Question 1

Under oligopolistic competition ________.

Accepted Answer

A)  the market consists of a single dominant seller 
B)  the market consists of numerous small sellers 
C)  the market consists of many buyers and sellers who trade over a range of prices rather than a single market price 
D)  sellers are typically unresponsive to competitors' pricing strategies and marketing moves 
E)  the market consists of only a few large sellers 
A)  the market consists of a single dominant seller 
B)  the market consists of numerous small sellers 
C)  the market consists of many buyers and sellers who trade over a range of prices rather than a single market price 
D)  sellers are typically unresponsive to competitors' pricing strategies and marketing moves 
E)  the market consists of only a few large sellers

Question 2

What is usually the first step in cost-based pricing?

Accepted Answer

A)  testing the product concept with potential customers 
B)  determining the marketing mix strategy 
C)  setting a price that covers costs plus a target profit 
D)  designing a good product 
E)  adding up the costs of making the product 
A)  testing the product concept with potential customers 
B)  determining the marketing mix strategy 
C)  setting a price that covers costs plus a target profit 
D)  designing a good product 
E)  adding up the costs of making the product

Question 3

While lower prices may attract additional customers, it is possible for pricing strategies to result in the product becoming a commodity in the customers' eyes.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is an external factor that affects pricing decisions in a company?

Accepted Answer

A)  the company's overall marketing strategy 
B)  the nature of the market 
C)  the organizational objectives of the company 
D)  elements of the company's marketing mix 
E)  the annual advertising budget of rival firms 
A)  the company's overall marketing strategy 
B)  the nature of the market 
C)  the organizational objectives of the company 
D)  elements of the company's marketing mix 
E)  the annual advertising budget of rival firms

Question 5

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

Accepted Answer

A)  $15 
B)  $25 
C)  $30 
D)  $50 
E)  $75 
A)  $15 
B)  $25 
C)  $30 
D)  $50 
E)  $75

Question 6

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

Accepted Answer

A)  demand curve 
B)  supply curve 
C)  learning curve 
D)  break-even pricing 
E)  target costing 
A)  demand curve 
B)  supply curve 
C)  learning curve 
D)  break-even pricing 
E)  target costing

Question 7

Markup pricing is used when a firm tries to determine the price at which it will break even or make the target return it is seeking.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an internal factor that affects pricing decisions in a company?

Accepted Answer

A)  the nature of the market 
B)  the degree of inflation in the economy 
C)  the overall marketing strategy of the company 
D)  the forces of demand and supply in the market 
E)  consumers' perception of value 
A)  the nature of the market 
B)  the degree of inflation in the economy 
C)  the overall marketing strategy of the company 
D)  the forces of demand and supply in the market 
E)  consumers' perception of value

Question 9

A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will ________ because ________.

Accepted Answer

A)  decrease; the plant becomes more efficient 
B)  stay the same; the plant becomes more efficient 
C)  decrease; the plant becomes inefficient 
D)  increase; the plant becomes more efficient 
E)  increase; the plant becomes inefficient 
A)  decrease; the plant becomes more efficient 
B)  stay the same; the plant becomes more efficient 
C)  decrease; the plant becomes inefficient 
D)  increase; the plant becomes more efficient 
E)  increase; the plant becomes inefficient

Question 10

Underpriced products ________.

Accepted Answer

A)  produce less revenue than they would if they were priced at the level of perceived value 
B)  sell poorly in the global marketplace 
C)  produce more revenue than they would if they were priced at the level of perceived value 
D)  mostly offer higher value than those with a high markup price 
E)  are characterized by rapidly declining demand 
A)  produce less revenue than they would if they were priced at the level of perceived value 
B)  sell poorly in the global marketplace 
C)  produce more revenue than they would if they were priced at the level of perceived value 
D)  mostly offer higher value than those with a high markup price 
E)  are characterized by rapidly declining demand

Question 11

Explain the significance of a downward-sloping experience curve.

Accepted Answer

If a downward-sloping experience curve e

Question 12

What is a demand curve? Explain its importance in the context of pricing decisions.

Accepted Answer

A demand curve shows the number of units

Question 13

Refer to the scenario below to answer the following question(s).
Alden Manufacturing produces small kitchen appliances-blenders, hand mixers, and electric skillets-under the brand name First Generation. Alden attempts to target newlyweds and first-time home buyers with this brand.
Considering that most young households have limited financial resources, Alden attempts to engage in target costing. "In doing this," says Milt Alden, the co-founder of Alden Electronics, "we have better control over keeping price right in line with customers."
Alden manufactures a three-speed blender, its top seller, along with a five-speed blender. The hand mixers are manufactured in two variants-a small handheld mixer with two rotating beaters and another that comes with an optional stand and an attached mixing bowl. Alden's temperature-controlled skillets are manufactured in a single style with three color options.
"Our product offerings are narrower," Milt Alden added, "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low.
-Milt Alden uses which of the following strategies for pricing his products?

