Question 1

Price competition is a very flexible marketing strategy.

Accepted Answer

A) True 
 B)False

Question 2

Price is the value that is exchanged for products in a marketing transaction.

Accepted Answer

A) True 
 B)False

Question 3

Ryan orders 16 dozen fishing lures from Strike Right for $375. When he gets the invoice, he is furious that $25 in freight charges has been tacked onto his bill because he thought the price included freight costs. Ryan should have been certain that the order terms were

Accepted Answer

A) F.O.B. origin. 
B) F.O.B. factory. 
C) C.O.D. 
D) 2/10, n/30. 
E) F.O.B. destination. 
A) F.O.B. origin. 
B) F.O.B. factory. 
C) C.O.D. 
D) 2/10, n/30. 
E) F.O.B. destination.

Question 4

If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point?

Accepted Answer

A) 500 units 
B) 2,000 units 
C) 1,200 units 
D) 300 units 
E) 3,000 units 
A) 500 units 
B) 2,000 units 
C) 1,200 units 
D) 300 units 
E) 3,000 units

Question 5

The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____ discounts.

Accepted Answer

A) trade 
B) cumulative 
C) noncumulative 
D) push 
E) intermediary 
A) trade 
B) cumulative 
C) noncumulative 
D) push 
E) intermediary

Question 6

Comparison of various prices and various breakeven points will tell the marketer exactly what price to charge.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is true about customers' interpretation and response to price? ​

Accepted Answer

A) An internal reference price is a comparison price provided by others such as friends and relatives. 
B) An external reference price is a price developed in the buyer's mind through experience with the product. 
C) Prestige-sensitive customers are concerned about both the price and quality aspects of a product. 
D) At times, customers interpret a higher price as higher product quality. 
E) Customers do not consider the resources required to maintain a product after purchase. 
A) An internal reference price is a comparison price provided by others such as friends and relatives. 
B) An external reference price is a price developed in the buyer's mind through experience with the product. 
C) Prestige-sensitive customers are concerned about both the price and quality aspects of a product. 
D) At times, customers interpret a higher price as higher product quality. 
E) Customers do not consider the resources required to maintain a product after purchase.

Question 8

Mars Petcare is one of the world's largest pet food manufacturers. If the strategic goal for Mars Petcare in the coming year was to ___________ in North America, it should use temporary price reductions.

Accepted Answer

A) increase the number of competitors. 
B) gain market share. 
C) decrease volume sold. 
D) increase revenue per item. 
E) decrease the number of competitors. 
A) increase the number of competitors. 
B) gain market share. 
C) decrease volume sold. 
D) increase revenue per item. 
E) decrease the number of competitors.

Question 9

Generally, customers are most likely to rely on the price-quality association when

Accepted Answer

A) they cannot judge the quality of the product for themselves. 
B) the product is a well-known brand. 
C) customers can judge the product's quality for themselves. 
D) the product is purchased through the use of the Internet. 
E) products are being purchased from well-established retailers that are familiar to customers. 
A) they cannot judge the quality of the product for themselves. 
B) the product is a well-known brand. 
C) customers can judge the product's quality for themselves. 
D) the product is purchased through the use of the Internet. 
E) products are being purchased from well-established retailers that are familiar to customers.

Question 10

A seller can change prices quickly in a price-competition situation.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following acts does not directly affect pricing decisions?

Accepted Answer

A) Sherman Antitrust Act 
B) Federal Trade Commission Act 
C) Wheeler-Lea Act 
D) Clayton Act 
E) Simpson-Marshall Act 
A) Sherman Antitrust Act 
B) Federal Trade Commission Act 
C) Wheeler-Lea Act 
D) Clayton Act 
E) Simpson-Marshall Act

Question 12

Scenario 19.1 Use the following to answer the questions.Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
-Refer to Scenario 19.1. To break even, Concession Supply should sell ____ cases of hot dogs per day at Wrigley Field.

Accepted Answer

A) 13 
B) 120 
C) 40 
D) 200 
E) 60 
A) 13 
B) 120 
C) 40 
D) 200 
E) 60

Question 13

Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product.

Accepted Answer

A) True 
 B)False

Question 14

Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition.

Accepted Answer

A) True 
 B)False

Question 15

Since Victoria's Secret has decided to use nonprice competition, it distinguishes its brand through all but which of the following?

