Question 1

__________ prices provide consistency and decrease the price shopping of customers.

Accepted Answer

A)  Prestige 
B)  Static 
C)  Cost-based 
D)  Value-based

Question 2

Analyses and calculations use estimates and projections. These will be imprecise, but the calculations require precision. Which of the following is NOT an approach that marketers can use to get more precise estimates?

Accepted Answer

A)  Marketing research 
B)  Forecasts from sales representatives in the field 
C)  Forecasts from trade associations 
D)  Executive opinions

Question 3

Which of the following is NOT one of the four primary factors that influence price?

Accepted Answer

A)  Customer perceptions 
B)  Company costs 
C)  Analyst expectations 
D)  Market characteristics

Question 4

Alex and Monica decided on a Saturday morning to have four other couples over that evening for a cookout. After they figured out how many people would be coming, they began to plan what to serve. Alex found steaks on sale at about $3.00 a pound cheaper at a store about ten miles away. Monica said, "We'll just get the meat here instead along with the other supplies. That's not enough of a savings to go there." Marketers know that customers are concerned about more than just the actual per item price. What did Monica see in the total price to counteract what seems like a very good deal?

Accepted Answer

The answer of Alex and Monica decided on a Saturday...

Question 5

A __________ strategy is defined as setting an initially high price and using gradual, timed price drops to make as much profit as possible over time by maximizing how much is made from each sale.

Accepted Answer

A)  skimming. 
B)  price. 
C)  penetration. 
D)  value-based.

Question 6

All of the following are primary factors that influence prices, EXCEPT

Accepted Answer

A)  customer perceptions or expectations. 
B)  company costs. 
C)  reference price. 
D)  market characteristics.

Question 7

Identify and discuss the conditions that must be met in order for skimming to be effective.

Accepted Answer

The answer of Identify and discuss the conditions that must...

Question 8

Which ideas validate the term prestige pricing?

Accepted Answer

The answer of Which ideas validate the term prestige pricing?...

Question 9

Discuss predatory pricing, including definition. Include an example-either real life, or one that you make up-to illustrate this concept further.

Accepted Answer

The answer of Discuss predatory pricing, including definition. Include an...

Question 10

All of the following are considered variable costs, EXCEPT

Accepted Answer

A)  expected unit sales. 
B)  manufacturing costs per unit. 
C)  sales promotion costs. 
D)  sales commissions.

Question 11

Simon is reviewing the marketing department's budget and expenses, and some figures would not fit easily into fixed or variable costs categories. Paul gave him an easy way to distinguish between the two, which was to determine

Accepted Answer

A)  if the costs are part of the marketing mix, then they are variable costs. 
B)  if the costs are linked to things that cannot be easily moved, then they are fixed expenses. 
C)  if the cost can be assigned on a per unit basis, then it is a variable cost. 
D)  if it is a cost associated with headquarters, then it is a fixed cost.

Question 12

Unlike variable costs, which vary with the quantity sold, _________ costs don't change based on sales.

Accepted Answer

A)  reference 
B)  marketing 
C)  product 
D)  fixed

Question 13

The product of expected unit sales and variable unit cost is known as

Accepted Answer

A)  total variable costs. 
B)  fixed costs. 
C)  variable costs. 
D)  expected unit sales.

Question 14

Your reference price will become more accurate and reflect real prices when

Accepted Answer

A)  you have found a similar item online. 
B)  you have experience related to the product. 
C)  you have consulted your friends, family and colleagues. 
D)  you are not emotionally involved in making the purchase.

Question 15

It is not unusual to see price mark-downs such as 50% off. A company does not to establish that products were sold at price as long as it can show it had been offered at that price for a reasonable period of time.

Accepted Answer

A) True 
 B)False

Question 16

Angie needed a new refrigerator after her old one stopped working and couldn't be repaired. At the appliance store, she ended getting a new refrigerator plus a new stove and dishwasher because the sales associate showed her that by buying all three, should could save money that she could save not buying any of the items separately. The store used what kind of adjustment to the base price?

Accepted Answer

A)  Financing 
B)  Quantity discounting 
C)  Rebates 
D)  Bundling

Question 17

____________ must consider costs from both sides to set an acceptable price.

Accepted Answer

A)  Customers 
B)  Sellers 
C)  Marketers 
D)  Owners

Question 18

Marketers go through a great deal of time and effort to set accurate and reasonable bases prices. When they make adjustments to the base price, they do so for specific reasons. Identify three common adjustments marketers make to the base price and for each, briefly describe when that adjustment would make the most sense.

Accepted Answer

The answer of Marketers go through a great deal of...

Question 19

John is trying to figure out what to charge customers in the landscaping business he is starting. He knows what the labor costs are, and how to include the materials (plants, mulch, etc.) that he will use in the price. He thought he could add these two together, add an amount for profit and general expenses, and he'd have a fair price. Is he right?

Accepted Answer

A)  Yes. He has the major items covered and incidentals can be covered in the general expenses. 
B)  No. He needs to ensure the price covers the tools needed for the job. 
C)  Yes. For a small or start-up business, pricing should be kept as simple as possible. 
D)  No. He needs to calculate any other expenses and add those into the price.

Question 20

For an exchange to take place, a marketer knows that

Accepted Answer

A)  both the buyer and seller see value being created in the exchange. 
B)  money needs to change hands. 
C)  the buyer must know exactly what he or she is receiving. 
D)  competitors cannot match the total offering.

Exam 10: Managing Price and Customer Cost Perceptions