Question 1

From a marketing viewpoint, __________ is the money or other considerations (including other products and services)  exchanged for the ownership or use of a product or service.

Accepted Answer

A)  value
B)  price
C)  barter
D)  currency
E)  a tariffF) A) and B)
G) B) and E)

Question 2

-In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, point A identifies the firm's __________ point.

Accepted Answer

A)  loss
B)  price
C)  margin
D)  profit
E)  break-evenF) None of the above
G) A) and B)

Question 3

Three pricing objectives relate to a firm's profit. In one known as __________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Accepted Answer

A)  maximizing current profit
B)  target return
C)  break-even strategy
D)  minimizing risk
E)  managing for long-run profitsF) A) and D)
G) A) and C)

Question 4

Pricing constraints are

Accepted Answer

A)  the controllable elements in a firm's marketing mix that allow it to charge the highest price possible.
B)  formulas used in establishing break-even points, price elasticity of demand, and marginal analysis of revenues and costs.
C)  factors that limit the range of prices a firm may set.
D)  high-level goals held by the firm that recommend methods of pricing a firm may use.
E)  virtual boundaries used when setting the initial price on a new product.F) B) and D)
G) C) and E)

Question 5

To promote their business, some psychics advertise free tarot-card readings and other insights into their customers' futures on television. Unfortunately, this "free reading" has cost some unsuspecting callers as much as $700 in phone charges. This sort of pricing practice would be primarily monitored by the

Accepted Answer

A)  Consumer Protection Agency.
B)  U.S. Department of Justice.
C)  Federal Trade Commission.
D)  Federal Communications Commission.
E)  Consumer Product Safety Commission.F) B) and D)
G) B) and C)

Question 6

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

Accepted Answer

A)  skimming pricing.
B)  status pricing.
C)  price lining.
D)  value pricing.
E)  prestige pricing.F) A) and E)
G) D) and E)

Question 7

Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price. Demand for pictures is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC)  total $32,000 (real estate taxes, interest on a bank loan, etc.)  and unit variable cost (UVC)  for a picture frame is $40 (labor, glass, frame, and matting) . What is the quantity of picture frames you will need to sell to break-even?

Accepted Answer

A)  200 picture frames
B)  400 picture frames
C)  800 picture frames
D)  1,600 picture frames
E)  2,000 picture framesF) B) and C)
G) A) and E)

Question 8

The Swedish manufacturer of Asko dishwashers concluded that consumers would be willing to pay approximately $1000 for a dishwasher that was quieter than any other on the market. Asko determined about $250 in markups would have to be given to wholesalers and retailers, and then designed the quietest product that it could make for $750. Asko used

Accepted Answer

A)  prestige pricing.
B)  price lining.
C)  cost-plus pricing.
D)  target pricing.
E)  customary pricing.F) C) and D)
G) A) and E)

Question 9

The percentage change in quantity demanded relative to the percentage change in price is referred to as

Accepted Answer

A)  price elasticity of demand.
B)  demand derivative of price.
C)  average demand.
D)  marginal revenue.
E)  derived demand.F) A) and C)
G) A) and E)

Question 10

What type of discount would Toro most likely offer its channel members to carry and sell its riding lawn mowers during the winter months?

Accepted Answer

A)  noncumulative discounts
B)  cumulative discounts
C)  functional discounts
D)  seasonal discounts
E)  trade discountsF) C) and D)
G) A) and B)

Question 11

Which of the following statements regarding a trade-in allowance is most accurate?

Accepted Answer

A)  A trade-in allowance is a noncash exchange of one product for another of equal or lesser value.
B)  A trade-in allowance is an effective way to lower the price a buyer has to pay without formally reducing the list price.
C)  A trade-in allowance is a cash-back payment when a more expensive item is replaced with a less expensive one.
D)  A trade-in allowance is the return of money based on proof of purchase.
E)  A trade-in allowance is a cash payment to a retailer for extra in-store support or special featuring of the brand.F) A) and B)
G) C) and D)

Question 12

SHAPE magazine is targeted at young women seeking healthier lifestyles. At a price of $3.00 per copy, 1.25 million copies are sold. If the price per issue is increased to $3.25, only 1 million copies would be sold. Fixed costs are $1 million and unit variable costs are $0.50 per magazine. From the information provided here, what is SHAPE magazine's total revenue obtained at the lower $3.00 price?

Accepted Answer

A)  $3,750,000
B)  $3,250,000
C)  $3,000,000
D)  $2,125,000
E)  $1,750,000F) A) and E)
G) A) and D)

Question 13

In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery. But unlike Duracell, Energizer priced its batteries at a low initial price to attract the mass market. Was Energizer's pricing strategy to take market share from Duracell a success?

Accepted Answer

A)  No, because consumers are price-insensitive when it comes to batteries.
B)  Yes, because of the positive association with the "Energizer Bunny" marketing campaign.
C)  No, because consumers were unable to perceive the improved quality due to the low price.
D)  Yes, because consumers typically respond positively to cost-plus pricing.
E)  Yes, because the demand for batteries has unitary elasticity.F) B) and E)
G) B) and D)

Question 14

Marketing executives must translate estimates of customer demand into estimates of

Accepted Answer

A)  personnel.
B)  advertising expenditures.
C)  ancillary product support.
D)  revenues the firm expects to receive.
E)  supply.F) B) and C)
G) A) and E)

Question 15

Talbot's sells women's clothes. A longsleeve scoopneck t-shirt with the Talbot's label costs $45. By comparison, you can buy a t-shirt for $5 at a Family Dollar Store, but it won't have the prestigious Talbot's label or quality. What kind of demand-oriented approach to pricing does Talbot's use?

