Question 1

It is legitimate for a manufacturer to charge a retailer a lower price than its usual price if:

Accepted Answer

A)  the retailer is related to the seller. 
B)  neither the retailer nor the seller are publically-traded companies. 
C)  the seller is trying to match a competitor's price. 
D)  the different price is a one-time occurrence. 
E)  the difference between the regular price and the reduced price is less than or equal to ten percent. 
A)  the retailer is related to the seller. 
B)  neither the retailer nor the seller are publically-traded companies. 
C)  the seller is trying to match a competitor's price. 
D)  the different price is a one-time occurrence. 
E)  the difference between the regular price and the reduced price is less than or equal to ten percent.

Question 2

Because consumers are generally more sensitive to price increases than to price decreases,it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Accepted Answer

A) True 
 B)False

Question 3

The food and beverage manager at an upscale country club once offered a two-for-one happy hour price for all alcoholic beverages,only to see a very little response to the special.For these consumers,demand for alcoholic beverages is:

Accepted Answer

A)  cross-price elastic. 
B)  derived demand elastic. 
C)  price elastic. 
D)  price inelastic. 
E)  status quo elastic. 
A)  cross-price elastic. 
B)  derived demand elastic. 
C)  price elastic. 
D)  price inelastic. 
E)  status quo elastic.

Question 4

For marketers using a price skimming strategy,once the initial demand is met for new and innovative products,they will likely:

Accepted Answer

A)  leave the market. 
B)  discontinue the product and create a new one. 
C)  offer deep discounts in order to create a loss leader pricing strategy. 
D)  lower the price to capture the next most price sensitive market segment. 
E)  use zone pricing to maximize differences. 
A)  leave the market. 
B)  discontinue the product and create a new one. 
C)  offer deep discounts in order to create a loss leader pricing strategy. 
D)  lower the price to capture the next most price sensitive market segment. 
E)  use zone pricing to maximize differences.

Question 5

The more substitutes that exist in a market:

Accepted Answer

A)  the lower the price elasticity for each product. 
B)  the greater the income elasticity for each product. 
C)  the easier it will be to utilize a target profit pricing strategy. 
D)  the more sensitive consumers will be to changes in the price of a particular product. 
E)  the more likely the market will be characterized as an oligopoly. 
A)  the lower the price elasticity for each product. 
B)  the greater the income elasticity for each product. 
C)  the easier it will be to utilize a target profit pricing strategy. 
D)  the more sensitive consumers will be to changes in the price of a particular product. 
E)  the more likely the market will be characterized as an oligopoly.

Question 6

Consumers judge the benefits the product delivers against the __________ necessary to obtain it.

Accepted Answer

A)  monetary cost 
B)  profit 
C)  variable cost 
D)  total return 
E)  sacrifice 
A)  monetary cost 
B)  profit 
C)  variable cost 
D)  total return 
E)  sacrifice

Question 7

Price skimming focuses on selling products to __________ and __________ in the consumer adoption process model.

Accepted Answer

A)  innovators and early adopters 
B)  early adopters and early majority 
C)  early majority and late majority 
D)  late majority and laggards 
E)  laggards and innovators 
A)  innovators and early adopters 
B)  early adopters and early majority 
C)  early majority and late majority 
D)  late majority and laggards 
E)  laggards and innovators

Question 8

A reference price might be considered deceptive if:

Accepted Answer

A)  the internal reference point is different from the external reference point. 
B)  the reference point has been inflated or is fictitious. 
C)  the reference price is more than two times the cost of the item. 
D)  the reference price has changed more than once in the past 12-month period. 
E)  All of these. 
A)  the internal reference point is different from the external reference point. 
B)  the reference point has been inflated or is fictitious. 
C)  the reference price is more than two times the cost of the item. 
D)  the reference price has changed more than once in the past 12-month period. 
E)  All of these.

Question 9

A mobile carrier decides to introduce a new cellular phone at a high price.This is known as:

Accepted Answer

A)  market penetration. 
B)  everyday low pricing. 
C)  competitor pricing. 
D)  loss leader pricing. 
E)  price skimming. 
A)  market penetration. 
B)  everyday low pricing. 
C)  competitor pricing. 
D)  loss leader pricing. 
E)  price skimming.

