Question 1

Kroger supermarkets will place well-known brands on the shelves at high prices while offering their own Kroger brand at lower prices.This practice is an example of:

Accepted Answer

A)  illegal pricing 
B)  selling against the brand 
C)  price pressurization 
D)  brand cutting 
E)  private-label cannibalization 
A)  illegal pricing 
B)  selling against the brand 
C)  price pressurization 
D)  brand cutting 
E)  private-label cannibalization

Question 2

Name two advantages and two disadvantages associated with the use of break-even analysis.

Accepted Answer

Advantages of using break-even analysis

Question 3

When a retailer offers a price-matching guarantee,it is signaling to the target market that it is positioned as a low-price dealer.

Accepted Answer

A) True 
 B)False

Question 4

If demand for milk is inelastic,consumers will not change their purchasing habits greatly when the price of milk changes.

Accepted Answer

A) True 
 B)False

Question 5

When Delta Airlines raises or lowers its prices on its Atlanta to Chicago route other airlines tend to make the same changes in their pricing.This is an example of _____ pricing.

Accepted Answer

A)  status quo 
B)  target return 
C)  market share 
D)  predatory 
E)  cost-plus 
A)  status quo 
B)  target return 
C)  market share 
D)  predatory 
E)  cost-plus

Question 6

Which of the following is most likely to be a variable cost for an Internet retailer that sells spices,herbs,and seasonings to consumers?

Accepted Answer

A)  annual lease on mixer used to blend seasonings 
B)  executive salaries 
C)  rent for building where spices and herbs are repackaged for consumers 
D)  workers' insurance 
E)  postage for shipping spices and herbs 
A)  annual lease on mixer used to blend seasonings 
B)  executive salaries 
C)  rent for building where spices and herbs are repackaged for consumers 
D)  workers' insurance 
E)  postage for shipping spices and herbs

Question 7

_____ pay for every activity of the company.

Accepted Answer

A)  Revenues 
B)  Investments 
C)  Retained earnings 
D)  Profits 
E)  Prices 
A)  Revenues 
B)  Investments 
C)  Retained earnings 
D)  Profits 
E)  Prices

Question 8

Which of the following statements about yield management systems (YMS)is true?

Accepted Answer

A)  The first use of YMS was in the U.S. car industry as it looked for ways to compete with imports. 
B)  YMS eliminate the problem of simultaneous production and consumption from services. 
C)  YMS cannot be used by any other businesses but services. 
D)  YMS are complex pricing systems used to set equilibrium pricing points. 
E)  YMS are mathematically complex systems to make use of underutilized capacity and reduce the cost of perishability. 
A)  The first use of YMS was in the U.S. car industry as it looked for ways to compete with imports. 
B)  YMS eliminate the problem of simultaneous production and consumption from services. 
C)  YMS cannot be used by any other businesses but services. 
D)  YMS are complex pricing systems used to set equilibrium pricing points. 
E)  YMS are mathematically complex systems to make use of underutilized capacity and reduce the cost of perishability.

Question 9

Price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount.

Accepted Answer

A) True 
 B)False

Question 10

Marketing managers who attempt to raise the quality image of their product by selling it at high prices are following a(n)_____ strategy.

Accepted Answer

A)  profit maximization 
B)  market share 
C)  maintained markup pricing 
D)  prestige pricing 
E)  investment asset 
A)  profit maximization 
B)  market share 
C)  maintained markup pricing 
D)  prestige pricing 
E)  investment asset

Question 11

When Insight Research Associates quotes a marketing research project management will first estimate the cost to conduct the research and produce and deliver the final client report.The next step in determining the price is to add 30% to that cost estimate.This becomes the price estimate given to the potential research client.This suggests that Insight Research Associates uses a(n)_____ pricing objective.

Accepted Answer

A)  profit-oriented 
B)  market share maximization 
C)  status quo 
D)  sales maximization 
E)  supply-demand equalization 
A)  profit-oriented 
B)  market share maximization 
C)  status quo 
D)  sales maximization 
E)  supply-demand equalization

Question 12

Maximization of cash should be a long-term objective.

Accepted Answer

A) True 
 B)False

Question 13

Regency,Inc.makes disposable cap and gown sets for graduations.Each cap and gown set sells for $15.The average variable cost for manufacturing 10 cap and gown sets is $100.Total fixed costs for the year equal $65,000.Calculate the break-even point in units.

