Question 1

Economic conditions cannot be ignored by marketers when setting prices.Among the important domestic economic considerations are:

Accepted Answer

A)  unemployment rates.
B)  distribution of wealth.
C)  levels of disposable income.
D)  interest rates.
E)  All of these.

Question 2

To discourage consumers from buying in gray markets,some manufacturers have:

Accepted Answer

A)  warned consumers that their warranty is null and void if purchased through a gray market supplier.
B)  shifted advertising resources from gray markets to red markets.
C)  increased the price to gray markets while maintaining existing prices to blue markets.
D)  petitioned government regulators to impose price controls.
E)  lowered the quality of their products to reduce gray market demand.

Question 3

The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the:

Accepted Answer

A)  break-even point.
B)  fixed cost margin.
C)  contribution per unit.
D)  unit cost.
E)  marginal revenue.

Question 4

The food and beverage manager at an upscale country club once offered a two-for-one happy hour price for all alcoholic beverages,only to see a very little response to the special.For these consumers,demand for alcoholic beverages is:

Accepted Answer

A)  cross-price elastic.
B)  derived demand elastic.
C)  price elastic.
D)  price inelastic.
E)  status quo elastic.

Question 5

Price is often the most challenging of the four Ps to manage,partly because it is often ___________________________ in developing marketing strategies.

Accepted Answer

A)  the least important aspect
B)  treated as an afterthought
C)  calculated by senior consultants
D)  difficult to calculate markups
E)  the subject of cross-shopping differentiation

Question 6

If Brandon buys hats for his store for $5 each and sells them for $15 each,he is using a keystoning pricing strategy.

Accepted Answer

A) True 
 B)False

Question 7

Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000.He expects the branch to attract 1,000 new customer accounts in the first year,each of which will cost $50 per year to service.He also expects to generate $100,000 per year in revenue.For Raymond,the total cost of opening the new branch and remaining open for one year will be:

Accepted Answer

A)  $500,000.
B)  $550,000.
C)  $650,000.
D)  $450,000.
E)  $605,000.

Question 8

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

Accepted Answer

A)  100
B)  1,500
C)  20,000
D)  1,000
E)  It cannot be determined from the information provided.

Question 9

What could go wrong if a firm's pricing strategy were NOT aligned with company objectives?

Accepted Answer

A)  The message and media in a promotional campaign could be inconsistent with the pricing strategy.
B)  Company growth objectives might not be supported.
C)  The channels selected might not be appropriate for the pricing levels established.
D)  Customers might be confused and select a competitor's product.
E)  All of these

Question 10

A gray market employs irregular but not necessarily illegal methods of distributing products.

Accepted Answer

A) True 
 B)False

Question 11

Because consumers are generally more sensitive to price increases than to price decreases,it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Accepted Answer

A) True 
 B)False

Question 12

Brad always buys and uses Nike brand golf balls.If he finds a Titlelist or Callaway ball in the rough,he gives it away.Brand loyal golfers like Brad allow Nike to charge a higher price and not lose many sales.By building a strong brand,Nike has effectively:

Accepted Answer

A)  increased the income effect for its products.
B)  increased the cross-price elasticity for its products.
C)  reduced 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 13

While prestige products and products for the status conscious command high prices and are targeted toward customers with plenty of disposable income,marketers have noticed that:

Accepted Answer

A)  the rich and super-rich are getting fewer and fewer in number,and prestige pricing may become a thing of the past.
B)  most consumers don't want flashy or high-priced products and the market is dwindling.
C)  there is a trend toward increased purchase of these products,most probably for the status conscious who would not normally be considered part of the target markets for these products.
D)  styles are changing faster than ever,and it's hard to keep this market supplied with the products and services they want and avoid obsolete or out-of-date inventory.
E)  All of these.

Question 14

The more substitutes that exist in a market:

Accepted Answer

A)  the lower the price elasticity for each product.
B)  the greater the income elasticity for each product.
C)  the easier it will be to utilize a target profit pricing strategy.
D)  the more sensitive consumers will be to changes in the price of a particular product.
E)  the more likely the market will be characterized as an oligopoly.

Question 15

Sharon knew that her established customers liked her product much better than the competitors.She was planning to expand into new markets,and she was considering pricing.She was leaning toward charging a higher price than competitors to help demonstrate that hers was a high-quality product.Sharon was considering:

Accepted Answer

A)  a top of market strategy.
B)  the value of quality.
C)  advantageous pricing.
D)  premium pricing.
E)  differential pricing.

Question 16

A demand curve is built assuming that:

Accepted Answer

A)  income is derived from demand.
B)  price remains the same,and fixed costs change.
C)  everything but price and demand remains the same.
D)  a change in quantity demanded causes a change in price.
E)  the firm does not advertise.

Question 17

What are some of the important factors that influence price elasticity of demand? Briefly describe the influence the factor has.

Accepted Answer

Students should demonstrate an...

Question 18

For which of the following is demand likely to be least sensitive to price increases?

Accepted Answer

A)  Spring break vacations.
B)  A specific brand of cereal.
C)  Prescription drugs.
D)  Theater tickets.
E)  Restaurant meals.

