Question 1

Price fixing is illegal under the

Accepted Answer

A) Sherman Act. 
B) Consumer Goods Pricing Act. 
C) Robinson-Patman Act. 
D) Federal Trade Commission Act. 
E) Clayton Act. 
A) Sherman Act. 
B) Consumer Goods Pricing Act. 
C) Robinson-Patman Act. 
D) Federal Trade Commission Act. 
E) Clayton Act.

Question 2

All of the following are demand-oriented approaches to selecting an approximate price level EXCEPT:

Accepted Answer

A) odd-even. 
B) yield management. 
C) customary. 
D) bundle. 
E) prestige 
A) odd-even. 
B) yield management. 
C) customary. 
D) bundle. 
E) prestige

Question 3

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Accepted Answer

A) target return on sales. 
B) industry profit. 
C) unit volume. 
D) market share. 
E) profit. 
A) target return on sales. 
B) industry profit. 
C) unit volume. 
D) market share. 
E) profit.

Question 4

$$\begin{array} { | l c c c c | } 
\hline \text { Brand } & { \text { Dollar Sales Market Share } } &&{ \text { Unit Volume Market Share } } \
\hline \text { Red Bull } & \mathbf { 2 0 1 0 } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 1 0 } & \mathbf { 2 0 0 9 } \
\hline \text { Monster } & 18 & 37 \% & 33 \% & 33 \% \
\hline \text { Rockstar } & 7 & 17 & 19 & 18 \
\hline \begin{array} { l } 
\text { Other } \
\text { Brands }
\end{array} & \frac { 37 } { 100 \% } & \frac { 38 } { 100 \% } & \frac { 40 } { 100 \% } & \frac { 40 } { 100 \% } \
\hline
\end{array}$$
-The Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks. What is the price premium for Red Bull in 2010?

Accepted Answer

A) -12.5% 
B) -7.5% 
C) -5.3% 
D) 0% 
E) 15.2% 
A) -12.5% 
B) -7.5% 
C) -5.3% 
D) 0% 
E) 15.2%

Question 5

Elastic demand exists when

Accepted Answer

A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded. 
B) a small percentage decrease in price produces a larger percentage increase in quantity demanded. 
C) an increase in price causes a larger increase in quantity demanded. 
D) the quantity demanded remains the same regardless of level of price. 
E) no change in price produces a small percentage change in quantity demanded. 
A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded. 
B) a small percentage decrease in price produces a larger percentage increase in quantity demanded. 
C) an increase in price causes a larger increase in quantity demanded. 
D) the quantity demanded remains the same regardless of level of price. 
E) no change in price produces a small percentage change in quantity demanded.

Question 6

A skimming pricing policy is likely to be most effective when

Accepted Answer

A) consumers tend to be price sensitive. 
B) it will be easier to set measurable sales unit goals. 
C) a lower price will significantly lower fixed costs. 
D) consumers perceive your product to be similar to other products on the market. 
E) customers are willing to buy immediately at the high initial price 
A) consumers tend to be price sensitive. 
B) it will be easier to set measurable sales unit goals. 
C) a lower price will significantly lower fixed costs. 
D) consumers perceive your product to be similar to other products on the market. 
E) customers are willing to buy immediately at the high initial price

Question 7

Which of the following statements is most accurate?

Accepted Answer

A) Nonprofit organizations are exempt from having to cover the costs of producing and/or marketing their products. 
B) Socially responsible corporations should have the pricing constraint of covering all costs of producing and marketing their products, but they should not price their products to earn a profit. 
C) Marketers must ensure that firms in their channels of distribution make an adequate profit or they will be cut off from their customers. 
D) Price elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times. 
E) Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization. 
A) Nonprofit organizations are exempt from having to cover the costs of producing and/or marketing their products. 
B) Socially responsible corporations should have the pricing constraint of covering all costs of producing and marketing their products, but they should not price their products to earn a profit. 
C) Marketers must ensure that firms in their channels of distribution make an adequate profit or they will be cut off from their customers. 
D) Price elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times. 
E) Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization.

