Question 1

If PepsiCo sets its twelve-pack price at $3.99 to match the price charged by Coca-Cola,Pepsi is using which of the following pricing methods?

Accepted Answer

A)  Demand-based 
B)  Cost-based 
C)  Reference pricing 
D)  Competition-based 
E)  Price leader 
A)  Demand-based 
B)  Cost-based 
C)  Reference pricing 
D)  Competition-based 
E)  Price leader

Question 2

Most pricing objectives based on ____ are achieved by trial and error because not all cost and revenue data are available when prices are set.

Accepted Answer

A)  market share 
B)  cash flow 
C)  return on investment 
D)  survival 
E)  profit 
A)  market share 
B)  cash flow 
C)  return on investment 
D)  survival 
E)  profit

Question 3

A retailer of Real Dry deodorant prices it at $2.00; it costs the retailer $1.40.What is the approximate markup as a percentage of selling price?

Accepted Answer

A)  3 percent 
B)  14.3 percent 
C)  30 percent 
D)  70 percent 
E)  20 percent 
A)  3 percent 
B)  14.3 percent 
C)  30 percent 
D)  70 percent 
E)  20 percent

Question 4

The price of a hotel room is more important to a business traveler than to a tourist.

Accepted Answer

A) True 
 B)False

Question 5

Price skimming and penetration pricing are both strategies used for

Accepted Answer

A)  product-line pricing. 
B)  business products only. 
C)  psychological pricing. 
D)  new-product pricing. 
E)  promotional pricing. 
A)  product-line pricing. 
B)  business products only. 
C)  psychological pricing. 
D)  new-product pricing. 
E)  promotional pricing.

Question 6

Penetration pricing is one new-product pricing approach that provides the most flexible introductory price.

Accepted Answer

A) True 
 B)False

Question 7

It is usually easy to obtain an accurate price list for a competitor's products.

Accepted Answer

A) True 
 B)False

Question 8

Showing a product's price along with its previous price,the price of a competing brand,or the price at another retail outlet is called

Accepted Answer

A)  competition-based pricing. 
B)  reference pricing. 
C)  comparison discounting. 
D)  captive pricing. 
E)  psychological pricing. 
A)  competition-based pricing. 
B)  reference pricing. 
C)  comparison discounting. 
D)  captive pricing. 
E)  psychological pricing.

Question 9

Identify and describe the four types of product-line pricing.

Accepted Answer

The answer of Identify and describe the four types of...

Question 10

When products in an industry are relatively homogeneous and price is a key purchase consideration,

Accepted Answer

A)  competition-based pricing becomes more important. 
B)  demand-based pricing dominates pricing decisions. 
C)  firms tend to use secondary-market pricing. 
D)  cost-based methods like markup pricing are dominant. 
E)  customary pricing is often used. 
A)  competition-based pricing becomes more important. 
B)  demand-based pricing dominates pricing decisions. 
C)  firms tend to use secondary-market pricing. 
D)  cost-based methods like markup pricing are dominant. 
E)  customary pricing is often used.

Question 11

Steinway produces concert grand pianos,often using the custom materials and designs desired by a specific customer.The average price of these pianos runs about $50,000 depending on the exact piano.What type of pricing does Steinway most likely use for these pianos?

Accepted Answer

A)  Markup 
B)  Competition-based 
C)  Cost-plus 
D)  Demand-based 
E)  Secondary-market 
A)  Markup 
B)  Competition-based 
C)  Cost-plus 
D)  Demand-based 
E)  Secondary-market

Question 12

When Mia and Shane are planning their honeymoon,their travel agent tells them that if they buy a special package,their trip to Paris will include meals,tickets to the theater,and a rental car in addition to airfare and a hotel.This is an example of the use of

Accepted Answer

A)  multiple-unit pricing. 
B)  bundle pricing. 
C)  prestige pricing. 
D)  price lining. 
E)  price packaging. 
A)  multiple-unit pricing. 
B)  bundle pricing. 
C)  prestige pricing. 
D)  price lining. 
E)  price packaging.

Question 13

Explain the ethical implications of professional pricing.

