Question 1

Markup can be stated as a percentage of the cost or as a percentage of the selling price.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following pricing objectives sets prices to recover cash as quickly as possible?

Accepted Answer

A)  Market share 
B)  Profit 
C)  Cash flow 
D)  Return on investment 
E)  Product quality 
A)  Market share 
B)  Profit 
C)  Cash flow 
D)  Return on investment 
E)  Product quality

Question 3

Information about competitors' prices  ________________________.

Accepted Answer

A)  cannot be uncovered during marketing research 
B)  is not a consideration in the price setting process 
C)  is essential in an industry dominated by non-price competition 
D)  is often a closely guarded secret 
E)  is readily available to all industry participants 
A)  cannot be uncovered during marketing research 
B)  is not a consideration in the price setting process 
C)  is essential in an industry dominated by non-price competition 
D)  is often a closely guarded secret 
E)  is readily available to all industry participants

Question 4

A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase.

Accepted Answer

A) True 
 B)False

Question 5

Aldi's and Dollar General stores have been expanding their footprint across the United States opening new locations and competing against traditional discount and grocery store chains, such as Walmart, Target, Kmart, Kroger, Jewel Osco, and Schnucks. Both Aldi's and Dollar General hope to capture a large proportion of the dollars consumers spend on grocery and general merchandise items and have responded to consumer desires for value and convenience of a smaller store. What type of pricing objective are these stores utilizing?

Accepted Answer

A)  survival 
B)  profit 
C)  market share 
D)  return on investment 
A)  survival 
B)  profit 
C)  market share 
D)  return on investment

Question 6

What are reference prices and how do customers use them? What is the difference between internal and external reference prices?

Accepted Answer

Reference pricing means pricing a produc

Question 7

For most products, a(n) ____ relationship exists between the price of a particular product and the quantity demanded.

Accepted Answer

A)  inelastic 
B)  inverse 
C)  positive 
D)  unknown 
E)  elastic 
A)  inelastic 
B)  inverse 
C)  positive 
D)  unknown 
E)  elastic

Question 8

Setting prices for business customers is very similar to setting prices for consumers.

Accepted Answer

A) True 
 B)False

Question 9

Scenario 12.1 Use the following to answer the questions.
Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
Refer to Scenario 12.1. To break even, Concession Supply should sell ____ cases of hot dogs per day at Wrigley Field.

Accepted Answer

A)  13 
B)  120 
C)  40 
D)  200 
E)  60 
A)  13 
B)  120 
C)  40 
D)  200 
E)  60

Question 10

The price of a hotel room is more important to a business traveler than to a tourist.

Accepted Answer

A) True 
 B)False

Question 11

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

Accepted Answer

A)  Reference pricing 
B)  Odd-number pricing 
C)  Customary pricing 
D)  Prestige pricing 
E)  Professional pricing 
A)  Reference pricing 
B)  Odd-number pricing 
C)  Customary pricing 
D)  Prestige pricing 
E)  Professional pricing

Question 12

Department stores such as Kohl's and Macy's are interested in learning how much their competitors are charging for similar merchandise. Which of the following practices might these retailers utilize to identify competitors' prices?

Accepted Answer

A)  Employing comparative shoppers who systematically collect data on prices at competing stores 
B)  Stealing price lists from a display at a trade show 
C)  Hiring sales representatives from competitor's companies and asking them to share price information 
D)  Pretending to be a buyer and soliciting pricing information from their competitor 
A)  Employing comparative shoppers who systematically collect data on prices at competing stores 
B)  Stealing price lists from a display at a trade show 
C)  Hiring sales representatives from competitor's companies and asking them to share price information 
D)  Pretending to be a buyer and soliciting pricing information from their competitor

Question 13

At the breakeven point,

Accepted Answer

A)  the money a company brings in from selling products equals the amount spent producing the products. 
B)  the total fixed costs are exactly equal to the total variable costs. 
C)  profits are exactly equal to the difference between revenue and total variable costs. 
D)  the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit. 
E)  the marginal cost curve and the average cost curve will be identical for a particular product. 
A)  the money a company brings in from selling products equals the amount spent producing the products. 
B)  the total fixed costs are exactly equal to the total variable costs. 
C)  profits are exactly equal to the difference between revenue and total variable costs. 
D)  the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit. 
E)  the marginal cost curve and the average cost curve will be identical for a particular product.