Question 19

For which of the following is demand likely to be most sensitive to price increases?

Accepted Answer

A)  Prescription drugs.
B)  College tuition for last-semester seniors.
C)  Electricity.
D)  Hospital care.
E)  A specific brand of soft drink.

Question 20

If upscale manufacturers of prestige products like BMW autos,Tiffany glass,or Rolex watches offered lower-priced products,what might happen to the demand for their products? Why?

Accepted Answer

For prestige products,lower prices might...

Exam 13: Pricing Concepts for Establishing Value

A demand curve is built assuming that:

Correct Answer
verified

While prestige products and products for the status conscious command high prices and are targeted toward customers with plenty of disposable income,marketers have noticed that:

Correct Answer
verified

Correct Answer
verified

The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the:

Correct Answer
verified

The more substitutes that exist in a market:

Correct Answer
verified

Correct Answer
verified

Price is often the most challenging of the four Ps to manage,partly because it is often ___________________________ in developing marketing strategies.

Correct Answer
verified

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

Correct Answer
verified

The food and beverage manager at an upscale country club once offered a two-for-one happy hour price for all alcoholic beverages,only to see a very little response to the special.For these consumers,demand for alcoholic beverages is:

Correct Answer
verified

If Brandon buys hats for his store for $5 each and sells them for $15 each,he is using a keystoning pricing strategy.

Correct Answer
verified

What are some of the important factors that influence price elasticity of demand? Briefly describe the influence the factor has.

Correct Answer
verified
Students should demonstrate an...
View Answer

What could go wrong if a firm's pricing strategy were NOT aligned with company objectives?

Correct Answer
verified

To discourage consumers from buying in gray markets,some manufacturers have:

Correct Answer
verified

Economic conditions cannot be ignored by marketers when setting prices.Among the important domestic economic considerations are:

Correct Answer
verified

For which of the following is demand likely to be most sensitive to price increases?

Correct Answer
verified

A gray market employs irregular but not necessarily illegal methods of distributing products.

Correct Answer
verified

Brad always buys and uses Nike brand golf balls.If he finds a Titlelist or Callaway ball in the rough,he gives it away.Brand loyal golfers like Brad allow Nike to charge a higher price and not lose many sales.By building a strong brand,Nike has effectively:

Correct Answer
verified

If upscale manufacturers of prestige products like BMW autos,Tiffany glass,or Rolex watches offered lower-priced products,what might happen to the demand for their products? Why?

Correct Answer
verified
For prestige products,lower prices might...
View Answer

Because consumers are generally more sensitive to price increases than to price decreases,it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Correct Answer
verified

For which of the following is demand likely to be least sensitive to price increases?

Correct Answer
verified

Exam 13: Pricing Concepts for Establishing Value

A demand curve is built assuming that:

Correct AnswerverifiedShow Answer

While prestige products and products for the status conscious command high prices and are targeted toward customers with plenty of disposable income,marketers have noticed that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the:

Correct AnswerverifiedShow Answer

The more substitutes that exist in a market:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Price is often the most challenging of the four Ps to manage,partly because it is often ___________________________ in developing marketing strategies.

Correct AnswerverifiedShow Answer

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

Correct AnswerverifiedShow Answer

The food and beverage manager at an upscale country club once offered a two-for-one happy hour price for all alcoholic beverages,only to see a very little response to the special.For these consumers,demand for alcoholic beverages is:

Correct AnswerverifiedShow Answer

If Brandon buys hats for his store for $5 each and sells them for $15 each,he is using a keystoning pricing strategy.

Correct AnswerverifiedShow Answer

What are some of the important factors that influence price elasticity of demand? Briefly describe the influence the factor has.

Correct AnswerverifiedStudents should demonstrate an...View AnswerShow Answer

What could go wrong if a firm's pricing strategy were NOT aligned with company objectives?

Correct AnswerverifiedShow Answer

To discourage consumers from buying in gray markets,some manufacturers have:

Correct AnswerverifiedShow Answer

Economic conditions cannot be ignored by marketers when setting prices.Among the important domestic economic considerations are:

Correct AnswerverifiedShow Answer

For which of the following is demand likely to be most sensitive to price increases?

Correct AnswerverifiedShow Answer

A gray market employs irregular but not necessarily illegal methods of distributing products.

Correct AnswerverifiedShow Answer

Brad always buys and uses Nike brand golf balls.If he finds a Titlelist or Callaway ball in the rough,he gives it away.Brand loyal golfers like Brad allow Nike to charge a higher price and not lose many sales.By building a strong brand,Nike has effectively:

Correct AnswerverifiedShow Answer

If upscale manufacturers of prestige products like BMW autos,Tiffany glass,or Rolex watches offered lower-priced products,what might happen to the demand for their products? Why?

Correct AnswerverifiedFor prestige products,lower prices might...View AnswerShow Answer

Because consumers are generally more sensitive to price increases than to price decreases,it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Correct AnswerverifiedShow Answer

For which of the following is demand likely to be least sensitive to price increases?

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
Students should demonstrate an...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
For prestige products,lower prices might...
View Answer

Correct Answer
verified

Correct Answer
verified