Question 1

The stockturn rate is

Accepted Answer

A) the firm's ability to meet its short-term financial obligations. 
B) the number of days that credit sales remains in receivables. 
C) the number of times the average inventory is sold in a year. 
D) the difference between net sales and cost of goods sold. 
E) the ratio of sales to inventory. 
A) the firm's ability to meet its short-term financial obligations. 
B) the number of days that credit sales remains in receivables. 
C) the number of times the average inventory is sold in a year. 
D) the difference between net sales and cost of goods sold. 
E) the ratio of sales to inventory.

Question 2

Online auctions (on the Internet)are becoming very popular as a way to determine how much customers are willing to pay for a product.

Accepted Answer

A) True 
 B)False

Question 3

Some retailers commonly use prices that end in certain numbers.They seem to assume that their customers see prices with these numbers as substantially lower.This is

Accepted Answer

A) odd-even pricing. 
B) demand-backward pricing. 
C) leader pricing. 
D) prestige pricing. 
E) psychological pricing. 
A) odd-even pricing. 
B) demand-backward pricing. 
C) leader pricing. 
D) prestige pricing. 
E) psychological pricing.

Question 4

Which of the following statements concerning reference prices is FALSE?

Accepted Answer

A) A reference price is the price consumers expect to pay for an item. 
B) Retailers sometimes want consumers to use the manufacturer's list price as the reference price even though their actual retail selling price is lower. 
C) Different customers may have different reference prices for the same type of purchase. 
D) Leader pricing is normally used with products for which consumers do not have a specific reference price. 
A) A reference price is the price consumers expect to pay for an item. 
B) Retailers sometimes want consumers to use the manufacturer's list price as the reference price even though their actual retail selling price is lower. 
C) Different customers may have different reference prices for the same type of purchase. 
D) Leader pricing is normally used with products for which consumers do not have a specific reference price.

Question 5

Use this information for questions that refer to the Sporting Products,Inc.(SPI)case. Randy Todd,marketing manager for Sporting Products,Inc.(SPI),is thinking about how changes taking place among retailers in his channel might impact his strategy.
SPI sells the products it produces through wholesalers and retailers.For example,SPI sells basketballs to Wholesale Supply for $8.00.Wholesale Supply uses a 20 percent markup,and most of its "sport shop" retailer customers,like Robinson's Sporting Goods,use a 33 percent markup to arrive at the price they charge final consumers.However,one fast-growing retail chain,Sports Depot,uses only a 20 percent markup for basketballs,even though it pays Wholesale Supply the same price as other retailers.Furthermore,Sports Depot occasionally lowers the price of basketballs and sells them at cost,to draw customers into its stores and stimulate sales of its pricey basketball shoes.
Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products.For example,Sports Depot prices all its baseball gloves at $20,$40,or $60-with no prices in between.There are three big bins,one for each price point.
Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out.The basic idea is to sell tennis balls in large quantities to nonprofit groups,who resell the balls to raise money.For example,a service organization at a local college bought 2,000 tennis balls printed with the college logo.Sports Depot charged $.50 each for the tennis balls,plus a $500 one-time charge for the stamp to print the logo.The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless.
Randy is not certain if Sports Depot's ideas will affect SPI's plans.For example,SPI is considering adding tennis racquets to the lines it produces.This would require a $500,000 addition to its factory,as well as the purchase of new equipment that costs $1,000,000.The variable cost to produce a tennis racquet would be $20,but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each.That would allow most retailers to add their normal markup and make a profit.However,Sports Depot may sells the racquet at a lower than normal price.
When Sports Depot temporarily lowers the price of basketballs,it is using

Accepted Answer

A) bait pricing. 
B) leader pricing. 
C) value in use pricing. 
D) psychological pricing. 
E) prestige pricing. 
A) bait pricing. 
B) leader pricing. 
C) value in use pricing. 
D) psychological pricing. 
E) prestige pricing.

Question 6

An item costs a retailer $140.If a 30 percent markup is desired,what should the retail selling price be?

Accepted Answer

A) $191.00 
B) $242.00 
C) $182.00 
D) $140.30 
E) $200.00 
A) $191.00 
B) $242.00 
C) $182.00 
D) $140.30 
E) $200.00

Question 7

According to the text,markup (percent)means percentage of cost unless otherwise stated.

Accepted Answer

A) True 
 B)False

Question 8

Walgreens Drugstores buys a bottle of shampoo from a wholesaler for $3.25 and then places it on a shelf with a price tag of $4.64.What is Walgreens' markup on selling price (expressed as a percentage)?

