Question 1

The key to effectively using perceived-value pricing is to always to deliver the same or equal value as your competitors.

Accepted Answer

A) True 
 B)False

Question 2

How was Apple able to gain market leadership for the iPod with a starting price much higher than its competition's?

Accepted Answer

To consumers,the iPod represented innova

Question 3

________ costs amounts differ greatly depending upon the level of production.

Accepted Answer

A)  Attributed 
B)  Fixed 
C)  Adjusted 
D)  Unknown 
E)  Variable 
A)  Attributed 
B)  Fixed 
C)  Adjusted 
D)  Unknown 
E)  Variable

Question 4

Companies sometimes initiate price cuts in a drive to dominate the market through lower costs. A price-cutting strategy involves possible traps. One of these "traps" is

Accepted Answer

A)  consistent high quality consumer. 
B)  shallow-pockets. 
C)  secure target market customer. 
D)  dependence on a firm market. 
E)  loyal customer market. 
A)  consistent high quality consumer. 
B)  shallow-pockets. 
C)  secure target market customer. 
D)  dependence on a firm market. 
E)  loyal customer market.

Question 5

A firm first decides where it wants to position its market offering. A company can pursue any of five major objectives through pricing. Which of the following objectives is a major one if a company is plagued with overcapacity, intense competition, or changing consumer wants?

Accepted Answer

A)  product-quality leadership 
B)  survival 
C)  predatory pricing 
D)  maximum current profit 
E)  maximum market share 
A)  product-quality leadership 
B)  survival 
C)  predatory pricing 
D)  maximum current profit 
E)  maximum market share

Question 6

Executives often complain that pricing is a big headache. One of the common mistakes made are: Price is not revised often enough to capitalize on market changes; price is set ________ of the rest of the marketing program rather than an intrinsic element of a marketing-positioning strategy.

Accepted Answer

A)  independently 
B)  too high 
C)  intrinsically 
D)  concurrently 
E)  divergently 
A)  independently 
B)  too high 
C)  intrinsically 
D)  concurrently 
E)  divergently

Question 7

The most elementary pricing method is to add a standard ________ to the product's cost.

Accepted Answer

A)  target-return 
B)  target margin 
C)  target price 
D)  markup 
E)  margin 
A)  target-return 
B)  target margin 
C)  target price 
D)  markup 
E)  margin

Question 8

In recent years, companies have adopted ________ where they try to win loyal customers by charging a fairly low price for a high-quality offering.

Accepted Answer

A)  everyday low pricing 
B)  quantity discounts 
C)  high-low pricing 
D)  value pricing 
E)  EDLP 
A)  everyday low pricing 
B)  quantity discounts 
C)  high-low pricing 
D)  value pricing 
E)  EDLP

Question 9

Your local retailer has instituted an EDLP pricing program for his stores. What would one of the reasons be for the retailer to adopt an EDLP pricing policy?

Accepted Answer

Constant prices eliminate week-to-week p

Question 10

Most companies will ________ their list price and give discounts and allowances for early payments, volume purchases, and off-season buying.

Accepted Answer

A)  reduce 
B)  increase 
C)  adjust 
D)  release 
E)  list two prices 
A)  reduce 
B)  increase 
C)  adjust 
D)  release 
E)  list two prices

Question 11

Promoting a product a sale price with reference to an inflated regular price, also known as a False Ordinary Selling Price is a perfectly legal practice in Canada.

Accepted Answer

A) True 
 B)False

Question 12

Companies that employ ________ offer discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires.

Accepted Answer

A)  psychological pricing 
B)  low-interest financing 
C)  yield pricing 
D)  loss leaders 
E)  special event pricing 
A)  psychological pricing 
B)  low-interest financing 
C)  yield pricing 
D)  loss leaders 
E)  special event pricing

Question 13

Purchase decisions are based on how consumers perceive prices and what they consider to be the ________ price not the marketer's stated price.

Accepted Answer

A)  current actual 
B)  current sale price 
C)  referent price 
D)  last purchased price 
E)  quality price 
A)  current actual 
B)  current sale price 
C)  referent price 
D)  last purchased price 
E)  quality price

Question 14

The concept of the lowest ________ means that a seller can charge a higher price if they can convince the customers that price is only a small part of the total cost of obtaining, operating, and servicing the product over its lifetime.

Accepted Answer

A)  life cycle cost 
B)  convenience pricing 
C)  prestige pricing 
D)  key price points 
E)  total cost of ownership 
A)  life cycle cost 
B)  convenience pricing 
C)  prestige pricing 
D)  key price points 
E)  total cost of ownership

Question 15

A firm has to consider many factors in setting its pricing policy. We list these as a six-step process. Which of the following steps could involve maximum market share?

