Question 1

Some firms pursue a ________ pricing objective to generate cash to ward off bankruptcy.

Accepted Answer

A)  market share 
B)  survival 
C)  sales revenue 
D)  single product line 
E)  profit 
A)  market share 
B)  survival 
C)  sales revenue 
D)  single product line 
E)  profit

Question 2

Price is

Accepted Answer

A)  the value assigned to the exchange of products and services for other products and services. 
B)  the value judgment made by both the buyer and seller regarding an item's worth. 
C)  the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service. 
D)  the value assessed for the benefits of using a product or service. 
E)  the highest monetary value a customer is willing to pay for a product or service. 
A)  the value assigned to the exchange of products and services for other products and services. 
B)  the value judgment made by both the buyer and seller regarding an item's worth. 
C)  the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service. 
D)  the value assessed for the benefits of using a product or service. 
E)  the highest monetary value a customer is willing to pay for a product or service.

Question 3

Mark Johnson, the manager of a discount consumer electronics store, was approached by the manufacturer's representative on behalf of a marketer of a popular and profitable line of storage racks. The manufacturer's representative implied that if Johnson didn't raise the retail prices for the storage racks to those paid by the marketer's non-discount customers, Johnson's supply of racks may be severely curtailed. The manufacturer's representative was guilty of attempting

Accepted Answer

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

Question 4

Companies often pursue a market share objective when

Accepted Answer

A)  industry sales are flat or declining. 
B)  profits are increasing. 
C)  industry sales are beginning to rise. 
D)  there is a sudden increase in production costs. 
E)  stockholders are seeking higher dividends. 
A)  industry sales are flat or declining. 
B)  profits are increasing. 
C)  industry sales are beginning to rise. 
D)  there is a sudden increase in production costs. 
E)  stockholders are seeking higher dividends.

Question 5

Creative marketers engage in value-pricing, which is the practice of simultaneously increasing product and service benefits while

Accepted Answer

A)  increasing costs. 
B)  increasing price. 
C)  increasing advertising. 
D)  decreasing costs. 
E)  maintaining or decreasing price. 
A)  increasing costs. 
B)  increasing price. 
C)  increasing advertising. 
D)  decreasing costs. 
E)  maintaining or decreasing price.

Question 6

In the purchase of the sugar substitute Splenda, you may compare it to something you know about like real sugar. Although Splenda is more expensive than sugar, it is purchased by many consumers because it sweetens with no calories. This situation involves the consumer considering

Accepted Answer

A)  a marginal analysis. 
B)  a profit equation. 
C)  a break-even analysis. 
D)  price elasticity of demand. 
E)  a reference value. 
A)  a marginal analysis. 
B)  a profit equation. 
C)  a break-even analysis. 
D)  price elasticity of demand. 
E)  a reference value.

Question 7

All of the following are examples of pricing objectives except which?

Accepted Answer

A)  market share 
B)  survival 
C)  unit sales 
D)  social responsibility 
E)  product obsolescence 
A)  market share 
B)  survival 
C)  unit sales 
D)  social responsibility 
E)  product obsolescence

Question 8

Loss-leader pricing refers to

Accepted Answer

A)  a pricing method where the price the seller charges is below the actual cost to make the product. 
B)  setting a low initial price and gradually but consistently increasing that price so as not to antagonize the consumer. 
C)  deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well. 
D)  a method of pricing based on a product's tradition, standardized channel of distribution, or other competitive factors. 
E)  pricing a product between 8 and 10 percent lower than nationally branded competitive products. 
A)  a pricing method where the price the seller charges is below the actual cost to make the product. 
B)  setting a low initial price and gradually but consistently increasing that price so as not to antagonize the consumer. 
C)  deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well. 
D)  a method of pricing based on a product's tradition, standardized channel of distribution, or other competitive factors. 
E)  pricing a product between 8 and 10 percent lower than nationally branded competitive products.

