point at which marginal cost equals marginal revenue 
B)  The point at which the firm sells its product at the highest price 
C)  The break-even point plus the adjusted marginal cost 
D)  The point at which marginal profits equal marginal revenue 
E)  The point at which marginal cost equals marginal profits 
A)  The point at which marginal cost equals marginal revenue 
B)  The point at which the firm sells its product at the highest price 
C)  The break-even point plus the adjusted marginal cost 
D)  The point at which marginal profits equal marginal revenue 
E)  The point at which marginal cost equals marginal profits

Question 8

Marketers at organizations engaged in price competition:

Accepted Answer

A)  are more concerned about knowing competitors' prices than marketers in organizations that are engaged in price competition. 
B)  are not concerned about the prices of competing brands. 
C)  need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands. 
D)  do not employ comparative shoppers to help them gather information regarding the prices of competing brands. 
E)  experience high levels of price instability. 
A)  are more concerned about knowing competitors' prices than marketers in organizations that are engaged in price competition. 
B)  are not concerned about the prices of competing brands. 
C)  need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands. 
D)  do not employ comparative shoppers to help them gather information regarding the prices of competing brands. 
E)  experience high levels of price instability.

Question 9

Non-price competition emphasizes distinctive product features, service, and product quality.

Accepted Answer

A) True 
 B)False

Question 10

If a firm currently produces 2,500 products per month and decides to produce 2,501, it will incur:

Accepted Answer

A)  more fixed costs. 
B)  higher average fixed costs. 
C)  fewer variable costs. 
D)  a marginal cost. 
E)  higher average variable costs. 
A)  more fixed costs. 
B)  higher average fixed costs. 
C)  fewer variable costs. 
D)  a marginal cost. 
E)  higher average variable costs.

Question 11

A retailer of Real Dry deodorant prices it at $2.00, while it costs the retailer $1.40. What is the approximate markup as a percentage of selling price?

Accepted Answer

A)  3 percent 
B)  14.3 percent 
C)  30 percent 
D)  70 percent 
E)  20 percent 
A)  3 percent 
B)  14.3 percent 
C)  30 percent 
D)  70 percent 
E)  20 percent

Question 12

A pricing strategy is a course of action designed to achieve pricing and marketing objectives.

Accepted Answer

A) True 
 B)False

Question 13

Setting prices for business products is very similar to setting prices for consumer products.

Accepted Answer

A) True 
 B)False

Question 14

The importance of price depends on the type of product, the type of target market, and the purchase situation.

Accepted Answer

A) True 
 B)False

Question 15

How are pricing objectives similar to a corporation's overall goals? How are they different?

Accepted Answer

Developing pricing objectives is an impo

Question 16

Scenario 12.3
Use the following to answer the questions.
Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit.
-Refer to Scenario 12.3. Glenwood has decided that it is going to offer a special package if the prevention plan is purchased within the first 30 days of each year's time for vaccinations. This type of pricing strategy would be an example of:

Accepted Answer

A)  customary pricing. 
B)  secondary-market pricing. 
C)  introductory pricing. 
D)  periodic discounting. 
E)  random discounting. 
A)  customary pricing. 
B)  secondary-market pricing. 
C)  introductory pricing. 
D)  periodic discounting. 
E)  random discounting.

Question 17

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is to:

Accepted Answer

A)  maintain the status quo. 
B)  increase profit. 
C)  survive. 
D)  increase market share. 
E)  recover. 
A)  maintain the status quo. 
B)  increase profit. 
C)  survive. 
D)  increase market share. 
E)  recover.

Question 18

Markum Industries determines that, for its air compressors, the following results are achieved at a price of $250: total costs = $250; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at units.

Accepted Answer

A)  1,167 
B)  1,000 
C)  1,750 
D)  2,500 
E)  700 
A)  1,167 
B)  1,000 
C)  1,750 
D)  2,500 
E)  700

Question 19

Brand uniqueness is not important in non-price competition.

Accepted Answer

A) True 
 B)False

Question 20

Under what conditions would a marketer most likely use a price leader strategy?

Accepted Answer

When a firm prices a few products below

Differential pricing is effective mainly when focusing on only one market segment.

All of the following are psychological techniques except:

Westin Hotels, Inc. has an objective of achieving a 25 percent return from its overall sales. This is an example of a pricing objective.

Bundle pricing is perceived to be of value by customers because:

When Mia and Shane are planning their honeymoon, their travel agent tells them that if they buy a special package, their trip to Paris will include meals, tickets to the theater, and a rental car in addition to airfare and a hotel. This is an example of the use of:

Managers at Caterpillar have determined the costs associated with producing hay balers are equal to the price that they charge for the hay balers. This indicates that Caterpillar is producing at the point.

At what point does a firm maximize profit?

Marketers at organizations engaged in price competition:

Non-price competition emphasizes distinctive product features, service, and product quality.

If a firm currently produces 2,500 products per month and decides to produce 2,501, it will incur:

A retailer of Real Dry deodorant prices it at $2.00, while it costs the retailer $1.40. What is the approximate markup as a percentage of selling price?

A pricing strategy is a course of action designed to achieve pricing and marketing objectives.

Setting prices for business products is very similar to setting prices for consumer products.

The importance of price depends on the type of product, the type of target market, and the purchase situation.

How are pricing objectives similar to a corporation's overall goals? How are they different?

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is to:

Markum Industries determines that, for its air compressors, the following results are achieved at a price of $250: total costs = $250; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at units.

Brand uniqueness is not important in non-price competition.

Under what conditions would a marketer most likely use a price leader strategy?

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Markets: Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packaging Concepts

Developing and Managing Goods and Services

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Filters

Exam 12: Pricing Concepts and Management

Differential pricing is effective mainly when focusing on only one market segment.

All of the following are psychological techniques except:

Westin Hotels, Inc. has an objective of achieving a 25 percent return from its overall sales. This is an example of a pricing objective.

Bundle pricing is perceived to be of value by customers because:

When Mia and Shane are planning their honeymoon, their travel agent tells them that if they buy a special package, their trip to Paris will include meals, tickets to the theater, and a rental car in addition to airfare and a hotel. This is an example of the use of:

Managers at Caterpillar have determined the costs associated with producing hay balers are equal to the price that they charge for the hay balers. This indicates that Caterpillar is producing at the point.

At what point does a firm maximize profit?

Marketers at organizations engaged in price competition:

Non-price competition emphasizes distinctive product features, service, and product quality.

If a firm currently produces 2,500 products per month and decides to produce 2,501, it will incur:

A retailer of Real Dry deodorant prices it at $2.00, while it costs the retailer $1.40. What is the approximate markup as a percentage of selling price?

A pricing strategy is a course of action designed to achieve pricing and marketing objectives.

Setting prices for business products is very similar to setting prices for consumer products.

The importance of price depends on the type of product, the type of target market, and the purchase situation.

How are pricing objectives similar to a corporation's overall goals? How are they different?

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is to:

Markum Industries determines that, for its air compressors, the following results are achieved at a price of $250: total costs = $250; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at units.

Brand uniqueness is not important in non-price competition.

Under what conditions would a marketer most likely use a price leader strategy?

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Markets: Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packaging Concepts

Developing and Managing Goods and Services

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Filters