Question 1

What is high-low pricing?

Accepted Answer

High-low pricing involves char

Question 2

Price is important to managers ________.

Accepted Answer

A)  because prices cannot be changed quickly, so must be correctly determined 
B)  because a small percentage improvement in price can generate a large percentage increase in profitability 
C)  but other marketing mix elements create customer value and build relationships 
D)  but product features can be changed more quickly 
E)  but has little impact on a firm's market share 
A)  because prices cannot be changed quickly, so must be correctly determined 
B)  because a small percentage improvement in price can generate a large percentage increase in profitability 
C)  but other marketing mix elements create customer value and build relationships 
D)  but product features can be changed more quickly 
E)  but has little impact on a firm's market share

Question 3

Elmo Inc., a global conglomerate, designed the ElBrush, an electric toothbrush. Sensing market demand for the electric toothbrush, Elmo started with an ideal selling price of $13 based on customer value considerations and then targeted costs to ensure that the price was met. This exemplifies ________.

Accepted Answer

A)  competition-based pricing 
B)  cost-plus pricing 
C)  target costing 
D)  everyday low pricing 
E)  high-low pricing 
A)  competition-based pricing 
B)  cost-plus pricing 
C)  target costing 
D)  everyday low pricing 
E)  high-low pricing

Question 4

Which of the following is true with regard to value-added pricing?

Accepted Answer

A)  Companies that practice value-added pricing typically match the competition by cutting prices. 
B)  Companies practicing value-added pricing differentiate their offers by attaching value-added features to offerings that, in turn, justify higher prices. 
C)  The intrinsic value of products sold by companies practicing value-added pricing is far less than their actual selling price. 
D)  Companies practicing value-added pricing primarily rely on cost differentiation. 
E)  Value-added pricing is the most suitable pricing strategy in pure monopolies. 
A)  Companies that practice value-added pricing typically match the competition by cutting prices. 
B)  Companies practicing value-added pricing differentiate their offers by attaching value-added features to offerings that, in turn, justify higher prices. 
C)  The intrinsic value of products sold by companies practicing value-added pricing is far less than their actual selling price. 
D)  Companies practicing value-added pricing primarily rely on cost differentiation. 
E)  Value-added pricing is the most suitable pricing strategy in pure monopolies.

Question 5

Break-even volume is the number of unit sales required for total revenue to cover total cost.

Accepted Answer

A) True 
 B)False

Question 6

DivetheBlue, a company marketing deep-sea diving equipment, charges very high prices for its products. Despite the availability of many low-priced products in the market, customers seem to prefer DivetheBlue, which has earned a reputation for selling high-quality products. This exemplifies ________.

Accepted Answer

A)  a pure monopoly 
B)  an oligopoly 
C)  a nonprice position 
D)  break-even pricing 
E)  target costing 
A)  a pure monopoly 
B)  an oligopoly 
C)  a nonprice position 
D)  break-even pricing 
E)  target costing

Question 7

As production moves up, the average cost per unit decreases because ________.

Accepted Answer

A)  variable costs decrease 
B)  of increasing diseconomies of scale 
C)  fixed costs are spread over more units 
D)  overhead costs decrease 
E)  revenue increases 
A)  variable costs decrease 
B)  of increasing diseconomies of scale 
C)  fixed costs are spread over more units 
D)  overhead costs decrease 
E)  revenue increases

Question 8

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

Accepted Answer

A)  20,000 
B)  25,000 
C)  30,000 
D)  35,000 
E)  40,000 
A)  20,000 
B)  25,000 
C)  30,000 
D)  35,000 
E)  40,000

Question 9

If a company faces competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices.

Accepted Answer

A) True 
 B)False

Question 10

If demand hardly changes with a small change in price, the demand is ________.

Accepted Answer

A)  variable 
B)  inelastic 
C)  highly elastic 
D)  derived 
E)  negative 
A)  variable 
B)  inelastic 
C)  highly elastic 
D)  derived 
E)  negative

Question 11

Which of the following is true of value-based pricing?

Accepted Answer

A)  The targeted value and price drive decisions about what costs can be incurred and the resulting product design. 
B)  Value-based pricing is mostly product driven. 
C)  Value-based pricing involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for its effort and risk. 
D)  The marketer usually designs a product and marketing program and then sets the price. 
E)  A company using value-based pricing designs what it considers to be a good product, adds up the costs of making the product, and sets a price that covers costs plus a target profit. 
A)  The targeted value and price drive decisions about what costs can be incurred and the resulting product design. 
B)  Value-based pricing is mostly product driven. 
C)  Value-based pricing involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for its effort and risk. 
D)  The marketer usually designs a product and marketing program and then sets the price. 
E)  A company using value-based pricing designs what it considers to be a good product, adds up the costs of making the product, and sets a price that covers costs plus a target profit.

Question 12

Why is markup pricing most likely popular?

