Question 1

Using "keystoning" as a pricing strategy:

Accepted Answer

A)  creates undue complexity for retailers. 
B)  avoids having to participate in pure competition. 
C)  ignores consumers' sensitivity to changes in prices. 
D)  allows marketers to estimate the substitution effect. 
E)  maximizes the difference between total cost and total variable cost. 
A)  creates undue complexity for retailers. 
B)  avoids having to participate in pure competition. 
C)  ignores consumers' sensitivity to changes in prices. 
D)  allows marketers to estimate the substitution effect. 
E)  maximizes the difference between total cost and total variable cost.

Question 2

It is important to Joanne to get value for her money but,she does not want to spend time comparison shopping.Joanne will likely respond to __________ pricing but not __________ pricing.

Accepted Answer

A)  high / low; everyday low 
B)  premium; everyday low 
C)  discount; vertical 
D)  horizontal; flattening 
E)  everyday low; high / low 
A)  high / low; everyday low 
B)  premium; everyday low 
C)  discount; vertical 
D)  horizontal; flattening 
E)  everyday low; high / low

Question 3

Earl was known for driving 30 miles to save a dollar on the price for his favorite beverage.Earl perceived price as __________,while most consumers recognize price as the __________ made to acquire a good or service.

Accepted Answer

A)  money paid; overall sacrifice 
B)  variable cost; fixed cost 
C)  fixed cost; variable payment 
D)  overall sacrifice; monetary payment 
E)  break-even amount; price elasticity 
A)  money paid; overall sacrifice 
B)  variable cost; fixed cost 
C)  fixed cost; variable payment 
D)  overall sacrifice; monetary payment 
E)  break-even amount; price elasticity

Question 4

What is the experience curve effect? What pricing strategy is it associated with?

Accepted Answer

The experience curve effect re

Question 5

When Burroughs-Welcome introduced the first anti-AIDS drugs,they initially set the price at $10,000 for a year's supply.Burroughs-Welcome was probably pursuing a __________ pricing strategy.

Accepted Answer

A)  skimming 
B)  introductory 
C)  slotting allowance 
D)  market penetration 
E)  cost-based 
A)  skimming 
B)  introductory 
C)  slotting allowance 
D)  market penetration 
E)  cost-based

Question 6

__________ lowers the price below the store's cost.

Accepted Answer

A)  Recessionary pricing 
B)  Loss leader pricing 
C)  Radical mark-down pricing 
D)  Employee pricing 
E)  Sales promotion pricing 
A)  Recessionary pricing 
B)  Loss leader pricing 
C)  Radical mark-down pricing 
D)  Employee pricing 
E)  Sales promotion pricing

Question 7

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty.Brand loyalty changes the demand curve for the firm's products by:

Accepted Answer

A)  reducing the price elasticity of demand. 
B)  making demand more oligopolistic and less monopolistic. 
C)  increasing the income effect. 
D)  reducing fixed costs and increasing the gray marketing effect. 
E)  shifting the market from a monopoly to pure competition. 
A)  reducing the price elasticity of demand. 
B)  making demand more oligopolistic and less monopolistic. 
C)  increasing the income effect. 
D)  reducing fixed costs and increasing the gray marketing effect. 
E)  shifting the market from a monopoly to pure competition.

Question 8

Price elasticity of demand is the:

Accepted Answer

A)  percentage change in quantity demanded divided by the percentage change in price. 
B)  percentage change in price divided by percentage change in quantity demanded. 
C)  change in price divided by change in quantity demanded. 
D)  change in quantity demanded divided by the change in price. 
E)  change in quantity demanded multiplied by the change in price. 
A)  percentage change in quantity demanded divided by the percentage change in price. 
B)  percentage change in price divided by percentage change in quantity demanded. 
C)  change in price divided by change in quantity demanded. 
D)  change in quantity demanded divided by the change in price. 
E)  change in quantity demanded multiplied by the change in price.

Question 9

Economic trends that affect pricing decisions include increases in disposable income and status consciousness,a trend for customers to shop cheap,global economic conditions,and local economic conditions.

Accepted Answer

A) True 
 B)False

Question 10

Because there are many firms with similar products in purely competitive markets:

Accepted Answer

A)  price is determined by the laws of supply and demand. 
B)  consumers develop personal preferences. 
C)  firms find it easy to build strong,distinct brands. 
D)  advertising is heavily used. 
E)  the many competitors will focus on variable cost pricing. 
A)  price is determined by the laws of supply and demand. 
B)  consumers develop personal preferences. 
C)  firms find it easy to build strong,distinct brands. 
D)  advertising is heavily used. 
E)  the many competitors will focus on variable cost pricing.

