Question 1

Explain the concept of the high\low strategy. Why is this an attractive strategy to marketers?

Accepted Answer

A high\low pricing strategy relies on th

Question 2

Sellers using an EDLP pricing strategy often communicate their strategy through the creative use of a reference price.

Accepted Answer

A) True 
 B)False

Question 3

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

Accepted Answer

In many markets, and particularly for ne

Question 4

According to a typical demand curve, the higher the price,

Accepted Answer

A) the greater the income effect. 
B) the lower the quantity consumers will buy. 
C) the lower the output of producers. 
D) the greater the production costs. 
E) the lower the cross-price elasticity. 
A) the greater the income effect. 
B) the lower the quantity consumers will buy. 
C) the lower the output of producers. 
D) the greater the production costs. 
E) the lower the cross-price elasticity.

Question 5

Traditional demand curve economic theory is used by marketers to understand ________ in the five Cs of pricing.

Accepted Answer

A) competitors 
B) channel members 
C) cost 
D) consumers 
E) company objectives 
A) competitors 
B) channel members 
C) cost 
D) consumers 
E) company objectives

Question 6

What methods might a firm use when pricing based on a profit orientation and how do they differ?

Accepted Answer

A firm may implement a profit orientatio

Question 7

A high\low pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.

Accepted Answer

A) True 
 B)False

Question 8

When Amy decides how to price new products in her cosmetics store, she measures the value of her product offerings against those of the other stores in her area. Amy uses a ________ pricing strategy.

Accepted Answer

A) maximizing profits 
B) target profit 
C) target return 
D) competitor-oriented 
E) sales oriented 
A) maximizing profits 
B) target profit 
C) target return 
D) competitor-oriented 
E) sales oriented

Question 9

Suppose that a friend asks you to drive him to the airport this weekend so he can catch a flight. He pays you for the gas used driving to the airport, and for the cost of parking the car at the airport while you help him in with his bags. He then declares that you are now "even," since he has fully compensated you for any costs you incurred in helping him get to his flight. From your perspective, what aspects of the "price" of taking your friend to the airport has he omitted?

Accepted Answer

The full sacrifice of taking t

Question 10

Lindsay believes that her customers prefer to wait until the price of a product has gone down before buying it and are not worried about being the first to have a new product or innovation. It would benefit Lindsay to use the price skimming strategy.

Accepted Answer

A) True 
 B)False

Question 11

Why might it be considered more fun and challenging for a marketer to be part of a market characterized by monopolistic competition than be part of one characterized by pure competition?

Accepted Answer

In pure competition, all products are si

Question 12

Rob is the marketing manager for a home goods store. His boss tells him the firm's primary goal is to increase its local market share from 10 to 20 percent. His firm is using a ________ orientation.

Accepted Answer

A) profit 
B) sales 
C) competitive 
D) customer satisfaction 
E) product development 
A) profit 
B) sales 
C) competitive 
D) customer satisfaction 
E) product development

Question 13

How is consumer behavior affected by the "substitution effect"?

Accepted Answer

The substitution effect refers to consum

Question 14

Ana is the marketing manager for a shoe store chain. She uses a target return pricing strategy because her firm's primary objective is to

Accepted Answer

A) increase profits. 
B) increase sales. 
C) decrease competition. 
D) build customer satisfaction. 
E) broaden the product line. 
A) increase profits. 
B) increase sales. 
C) decrease competition. 
D) build customer satisfaction. 
E) broaden the product line.

Question 15

If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

Accepted Answer

A) True 
 B)False

Question 16

Vern is the only retailer in his market selling a new, ergonomically designed desk. What are the objectives of using a penetration pricing strategy? Why would Vern consider using a market penetration pricing strategy?

Accepted Answer

The objectives of using a penetration pr

Question 17

Sherri initially charged $80 for an hour-long facial and averaged 20 clients per week. When she raised her price to $100, the number of facials decreased to 15 per week. What is the price elasticity of demand for her service?

Accepted Answer

Price elasticity of demand is the percen

Question 18

When a firm has a particular profit goal as its overriding concern, it will use target return pricing to meet the profit objective.

Accepted Answer

A) True 
 B)False

Question 19

When members of the marketing channel collude to control the prices passed on to consumers, they are engaging in

Accepted Answer

A) loss-leader price fixing. 
B) bait-and-switch price fixing. 
C) horizontal price fixing. 
D) vertical price fixing. 
E) predatory pricing. 
A) loss-leader price fixing. 
B) bait-and-switch price fixing. 
C) horizontal price fixing. 
D) vertical price fixing. 
E) predatory pricing.