Accepted Answer

A)  basing company price on competitors' prices 
B)  using everyday low pricing 
C)  initiating an aggressive promotional campaign 
D)  starting with customer-value considerations 
E)  focusing on overall fixed costs of manufacturing 
A)  basing company price on competitors' prices 
B)  using everyday low pricing 
C)  initiating an aggressive promotional campaign 
D)  starting with customer-value considerations 
E)  focusing on overall fixed costs of manufacturing

Question 14

Average cost tends to increase with accumulated production experience.

Accepted Answer

A) True 
 B)False

Question 15

What is good-value pricing?

Accepted Answer

Good-value pricing refers to o

Question 16

In a pure monopoly, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

Accepted Answer

A) True 
 B)False

Question 17

Using value-based pricing, a marketer would not design a product and marketing program before setting the price.

Accepted Answer

A) True 
 B)False

Question 18

"Beyond the market and the economy, the company must consider several other factors in its external environment when setting prices." Explain this statement.

Accepted Answer

Beyond the market and the economy, the c

Question 19

Companies with lower costs ________.

Accepted Answer

A)  specialize in selling products with value-added features 
B)  usually market products with inferior quality, thereby justifying the low selling price 
C)  can set lower prices that result in smaller margins but greater sales and profits 
D)  tend to overprice products owing to their monopolistic advantage 
E)  usually set higher prices that result in higher margins 
A)  specialize in selling products with value-added features 
B)  usually market products with inferior quality, thereby justifying the low selling price 
C)  can set lower prices that result in smaller margins but greater sales and profits 
D)  tend to overprice products owing to their monopolistic advantage 
E)  usually set higher prices that result in higher margins

Question 20

In 2011, the fixed costs of a company were $500,000, and its variable costs equaled $150,000. In 2010, the company made an annual profit of $200,000. It has been predicted that, despite a steady growth, the company's variable costs will likely equal $300,000 by 2013. The total costs of the company in 2011 were ________.

Accepted Answer

A)  $350,000 
B)  $450,000 
C)  $650,000 
D)  $800,000 
E)  $950,000 
A)  $350,000 
B)  $450,000 
C)  $650,000 
D)  $800,000 
E)  $950,000

Under oligopolistic competition ________.

What is usually the first step in cost-based pricing?

While lower prices may attract additional customers, it is possible for pricing strategies to result in the product becoming a commodity in the customers' eyes.

Which of the following is an external factor that affects pricing decisions in a company?

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

Markup pricing is used when a firm tries to determine the price at which it will break even or make the target return it is seeking.

Which of the following is an internal factor that affects pricing decisions in a company?

A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will because .

Underpriced products ________.

Explain the significance of a downward-sloping experience curve.

What is a demand curve? Explain its importance in the context of pricing decisions.

Average cost tends to increase with accumulated production experience.

What is good-value pricing?

In a pure monopoly, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

Using value-based pricing, a marketer would not design a product and marketing program before setting the price.

"Beyond the market and the economy, the company must consider several other factors in its external environment when setting prices." Explain this statement.

Companies with lower costs ________.

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters

Exam 10: Pricing: Understanding and Capturing Customer Value

Under oligopolistic competition ________.

What is usually the first step in cost-based pricing?

While lower prices may attract additional customers, it is possible for pricing strategies to result in the product becoming a commodity in the customers' eyes.

Which of the following is an external factor that affects pricing decisions in a company?

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

Markup pricing is used when a firm tries to determine the price at which it will break even or make the target return it is seeking.

Which of the following is an internal factor that affects pricing decisions in a company?

A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will ________ because ________.

Underpriced products ________.

Explain the significance of a downward-sloping experience curve.

What is a demand curve? Explain its importance in the context of pricing decisions.

Average cost tends to increase with accumulated production experience.

What is good-value pricing?

In a pure monopoly, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

Using value-based pricing, a marketer would not design a product and marketing program before setting the price.

"Beyond the market and the economy, the company must consider several other factors in its external environment when setting prices." Explain this statement.

Companies with lower costs ________.

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters

A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will because .