Question 1

Customers are MORE likely to be price sensitive in all of the following conditions, EXCEPT:

Accepted Answer

A)  switching costs are low. 
B)  it is difficult to compare suppliers. 
C)  price is used as a sign of product quality. 
D)  some, or all, of the price is paid by others. 
E)  the expenditure is small. 
A)  switching costs are low. 
B)  it is difficult to compare suppliers. 
C)  price is used as a sign of product quality. 
D)  some, or all, of the price is paid by others. 
E)  the expenditure is small.

Question 2

A standard mark- up is added to the cost of producing a product under which of the following approaches to pricing?

Accepted Answer

A)  value- based approach 
B)  performance- based approach 
C)  relationship approach 
D)  competition- based approach 
E)  cost- based approach 
A)  value- based approach 
B)  performance- based approach 
C)  relationship approach 
D)  competition- based approach 
E)  cost- based approach

Question 3

The Rodkin Corporation has just introduced an innovative new product. In an effort to recoup its investment in R & D, as quickly as possible, Rodkin will MOST likely consider using which approach to pricing?

Accepted Answer

A)  demand based pricing 
B)  price penetration 
C)  price maximising 
D)  value approach to pricing 
E)  price skimming 
A)  demand based pricing 
B)  price penetration 
C)  price maximising 
D)  value approach to pricing 
E)  price skimming

Question 4

Dizzy's Jazz Club charges potential members a $250 joining fee. In return for their annual membership fee, club members receive priority reservations for top international performers, free access to the jazz jam session held on Fridays, free access to four exclusive members- only events per year and a 50% discount on the admission price for all programmed jazz sessions. However, club members must still purchase an admission ticket as well as pay for food and beverage purchased from the bar. Dizzy's pricing is an example of:

Accepted Answer

A)  offset pricing. 
B)  captive market pricing. 
C)  optional product pricing. 
D)  two- part pricing. 
E)  none of the above 
A)  offset pricing. 
B)  captive market pricing. 
C)  optional product pricing. 
D)  two- part pricing. 
E)  none of the above

Question 5

Channel members who perform certain marketing functions may be provided with a discount called:

Accepted Answer

A)  a special discount. 
B)  a quantity discount. 
C)  a functional discount. 
D)  an allowance. 
E)  a cash discount. 
A)  a special discount. 
B)  a quantity discount. 
C)  a functional discount. 
D)  an allowance. 
E)  a cash discount.

Question 6

A manufacturer of women's hosiery offers consumers three pairs of pantihose plus a pair of leggings attractively packaged as a single unit and available for a single price. The hosiery manufacturer is using:

Accepted Answer

A)  offset pricing. 
B)  product- bundle pricing. 
C)  optional product pricing. 
D)  by- product pricing. 
E)  none of the above 
A)  offset pricing. 
B)  product- bundle pricing. 
C)  optional product pricing. 
D)  by- product pricing. 
E)  none of the above

Question 7

Under which of the following market conditions are marketing activities such as marketing research, product development, pricing, advertising and sales promotion MOST likely to play little or no role?

Accepted Answer

A)  monopolistic competition 
B)  pure competition 
C)  oligopolistic competition 
D)  free market 
E)  monopoly 
A)  monopolistic competition 
B)  pure competition 
C)  oligopolistic competition 
D)  free market 
E)  monopoly

Question 8

A discount available to sellers during normal periods of low demand is known as:

Accepted Answer

A)  segmented pricing. 
B)  seasonal discounts. 
C)  psychological pricing. 
D)  functional discount. 
E)  price discrimination. 
A)  segmented pricing. 
B)  seasonal discounts. 
C)  psychological pricing. 
D)  functional discount. 
E)  price discrimination.

Question 9

Which of the following statements about cost- plus pricing is FALSE?

Accepted Answer

A)  Markups tend to be lower on staple goods. 
B)  Markups tend to be higher on goods with few substitutes. 
C)  Markups tend to be higher on seasonal produce and perishables. 
D)  Markups tend to be higher on fresh produce. 
E)  Markups tend to be lower on items with inelastic demand. 
A)  Markups tend to be lower on staple goods. 
B)  Markups tend to be higher on goods with few substitutes. 
C)  Markups tend to be higher on seasonal produce and perishables. 
D)  Markups tend to be higher on fresh produce. 
E)  Markups tend to be lower on items with inelastic demand.

