Question 1

Historically, prices were set through bargaining by the buyer and the seller.

Accepted Answer

A) True 
 B)False

Question 2

Since they have no competition, monopolists will always charge the highest possible price for their goods and services.

Accepted Answer

A) True 
 B)False

Question 3

Price bundling may be used to promote the sale of products that the consumer may not otherwise purchase.

Accepted Answer

A) True 
 B)False

Question 4

Market- skimming pricing takes advantage of the fact that some customers are willing to pay more to be the first to own a new, or unique, product.

Accepted Answer

A) True 
 B)False

Question 5

A temporary reduction in price, which may involve pricing at below cost, and which is designed to increase patronage is known as a(n):

Accepted Answer

A)  rebate. 
B)  allowance. 
C)  loss leader. 
D)  discount. 
E)  special price. 
A)  rebate. 
B)  allowance. 
C)  loss leader. 
D)  discount. 
E)  special price.

Question 6

The pricing approach that bases its prices on how it believes competitors will price rather than on its own costs or demand estimates is known as:

Accepted Answer

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

Question 7

Briefly describe market- penetration pricing. What benefits does it offer? Under what circumstances is this approach most likely to be used?

Accepted Answer

In market- penetration pricing, a low in

Question 8

Promotional allowances are a form of bribery and, as such, their use is a violation of the Consumer and Competition Act.

Accepted Answer

A) True 
 B)False

Question 9

Market segments that are willing to pay a premium for the privilege of being the first to own a new product or service are prime candidates for:

Accepted Answer

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

Question 10

Which of the following statements provides the broadest, most complete definition of price?

Accepted Answer

A)  the value of the product, as defined by the marketer, and displayed on the price tag 
B)  the amount charged for a product or service 
C)  the sum of the values consumers exchange for the benefits of having or using the product or service 
D)  the costs associated with the consumer's acquisition and ownership of a product 
A)  the value of the product, as defined by the marketer, and displayed on the price tag 
B)  the amount charged for a product or service 
C)  the sum of the values consumers exchange for the benefits of having or using the product or service 
D)  the costs associated with the consumer's acquisition and ownership of a product

Question 11

The corporate travel segment is often said to be relatively price insensitive. Which of the following is the MOST LIKELY explanation for price insensitivity in this market segment?

Accepted Answer

A)  The cost of switching to other travel service providers including airlines and hotels is relatively low. 
B)  It is difficult for business executives to compare suppliers and prices. 
C)  Travel expenses are relatively small compared to executive salaries. 
D)  Some, or all, of executive travel costs are paid by their employers. 
E)  All of the above are possible explanations. 
A)  The cost of switching to other travel service providers including airlines and hotels is relatively low. 
B)  It is difficult for business executives to compare suppliers and prices. 
C)  Travel expenses are relatively small compared to executive salaries. 
D)  Some, or all, of executive travel costs are paid by their employers. 
E)  All of the above are possible explanations.

Question 12

An experience curve illustrates average cost will tend to remain fairly constant while a firm's total cost of production keeps increasing.

Accepted Answer

A) True 
 B)False

Question 13

Price elasticity measures the responsiveness of demand to changes in price.

Accepted Answer

A) True 
 B)False

Question 14

When demand hardly changes with a small change in price, then demand is said to be:

Accepted Answer

A)  inverse. 
B)  elastic. 
C)  inelastic. 
D)  reverse. 
E)  dynamic. 
A)  inverse. 
B)  elastic. 
C)  inelastic. 
D)  reverse. 
E)  dynamic.

Question 15

The travel market is often divided into two major groups based on price sensitivity. Corporate travellers are not very price sensitive, but are more time sensitive while the pleasure- leisure travel segment is very price sensitive, but not very time sensitive. Briefly outline the factors that contribute to the price sensitivities in these two market segments.

Accepted Answer

S1S1P0According to the text, the factors

Question 16

The number of units that the market will buy in a given time period and at different possible prices is demonstrated by the_________ .

Accepted Answer

A)  demand curve 
B)  learning curve 
C)  scale economies curve 
D)  experience curve 
E)  supply curve 
A)  demand curve 
B)  learning curve 
C)  scale economies curve 
D)  experience curve 
E)  supply curve

Question 17

When a company charges the same price plus freight to all customers regardless of their location, this is known as:

Accepted Answer

A)  geographical pricing. 
B)  free- on- board pricing. 
C)  price- location discounting. 
D)  customer- segment discounting. 
E)  uniform delivered pricing. 
A)  geographical pricing. 
B)  free- on- board pricing. 
C)  price- location discounting. 
D)  customer- segment discounting. 
E)  uniform delivered pricing.