Question 20

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

Accepted Answer

A) cross-price elastic. 
B) price inelastic. 
C) price elastic. 
D) status quo elastic. 
E) derived demand inelastic. 
A) cross-price elastic. 
B) price inelastic. 
C) price elastic. 
D) status quo elastic. 
E) derived demand inelastic.

Explain the concept of the high\low strategy. Why is this an attractive strategy to marketers?

Sellers using an EDLP pricing strategy often communicate their strategy through the creative use of a reference price.

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

According to a typical demand curve, the higher the price,

Traditional demand curve economic theory is used by marketers to understand ________ in the five Cs of pricing.

What methods might a firm use when pricing based on a profit orientation and how do they differ?

A high\low pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.

When Amy decides how to price new products in her cosmetics store, she measures the value of her product offerings against those of the other stores in her area. Amy uses a ________ pricing strategy.

Lindsay believes that her customers prefer to wait until the price of a product has gone down before buying it and are not worried about being the first to have a new product or innovation. It would benefit Lindsay to use the price skimming strategy.

Why might it be considered more fun and challenging for a marketer to be part of a market characterized by monopolistic competition than be part of one characterized by pure competition?

Rob is the marketing manager for a home goods store. His boss tells him the firm's primary goal is to increase its local market share from 10 to 20 percent. His firm is using a ________ orientation.

How is consumer behavior affected by the "substitution effect"?

Ana is the marketing manager for a shoe store chain. She uses a target return pricing strategy because her firm's primary objective is to

If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

Vern is the only retailer in his market selling a new, ergonomically designed desk. What are the objectives of using a penetration pricing strategy? Why would Vern consider using a market penetration pricing strategy?

Sherri initially charged $80 for an hour-long facial and averaged 20 clients per week. When she raised her price to $100, the number of facials decreased to 15 per week. What is the price elasticity of demand for her service?

When a firm has a particular profit goal as its overriding concern, it will use target return pricing to meet the profit objective.

When members of the marketing channel collude to control the prices passed on to consumers, they are engaging in

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Digital Marketing: Online, Social, and Mobile

Conscious Marketing, Corporate Social Responsibility, and Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Supply Chain and Channel Management

Retailing and Omnichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters

Exam 14: Pricing Concepts for Capturing Value

Explain the concept of the high\low strategy. Why is this an attractive strategy to marketers?

Sellers using an EDLP pricing strategy often communicate their strategy through the creative use of a reference price.

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

According to a typical demand curve, the higher the price,

Traditional demand curve economic theory is used by marketers to understand ________ in the five Cs of pricing.

What methods might a firm use when pricing based on a profit orientation and how do they differ?

A high\low pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.

When Amy decides how to price new products in her cosmetics store, she measures the value of her product offerings against those of the other stores in her area. Amy uses a ________ pricing strategy.

Lindsay believes that her customers prefer to wait until the price of a product has gone down before buying it and are not worried about being the first to have a new product or innovation. It would benefit Lindsay to use the price skimming strategy.

Why might it be considered more fun and challenging for a marketer to be part of a market characterized by monopolistic competition than be part of one characterized by pure competition?

Rob is the marketing manager for a home goods store. His boss tells him the firm's primary goal is to increase its local market share from 10 to 20 percent. His firm is using a ________ orientation.

How is consumer behavior affected by the "substitution effect"?

Ana is the marketing manager for a shoe store chain. She uses a target return pricing strategy because her firm's primary objective is to

If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

Vern is the only retailer in his market selling a new, ergonomically designed desk. What are the objectives of using a penetration pricing strategy? Why would Vern consider using a market penetration pricing strategy?

Sherri initially charged $80 for an hour-long facial and averaged 20 clients per week. When she raised her price to $100, the number of facials decreased to 15 per week. What is the price elasticity of demand for her service?

When a firm has a particular profit goal as its overriding concern, it will use target return pricing to meet the profit objective.

When members of the marketing channel collude to control the prices passed on to consumers, they are engaging in

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Digital Marketing: Online, Social, and Mobile

Conscious Marketing, Corporate Social Responsibility, and Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Supply Chain and Channel Management

Retailing and Omnichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters