Question 1

Value is only implicitly considered in customer-oriented strategies.

Accepted Answer

A) True 
 B)False

Question 2

Explain what motivates firms to enter price wars.

Accepted Answer

New entrants might want to gain market s

Question 3

A newly opened supermarket offers vegetables at reduced prices so as to attract customers.The idea behind lowering the prices is that the customers who visit the supermarket to purchase these vegetables at lower costs are more likely to purchase other items offered in the supermarket.This pricing tactic is an example of:

Accepted Answer

A) price fixing. 
B) price bundling. 
C) price lining. 
D) leader pricing. 
E) listing allowance. 
A) price fixing. 
B) price bundling. 
C) price lining. 
D) leader pricing. 
E) listing allowance.

Question 4

Books Inc.is an online seller of books.It ships its books to different parts of the world.When it delivers its shipments, it charges customers based on the zone in which they are located.This is an example of:

Accepted Answer

A) price bundling. 
B) geographic pricing. 
C) an allowance. 
D) leader pricing. 
E) premium pricing. 
A) price bundling. 
B) geographic pricing. 
C) an allowance. 
D) leader pricing. 
E) premium pricing.

Question 5

Megan was an assistant manager in a firm when she had bought a Hyundai Accent L hatchback.After she was promoted to the position of a senior manager with a big pay raise, she bought a Volvo S80.This is an example of the:

Accepted Answer

A) substitution effect. 
B) pricing effect. 
C) supply effect. 
D) demand effect. 
E) income effect. 
A) substitution effect. 
B) pricing effect. 
C) supply effect. 
D) demand effect. 
E) income effect.

Question 6

When determining its pricing strategy, if a firm is willing to let profits suffer in order to increase its customer base, the company objective is most likely to be:

Accepted Answer

A) sales oriented. 
B) customer oriented. 
C) profit oriented. 
D) cost oriented. 
E) quality oriented. 
A) sales oriented. 
B) customer oriented. 
C) profit oriented. 
D) cost oriented. 
E) quality oriented.

Question 7

A situation in the market that occurs when two or more firms compete primarily by lowering their prices is referred to as:

Accepted Answer

A) pure competition. 
B) vertical price fixing. 
C) horizontal price fixing. 
D) price negotiation. 
E) price war. 
A) pure competition. 
B) vertical price fixing. 
C) horizontal price fixing. 
D) price negotiation. 
E) price war.

Question 8

A method for setting prices that determines the total expense of possessing a product over its useful life is called the:

Accepted Answer

A) improvement value method. 
B) supply-based method. 
C) demand-based method. 
D) premium pricing method. 
E) cost of ownership method. 
A) improvement value method. 
B) supply-based method. 
C) demand-based method. 
D) premium pricing method. 
E) cost of ownership method.

Question 9

A company sells shoes at a price somewhere between the regular, nonsale price and the deep-discount sale prices that its competitors may offer.This is an example of:

Accepted Answer

A) everyday low pricing. 
B) external reference pricing. 
C) high/low pricing. 
D) price skimming. 
E) odd pricing. 
A) everyday low pricing. 
B) external reference pricing. 
C) high/low pricing. 
D) price skimming. 
E) odd pricing.

Question 10

A supermarket offers a 1-litre milk carton, a 2-litre milk carton, and a 3-litre milk jug at $3.50, $6.25, and $9.00, respectively.Thus, the larger the quantity bought, the lower the cost.This is an example of a:

Accepted Answer

A) rebate. 
B) size discount. 
C) markdown. 
D) coupon. 
E) quality discount. 
A) rebate. 
B) size discount. 
C) markdown. 
D) coupon. 
E) quality discount.

Question 11

What is implemented by firms that focus on the rate at which their profits are generated relative to their investments rather than the absolute level of profits?

Accepted Answer

A) Maximizing profits strategy 
B) Target return pricing strategy 
C) Value-based strategy 
D) Competitive parity strategy 
E) Target profit pricing strategy 
A) Maximizing profits strategy 
B) Target return pricing strategy 
C) Value-based strategy 
D) Competitive parity strategy 
E) Target profit pricing strategy

Question 12

Which of the following is reflective of oligopolistic competition?