Question 9

Managing for long-run profits as a pricing objective implies that a company will

Accepted Answer

A)  give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. 
B)  maintain a given price range to ensure there is no loss of customers over time, even if the profit margin declines. 
C)  invest excess cash in bonds and certificates of deposit in order to counteract any inflationary economic changes in the future. 
D)  reinvest all profits into market research or product research rather than returned to shareholders. 
E)  drop all products, product lines, or divisions that cannot maintain their pricing goals. 
A)  give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. 
B)  maintain a given price range to ensure there is no loss of customers over time, even if the profit margin declines. 
C)  invest excess cash in bonds and certificates of deposit in order to counteract any inflationary economic changes in the future. 
D)  reinvest all profits into market research or product research rather than returned to shareholders. 
E)  drop all products, product lines, or divisions that cannot maintain their pricing goals.

Question 10

The Brazilian government wants to build a global positioning satellite (GPS) system. The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

Accepted Answer

A)  standard markup pricing. 
B)  experience curve pricing. 
C)  cost-plus-percentage-of-cost pricing. 
D)  cost-plus-fixed-fee pricing. 
E)  bundle pricing. 
A)  standard markup pricing. 
B)  experience curve pricing. 
C)  cost-plus-percentage-of-cost pricing. 
D)  cost-plus-fixed-fee pricing. 
E)  bundle pricing.

Question 11

In controversial move, Amazon.com was caught manipulating its prices. Avid DVD buyers, buying in quantity for resale, found that the online retailer was offering different customers different prices for the same DVD, and complained vociferously. Company officials admitted that the company was trying to see how much it could charge for an item before buyers balked. Amazon was caught attempting

Accepted Answer

A)  horizontal price-fixing. 
B)  price discrimination. 
C)  resale price maintenance. 
D)  predatory pricing. 
E)  bait and switch pricing. 
A)  horizontal price-fixing. 
B)  price discrimination. 
C)  resale price maintenance. 
D)  predatory pricing. 
E)  bait and switch pricing.

Question 12

An ad campaign by Suave shampoo asked television viewers to identify the heads of hair of women who used Suave shampoo and conditioner and those that used the much more expensive salon hair-care products. The idea of the ad was that no one could tell which woman used the much cheaper Suave brand. By making price its selling point, Suave is most likely using

Accepted Answer

A)  customary pricing. 
B)  loss-leader pricing. 
C)  prestige pricing. 
D)  skimming pricing. 
E)  below-market pricing. 
A)  customary pricing. 
B)  loss-leader pricing. 
C)  prestige pricing. 
D)  skimming pricing. 
E)  below-market pricing.

Question 13

________ = (Unit price × Quantity sold) − Total cost.

Accepted Answer

A)  Total revenue 
B)  Variable cost 
C)  Net present value 
D)  Profit 
E)  Break-even point 
A)  Total revenue 
B)  Variable cost 
C)  Net present value 
D)  Profit 
E)  Break-even point

Question 14

Odd-even pricing is considered to be a ________ approach to pricing.

Accepted Answer

A)  cost-oriented 
B)  profit-oriented 
C)  demand-oriented 
D)  competition-oriented 
E)  service-oriented 
A)  cost-oriented 
B)  profit-oriented 
C)  demand-oriented 
D)  competition-oriented 
E)  service-oriented

Question 15

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Accepted Answer

A)  target return-on-sales pricing 
B)  flexible pricing 
C)  cost-plus pricing 
D)  standard markup pricing 
E)  customary pricing 
A)  target return-on-sales pricing 
B)  flexible pricing 
C)  cost-plus pricing 
D)  standard markup pricing 
E)  customary pricing

Question 16

Which of the following statements about the factors that influence demand is true?

Accepted Answer

A)  As the availability of close substitutes increases, the demand for a product increases. 
B)  As real consumer income increases, the demand for a product increases. 
C)  As the price of close substitutes increases, the demand for a product declines. 
D)  Changing consumer tastes have little impact on the demand for a product. 
E)  As real consumer income decreases, the demand for a product increases. 
A)  As the availability of close substitutes increases, the demand for a product increases. 
B)  As real consumer income increases, the demand for a product increases. 
C)  As the price of close substitutes increases, the demand for a product declines. 
D)  Changing consumer tastes have little impact on the demand for a product. 
E)  As real consumer income decreases, the demand for a product increases.

