Question 1

Auctions are successful because

Accepted Answer

A)  marketers don't need to set prices. 
B)  customers prefer to compete with one another. 
C)  customers have different perceived value for products. 
D)  marketers can avoid costly couponing and price promotions.

Question 2

Nevin has an electronics store with a focus on high-end audio and visual products. He knows he cannot compete with the "big box" stores to attract everyone, so he has focused on people who demand high quality in their electronics even though some can't easily afford it. He has already used rebates, especially those offered by the manufacturers. He doesn't want to lower his prices as a large part of his customer base can afford his prices. What other discounting option does Nevin have that makes sense for his business and won't undermine the base price?

Accepted Answer

A)  Price lining 
B)  Financing 
C)  Buy-one-get-a-discount-on-the-second purchases 
D)  Refer-a-friend bonuses

Question 3

Positioning influences the way customers see value in a product or service, and while the price is of major concern to the marketer, price has much less influence than effective positioning for the customer.

Accepted Answer

A) True 
 B)False

Question 4

One of the most challenging pricing decisions a marketer faces is

Accepted Answer

A)  knowing when the product is changing from the mature stage to the decline stage in the product life cycle. 
B)  keeping prices low without starting a price war. 
C)  establishing a price for new products without any market experience. 
D)  keeping track of the laws and regulations affecting pricing.

Question 5

While it is relatively easy to determine variable costs as they are linked to the units produced, fixed costs are more difficult to determine as

Accepted Answer

A)  much of the information is confidential and not readily available to the marketer. 
B)  there are no formulas to work with. 
C)  they must cover all the expenses of the firm and it may be difficult to get accurate estimates. 
D)  depreciation on fixed assets can vary with accounting practices.

Question 6

The product life cycle curve can help marketers determine pricing. In general, as a product matures, the price will go down as

Accepted Answer

A)  competitors exit the market. 
B)  costs to make the product go down as it matures. 
C)  inelastic prices are now becoming more elastic. 
D)  all profits have been realized in a product, and the firm is moving to harvest the remaining value.

Question 7

Price is related to _________ for both the buyer and seller.

Accepted Answer

A)  market characteristics 
B)  cost 
C)  value 
D)  strategy

Question 8

Customer perceptions are more important than reality in setting prices.

Accepted Answer