Accepted Answer

A) A large number of companies sell silver in a market where the price of silver is determined by demand and supply. 
B) Ramsons is the sole supplier of military binoculars in the market. 
C) Hundreds of firms make wristwatches, and the market is highly differentiated. 
D) Pure Diamonds Inc.controls the diamond market as it is the only supplier of diamonds. 
E) A price war occurs between Comfort Airlines and Air Secure, the only two airlines in the market. 
A) A large number of companies sell silver in a market where the price of silver is determined by demand and supply. 
B) Ramsons is the sole supplier of military binoculars in the market. 
C) Hundreds of firms make wristwatches, and the market is highly differentiated. 
D) Pure Diamonds Inc.controls the diamond market as it is the only supplier of diamonds. 
E) A price war occurs between Comfort Airlines and Air Secure, the only two airlines in the market.

Question 13

Leader pricing is an illegal attempt to increase store traffic by pricing a regularly purchased item much higher than the store's cost.

Accepted Answer

A) True 
 B)False

Question 14

A company selling air conditioners finds that sales begin to decrease at the end of summer.The company then reduces the price of air conditioners to get rid of the slow-moving merchandise.This is an example of a:

Accepted Answer

A) rebate. 
B) size discount. 
C) markdown. 
D) coupon. 
E) quantity discount. 
A) rebate. 
B) size discount. 
C) markdown. 
D) coupon. 
E) quantity discount.

Question 15

The fall in the price of coffee in the market led to a fall in the demand for tea.In this context, coffee and tea are examples of:

Accepted Answer

A) substitute products. 
B) complementary products. 
C) luxury products. 
D) convenience products. 
E) standard products. 
A) substitute products. 
B) complementary products. 
C) luxury products. 
D) convenience products. 
E) standard products.

Question 16

Generally, a pricing tactic represents a long-term response to a competitive threat.

Accepted Answer

A) True 
 B)False

Question 17

The followings are critical components of pricing strategies EXCEPT:

Accepted Answer

A) Promotions 
B) Objectives 
C) Competitions 
D) Costs 
E) Customers 
A) Promotions 
B) Objectives 
C) Competitions 
D) Costs 
E) Customers

Question 18

Predatory pricing, although representative of a form of unfair competition, promotes free trade.

Accepted Answer

A) True 
 B)False

Question 19

Purple Corp., a retailer selling air conditioners, aims to sell 5,000 air conditioners in a year.If Purple reaches this target, the manufacturer will offer a discount on every air conditioner bought by the retailer during that year.This is an example of a(n):

Accepted Answer

A) seasonal discount. 
B) quantity discount. 
C) odd price. 
D) price bundling. 
E) markdown. 
A) seasonal discount. 
B) quantity discount. 
C) odd price. 
D) price bundling. 
E) markdown.

Question 20

Which of the following is NOT true about pricing?

Accepted Answer

A) It is the only element of marketing mix that generate revenue 
B) Implementing a good pricing strategy is challenging but can last effective for a very long time. 
C) Price is broader than the money customers pay to purchase a product. 
D) Price is one of the most important factors in customer purchase decisions 
E) Pricing decisions should be viewed as opportunity to create value for customers. 
A) It is the only element of marketing mix that generate revenue 
B) Implementing a good pricing strategy is challenging but can last effective for a very long time. 
C) Price is broader than the money customers pay to purchase a product. 
D) Price is one of the most important factors in customer purchase decisions 
E) Pricing decisions should be viewed as opportunity to create value for customers.

Value is only implicitly considered in customer-oriented strategies.

Explain what motivates firms to enter price wars.

Books Inc.is an online seller of books.It ships its books to different parts of the world.When it delivers its shipments, it charges customers based on the zone in which they are located.This is an example of:

Megan was an assistant manager in a firm when she had bought a Hyundai Accent L hatchback.After she was promoted to the position of a senior manager with a big pay raise, she bought a Volvo S80.This is an example of the:

When determining its pricing strategy, if a firm is willing to let profits suffer in order to increase its customer base, the company objective is most likely to be:

A situation in the market that occurs when two or more firms compete primarily by lowering their prices is referred to as:

A method for setting prices that determines the total expense of possessing a product over its useful life is called the:

A company sells shoes at a price somewhere between the regular, nonsale price and the deep-discount sale prices that its competitors may offer.This is an example of:

A supermarket offers a 1-litre milk carton, a 2-litre milk carton, and a 3-litre milk jug at $3.50, $6.25, and $9.00, respectively.Thus, the larger the quantity bought, the lower the cost.This is an example of a:

What is implemented by firms that focus on the rate at which their profits are generated relative to their investments rather than the absolute level of profits?