Question 17

What profit-oriented pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Accepted Answer

A)  target return-on-investment pricing 
B)  target return-on-sales pricing 
C)  standard markup pricing 
D)  target profit pricing 
E)  loss-leader pricing 
A)  target return-on-investment pricing 
B)  target return-on-sales pricing 
C)  standard markup pricing 
D)  target profit pricing 
E)  loss-leader pricing

Question 18

Figure 11-7
-Suppose you are the owner of a picture frame store. Assume that 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). According to Figure 11-7a above, how much profit will your picture frame store make if it sells 400 picture frames?

Accepted Answer

A)  $48,000 
B)  $32,000 
C)  $16,000 
D)  $0 
E)  $64,000 
A)  $48,000 
B)  $32,000 
C)  $16,000 
D)  $0 
E)  $64,000

Question 19

Which of the following statements regarding a trade-in allowance is most accurate?

Accepted Answer

A)  A trade-in allowance is a noncash exchange of one product for another of equal or lesser value. 
B)  A trade-in allowance is an effective way to lower the price a buyer has to pay without formally reducing the list price. 
C)  A trade-in allowance is a cash-back payment when a more expensive item is replaced with a less expensive one. 
D)  A trade-in allowance is the return of money based on proof of purchase. 
E)  A trade-in allowance is a cash payment to a retailer for extra in-store support or special featuring of the brand. 
A)  A trade-in allowance is a noncash exchange of one product for another of equal or lesser value. 
B)  A trade-in allowance is an effective way to lower the price a buyer has to pay without formally reducing the list price. 
C)  A trade-in allowance is a cash-back payment when a more expensive item is replaced with a less expensive one. 
D)  A trade-in allowance is the return of money based on proof of purchase. 
E)  A trade-in allowance is a cash payment to a retailer for extra in-store support or special featuring of the brand.

Question 20

Setting one price for all buyers of a product or service is referred to as

Accepted Answer

A)  customary pricing. 
B)  a one-price policy. 
C)  a dynamic pricing policy. 
D)  standard markup pricing. 
E)  uniform pricing. 
A)  customary pricing. 
B)  a one-price policy. 
C)  a dynamic pricing policy. 
D)  standard markup pricing. 
E)  uniform pricing.

Some firms pursue a ________ pricing objective to generate cash to ward off bankruptcy.

Price is

Companies often pursue a market share objective when

Creative marketers engage in value-pricing, which is the practice of simultaneously increasing product and service benefits while

In the purchase of the sugar substitute Splenda, you may compare it to something you know about like real sugar. Although Splenda is more expensive than sugar, it is purchased by many consumers because it sweetens with no calories. This situation involves the consumer considering

All of the following are examples of pricing objectives except which?

Loss-leader pricing refers to

Managing for long-run profits as a pricing objective implies that a company will

The Brazilian government wants to build a global positioning satellite (GPS) system. The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

________ = (Unit price × Quantity sold) − Total cost.

Odd-even pricing is considered to be a ________ approach to pricing.

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Which of the following statements about the factors that influence demand is true?

What profit-oriented pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Which of the following statements regarding a trade-in allowance is most accurate?

Setting one price for all buyers of a product or service is referred to as

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

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

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Implementing Interactive and Multichannel Marketing

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

Filters

Exam 11: Pricing Products and Services

Some firms pursue a ________ pricing objective to generate cash to ward off bankruptcy.

Price is

Companies often pursue a market share objective when

Creative marketers engage in value-pricing, which is the practice of simultaneously increasing product and service benefits while

In the purchase of the sugar substitute Splenda, you may compare it to something you know about like real sugar. Although Splenda is more expensive than sugar, it is purchased by many consumers because it sweetens with no calories. This situation involves the consumer considering

All of the following are examples of pricing objectives except which?

Loss-leader pricing refers to

Managing for long-run profits as a pricing objective implies that a company will

The Brazilian government wants to build a global positioning satellite (GPS) system. The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

________ = (Unit price × Quantity sold) − Total cost.

Odd-even pricing is considered to be a ________ approach to pricing.

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Which of the following statements about the factors that influence demand is true?

What profit-oriented pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Which of the following statements regarding a trade-in allowance is most accurate?

Setting one price for all buyers of a product or service is referred to as

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

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

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Implementing Interactive and Multichannel Marketing

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

Filters