Accepted Answer

A) distinctive product features. 
B) exceptional service. 
C) rebates. 
D) variety and selection. 
E) product quality and style. 
A) distinctive product features. 
B) exceptional service. 
C) rebates. 
D) variety and selection. 
E) product quality and style.

Question 16

A certain location of O'Charley's Restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must O'Charley's serve per year in order to break even?

Accepted Answer

A) 2,000 
B) 5,000 
C) 10,000 
D) 3,333 
E) 2,500 
A) 2,000 
B) 5,000 
C) 10,000 
D) 3,333 
E) 2,500

Question 17

Rent is usually a fixed cost.

Accepted Answer

A) True 
 B)False

Question 18

Brand uniqueness is not important in nonprice competition.

Accepted Answer

A) True 
 B)False

Question 19

Advertisements for Suave shampoos emphasize that other shampoos may cost more but don't work any better than Suave. In this example, Suave is competing on the basis of

Accepted Answer

A) product attributes. 
B) product performance. 
C) product price. 
D) available selection. 
E) product packaging. 
A) product attributes. 
B) product performance. 
C) product price. 
D) available selection. 
E) product packaging.

Question 20

Which of the following is not a major factor for firms making price decisions?

Accepted Answer

A) Costs 
B) Competition 
C) Previous sales 
D) Channel member expectations 
E) Legal and regulatory issues 
A) Costs 
B) Competition 
C) Previous sales 
D) Channel member expectations 
E) Legal and regulatory issues

Price competition is a very flexible marketing strategy.

Price is the value that is exchanged for products in a marketing transaction.

Ryan orders 16 dozen fishing lures from Strike Right for $375. When he gets the invoice, he is furious that $25 in freight charges has been tacked onto his bill because he thought the price included freight costs. Ryan should have been certain that the order terms were

If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point?

The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____ discounts.

Comparison of various prices and various breakeven points will tell the marketer exactly what price to charge.

Which of the following statements is true about customers' interpretation and response to price?

Mars Petcare is one of the world's largest pet food manufacturers. If the strategic goal for Mars Petcare in the coming year was to ___________ in North America, it should use temporary price reductions.

Generally, customers are most likely to rely on the price-quality association when

A seller can change prices quickly in a price-competition situation.

Which of the following acts does not directly affect pricing decisions?

Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product.

Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition.

Since Victoria's Secret has decided to use nonprice competition, it distinguishes its brand through all but which of the following?

A certain location of O'Charley's Restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must O'Charley's serve per year in order to break even?

Rent is usually a fixed cost.

Brand uniqueness is not important in nonprice competition.

Advertisements for Suave shampoos emphasize that other shampoos may cost more but don't work any better than Suave. In this example, Suave is competing on the basis of

Which of the following is not a major factor for firms making price decisions?

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

Marketing Research and Information Systems

Target Markets Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product Concepts, Branding and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters

Exam 19: Pricing Concepts

Price competition is a very flexible marketing strategy.

Price is the value that is exchanged for products in a marketing transaction.

Ryan orders 16 dozen fishing lures from Strike Right for $375. When he gets the invoice, he is furious that $25 in freight charges has been tacked onto his bill because he thought the price included freight costs. Ryan should have been certain that the order terms were

If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point?

The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____ discounts.

Comparison of various prices and various breakeven points will tell the marketer exactly what price to charge.

Which of the following statements is true about customers' interpretation and response to price? ​

Mars Petcare is one of the world's largest pet food manufacturers. If the strategic goal for Mars Petcare in the coming year was to ___________ in North America, it should use temporary price reductions.

Generally, customers are most likely to rely on the price-quality association when

A seller can change prices quickly in a price-competition situation.

Which of the following acts does not directly affect pricing decisions?

Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product.

Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition.

Since Victoria's Secret has decided to use nonprice competition, it distinguishes its brand through all but which of the following?

A certain location of O'Charley's Restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must O'Charley's serve per year in order to break even?

Rent is usually a fixed cost.

Brand uniqueness is not important in nonprice competition.

Advertisements for Suave shampoos emphasize that other shampoos may cost more but don't work any better than Suave. In this example, Suave is competing on the basis of

Which of the following is not a major factor for firms making price decisions?

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

Marketing Research and Information Systems

Target Markets Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product Concepts, Branding and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters

Which of the following statements is true about customers' interpretation and response to price?