Question 1

The goal of _____ is to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price.

Accepted Answer

A)  price skimming 
B)  odd pricing 
C)  penetration pricing 
D)  first-mover pricing 
E)  market acceptance pricing 
A)  price skimming 
B)  odd pricing 
C)  penetration pricing 
D)  first-mover pricing 
E)  market acceptance pricing C

Question 2

Which of the following IS NOT a situation that can cause customers to be less sensitive to price increases?

Accepted Answer

A)  when customers have few product choices 
B)  when products are highly differentiated 
C)  when the product is a real or a perceived necessity 
D)  when the total expenditure is high 
E)  when the product is considered to be "worth it" 
A)  when customers have few product choices 
B)  when products are highly differentiated 
C)  when the product is a real or a perceived necessity 
D)  when the total expenditure is high 
E)  when the product is considered to be "worth it" D

Question 3

Why are firms so obsessed with the pricing element of the marketing mix?

Accepted Answer

A)  because pricing is the most difficult element of the marketing mix to change 
B)  because the firm's pricing has a direct bearing on its ability to increase revenue 
C)  because pricing is the only marketing element that matters to customers 
D)  because pricing is the best part of the marketing mix in which to make an educated guess about the most appropriate strategy 
E)  because pricing is directly responsible for demand 
A)  because pricing is the most difficult element of the marketing mix to change 
B)  because the firm's pricing has a direct bearing on its ability to increase revenue 
C)  because pricing is the only marketing element that matters to customers 
D)  because pricing is the best part of the marketing mix in which to make an educated guess about the most appropriate strategy 
E)  because pricing is directly responsible for demand B

Question 4

In many (if not most) circumstances, cutting prices to increase sales volume is not a good idea. Explain why this is so. What are some alternatives that are preferable to cutting prices?

Accepted Answer

All marketers understand the relationshi

Question 5

Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firm's cost structure, they should never be the driving force behind pricing strategy. Why?

Accepted Answer

A)  because firms want to make a profit, not just break even 
B)  because customer expectations are far more important in setting prices 
C)  because prices should be based on demand, not costs 
D)  because different firms have different cost structures 
E)  because competitor's prices are far more important in setting prices 
A)  because firms want to make a profit, not just break even 
B)  because customer expectations are far more important in setting prices 
C)  because prices should be based on demand, not costs 
D)  because different firms have different cost structures 
E)  because competitor's prices are far more important in setting prices

Question 6

Which of the following IS NOT a situation when buyers will have increased power over sellers in a market?

Accepted Answer

A)  when there are a large number of sellers in the market 
B)  when there are many substitutes for the product 
C)  when product demand is high 
D)  when the economy is weak 
E)  when product supply is plentiful 
A)  when there are a large number of sellers in the market 
B)  when there are many substitutes for the product 
C)  when product demand is high 
D)  when the economy is weak 
E)  when product supply is plentiful

Question 7

Identify and discuss reasons why firms become so infatuated with pricing.

Accepted Answer

There is no other component of the marke

Question 8

Explain how competition and industry structure are related to pricing strategy. In your answer, identify the four basic competitive market structures and how pricing differs across each one.

Accepted Answer

The competitive market structure of the

Question 9

Retailers use _____ extensively. This occurs when the retailer compares sale prices to regular prices, such as when Best Buy promotes a DVD player as "Regularly $99, Now $49."

Accepted Answer

A)  reference pricing 
B)  EDLP 
C)  odd pricing 
D)  value-based pricing 
E)  sale pricing 
A)  reference pricing 
B)  EDLP 
C)  odd pricing 
D)  value-based pricing 
E)  sale pricing

Question 10

In a price negotiation, the number that each side will use to distinguish between a successful and an unsuccessful negotiation is called the:

Accepted Answer

A)  concession 
B)  opening position 
C)  aspiration price 
D)  limit 
E)  breakeven position 
A)  concession 
B)  opening position 
C)  aspiration price 
D)  limit 
E)  breakeven position

Question 11

The Fairmont Hotel is widely known for its exceptional quality and impeccable customer service. Not surprisingly, the Fairmont sets prices at the top end of all competing hotels. Which pricing strategy is the Fairmont using?

Accepted Answer

A)  exclusive pricing 
B)  image pricing 
C)  psychological pricing 
D)  prestige pricing 
E)  service-based pricing 
A)  exclusive pricing 
B)  image pricing 
C)  psychological pricing 
D)  prestige pricing 
E)  service-based pricing

Question 12

What is the basic difference between the seller's and the buyer's perspectives on pricing?