Accepted Answer

A)  Sellers are more certain about demand than about costs. 
B)  Markup pricing tends to maximize market competition. 
C)  Markup pricing affords buyers greater bargaining power. 
D)  Sellers do not need to make frequent adjustments as demand changes. 
E)  Markup pricing is designed to set prices to break even on the costs of making and marketing a product. 
A)  Sellers are more certain about demand than about costs. 
B)  Markup pricing tends to maximize market competition. 
C)  Markup pricing affords buyers greater bargaining power. 
D)  Sellers do not need to make frequent adjustments as demand changes. 
E)  Markup pricing is designed to set prices to break even on the costs of making and marketing a product.

Question 13

Cost-plus pricing ________.

Accepted Answer

A)  is a complex pricing method 
B)  involves pricing that accurately reflects production costs 
C)  involves adding a standard markup for profit 
D)  aims at breaking even on the costs of making and marketing a product 
E)  is a value-based pricing method 
A)  is a complex pricing method 
B)  involves pricing that accurately reflects production costs 
C)  involves adding a standard markup for profit 
D)  aims at breaking even on the costs of making and marketing a product 
E)  is a value-based pricing method

Question 14

A company must pay each month's bills for rent, heat, interest, and executive salaries regardless of the company's level of output. This exemplifies its ________ costs.

Accepted Answer

A)  overhead 
B)  variable 
C)  target 
D)  total 
E)  unit 
A)  overhead 
B)  variable 
C)  target 
D)  total 
E)  unit

Question 15

Which of the following is true of a pure competitive market?

Accepted Answer

A)  A single seller has a major effect on the current and future market price. 
B)  Companies spend significantly on marketing research and product development. 
C)  The advertising budget of companies is usually huge. 
D)  Sellers try to develop differentiated offers for different customer segments. 
E)  Sellers spend little time on marketing strategy. 
A)  A single seller has a major effect on the current and future market price. 
B)  Companies spend significantly on marketing research and product development. 
C)  The advertising budget of companies is usually huge. 
D)  Sellers try to develop differentiated offers for different customer segments. 
E)  Sellers spend little time on marketing strategy.

Question 16

Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?

Accepted Answer

A)  target return pricing 
B)  good-value pricing 
C)  competitor value-added pricing 
D)  market-based pricing 
E)  competition-based pricing 
A)  target return pricing 
B)  good-value pricing 
C)  competitor value-added pricing 
D)  market-based pricing 
E)  competition-based pricing

Question 17

________ refers to the amount of money charged for a product or service.

Accepted Answer

A)  Value 
B)  Cost 
C)  Price 
D)  Wage 
E)  Salary 
A)  Value 
B)  Cost 
C)  Price 
D)  Wage 
E)  Salary

Question 18

In customer value-based pricing, price is considered along with all other marketing mix variables before the marketing program is set.

Accepted Answer

A) True 
 B)False

Question 19

The break-even volume is the point at which ________.

Accepted Answer

A)  the total revenue and total cost curves intersect 
B)  demand equals supply 
C)  the production of one more unit will not lead to increase in demand 
D)  the company can pay off all its long-term debt 
E)  a firm exceeds the sales forecast 
A)  the total revenue and total cost curves intersect 
B)  demand equals supply 
C)  the production of one more unit will not lead to increase in demand 
D)  the company can pay off all its long-term debt 
E)  a firm exceeds the sales forecast

Question 20

Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________ pricing.

Accepted Answer

A)  competition-based 
B)  everyday low 
C)  cost-plus 
D)  break-even 
E)  penetration 
A)  competition-based 
B)  everyday low 
C)  cost-plus 
D)  break-even 
E)  penetration

What is high-low pricing?

Price is important to managers ________.

Which of the following is true with regard to value-added pricing?

Break-even volume is the number of unit sales required for total revenue to cover total cost.

DivetheBlue, a company marketing deep-sea diving equipment, charges very high prices for its products. Despite the availability of many low-priced products in the market, customers seem to prefer DivetheBlue, which has earned a reputation for selling high-quality products. This exemplifies ________.

As production moves up, the average cost per unit decreases because ________.

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

If a company faces competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices.

If demand hardly changes with a small change in price, the demand is ________.

Which of the following is true of value-based pricing?

Why is markup pricing most likely popular?

Cost-plus pricing ________.

A company must pay each month's bills for rent, heat, interest, and executive salaries regardless of the company's level of output. This exemplifies its ________ costs.

Which of the following is true of a pure competitive market?

Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?

________ refers to the amount of money charged for a product or service.

In customer value-based pricing, price is considered along with all other marketing mix variables before the marketing program is set.

The break-even volume is the point at which ________.

Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________ pricing.

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

What is high-low pricing?

Price is important to managers ________.

Which of the following is true with regard to value-added pricing?

Break-even volume is the number of unit sales required for total revenue to cover total cost.

As production moves up, the average cost per unit decreases because ________.

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

If a company faces competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices.

If demand hardly changes with a small change in price, the demand is ________.

Which of the following is true of value-based pricing?

Why is markup pricing most likely popular?

Cost-plus pricing ________.

A company must pay each month's bills for rent, heat, interest, and executive salaries regardless of the company's level of output. This exemplifies its ________ costs.

Which of the following is true of a pure competitive market?

Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?

________ refers to the amount of money charged for a product or service.

In customer value-based pricing, price is considered along with all other marketing mix variables before the marketing program is set.

The break-even volume is the point at which ________.

Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________ pricing.

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