Question 1

If Pacific Power and Light increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be

Accepted Answer

A) elastic. 
B) minimal. 
C) minor elasticity. 
D) variable. 
E) inelastic. 
A) elastic. 
B) minimal. 
C) minor elasticity. 
D) variable. 
E) inelastic.

Question 2

Gallants Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Gallant would break even at ____ units.

Accepted Answer

A) 1,167 
B) 1,000 
C) 1,750 
D) 2,500 
E) 700 
A) 1,167 
B) 1,000 
C) 1,750 
D) 2,500 
E) 700

Question 3

Pricing decisions can be based on determining whether the demand for a product is price elastic or price inelastic.

Accepted Answer

A) True 
 B)False

Question 4

Maintaining or increasing market share

Accepted Answer

A) can be achieved even if industry sales are flat or decreasing. 
B) is an infrequently used pricing objective in most industries. 
C) depends on the overall growth of the total industry. 
D) is a profit-related objective based on price. 
E) is directly tied to leading an industry in product quality. 
A) can be achieved even if industry sales are flat or decreasing. 
B) is an infrequently used pricing objective in most industries. 
C) depends on the overall growth of the total industry. 
D) is a profit-related objective based on price. 
E) is directly tied to leading an industry in product quality.

Question 5

HP sells some of its color printers for about $100, but the refill cartridges cost over $30 each. HP's pricing strategy would be best labeled as

Accepted Answer

A) reference pricing. 
B) captive pricing. 
C) customary pricing. 
D) price lining. 
E) complementary pricing. 
A) reference pricing. 
B) captive pricing. 
C) customary pricing. 
D) price lining. 
E) complementary pricing.

Question 6

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

Accepted Answer

A) True 
 B)False

Question 7

Kohl's pays $16.50 for a six-ounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately ____ % for this product.

Accepted Answer

A) 64 
B) 36 
C) 18 
D) 57 
E) 45 
A) 64 
B) 36 
C) 18 
D) 57 
E) 45

Question 8

Describe the six steps of the process that marketers can use to establish prices.

Accepted Answer

Before a product's price can be set, an

Question 9

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true about the evaluation of competitors' prices?

Accepted Answer

A) This is done in stage three of the price-setting process. 
B) This is done in stage four of the price-setting process. 
C) This is done in stage five of the price-setting process. 
D) This is done in stage six of the price-setting process. 
E) This is done in stage two of the price-setting process. 
A) This is done in stage three of the price-setting process. 
B) This is done in stage four of the price-setting process. 
C) This is done in stage five of the price-setting process. 
D) This is done in stage six of the price-setting process. 
E) This is done in stage two of the price-setting process.

Question 11

Scenario 12.2
Use the following to answer the questions.
Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands.
-Refer to Scenario 12.2. If Ray-Ban selected the prices for its new sunglasses to be $59.99 or $79.99, this would most likely be an example of using ____ pricing in order to increase sales of the new line.

Accepted Answer

A) product-line 
B) odd-number 
C) customary 
D) promotional 
E) penetration 
A) product-line 
B) odd-number 
C) customary 
D) promotional 
E) penetration

Question 12

Competition-based pricing is important if competing products are almost homogeneous or if price is the key variable in the marketing strategy.

Accepted Answer

A) True 
 B)False

Question 13

Frito-Lay introduced its Stax brand of potato chips to compete directly against Pringles. The intent was to gain market share quickly. During the first few months they were on the market, Stax retailed for 69 cents. What type of pricing strategy was Frito-Lay likely using?

Accepted Answer

A) Price skimming 
B) Captive pricing 
C) Periodic discounting 
D) Penetration pricing 
E) Reference pricing 
A) Price skimming 
B) Captive pricing 
C) Periodic discounting 
D) Penetration pricing 
E) Reference pricing

Question 14

Amtrak is considering two pricing strategies for its service. One is to price its train tickets so that it is less expensive to travel on weekends than during the week when there is heavy business travel, which illustrates ____ pricing. The second is to price its train tickets so that the further away the travel date, the greater the discount, which is best described as ___.

Accepted Answer

A) demand-based; secondary market pricing 
B) demand-based; differential pricing 
C) demand-based; periodic discounting 
D) cost-plus; secondary markup 
E) cost-plus; periodic discounting 
A) demand-based; secondary market pricing 
B) demand-based; differential pricing 
C) demand-based; periodic discounting 
D) cost-plus; secondary markup 
E) cost-plus; periodic discounting

Question 15

Timothy is developing a business plan for a new type of bicycle helmet. He is interested in finding the point at which the costs of producing the helmet will equal the revenue earned from selling the product. Timothy is interested in finding the

Accepted Answer

A) elasticity of demand. 
B) breakeven point. 
C) variable costs. 
D) price elasticity. 
E) sum of fixed costs. 
A) elasticity of demand. 
B) breakeven point. 
C) variable costs. 
D) price elasticity. 
E) sum of fixed costs.