Accepted Answer

A)  650 
B)  765 
C)  1,300 
D)  4,334 
E)  13,000 
A)  650 
B)  765 
C)  1,300 
D)  4,334 
E)  13,000

Question 14

_____ determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned.

Accepted Answer

A)  Marginal revenue estimates 
B)  Price equilibrium analyses 
C)  Break-even analyses 
D)  Average total cost (AT
C)  figures 
E)  Marginal costs of goods sold 
A)  Marginal revenue estimates 
B)  Price equilibrium analyses 
C)  Break-even analyses 
D)  Average total cost (AT
C)  figures 
E)  Marginal costs of goods sold

Question 15

David likes New Balance running shoes.However,when he stopped by the Foot Locker to buy a new pair of running shoes he notice that Nike had a new pair of running shoes that cost $350.To David the higher price of the Nike shoe indicated that it would be a better pair of running shoes.This is an example of _____.

Accepted Answer

A)  premium pricing 
B)  price lining 
C)  prestige pricing 
D)  exclusive pricing 
E)  selective pricing 
A)  premium pricing 
B)  price lining 
C)  prestige pricing 
D)  exclusive pricing 
E)  selective pricing

Question 16

Smelly Fruit
At first glance there is little to like about the durian. The durian is a fruit popular in Thailand that is spiky outside and stinky on the inside. When confronted with the durian for the first time, the Wall Street Journal recently reported that westerners often describe its distinctive sulphurous smell with words like stinky socks and manure. However, the durian is so popular in Thailand that one variety of the durian fruit, called the Kan Yao, has been selling for as high as $200. Even at that price, supply of the Kan Yao cannot keep up with demand. There are approximately 30 varieties of the durian grown in Thailand, with the most plentiful selling in the $15 range. The yellow flesh of the durian, the part you eat, has very powerful smell, but possesses a sweet, nutty taste that Thais cannot seem to get enough of at any price.
-Refer to Smelly Fruit.Suppose you have decided to buy land in Thailand and become a durian producer.You see that the customary price for a Kan Yao is $200,so that is the price you decide to charge for your durian crop.This suggests you are using a _____ approach to setting your price.

Accepted Answer

A)  Profit maximization 
B)  Market share 
C)  Return on investment (ROI) 
D)  Sales maximization 
E)  Status quo 
A)  Profit maximization 
B)  Market share 
C)  Return on investment (ROI) 
D)  Sales maximization 
E)  Status quo

Question 17

At the end of the summer,Howard Nursery reduced the price on all of its plants,fertilizer,and potting soil by 50 percent in order to liquidate this inventory.What type of pricing strategy is being used in this example?

Accepted Answer

A)  supply oriented 
B)  sales maximization 
C)  target return on investment 
D)  satisfactory profit 
E)  profit maximization 
A)  supply oriented 
B)  sales maximization 
C)  target return on investment 
D)  satisfactory profit 
E)  profit maximization

Question 18

All of the following statements about price are true EXCEPT:

Accepted Answer

A)  Price can relate to anything with perceived value, not just money. 
B)  Price is that which is given up in an exchange to acquire a product. 
C)  Price means the same thing to the consumer and the seller. 
D)  The price paid is based on the satisfaction consumers expect to receive from a product. 
E)  Customers are interested in obtaining a perceived reasonable price. 
A)  Price can relate to anything with perceived value, not just money. 
B)  Price is that which is given up in an exchange to acquire a product. 
C)  Price means the same thing to the consumer and the seller. 
D)  The price paid is based on the satisfaction consumers expect to receive from a product. 
E)  Customers are interested in obtaining a perceived reasonable price.

Question 19

Why are marketing managers finding it more difficult to set prices in today's environment?

Accepted Answer

A)  Inflationary and recessionary periods have made customers less price-sensitive. 
B)  Fewer dealer and generic brands are available because the competition has been eliminated. 
C)  The high rate of new-product introductions has led to careful reevaluation by consumers. 
D)  Marketing managers are finding it difficult to compare prices between suppliers. 
E)  Buyers are less informed and are less price-sensitive. 
A)  Inflationary and recessionary periods have made customers less price-sensitive. 
B)  Fewer dealer and generic brands are available because the competition has been eliminated. 
C)  The high rate of new-product introductions has led to careful reevaluation by consumers. 
D)  Marketing managers are finding it difficult to compare prices between suppliers. 
E)  Buyers are less informed and are less price-sensitive.