Question 11

In a market with __________,there are many firms providing differentiated products.

Accepted Answer

A)  pure competition 
B)  oligopolistic competition 
C)  monopolistic competition 
D)  a monopoly 
E)  a duopoly 
A)  pure competition 
B)  oligopolistic competition 
C)  monopolistic competition 
D)  a monopoly 
E)  a duopoly

Question 12

Diane owns a bakery where she sells cupcakes.Two blocks down there is another bakery,CC's Bakery,that sells cupcakes for $1 less than Diane.Diane decides to lower her price and match CC's Bakery prices.What type of pricing strategy is Diane implementing?

Accepted Answer

A)  internal pricing 
B)  profit-oriented pricing 
C)  competitor-oriented pricing 
D)  customer-oriented pricing 
E)  sales-oriented pricing 
A)  internal pricing 
B)  profit-oriented pricing 
C)  competitor-oriented pricing 
D)  customer-oriented pricing 
E)  sales-oriented pricing

Question 13

If firms price their products too low,it may:

Accepted Answer

A)  result in lower costs. 
B)  create a premium pricing effect. 
C)  increase contribution per unit. 
D)  result in inelastic demand. 
E)  signal poor quality. 
A)  result in lower costs. 
B)  create a premium pricing effect. 
C)  increase contribution per unit. 
D)  result in inelastic demand. 
E)  signal poor quality.

Question 14

In a __________ pricing tactic,sellers advertise low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

Accepted Answer

A)  fixed offer 
B)  reference 
C)  seasonal 
D)  bait and switch 
E)  cost-based 
A)  fixed offer 
B)  reference 
C)  seasonal 
D)  bait and switch 
E)  cost-based

Question 15

Chet knows that the pro shops selling his tennis racquets will "keystone" his product.He also knows sales will decline significantly if the retail price is greater than $100.What is the maximum wholesale price Chet can charge?

Accepted Answer

Keystoning means selling the p

Question 16

__________ is the practice of colluding with other firms to control prices.

Accepted Answer

A)  Competitive favoritism 
B)  Industry tightening 
C)  Monopolistic competition 
D)  Price fixing 
E)  Regressive pricing 
A)  Competitive favoritism 
B)  Industry tightening 
C)  Monopolistic competition 
D)  Price fixing 
E)  Regressive pricing

Question 17

The major objectives associated with a market penetration pricing strategy are to:

Accepted Answer

A)  capture the high end of the market demand curve and lower introduction costs. 
B)  build sales and market share. 
C)  minimize customer dissatisfaction and maximize reference price value. 
D)  provide an incentive to purchase a less desirable product in order to obtain a more desirable product. 
E)  match competitors' prices and communicate high quality. 
A)  capture the high end of the market demand curve and lower introduction costs. 
B)  build sales and market share. 
C)  minimize customer dissatisfaction and maximize reference price value. 
D)  provide an incentive to purchase a less desirable product in order to obtain a more desirable product. 
E)  match competitors' prices and communicate high quality.

Question 18

Frank's Heating and Air Conditioning Company specializes in electric heat pumps.Frank keeps track of the price of natural gas,knowing that:

Accepted Answer

A)  natural gas creates more environmental greenhouse effects than coal. 
B)  an increase in the price of natural gas will increase demand for his electrical heating systems. 
C)  gas heating systems and electrical heating systems are complementary goods. 
D)  when the price of natural gas goes up,the quantity demanded also rises. 
E)  the demand for natural gas is price elastic. 
A)  natural gas creates more environmental greenhouse effects than coal. 
B)  an increase in the price of natural gas will increase demand for his electrical heating systems. 
C)  gas heating systems and electrical heating systems are complementary goods. 
D)  when the price of natural gas goes up,the quantity demanded also rises. 
E)  the demand for natural gas is price elastic.

Question 19

If a firm in a purely competitive market can differentiate its product or service,it becomes part of a __________ market.

Accepted Answer

A)  pure competition 
B)  oligopolistic competition 
C)  monopolistic competition 
D)  monopoly 
E)  duopoly 
A)  pure competition 
B)  oligopolistic competition 
C)  monopolistic competition 
D)  monopoly 
E)  duopoly

Question 20

In general,prices should not be based on costs because consumers make their purchase decisions based on perceived value,not the cost of production.

