Question 1

Break-even analysis is useful because it allows managers to

Accepted Answer

A) quantify the relationship between price elasticity and product elasticity. 
B) reposition products based on their break-even positioning revenue. 
C) estimate the quantity they will need to sell at a given price to break even. 
D) determine the relationship between price and quantity demanded. 
E) analyze the different elements contributing to their variable costs. 
A) quantify the relationship between price elasticity and product elasticity. 
B) reposition products based on their break-even positioning revenue. 
C) estimate the quantity they will need to sell at a given price to break even. 
D) determine the relationship between price and quantity demanded. 
E) analyze the different elements contributing to their variable costs.

Question 2

What makes a high\low pricing strategy appealing to sellers?

Accepted Answer

A) It attracts two distinct market segments. 
B) It allows the seller to market itself as an "everyday low price leader." 
C) It doesn't require the seller to continually offer sales or deep discounts. 
D) It allows sellers to capture the most profit from a new product or service. 
E) It reduces the need for slotting and advertising allowances. 
A) It attracts two distinct market segments. 
B) It allows the seller to market itself as an "everyday low price leader." 
C) It doesn't require the seller to continually offer sales or deep discounts. 
D) It allows sellers to capture the most profit from a new product or service. 
E) It reduces the need for slotting and advertising allowances.

Question 3

Managers of Wendy's fast-food restaurants keep track of prices at competitors such as McDonald's, Burger King, and Arby's knowing that a decrease in the prices at these other fast-food restaurants will

Accepted Answer

A) increase the income effect for Wendy's products. 
B) increase demand for Wendy's products. 
C) decrease the income effect for Wendy's products. 
D) increase the complementary effect for Wendy's products. 
E) decrease demand for Wendy's products. 
A) increase the income effect for Wendy's products. 
B) increase demand for Wendy's products. 
C) decrease the income effect for Wendy's products. 
D) increase the complementary effect for Wendy's products. 
E) decrease demand for Wendy's products.

Question 4

Cassie stopped by the hardware store because she had seen an ad for 50% off a thermostat. When she got to the store, she was told they didn't have any of those thermostats in stock and wouldn't be ordering more but she could buy a higher-priced Nest thermostat which was supposed to be better anyway. This appears to be a case of

Accepted Answer

A) loss-leader pricing. 
B) price skimming. 
C) bait-and-switch. 
D) regressive pricing. 
E) a monopoly. 
A) loss-leader pricing. 
B) price skimming. 
C) bait-and-switch. 
D) regressive pricing. 
E) a monopoly.

Question 5

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

Accepted Answer

The price elasticity for Crest toothpast

Question 6

When a firm uses premium pricing, it sets lower prices for everyday items such as toothpaste that consumers purchase frequently.

Accepted Answer

A) True 
 B)False

Question 7

Many years ago, Honda's Accord and Ford's Taurus were the two top-selling cars in the United States. As the year was coming to an end, Ford cut the price of the Taurus, hoping to outsell the Accord and allow Ford to claim that "Taurus is the best-selling car in America." Ford was using a ________ pricing strategy.

Accepted Answer

A) maximizing profits 
B) target profit 
C) sales orientation 
D) status quo 
E) target return 
A) maximizing profits 
B) target profit 
C) sales orientation 
D) status quo 
E) target return

Question 8

In general, prices should not be based on costs because

Accepted Answer

A) consumers are cost-conscious. 
B) producers rarely know what their costs are. 
C) consumers make their purchase decisions based on perceived value. 
D) producers need to avoid creating a cost competitive parity debate. 
E) customers are always right. 
A) consumers are cost-conscious. 
B) producers rarely know what their costs are. 
C) consumers make their purchase decisions based on perceived value. 
D) producers need to avoid creating a cost competitive parity debate. 
E) customers are always right.

Question 9

In an effort to build sales for their new running shoes quickly, Sprinters Inc. set the initial price of the shoes very low. What type of pricing does this reflect?

Accepted Answer

A) market penetration 
B) bundling 
C) price fixing 
D) reference 
E) skimming 
A) market penetration 
B) bundling 
C) price fixing 
D) reference 
E) skimming

Question 10

When it comes to measuring consumers' price sensitivity, products are viewed as either

Accepted Answer

A) elastic or inelastic. 
B) fixed or variable. 
C) complementary or substitutable. 
D) necessary or optional. 
E) dynamic or rigid. 
A) elastic or inelastic. 
B) fixed or variable. 
C) complementary or substitutable. 
D) necessary or optional. 
E) dynamic or rigid.

Question 11

A ________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

Accepted Answer

A) sales orientation 
B) target profit 
C) target return 
D) status quo 
E) maximizing profits 
A) sales orientation 
B) target profit 
C) target return 
D) status quo 
E) maximizing profits

Question 12

Explain how the demand curve works, and how it benefits a firm.

Accepted Answer

A demand curve shows how many units of a

Question 13

When a retail store rarely sells deeply discounted or sale products, it is known as "everyday low pricing."

Accepted Answer

A) True 
 B)False

Question 14

A demand curve shows the relationship between income and demand.

Accepted Answer

A) True 
 B)False

Question 15

At the break-even point, companies finally recognize a profit.

Accepted Answer

A) True 
 B)False

Question 16

A strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy

Accepted Answer

A) leads the marketer to be the low-cost seller. 
B) is supported by consistent advertising and distribution strategies. 
C) challenges consumers to discard their perceptions of value. 
D) is consistent with a competitive target return strategy. 
E) is measured against the competition. 
A) leads the marketer to be the low-cost seller. 
B) is supported by consistent advertising and distribution strategies. 
C) challenges consumers to discard their perceptions of value. 
D) is consistent with a competitive target return strategy. 
E) is measured against the competition.