Question 20

Tesla Motors
"Going green" doesn't have to be boring. The Tesla Roadster Sport is an electric car that goes from 0 to 60 in four seconds and drives more like a race car than an environmentally-friendly ride. But that level of performance will set you back $128,500. As of 2009, Silicon Valley-based Tesla Motors, Inc. was the only company offering highway-compatible electric cars. Most Roadster Sport buyers are car enthusiasts and are buying them for the "fun toy" aspect of having an electric car rather than for environmental reasons.
-Refer to Tesla Motors. If Tesla had assets of $5 million and net profits after taxes of $550,000,what is Tesla's return on investment (ROI)?

Accepted Answer

A)  1 percent 
B)  9 percent 
C)  11 percent 
D)  $14,135 
E)  $4,450,000 
A)  1 percent 
B)  9 percent 
C)  11 percent 
D)  $14,135 
E)  $4,450,000

Kroger supermarkets will place well-known brands on the shelves at high prices while offering their own Kroger brand at lower prices.This practice is an example of:

Name two advantages and two disadvantages associated with the use of break-even analysis.

When a retailer offers a price-matching guarantee,it is signaling to the target market that it is positioned as a low-price dealer.

If demand for milk is inelastic,consumers will not change their purchasing habits greatly when the price of milk changes.

When Delta Airlines raises or lowers its prices on its Atlanta to Chicago route other airlines tend to make the same changes in their pricing.This is an example of _____ pricing.

Which of the following is most likely to be a variable cost for an Internet retailer that sells spices,herbs,and seasonings to consumers?

_____ pay for every activity of the company.

Which of the following statements about yield management systems (YMS)is true?

Price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount.

Marketing managers who attempt to raise the quality image of their product by selling it at high prices are following a(n)_____ strategy.

Maximization of cash should be a long-term objective.

Regency,Inc.makes disposable cap and gown sets for graduations.Each cap and gown set sells for $15.The average variable cost for manufacturing 10 cap and gown sets is $100.Total fixed costs for the year equal $65,000.Calculate the break-even point in units.

_____ determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned.

At the end of the summer,Howard Nursery reduced the price on all of its plants,fertilizer,and potting soil by 50 percent in order to liquidate this inventory.What type of pricing strategy is being used in this example?

All of the following statements about price are true EXCEPT:

Why are marketing managers finding it more difficult to set prices in today's environment?

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics & Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Promotional Planning for Competitive Advantage

Advertising and Public Relations

Sales Promotion and Personal Selling

Setting the Right Price

Customer Relationship Management (CRM)

Filters

Exam 19: Pricing Concepts

Kroger supermarkets will place well-known brands on the shelves at high prices while offering their own Kroger brand at lower prices.This practice is an example of:

Name two advantages and two disadvantages associated with the use of break-even analysis.

When a retailer offers a price-matching guarantee,it is signaling to the target market that it is positioned as a low-price dealer.

If demand for milk is inelastic,consumers will not change their purchasing habits greatly when the price of milk changes.

When Delta Airlines raises or lowers its prices on its Atlanta to Chicago route other airlines tend to make the same changes in their pricing.This is an example of _____ pricing.

Which of the following is most likely to be a variable cost for an Internet retailer that sells spices,herbs,and seasonings to consumers?

_____ pay for every activity of the company.

Which of the following statements about yield management systems (YMS)is true?

Price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount.

Marketing managers who attempt to raise the quality image of their product by selling it at high prices are following a(n)_____ strategy.

Maximization of cash should be a long-term objective.

Regency,Inc.makes disposable cap and gown sets for graduations.Each cap and gown set sells for $15.The average variable cost for manufacturing 10 cap and gown sets is $100.Total fixed costs for the year equal $65,000.Calculate the break-even point in units.

_____ determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned.

At the end of the summer,Howard Nursery reduced the price on all of its plants,fertilizer,and potting soil by 50 percent in order to liquidate this inventory.What type of pricing strategy is being used in this example?

All of the following statements about price are true EXCEPT:

Why are marketing managers finding it more difficult to set prices in today's environment?

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics & Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Promotional Planning for Competitive Advantage

Advertising and Public Relations

Sales Promotion and Personal Selling

Setting the Right Price

Customer Relationship Management (CRM)

Filters