Question 10

The major cause of price increases is:

Accepted Answer

A)  company desire for profit maximisation. 
B)  changes in consumer purchasing patterns. 
C)  rising costs. 
D)  widespread price elasticity. 
E)  government regulation. 
A)  company desire for profit maximisation. 
B)  changes in consumer purchasing patterns. 
C)  rising costs. 
D)  widespread price elasticity. 
E)  government regulation.

Question 11

When sellers combine two or more of their products and offer them for sale as a single unit for a single price, that represents less than if both products were purchased separately, this is known as:

Accepted Answer

A)  optional product pricing. 
B)  product- bundle pricing. 
C)  offset pricing. 
D)  by- product pricing. 
E)  none of the above 
A)  optional product pricing. 
B)  product- bundle pricing. 
C)  offset pricing. 
D)  by- product pricing. 
E)  none of the above

Question 12

A company that plans to develop an imitative new product faces a product- positioning problem.

Accepted Answer

A) True 
 B)False

Question 13

According to the experience curve concept, the average cost of producing a product is likely to drop as a firm accumulates experience in its production.

Accepted Answer

A) True 
 B)False

Question 14

A product market that consists of many buyers and sellers trading in a uniform commodity such as wheat, vegetables or financial securities, this is known as:

Accepted Answer

A)  monopolistic competition. 
B)  pure competition. 
C)  oligopolistic competition. 
D)  free market. 
E)  monopoly. 
A)  monopolistic competition. 
B)  pure competition. 
C)  oligopolistic competition. 
D)  free market. 
E)  monopoly.

Question 15

The formula for price- elasticity attempts to show the relationship between the percentage change in quantity demanded and the percentage change in _________.

Accepted Answer

A)  market size 
B)  price 
C)  demand 
D)  market share 
E)  costs 
A)  market size 
B)  price 
C)  demand 
D)  market share 
E)  costs

Question 16

The Consumer and Competition Act, 2010 prohibits a number of pricing strategies and tactics. Which of the following is NOT one of these prohibitions?

Accepted Answer

A)  predatory pricing 
B)  price fixing 
C)  resale price maintenance 
D)  prestige pricing 
E)  some forms of price discrimination 
A)  predatory pricing 
B)  price fixing 
C)  resale price maintenance 
D)  prestige pricing 
E)  some forms of price discrimination

Question 17

Briefly describe market- skimming pricing. What benefits does it offer? What circumstances favour its use?

Accepted Answer

Market- skimming pricing utilises price

Question 18

Read the mini case study below and answer the following questions:
a) Comment on Virgin Galactic's current approach to pricing.
b) How do you think VG's approach to pricing is likely to change as the space tourism market matures?
Mini- Case: Virgin Galactic and Space Tourism
The race to develop commercial flights into outer space is well and truly on with several companies having reached the prototype stage. Virgin Galactic (VG) is widely regarded as the pioneer and market leader, is currently running test flights and expects to offer the first commercial services around 2014. Although the costs of developing this technology have never been disclosed, the investment in sub- orbital space travel is expected to run into many billions of dollars. Market players will no doubt want to recoup this investment as quickly as possible by charging the right prices. VG will be offering space flights of about two hours duration for $200,000 per person and has already attracted deposits from more than 600 eager customers. Hot on VG's heels are several potential competitors-Space Adventures intends to commercialise in around 2016 and has announced a price of $110,000; XCOR currently quote a fare of $95,000 per person while Armadillo quote $102,000 but neither of the latter two companies have offered firm dates for commercial service availability which suggests that they are 5-10 years away from launch. Analysts who have studied the space tourism market suggest that as the industry matures, prices are likely to drop as low as $20,000 per fare.

Accepted Answer

to the "thrill seeker" segment of the ma

Question 19

Sellers who are keen to build business with customers in a given geographic area, may consider using:

Accepted Answer

A)  geographic pricing. 
B)  freight absorption pricing. 
C)  basing point pricing. 
D)  zone pricing. 
E)  none of the above 
A)  geographic pricing. 
B)  freight absorption pricing. 
C)  basing point pricing. 
D)  zone pricing. 
E)  none of the above

Question 20

Functional discounts are offered to channel members for performing certain basic marketing functions in the channel of distribution.

Accepted Answer

A) True 
 B)False

Customers are MORE likely to be price sensitive in all of the following conditions, EXCEPT:

A standard mark- up is added to the cost of producing a product under which of the following approaches to pricing?

