Question 1

Explain why and how the Internet is partially reversing the fixed price concept of retailing?

Accepted Answer

The answer of Explain why and how the Internet is...

Question 2

If demand changes considerably, we say that the demand is

Accepted Answer

A)  marginal. 
B)  consistent. 
C)  inelastic. 
D)  elastic. 
E)  equal.

Question 3

Ensuring that customers appreciate the total value of a product or service offering is not important.

Accepted Answer

A) True 
 B)False

Question 4

Price elasticity depends on the magnitude and direction of the price change. It may differ for a price cut versus a price increase. When the price changes have little or no effect there might exist a ________ for your product.

Accepted Answer

A)  substitute product 
B)  selective price 
C)  price indifference band 
D)  collective price 
E)  promotional price

Question 5

In responding to a competitor's price cut, a firm in a nonhomogeneous market has more latitude and should consider what four issues before responding?

Accepted Answer

The answer of In responding to a competitor's price cut,...

Question 6

Pricing methods narrow the range from which the company selects its final price. In selecting that price, the company must consider additional factors, including the impact of other marketing activities, company pricing policies, gain-and-risk-sharing pricing, and the impact of price on

Accepted Answer

A)  channel partners. 
B)  channels of distribution. 
C)  product quality. 
D)  marketing activities. 
E)  other parties.

Question 7

A major circumstance provoking price increases is cost inflation.

Accepted Answer

A) True 
 B)False

Question 8

The three major considerations in price setting are: costs set a "floor" to the price; ________; and customers' assessment of unique features establishes the price ceiling.

Accepted Answer

A)  the price of competitors and substitutes 
B)  the price of substitutes establishes a "target price" 
C)  competitors' prices and the price of substitutes provide an orienting point 
D)  competitors' prices establishes a "target price" goal 
E)  competitors' target-costing

Question 9

Price elasticity depends upon the magnitude and direction of the contemplated price change.

Accepted Answer

A) True 
 B)False

Question 10

Starbucks coffee, Aveda shampoo, and Grey Goose vodka position themselves as quality leaders in their category. What is their pricing objective and how can it be achieved?

Accepted Answer

The answer of Starbucks coffee, Aveda shampoo, and Grey Goose...

Question 11

An increasing number of companies are basing their prices on the customer's perceived value. Explain the concept of "perceived value" and what is the "key" to pricing in this manner.

Accepted Answer

The answer of An increasing number of companies are basing...

Question 12

EDLP pricing is a type of going-rate pricing in which the retailer sets low prices everyday on selected items.

Accepted Answer

A) True 
 B)False

Question 13

There are ways that brand leaders can respond to competitors' price declines. Which of the following strategies involves spending money to improve perceived quality.

Accepted Answer

A)  Increase price and improve quality. 
B)  Reduce your price. 
C)  Maintain your price. 
D)  Further differentiate the product or service. 
E)  Launch a low-price fighter line.

Question 14

A well-designed and marketed product can command a price premium and reap big profits.

Accepted Answer

A) True 
 B)False

Question 15

In markets that are characterized by products that are highly homogenous, how should a firm react to a competitor's price decline?

Accepted Answer

A)  Reduce product performance levels. 
B)  Reduce its services. 
C)  Adjust product characteristics. 
D)  Enhance its services. 
E)  Enhance its augmented product.

Question 16

Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of a pricing is the company depending on?

Accepted Answer

A)  going-rate pricing 
B)  market-skimming pricing 
C)  target pricing 
D)  image pricing 
E)  markup pricing

Question 17

Prices that vary by time of the day, the season of the year, or the day of the week are called

Accepted Answer

A)  price discrimination. 
B)  time pricing. 
C)  channel pricing. 
D)  product form pricing. 
E)  discounting.

Question 18

When a firm bases its price largely on competitors' prices, it is using a pricing strategy that is called

Accepted Answer

A)  going-rate pricing. 
B)  value pricing. 
C)  everyday low pricing. 
D)  perceived value pricing. 
E)  high-low pricing.

Question 19

Research has shown that consumers tend to process prices in a "left-to-right" manner rather than by rounding. With this knowledge which of the following prices for a stereo receiver would seem to be a better physiological price?

Accepted Answer

A)  $110.00 
B)  $109.50 
C)  $100.00 
D)  $99.99 
E)  $150.00

Question 20

Value pricing is not a matter of simply setting lower prices; it is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality; and lowering prices significantly to attract a large number of ________ customers.

Accepted Answer

A)  price-orientated 
B)  image-oriented customers 
C)  expert customers 
D)  product-orientated customers 
E)  value-conscious

Exam 14: Developing Pricing Strategies and Programs

Explain why and how the Internet is partially reversing the fixed price concept of retailing?

If demand changes considerably, we say that the demand is

Ensuring that customers appreciate the total value of a product or service offering is not important.

Price elasticity depends on the magnitude and direction of the price change. It may differ for a price cut versus a price increase. When the price changes have little or no effect there might exist a ________ for your product.

In responding to a competitor's price cut, a firm in a nonhomogeneous market has more latitude and should consider what four issues before responding?

Pricing methods narrow the range from which the company selects its final price. In selecting that price, the company must consider additional factors, including the impact of other marketing activities, company pricing policies, gain-and-risk-sharing pricing, and the impact of price on

A major circumstance provoking price increases is cost inflation.

The three major considerations in price setting are: costs set a "floor" to the price; ________; and customers' assessment of unique features establishes the price ceiling.

Price elasticity depends upon the magnitude and direction of the contemplated price change.

Starbucks coffee, Aveda shampoo, and Grey Goose vodka position themselves as quality leaders in their category. What is their pricing objective and how can it be achieved?

An increasing number of companies are basing their prices on the customer's perceived value. Explain the concept of "perceived value" and what is the "key" to pricing in this manner.

EDLP pricing is a type of going-rate pricing in which the retailer sets low prices everyday on selected items.

There are ways that brand leaders can respond to competitors' price declines. Which of the following strategies involves spending money to improve perceived quality.

A well-designed and marketed product can command a price premium and reap big profits.

In markets that are characterized by products that are highly homogenous, how should a firm react to a competitor's price decline?

Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of a pricing is the company depending on?

Prices that vary by time of the day, the season of the year, or the day of the week are called

When a firm bases its price largely on competitors' prices, it is using a pricing strategy that is called

Research has shown that consumers tend to process prices in a "left-to-right" manner rather than by rounding. With this knowledge which of the following prices for a stereo receiver would seem to be a better physiological price?

Value pricing is not a matter of simply setting lower prices; it is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality; and lowering prices significantly to attract a large number of ________ customers.