Question 1

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)  other parties 
B)  channels of distribution 
C)  channel partners 
D)  marketing activities 
E)  none of the above

Question 2

Your local retailer has instituted an EDLP pricing program for his stores.What would one of the reasons be for the retailer to adopt an EDLP pricing policy

Accepted Answer

The answer of Your local retailer has instituted an EDLP...

Question 3

To maximize market share,a firm may use _____________ pricing,which is based on the theory that as sales volume increases,unit costs will decrease.

Accepted Answer

A)  market-penetration 
B)  market-skimming 
C)  value pricing 
D)  demand pricing 
E)  price bands

Question 4

One of the traps of instituting a price decrease is when that low price buys market share in the short term.The same customers will shift to any lower-priced product that may come along.This trap is called ________.

Accepted Answer

A)  low-price trap 
B)  market-loyalty trap 
C)  shallow-pockets trap 
D)  low-quality trap 
E)  fragile-market-share trap

Question 5

Manufacturing costs such as rent,utilities,interest expense,and some salaries are considered ________ and these costs do not vary with the production or sale of the item.

Accepted Answer

A)  corporate overhead 
B)  division overhead 
C)  overhead 
D)  fixed costs 
E)  variable

Question 6

A price indifference band is that section of the price increase in which the consumer does not notice or does not have any effect in demand.

Accepted Answer

A) True 
 B)False

Question 7

Psychological discounting involves setting an artificially high price and then offering the product at substantial savings.

Accepted Answer

A) True 
 B)False

Question 8

Movie matinees are priced lower than the evening shows; afternoon ball games are sometimes priced cheaper than the evening games,television advertising costs less when run after midnight.These are examples of what type of price discrimination

Accepted Answer

The answer of Movie matinees are priced lower than the...

Question 9

Your company has invested $1,000,000 in plant and equipment and wants to ensure that it receives a 20% ROI on the pricing of its products.This 20% translates into $200,000.At a $16.00 cost and a 50,000 expected sales volume,at what price must your product "go out the door" to satisfy this ROI return

Accepted Answer

A)  $24.00 
B)  $20.00 
C)  $40.00 
D)  $44.00 
E)  none of the above

Question 10

When prices start off high and are slowly lowered over time,this is called market-skimming pricing.

Accepted Answer

A) True 
 B)False

Question 11

Pricing cues such as sale signs and prices that end in 9 become more influential when ________.

Accepted Answer

A)  consumer price knowledge is poor 
B)  items are purchased frequently 
C)  items have been on the market a long time 
D)  prices are consistent year-round 
E)  they are employed frequently

Question 12

IKEA and Southwest Airlines are among the best practitioners of value pricing-win loyal customers by charging a fairly low price for a high-quality offering.Why is value pricing not a matter of simply lowering prices

Accepted Answer

The answer of IKEA and Southwest Airlines are among the...

Question 13

In oligopolistic industries that sell a commodity,firms base their prices largely on competitors' prices.This is an example of ________.

Accepted Answer

A)  EDLP 
B)  countertrade 
C)  price discrimination 
D)  going-rate pricing 
E)  high-low pricing

Question 14

In one type of ________,the auctioneer announces a high price for a product and then slowly decreases the price until a bidder accepts the price.

Accepted Answer

A)  ascending auction 
B)  English auction 
C)  sealed-bid auction 
D)  going-rate auction 
E)  Dutch auction

Question 15

Today,________ is partially reversing the fixed pricing trend.

Accepted Answer

A)  volume discounting 
B)  big-box retailing 
C)  the Internet 
D)  high-margin niching 
E)  all of the above

Question 16

At 1,000 calculators per day,Texas Instrument's factory is running at full capacity.This means that the cost of each calculator is now at its ________ cost.

Accepted Answer

A)  total 
B)  average 
C)  lowest 
D)  highest 
E)  undetermined

Question 17

The most elementary pricing method is to add a standard ________ to the product's cost.

Accepted Answer

A)  target margin 
B)  target price 
C)  markup 
D)  margin 
E)  target-return

Question 18

Executives often complain that pricing is a big headache.Common mistakes include: price is not revised often enough to capitalize on market changes; price is set ________ of the rest of the marketing mix rather than an intrinsic element of a market-positioning strategy.

Accepted Answer

A)  divergently 
B)  too high 
C)  intrinsically 
D)  independently 
E)  concurrently

Question 19

A company's costs take two forms.________ are costs that do not vary with production or sales revenue.

Accepted Answer

A)  Fixed costs 
B)  Variable costs 
C)  Adjusted costs 
D)  Attributed costs 
E)  Unknown costs

Question 20

Price elasticities are higher for individual items than for overall brands.

Accepted Answer

A) True 
 B)False

Exam 14: Developing Pricing Strategies and Programs

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 ________.

Your local retailer has instituted an EDLP pricing program for his stores.What would one of the reasons be for the retailer to adopt an EDLP pricing policy

To maximize market share,a firm may use _____________ pricing,which is based on the theory that as sales volume increases,unit costs will decrease.

One of the traps of instituting a price decrease is when that low price buys market share in the short term.The same customers will shift to any lower-priced product that may come along.This trap is called ________.

Manufacturing costs such as rent,utilities,interest expense,and some salaries are considered ________ and these costs do not vary with the production or sale of the item.

A price indifference band is that section of the price increase in which the consumer does not notice or does not have any effect in demand.

Psychological discounting involves setting an artificially high price and then offering the product at substantial savings.

Movie matinees are priced lower than the evening shows; afternoon ball games are sometimes priced cheaper than the evening games,television advertising costs less when run after midnight.These are examples of what type of price discrimination

When prices start off high and are slowly lowered over time,this is called market-skimming pricing.

Pricing cues such as sale signs and prices that end in 9 become more influential when ________.

IKEA and Southwest Airlines are among the best practitioners of value pricing-win loyal customers by charging a fairly low price for a high-quality offering.Why is value pricing not a matter of simply lowering prices

In oligopolistic industries that sell a commodity,firms base their prices largely on competitors' prices.This is an example of ________.

In one type of ________,the auctioneer announces a high price for a product and then slowly decreases the price until a bidder accepts the price.

Today,________ is partially reversing the fixed pricing trend.

At 1,000 calculators per day,Texas Instrument's factory is running at full capacity.This means that the cost of each calculator is now at its ________ cost.

The most elementary pricing method is to add a standard ________ to the product's cost.

Executives often complain that pricing is a big headache.Common mistakes include: price is not revised often enough to capitalize on market changes; price is set ________ of the rest of the marketing mix rather than an intrinsic element of a market-positioning strategy.

A company's costs take two forms.________ are costs that do not vary with production or sales revenue.

Price elasticities are higher for individual items than for overall brands.