Question 1

Gray markets can be a challenge to marketers because:

Accepted Answer

A)  they are just as illegal as black markets. 
B)  they may tarnish the manufacturer's image. 
C)  they are legal in some states and illegal in others. 
D)  consumers are against them,but retailers support them. 
E)  None of these. 
A)  they are just as illegal as black markets. 
B)  they may tarnish the manufacturer's image. 
C)  they are legal in some states and illegal in others. 
D)  consumers are against them,but retailers support them. 
E)  None of these.

Question 2

__________ occurs when members of the marketing channel collude to control the prices passed on to consumers.

Accepted Answer

A)  Loss leader price fixing 
B)  Bait and switch price fixing 
C)  Horizontal price fixing 
D)  Vertical price fixing 
E)  Predatory pricing 
A)  Loss leader price fixing 
B)  Bait and switch price fixing 
C)  Horizontal price fixing 
D)  Vertical price fixing 
E)  Predatory pricing

Question 3

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 4

Labor,materials,and energy are typically __________ costs.

Accepted Answer

A)  fixed 
B)  incidental 
C)  prestige 
D)  inelastic 
E)  variable 
A)  fixed 
B)  incidental 
C)  prestige 
D)  inelastic 
E)  variable

Question 5

The fact that millions of consumers are using online search engines for comparison shopping has:

Accepted Answer

A)  reduced demand. 
B)  increased price elasticity of demand. 
C)  reduced the income effect. 
D)  reduced price elasticity of demand. 
E)  increased the income effect. 
A)  reduced demand. 
B)  increased price elasticity of demand. 
C)  reduced the income effect. 
D)  reduced price elasticity of demand. 
E)  increased the income effect.

Question 6

One of the limitations associated with break-even analysis is that:

Accepted Answer

A)  it assumes fixed costs are zero. 
B)  it cannot adjust for high variable costs. 
C)  it only tells marketers what price is needed to break even. 
D)  it assumes that there is only one price. 
E)  it assumes that demand is extremely inelastic. 
A)  it assumes fixed costs are zero. 
B)  it cannot adjust for high variable costs. 
C)  it only tells marketers what price is needed to break even. 
D)  it assumes that there is only one price. 
E)  it assumes that demand is extremely inelastic.

Question 7

__________ measures consumers' sensitivity to price changes.

Accepted Answer

A)  Cross-price elasticity of demand 
B)  Price elasticity of demand 
C)  Income elasticity of demand 
D)  Competitive profit elasticity of demand 
E)  Inelastic demand price parity 
A)  Cross-price elasticity of demand 
B)  Price elasticity of demand 
C)  Income elasticity of demand 
D)  Competitive profit elasticity of demand 
E)  Inelastic demand price parity

Question 8

__________ are costs that remain constant as the volume of production increases or decreases.

Accepted Answer

A)  Fixed costs 
B)  Variable costs 
C)  Beneficial costs 
D)  Contribution per unit costs 
E)  Break-even point costs 
A)  Fixed costs 
B)  Variable costs 
C)  Beneficial costs 
D)  Contribution per unit costs 
E)  Break-even point costs

Question 9

The Clayton Act and the Robinson-Patman Act forbid certain types of:

Accepted Answer

A)  price discrimination. 
B)  bait and switch pricing. 
C)  price fixing. 
D)  predatory pricing. 
E)  loss leader pricing. 
A)  price discrimination. 
B)  bait and switch pricing. 
C)  price fixing. 
D)  predatory pricing. 
E)  loss leader pricing.

Question 10

With a __________ pricing strategy,marketers set a low initial price for the introduction of a new product or service.

Accepted Answer

A)  market penetration 
B)  bundling 
C)  price fixing 
D)  reference 
E)  skimming 
A)  market penetration 
B)  bundling 
C)  price fixing 
D)  reference 
E)  skimming

Question 11

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 12

In many high-end resort markets,Westin hotels compete directly with Crown Plaza hotels.Each firm weighs the comparative advantages and disadvantages of their offerings to determine whether to price above,equal to,or below the other hotel.In these markets,the hotels are using a __________ pricing strategy.

Accepted Answer

A)  maximizing profits 
B)  target profit 
C)  target return 
D)  competitive parity 
E)  sales oriented 
A)  maximizing profits 
B)  target profit 
C)  target return 
D)  competitive parity 
E)  sales oriented

Question 13

Your spice company's pricing is set according to the laws of supply and demand.Therefore,when selling your spices you depend on the market to establish the price at which you will sell your spices.Which type of market are you operating in?

Accepted Answer

A)  Pure competition 
B)  Oligopoly 
C)  Monopoly 
D)  Monopolistic competition 
E)  Duopoly 
A)  Pure competition 
B)  Oligopoly 
C)  Monopoly 
D)  Monopolistic competition 
E)  Duopoly

Question 14

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 15

Julia wants her firm's gourmet snacks to be the leading brand in the U.S.market.When adopting a pricing strategy designed to gain market share,she should remember that:

Accepted Answer

A)  rarely is the lowest-price offering the dominant brand in a market. 
B)  prestige products need to be competitively priced. 
C)  companies can gain market share by offering low-quality products at a high price. 
D)  total value equals total cost minus variable costs leading to price escalation. 
E)  price wars are the way to become the dominant brand. 
A)  rarely is the lowest-price offering the dominant brand in a market. 
B)  prestige products need to be competitively priced. 
C)  companies can gain market share by offering low-quality products at a high price. 
D)  total value equals total cost minus variable costs leading to price escalation. 
E)  price wars are the way to become the dominant brand.

