Question 1

A pricing approach that is based on the buyer's perceptions rather than the seller's costs is known as which of the following?

Accepted Answer

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

Question 2

Sally has decided to buy herself a new winter coat and wants to buy from the high range, preferably a cashmere coat. Based on what Sally learned while researching coats using online sources, she figures that she won't be able to obtain the required quality for less than $300. She is willing and able to pay up to $600 for the "right" coat. This price range, $300- $600, represents Sally's:

Accepted Answer

A)  psychological prices. 
B)  reference prices. 
C)  product- form prices. 
D)  reservation prices. 
E)  none of the above 
A)  psychological prices. 
B)  reference prices. 
C)  product- form prices. 
D)  reservation prices. 
E)  none of the above

Question 3

The use of optional product pricing allows a seller to keep the price of the basic product low while making a profit on extras the consumer would like to add to that product.

Accepted Answer

A) True 
 B)False

Question 4

In an effort to find a middle ground between free- on- board pricing and uniform delivered pricing, many companies have turned to:

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 5

The Beta Corporation has experienced high credit collection costs and bad debt losses. The firm may be able to reduce these expenses by offering cash discounts to encourage early payment or prompt payment.

Accepted Answer

A) True 
 B)False

Question 6

When it is not necessary for a firm to spend any time in developing a marketing strategy, it is probably competing in a purely competitive market.

Accepted Answer

A) True 
 B)False

Question 7

A company will place its major emphasis on competitors' prices in which of the following approaches to pricing?

Accepted Answer

A)  sealed- bid pricing 
B)  going rate pricing 
C)  break- even pricing 
D)  value- based pricing 
E)  economic value pricing 
A)  sealed- bid pricing 
B)  going rate pricing 
C)  break- even pricing 
D)  value- based pricing 
E)  economic value pricing

Question 8

What is psychological pricing? Why is this concept important to marketers? Briefly discuss the impact of reference and odd- pricing.

Accepted Answer

Psychological pricing goes beyond simple

Question 9

Sellers are likely to initiate price cuts for any of the following reasons, EXCEPT:

Accepted Answer

A)  to dominate the market. 
B)  to respond to falling market share. 
C)  to initiate a price war. 
D)  to trim excess capacity. 
E)  All of the above are reasons for price cuts. 
A)  to dominate the market. 
B)  to respond to falling market share. 
C)  to initiate a price war. 
D)  to trim excess capacity. 
E)  All of the above are reasons for price cuts.

Question 10

The majority of consumer goods industries are monopolistically competitive.

Accepted Answer

A) True 
 B)False

Question 11

Prices are normally set by top management in small companies rather than by the marketing or sales departments.

Accepted Answer

A) True 
 B)False

Question 12

Cost- plus pricing is the simplest pricing method.

Accepted Answer

A) True 
 B)False

Question 13

When a company offers to sell accessories along with the main product, this is known as:

Accepted Answer

A)  product line pricing. 
B)  product bundle pricing. 
C)  optional product pricing. 
D)  product mix pricing. 
E)  none of the above 
A)  product line pricing. 
B)  product bundle pricing. 
C)  optional product pricing. 
D)  product mix pricing. 
E)  none of the above

Question 14

When average costs of production drop as a result of a company learning how to produce items more efficiently, this is known as:

Accepted Answer

A)  natural attrition. 
B)  scale economies. 
C)  scale diseconomies. 
D)  experience curve. 
E)  scope economies. 
A)  natural attrition. 
B)  scale economies. 
C)  scale diseconomies. 
D)  experience curve. 
E)  scope economies.

Question 15

The highly heterogeneous nature of products sold under oligopolistic competition allows each oligopolist to virtually ignore the pricing activities of its competitors.

Accepted Answer

A) True 
 B)False

Question 16

A product- market that consists of just one seller 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 17

When a car maker offers to sell the customer accessories such as Bluetooth, GPS, alloy wheels and an array of computerised accessories, the car dealer is practising:

Accepted Answer

A)  product line pricing. 
B)  product bundle pricing. 
C)  optional product pricing. 
D)  product mix pricing. 
E)  none of the above 
A)  product line pricing. 
B)  product bundle pricing. 
C)  optional product pricing. 
D)  product mix pricing. 
E)  none of the above

Question 18

Going- rate pricing is especially popular if costs are difficult to measure or competitive response is certain.