Which of the following is reflective of oligopolistic competition?

Leader pricing is an illegal attempt to increase store traffic by pricing a regularly purchased item much higher than the store's cost.

A company selling air conditioners finds that sales begin to decrease at the end of summer.The company then reduces the price of air conditioners to get rid of the slow-moving merchandise.This is an example of a:

The fall in the price of coffee in the market led to a fall in the demand for tea.In this context, coffee and tea are examples of:

Generally, a pricing tactic represents a long-term response to a competitive threat.

The followings are critical components of pricing strategies EXCEPT:

Predatory pricing, although representative of a form of unfair competition, promotes free trade.

Purple Corp., a retailer selling air conditioners, aims to sell 5,000 air conditioners in a year.If Purple reaches this target, the manufacturer will offer a discount on every air conditioner bought by the retailer during that year.This is an example of a(n):

Which of the following is NOT true about pricing?

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Analyzing the Marketing Environment

Consumer Behaviour

Business-To-Business Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Developing New Products

Product, Branding, and Packaging Decisions

Services: The Intangible Product

Distribution Channels

Retailing and Omni-Channel Marketing

Integrated Marketing Communications

Advertising, Sales Promotions, and Personal Selling

Social and Mobile Marketing

Global Marketing

Ethics and Socially Responsible Marketing

Filters

Exam 11: Pricing Concepts and Strategies: Establishing Value

Value is only implicitly considered in customer-oriented strategies.

Explain what motivates firms to enter price wars.

Books Inc.is an online seller of books.It ships its books to different parts of the world.When it delivers its shipments, it charges customers based on the zone in which they are located.This is an example of:

Megan was an assistant manager in a firm when she had bought a Hyundai Accent L hatchback.After she was promoted to the position of a senior manager with a big pay raise, she bought a Volvo S80.This is an example of the:

When determining its pricing strategy, if a firm is willing to let profits suffer in order to increase its customer base, the company objective is most likely to be:

A situation in the market that occurs when two or more firms compete primarily by lowering their prices is referred to as:

A method for setting prices that determines the total expense of possessing a product over its useful life is called the:

A company sells shoes at a price somewhere between the regular, nonsale price and the deep-discount sale prices that its competitors may offer.This is an example of:

A supermarket offers a 1-litre milk carton, a 2-litre milk carton, and a 3-litre milk jug at $3.50, $6.25, and $9.00, respectively.Thus, the larger the quantity bought, the lower the cost.This is an example of a:

What is implemented by firms that focus on the rate at which their profits are generated relative to their investments rather than the absolute level of profits?

Which of the following is reflective of oligopolistic competition?

Leader pricing is an illegal attempt to increase store traffic by pricing a regularly purchased item much higher than the store's cost.

A company selling air conditioners finds that sales begin to decrease at the end of summer.The company then reduces the price of air conditioners to get rid of the slow-moving merchandise.This is an example of a:

The fall in the price of coffee in the market led to a fall in the demand for tea.In this context, coffee and tea are examples of:

Generally, a pricing tactic represents a long-term response to a competitive threat.

The followings are critical components of pricing strategies EXCEPT:

Predatory pricing, although representative of a form of unfair competition, promotes free trade.

Purple Corp., a retailer selling air conditioners, aims to sell 5,000 air conditioners in a year.If Purple reaches this target, the manufacturer will offer a discount on every air conditioner bought by the retailer during that year.This is an example of a(n):

Which of the following is NOT true about pricing?

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Analyzing the Marketing Environment

Consumer Behaviour

Business-To-Business Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Developing New Products

Product, Branding, and Packaging Decisions

Services: The Intangible Product

Distribution Channels

Retailing and Omni-Channel Marketing

Integrated Marketing Communications

Advertising, Sales Promotions, and Personal Selling

Social and Mobile Marketing

Global Marketing

Ethics and Socially Responsible Marketing

Filters