The Rodkin Corporation has just introduced an innovative new product. In an effort to recoup its investment in R & D, as quickly as possible, Rodkin will MOST likely consider using which approach to pricing?

Channel members who perform certain marketing functions may be provided with a discount called:

A manufacturer of women's hosiery offers consumers three pairs of pantihose plus a pair of leggings attractively packaged as a single unit and available for a single price. The hosiery manufacturer is using:

Under which of the following market conditions are marketing activities such as marketing research, product development, pricing, advertising and sales promotion MOST likely to play little or no role?

A discount available to sellers during normal periods of low demand is known as:

Which of the following statements about cost- plus pricing is FALSE?

The major cause of price increases is:

When sellers combine two or more of their products and offer them for sale as a single unit for a single price, that represents less than if both products were purchased separately, this is known as:

A company that plans to develop an imitative new product faces a product- positioning problem.

According to the experience curve concept, the average cost of producing a product is likely to drop as a firm accumulates experience in its production.

A product market that consists of many buyers and sellers trading in a uniform commodity such as wheat, vegetables or financial securities, this is known as:

The formula for price- elasticity attempts to show the relationship between the percentage change in quantity demanded and the percentage change in _________.

The Consumer and Competition Act, 2010 prohibits a number of pricing strategies and tactics. Which of the following is NOT one of these prohibitions?

Briefly describe market- skimming pricing. What benefits does it offer? What circumstances favour its use?

Sellers who are keen to build business with customers in a given geographic area, may consider using:

Functional discounts are offered to channel members for performing certain basic marketing functions in the channel of distribution.

Marketing: Creating Superior Customer Value

Marketing: Delivering and Capturing Value

Strategic Planning and Marketing

Marketing Strategies for Competitive Advantage

The Global Marketing Environment

Information Management and Marketing Research

Consumer Behaviour

Business-To-Business Behaviour

Market Segmentation, Targeting and Positioning

Products and Services Marketing

New Products

Marketing Channels and Logistics Networks

Retailing and Wholesaling

Advertising and Public Relations

Sales Promotion and Selling

Direct and Online Marketing

Tapping Into Markets Across the Globe

Responsible Marketing

Filters

Exam 12: Pricing for Value

Customers are MORE likely to be price sensitive in all of the following conditions, EXCEPT:

A standard mark- up is added to the cost of producing a product under which of the following approaches to pricing?

The Rodkin Corporation has just introduced an innovative new product. In an effort to recoup its investment in R & D, as quickly as possible, Rodkin will MOST likely consider using which approach to pricing?

Channel members who perform certain marketing functions may be provided with a discount called:

A manufacturer of women's hosiery offers consumers three pairs of pantihose plus a pair of leggings attractively packaged as a single unit and available for a single price. The hosiery manufacturer is using:

Under which of the following market conditions are marketing activities such as marketing research, product development, pricing, advertising and sales promotion MOST likely to play little or no role?

A discount available to sellers during normal periods of low demand is known as:

Which of the following statements about cost- plus pricing is FALSE?

The major cause of price increases is:

When sellers combine two or more of their products and offer them for sale as a single unit for a single price, that represents less than if both products were purchased separately, this is known as:

A company that plans to develop an imitative new product faces a product- positioning problem.

According to the experience curve concept, the average cost of producing a product is likely to drop as a firm accumulates experience in its production.

A product market that consists of many buyers and sellers trading in a uniform commodity such as wheat, vegetables or financial securities, this is known as:

The formula for price- elasticity attempts to show the relationship between the percentage change in quantity demanded and the percentage change in _________.

The Consumer and Competition Act, 2010 prohibits a number of pricing strategies and tactics. Which of the following is NOT one of these prohibitions?

Briefly describe market- skimming pricing. What benefits does it offer? What circumstances favour its use?

Sellers who are keen to build business with customers in a given geographic area, may consider using:

Functional discounts are offered to channel members for performing certain basic marketing functions in the channel of distribution.

Marketing: Creating Superior Customer Value

Marketing: Delivering and Capturing Value

Strategic Planning and Marketing

Marketing Strategies for Competitive Advantage

The Global Marketing Environment

Information Management and Marketing Research

Consumer Behaviour

Business-To-Business Behaviour

Market Segmentation, Targeting and Positioning

Products and Services Marketing

New Products

Marketing Channels and Logistics Networks

Retailing and Wholesaling

Advertising and Public Relations

Sales Promotion and Selling

Direct and Online Marketing

Tapping Into Markets Across the Globe

Responsible Marketing

Filters