Question 1

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Accepted Answer

A) True 
 B)False

Question 2

American Girl Doll
The American Girl catalog began as a concept to introduce today's girls to those who lived in the past. Each historically accurate doll is carefully crafted and dressed and has books to describe her life. For example, Kristen is an 1854 pioneer girl who is growing up in Minnesota. Her story begins with her long sea voyage from Sweden. The basic doll, dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota, costs $90.00. Six more hardback books of Kristen's life are available for $74.95. Kristen's nightgown costs $20.00, and a matching one for the doll owner is an additional $38.00. Buy both together and the price is only $50.00. A hand-painted wooden bed and trunk for Kristen are available for $213.00. Shipping costs vary with the price of the merchandise ordered.
-Refer to American Girl Doll.The popularity of the American Girl dolls is so great that an increase in the price of the basic Kristen doll and books by 5 percent will not significantly affect the demand for the product.The means that the demand for the American Girl doll is:

Accepted Answer

A)  elastic. 
B)  derived. 
C)  a multiplier. 
D)  inelastic. 
E)  symmetrical. 
A)  elastic. 
B)  derived. 
C)  a multiplier. 
D)  inelastic. 
E)  symmetrical.

Question 3

Yield management systems employ techniques such as discounting early purchases,limiting early sales at these discounted prices,and overbooking capacity.

Accepted Answer

A) True 
 B)False

Question 4

Define price and discuss the two roles price plays in the evaluation of product alternatives.

Accepted Answer

Price is that which is given up in an ex

Question 5

Your Memory Lane creates custom art prints that use graphs and icons in a street scene to commemorate special occasions.Suppose that Your Memory Lane has priced its product at $350 per print.Further,it has determined that the company's fixed cost is $12,500,with average variable costs per print of $250.What is the fixed cost contribution per print?

Accepted Answer

A)  $225 
B)  $100 
C)  $605 
D)  $2 
E)  $1 
A)  $225 
B)  $100 
C)  $605 
D)  $2 
E)  $1

Question 6

Specialty Cakes
Imagine that you're planning an after-symphony fund-raising party, and you need a life-size grand piano cake. Or, you are a developer proposing a new shopping center to a group of investors, and you want to serve a cake shaped like an architectural rendition of the center. Is this impossible? No, you just need to contact Cecilia Villaveces Cakes. She actually built a life-size grand piano for a gala in Macon, Georgia. You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations, depending on complexity of design and size. She uses only the best ingredients, and no two cakes are ever quite alike.
-Refer to Specialty Cakes.Although many factors determine the prices charged by Cecilia Villaveces Cakes,the two primary determinants are:

Accepted Answer

A)  costs of manufacturing and distribution costs. 
B)  stage of the product life cycle and costs to the consumers. 
C)  the demand for the good and the cost to the seller. 
D)  demand by the consumer and perceived quality. 
E)  distribution and promotion strategies used by the cake maker. 
A)  costs of manufacturing and distribution costs. 
B)  stage of the product life cycle and costs to the consumers. 
C)  the demand for the good and the cost to the seller. 
D)  demand by the consumer and perceived quality. 
E)  distribution and promotion strategies used by the cake maker.

Question 7

There are three general types of shopping bots: broad-based,niche-oriented,and enterprise-level.

Accepted Answer

A) True 
 B)False

Question 8

Your Memory Lane produces custom-made art prints that include graphics and icons to celebrate life's special moments.For example,on his wedding anniversary,David had an art print produced that celebrated highlights of his ten years with his wife,Kathy.Suppose that Your Memory Lane sells the custom artwork for $500.It estimates its average variable costs to be $200 per unit produced.It figures its fixed costs to be $900,000 per year.How many prints does it have to sell to break even?

Accepted Answer

A)  2,000 prints 
B)  1,200 prints 
C)  3,000 prints 
D)  2,500 prints 
E)  6,000 prints 
A)  2,000 prints 
B)  1,200 prints 
C)  3,000 prints 
D)  2,500 prints 
E)  6,000 prints

Question 9

List the two primary determinants of price.What other factors can affect price setting?