Question 16

Which of the following pricing strategies often results in a retailer losing money on the product?

Accepted Answer

A) Price leader 
B) Psychological discounting 
C) Penetration pricing 
D) Special-event pricing 
E) Ethical pricing 
A) Price leader 
B) Psychological discounting 
C) Penetration pricing 
D) Special-event pricing 
E) Ethical pricing

Question 17

Blake is trying to come up with a pricing strategy for his store. He greatly admires Walmart and is considering adopting an everyday low price strategy. However, he is concerned because he believes that consumers might then view his products as being of low quality. At what stage of the process is Blake currently at as he is trying to establish prices?

Accepted Answer

A) Step 1: Development of pricing objectives 
B) Step 2: Assessment of the target market's evaluation of price 
C) Step 3: Assessment of competitor's prices 
D) Step 4: Selection of a basis for pricing 
E) Step 5: Determination of a specific price 
A) Step 1: Development of pricing objectives 
B) Step 2: Assessment of the target market's evaluation of price 
C) Step 3: Assessment of competitor's prices 
D) Step 4: Selection of a basis for pricing 
E) Step 5: Determination of a specific price

Question 18

Target has worked closely with suppliers such as Calphalon to offer customers a high-quality, branded product that is only available in Target stores. Due to these partnerships, Target has established a high level of perceived _______ among their customers since they provide a large range of brand-name merchandise at reasonable or below-competition prices.

Accepted Answer

A) value 
B) demand 
C) supply 
D) competitive differentiation 
A) value 
B) demand 
C) supply 
D) competitive differentiation

Question 19

A product is a price leader when

Accepted Answer

A) it is sold at the highest price. 
B) its price maximizes profits. 
C) an increase or decrease in price leads to increased revenue or lower costs. 
D) it is sold at less than cost in the hope that sales of other products will increase. 
E) its price leads the industry in sales. 
A) it is sold at the highest price. 
B) its price maximizes profits. 
C) an increase or decrease in price leads to increased revenue or lower costs. 
D) it is sold at less than cost in the hope that sales of other products will increase. 
E) its price leads the industry in sales.

Question 20

The importance of price depends on the type of product, the type of target market, and the purchase situation.

Accepted Answer

A) True 
 B)False

If Pacific Power and Light increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be

Gallants Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Gallant would break even at ____ units.

Pricing decisions can be based on determining whether the demand for a product is price elastic or price inelastic.

Maintaining or increasing market share

HP sells some of its color printers for about $100, but the refill cartridges cost over $30 each. HP's pricing strategy would be best labeled as

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

Kohl's pays $16.50 for a six-ounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately ____ % for this product.

Describe the six steps of the process that marketers can use to establish prices.

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

Which of the following is true about the evaluation of competitors' prices?

Competition-based pricing is important if competing products are almost homogeneous or if price is the key variable in the marketing strategy.

Frito-Lay introduced its Stax brand of potato chips to compete directly against Pringles. The intent was to gain market share quickly. During the first few months they were on the market, Stax retailed for 69 cents. What type of pricing strategy was Frito-Lay likely using?

Timothy is developing a business plan for a new type of bicycle helmet. He is interested in finding the point at which the costs of producing the helmet will equal the revenue earned from selling the product. Timothy is interested in finding the

Which of the following pricing strategies often results in a retailer losing money on the product?

A product is a price leader when

The importance of price depends on the type of product, the type of target market, and the purchase situation.

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Market Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packaging Concepts

Developing and Managing Goods and Services

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Filters

Exam 12: Pricing Concepts and Management

If Pacific Power and Light increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be

Gallants Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Gallant would break even at ____ units.

Pricing decisions can be based on determining whether the demand for a product is price elastic or price inelastic.

Maintaining or increasing market share

HP sells some of its color printers for about $100, but the refill cartridges cost over $30 each. HP's pricing strategy would be best labeled as

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

Kohl's pays $16.50 for a six-ounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately ____ % for this product.

Describe the six steps of the process that marketers can use to establish prices.

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

Which of the following is true about the evaluation of competitors' prices?

Competition-based pricing is important if competing products are almost homogeneous or if price is the key variable in the marketing strategy.

Frito-Lay introduced its Stax brand of potato chips to compete directly against Pringles. The intent was to gain market share quickly. During the first few months they were on the market, Stax retailed for 69 cents. What type of pricing strategy was Frito-Lay likely using?

Timothy is developing a business plan for a new type of bicycle helmet. He is interested in finding the point at which the costs of producing the helmet will equal the revenue earned from selling the product. Timothy is interested in finding the

Which of the following pricing strategies often results in a retailer losing money on the product?

A product is a price leader when

The importance of price depends on the type of product, the type of target market, and the purchase situation.

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Market Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packaging Concepts

Developing and Managing Goods and Services

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Filters