Question 1

A firm may forgo a higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Accepted Answer

A)  profit 
B)  market share 
C)  unit volume 
D)  survival 
E)  social responsibility

Question 2

With profit-oriented approaches to pricing, a price setter may choose to balance both ________ and ________ to set price.

Accepted Answer

A)  revenues; profit 
B)  tangible goods; services 
C)  costs; revenues 
D)  demand; supply 
E)  costs; demand

Question 3

What are the four kinds of discounts that are especially important in marketing pricing strategy?

Accepted Answer

The answer of What are the four kinds of discounts...

Question 4

Which of the following is a demand-oriented approach to pricing?

Accepted Answer

A)  customary pricing 
B)  target profit pricing 
C)  standard markup pricing 
D)  bundle pricing 
E)  service-oriented pricing

Question 5

When a firm offers a very low price on a product to attract customers to a store, and once in the store, the customer is persuaded to purchase a higher-priced item, the practice is referred to as

Accepted Answer

A)  predatory pricing. 
B)  deceptive pricing. 
C)  price discrimination. 
D)  caveat emptor. 
E)  bait and switch.

Question 6

To increase value the most, marketers should

Accepted Answer

A)  decrease benefits. 
B)  decrease benefits and increase price. 
C)  decrease price and increase benefits. 
D)  decrease price and decrease benefits. 
E)  hold the price steady and let the perceived value of the item increase as it matures in its life cycle.

Question 7

To increase value, marketers may ________, decrease price, or do both.

Accepted Answer

A)  decrease promotion 
B)  increase benefits 
C)  decrease distribution 
D)  increase advertising 
E)  allow the perceived value of the item to increase as it matures in the life cycle

Question 8

While consumer tastes and price and availability of similar products determine what consumers want to buy, consumer income determines

Accepted Answer

A)  where they buy. 
B)  the degree of brand loyalty. 
C)  the degree of repeat purchase. 
D)  what they can buy. 
E)  their likelihood of spreading positive word-of-mouth.

Question 9

Which of the following statements about consumer demand as a pricing constraint is most accurate?

Accepted Answer

A)  The price charged by competitors for similar offerings has little effect on the price a seller can charge, usually only if there are very few potential buyers. 
B)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is using a push strategy in the channel. 
C)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is a necessity item. 
D)  The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage. 
E)  The number of potential buyers generally affects the price a seller can charge.

Question 10

When buying highly technical, few-of-a-kind products such as hydroelectric power plants, governments have found that general contractors are reluctant to specify a formal, fixed price for the procurement. Therefore, these contractors use ________ to compensate them for any cost overruns.

Accepted Answer

A)  at-market pricing 
B)  experience curve pricing 
C)  cost-plus-fixed-fee pricing 
D)  standard markup pricing 
E)  yield management pricing

Question 11

Which of the following statements regarding pricing constraints is most accurate?

Accepted Answer

A)  Generally, the greater the demand for a product, the higher the price that can be set. 
B)  At the corporate level, when setting pricing constraints, a firm must disregard current conditions in the marketplace because they are too temporal for long-term planning. 
C)  Pricing constraints must always be set, but they are rarely enforced. 
D)  It is possible to create pricing constraints with the greatest range possible in order to anticipate any and all changes in the marketing environment. 
E)  Even if a firm is trying to satisfy its obligations to its customers and society in general, it should ignore setting pricing constraints.

Question 12

Figure 11-3b
-Figure 11-3b above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units from the demand curve D1 to the demand curve D2, the profit

Accepted Answer

A)  impacts cannot be determined. Figure 11-3b does not indicate what happens to profit when the quantity demanded changes. 
B)  increases from $2 to $3 per unit. 
C)  stays the same per unit. 
D)  increases from $6 to $8 per unit. 
E)  decreases from $8 to $6 per unit.

Question 13

Manufacturers use seasonal discounts to

Accepted Answer

A)  get rid of expired merchandise. 
B)  prevent retailers from purchasing competitors' products. 
C)  extend the peak seasonal selling season. 
D)  encourage buyers to stock inventory earlier than their normal demand would require. 
E)  temporarily spur primary demand during periods of soft sales, such as the beginning of a month, after which prices will return to normal when selective demand picks up.

Question 14

Reductions in unit costs for a larger order are referred to as

Accepted Answer

A)  promotional allowances. 
B)  economic order discounts. 
C)  penetration pricing. 
D)  quantity discounts. 
E)  case allowances.

Question 15

Figure 11-6a
-In break-even chart in Figure 11-7a above, point A identifies the firm's ________ point.

Accepted Answer

A)  loss 
B)  price 
C)  margin 
D)  profit 
E)  break-even

Question 16

Figure 11-3
-The movement from point A to point B in Figure 11-3 above shows

Accepted Answer

A)  skimming demand. 
B)  penetration demand. 
C)  that buyers see the product as a bargain and buy more. 
D)  that buyers become dubious about the quality and prestige and buy less. 
E)  a downturn in the economy.

Question 17

Describe the pricing constraints a firm is likely to face.

Accepted Answer

The answer of Describe the pricing constraints a firm is...

Question 18

A firm's profit equation equals

Accepted Answer

A)  Total cost + Total revenue or [(Fixed cost + Variable cost) + (Unit price × Quantity sold)]. 
B)  Total revenue − Total cost or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)]. 
C)  Total cost − Marginal cost or [(Fixed cost + Variable cost) − (Unit price × Quantity sold)]. 
D)  Total cost − Variable cost or [(Fixed cost + Variable cost) − (Unit price × Quantity sold)]. 
E)  Total revenue ÷ Total cost or [(Unit price × Quantity sold) ÷ (Fixed cost + Variable cost)].

Question 19

The ratio of perceived benefits to price is referred to as

Accepted Answer

A)  the price-quality relationship. 
B)  customer-value pricing. 
C)  value-added pricing. 
D)  value analysis. 
E)  value.

Question 20

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, consumers benefitted from an increase in what?

Accepted Answer

A)  cost 
B)  appearance 
C)  value 
D)  price 
E)  quality

Exam 11: Pricing Products and Services