Question 1

Which of the following is a cost-based approach to pricing?

Accepted Answer

A) value-based pricing 
B) going-rate pricing 
C) break-even pricing 
D) good-value pricing 
E) EDLP 
A) value-based pricing 
B) going-rate pricing 
C) break-even pricing 
D) good-value pricing 
E) EDLP

Question 2

Hotline Long Distance Service uses captive-product pricing for its phone call charges. Because this is a service, the price is broken into a fixed rate plus a per-call ________.

Accepted Answer

A) fixed rate usage 
B) variable usage rate 
C) standard usage rate 
D) market usage rate 
E) fixed fee 
A) fixed rate usage 
B) variable usage rate 
C) standard usage rate 
D) market usage rate 
E) fixed fee

Question 3

Vac 'N' Sew will give customers $100 for a used vacuum cleaner, regardless of condition, when they purchase a new vacuum or sewing machine. This essentially reduces the price by $100. What is this type of discount called?

Accepted Answer

A) functional discount 
B) captive-product discount 
C) seasonal discount 
D) trade-in allowance 
E) by-product allowance 
A) functional discount 
B) captive-product discount 
C) seasonal discount 
D) trade-in allowance 
E) by-product allowance

Question 4

The fact that a hot dog costs five times more at Disneyland than at Costco is an example of ________.

Accepted Answer

A) allowance pricing 
B) captive-product pricing 
C) penetration pricing 
D) segmented pricing 
E) promotional pricing 
A) allowance pricing 
B) captive-product pricing 
C) penetration pricing 
D) segmented pricing 
E) promotional pricing

Question 5

Demand and consumer value perceptions set the floor for prices.

Accepted Answer

A) True 
 B)False

Question 6

If Canon Camera Company follows a high-price, high-margin strategy, what will competitors most likely do?

Accepted Answer

A) They will go out of business. 
B) They will want to compete by undercutting Canon's price. 
C) They will advertise less. 
D) They will unbundle their products. 
E) They will use market-skimming pricing. 
A) They will go out of business. 
B) They will want to compete by undercutting Canon's price. 
C) They will advertise less. 
D) They will unbundle their products. 
E) They will use market-skimming pricing.

Question 7

The relationship between the price charged and the resulting demand level can be shown as the ________.

Accepted Answer

A) demand curve 
B) variable cost 
C) target cost 
D) break-even chart 
E) experience curve 
A) demand curve 
B) variable cost 
C) target cost 
D) break-even chart 
E) experience curve

Question 8

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________.

Accepted Answer

A) product line pricing 
B) market-skimming pricing 
C) market-penetration pricing 
D) break-even pricing 
E) target return pricing 
A) product line pricing 
B) market-skimming pricing 
C) market-penetration pricing 
D) break-even pricing 
E) target return pricing

Question 9

In a monopolistic competitive market, a company might decide to ________ if only one competitor raises its prices.

Accepted Answer

A) reduce its production costs 
B) reduce its marketing costs 
C) maintain its current price and profit margin 
D) increase its marketing budget to raise the perceived value of its product 
E) increase its production costs to improve the quality of the product 
A) reduce its production costs 
B) reduce its marketing costs 
C) maintain its current price and profit margin 
D) increase its marketing budget to raise the perceived value of its product 
E) increase its production costs to improve the quality of the product

Question 10

Used too frequently, promotional pricing can have the negative effect of decreasing the brand's value in the eyes of customers.

Accepted Answer

A) True 
 B)False

Question 11

Describe what a demand curve is and explain how it helps businesses.

Accepted Answer

Most companies use the demand curve to e

Question 12

Price is the only element in the marketing mix that produces ________.

Accepted Answer

A) revenue 
B) variable costs 
C) expenses 
D) fixed costs 
E) stability 
A) revenue 
B) variable costs 
C) expenses 
D) fixed costs 
E) stability

Question 13

________ involves charging a constant low price with few or no temporary price discounts.

Accepted Answer

A) High-low pricing 
B) Target return pricing 
C) Cost-plus pricing 
D) Everyday low pricing (EDLP) 
E) Penetration pricing 
A) High-low pricing 
B) Target return pricing 
C) Cost-plus pricing 
D) Everyday low pricing (EDLP) 
E) Penetration pricing

Question 14

Identify and explain several situations in which price cuts or price increases might be necessary.

Accepted Answer

Price cuts may be necessary when there i

Question 15

Price discrimination is legal under which of the following conditions?

Accepted Answer

A) when a manufacturer and reseller have agreed upon a specified retail price for a product 
B) when a manufacturer sells to retailers in different markets 
C) if a seller can prove its costs per unit are different when selling to different retailers 
D) if a seller advertises prices that are not actually available to consumers 
E) if a seller has not communicated with competitors before announcing prices 
A) when a manufacturer and reseller have agreed upon a specified retail price for a product 
B) when a manufacturer sells to retailers in different markets 
C) if a seller can prove its costs per unit are different when selling to different retailers 
D) if a seller advertises prices that are not actually available to consumers 
E) if a seller has not communicated with competitors before announcing prices

Question 16

Some industries commonly use two-part pricing, where the price is broken down into a fixed fee and a fixed usage rate.