Question 10

The Internet has decreased consumers' price sensitivity.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT one of the Five Cs of pricing?

Accepted Answer

A)  Customers. 
B)  Channel members. 
C)  Cost. 
D)  Collaboration. 
E)  Company objectives. 
A)  Customers. 
B)  Channel members. 
C)  Cost. 
D)  Collaboration. 
E)  Company objectives.

Question 12

Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000.He expects the branch to attract 1,000 new customer accounts in the first year,each of which will cost $50 per year to service.He also expects to generate $100,000 per year in revenue.For Raymond,the total cost of opening the new branch and remaining open for one year will be:

Accepted Answer

A)  $500,000. 
B)  $550,000. 
C)  $650,000. 
D)  $450,000. 
E)  $605,000. 
A)  $500,000. 
B)  $550,000. 
C)  $650,000. 
D)  $450,000. 
E)  $605,000.

Question 13

Ferrari and Lamborghini are manufacturers of very expensive automobiles.Their limited edition cars often sell for $300,000 or more.For most consumers,these are prestige products,and demand is likely to be:

Accepted Answer

A)  cross-price elastic. 
B)  price inelastic. 
C)  price elastic. 
D)  status quo elastic. 
E)  derived demand inelastic. 
A)  cross-price elastic. 
B)  price inelastic. 
C)  price elastic. 
D)  status quo elastic. 
E)  derived demand inelastic.

Question 14

If a market penetration pricing strategy results in lower per-unit cost,competitors will be discouraged from entering the market because:

Accepted Answer

A)  selective consumer demand will increase gross profit margins. 
B)  a high / low cost-based pricing strategy will not work. 
C)  they would likely need to quickly produce a large volume in order to compete. 
D)  profits would increase too rapidly. 
E)  they will only be able to advertise in the same media as the firm using the market penetration strategy. 
A)  selective consumer demand will increase gross profit margins. 
B)  a high / low cost-based pricing strategy will not work. 
C)  they would likely need to quickly produce a large volume in order to compete. 
D)  profits would increase too rapidly. 
E)  they will only be able to advertise in the same media as the firm using the market penetration strategy.

Question 15

Raymond estimates the fixed costs associated with opening a new bank branch are $500,000.He estimates the branch will attract 1,000 new customers who will cost $50 / year to service each of their accounts.He also expects to generate $100,000 in fees annually from these accounts.What will be the total cost of opening the new branch and remaining open for one year?

Accepted Answer

Total cost = fixed c

Question 16

When Sony released their PlayStation 3 game machines,they charged a high price,attracting the most avid game players.This was a market penetration pricing strategy.

Accepted Answer

A) True 
 B)False

Question 17

The full price of a product or service includes all of the following EXCEPT:

Accepted Answer

A)  taxes. 
B)  shipping. 
C)  travel costs. 
D)  the price of alternative products and services. 
E)  value of the consumer's time. 
A)  taxes. 
B)  shipping. 
C)  travel costs. 
D)  the price of alternative products and services. 
E)  value of the consumer's time.

Question 18

Suppose that a friend asks you to drive him to the airport this weekend so that he can catch a flight.He pays you for the gas used driving to the airport,and for the cost of parking the car at the airport while you help him in with his bags.He then declares that you are now "even," since he has fully compensated you for any costs you incurred in helping him get to his flight.From your perspective,what aspects of the "price" of taking your friend to the airport has he omitted.

Accepted Answer

The full sacrifice of taking t

Question 19

For which of the following is demand likely to be least sensitive to price increases?

Accepted Answer

A)  Spring break vacations. 
B)  A specific brand of cereal. 
C)  Prescription drugs. 
D)  Theater tickets. 
E)  Restaurant meals. 
A)  Spring break vacations. 
B)  A specific brand of cereal. 
C)  Prescription drugs. 
D)  Theater tickets. 
E)  Restaurant meals.

