Question 1

How does unit pricing state its price?

Accepted Answer

A)   displayed in even dollar units, such as $5 or $8
B)   the opposite of odd pricing
C)   the same as uniform-delivered pricing
D)   in terms of quantities of measure D

Question 2

When do online marketers run the risk of cannibalization?

Accepted Answer

A)   when they compete with off-price houses on the Internet
B)   when they self-inflict price cuts by creating competition among their own products
C)   when they construct numerous new brick and mortar stores alongside their virtual websites
D)   when they hold onto tradition in the face of new technology B

Question 3

Marketers may thoroughly understand price theory concepts but still encounter difficulty applying them in practice.

Accepted Answer

A) True 
 B)False  True

Question 4

Value pricing is a strategy typically used for relatively low-priced goods and services that emphasizes the benefits derived from a product in comparison to the price and quality levels of competing offerings.

Accepted Answer

A) True 
 B)False

Question 5

What did the Profit Impact of Market Strategies Project (PIMS) reveal were the two most important factors influencing profitability?

Accepted Answer

A)   sales cost and market demand
B)   product quality and market share
C)   profit margin and market share
D)   profit maximization and competition

Question 6

What is a theatre practising when they lower prices in the afternoon to offset low demand and raise prices in the evening when demand rises?

Accepted Answer

A)   breakeven analysis
B)   yield management
C)   exploitation of the local theatre-goers
D)   marginal pricing

Question 7

Explain the concept of marginal analysis.

Accepted Answer

The answer of Explain the concept of marginal analysis....

Question 8

What is an attempt to integrate promotional strategies within the marketing channel called?

Accepted Answer

A)   quantity discount
B)   rebate
C)   trade-in
D)   promotional allowance

Question 9

Why does transfer pricing become especially complex when the global market is involved?

Accepted Answer

A)   A global firm can use transfer pricing as a tax-avoidance device and governments dislike such activities.
B)   Issues of quality control can be serious, even when divisions of the same firm are involved.
C)   Shipping materials across national lines involves payment of duties and taxes, and these become part of the total price of the goods.
D)   The temperature and humidity differences between origins and destinations often damage the products.

Question 10

Tariffs often make it possible for firms to set prices on domestically priced goods well above world market levels.

Accepted Answer

A) True 
 B)False

Question 11

What does the demand side of the pricing equation focus on?

Accepted Answer

A)   revenue curves
B)   cost curves
C)   marginal curves
D)   absolute values

Question 12

What term refers to penetration pricing?

Accepted Answer

A)   market-plus pricing
B)   market-minus pricing
C)   cost-plus pricing
D)   prestige pricing

Question 13

A pricing policy is a general guideline that reflects marketing objectives and influences specific pricing decisions.

Accepted Answer

A) True 
 B)False

Question 14

Match each item to the statement or sentence listed below.
a.competitive bidding
b.penetration pricing strategy
c.list price
d.trade discount
e.price flexibility
f.promotional pricing
g.loss leader
h.cannibalization
i.bundle pricing
j.odd pricing
k.transfer price
l.profit centre
m.skimming pricing strategy
n.competitive pricing strategy
o.pricing policy
p.market price
q.noncumulative quantity discount
r.step out
s.bot
t.cash discount
-The price reduction granted on a one-time-only basis is called a(n) _____.

Accepted Answer

The answer of Match each item to the statement or...

Question 15

A product is priced to sell for $12 with average variable costs of $8. The company expects to earn a profit of $400,000 with its total fixed costs of $120,000. What is the minimum number of units that must be sold in order to reach this target return?

Accepted Answer

A)   80,000
B)   120,000
C)   130,000
D)   400,000

Question 16

When General Motors introduced the Saturn, it priced the SL sports sedan at $2,000 less than the Toyota Corolla DLX and $1,500 less than comparable Nissan and Honda automobiles. What pricing strategy is this an example of?

Accepted Answer

A)   skimming
B)   loss-leader
C)   competitive
D)   penetration

Question 17

More than half of all eBay transactions occur at fixed prices.

Accepted Answer

A) True 
 B)False

Question 18

What occurs when a company offers two or more complementary products and sells them for a single price?

Accepted Answer

A)   multiple packaging
B)   combination pricing
C)   protective pricing
D)   bundle pricing

Question 19

Product-line pricing is the practice of marketing merchandise at variable prices negotiated between buyer and seller.

Accepted Answer

A) True 
 B)False

Question 20

A trade discount is a payment to channel members for performing marketing functions.

Accepted Answer

A) True 
 B)False

Exam 16: Pricing Concepts and Strategies

How does unit pricing state its price?

When do online marketers run the risk of cannibalization?

Marketers may thoroughly understand price theory concepts but still encounter difficulty applying them in practice.

Value pricing is a strategy typically used for relatively low-priced goods and services that emphasizes the benefits derived from a product in comparison to the price and quality levels of competing offerings.

What did the Profit Impact of Market Strategies Project (PIMS) reveal were the two most important factors influencing profitability?

What is a theatre practising when they lower prices in the afternoon to offset low demand and raise prices in the evening when demand rises?

Explain the concept of marginal analysis.

What is an attempt to integrate promotional strategies within the marketing channel called?

Why does transfer pricing become especially complex when the global market is involved?

Tariffs often make it possible for firms to set prices on domestically priced goods well above world market levels.

What does the demand side of the pricing equation focus on?

What term refers to penetration pricing?

A pricing policy is a general guideline that reflects marketing objectives and influences specific pricing decisions.

A product is priced to sell for $12 with average variable costs of $8. The company expects to earn a profit of $400,000 with its total fixed costs of $120,000. What is the minimum number of units that must be sold in order to reach this target return?

When General Motors introduced the Saturn, it priced the SL sports sedan at $2,000 less than the Toyota Corolla DLX and $1,500 less than comparable Nissan and Honda automobiles. What pricing strategy is this an example of?

More than half of all eBay transactions occur at fixed prices.

What occurs when a company offers two or more complementary products and sells them for a single price?

Product-line pricing is the practice of marketing merchandise at variable prices negotiated between buyer and seller.

A trade discount is a payment to channel members for performing marketing functions.