Accepted Answer

The price established depends primarily

Question 10

The only way to maximize profits is to reduce costs by operating more efficiently.

Accepted Answer

A) True 
 B)False

Question 11

An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.

Accepted Answer

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

Question 12

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

Accepted Answer

A) True 
 B)False

Question 13

Markup pricing,adding an amount to cost to cover expenses and profit,is the most popular method used by wholesalers and retailers to establish a selling price.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Which of the following statements describes a limitation associated with break-even analysis?

Accepted Answer

A)  It is sometimes difficult to ascertain whether a cost is fixed or variable. 
B)  It requires the calculation of marginal revenue. 
C)  It strictly considers demand. 
D)  It assumes variable cost per item, which is difficult to calculate. 
E)  It can only be expressed as a break-even point in dollar amounts. 
A)  It is sometimes difficult to ascertain whether a cost is fixed or variable. 
B)  It requires the calculation of marginal revenue. 
C)  It strictly considers demand. 
D)  It assumes variable cost per item, which is difficult to calculate. 
E)  It can only be expressed as a break-even point in dollar amounts.

Question 16

When goods and services are exchanged,the trade is called:

Accepted Answer

A)  exchange. 
B)  substitution. 
C)  barter. 
D)  swap. 
E)  bargaining. 
A)  exchange. 
B)  substitution. 
C)  barter. 
D)  swap. 
E)  bargaining.

Question 17

Yield management systems were first developed by which industry?

Accepted Answer

A)  The manufacturing industry. 
B)  The airline industry. 
C)  The retail industry. 
D)  The healthcare industry. 
E)  The automobile industry. 
A)  The manufacturing industry. 
B)  The airline industry. 
C)  The retail industry. 
D)  The healthcare industry. 
E)  The automobile industry.

Question 18

The two types of costs a marketer needs to consider when setting prices are:

Accepted Answer

A)  primary and secondary. 
B)  variable and fixed. 
C)  marginal and absolute. 
D)  short term and long term. 
E)  elastic and inelastic. 
A)  primary and secondary. 
B)  variable and fixed. 
C)  marginal and absolute. 
D)  short term and long term. 
E)  elastic and inelastic.

Question 19

While the sales of the Apple iPhone have been great from the beginning,when Apple released its iPhone 4S and cut the price of the iPhone 4 from $399 to $199,sales exploded with one million iPhone 4s sold the first weekend.Demand for the iPhone appears to be:

Accepted Answer

A)  unitary. 
B)  predictable. 
C)  synergistic. 
D)  inelastic. 
E)  elastic. 
A)  unitary. 
B)  predictable. 
C)  synergistic. 
D)  inelastic. 
E)  elastic.

Question 20

Even though businesses are spending billions on Internet auctions,consumer auctions are likely to be the dominant form in the future.

Accepted Answer

A) True 
 B)False

Exam 37: Pricing Concepts

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Yield management systems employ techniques such as discounting early purchases,limiting early sales at these discounted prices,and overbooking capacity.

Define price and discuss the two roles price plays in the evaluation of product alternatives.

There are three general types of shopping bots: broad-based,niche-oriented,and enterprise-level.

List the two primary determinants of price.What other factors can affect price setting?

The only way to maximize profits is to reduce costs by operating more efficiently.

An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

Markup pricing,adding an amount to cost to cover expenses and profit,is the most popular method used by wholesalers and retailers to establish a selling price.

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

Which of the following statements describes a limitation associated with break-even analysis?

When goods and services are exchanged,the trade is called:

Yield management systems were first developed by which industry?

The two types of costs a marketer needs to consider when setting prices are:

While the sales of the Apple iPhone have been great from the beginning,when Apple released its iPhone 4S and cut the price of the iPhone 4 from $399 to $199,sales exploded with one million iPhone 4s sold the first weekend.Demand for the iPhone appears to be:

Even though businesses are spending billions on Internet auctions,consumer auctions are likely to be the dominant form in the future.

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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