Question 1

Which of the following is defined as the quantity of a product that will be sold at various prices for a specified period?

Accepted Answer

A) market share 
B) demand 
C) supply 
D) revenue 
A) market share 
B) demand 
C) supply 
D) revenue B

Question 2

When price decreases and total revenue falls,how can demand be described?

Accepted Answer

A) as elastic 
B) as inelastic 
C) as unitary 
D) as stable 
A) as elastic 
B) as inelastic 
C) as unitary 
D) as stable B

Question 3

As a product moves through its life cycle,the demand for the product and the competitive conditions tend to change.For each stage in the product life cycle,discuss pricing strategies appropriate for that stage.

Accepted Answer

Introduction: Generally,prices are set high in the introduction stage to recover developmental costs.However,pricing strategies followed in this stage depend on elasticity of demand.If demand is inelastic,a high introductory price is warranted.If demand is elastic and consumers are price-sensitive,the price should be set at the market level or lower.
Growth: Price may stabilize at this level as competitors enter the marketplace.Price may fall somewhat as economies of scale allow lower costs to be passed on to the consumer in the form of lower prices.
Maturity: This stage brings on further price declines as competition increases and inefficient,high-cost firms are eliminated.Remaining competitors typically offer similar prices.Price increases are cost initiated rather than demand initiated.
Decline: In the final stage of the product life cycle,prices may decline even further as the few remaining competitors attempt to salvage the last vestiges of demand.If only one firm is left in the market,prices will stabilize or even rise as the product becomes a specialty good.

Question 4

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following measures the overall effectiveness of management in generating profits with its available assets?

Accepted Answer

A) return on investment 
B) economic order quantity 
C) target-on-sales 
D) retained earnings 
A) return on investment 
B) economic order quantity 
C) target-on-sales 
D) retained earnings

Question 6

In the mid-1990s,Continental Airlines in the United States chose to compete head-on with Southwest Airlines by launching Continental Lite,an alternative low-fare commercial airline passenger operation.Top executives at Continental had expected its no-frills operation to break even within a year of its inception,but the airline fell short of the goal.A source close to the company explained it by saying,"Its costs were too high,and its revenues were too low." Some observers criticized Continental's marketing efforts.When the no-frills service was first launched,it lacked a distinct name or identity,missing its chance to make a splash.Then Continental tried to sell three "brands" at once-Lite,a new premium service,and its more traditional long-haul domestic flights.As one rival expressed it,"You cannot be all things to all people."
-Refer to Continental Lite.Continental Lite's pricing objectives were based on gaining as much market share as possible from Southwest Airlines.This suggests that Continental Lite had which type of pricing objectives?

Accepted Answer

A) sales oriented 
B) profit oriented 
C) cost oriented 
D) status quo 
A) sales oriented 
B) profit oriented 
C) cost oriented 
D) status quo

Question 7

Distribution strategies become a less important factor during the maturity stage of a product's life cycle.

Accepted Answer

A) True 
 B)False

Question 8

Which type of strategy is being followed by marketing managers who attempt to raise the quality image of their product by selling it at high prices?

Accepted Answer

A) profit maximization 
B) market share 
C) maintained markup pricing 
D) prestige pricing 
A) profit maximization 
B) market share 
C) maintained markup pricing 
D) prestige pricing

Question 9

Name two advantages and two disadvantages associated with the use of break-even analysis.

Accepted Answer

Advantages of using break-even analysis

Question 10

If a company's pricing objective is to meet the competition or to maintain existing prices,which type of pricing is it using?

Accepted Answer

A) head-on 
B) target return on investment 
C) status quo 
D) market share 
A) head-on 
B) target return on investment 
C) status quo 
D) market share

Question 11

Vortex oxygen water is a product that is in the introductory stage of its product life cycle.If the manufacturer of Vortex is typical,its pricing strategy will consider the elasticity of demand for oxygenated water.

Accepted Answer

A) True 
 B)False

Question 12

Customers who suffer a poverty of time and have a strong need for convenience are taken advantage of by ATMs because of which of these?

Accepted Answer

A) elasticity of demand 
B) inelastic demand schedule 
C) unitary supply and demand 
D) supply characteristics 
A) elasticity of demand 
B) inelastic demand schedule 
C) unitary supply and demand 
D) supply characteristics

Question 13

How does price interact with the other three Ps of the marketing mix?

Accepted Answer

Product: The product life cycle stage an

Question 14

A firm has maximized its profits when its marginal revenue equals its marginal cost.

Accepted Answer

A) True 
 B)False

Question 15

Besides a given fixed cost,what does the typical break-even model assume?

Accepted Answer

A) variable per unit cost 
B) constant inventory turnover 
C) constant production schedule 
D) constant average variable cost 
A) variable per unit cost 
B) constant inventory turnover 
C) constant production schedule 
D) constant average variable cost

Question 16

Jon P.Farmer is the founder of Kolopua Hawaii LLC,a company that markets Pure Hawaiian Air.Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii.When a tourist shop began selling Pure Hawaiian Air,it charged $5 per bottle and could not keep up with the demand.It has since raised the price to $7.Now the shop is still selling all the bottles of Pure Hawaiian Air it carries,but the owner is not forced to reorder on a daily basis.What is the $7 price likely to be?