Accepted Answer

A) True 
 B)False

Question 19

The more inelastic demand is for a product, the more a seller will profit from an increase in price.

Accepted Answer

A) True 
 B)False

Question 20

To be effective, market skimming should be used under which conditions?

Accepted Answer

A)  The product's quality and image should be consistent with a high price. 
B)  When the company has a patent or some other type of legal protection. 
C)  Demand should be relatively inelastic. 
D)  Costs of producing a small volume should not be so high that there is an inadequate margin. 
E)  all of the above 
A)  The product's quality and image should be consistent with a high price. 
B)  When the company has a patent or some other type of legal protection. 
C)  Demand should be relatively inelastic. 
D)  Costs of producing a small volume should not be so high that there is an inadequate margin. 
E)  all of the above

A pricing approach that is based on the buyer's perceptions rather than the seller's costs is known as which of the following?

The use of optional product pricing allows a seller to keep the price of the basic product low while making a profit on extras the consumer would like to add to that product.

In an effort to find a middle ground between free- on- board pricing and uniform delivered pricing, many companies have turned to:

The Beta Corporation has experienced high credit collection costs and bad debt losses. The firm may be able to reduce these expenses by offering cash discounts to encourage early payment or prompt payment.

When it is not necessary for a firm to spend any time in developing a marketing strategy, it is probably competing in a purely competitive market.

A company will place its major emphasis on competitors' prices in which of the following approaches to pricing?

What is psychological pricing? Why is this concept important to marketers? Briefly discuss the impact of reference and odd- pricing.

Sellers are likely to initiate price cuts for any of the following reasons, EXCEPT:

The majority of consumer goods industries are monopolistically competitive.

Prices are normally set by top management in small companies rather than by the marketing or sales departments.

Cost- plus pricing is the simplest pricing method.

When a company offers to sell accessories along with the main product, this is known as:

When average costs of production drop as a result of a company learning how to produce items more efficiently, this is known as:

The highly heterogeneous nature of products sold under oligopolistic competition allows each oligopolist to virtually ignore the pricing activities of its competitors.

A product- market that consists of just one seller is known as:

When a car maker offers to sell the customer accessories such as Bluetooth, GPS, alloy wheels and an array of computerised accessories, the car dealer is practising:

Going- rate pricing is especially popular if costs are difficult to measure or competitive response is certain.

The more inelastic demand is for a product, the more a seller will profit from an increase in price.

To be effective, market skimming should be used under which conditions?

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

A pricing approach that is based on the buyer's perceptions rather than the seller's costs is known as which of the following?

The use of optional product pricing allows a seller to keep the price of the basic product low while making a profit on extras the consumer would like to add to that product.

In an effort to find a middle ground between free- on- board pricing and uniform delivered pricing, many companies have turned to:

The Beta Corporation has experienced high credit collection costs and bad debt losses. The firm may be able to reduce these expenses by offering cash discounts to encourage early payment or prompt payment.

When it is not necessary for a firm to spend any time in developing a marketing strategy, it is probably competing in a purely competitive market.

A company will place its major emphasis on competitors' prices in which of the following approaches to pricing?

What is psychological pricing? Why is this concept important to marketers? Briefly discuss the impact of reference and odd- pricing.

Sellers are likely to initiate price cuts for any of the following reasons, EXCEPT:

The majority of consumer goods industries are monopolistically competitive.

Prices are normally set by top management in small companies rather than by the marketing or sales departments.

Cost- plus pricing is the simplest pricing method.

When a company offers to sell accessories along with the main product, this is known as:

When average costs of production drop as a result of a company learning how to produce items more efficiently, this is known as:

The highly heterogeneous nature of products sold under oligopolistic competition allows each oligopolist to virtually ignore the pricing activities of its competitors.

A product- market that consists of just one seller is known as:

When a car maker offers to sell the customer accessories such as Bluetooth, GPS, alloy wheels and an array of computerised accessories, the car dealer is practising:

Going- rate pricing is especially popular if costs are difficult to measure or competitive response is certain.

The more inelastic demand is for a product, the more a seller will profit from an increase in price.

To be effective, market skimming should be used under which conditions?

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