Question 17

At the break-even point,

Accepted Answer

A) costs are zero. 
B) price is maximized. 
C) profits are zero. 
D) fixed costs are zero. 
E) contribution per unit is zero. 
A) costs are zero. 
B) price is maximized. 
C) profits are zero. 
D) fixed costs are zero. 
E) contribution per unit is zero.

Question 18

Kendra always buys and uses Wilson brand tennis balls. If she finds a Penn or Dunlop ball on the court, she gives it away. Brand-loyal tennis players like Kendra allow Wilson to charge a higher price and not lose many sales. By building a strong brand, Wilson has effectively

Accepted Answer

A) increased the income effect for its products. 
B) increased the cross-price elasticity for its products. 
C) focused on the competitive parity point for its products. 
D) shifted the golf ball market from a monopoly to pure competition. 
E) reduced the price elasticity of demand for its products. 
A) increased the income effect for its products. 
B) increased the cross-price elasticity for its products. 
C) focused on the competitive parity point for its products. 
D) shifted the golf ball market from a monopoly to pure competition. 
E) reduced the price elasticity of demand for its products.

Question 19

There are many options available to consumers when it comes to toothpaste. So, if Procter & Gamble significantly increases the price of Crest toothpaste, consumers are more apt to buy alternate toothpaste instead. This illustrates which concept?

Accepted Answer

A) the income effect 
B) the substitution effect 
C) the break-even point 
D) the target return effect 
E) cross-price elasticity 
A) the income effect 
B) the substitution effect 
C) the break-even point 
D) the target return effect 
E) cross-price elasticity

Question 20

Jenna wants her firm's gourmet teas to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that

Accepted Answer

A) rarely is the lowest-price offering the dominant brand in a market. 
B) prestige products need to be competitively priced. 
C) companies can gain market share by offering low-quality products at a high price. 
D) total value equals total cost minus variable costs leading to price escalation. 
E) price wars are the way to become the dominant brand. 
A) rarely is the lowest-price offering the dominant brand in a market. 
B) prestige products need to be competitively priced. 
C) companies can gain market share by offering low-quality products at a high price. 
D) total value equals total cost minus variable costs leading to price escalation. 
E) price wars are the way to become the dominant brand.

Break-even analysis is useful because it allows managers to

What makes a high\low pricing strategy appealing to sellers?

Managers of Wendy's fast-food restaurants keep track of prices at competitors such as McDonald's, Burger King, and Arby's knowing that a decrease in the prices at these other fast-food restaurants will

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

When a firm uses premium pricing, it sets lower prices for everyday items such as toothpaste that consumers purchase frequently.

In general, prices should not be based on costs because

In an effort to build sales for their new running shoes quickly, Sprinters Inc. set the initial price of the shoes very low. What type of pricing does this reflect?

When it comes to measuring consumers' price sensitivity, products are viewed as either

A ________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

Explain how the demand curve works, and how it benefits a firm.

When a retail store rarely sells deeply discounted or sale products, it is known as "everyday low pricing."

A demand curve shows the relationship between income and demand.

At the break-even point, companies finally recognize a profit.

A strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy

At the break-even point,

Kendra always buys and uses Wilson brand tennis balls. If she finds a Penn or Dunlop ball on the court, she gives it away. Brand-loyal tennis players like Kendra allow Wilson to charge a higher price and not lose many sales. By building a strong brand, Wilson has effectively

There are many options available to consumers when it comes to toothpaste. So, if Procter & Gamble significantly increases the price of Crest toothpaste, consumers are more apt to buy alternate toothpaste instead. This illustrates which concept?

Jenna wants her firm's gourmet teas to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Digital Marketing: Online, Social, and Mobile

Conscious Marketing, Corporate Social Responsibility, and Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Supply Chain and Channel Management

Retailing and Omnichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

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Exam 14: Pricing Concepts for Capturing Value

Break-even analysis is useful because it allows managers to

What makes a high\low pricing strategy appealing to sellers?

Managers of Wendy's fast-food restaurants keep track of prices at competitors such as McDonald's, Burger King, and Arby's knowing that a decrease in the prices at these other fast-food restaurants will

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

When a firm uses premium pricing, it sets lower prices for everyday items such as toothpaste that consumers purchase frequently.

In general, prices should not be based on costs because

In an effort to build sales for their new running shoes quickly, Sprinters Inc. set the initial price of the shoes very low. What type of pricing does this reflect?

When it comes to measuring consumers' price sensitivity, products are viewed as either

A ________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

Explain how the demand curve works, and how it benefits a firm.

When a retail store rarely sells deeply discounted or sale products, it is known as "everyday low pricing."

A demand curve shows the relationship between income and demand.

At the break-even point, companies finally recognize a profit.

A strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy

At the break-even point,

Kendra always buys and uses Wilson brand tennis balls. If she finds a Penn or Dunlop ball on the court, she gives it away. Brand-loyal tennis players like Kendra allow Wilson to charge a higher price and not lose many sales. By building a strong brand, Wilson has effectively

There are many options available to consumers when it comes to toothpaste. So, if Procter & Gamble significantly increases the price of Crest toothpaste, consumers are more apt to buy alternate toothpaste instead. This illustrates which concept?

Jenna wants her firm's gourmet teas to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Digital Marketing: Online, Social, and Mobile

Conscious Marketing, Corporate Social Responsibility, and Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Supply Chain and Channel Management

Retailing and Omnichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters