Question 1

Seasonal discounts provide price incentives to customers during peak selling seasons.

Accepted Answer

A) True 
 B)False

Question 2

Price competition is a very flexible marketing strategy.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a method used to determine transfer prices?

Accepted Answer

A) Discounted standard cost 
B) Actual full cost 
C) Standard full cost 
D) Cost plus investment 
E) Market-based cost 
A) Discounted standard cost 
B) Actual full cost 
C) Standard full cost 
D) Cost plus investment 
E) Market-based cost

Question 4

Duds and Suds is a bar with a country and western atmosphere. In addition to the bar, Duds and Suds has a gift shop that sells western clothing with its logo. Norman is the owner of the business and has recently enacted temporary price reductions through clearance sales, discounts, and nightly drink specials. What is Norman most likely trying to do?

Accepted Answer

A) raise cash quickly. 
B) decrease costs. 
C) increase profitability. 
D) run off the competition. 
E) create a value image. 
A) raise cash quickly. 
B) decrease costs. 
C) increase profitability. 
D) run off the competition. 
E) create a value image.

Question 5

Marketers have more difficulty adjusting their prices than they do any other marketing mix variable.

Accepted Answer

A) True 
 B)False

Question 6

Electricity is an example of a product that is price elastic.

Accepted Answer

A) True 
 B)False

Question 7

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

Accepted Answer

A) The quantity demanded would immediately fall. 
B) The quantity demanded would always increase. 
C) Above some price level, the quantity demanded would begin to decrease. 
D) The demand curve for the product would always shift to the right. 
E) The demand curve for the product would always shift to the left. 
A) The quantity demanded would immediately fall. 
B) The quantity demanded would always increase. 
C) Above some price level, the quantity demanded would begin to decrease. 
D) The demand curve for the product would always shift to the right. 
E) The demand curve for the product would always shift to the left.

Question 8

What equation shows organizations the relationship between price and profit?

Accepted Answer

A) Total Variable Costs + Total Fixed Costs = Sales - Profit 
B) Price = Profit per Item × Number of Units Sold 
C) (Price × Quantity Sold) - Total Costs = Profits 
D) (Price - Profits) × Total Costs = Sales 
E) Total Costs = (Price × Quantity Sold) - Profits 
A) Total Variable Costs + Total Fixed Costs = Sales - Profit 
B) Price = Profit per Item × Number of Units Sold 
C) (Price × Quantity Sold) - Total Costs = Profits 
D) (Price - Profits) × Total Costs = Sales 
E) Total Costs = (Price × Quantity Sold) - Profits

Question 9

Which of the following is not a discount provided to business customers?

Accepted Answer

A) Trade 
B) Cumulative 
C) Cash 
D) Seasonal 
E) Differentiated 
A) Trade 
B) Cumulative 
C) Cash 
D) Seasonal 
E) Differentiated

Question 10

When Cadillac buys headlights from Delco (both of which are divisions of General Motors), ____ pricing occurs.

Accepted Answer

A) base-point 
B) zone 
C) transfer 
D) uniform geographic 
E) matrix 
A) base-point 
B) zone 
C) transfer 
D) uniform geographic 
E) matrix

Question 11

A price developed in the consumer's mind through experience with the product is called a(n)

Accepted Answer

A) external reference price. 
B) value-price guideline. 
C) frame of reference. 
D) internalized price. 
E) internal reference price. 
A) external reference price. 
B) value-price guideline. 
C) frame of reference. 
D) internalized price. 
E) internal reference price.

Question 12

Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted.

Accepted Answer

A) True 
 B)False

Question 13

Scenario 20.2
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 20.2. BASF is considering the problem of actual distance in delivering its product from the plant in Germany to some of its customers in China. Which pricing strategy would help overcome this problem?

Accepted Answer

A) Geographic 
B) Transfer 
C) Commercial 
D) Transit 
E) Factory 
A) Geographic 
B) Transfer 
C) Commercial 
D) Transit 
E) Factory

Question 14

Total costs are influenced by quantities sold.

Accepted Answer

A) True 
 B)False

Question 15

If fixed costs = $6,000, selling price = $10, and variable costs per unit = $5, what is the breakeven point in units and in dollar sales volume?

Accepted Answer

The answer of If fixed costs = $6,000, selling price...

Question 16

A seller can change prices quickly in a price-competition situation.

Accepted Answer

A) True 
 B)False

Question 17

Lucy buys a new dress at T.J. Maxx that has a price tag with "Compare at $150.00. Our Price $89.99." This is an example of the use of

Accepted Answer

A) internal referencing. 
B) cumulative discounts. 
C) seasonal discounts. 
D) base-point pricing. 
E) an external reference price. 
A) internal referencing. 
B) cumulative discounts. 
C) seasonal discounts. 
D) base-point pricing. 
E) an external reference price.

Question 18

The perception of price depends on a

Accepted Answer

A) product's actual price and consumers' expectations regarding price. 
B) consumer's analysis of competitive prices. 
C) consumer's reference price. 
D) consumer's expectation of price. 
E) product's actual price in comparison with the manufacturer's suggested price. 
A) product's actual price and consumers' expectations regarding price. 
B) consumer's analysis of competitive prices. 
C) consumer's reference price. 
D) consumer's expectation of price. 
E) product's actual price in comparison with the manufacturer's suggested price.

Question 19

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 20

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

Accepted Answer

The answer of What are reference prices and how do...

Seasonal discounts provide price incentives to customers during peak selling seasons.

Price competition is a very flexible marketing strategy.

Which of the following is not a method used to determine transfer prices?

Marketers have more difficulty adjusting their prices than they do any other marketing mix variable.

Electricity is an example of a product that is price elastic.

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

What equation shows organizations the relationship between price and profit?

Which of the following is not a discount provided to business customers?

When Cadillac buys headlights from Delco (both of which are divisions of General Motors), ____ pricing occurs.

A price developed in the consumer's mind through experience with the product is called a(n)

Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted.

Total costs are influenced by quantities sold.

If fixed costs = $6,000, selling price = $10, and variable costs per unit = $5, what is the breakeven point in units and in dollar sales volume?

A seller can change prices quickly in a price-competition situation.

Lucy buys a new dress at T.J. Maxx that has a price tag with "Compare at $150.00. Our Price $89.99." This is an example of the use of

The perception of price depends on a

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

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

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

Developing and Managing Products

Services Marketing

Branding and Packaging

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 20: Pricing Concepts

Seasonal discounts provide price incentives to customers during peak selling seasons.

Price competition is a very flexible marketing strategy.

Which of the following is not a method used to determine transfer prices?

Marketers have more difficulty adjusting their prices than they do any other marketing mix variable.

Electricity is an example of a product that is price elastic.

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

What equation shows organizations the relationship between price and profit?

Which of the following is not a discount provided to business customers?

When Cadillac buys headlights from Delco (both of which are divisions of General Motors), ____ pricing occurs.

A price developed in the consumer's mind through experience with the product is called a(n)

Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted.

Total costs are influenced by quantities sold.

If fixed costs = $6,000, selling price = $10, and variable costs per unit = $5, what is the breakeven point in units and in dollar sales volume?

A seller can change prices quickly in a price-competition situation.

Lucy buys a new dress at T.J. Maxx that has a price tag with "Compare at $150.00. Our Price $89.99." This is an example of the use of

The perception of price depends on a

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

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

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

Developing and Managing Products

Services Marketing

Branding and Packaging

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