Question 20

Internet comparison shopping sites like Shopping.com and Pricegrabber.com allow consumers to compare prices of substitute products much more easily than is possible without the Internet.These sites have:

Accepted Answer

A)  reduced the price elasticity demand for individual products. 
B)  increased the cross-price elasticity for substitute products. 
C)  increased the income effect on price elasticity of demand. 
D)  reduced the cross-price elasticity of demand for complementary goods. 
E)  decreased the price elasticity of demand for groups of similar products. 
A)  reduced the price elasticity demand for individual products. 
B)  increased the cross-price elasticity for substitute products. 
C)  increased the income effect on price elasticity of demand. 
D)  reduced the cross-price elasticity of demand for complementary goods. 
E)  decreased the price elasticity of demand for groups of similar products.

It is legitimate for a manufacturer to charge a retailer a lower price than its usual price if:

Because consumers are generally more sensitive to price increases than to price decreases,it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

The food and beverage manager at an upscale country club once offered a two-for-one happy hour price for all alcoholic beverages,only to see a very little response to the special.For these consumers,demand for alcoholic beverages is:

For marketers using a price skimming strategy,once the initial demand is met for new and innovative products,they will likely:

The more substitutes that exist in a market:

Consumers judge the benefits the product delivers against the __________ necessary to obtain it.

Price skimming focuses on selling products to and in the consumer adoption process model.

A reference price might be considered deceptive if:

A mobile carrier decides to introduce a new cellular phone at a high price.This is known as:

The Internet has decreased consumers' price sensitivity.

Which of the following is NOT one of the Five Cs of pricing?

Ferrari and Lamborghini are manufacturers of very expensive automobiles.Their limited edition cars often sell for $300,000 or more.For most consumers,these are prestige products,and demand is likely to be:

If a market penetration pricing strategy results in lower per-unit cost,competitors will be discouraged from entering the market because:

When Sony released their PlayStation 3 game machines,they charged a high price,attracting the most avid game players.This was a market penetration pricing strategy.

The full price of a product or service includes all of the following EXCEPT:

For which of the following is demand likely to be least sensitive to price increases?

Internet comparison shopping sites like Shopping.com and Pricegrabber.com allow consumers to compare prices of substitute products much more easily than is possible without the Internet.These sites have:

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Marketing Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: The Intangible Product

Supply Chain and Channel Management

Retailing and Multichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters

Exam 13: Pricing Concepts for Establishing Value

It is legitimate for a manufacturer to charge a retailer a lower price than its usual price if:

Because consumers are generally more sensitive to price increases than to price decreases,it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

The food and beverage manager at an upscale country club once offered a two-for-one happy hour price for all alcoholic beverages,only to see a very little response to the special.For these consumers,demand for alcoholic beverages is:

For marketers using a price skimming strategy,once the initial demand is met for new and innovative products,they will likely:

The more substitutes that exist in a market:

Consumers judge the benefits the product delivers against the __________ necessary to obtain it.

Price skimming focuses on selling products to __________ and __________ in the consumer adoption process model.

A reference price might be considered deceptive if:

A mobile carrier decides to introduce a new cellular phone at a high price.This is known as:

The Internet has decreased consumers' price sensitivity.

Which of the following is NOT one of the Five Cs of pricing?

Ferrari and Lamborghini are manufacturers of very expensive automobiles.Their limited edition cars often sell for $300,000 or more.For most consumers,these are prestige products,and demand is likely to be:

If a market penetration pricing strategy results in lower per-unit cost,competitors will be discouraged from entering the market because:

When Sony released their PlayStation 3 game machines,they charged a high price,attracting the most avid game players.This was a market penetration pricing strategy.

The full price of a product or service includes all of the following EXCEPT:

For which of the following is demand likely to be least sensitive to price increases?

Internet comparison shopping sites like Shopping.com and Pricegrabber.com allow consumers to compare prices of substitute products much more easily than is possible without the Internet.These sites have:

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Marketing Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: The Intangible Product

Supply Chain and Channel Management

Retailing and Multichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters

Price skimming focuses on selling products to and in the consumer adoption process model.