Question 1

What pricing strategies are available to manufacturers? Explain each,why it is used,and what it does for the manufacturer.

Accepted Answer

A manufacturer's pricing decision depend

Question 2

When considering the competition in price setting,the small business owner should:

Accepted Answer

A) consider the competitors' location. 
B) consider the competitors' motives for their prices. 
C) consider the nature of the goods being sold. 
D) consider all of these. 
A) consider the competitors' location. 
B) consider the competitors' motives for their prices. 
C) consider the nature of the goods being sold. 
D) consider all of these.

Question 3

The skimming pricing strategy is used when there is a lot of competition in the market.

Accepted Answer

A) True 
 B)False

Question 4

When small manufacturing companies face rapidly increasing raw material costs,they can adopt a number of strategies including:

Accepted Answer

A) pass the increasing costs along to their customers without comment. 
B) absorb costs for the short term and plan for double price increases in the next pricing cycle. 
C) reconsider their competitive strategy and seek a niche they can service. 
D) emphasize the value their company provides customers. 
A) pass the increasing costs along to their customers without comment. 
B) absorb costs for the short term and plan for double price increases in the next pricing cycle. 
C) reconsider their competitive strategy and seek a niche they can service. 
D) emphasize the value their company provides customers.

Question 5

Absorption costing:

Accepted Answer

A) is complete pricing in that it takes into consideration all manufacturing and overhead costs. 
B) guarantees the manufacturer a desired profit margin. 
C) does not encourage a manufacturer to operate efficiently. 
D) clouds the true relationship of price,volume,and costs. 
A) is complete pricing in that it takes into consideration all manufacturing and overhead costs. 
B) guarantees the manufacturer a desired profit margin. 
C) does not encourage a manufacturer to operate efficiently. 
D) clouds the true relationship of price,volume,and costs.

Question 6

A ________ pricing strategy often is used when a company introduces a new product into a market with little or no competition.

Accepted Answer

A) price war 
B) competitive 
C) skimming 
D) price floor 
A) price war 
B) competitive 
C) skimming 
D) price floor

Question 7

Customers that sell small-ticket items frequently offer their customers:

Accepted Answer

A) discounts. 
B) installment credit option. 
C) "store value" cards. 
D) trade credit. 
A) discounts. 
B) installment credit option. 
C) "store value" cards. 
D) trade credit.

Question 8

Uniform delivered pricing is a variation of:

Accepted Answer

A) opportunistic pricing. 
B) leader pricing. 
C) geographic pricing. 
D) multiple pricing. 
A) opportunistic pricing. 
B) leader pricing. 
C) geographic pricing. 
D) multiple pricing.

Question 9

When setting prices,business owners should automatically match or beat the competitors.

Accepted Answer

A) True 
 B)False

Question 10

Although competitor's prices can have a dramatic effect on a small business's own prices,monitoring competitor prices is illegal in many states.

Accepted Answer

A) True 
 B)False

Question 11

A firm's initial markup is the average markup required on all merchandise to cover the cost of items,incidental expenses,and a profit.

Accepted Answer

A) True 
 B)False

Question 12

Price ________ usually begin(s)when one competitor believes that they can achieve a higher volume through lower price,or they believe that they can exert enough pressure on other competitors' profits to drive them out of business.

Accepted Answer

A) discounts 
B) markdowns 
C) wars 
D) penetration 
A) discounts 
B) markdowns 
C) wars 
D) penetration

Question 13

The prices a small business charges influence its image in the marketplace.

Accepted Answer

A) True 
 B)False

Question 14

The nature of competitors' goods does not influence the small firm's pricing policies.

Accepted Answer

A) True 
 B)False

Question 15

A customer who purchases a television from Ace Appliance Store and pays for it in 36 monthly payments is using:

Accepted Answer

A) trade credit. 
B) charge account credit. 
C) installment credit. 
D) debit card credit. 
A) trade credit. 
B) charge account credit. 
C) installment credit. 
D) debit card credit.

Question 16

Three objectives of new product pricing are:

Accepted Answer

A) get the product accepted,maintain market share as competition grows,and earn a profit. 
B) get the product accepted,avoid price wars,and earn a profit. 
C) maintain market share as competition grows,earn profits,and increase sales. 
D) None of the above 
A) get the product accepted,maintain market share as competition grows,and earn a profit. 
B) get the product accepted,avoid price wars,and earn a profit. 
C) maintain market share as competition grows,earn profits,and increase sales. 
D) None of the above

Question 17

If a company wants quick acceptance and extensive distribution,when introducing a new product into a highly competitive market with a large number of similar products,penetration pricing is the best strategy.

Accepted Answer

A) True 
 B)False

Question 18

Price is the monetary value of a good or service in the marketplace.

Accepted Answer

A) True 
 B)False

Question 19

Before deciding to use credit as a competitive weapon,small business owners must make sure that the firm's cash position is strong enough to support additional pressure.

Accepted Answer

A) True 
 B)False

Question 20

Merchant status permits a small business to accept credit card payments and enhances the reputation of the small business.

Accepted Answer

A) True 
 B)False

Exam 11: Pricing and Credit Strategies

What pricing strategies are available to manufacturers? Explain each,why it is used,and what it does for the manufacturer.

When considering the competition in price setting,the small business owner should:

The skimming pricing strategy is used when there is a lot of competition in the market.

When small manufacturing companies face rapidly increasing raw material costs,they can adopt a number of strategies including:

Absorption costing:

A ________ pricing strategy often is used when a company introduces a new product into a market with little or no competition.

Customers that sell small-ticket items frequently offer their customers:

Uniform delivered pricing is a variation of:

When setting prices,business owners should automatically match or beat the competitors.

Although competitor's prices can have a dramatic effect on a small business's own prices,monitoring competitor prices is illegal in many states.

A firm's initial markup is the average markup required on all merchandise to cover the cost of items,incidental expenses,and a profit.

Price ________ usually begin(s)when one competitor believes that they can achieve a higher volume through lower price,or they believe that they can exert enough pressure on other competitors' profits to drive them out of business.

The prices a small business charges influence its image in the marketplace.

The nature of competitors' goods does not influence the small firm's pricing policies.

A customer who purchases a television from Ace Appliance Store and pays for it in 36 monthly payments is using:

Three objectives of new product pricing are:

If a company wants quick acceptance and extensive distribution,when introducing a new product into a highly competitive market with a large number of similar products,penetration pricing is the best strategy.

Price is the monetary value of a good or service in the marketplace.

Before deciding to use credit as a competitive weapon,small business owners must make sure that the firm's cash position is strong enough to support additional pressure.

Merchant status permits a small business to accept credit card payments and enhances the reputation of the small business.

Entrepreneurs: the Driving Force Behind Small Business

Ethics and Social Responsibility: Doing the Right Thing

Creativity and Innovation: Keys to Entrepreneurial Success

Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Franchising and the Entrepreneur

Buying an Existing Business

New Business Planning Process: Feasibility Analysis,business Modeling,

Building a Bootstrap Marketing Plan

Creative Use of Advertising and Promotion

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Managing Cash Flow

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

The Legal Environment: Business Law and Government Regulation

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