Question 18

The demand curve is a graphical representation of the levels of demand that might be expected at each of a variety of prices.

Accepted Answer

A) True 
 B)False

Question 19

The Manly Meat Packing Company routinely sells animal parts considered unfit for human consumption to pet food manufacturers. The profits on these sales allow Manly to price its meats more attractively. The firm employs:

Accepted Answer

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

Question 20

Firms competing in industries where prices change frequently and without notice, and where individual companies must react quickly to price changes, are likely to consider:

Accepted Answer

A)  employing price leadership 
B)  establishing a one- price policy. 
C)  developing a price- reaction programme. 
D)  seeking government intervention. 
E)  all of the above 
A)  employing price leadership 
B)  establishing a one- price policy. 
C)  developing a price- reaction programme. 
D)  seeking government intervention. 
E)  all of the above

Historically, prices were set through bargaining by the buyer and the seller.

Since they have no competition, monopolists will always charge the highest possible price for their goods and services.

Price bundling may be used to promote the sale of products that the consumer may not otherwise purchase.

Market- skimming pricing takes advantage of the fact that some customers are willing to pay more to be the first to own a new, or unique, product.

A temporary reduction in price, which may involve pricing at below cost, and which is designed to increase patronage is known as a(n):

The pricing approach that bases its prices on how it believes competitors will price rather than on its own costs or demand estimates is known as:

Briefly describe market- penetration pricing. What benefits does it offer? Under what circumstances is this approach most likely to be used?

Promotional allowances are a form of bribery and, as such, their use is a violation of the Consumer and Competition Act.

Market segments that are willing to pay a premium for the privilege of being the first to own a new product or service are prime candidates for:

Which of the following statements provides the broadest, most complete definition of price?

The corporate travel segment is often said to be relatively price insensitive. Which of the following is the MOST LIKELY explanation for price insensitivity in this market segment?

An experience curve illustrates average cost will tend to remain fairly constant while a firm's total cost of production keeps increasing.

Price elasticity measures the responsiveness of demand to changes in price.

When demand hardly changes with a small change in price, then demand is said to be:

The number of units that the market will buy in a given time period and at different possible prices is demonstrated by the_________ .

When a company charges the same price plus freight to all customers regardless of their location, this is known as:

The demand curve is a graphical representation of the levels of demand that might be expected at each of a variety of prices.

The Manly Meat Packing Company routinely sells animal parts considered unfit for human consumption to pet food manufacturers. The profits on these sales allow Manly to price its meats more attractively. The firm employs:

Firms competing in industries where prices change frequently and without notice, and where individual companies must react quickly to price changes, are likely to consider:

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

Historically, prices were set through bargaining by the buyer and the seller.

Since they have no competition, monopolists will always charge the highest possible price for their goods and services.

Price bundling may be used to promote the sale of products that the consumer may not otherwise purchase.

Market- skimming pricing takes advantage of the fact that some customers are willing to pay more to be the first to own a new, or unique, product.

A temporary reduction in price, which may involve pricing at below cost, and which is designed to increase patronage is known as a(n):

The pricing approach that bases its prices on how it believes competitors will price rather than on its own costs or demand estimates is known as:

Briefly describe market- penetration pricing. What benefits does it offer? Under what circumstances is this approach most likely to be used?

Promotional allowances are a form of bribery and, as such, their use is a violation of the Consumer and Competition Act.

Market segments that are willing to pay a premium for the privilege of being the first to own a new product or service are prime candidates for:

Which of the following statements provides the broadest, most complete definition of price?

The corporate travel segment is often said to be relatively price insensitive. Which of the following is the MOST LIKELY explanation for price insensitivity in this market segment?

An experience curve illustrates average cost will tend to remain fairly constant while a firm's total cost of production keeps increasing.

Price elasticity measures the responsiveness of demand to changes in price.

When demand hardly changes with a small change in price, then demand is said to be:

The number of units that the market will buy in a given time period and at different possible prices is demonstrated by the_________ .

When a company charges the same price plus freight to all customers regardless of their location, this is known as:

The demand curve is a graphical representation of the levels of demand that might be expected at each of a variety of prices.

The Manly Meat Packing Company routinely sells animal parts considered unfit for human consumption to pet food manufacturers. The profits on these sales allow Manly to price its meats more attractively. The firm employs:

Firms competing in industries where prices change frequently and without notice, and where individual companies must react quickly to price changes, are likely to consider:

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