Accepted Answer

A) True 
 B)False

Using "keystoning" as a pricing strategy:

It is important to Joanne to get value for her money but,she does not want to spend time comparison shopping.Joanne will likely respond to pricing but not pricing.

Earl was known for driving 30 miles to save a dollar on the price for his favorite beverage.Earl perceived price as ,while most consumers recognize price as the made to acquire a good or service.

What is the experience curve effect? What pricing strategy is it associated with?

When Burroughs-Welcome introduced the first anti-AIDS drugs,they initially set the price at $10,000 for a year's supply.Burroughs-Welcome was probably pursuing a __________ pricing strategy.

__________ lowers the price below the store's cost.

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty.Brand loyalty changes the demand curve for the firm's products by:

Price elasticity of demand is the:

Economic trends that affect pricing decisions include increases in disposable income and status consciousness,a trend for customers to shop cheap,global economic conditions,and local economic conditions.

Because there are many firms with similar products in purely competitive markets:

In a market with __________,there are many firms providing differentiated products.

Diane owns a bakery where she sells cupcakes.Two blocks down there is another bakery,CC's Bakery,that sells cupcakes for $1 less than Diane.Diane decides to lower her price and match CC's Bakery prices.What type of pricing strategy is Diane implementing?

If firms price their products too low,it may:

In a __________ pricing tactic,sellers advertise low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

Chet knows that the pro shops selling his tennis racquets will "keystone" his product.He also knows sales will decline significantly if the retail price is greater than $100.What is the maximum wholesale price Chet can charge?

__________ is the practice of colluding with other firms to control prices.

The major objectives associated with a market penetration pricing strategy are to:

Frank's Heating and Air Conditioning Company specializes in electric heat pumps.Frank keeps track of the price of natural gas,knowing that:

If a firm in a purely competitive market can differentiate its product or service,it becomes part of a __________ market.

In general,prices should not be based on costs because consumers make their purchase decisions based on perceived value,not the cost of production.

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

Using "keystoning" as a pricing strategy:

It is important to Joanne to get value for her money but,she does not want to spend time comparison shopping.Joanne will likely respond to __________ pricing but not __________ pricing.

Earl was known for driving 30 miles to save a dollar on the price for his favorite beverage.Earl perceived price as __________,while most consumers recognize price as the __________ made to acquire a good or service.

What is the experience curve effect? What pricing strategy is it associated with?

When Burroughs-Welcome introduced the first anti-AIDS drugs,they initially set the price at $10,000 for a year's supply.Burroughs-Welcome was probably pursuing a __________ pricing strategy.

__________ lowers the price below the store's cost.

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty.Brand loyalty changes the demand curve for the firm's products by:

Price elasticity of demand is the:

Economic trends that affect pricing decisions include increases in disposable income and status consciousness,a trend for customers to shop cheap,global economic conditions,and local economic conditions.

Because there are many firms with similar products in purely competitive markets:

In a market with __________,there are many firms providing differentiated products.

Diane owns a bakery where she sells cupcakes.Two blocks down there is another bakery,CC's Bakery,that sells cupcakes for $1 less than Diane.Diane decides to lower her price and match CC's Bakery prices.What type of pricing strategy is Diane implementing?

If firms price their products too low,it may:

In a __________ pricing tactic,sellers advertise low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

Chet knows that the pro shops selling his tennis racquets will "keystone" his product.He also knows sales will decline significantly if the retail price is greater than $100.What is the maximum wholesale price Chet can charge?

__________ is the practice of colluding with other firms to control prices.

The major objectives associated with a market penetration pricing strategy are to:

Frank's Heating and Air Conditioning Company specializes in electric heat pumps.Frank keeps track of the price of natural gas,knowing that:

If a firm in a purely competitive market can differentiate its product or service,it becomes part of a __________ market.

In general,prices should not be based on costs because consumers make their purchase decisions based on perceived value,not the cost of production.

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

It is important to Joanne to get value for her money but,she does not want to spend time comparison shopping.Joanne will likely respond to pricing but not pricing.

Earl was known for driving 30 miles to save a dollar on the price for his favorite beverage.Earl perceived price as ,while most consumers recognize price as the made to acquire a good or service.