Accepted Answer

Professional pricing has several ethical

Question 14

Price leaders,comparison discounting,and special-event pricing are applications of

Accepted Answer

A)  psychological pricing. 
B)  professional pricing. 
C)  product-line pricing. 
D)  bait-and-switch. 
E)  promotional pricing. 
A)  psychological pricing. 
B)  professional pricing. 
C)  product-line pricing. 
D)  bait-and-switch. 
E)  promotional pricing.

Question 15

The importance of price depends on the type of product,the type of target market,and the purchase situation.

Accepted Answer

A) True 
 B)False

Question 16

Cost-based pricing results in a high price when demand is high and a low price when demand is low.

Accepted Answer

A) True 
 B)False

Question 17

When establishing prices,a marketer's first step is to

Accepted Answer

A)  determine demand. 
B)  develop pricing objectives. 
C)  select a pricing policy. 
D)  evaluate competitors' prices. 
E)  determine a pricing method. 
A)  determine demand. 
B)  develop pricing objectives. 
C)  select a pricing policy. 
D)  evaluate competitors' prices. 
E)  determine a pricing method.

Question 18

A price-skimming strategy assumes that

Accepted Answer

A)  the initial demand is highly elastic. 
B)  the product is efficient. 
C)  it will be difficult to recoup development costs. 
D)  all consumers have homogeneous tastes. 
E)  the initial demand is highly inelastic. 
A)  the initial demand is highly elastic. 
B)  the product is efficient. 
C)  it will be difficult to recoup development costs. 
D)  all consumers have homogeneous tastes. 
E)  the initial demand is highly inelastic.

Question 19

A major reason why retailers use markup pricing is that it is convenient.

Accepted Answer

A) True 
 B)False

Question 20

A company wanting to maximize profits from its new product would use product-line pricing.

Accepted Answer

A) True 
 B)False

Exam 20: Pricingdecisions

If PepsiCo sets its twelve-pack price at $3.99 to match the price charged by Coca-Cola,Pepsi is using which of the following pricing methods?

Most pricing objectives based on ____ are achieved by trial and error because not all cost and revenue data are available when prices are set.

A retailer of Real Dry deodorant prices it at $2.00; it costs the retailer $1.40.What is the approximate markup as a percentage of selling price?

The price of a hotel room is more important to a business traveler than to a tourist.

Price skimming and penetration pricing are both strategies used for

Penetration pricing is one new-product pricing approach that provides the most flexible introductory price.

It is usually easy to obtain an accurate price list for a competitor's products.

Showing a product's price along with its previous price,the price of a competing brand,or the price at another retail outlet is called

Identify and describe the four types of product-line pricing.

When products in an industry are relatively homogeneous and price is a key purchase consideration,

Steinway produces concert grand pianos,often using the custom materials and designs desired by a specific customer.The average price of these pianos runs about $50,000 depending on the exact piano.What type of pricing does Steinway most likely use for these pianos?

When Mia and Shane are planning their honeymoon,their travel agent tells them that if they buy a special package,their trip to Paris will include meals,tickets to the theater,and a rental car in addition to airfare and a hotel.This is an example of the use of

Explain the ethical implications of professional pricing.

Price leaders,comparison discounting,and special-event pricing are applications of

The importance of price depends on the type of product,the type of target market,and the purchase situation.

Cost-based pricing results in a high price when demand is high and a low price when demand is low.

When establishing prices,a marketer's first step is to

A price-skimming strategy assumes that

A major reason why retailers use markup pricing is that it is convenient.

A company wanting to maximize profits from its new product would use product-line pricing.

Strategic Marketing Management

Developing and Implementing Marketing Strategies

The Global Marketing Environment

Information for Marketing Decisions

Selecting Target Markets

Consumer Behavior

Business Buying Behavior

International Marketing

Digital Marketing and Social Media

Product Decisions

Strategic Product Management

Services Marketing

Strategic Management of Branding and Packaging

A Supply Chain Management and Marketing Channels

B Supply Chain Management and Marketing Channels

A Retailing,wholesaling and Direct Marketing

B Retailing,wholesaling and Direct Marketing

Integrated Marketing Communications

Advertising and Publicrelations

Personal Selling and Sales Promotion

Strategic Pricing Management

Global Issues,social Responsibility and Marketing

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