Accepted Answer

A)  Buyers see pricing as negotiable; sellers do not. 
B)  Buyers are very concerned about price elasticity; sellers are not. 
C)  Sellers tend to inflate prices; buyers tend to see prices as being lower. 
D)  Buyers are quite concerned about competitors' prices; sellers are not. 
E)  Buyers tend to inflate prices; sellers tend to see prices as being lower. 
A)  Buyers see pricing as negotiable; sellers do not. 
B)  Buyers are very concerned about price elasticity; sellers are not. 
C)  Sellers tend to inflate prices; buyers tend to see prices as being lower. 
D)  Buyers are quite concerned about competitors' prices; sellers are not. 
E)  Buyers tend to inflate prices; sellers tend to see prices as being lower.

Question 13

Rather than cutting prices to generate sales, most firms would be better off adjusting their marketing strategy to:

Accepted Answer

A)  build value into the product and justify the current price or even a price increase. 
B)  decrease the supply of the product to keep prices high. 
C)  heavily promote the product to stimulate sales. 
D)  move toward an exclusive distribution strategy to increase the product's image. 
E)  increase the availability of the product so more customers can purchase it. 
A)  build value into the product and justify the current price or even a price increase. 
B)  decrease the supply of the product to keep prices high. 
C)  heavily promote the product to stimulate sales. 
D)  move toward an exclusive distribution strategy to increase the product's image. 
E)  increase the availability of the product so more customers can purchase it.

Question 14

Which of the following pricing practices is widely used in business markets but not in consumer markets?

Accepted Answer

A)  geographic pricing 
B)  reference pricing 
C)  EDLP 
D)  price lining 
E)  value-based pricing 
A)  geographic pricing 
B)  reference pricing 
C)  EDLP 
D)  price lining 
E)  value-based pricing

Question 15

Price elasticity is defined as:

Accepted Answer

A)  a situation where prices routinely move up and down in a short period of time. 
B)  customers' responsiveness or sensitivity to changes in price. 
C)  the impact on a product's demand when customers are in unique buying situations. 
D)  the relative ease with which prices can be changed. 
E)  price flexibility-a pricing strategy used by startup firms. 
A)  a situation where prices routinely move up and down in a short period of time. 
B)  customers' responsiveness or sensitivity to changes in price. 
C)  the impact on a product's demand when customers are in unique buying situations. 
D)  the relative ease with which prices can be changed. 
E)  price flexibility-a pricing strategy used by startup firms.

Question 16

From the buyer's perspective, two key issues determine pricing strategy for most firms: perceived value and:

Accepted Answer

A)  competitors' prices. 
B)  the firm's cost structure. 
C)  market demand. 
D)  economic conditions. 
E)  price sensitivity. 
A)  competitors' prices. 
B)  the firm's cost structure. 
C)  market demand. 
D)  economic conditions. 
E)  price sensitivity.

Question 17

The inherent goal of product differentiation is to make the demand curve for a product more inelastic. This happens because increased differentiation:

Accepted Answer

A)  reduces the number of perceived substitutes for a product. 
B)  makes the product more expensive than its competitors. 
C)  increases the quality of the product making it worth the expense. 
D)  reduces the time and effort required to obtain the product. 
E)  increases the just noticeable differences among competing products. 
A)  reduces the number of perceived substitutes for a product. 
B)  makes the product more expensive than its competitors. 
C)  increases the quality of the product making it worth the expense. 
D)  reduces the time and effort required to obtain the product. 
E)  increases the just noticeable differences among competing products.

Question 18

Discuss the process of negotiated pricing. Be sure to explain the goals and process from both sides of the negotiation.

Accepted Answer

Although generally new to consumer marke

Question 19

Discuss the challenges associated with pricing services. How do service firms use yield management systems to balance price with revenue and maximize capacity utilization?

Accepted Answer

When it comes to buying services, custom

Question 20

While following a competitor's lead in pricing is acceptable, there can be no signaling of prices to a competitor. This illegal practice, called _____, occurs when two or more competitors collaborate in setting prices.

Accepted Answer

A)  indirect pricing 
B)  reference pricing 
C)  collaborative pricing 
D)  price fixing 
E)  price signaling 
A)  indirect pricing 
B)  reference pricing 
C)  collaborative pricing 
D)  price fixing 
E)  price signaling

The goal of _____ is to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price.

Which of the following IS NOT a situation that can cause customers to be less sensitive to price increases?

Why are firms so obsessed with the pricing element of the marketing mix?

In many (if not most) circumstances, cutting prices to increase sales volume is not a good idea. Explain why this is so. What are some alternatives that are preferable to cutting prices?

Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firm's cost structure, they should never be the driving force behind pricing strategy. Why?

Which of the following IS NOT a situation when buyers will have increased power over sellers in a market?

Identify and discuss reasons why firms become so infatuated with pricing.

Explain how competition and industry structure are related to pricing strategy. In your answer, identify the four basic competitive market structures and how pricing differs across each one.

Retailers use _____ extensively. This occurs when the retailer compares sale prices to regular prices, such as when Best Buy promotes a DVD player as "Regularly $99, Now $49."

In a price negotiation, the number that each side will use to distinguish between a successful and an unsuccessful negotiation is called the:

The Fairmont Hotel is widely known for its exceptional quality and impeccable customer service. Not surprisingly, the Fairmont sets prices at the top end of all competing hotels. Which pricing strategy is the Fairmont using?

What is the basic difference between the seller's and the buyer's perspectives on pricing?

Rather than cutting prices to generate sales, most firms would be better off adjusting their marketing strategy to:

Which of the following pricing practices is widely used in business markets but not in consumer markets?

Price elasticity is defined as:

From the buyer's perspective, two key issues determine pricing strategy for most firms: perceived value and:

The inherent goal of product differentiation is to make the demand curve for a product more inelastic. This happens because increased differentiation:

Discuss the process of negotiated pricing. Be sure to explain the goals and process from both sides of the negotiation.

Discuss the challenges associated with pricing services. How do service firms use yield management systems to balance price with revenue and maximize capacity utilization?

While following a competitor's lead in pricing is acceptable, there can be no signaling of prices to a competitor. This illegal practice, called _____, occurs when two or more competitors collaborate in setting prices.

Marketing in Todays Economy

Strategic Marketing Planning

Marketing Ethics and Social Responsibility in Strategic Planning

Collecting and Analyzing Marketing Information

Developing Competitive Advantage and Strategic Focus

Customers, Segmentation, and Target Marketing

Product Strategy

Distribution and Supply Chain Management

Integrated Marketing Communications

Marketing Implementation and Control

Developing and Maintaining Long Term Customer Relationships

Filters

Exam 8: Pricing Strategy

The goal of _____ is to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price.

Which of the following IS NOT a situation that can cause customers to be less sensitive to price increases?

Why are firms so obsessed with the pricing element of the marketing mix?

In many (if not most) circumstances, cutting prices to increase sales volume is not a good idea. Explain why this is so. What are some alternatives that are preferable to cutting prices?

Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firm's cost structure, they should never be the driving force behind pricing strategy. Why?

Which of the following IS NOT a situation when buyers will have increased power over sellers in a market?

Identify and discuss reasons why firms become so infatuated with pricing.

Explain how competition and industry structure are related to pricing strategy. In your answer, identify the four basic competitive market structures and how pricing differs across each one.

Retailers use _____ extensively. This occurs when the retailer compares sale prices to regular prices, such as when Best Buy promotes a DVD player as "Regularly $99, Now $49."

In a price negotiation, the number that each side will use to distinguish between a successful and an unsuccessful negotiation is called the:

The Fairmont Hotel is widely known for its exceptional quality and impeccable customer service. Not surprisingly, the Fairmont sets prices at the top end of all competing hotels. Which pricing strategy is the Fairmont using?

What is the basic difference between the seller's and the buyer's perspectives on pricing?

Rather than cutting prices to generate sales, most firms would be better off adjusting their marketing strategy to:

Which of the following pricing practices is widely used in business markets but not in consumer markets?

Price elasticity is defined as:

From the buyer's perspective, two key issues determine pricing strategy for most firms: perceived value and:

The inherent goal of product differentiation is to make the demand curve for a product more inelastic. This happens because increased differentiation:

Discuss the process of negotiated pricing. Be sure to explain the goals and process from both sides of the negotiation.

Discuss the challenges associated with pricing services. How do service firms use yield management systems to balance price with revenue and maximize capacity utilization?

While following a competitor's lead in pricing is acceptable, there can be no signaling of prices to a competitor. This illegal practice, called _____, occurs when two or more competitors collaborate in setting prices.

Marketing in Todays Economy

Strategic Marketing Planning

Marketing Ethics and Social Responsibility in Strategic Planning

Collecting and Analyzing Marketing Information

Developing Competitive Advantage and Strategic Focus

Customers, Segmentation, and Target Marketing

Product Strategy

Distribution and Supply Chain Management

Integrated Marketing Communications

Marketing Implementation and Control

Developing and Maintaining Long Term Customer Relationships

Filters