Question 1

Prices always steadily decline for a product in the decline stage of the product life cycle.

Accepted Answer

A) True 
 B)False

Question 2

Costs should not be part of price determination,especially not as a floor for long run pricing.

Accepted Answer

A) True 
 B)False

Question 3

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 4

When many substitute products are available,demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 5

When Apple,Inc.originally introduced its iPhone,it was priced at what many believed to be about as high as the market would allow.Within weeks,Apple lowered the price of the iPhone.It appears that Apple entered the market with a _____ approach to pricing the iPhone.

Accepted Answer

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

Question 6

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?

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

Question 7

At a price of $6,000,only 191 of the Moulton 60 model bicycle are being made.If Moulton sells each one of the bicycles at that price,then a state of _____has been achieved.

Accepted Answer

A)  symmetry 
B)  marketing balance 
C)  unitary economics 
D)  commerce stability 
E)  price equilibrium 
A)  symmetry 
B)  marketing balance 
C)  unitary economics 
D)  commerce stability 
E)  price equilibrium

Question 8

Revenue:

Accepted Answer

A)  equals quantity sold times profit margin 
B)  equals price minus costs 
C)  equals return on investment 
D)  is synonymous with profit 
E)  equals price of goods times quantity sold 
A)  equals quantity sold times profit margin 
B)  equals price minus costs 
C)  equals return on investment 
D)  is synonymous with profit 
E)  equals price of goods times quantity sold

Question 9

David likes New Balance running shoes.However,when he stopped by the Foot Locker to buy a new pair of running shoes,he noticed 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 10

As a product enters the growth stage,prices generally begin to stabilize.One reason for this is that:

Accepted Answer

A)  the product has begun to appeal to a broader market. 
B)  most competitors have been eliminated from the market. 
C)  manufacturers hope to recover their development costs quickly. 
D)  the available supply decreases. 
E)  All of the above are correct. 
A)  the product has begun to appeal to a broader market. 
B)  most competitors have been eliminated from the market. 
C)  manufacturers hope to recover their development costs quickly. 
D)  the available supply decreases. 
E)  All of the above are correct.

Question 11

Britney is fifteen years old and wants to open her own business selling cupcakes to local coffee shops and restaurants.She is having a tough time deciding whether to base her pricing objectives on market share,dollar sales,or unit sales.Regardless of which she chooses,her pricing objective can be categorized as:

Accepted Answer

A)  status quo. 
B)  profit oriented. 
C)  need oriented. 
D)  cost oriented. 
E)  sales oriented. 
A)  status quo. 
B)  profit oriented. 
C)  need oriented. 
D)  cost oriented. 
E)  sales oriented.

Question 12

A cost that changes with the level of output is called a(n)_____ cost.

Accepted Answer

A)  liquidity 
B)  variable 
C)  fixed 
D)  asset 
E)  elastic 
A)  liquidity 
B)  variable 
C)  fixed 
D)  asset 
E)  elastic

Question 13

The Nest is a retail store owned and operated by an interior designer.The markup on all items in the store is 100 percent over cost (or double the cost).In this case,we would say the designer uses:

Accepted Answer

A)  keystoning. 
B)  target ROI pricing. 
C)  break-even pricing. 
D)  marginalizing. 
E)  double sourcing. 
A)  keystoning. 
B)  target ROI pricing. 
C)  break-even pricing. 
D)  marginalizing. 
E)  double sourcing.

Question 14

What does "YMS" stands for?

Accepted Answer

A)  Yorkshire manufacturing sector. 
B)  Yield management systems. 
C)  Yes-man syndrome. 
D)  Yardstick measurement scale. 
E)  Year-end marketing services. 
A)  Yorkshire manufacturing sector. 
B)  Yield management systems. 
C)  Yes-man syndrome. 
D)  Yardstick measurement scale. 
E)  Year-end marketing services.

Question 15

During the hot summer months,or the week before a new class starts if there is still space available,the Nick Price golf school in Orlando,Florida,offers a 25 percent reduction to get golfers during the off-season or those making a last-minute decision.This is an example of pricing strategy used as a(n):

Accepted Answer

A)  distribution tool. 
B)  price enhancer. 
C)  product strategy. 
D)  direct sales tool. 
E)  promotion strategy. 
A)  distribution tool. 
B)  price enhancer. 
C)  product strategy. 
D)  direct sales tool. 
E)  promotion strategy.

Question 16

Pet's Eye View Digital Camera is a small,durable digital camera that pet owners can clip to their pets' collars.A programmable timer takes pictures every few minutes,recording a photographic diary of the pet's day.The camera sells for $25.The average variable cost for each camera is $10 and the total annual fixed costs for plant operation are $45,000.What is the break-even point in units?

