Question 1

Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains. Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets.
-If Quills decided to introduce its products internationally, what factors may cause a change in price?

Accepted Answer

The answer of Quills, Inc., is a manufacturer of ball-point...

Question 2

Pricing a product mix is often difficult because various products have related demand and costs, and they face different degrees of competition.

Accepted Answer

A) True 
 B)False

Question 3

________ are the sum of the ________ and ________ for any given level of production.

Accepted Answer

A) Fixed costs; variable; total costs 
B) Fixed costs; total; variable costs 
C) Variable costs; fixed; total costs 
D) Total costs; fixed; variable costs 
E) Break-even costs; fixed; total costs

Question 4

The simplest pricing method is break-even pricing.

Accepted Answer

A) True 
 B)False

Question 5

When there is price competition, many companies adopt ________ rather than cutting prices to match competitors.

Accepted Answer

A) pricing power 
B) value-added pricing strategies 
C) fixed costs 
D) price elasticity 
E) image pricing

Question 6

Explain the factors involved in setting international pricing.

Accepted Answer

The answer of Explain the factors involved in setting international...

Question 7

When consumers cannot judge the quality of a product because they lack information or skill, they are likely to perceive a higher-priced product as having higher quality.

Accepted Answer

A) True 
 B)False

Question 8

Environmental elements that affect pricing decisions are categorized as external factors.

Accepted Answer

A) True 
 B)False

Question 9

Explain how web retailers can initiate dynamic pricing.

Accepted Answer

The answer of Explain how web retailers can initiate dynamic...

Question 10

Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains. Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets.
-Would quantity discounts be possible for Quills to offer? Why?

Accepted Answer

The answer of Quills, Inc., is a manufacturer of ball-point...

Question 11

Explain two different ways a consumer might view a price cut.

Accepted Answer

The answer of Explain two different ways a consumer might...

Question 12

Fixed costs ________ as the number of units produced increases.

Accepted Answer

A) decrease 
B) increase 
C) divide in half 
D) remain the same 
E) increase at a diminishing rate

Question 13

Which of the following statements about a break-even chart is true?

Accepted Answer

A) It is used to determine how the customer-perceived value changes with value-added pricing. 
B) It is a tool used to calculate fixed costs. 
C) It shows the level of earnings a company has during an accounting period. 
D) It is a tool marketers use to examine the relationship between supply and demand. 
E) It uses variable costs, the unit price, and fixed costs.

Question 14

Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains. Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets.
-Explain how a reference price could partially build Quills' image in the market.

Accepted Answer

The answer of Quills, Inc., is a manufacturer of ball-point...

Question 15

Which of the following is not a price adjustment strategy?

Accepted Answer

A) segmented pricing 
B) customer value-based pricing 
C) promotional pricing 
D) discount and allowance pricing 
E) dynamic pricing

Question 16

The major price-adjustment strategies include discount and allowance pricing, segmented pricing, psychological pricing, promotional pricing, geographical pricing, dynamic pricing, and international pricing.

Accepted Answer

A) True 
 B)False

Question 17

Give two examples of products for which captive-product pricing may be used.

Accepted Answer

The answer of Give two examples of products for which...

Question 18

Which of the following is an external factor that affects pricing decisions?

Accepted Answer

A) the salaries of production management 
B) competition 
C) the salaries of finance management 
D) overall pricing objectives 
E) the company's overall marketing strategy

Question 19

General Motors prices its automobiles to achieve a 15 to 20 percent profit on its investment. This approach is called ________.

Accepted Answer

A) value-based pricing 
B) going-rate pricing 
C) cost-plus pricing 
D) low-price image 
E) target return pricing

Question 20

By definition, this type of pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.

Accepted Answer

A) segmented pricing 
B) variable pricing 
C) flexible pricing 
D) cost-plus pricing 
E) reference pricing

Exam 10: Pricing: Understanding and Capturing Customer Value

Pricing a product mix is often difficult because various products have related demand and costs, and they face different degrees of competition.

are the sum of the and for any given level of production.

The simplest pricing method is break-even pricing.

When there is price competition, many companies adopt ________ rather than cutting prices to match competitors.

Explain the factors involved in setting international pricing.

When consumers cannot judge the quality of a product because they lack information or skill, they are likely to perceive a higher-priced product as having higher quality.

Environmental elements that affect pricing decisions are categorized as external factors.

Explain how web retailers can initiate dynamic pricing.

Explain two different ways a consumer might view a price cut.

Fixed costs ________ as the number of units produced increases.

Which of the following statements about a break-even chart is true?

Which of the following is not a price adjustment strategy?

The major price-adjustment strategies include discount and allowance pricing, segmented pricing, psychological pricing, promotional pricing, geographical pricing, dynamic pricing, and international pricing.

Give two examples of products for which captive-product pricing may be used.

Which of the following is an external factor that affects pricing decisions?

General Motors prices its automobiles to achieve a 15 to 20 percent profit on its investment. This approach is called ________.

By definition, this type of pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.