Accepted Answer

A) a supply schedule 
B) a symmetrical price 
C) a price equilibrium 
D) an inventory equalizer 
A) a supply schedule 
B) a symmetrical price 
C) a price equilibrium 
D) an inventory equalizer

Question 17

Imagine you're planning an after-symphony fundraising party,and you need a life-size grand piano cake.Or,you are a developer proposing a new shopping centre to a group of investors,and you want to serve a cake shaped like an architectural rendition of the centre.Is this impossible? No,you just need to contact Cecilia Villaveces Cakes.She actually built a life-size grand piano for a major gala.You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations,depending on complexity of design and size.She uses only the best ingredients,and no two cakes are ever quite alike.
-Refer to Specialty Cakes.To set the price of her cakes,Cecilia simply doubles her costs,which often include several hours of labour and expensive raw materials.What is this method of price setting called?

Accepted Answer

A) mark-on pricing 
B) premium pricing 
C) keystoning 
D) add-on pricing 
A) mark-on pricing 
B) premium pricing 
C) keystoning 
D) add-on pricing

Question 18

Which of the following use complex mathematical software to profitably fill unused capacity?

Accepted Answer

A) yield management systems 
B) capacity correlation systems 
C) service forecasting systems 
D) service management systems 
A) yield management systems 
B) capacity correlation systems 
C) service forecasting systems 
D) service management systems

Question 19

The price of the good or service is a key decision for a marketer because it most significantly and directly affects which of the following?

Accepted Answer

A) the product's distribution 
B) the product's demand 
C) the product's promotion 
D) the product's quality 
A) the product's distribution 
B) the product's demand 
C) the product's promotion 
D) the product's quality

Question 20

Monthly output at Leisure-Time,Inc.changed from 12 to 13 prefabricated gazebos,and the total costs changed from $9,000 to $10,500.What is the marginal cost for this company?

Accepted Answer

A) $1,500 
B) $2,000 
C) $10,000 
D) $12,000 
A) $1,500 
B) $2,000 
C) $10,000 
D) $12,000

Which of the following is defined as the quantity of a product that will be sold at various prices for a specified period?

When price decreases and total revenue falls,how can demand be described?

As a product moves through its life cycle,the demand for the product and the competitive conditions tend to change.For each stage in the product life cycle,discuss pricing strategies appropriate for that stage.

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

Which of the following measures the overall effectiveness of management in generating profits with its available assets?

Distribution strategies become a less important factor during the maturity stage of a product's life cycle.

Which type of strategy is being followed by marketing managers who attempt to raise the quality image of their product by selling it at high prices?

Name two advantages and two disadvantages associated with the use of break-even analysis.

If a company's pricing objective is to meet the competition or to maintain existing prices,which type of pricing is it using?

Vortex oxygen water is a product that is in the introductory stage of its product life cycle.If the manufacturer of Vortex is typical,its pricing strategy will consider the elasticity of demand for oxygenated water.

Customers who suffer a poverty of time and have a strong need for convenience are taken advantage of by ATMs because of which of these?

How does price interact with the other three Ps of the marketing mix?

A firm has maximized its profits when its marginal revenue equals its marginal cost.

Besides a given fixed cost,what does the typical break-even model assume?

Which of the following use complex mathematical software to profitably fill unused capacity?

The price of the good or service is a key decision for a marketer because it most significantly and directly affects which of the following?

Monthly output at Leisure-Time,Inc.changed from 12 to 13 prefabricated gazebos,and the total costs changed from $9,000 to $10,500.What is the marginal cost for this company?

An Overview of Marketing

The Marketing Environment, social Responsibility, and Ethics

Strategic Planning for Competitive Advantage

Decision Support Systems and Marketing Research

Consumer Decision Making

Business Marketing

Segmenting, targeting, and Positioning

Customer Relationship Management CRM

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels and Supply Chain Management

Retailing

Integrated Marketing Communication

Advertising, public Relations, and Direct Response

Social Media and Marketing

Sales Promotion and Personal Selling

Setting the Right Price

Developing a Global Vision

Filters

Exam 18: Pricing Concepts

Which of the following is defined as the quantity of a product that will be sold at various prices for a specified period?

When price decreases and total revenue falls,how can demand be described?

As a product moves through its life cycle,the demand for the product and the competitive conditions tend to change.For each stage in the product life cycle,discuss pricing strategies appropriate for that stage.

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

Which of the following measures the overall effectiveness of management in generating profits with its available assets?

Distribution strategies become a less important factor during the maturity stage of a product's life cycle.

Which type of strategy is being followed by marketing managers who attempt to raise the quality image of their product by selling it at high prices?

Name two advantages and two disadvantages associated with the use of break-even analysis.

If a company's pricing objective is to meet the competition or to maintain existing prices,which type of pricing is it using?

Vortex oxygen water is a product that is in the introductory stage of its product life cycle.If the manufacturer of Vortex is typical,its pricing strategy will consider the elasticity of demand for oxygenated water.

Customers who suffer a poverty of time and have a strong need for convenience are taken advantage of by ATMs because of which of these?

How does price interact with the other three Ps of the marketing mix?

A firm has maximized its profits when its marginal revenue equals its marginal cost.

Besides a given fixed cost,what does the typical break-even model assume?

Which of the following use complex mathematical software to profitably fill unused capacity?

The price of the good or service is a key decision for a marketer because it most significantly and directly affects which of the following?

Monthly output at Leisure-Time,Inc.changed from 12 to 13 prefabricated gazebos,and the total costs changed from $9,000 to $10,500.What is the marginal cost for this company?

An Overview of Marketing

The Marketing Environment, social Responsibility, and Ethics

Strategic Planning for Competitive Advantage

Decision Support Systems and Marketing Research

Consumer Decision Making

Business Marketing

Segmenting, targeting, and Positioning

Customer Relationship Management CRM

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels and Supply Chain Management

Retailing

Integrated Marketing Communication

Advertising, public Relations, and Direct Response

Social Media and Marketing

Sales Promotion and Personal Selling

Setting the Right Price

Developing a Global Vision

Filters