Question 1

Which equation shows the organisation's relationship between price and profit?

Accepted Answer

A)  Total variable costs + total fixed costs = sales - profits
B)  Price = profit per item × number of units sold
C)  (Price × quantity sold)  - total costs = profits
D)  (Price - profits)  × total costs = sales
E)  Total costs = (price × quantity sold)  - profitsF) B) and E)
G) A) and D)

Question 2

Which of the following is least likely to influence demand for a product?

Accepted Answer

A)  Changes in buyers' needs
B)  The presence of substitute goods
C)  Changes in manufacturing capacity in the industry
D)  The effectiveness of other marketing mix variables
E)  The economic environmentF) A) and D)
G) None of the above

Question 3

A price that develops in the mind of a buyer through experience with the product is known as:

Accepted Answer

A)  an internal reference price.
B)  a value-conscious price.
C)  an external reference price
D)  a prestige-sensitive price.
E)  a demand-based price.F) C) and D)
G) B) and D)

Question 4

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.F) A) and D)
G) C) and D)

Question 5

A __________ customer is likely to say, 'People notice when you buy the most expensive brand of a product'.

Accepted Answer

A)  price-conscious
B)  quality-conscious
C)  value-conscious
D)  socially conscious
E)  prestige-sensitiveF) A) and D)
G) A) and E)

Question 6

Today, many marketers are attempting to reduce the use of frequent short-term price reductions.Which strategy would likely accomplish this objective?

Accepted Answer

A)  Everyday low prices
B)  Bundle pricing
C)  Reference pricing
D)  Customary pricing
E)  Odd-even pricingF) C) and D)
G) B) and C)

Question 7

Secondary-market pricing means setting the same price for all markets.

Accepted Answer

A) True 
 B)False

Question 8

Laura Spangler of North Novelties reduces the prices of games sold to Robertson's Entertainment by 10 per cent to allow for expenses associated with Robertson's promoting the games to consumers.This is an example of a __________ discount.

Accepted Answer

A)  quantity
B)  cash
C)  seasonal
D)  tradeE) C) and D)
F) None of the above

Question 9

Which of the following strategies assumes that demand is inelastic for groups or sets of products?

Accepted Answer

A)  Captive pricing
B)  Price lining
C)  Bait pricing
D)  Premium pricing
E)  Price skimmingF) B) and E)
G) None of the above

Question 10

A marketer uses only one pricing objective to avoid organisational confusion.

Accepted Answer

A) True 
 B)False

Question 11

Marketing mix variables are highly interrelated.

Accepted Answer

A) True 
 B)False

Question 12

Seasonal discounts provide price incentives to customers during peak selling seasons.

Accepted Answer

A) True 
 B)False

Question 13

Price competition is a very flexible marketing strategy.

Accepted Answer

A) True 
 B)False

Question 14

A manager at Myer designs the casual clothing department so that Myer's private-label jeans, priced at $29.99, are displayed next to a national brand of jeans, such as Levi's, priced at $37.99.Which pricing strategy is the manager attempting to use?

Accepted Answer

A)  Everyday low prices
B)  Odd-even pricing
C)  Prestige pricing
D)  Special-event pricing
E)  Reference pricingF) None of the above
G) D) and E)

Question 15

When a customer is considering the purchase of a product in a relatively unfamiliar product category, that individual is likely to rely more heavily on:

Accepted Answer

A)  internal reference prices.
B)  symbol prices.
C)  high-value products.
D)  discounted reference prices.
E)  external reference prices.F) A) and E)
G) A) and B)

Question 16

Factors affecting pricing decisions can include demand, distribution and the way in which the product is promoted.

Accepted Answer

A) True 
 B)False

Question 17

A major disadvantage of non-price competition is that a company cannot build customer loyalty towards its brand using price.

Accepted Answer

A) True 
 B)False

Question 18

Non-price competition allows a company to increase its brand's unit sales through means other than changing the brand's price.

Accepted Answer

A) True 
 B)False

Question 19

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements about non-price competition is false?

Accepted Answer

A)  Companies that use non-price competition do not need to keep track of their competitors' prices.
B)  A company must be able to distinguish its brand through some unique feature in order to successfully engage in non-price competition.
C)  A firm using non-price competition can build loyalty to both its company and its products.
D)  When using non-price competition, a company should promote the distinguishing characteristics of its brand.
E)  Buyers must view the distinguishing characteristics of a product offered through non-price competition as being important.F) A) and B)
G) None of the above

Exam 10: Pricing Decisions

A __________ customer is likely to say, 'People notice when you buy the most expensive brand of a product'.

Correct AnswerverifiedShow Answer

Today, many marketers are attempting to reduce the use of frequent short-term price reductions.Which strategy would likely accomplish this objective?

Correct AnswerverifiedShow Answer

Which equation shows the organisation's relationship between price and profit?

Correct AnswerverifiedShow Answer

Marketing mix variables are highly interrelated.

Correct AnswerverifiedShow Answer

Non-price competition allows a company to increase its brand's unit sales through means other than changing the brand's price.

Correct AnswerverifiedShow Answer

Which of the following statements about non-price competition is false?

Correct AnswerverifiedShow Answer

Factors affecting pricing decisions can include demand, distribution and the way in which the product is promoted.

Correct AnswerverifiedShow Answer

A price that develops in the mind of a buyer through experience with the product is known as:

Correct AnswerverifiedShow Answer

When a customer is considering the purchase of a product in a relatively unfamiliar product category, that individual is likely to rely more heavily on:

Correct AnswerverifiedShow Answer

A major disadvantage of non-price competition is that a company cannot build customer loyalty towards its brand using price.

Correct AnswerverifiedShow Answer

Seasonal discounts provide price incentives to customers during peak selling seasons.

Correct AnswerverifiedShow Answer

Which of the following strategies assumes that demand is inelastic for groups or sets of products?

Correct AnswerverifiedShow Answer

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

Correct AnswerverifiedShow Answer

Which of the following is least likely to influence demand for a product?

Correct AnswerverifiedShow Answer

Laura Spangler of North Novelties reduces the prices of games sold to Robertson's Entertainment by 10 per cent to allow for expenses associated with Robertson's promoting the games to consumers.This is an example of a __________ discount.

Correct AnswerverifiedShow Answer

Secondary-market pricing means setting the same price for all markets.

Correct AnswerverifiedShow Answer

A manager at Myer designs the casual clothing department so that Myer's private-label jeans, priced at $29.99, are displayed next to a national brand of jeans, such as Levi's, priced at $37.99.Which pricing strategy is the manager attempting to use?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Price competition is a very flexible marketing strategy.

Correct AnswerverifiedShow Answer

A marketer uses only one pricing objective to avoid organisational confusion.

Correct AnswerverifiedShow Answer

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