Question 14

Scenario 12.4 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 and then 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 12.4. Glenwood's closest competitor, The Hearthstone Pet Hospital, currently charges $60 for each basic office visit. If Glenwood were to price its basic office visit at $45, it would most likely be employing which of the following?

Accepted Answer

A)  customary pricing. 
B)  penetration pricing. 
C)  prestige pricing. 
D)  price skimming. 
E)  cost-based pricing. 
A)  customary pricing. 
B)  penetration pricing. 
C)  prestige pricing. 
D)  price skimming. 
E)  cost-based pricing.

Question 15

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

Accepted Answer

Sometimes a firm prices a few products b

Question 16

Suppose 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)  breakeven 
B)  marginal revenue less than marginal cost 
C)  profit margin 
D)  competitive price 
E)  profit maximizing 
A)  breakeven 
B)  marginal revenue less than marginal cost 
C)  profit margin 
D)  competitive price 
E)  profit maximizing

Question 17

A manager at Kohl's discovers that Macy's has reduced the price of its children's Levi's from $31.99 to $24.99, according to an advertisement in the Sunday newspaper. She immediately phones her store and instructs the salesperson on duty to put a sign up next to their children's Levi's that reads, "SALE: $24.99." This is an example of what pricing strategy?

Accepted Answer

A)  Secondary-market pricing 
B)  Captive pricing 
C)  Reference pricing 
D)  Random discounting 
E)  Comparison discounting 
A)  Secondary-market pricing 
B)  Captive pricing 
C)  Reference pricing 
D)  Random discounting 
E)  Comparison discounting

Question 18

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

Accepted Answer

A)  price reduction planning. 
B)  random discounting. 
C)  reference pricing. 
D)  periodic discounting. 
E)  penetration pricing. 
A)  price reduction planning. 
B)  random discounting. 
C)  reference pricing. 
D)  periodic discounting. 
E)  penetration pricing.

Question 19

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the

Accepted Answer

A)  quantity demanded goes down. 
B)  demand remains constant. 
C)  quantity demanded increases. 
D)  demand increases. 
E)  breakeven increases. 
A)  quantity demanded goes down. 
B)  demand remains constant. 
C)  quantity demanded increases. 
D)  demand increases. 
E)  breakeven increases.

Question 20

Cost-based pricing results in a high price when demand is high and a low price when demand is low.

Accepted Answer

A) True 
 B)False

Markup can be stated as a percentage of the cost or as a percentage of the selling price.

Which of the following pricing objectives sets prices to recover cash as quickly as possible?

Information about competitors' prices ________________________.

A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase.

What are reference prices and how do customers use them? What is the difference between internal and external reference prices?

For most products, a(n) ____ relationship exists between the price of a particular product and the quantity demanded.

Setting prices for business customers is very similar to setting prices for consumers.

The price of a hotel room is more important to a business traveler than to a tourist.

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

Department stores such as Kohl's and Macy's are interested in learning how much their competitors are charging for similar merchandise. Which of the following practices might these retailers utilize to identify competitors' prices?

At the breakeven point,

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

Suppose 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.

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the

Cost-based pricing results in a high price when demand is high and a low price when demand is low.

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Market Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packing 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

Markup can be stated as a percentage of the cost or as a percentage of the selling price.

Which of the following pricing objectives sets prices to recover cash as quickly as possible?

Information about competitors' prices ________________________.

A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase.

What are reference prices and how do customers use them? What is the difference between internal and external reference prices?

For most products, a(n) ____ relationship exists between the price of a particular product and the quantity demanded.

Setting prices for business customers is very similar to setting prices for consumers.

The price of a hotel room is more important to a business traveler than to a tourist.

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

Department stores such as Kohl's and Macy's are interested in learning how much their competitors are charging for similar merchandise. Which of the following practices might these retailers utilize to identify competitors' prices?

At the breakeven point,

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

Suppose 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.

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the

Cost-based pricing results in a high price when demand is high and a low price when demand is low.

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Market Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packing 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