Accepted Answer

A)  1,800 
B)  2,500 
C)  3,000 
D)  4,500 
E)  5,000 
A)  1,800 
B)  2,500 
C)  3,000 
D)  4,500 
E)  5,000

Question 17

The difference between the retailer's cost and the selling price is the:

Accepted Answer

A)  gross margin. 
B)  markup percentage. 
C)  profit. 
D)  keystone. 
E)  breakeven profit. 
A)  gross margin. 
B)  markup percentage. 
C)  profit. 
D)  keystone. 
E)  breakeven profit.

Question 18

Ceylon Express sells bottled pasteurized tea to retailers.It has the following revenues and costs:  
What is the annual break-even point in units for the company?

Accepted Answer

A)  50,000 
B)  250,000 
C)  100,000 
D)  166,667 
E)  500,000 
A)  50,000 
B)  250,000 
C)  100,000 
D)  166,667 
E)  500,000

Question 19

In most communities,the price of gas is more or less the same at all area service stations.This is an example of sales-oriented pricing.

Accepted Answer

A) True 
 B)False

Question 20

Thompson Pool and Patio is known for quality pool installations,excellent customer service,and reasonable prices.If you want to have a Thompson pool,you will have to wait about six months due to demand for their product.While Thompson could probably price its product higher,given the demand,they don't.Instead,the company sets its price so that it will earn a reasonable level of profits.Thompson seems to base its pricing policy on:

Accepted Answer

A)  profit maximization. 
B)  earning satisfactory profits. 
C)  creating retained earnings. 
D)  making the most money as possible. 
E)  decreasing consumer demand. 
A)  profit maximization. 
B)  earning satisfactory profits. 
C)  creating retained earnings. 
D)  making the most money as possible. 
E)  decreasing consumer demand.

Exam 37: Pricing Concepts

Prices always steadily decline for a product in the decline stage of the product life cycle.

Costs should not be part of price determination,especially not as a floor for long run pricing.

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

When many substitute products are available,demand is inelastic.

When Apple,Inc.originally introduced its iPhone,it was priced at what many believed to be about as high as the market would allow.Within weeks,Apple lowered the price of the iPhone.It appears that Apple entered the market with a _____ approach to pricing the iPhone.

At a price of $6,000,only 191 of the Moulton 60 model bicycle are being made.If Moulton sells each one of the bicycles at that price,then a state of _____has been achieved.

Revenue:

As a product enters the growth stage,prices generally begin to stabilize.One reason for this is that:

A cost that changes with the level of output is called a(n)_____ cost.

The Nest is a retail store owned and operated by an interior designer.The markup on all items in the store is 100 percent over cost (or double the cost).In this case,we would say the designer uses:

What does "YMS" stands for?

The difference between the retailer's cost and the selling price is the:

Ceylon Express sells bottled pasteurized tea to retailers.It has the following revenues and costs: What is the annual break-even point in units for the company?

In most communities,the price of gas is more or less the same at all area service stations.This is an example of sales-oriented pricing.

An Overview of Marketing

Case Study Girl Scout Cookies

Strategic Planning for Competitive Advantage

Case Study Disney: The Happiest Brand on Earth

Ethics and Social Responsibility

Case Study Barclays Bank: Banking on Ethics

The Marketing Environment

Case Study Daimler/BMW: A New Breed of Driver

Developing a Global Vision

Case Study P&G Unilever Panasonic: The $2-a-Day Initiative

Consumer Decision Making

Case Study eBay: Creating Customers on the Move

Business Marketing

Case Study Pantone: This Year’s Color: Honeysuckle

Segmenting and Targeting Markets

Coke Zero

Marketing Research

Case Study Marriott International: A Marriott Site for Those on the Move

Product Concepts

Case Study Ford Motor Co.: One Ford; One Big Turnaround

Developing and Managing Products

Case Study Harmonix: Embrace Your Inner Rock Star

Services and Nonprofit Organization Marketing

Minute Clinic

Supply Chain Management

The U.S.Transportation Industry: Planning for a Potential Post-Recession Capacity Crunch

Marketing Channels and Retailing

Nordstrom's

Marketing Communications

HBO's True Blood

Advertising Public Relations and Sales Promotion

Burger King

Personal Selling and Sales Management

Ron Popeil

Social Media and Marketing

Facebook: Advertising’s Troubling Future

Groupon vs.LivingSocial: Coupon Wars

Setting the Right Price

Black Friday Sales: Deal…or No Deal?

Telekom Austria Group: Sustainability to Increase Value

Mary Kay Inc: Taps into a Changing Demographic

Prestige Brands Inc-Transforming the Business

Cutco Cutlery Corporation: Direct to Consumer for Over 60 Years!

Lap Dance at Boston Blazers Lacrosse Game: Promotional Mistake or Creative Genius?

Will a New Reservation System Translate to Higher Prices for Travelers?

Concerns over Sustainability Result in Social Media Disaster for Nestlé

Four Loko Targets Young College Hedonists

McAfee Virus Protection Update Crashes Computers Worldwide

Microsoft Implies Distribution of Angry Birds on Windows Phone 7

Yellow Tail’s Tails-for-Tails Campaign

Concerns over Sustainability Result in Social Media Disaster for Nestlé

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