Accepted Answer

A) True 
 B)False

Question 17

A company considering a price change should be concerned about consumers' reactions but not competitors' reactions.

Accepted Answer

A) True 
 B)False

Question 18

L.L. Bean sells its catalog items FOB-origin pricing. Who pays the freight charges?

Accepted Answer

FOB means free on board at the

Question 19

A challenge for management in product line pricing is to decide on the price steps between the ________.

Accepted Answer

A) various products in a line 
B) product mixes 
C) product groupings 
D) product lines 
E) various target markets 
A) various products in a line 
B) product mixes 
C) product groupings 
D) product lines 
E) various target markets

Question 20

Price setting is usually determined by ________ in large companies.

Accepted Answer

A) top management 
B) divisional managers 
C) finance managers 
D) purchasing departments 
E) suppliers 
A) top management 
B) divisional managers 
C) finance managers 
D) purchasing departments 
E) suppliers

Which of the following is a cost-based approach to pricing?

Hotline Long Distance Service uses captive-product pricing for its phone call charges. Because this is a service, the price is broken into a fixed rate plus a per-call ________.

Vac 'N' Sew will give customers $100 for a used vacuum cleaner, regardless of condition, when they purchase a new vacuum or sewing machine. This essentially reduces the price by $100. What is this type of discount called?

The fact that a hot dog costs five times more at Disneyland than at Costco is an example of ________.

Demand and consumer value perceptions set the floor for prices.

If Canon Camera Company follows a high-price, high-margin strategy, what will competitors most likely do?

The relationship between the price charged and the resulting demand level can be shown as the ________.

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________.

In a monopolistic competitive market, a company might decide to ________ if only one competitor raises its prices.

Used too frequently, promotional pricing can have the negative effect of decreasing the brand's value in the eyes of customers.

Describe what a demand curve is and explain how it helps businesses.

Price is the only element in the marketing mix that produces ________.

________ involves charging a constant low price with few or no temporary price discounts.

Identify and explain several situations in which price cuts or price increases might be necessary.

Price discrimination is legal under which of the following conditions?

Some industries commonly use two-part pricing, where the price is broken down into a fixed fee and a fixed usage rate.

A company considering a price change should be concerned about consumers' reactions but not competitors' reactions.

L.L. Bean sells its catalog items FOB-origin pricing. Who pays the freight charges?

A challenge for management in product line pricing is to decide on the price steps between the ________.

Price setting is usually determined by ________ in large companies.

Marketing: Creating and Capturing Customer Value

Company and Marketing Strategy: Partnering to Build Customer Relationships

Sustainable Marketing, Social Responsibility and Ethics

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Understanding Consumer and Business Buyer Behaviour

Segmentation, Targeting, and Positioning

Developing and Managing Products and Services

Brand Strategy and Management

Marketing Channels

Retailing and Wholesaling

Communicating Customer Value: Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

The Global Marketplace

Filters

Exam 10: Pricing: Understanding and Capturing Customer Value

Which of the following is a cost-based approach to pricing?

Hotline Long Distance Service uses captive-product pricing for its phone call charges. Because this is a service, the price is broken into a fixed rate plus a per-call ________.

Vac 'N' Sew will give customers $100 for a used vacuum cleaner, regardless of condition, when they purchase a new vacuum or sewing machine. This essentially reduces the price by $100. What is this type of discount called?

The fact that a hot dog costs five times more at Disneyland than at Costco is an example of ________.

Demand and consumer value perceptions set the floor for prices.

If Canon Camera Company follows a high-price, high-margin strategy, what will competitors most likely do?

The relationship between the price charged and the resulting demand level can be shown as the ________.

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________.

In a monopolistic competitive market, a company might decide to ________ if only one competitor raises its prices.

Used too frequently, promotional pricing can have the negative effect of decreasing the brand's value in the eyes of customers.

Describe what a demand curve is and explain how it helps businesses.

Price is the only element in the marketing mix that produces ________.

________ involves charging a constant low price with few or no temporary price discounts.

Identify and explain several situations in which price cuts or price increases might be necessary.

Price discrimination is legal under which of the following conditions?

Some industries commonly use two-part pricing, where the price is broken down into a fixed fee and a fixed usage rate.

A company considering a price change should be concerned about consumers' reactions but not competitors' reactions.

L.L. Bean sells its catalog items FOB-origin pricing. Who pays the freight charges?

A challenge for management in product line pricing is to decide on the price steps between the ________.

Price setting is usually determined by ________ in large companies.

Marketing: Creating and Capturing Customer Value

Company and Marketing Strategy: Partnering to Build Customer Relationships

Sustainable Marketing, Social Responsibility and Ethics

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Understanding Consumer and Business Buyer Behaviour

Segmentation, Targeting, and Positioning

Developing and Managing Products and Services

Brand Strategy and Management

Marketing Channels

Retailing and Wholesaling

Communicating Customer Value: Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

The Global Marketplace

Filters