Accepted Answer

A) 20 percent 
B) 26 percent 
C) 30 percent 
D) 43 percent 
E) 48 percent 
A) 20 percent 
B) 26 percent 
C) 30 percent 
D) 43 percent 
E) 48 percent

Question 9

If a firm's average variable cost is constant per unit,then the firm's average cost decreases continually as output increases because average fixed cost decreases continually.

Accepted Answer

A) True 
 B)False

Question 10

A college "marketing club" printed 1,000 "We're Number 1" bumper stickers for sale at $3.00 each as a fund-raiser.Its fixed costs were $500,and the variable cost for each sticker was $0.50.The club's average cost per unit was

Accepted Answer

A) $2.00. 
B) $2.50. 
C) $0.50. 
D) $1.00. 
E) Not enough information is provided to determine the cost per unit. 
A) $2.00. 
B) $2.50. 
C) $0.50. 
D) $1.00. 
E) Not enough information is provided to determine the cost per unit.

Question 11

Spruce Pine Mfg.Co.has total fixed costs of $300,000 a year.The owner estimates that average variable costs for its product will be about $30 next year.The selling price to wholesalers will be $50.The break-even point is

Accepted Answer

A) 6,000 units. 
B) 10,000 units. 
C) 12,000 units. 
D) 15,000 units. 
E) 20,000 units. 
A) 6,000 units. 
B) 10,000 units. 
C) 12,000 units. 
D) 15,000 units. 
E) 20,000 units.

Question 12

Value in use pricing considers what a customer will save by buying a product.

Accepted Answer

A) True 
 B)False

Question 13

Average-cost pricing

Accepted Answer

A) may be very profitable if actual sales are higher than expected. 
B) may lose money for the firm if actual sales are less than expected. 
C) does not take demand into account in setting prices. 
D) is simple in theory but often fails in practice. 
E) All these answers are correct. 
A) may be very profitable if actual sales are higher than expected. 
B) may lose money for the firm if actual sales are less than expected. 
C) does not take demand into account in setting prices. 
D) is simple in theory but often fails in practice. 
E) All these answers are correct.

Question 14

The Horizons Cycle Shop bought 3 motorcycles for $2,100 and sold each one for $1,000.The markup percentage was

Accepted Answer

A) 33 1/3 percent. 
B) 30 percent. 
C) 142 percent. 
D) 50 percent. 
E) There is not enough information to determine the markup. 
A) 33 1/3 percent. 
B) 30 percent. 
C) 142 percent. 
D) 50 percent. 
E) There is not enough information to determine the markup.

Question 15

Most firms in the business world set their prices using

Accepted Answer

A) federal price guidelines. 
B) demand-oriented price setting. 
C) cost-oriented price setting. 
D) supply and demand analysis. 
E) marginal analysis. 
A) federal price guidelines. 
B) demand-oriented price setting. 
C) cost-oriented price setting. 
D) supply and demand analysis. 
E) marginal analysis.

Question 16

A retailer buys a particular product for $4.To make a profit,the retailer adds $2 to cover operating expenses and provide a profit.The percentage markup on the $6 selling price is

Accepted Answer

A) 50 percent. 
B) 33.33 percent. 
C) 100 percent. 
D) 20 percent. 
E) 25 percent. 
A) 50 percent. 
B) 33.33 percent. 
C) 100 percent. 
D) 20 percent. 
E) 25 percent.

Question 17

Product-bundle pricing may encourage customers to spend more and buy products that they would not buy otherwise.

Accepted Answer

A) True 
 B)False

Question 18

If Macy's department store prices its men's ties at $10 intervals between $38 and $68,it is an example of

Accepted Answer

A) reference pricing. 
B) price lining. 
C) bundle pricing. 
D) leader pricing. 
E) bait pricing. 
A) reference pricing. 
B) price lining. 
C) bundle pricing. 
D) leader pricing. 
E) bait pricing.

Question 19

If a company raises its price per unit but keeps total fixed cost and variable cost per unit the same,the break-even point will be lower.

Accepted Answer

A) True 
 B)False

Question 20

An intermediary seeking high profits should

Accepted Answer

A) use the lowest markup that will still cover selling expenses. 
B) use price lining. 
C) use high markups. 
D) choose the markup that maximizes turnover. 
E) try to find the markup level related to the most profitable price. 
A) use the lowest markup that will still cover selling expenses. 
B) use price lining. 
C) use high markups. 
D) choose the markup that maximizes turnover. 
E) try to find the markup level related to the most profitable price.

