Question 1

Which of the following is true about price competition?

Accepted Answer

A)  A major advantage of price competition is flexibility. 
B)  Price competition allows the marketer to build brand loyalty. 
C)  Price wars do not result from price competition. 
D)  In price competition, marketers distinguish their brands with unique product features. 
E)  In price competition, marketers distinguish their brands with promotion and packaging. 
A)  A major advantage of price competition is flexibility. 
B)  Price competition allows the marketer to build brand loyalty. 
C)  Price wars do not result from price competition. 
D)  In price competition, marketers distinguish their brands with unique product features. 
E)  In price competition, marketers distinguish their brands with promotion and packaging.

Question 2

Francine owns her own widget store. She currently does not have enough money to hire anyone else, so she is the only employee. Francine purchased 1,500 widgets for her inventory at $1.50 per widget. In one month, she sold all her widgets for $3.00 each. That month her rent was $700 and utilities were $200. With just this information, Francine's total profit would be $________.

Accepted Answer

A)  1,250 
B)  550 
C)  1,350 
D)  1,100 
E)  -500 
A)  1,250 
B)  550 
C)  1,350 
D)  1,100 
E)  -500

Question 3

Which of the following statements is true about the factors that affect pricing decisions?

Accepted Answer

A)  In the long term, a firm may sell products below cost to match competition. 
B)  Marketers should set prices that are consistent with the organization's goals and mission. 
C)  Pricing decisions should not influence activities associated with the other marketing mix variables. 
D)  Price is not linked to elements of the distribution variable of the marketing mix. 
E)  Costs should not be an issue when establishing price. 
A)  In the long term, a firm may sell products below cost to match competition. 
B)  Marketers should set prices that are consistent with the organization's goals and mission. 
C)  Pricing decisions should not influence activities associated with the other marketing mix variables. 
D)  Price is not linked to elements of the distribution variable of the marketing mix. 
E)  Costs should not be an issue when establishing price.

Question 4

A product under nonprice competition would most likely not succeed in the market if

Accepted Answer

A)  a new advertising campaign is established for it. 
B)  it is easy to duplicate. 
C)  it is packaged differently from similar products. 
D)  it is priced near the competitors' price. 
E)  its quality has been upgraded. 
A)  a new advertising campaign is established for it. 
B)  it is easy to duplicate. 
C)  it is packaged differently from similar products. 
D)  it is priced near the competitors' price. 
E)  its quality has been upgraded.

Question 5

Buyers who focus on purchasing products that signify prominence and status are

Accepted Answer

A)  value-conscious consumers. 
B)  price-conscious consumers. 
C)  socially-elite buyers. 
D)  prestige-sensitive buyers. 
E)  brand-aware consumers. 
A)  value-conscious consumers. 
B)  price-conscious consumers. 
C)  socially-elite buyers. 
D)  prestige-sensitive buyers. 
E)  brand-aware consumers.

Question 6

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 7

Scenario 19.2 Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China.
Refer to Scenario 19.2. If BASF were to employ pricing that includes the price at the factory plus freight charges from a chosen point nearest the buyer, this would be an example of ____ pricing.

Accepted Answer

A)  factory plus 
B)  dispersion 
C)  base-point 
D)  freight absorption 
E)  uniform geographic 
A)  factory plus 
B)  dispersion 
C)  base-point 
D)  freight absorption 
E)  uniform geographic

Question 8

You and a partner are planning to open a dollar discount store in your hometown. You plan to sell the majority of the items in the store for one dollar unit price. You have seen this concept work well in other cities, and you believe the demographics of your hometown are a good fit for this retail concept.
Which of the following types of customers are you expecting to frequent your store?

Accepted Answer

A)  Price-conscious customers 
B)  Wholesalers 
C)  Other retailers 
D)  Prestige-sensitive customers 
E)  Value-conscious customers 
A)  Price-conscious customers 
B)  Wholesalers 
C)  Other retailers 
D)  Prestige-sensitive customers 
E)  Value-conscious customers

Question 9

Sellers using nonprice competition are not concerned with prices charged by competitors.

Accepted Answer

A) True 
 B)False

Question 10

Identify and describe the major types of discounts used for business markets. Then explain the reasons for using each type.

Accepted Answer

The major types of discounts include: tr

Question 11

Suppose that the frozen foods division of Swanson purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called

Accepted Answer

A)  zone pricing. 
B)  base-point pricing. 
C)  business-unit pricing. 
D)  transfer pricing. 
E)  price discrimination. 
A)  zone pricing. 
B)  base-point pricing. 
C)  business-unit pricing. 
D)  transfer pricing. 
E)  price discrimination.

Question 12

You are reading the quarterly financial report of one of your competitors. You expected to see their total sales revenue decline because they had a large price increase during the quarter. You were certain that the price increase would lead to an equivalently large decrease in their total sales revenue. To your surprise, their total sales revenue actually increased in the quarter. Based on this information, which of the following explanations could explain why the competitor's total sales revenue increased?

Accepted Answer

A)  The demand for the company's products is inelastic, so total revenue declines when prices are raised. 
B)  The demand for the company's products is elastic, so total revenue declines when prices are raised. 
C)  The demand for the company's products is elastic, so unit sales increase when prices are raised. 
D)  The demand for the company's products is inelastic, so total sales revenue increases when prices are raised. 
E)  The demand for the company's products is elastic, so fixed costs increase when prices are raised. 
A)  The demand for the company's products is inelastic, so total revenue declines when prices are raised. 
B)  The demand for the company's products is elastic, so total revenue declines when prices are raised. 
C)  The demand for the company's products is elastic, so unit sales increase when prices are raised. 
D)  The demand for the company's products is inelastic, so total sales revenue increases when prices are raised. 
E)  The demand for the company's products is elastic, so fixed costs increase when prices are raised.

Which of the following is true about price competition?

Which of the following statements is true about the factors that affect pricing decisions?

A product under nonprice competition would most likely not succeed in the market if

Buyers who focus on purchasing products that signify prominence and status are

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

Sellers using nonprice competition are not concerned with prices charged by competitors.

Identify and describe the major types of discounts used for business markets. Then explain the reasons for using each type.

Suppose that the frozen foods division of Swanson purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

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 Concepts, Branding, and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters

Exam 19: Pricing Concepts

Which of the following is true about price competition?

Which of the following statements is true about the factors that affect pricing decisions?

A product under nonprice competition would most likely not succeed in the market if

Buyers who focus on purchasing products that signify prominence and status are

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

Sellers using nonprice competition are not concerned with prices charged by competitors.

Identify and describe the major types of discounts used for business markets. Then explain the reasons for using each type.

Suppose that the frozen foods division of Swanson purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

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 Concepts, Branding, and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters