Question 1

Describe the pricing constraints a firm is likely to face.

Accepted Answer

Pricing constraints are factors that lim...

Question 2

The ratio of perceived benefits to price is referred to as

Accepted Answer

A)   the price-quality relationship.
B)   customer-value pricing.
C)   value-added pricing.
D)   value analysis.
E)   value.F) A) and B)
G) A) and C)

Question 3

When a firm offers a very low price on a product to attract customers to a store, and once in the store, the customer is persuaded to purchase a higher-priced item, the practice is referred to as

Accepted Answer

A)   predatory pricing.
B)   deceptive pricing.
C)   price discrimination.
D)   caveat emptor.
E)   bait and switch.F) B) and D)
G) A) and D)

Question 4

While consumer tastes and price and availability of similar products determine what consumers want to buy, consumer income determines

Accepted Answer

A)   where they buy.
B)   the degree of brand loyalty.
C)   the degree of repeat purchase.
D)   what they can buy.
E)   their likelihood of spreading positive word-of-mouth.F) B) and D)
G) C) and D)

Question 5

Which of the following is a demand-oriented approach to pricing?

Accepted Answer

A)   customary pricing
B)   target profit pricing
C)   standard markup pricing
D)   bundle pricing
E)   service-oriented pricingF) C) and D)
G) B) and D)

Question 6

A firm's profit equation equals

Accepted Answer

A)   Total cost + Total revenue or [(Fixed cost + Variable cost)  + (Unit price × Quantity sold) ].
B)   Total revenue − Total cost or [(Unit price × Quantity sold)  − (Fixed cost + Variable cost) ].
C)   Total cost − Marginal cost or [(Fixed cost + Variable cost)  − (Unit price × Quantity sold) ].
D)   Total cost − Variable cost or [(Fixed cost + Variable cost)  − (Unit price × Quantity sold) ].
E)   Total revenue ÷ Total cost or [(Unit price × Quantity sold)  ÷ (Fixed cost + Variable cost) ].F) A) and E)
G) A) and C)

Question 7

Figure 11-3
-The movement from point A to point B in Figure 11-3 above shows

Accepted Answer

A)   skimming demand.
B)   penetration demand.
C)   that buyers see the product as a bargain and buy more.
D)   that buyers become dubious about the quality and prestige and buy less.
E)   a downturn in the economy.F) B) and D)
G) C) and D)

Question 8

With profit-oriented approaches to pricing, a price setter may choose to balance both ________ and ________ to set price.

Accepted Answer

A)   revenues; profit
B)   tangible goods; services
C)   costs; revenues
D)   demand; supply
E)   costs; demandF) A) and B)
G) A) and C)

Question 9

Figure 11-6a
-In break-even chart in Figure 11-7a above, point A identifies the firm's ________ point.

Accepted Answer

A)   loss
B)   price
C)   margin
D)   profit
E)   break-evenF) A) and B)
G) A) and C)

Question 10

To increase value the most, marketers should

Accepted Answer

A)   decrease benefits.
B)   decrease benefits and increase price.
C)   decrease price and increase benefits.
D)   decrease price and decrease benefits.
E)   hold the price steady and let the perceived value of the item increase as it matures in its life cycle.F) A) and D)
G) A) and C)

Question 11

Which of the following statements about consumer demand as a pricing constraint is most accurate?

Accepted Answer

A)   The price charged by competitors for similar offerings has little effect on the price a seller can charge, usually only if there are very few potential buyers.
B)   The number of potential buyers for the product affects the price a seller can charge, but only if the product is using a push strategy in the channel.
C)   The number of potential buyers for the product affects the price a seller can charge, but only if the product is a necessity item.
D)   The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage.
E)   The number of potential buyers generally affects the price a seller can charge.F) B) and E)
G) A) and E)

Question 12

What are the four kinds of discounts that are especially important in marketing pricing strategy?

Accepted Answer

Discounts are reductions from list price...

Question 13

When buying highly technical, few-of-a-kind products such as hydroelectric power plants, governments have found that general contractors are reluctant to specify a formal, fixed price for the procurement. Therefore, these contractors use ________ to compensate them for any cost overruns.

Accepted Answer

A)   at-market pricing
B)   experience curve pricing
C)   cost-plus-fixed-fee pricing
D)   standard markup pricing
E)   yield management pricingF) A) and E)
G) A) and B)

Question 14

Reductions in unit costs for a larger order are referred to as

Accepted Answer

A)   promotional allowances.
B)   economic order discounts.
C)   penetration pricing.
D)   quantity discounts.
E)   case allowances.F) B) and D)
G) C) and D)

Question 15

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, consumers benefitted from an increase in what?

Accepted Answer

A)   cost
B)   appearance
C)   value
D)   price
E)   qualityF) B) and E)
G) C) and E)

Question 16

A firm may forgo a higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Accepted Answer

A)   profit
B)   market share
C)   unit volume
D)   survival
E)   social responsibilityF) C) and D)
G) B) and E)

Question 17

To increase value, marketers may ________, decrease price, or do both.

Accepted Answer

A)   decrease promotion
B)   increase benefits
C)   decrease distribution
D)   increase advertising
E)   allow the perceived value of the item to increase as it matures in the life cycleF) A) and C)
G) C) and E)

Question 18

Manufacturers use seasonal discounts to

Accepted Answer

A)   get rid of expired merchandise.
B)   prevent retailers from purchasing competitors' products.
C)   extend the peak seasonal selling season.
D)   encourage buyers to stock inventory earlier than their normal demand would require.
E)   temporarily spur primary demand during periods of soft sales, such as the beginning of a month, after which prices will return to normal when selective demand picks up.F) B) and E)
G) B) and D)

Question 19

Figure 11-3b
-Figure 11-3b above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units from the demand curve D1 to the demand curve D2, the profit

Accepted Answer

A)   impacts cannot be determined. Figure 11-3b does not indicate what happens to profit when the quantity demanded changes.
B)   increases from $2 to $3 per unit.
C)   stays the same per unit.
D)   increases from $6 to $8 per unit.
E)   decreases from $8 to $6 per unit.F) C) and D)
G) D) and E)

Question 20

Which of the following statements regarding pricing constraints is most accurate?

Accepted Answer

A)   Generally, the greater the demand for a product, the higher the price that can be set.
B)   At the corporate level, when setting pricing constraints, a firm must disregard current conditions in the marketplace because they are too temporal for long-term planning.
C)   Pricing constraints must always be set, but they are rarely enforced.
D)   It is possible to create pricing constraints with the greatest range possible in order to anticipate any and all changes in the marketing environment.
E)   Even if a firm is trying to satisfy its obligations to its customers and society in general, it should ignore setting pricing constraints.F) D) and E)
G) A) and B)

Exam 11: Pricing Products and Services

With profit-oriented approaches to pricing, a price setter may choose to balance both ________ and ________ to set price.

Correct AnswerverifiedShow Answer

A firm may forgo a higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Correct AnswerverifiedShow Answer

While consumer tastes and price and availability of similar products determine what consumers want to buy, consumer income determines

Correct AnswerverifiedShow Answer

When a firm offers a very low price on a product to attract customers to a store, and once in the store, the customer is persuaded to purchase a higher-priced item, the practice is referred to as

Correct AnswerverifiedShow Answer

Manufacturers use seasonal discounts to

Correct AnswerverifiedShow Answer

When buying highly technical, few-of-a-kind products such as hydroelectric power plants, governments have found that general contractors are reluctant to specify a formal, fixed price for the procurement. Therefore, these contractors use ________ to compensate them for any cost overruns.

Correct AnswerverifiedShow Answer

Describe the pricing constraints a firm is likely to face.

Correct AnswerverifiedPricing constraints are factors that lim...View AnswerShow Answer

Figure 11-3 -The movement from point A to point B in Figure 11-3 above shows

Correct AnswerverifiedShow Answer

Figure 11-6a -In break-even chart in Figure 11-7a above, point A identifies the firm's ________ point.

Correct AnswerverifiedShow Answer

Which of the following statements regarding pricing constraints is most accurate?

Correct AnswerverifiedShow Answer

Which of the following is a demand-oriented approach to pricing?

Correct AnswerverifiedShow Answer

A firm's profit equation equals

Correct AnswerverifiedShow Answer

Figure 11-3b -Figure 11-3b above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units from the demand curve D1 to the demand curve D2, the profit

Correct AnswerverifiedShow Answer

To increase value the most, marketers should

Correct AnswerverifiedShow Answer

Which of the following statements about consumer demand as a pricing constraint is most accurate?

Correct AnswerverifiedShow Answer

To increase value, marketers may ________, decrease price, or do both.

Correct AnswerverifiedShow Answer

What are the four kinds of discounts that are especially important in marketing pricing strategy?

Correct AnswerverifiedDiscounts are reductions from list price...View AnswerShow Answer

The ratio of perceived benefits to price is referred to as

Correct AnswerverifiedShow Answer

Reductions in unit costs for a larger order are referred to as

Correct AnswerverifiedShow Answer

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, consumers benefitted from an increase in what?

Correct AnswerverifiedShow Answer

With profit-oriented approaches to pricing, a price setter may choose to balance both and to set price.

Correct Answer
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Pricing constraints are factors that lim...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Discounts are reductions from list price...
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Correct Answer
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Correct Answer
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