The stockturn rate is

Online auctions (on the Internet)are becoming very popular as a way to determine how much customers are willing to pay for a product.

Some retailers commonly use prices that end in certain numbers.They seem to assume that their customers see prices with these numbers as substantially lower.This is

Which of the following statements concerning reference prices is FALSE?

An item costs a retailer $140.If a 30 percent markup is desired,what should the retail selling price be?

According to the text,markup (percent)means percentage of cost unless otherwise stated.

Walgreens Drugstores buys a bottle of shampoo from a wholesaler for $3.25 and then places it on a shelf with a price tag of $4.64.What is Walgreens' markup on selling price (expressed as a percentage)?

If a firm's average variable cost is constant per unit,then the firm's average cost decreases continually as output increases because average fixed cost decreases continually.

A college "marketing club" printed 1,000 "We're Number 1" bumper stickers for sale at $3.00 each as a fund-raiser.Its fixed costs were $500,and the variable cost for each sticker was $0.50.The club's average cost per unit was

Spruce Pine Mfg.Co.has total fixed costs of $300,000 a year.The owner estimates that average variable costs for its product will be about $30 next year.The selling price to wholesalers will be $50.The break-even point is

Value in use pricing considers what a customer will save by buying a product.

Average-cost pricing

The Horizons Cycle Shop bought 3 motorcycles for $2,100 and sold each one for $1,000.The markup percentage was

Most firms in the business world set their prices using

A retailer buys a particular product for $4.To make a profit,the retailer adds $2 to cover operating expenses and provide a profit.The percentage markup on the $6 selling price is

Product-bundle pricing may encourage customers to spend more and buy products that they would not buy otherwise.

If Macy's department store prices its men's ties at $10 intervals between $38 and $68,it is an example of

If a company raises its price per unit but keeps total fixed cost and variable cost per unit the same,the break-even point will be lower.

An intermediary seeking high profits should

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Market Environment

Focusing Marketing Strategy With Segmentation and Positioning

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers, Wholesalers, and Their Strategy Planning

Promotionintroduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising and Sales Promotion

Publicity: Promotion Using Earned Media, Owned Media, and Social Media

Pricing Objectives and Policies

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Filters

Exam 18: Price Setting in the Business World

The stockturn rate is

Online auctions (on the Internet)are becoming very popular as a way to determine how much customers are willing to pay for a product.

Some retailers commonly use prices that end in certain numbers.They seem to assume that their customers see prices with these numbers as substantially lower.This is

Which of the following statements concerning reference prices is FALSE?

An item costs a retailer $140.If a 30 percent markup is desired,what should the retail selling price be?

According to the text,markup (percent)means percentage of cost unless otherwise stated.

Walgreens Drugstores buys a bottle of shampoo from a wholesaler for $3.25 and then places it on a shelf with a price tag of $4.64.What is Walgreens' markup on selling price (expressed as a percentage)?

If a firm's average variable cost is constant per unit,then the firm's average cost decreases continually as output increases because average fixed cost decreases continually.

A college "marketing club" printed 1,000 "We're Number 1" bumper stickers for sale at $3.00 each as a fund-raiser.Its fixed costs were $500,and the variable cost for each sticker was $0.50.The club's average cost per unit was

Spruce Pine Mfg.Co.has total fixed costs of $300,000 a year.The owner estimates that average variable costs for its product will be about $30 next year.The selling price to wholesalers will be $50.The break-even point is

Value in use pricing considers what a customer will save by buying a product.

Average-cost pricing

The Horizons Cycle Shop bought 3 motorcycles for $2,100 and sold each one for $1,000.The markup percentage was

Most firms in the business world set their prices using

A retailer buys a particular product for $4.To make a profit,the retailer adds $2 to cover operating expenses and provide a profit.The percentage markup on the $6 selling price is

Product-bundle pricing may encourage customers to spend more and buy products that they would not buy otherwise.

If Macy's department store prices its men's ties at $10 intervals between $38 and $68,it is an example of

If a company raises its price per unit but keeps total fixed cost and variable cost per unit the same,the break-even point will be lower.

An intermediary seeking high profits should

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Market Environment

Focusing Marketing Strategy With Segmentation and Positioning

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers, Wholesalers, and Their Strategy Planning

Promotionintroduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising and Sales Promotion

Publicity: Promotion Using Earned Media, Owned Media, and Social Media

Pricing Objectives and Policies

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Filters