Accepted Answer

A)  experience curve pricing
B)  skimming pricing
C)  demand-backward pricing
D)  prestige pricing
E)  flexible pricingF) A) and B)
G) None of the above

Question 16

One problem in the interstate trucking industry is the number of trucks that return empty after making a delivery. There is a website where independent interstate truckers can look for loads to carry on their return trips, known as backhauls. Because the trucks would normally return empty, truckers who use this website to generate business they would not have had otherwise receive a reduced shipping rate. This reduced rate for a backhaul is an example of

Accepted Answer

A)  penetration pricing.
B)  target pricing.
C)  cost-plus pricing.
D)  odd-even pricing.
E)  yield management pricing.F) D) and E)
G) A) and C)

Question 17

A skimming pricing policy is likely to be most effective when

Accepted Answer

A)  consumers perceive your product to be similar to other products on the market.
B)  a lower price will significantly lower fixed costs.
C)  customers interpret the high price as signifying high quality.
D)  consumers tend to be price sensitive.
E)  it will be easier to set measurable sales unit goals.F) A) and E)
G) C) and D)

Question 18

Which of the following statements about the price-setting process is most accurate?

Accepted Answer

A)  When selecting a strategy for setting an initial price, it does not matter which one you use as long as you stick with it.
B)  Sometimes pricing strategies overlap, and a seasoned marketer will consider several strategies when choosing an approximate price level.
C)  Demand-oriented pricing approaches rely heavily on competitors' prices.
D)  Skimming pricing is a competition-oriented pricing strategy.
E)  Penetration pricing is the best pricing strategy for companies trying to meet the goals of a profit-oriented pricing approach.F) C) and D)
G) A) and D)

Question 19

Larry's Lawn Care allows customers to use a credit card for purchases. Larry pays 4 percent of the sale to the credit card company. To promote more business, Larry decides to offer a lower price to customers paying cash - that price being 3 percent less than the standard list price. Larry is giving his customers a(n)

Accepted Answer

A)  functional discount.
B)  trade-in allowance.
C)  promotional allowance.
D)  cash discount.
E)  everyday low priceF) None of the above
G) A) and C)

Question 20

Which of the following statements regarding new car purchases in the U.S. is most accurate?

Accepted Answer

A)  While men of all races pay basically the same price, women, regardless of race, pay considerably less.
B)  Seventy-nine percent of all men purchasing cars cite haggling over price as the most exciting aspect of the purchase.
C)  A fixed price policy is now the standard in the automobile industry due to violations of the Robinson-Patman Act.
D)  Female automobile salespeople rarely, if ever, offer flexible pricing to women customers.
E)  African-Americans, women, and Hispanics pay higher prices than the average price paid for a new car.F) None of the above
G) B) and C)

Exam 11: Pricing Products and Services

Correct Answer
verified

The percentage change in quantity demanded relative to the percentage change in price is referred to as

Correct Answer
verified

Talbot's sells women's clothes. A longsleeve scoopneck t-shirt with the Talbot's label costs $45. By comparison, you can buy a t-shirt for $5 at a Family Dollar Store, but it won't have the prestigious Talbot's label or quality. What kind of demand-oriented approach to pricing does Talbot's use?

Correct Answer
verified

What type of discount would Toro most likely offer its channel members to carry and sell its riding lawn mowers during the winter months?

Correct Answer
verified

Correct Answer
verified

Pricing constraints are

Correct Answer
verified

Which of the following statements regarding a trade-in allowance is most accurate?

Correct Answer
verified

Marketing executives must translate estimates of customer demand into estimates of

Correct Answer
verified

Correct Answer
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Correct Answer
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Which of the following statements regarding new car purchases in the U.S. is most accurate?

Correct Answer
verified

Correct Answer
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From a marketing viewpoint, __________ is the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service.

Correct Answer
verified

A skimming pricing policy is likely to be most effective when

Correct Answer
verified

Correct Answer
verified

-In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, point A identifies the firm's __________ point.

Correct Answer
verified

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

Correct Answer
verified

Correct Answer
verified

Which of the following statements about the price-setting process is most accurate?

Correct Answer
verified

Three pricing objectives relate to a firm's profit. In one known as __________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Correct Answer
verified

Exam 11: Pricing Products and Services

Correct AnswerverifiedShow Answer

The percentage change in quantity demanded relative to the percentage change in price is referred to as

Correct AnswerverifiedShow Answer

Talbot's sells women's clothes. A longsleeve scoopneck t-shirt with the Talbot's label costs $45. By comparison, you can buy a t-shirt for $5 at a Family Dollar Store, but it won't have the prestigious Talbot's label or quality. What kind of demand-oriented approach to pricing does Talbot's use?

Correct AnswerverifiedShow Answer

What type of discount would Toro most likely offer its channel members to carry and sell its riding lawn mowers during the winter months?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Pricing constraints are

Correct AnswerverifiedShow Answer

Which of the following statements regarding a trade-in allowance is most accurate?

Correct AnswerverifiedShow Answer

Marketing executives must translate estimates of customer demand into estimates of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements regarding new car purchases in the U.S. is most accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

From a marketing viewpoint, __________ is the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service.

Correct AnswerverifiedShow Answer

A skimming pricing policy is likely to be most effective when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

-In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, point A identifies the firm's __________ point.

Correct AnswerverifiedShow Answer

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements about the price-setting process is most accurate?

Correct AnswerverifiedShow Answer

Three pricing objectives relate to a firm's profit. In one known as __________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Correct AnswerverifiedShow Answer

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