Question 8

Which of the following illustrates movement along the demand curve?

Accepted Answer

A) Prices remain the same, but there is a significant increase in demand. 
B) Prices remain the same, but there is a significant decrease in demand. 
C) As the price is raised, the quantity demanded increases, assuming all demand factors stay the same. 
D) As the price is lowered, the quantity demanded increases, assuming all demand factors stay the same. 
E) Movement along the curve indicates that some significant event has taken place outside the organization that has affected demand. 
A) Prices remain the same, but there is a significant increase in demand. 
B) Prices remain the same, but there is a significant decrease in demand. 
C) As the price is raised, the quantity demanded increases, assuming all demand factors stay the same. 
D) As the price is lowered, the quantity demanded increases, assuming all demand factors stay the same. 
E) Movement along the curve indicates that some significant event has taken place outside the organization that has affected demand.

Question 9

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product. Which of the following conditions would argue AGAINST using a penetration pricing strategy for the tasty fat-free ice cream?

Accepted Answer

A) The ice cream market is highly elastic. 
B) A large portion of the market has inelastic demand for ice cream over a broad range of prices. 
C) Economies of scale in production would be substantial. 
D) Retailers are not willing to pay for new brands of premium ice cream in the already overcrowded category. 
E) Once the initial price is set, it is nearly impossible to lower prices without alienating buyers. 
A) The ice cream market is highly elastic. 
B) A large portion of the market has inelastic demand for ice cream over a broad range of prices. 
C) Economies of scale in production would be substantial. 
D) Retailers are not willing to pay for new brands of premium ice cream in the already overcrowded category. 
E) Once the initial price is set, it is nearly impossible to lower prices without alienating buyers.

Question 10

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Accepted Answer

A) target return-on-sales pricing 
B) flexible pricing 
C) cost-plus pricing 
D) standard markup pricing 
E) customary pricing 
A) target return-on-sales pricing 
B) flexible pricing 
C) cost-plus pricing 
D) standard markup pricing 
E) customary pricing

Question 11

Charging different prices to maximize revenue for a set amount of capacity at any given time is referred to as

Accepted Answer

A) demand backward pricing. 
B) target pricing. 
C) skimming pricing. 
D) yield management pricing. 
E) penetration pricing. 
A) demand backward pricing. 
B) target pricing. 
C) skimming pricing. 
D) yield management pricing. 
E) penetration pricing.

Question 12

A skimming pricing policy is likely to be most effective when

Accepted Answer

A) consumers perceive one product to be similar to other products on the market. 
B) a lower price will significantly lower fixed costs. 
C) competitors will be attracted to the market due to the potential for high sales revenues. 
D) consumers tend to be price sensitive. 
E) the high initial price will not attract competitors. 
A) consumers perceive one product to be similar to other products on the market. 
B) a lower price will significantly lower fixed costs. 
C) competitors will be attracted to the market due to the potential for high sales revenues. 
D) consumers tend to be price sensitive. 
E) the high initial price will not attract competitors.

Question 13

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Accepted Answer

A) competitive collusion 
B) vertical price fixing 
C) horizontal price fixing 
D) lateral price fixing 
E) price cooperation 
A) competitive collusion 
B) vertical price fixing 
C) horizontal price fixing 
D) lateral price fixing 
E) price cooperation

Question 14

Rather than emphasize demand, cost, or profit factors, a price setter can stress what __________ is (are) doing.

Accepted Answer

A) the service sector 
B) the market or competitors 
C) consumers 
D) suppliers 
E) the financial markets 
A) the service sector 
B) the market or competitors 
C) consumers 
D) suppliers 
E) the financial markets

Question 15

The ratio of __________ to price is referred to as value.