Question 16

Health clubs often use a low,introductory offer price to get people to join their club.These low prices represent a __________ pricing strategy.

Accepted Answer

A)  maximizing profits 
B)  target profit 
C)  target return 
D)  status quo 
E)  sales orientation 
A)  maximizing profits 
B)  target profit 
C)  target return 
D)  status quo 
E)  sales orientation

Question 17

If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors,the company could be charged with:

Accepted Answer

A)  loss leader pricing. 
B)  bait and switch pricing. 
C)  price fixing. 
D)  unfair slotting. 
E)  predatory pricing. 
A)  loss leader pricing. 
B)  bait and switch pricing. 
C)  price fixing. 
D)  unfair slotting. 
E)  predatory pricing.

Question 18

Brian knows his firm's pricing strategy needs to be consistent with the company's overall objectives.As marketing manager,Brian will base his pricing strategy on whether the company's objective is to:

Accepted Answer

A)  increase profits. 
B)  increase sales. 
C)  decrease competition. 
D)  build customer satisfaction. 
E)  any of these. 
A)  increase profits. 
B)  increase sales. 
C)  decrease competition. 
D)  build customer satisfaction. 
E)  any of these.

Question 19

The Robinson-Patman Act does NOT apply to end consumers,at which point many forms of price discrimination occur.

Accepted Answer

A) True 
 B)False

Question 20

A major hotel chain found that if they were to reduce the cost of the ice cream they currently served they would be able to save over 400 employees jobs.Therefore,they switched from a high priced brand of ice cream to a more moderate priced ice cream.This is known as the:

Accepted Answer

A)  substitution effect 
B)  income effect 
C)  brand effect 
D)  commercial effect 
E)  value effect 
A)  substitution effect 
B)  income effect 
C)  brand effect 
D)  commercial effect 
E)  value effect

Gray markets can be a challenge to marketers because:

__________ occurs when members of the marketing channel collude to control the prices passed on to consumers.

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

Labor,materials,and energy are typically __________ costs.

The fact that millions of consumers are using online search engines for comparison shopping has:

One of the limitations associated with break-even analysis is that:

__________ measures consumers' sensitivity to price changes.

__________ are costs that remain constant as the volume of production increases or decreases.

The Clayton Act and the Robinson-Patman Act forbid certain types of:

With a __________ pricing strategy,marketers set a low initial price for the introduction of a new product or service.

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.

Your spice company's pricing is set according to the laws of supply and demand.Therefore,when selling your spices you depend on the market to establish the price at which you will sell your spices.Which type of market are you operating in?

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.

Julia wants her firm's gourmet snacks to be the leading brand in the U.S.market.When adopting a pricing strategy designed to gain market share,she should remember that:

Health clubs often use a low,introductory offer price to get people to join their club.These low prices represent a __________ pricing strategy.

If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors,the company could be charged with:

Brian knows his firm's pricing strategy needs to be consistent with the company's overall objectives.As marketing manager,Brian will base his pricing strategy on whether the company's objective is to:

The Robinson-Patman Act does NOT apply to end consumers,at which point many forms of price discrimination occur.

A major hotel chain found that if they were to reduce the cost of the ice cream they currently served they would be able to save over 400 employees jobs.Therefore,they switched from a high priced brand of ice cream to a more moderate priced ice cream.This is known as the:

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

Gray markets can be a challenge to marketers because:

__________ occurs when members of the marketing channel collude to control the prices passed on to consumers.

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

Labor,materials,and energy are typically __________ costs.

The fact that millions of consumers are using online search engines for comparison shopping has:

One of the limitations associated with break-even analysis is that:

__________ measures consumers' sensitivity to price changes.

__________ are costs that remain constant as the volume of production increases or decreases.

The Clayton Act and the Robinson-Patman Act forbid certain types of:

With a __________ pricing strategy,marketers set a low initial price for the introduction of a new product or service.

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.

Your spice company's pricing is set according to the laws of supply and demand.Therefore,when selling your spices you depend on the market to establish the price at which you will sell your spices.Which type of market are you operating in?

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.

Julia wants her firm's gourmet snacks to be the leading brand in the U.S.market.When adopting a pricing strategy designed to gain market share,she should remember that:

Health clubs often use a low,introductory offer price to get people to join their club.These low prices represent a __________ pricing strategy.

If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors,the company could be charged with:

Brian knows his firm's pricing strategy needs to be consistent with the company's overall objectives.As marketing manager,Brian will base his pricing strategy on whether the company's objective is to:

The Robinson-Patman Act does NOT apply to end consumers,at which point many forms of price discrimination occur.

A major hotel chain found that if they were to reduce the cost of the ice cream they currently served they would be able to save over 400 employees jobs.Therefore,they switched from a high priced brand of ice cream to a more moderate priced ice cream.This is known as the:

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.