Accepted Answer

A)  selecting a pricing method 
B)  determining demand 
C)  selecting the pricing objective 
D)  researching reference prices in the target market 
E)  selecting the final price 
A)  selecting a pricing method 
B)  determining demand 
C)  selecting the pricing objective 
D)  researching reference prices in the target market 
E)  selecting the final price

Question 16

________ sets a ceiling on the price the company can charge for its products.

Accepted Answer

A)  Competition 
B)  Market forces 
C)  Demand 
D)  Government regulations 
E)  Costs 
A)  Competition 
B)  Market forces 
C)  Demand 
D)  Government regulations 
E)  Costs

Question 17

A quantity discount is a price reduction given to those who buy a large volume of the manufacturer's products.

Accepted Answer

A) True 
 B)False

Question 18

Trying to maximize market share a firm would be best served to use a market-skimming pricing strategy.

Accepted Answer

A) True 
 B)False

Question 19

A(n) ________ is a price reduction to buyers who pay their bills promptly.

Accepted Answer

A)  discount 
B)  functional discount 
C)  quantity discount 
D)  seasonal allowance 
E)  allowance 
A)  discount 
B)  functional discount 
C)  quantity discount 
D)  seasonal allowance 
E)  allowance

Question 20

Predatory pricing selling below cost with the intention of destroying competition is legal under certain conditions.

Accepted Answer

A) True 
 B)False

Exam 14: Developing Pricing Strategies and Programs

The key to effectively using perceived-value pricing is to always to deliver the same or equal value as your competitors.

How was Apple able to gain market leadership for the iPod with a starting price much higher than its competition's?

________ costs amounts differ greatly depending upon the level of production.

Companies sometimes initiate price cuts in a drive to dominate the market through lower costs. A price-cutting strategy involves possible traps. One of these "traps" is

A firm first decides where it wants to position its market offering. A company can pursue any of five major objectives through pricing. Which of the following objectives is a major one if a company is plagued with overcapacity, intense competition, or changing consumer wants?

Executives often complain that pricing is a big headache. One of the common mistakes made are: Price is not revised often enough to capitalize on market changes; price is set ________ of the rest of the marketing program rather than an intrinsic element of a marketing-positioning strategy.

The most elementary pricing method is to add a standard ________ to the product's cost.

In recent years, companies have adopted ________ where they try to win loyal customers by charging a fairly low price for a high-quality offering.

Your local retailer has instituted an EDLP pricing program for his stores. What would one of the reasons be for the retailer to adopt an EDLP pricing policy?

Most companies will ________ their list price and give discounts and allowances for early payments, volume purchases, and off-season buying.

Promoting a product a sale price with reference to an inflated regular price, also known as a False Ordinary Selling Price is a perfectly legal practice in Canada.

Companies that employ ________ offer discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires.

Purchase decisions are based on how consumers perceive prices and what they consider to be the ________ price not the marketer's stated price.

The concept of the lowest ________ means that a seller can charge a higher price if they can convince the customers that price is only a small part of the total cost of obtaining, operating, and servicing the product over its lifetime.

A firm has to consider many factors in setting its pricing policy. We list these as a six-step process. Which of the following steps could involve maximum market share?

________ sets a ceiling on the price the company can charge for its products.

A quantity discount is a price reduction given to those who buy a large volume of the manufacturer's products.

Trying to maximize market share a firm would be best served to use a market-skimming pricing strategy.

A(n) ________ is a price reduction to buyers who pay their bills promptly.

Predatory pricing selling below cost with the intention of destroying competition is legal under certain conditions.

Defining Marketing for the 21st Century

Developing Marketing Strategies and Plans

Collecting Information and Forecasting Demand

Conducting Marketing Research

Creating Long term Loyalty Relationships

Analyzing Consumer Markets

Analyzing Business Markets

Identifying Market Segments and Targets

Creating Brand Equity

Crafting the Brand Position

Competitive Dynamics

Setting Product Strategy

Designing and Managing Services

Designing and Managing Integrated Marketing Channels

Managing Retailing, Wholesaling, and Logistics

Designing and Managing Integrated Marketing Communications

Managing Mass Communications: Advertising, Sales Promotions, Events and Experiences, and Public Relations

Managing Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling

Introducing New Marketing Offerings

Tapping into Global Markets

Managing a Holistic Marketing Organization

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