Question 1

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following pricing strategies most likely results in a retailer losing money on the product?

Accepted Answer

A)  Price leader pricing 
B)  Psychological pricing 
C)  Penetration pricing 
D)  Special-event pricing 
E)  Ethical pricing 
A)  Price leader pricing 
B)  Psychological pricing 
C)  Penetration pricing 
D)  Special-event pricing 
E)  Ethical pricing

Question 3

The eight stages of setting prices should always be followed if prices are to be set correctly.

Accepted Answer

A) True 
 B)False

Question 4

Cost-based pricing strategies result in a percentage being added to the cost of the product.

Accepted Answer

A) True 
 B)False

Question 5

Maintaining or increasing market share:

Accepted Answer

A)  can be achieved even if industry sales are flat or decreasing. 
B)  is an infrequently used pricing objective in most industries. 
C)  depends upon the overall growth of the total industry. 
D)  is a profit-related objective based on price. 
E)  is directly tied to leading an industry in product quality. 
A)  can be achieved even if industry sales are flat or decreasing. 
B)  is an infrequently used pricing objective in most industries. 
C)  depends upon the overall growth of the total industry. 
D)  is a profit-related objective based on price. 
E)  is directly tied to leading an industry in product quality.

Question 6

Laura Spangler, of North Central Novelties, reduces the price of games sold to Robertson's Entertainment by 10 percent to allow for expenses associated with Robertson's promoting the games to consumers. This is an example of a discount.

Accepted Answer

A)  quantity 
B)  cash 
C)  seasonal 
D)  trade 
E)  complementary 
A)  quantity 
B)  cash 
C)  seasonal 
D)  trade 
E)  complementary

Question 7

Scenario 12.2
Use the following to answer the questions.
Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store. A lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands.
-Refer to Scenario 12.2. Ray-Ban has decided to promote the new sunglasses line as an "affordable luxury" and plans significant promotional expenditures. With these objectives, which of the following should Ray-Ban use to price its product line?

Accepted Answer

A)  competition-based pricing 
B)  cost-plus pricing 
C)  markup pricing 
D)  demand-based pricing 
E)  differential pricing 
A)  competition-based pricing 
B)  cost-plus pricing 
C)  markup pricing 
D)  demand-based pricing 
E)  differential pricing

Question 8

Gambrel Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle. Therefore, its marketing department sets its primary pricing objective as:

Accepted Answer

A)  market share. 
B)  cash flow. 
C)  profit. 
D)  product quality. 
E)  status quo. 
A)  market share. 
B)  cash flow. 
C)  profit. 
D)  product quality. 
E)  status quo.

Question 9

A product is a price leader when:

Accepted Answer

A)  it is sold at the highest price. 
B)  its price maximizes profits. 
C)  an increase or decrease in price leads to increased revenue or lower costs. 
D)  it is sold at a lower cost in the hope that sales of other products will increase. 
E)  its price leads the industry in sales. 
A)  it is sold at the highest price. 
B)  its price maximizes profits. 
C)  an increase or decrease in price leads to increased revenue or lower costs. 
D)  it is sold at a lower cost in the hope that sales of other products will increase. 
E)  its price leads the industry in sales.

Question 10

Ethan is an operations unit manager for Morningstar Foods. When developing his monthly budget, he has identified the following costs: Overhead at $120,000; Packaging at $70,000; Advertising at $60,000; Salaries at $400,000; Food production at $90,000, and Distribution at $22,000. The fixed costs in this situation would be:

Accepted Answer

A)  overhead, packaging, advertising, salaries, food production, and distribution 
B)  overhead, packaging, advertising, salaries, and distribution 
C)  overhead, advertising, distribution, and salaries 
D)  packaging and distribution 
E)  food production 
A)  overhead, packaging, advertising, salaries, food production, and distribution 
B)  overhead, packaging, advertising, salaries, and distribution 
C)  overhead, advertising, distribution, and salaries 
D)  packaging and distribution 
E)  food production

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Which of the following pricing strategies most likely results in a retailer losing money on the product?

The eight stages of setting prices should always be followed if prices are to be set correctly.

Cost-based pricing strategies result in a percentage being added to the cost of the product.

Maintaining or increasing market share:

Laura Spangler, of North Central Novelties, reduces the price of games sold to Robertson's Entertainment by 10 percent to allow for expenses associated with Robertson's promoting the games to consumers. This is an example of a discount.

Gambrel Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle. Therefore, its marketing department sets its primary pricing objective as:

A product is a price leader when:

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

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Which of the following pricing strategies most likely results in a retailer losing money on the product?

The eight stages of setting prices should always be followed if prices are to be set correctly.

Cost-based pricing strategies result in a percentage being added to the cost of the product.

Maintaining or increasing market share:

Laura Spangler, of North Central Novelties, reduces the price of games sold to Robertson's Entertainment by 10 percent to allow for expenses associated with Robertson's promoting the games to consumers. This is an example of a discount.

Gambrel Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle. Therefore, its marketing department sets its primary pricing objective as:

A product is a price leader when:

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