Question 1

How does the stage in the product lifecycle influence pricing?

Accepted Answer

The answer of How does the stage in the product...

Question 2

If you go to a fancy steak house and see a hamburger on the menu for $1.19 or if you go to a fast food restaurant and see a hamburger on the menu for $24.00, you'd think something was not right. Marketers understand you are comparing those posted menu prices to your own

Accepted Answer

A)  learned dining costs. 
B)  reference price. 
C)  perceived cost. 
D)  expected value.

Question 3

When pricing existing products, the marketer must make three basic sets of decisions: the basis for setting the price, if the prices will change very much, and

Accepted Answer

A)  how it relates to other products the company sells. 
B)  what the competition is doing. 
C)  how similar products in target retailers are priced. 
D)  how difficult or easy it will be to promote the price.

Question 4

Assume you were tasked with calculating the outcome for the following question: How much profit or loss are you making if you have 15% market share? Why is this calculation important? Explain.

Accepted Answer

The answer of Assume you were tasked with calculating the...

Question 5

The first step in setting a base price for a product is

Accepted Answer

A)  estimate demand and revenue. 
B)  determine cost, volume and profit relationships for different price points. 
C)  analyze competitors' prices, offers and value propositions. 
D)  set pricing objectives.

Question 6

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

Accepted Answer

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

Question 7

One of the major problems marketers face with pricing is that although there are many "wrong" prices, there isn't one "right" price.

Accepted Answer

A) True 
 B)False

Question 8

Taking into consideration how the price of one product might influence the perception and price of another product is called price

Accepted Answer

A)  calculating. 
B)  strategy. 
C)  prestige. 
D)  lining.

Question 9

One of the fundamental "building blocks" of pricing is an estimate or understanding of how many units can be sold in a given period-usually a year. This estimate is known as expected unit sales or

Accepted Answer

A)  annual product sales. 
B)  demand forecast. 
C)  sales forecast 
D)  product forecast.

Question 10

Some companies will drop prices to a point where competitors may question their motives. Although federal law prohibits predatory pricing and similar actions, the situations are rarely prosecuted because it is difficult to prove and

Accepted Answer

A)  the fines are so low it's not worth the effort. 
B)  consumers gain from artificially low prices. 
C)  primary jurisdiction is often with the states. 
D)  few lawyers are qualified to prosecute or defend charges in this area.

Question 11

All of the following are considered fixed costs, EXCEPT

Accepted Answer

A)  rent. 
B)  advertising. 
C)  salaries. 
D)  sales promotion costs.

Question 12

Daniel and Sarah were going to a movie, and they started discussing the way the theater offered discounts to senior citizens before 6:00 pm. Sarah commented, "That's discrimination. They see the same movie in the same seats. Why should they pay less?" Which of the following is NOT one of the explanations as to why this is not treated as discrimination?

Accepted Answer

A)  Marketers can use pricing as a way to influence demand. 
B)  Services are not subject to the Robinson-Patman Act. 
C)  Marketing practice allows discounts as long as they do not discriminate within protected classes. 
D)  Senior citizens can rarely afford the costs of the full-priced tickets.

Question 13

Chris and Lynn were watching sales slumping for their line of expensive, exotically-scented candles, and they had narrowed down their options to adjusting the price. Chris suggested the best thing to do would be to raise prices. Lynn thought Chris wasn't thinking clearly, but increasing prices to stimulate sales for luxury items is known as

Accepted Answer

A)  reverse pricing logic. 
B)  prestige pricing. 
C)  enhanced value-based pricing. 
D)  dynamic pricing.

Question 14

Rick had solid information about the internal costs, volume and objectives he needed to set prices for the next year. Before he can set prices, he also needs to understand what is going on the market in general. He will examine the competitors' overall pricing, and he will need to research consumer demand for the products to know how the size of the total market and

Accepted Answer

A)  the competitors' break-even points. 
B)  the demand for his product. 
C)  the impact of changing demographics. 
D)  the actual sales for the past three years.

Question 15

Consumers are familiar with the Manufacturer's Suggested Retail Price (MSRP), but it might be illegal to sell products at that price.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  Customer expectation 
B)  Company costs 
C)  Marketers 
D)  Competition

Question 17

What can be said of price spirals considering how they negatively affect businesses?

Accepted Answer

The answer of What can be said of price spirals...

Question 18

While marketers must pay attention to the prices charged by competitors and the expectations of customers, the effective way to attract customers at fair prices is to emphasis benefits and non-price elements.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is defined as introducing a new product at a relatively low price with the intention of establishing a large market share before competitors can establish themselves?

Accepted Answer

A)  Skimming strategy 
B)  Penetration pricing 
C)  Cost-based pricing 
D)  Value-based pricing

Question 20

Businesses in the U.S. often compete on price, and competition can be very tough beyond pricing. Competing on price is an accepted practice in the marketplace and under the law. What is the name of the practice that goes beyond fair competition to drive another business out of the market by dropping prices to an extremely low level with the intention of destroying another business?

Accepted Answer

A)  Loss-leader pricing 
B)  Domestic dumping 
C)  Predatory pricing 
D)  Monopolistic pricing

Exam 10: Managing Price and Customer Cost Perceptions

How does the stage in the product lifecycle influence pricing?

If you go to a fancy steak house and see a hamburger on the menu for $1.19 or if you go to a fast food restaurant and see a hamburger on the menu for $24.00, you'd think something was not right. Marketers understand you are comparing those posted menu prices to your own

When pricing existing products, the marketer must make three basic sets of decisions: the basis for setting the price, if the prices will change very much, and

Assume you were tasked with calculating the outcome for the following question: How much profit or loss are you making if you have 15% market share? Why is this calculation important? Explain.

The first step in setting a base price for a product is

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

One of the major problems marketers face with pricing is that although there are many "wrong" prices, there isn't one "right" price.

Taking into consideration how the price of one product might influence the perception and price of another product is called price

One of the fundamental "building blocks" of pricing is an estimate or understanding of how many units can be sold in a given period-usually a year. This estimate is known as expected unit sales or

Some companies will drop prices to a point where competitors may question their motives. Although federal law prohibits predatory pricing and similar actions, the situations are rarely prosecuted because it is difficult to prove and

All of the following are considered fixed costs, EXCEPT

Consumers are familiar with the Manufacturer's Suggested Retail Price (MSRP), but it might be illegal to sell products at that price.

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

What can be said of price spirals considering how they negatively affect businesses?

While marketers must pay attention to the prices charged by competitors and the expectations of customers, the effective way to attract customers at fair prices is to emphasis benefits and non-price elements.

Which of the following is defined as introducing a new product at a relatively low price with the intention of establishing a large market share before competitors can establish themselves?