Question 1

Eduardo and David have developed a unique gaming accessory and are determining how to price it. Their market analysis has told them the accessory will appeal to a large number of gamers, it is relatively inexpensive to produce, and they already are thinking about how they could enhance the accessory to make it even more attractive. What kind of pricing strategy should they use?

Accepted Answer

A)   Entrepreneurial
B)   Penetration
C)   Skimming
D)   Contingent B

Question 2

An approach services use to set prices according to changing market conditions is known as

Accepted Answer

A)   value-based pricing.
B)   cost-based pricing.
C)   premium pricing.
D)   dynamic pricing. D

Question 3

To be financially successful, companies must also consider their own costs when setting

Accepted Answer

A)   fixed costs.
B)   variable costs.
C)   strategy.
D)   prices. D

Question 4

When a new product is introduced to a market and is priced high with the intention of eventually lowering the price as the market becomes more competitive, marketers are using a pricing strategy known as

Accepted Answer

A)   value-adding prices.
B)   premium pricing.
C)   rapid recovery.
D)   skimming.

Question 5

While consumers gain from artificially low prices in predatory pricing and price wars, they are harmed by the illegal practice of price-fixing.

Accepted Answer

A) True 
 B)False

Question 6

A significant disadvantage of cost-based pricing is that it is difficult to get accurate information about what customers would consider the true price.

Accepted Answer

A) True 
 B)False

Question 7

___________ is one of the most difficult decisions in the marketing mix, since it directly influences customer perceptions of value.

Accepted Answer

A)   Strategy
B)   Costs
C)   Market characteristics
D)   Pricing

Question 8

Catherine had calculated and was using a set of prices to market her product line of baking pans and related items. Midway through the year, a competitor introduces an imported product line of comparable products at a much lower price. Catherine does not want to start a price war, but she knows she must respond. To determine what pricing options she has, she will need to re-examine all of the calculations she made. Which factors can she consider changing and which will remain the same?

Accepted Answer

The answer of Catherine had calculated and was using a...

Question 9

Price wars are usually harmful to firms because non-loyal customers will switch to whichever product has a lower price, and loyal customers

Accepted Answer

A)   take advantage of lower prices, which diminishes profit.
B)   will abandon the product as the image becomes cheapened.
C)   will often pursue legal remedies.
D)   will stay out of the market until prices stabilize.

Question 10

Ming-tao was trying to figure out how much revenue he would have to bring in on a specific product to start earning a profit. He wanted to know the point at which the total sales at a given price level needed to produce zero profits, but cover costs. To determine the this, he needs to know the fixed costs and

Accepted Answer

A)   markup.
B)   expected unit sales.
C)   contribution margin.
D)   unit variable cost.

Question 11

Damon is developing a marketing plan for the product he is managing. What calculation will he use to determine how many incremental sales he will have to make if he increases advertising efforts by three different amounts?

Accepted Answer

A)   Bread-even analysis
B)   Total variable costs
C)   Total fixed costs
D)   Unit contribution

Question 12

Identify and discuss three of the six steps of the price-setting process.

Accepted Answer

The answer of Identify and discuss three of the six...

Question 13

Elastic demand characterizes discretionary items where a small change in the price of the items will have a noticeable effect on the number sold.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are marketing costs that are considered fixed costs, EXCEPT

Accepted Answer

A)   sales salaries
B)   sponsorships
C)   commissions
D)   research and development costs

Question 15

How a price is presented can also influence customer price

Accepted Answer

A)   feedback.
B)   decisions.
C)   perceptions.
D)   comparisons.

Question 16

Price is a measure of the relative value of an item for both the customer and the ___________.

Accepted Answer

A)   seller
B)   market characteristics
C)   costs
D)   owner

Question 17

Identify and describe common adjustments to price that are used by marketers. Provide an example of each.

Accepted Answer

The answer of Identify and describe common adjustments to price...

Question 18

_________ change with quantity sold and are generally tied to the product sold.

Accepted Answer

A)   Fixed costs
B)   Variable costs
C)   Reference costs
D)   Marketing costs

Question 19

Maya is setting prices for her home remodeling business. Over the course of the year, there are times of peak activities-such as pre-holidays-and times when consumers were not as interested in home remodeling. This is an issue throughout the industry, so she knows it isn't just her business. After she determines a base price for the service, she could stimulate demand during the slow periods by using

Accepted Answer

A)   discounts.
B)   bundling.
C)   premium pricing.
D)   no-cost consultations.

Question 20

An expectation about the price of a given product is known as

Accepted Answer

A)   pricing strategy.
B)   reference price.
C)   quote.
D)   market price.

Exam 10: Managing Price and Customer Cost Perceptions

An approach services use to set prices according to changing market conditions is known as

To be financially successful, companies must also consider their own costs when setting

When a new product is introduced to a market and is priced high with the intention of eventually lowering the price as the market becomes more competitive, marketers are using a pricing strategy known as

While consumers gain from artificially low prices in predatory pricing and price wars, they are harmed by the illegal practice of price-fixing.

A significant disadvantage of cost-based pricing is that it is difficult to get accurate information about what customers would consider the true price.

___________ is one of the most difficult decisions in the marketing mix, since it directly influences customer perceptions of value.

Price wars are usually harmful to firms because non-loyal customers will switch to whichever product has a lower price, and loyal customers

Damon is developing a marketing plan for the product he is managing. What calculation will he use to determine how many incremental sales he will have to make if he increases advertising efforts by three different amounts?

Identify and discuss three of the six steps of the price-setting process.

Elastic demand characterizes discretionary items where a small change in the price of the items will have a noticeable effect on the number sold.

All of the following are marketing costs that are considered fixed costs, EXCEPT

How a price is presented can also influence customer price

Price is a measure of the relative value of an item for both the customer and the ___________.

Identify and describe common adjustments to price that are used by marketers. Provide an example of each.

_________ change with quantity sold and are generally tied to the product sold.

An expectation about the price of a given product is known as