Accepted Answer

A) prestige value 
B) perceived benefits 
C) costs 
D) perceived quality 
E) profits 
A) prestige value 
B) perceived benefits 
C) costs 
D) perceived quality 
E) profits

Question 16

Target return-on-investment (ROI) is frequently used by

Accepted Answer

A) contractors. 
B) public utilities. 
C) business-to-business markets. 
D) supermarkets. 
E) small privately owned firms. 
A) contractors. 
B) public utilities. 
C) business-to-business markets. 
D) supermarkets. 
E) small privately owned firms.

Question 17

What are the conditions favoring the use of penetration pricing?

Accepted Answer

The conditions favoring penetration pric

Question 18

-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box A represents which approach?

Accepted Answer

A) cost-oriented approach 
B) profit-oriented approach 
C) competition-oriented approach 
D) demand-oriented approach 
E) results-oriented approach 
A) cost-oriented approach 
B) profit-oriented approach 
C) competition-oriented approach 
D) demand-oriented approach 
E) results-oriented approach

Question 19

Explain why price elasticity is important to marketing managers.

Accepted Answer

Price elasticity of demand is important

Question 20

There are a lot of skateboards on the market, but the BMW Streetcarver is the only one with stabilizers and wheel design based on BMW's automobiles. This technology gives the BMW Streetcarver better control at high speeds and around sharp turns than any other brand. The skateboard is priced at $495, which leaves many consumers who might want to buy the Streetcarver (especially young males) unable to afford it. This inability to pay for the high-priced BMW-made skateboard shows the affect of __________ on sales.

Accepted Answer

A) demand factors 
B) macroeconomic environmental factors 
C) barter factors 
D) supply factors 
E) exchange parameters 
A) demand factors 
B) macroeconomic environmental factors 
C) barter factors 
D) supply factors 
E) exchange parameters

Price fixing is illegal under the

All of the following are demand-oriented approaches to selecting an approximate price level EXCEPT:

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Brand Dollar Sales Market Share Unit Volume Market Share Red Bull Monster 18 37\% 33\% 33\% Rockstar 7 17 19 18 Other Brands -The Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks. What is the price premium for Red Bull in 2010?

Elastic demand exists when

A skimming pricing policy is likely to be most effective when

Which of the following statements is most accurate?

Which of the following illustrates movement along the demand curve?

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Charging different prices to maximize revenue for a set amount of capacity at any given time is referred to as

A skimming pricing policy is likely to be most effective when

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Rather than emphasize demand, cost, or profit factors, a price setter can stress what __________ is (are) doing.

The ratio of __________ to price is referred to as value.

Target return-on-investment (ROI) is frequently used by

What are the conditions favoring the use of penetration pricing?

-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box A represents which approach?

Explain why price elasticity is important to marketing managers.

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation, Targeting, and Positioning

Developing New Products and Services

Managing Successful Products, Services, and Brands

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Using Social Media to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Filters

Exam 11: Pricing Products and Services

Price fixing is illegal under the

All of the following are demand-oriented approaches to selecting an approximate price level EXCEPT:

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Brand Dollar Sales Market Share Unit Volume Market Share Red Bull Monster 18 37\% 33\% 33\% Rockstar 7 17 19 18 Other Brands -The Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks. What is the price premium for Red Bull in 2010?

Elastic demand exists when

A skimming pricing policy is likely to be most effective when

Which of the following statements is most accurate?

Which of the following illustrates movement along the demand curve?

Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

Charging different prices to maximize revenue for a set amount of capacity at any given time is referred to as

A skimming pricing policy is likely to be most effective when

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Rather than emphasize demand, cost, or profit factors, a price setter can stress what __________ is (are) doing.

The ratio of __________ to price is referred to as value.

Target return-on-investment (ROI) is frequently used by

What are the conditions favoring the use of penetration pricing?

-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box A represents which approach?

Explain why price elasticity is important to marketing managers.

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation, Targeting, and Positioning

Developing New Products and Services

Managing Successful Products, Services, and Brands

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Using Social Media to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Filters