Question 1

All of the following statements about price are true except which?

Accepted Answer

A)   Small changes in price can have big effects on both the number of units sold and company profit.
B)   The price for a product or service must earn a profit for the company.
C)   For most products and services, there is an agreed-upon price range set by makers.
D)   The price must be right-in the sense that customers must be willing to pay it.
E)   The price must generate enough sales dollars to pay for the cost of developing, producing, and marketing the product.F) A) and B)
G) C) and E)

Question 2

Cost-plus-percentage-of-cost pricing refers to

Accepted Answer

A)   summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price.
B)   adding a fixed percentage to the cost of all items in a specific product class.
C)   setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors.
D)   setting the price of a product or service by adding a fixed percentage to the total unit cost.
E)   charging different prices to different buyers for goods of like grade and quality.F) C) and D)
G) A) and B)

Question 3

Target profit pricing refers to

Accepted Answer

A)   adjusting the price of a product so it is "in line" with that of its largest competitor.
B)   setting an annual target of a specific dollar volume of profit.
C)   setting the price of a line of products at a number of different price points.
D)   adding a fixed percentage to the cost of all items in a specific product class.
E)   setting prices to achieve a profit that is a specified percentage of production costs.F) A) and B)
G) A) and C)

Question 4

Manufacturers of private brands use which method of competition-oriented pricing?

Accepted Answer

A)   penetration pricing
B)   below-market pricing
C)   loss-leader pricing
D)   prestige pricing
E)   skimming pricingF) C) and D)
G) B) and C)

Question 5

The ratio of perceived benefits to ________ is referred to as value.

Accepted Answer

A)   price
B)   prestige
C)   anticipated quality
D)   profits
E)   discountsF) B) and E)
G) D) and E)

Question 6

To reward wholesalers and retailers for marketing functions they will perform in the future, a manufacturer often gives ________ discounts.

Accepted Answer

A)   seasonal
B)   cash
C)   promotional
D)   trade
E)   cumulativeF) C) and D)
G) C) and E)

Question 7

A reference value involves comparing the costs and benefits of

Accepted Answer

A)   substitute items.
B)   items of equal or greater value.
C)   products with which a consumer is familiar and items the consumer has not seen or used before.
D)   items from one particular manufacturer or distributor.
E)   intangible items.F) B) and E)
G) C) and E)

Question 8

Most consumers realize that the quality of diamonds varies, and most believe the higher the price of a diamond, the higher its quality. This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Accepted Answer

A)   acceptable cost
B)   perceptual investment
C)   barter potential
D)   return on investment
E)   valueF) A) and D)
G) B) and E)

Question 9

Prestige pricing is a ________ approach to pricing.

Accepted Answer

A)   demand-oriented
B)   cost-oriented
C)   profit-oriented
D)   competition-oriented
E)   service-orientedF) B) and E)
G) All of the above

Question 10

Figure 11-2
-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box B includes standard markup and cost-plus so it represents which approach?

Accepted Answer

A)   demand-oriented approach
B)   profit-oriented approach
C)   competition-oriented approach
D)   results-oriented approach
E)   cost-oriented approachF) C) and E)
G) A) and B)

Question 11

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Accepted Answer

A)   allowances.
B)   subsidies.
C)   remittances.
D)   noncumulative deductions.
E)   list price deductions.F) None of the above
G) A) and B)

Question 12

Target return-on-investment (ROI)  is frequently used by

Accepted Answer

A)   contractors.
B)   public utilities.
C)   business-to-business markets.
D)   supermarkets.
E)   small privately owned firms.F) C) and E)
G) A) and D)

Question 13

VIZIO's HDTVs are sold through all of the following types of retailers except which?

Accepted Answer

A)   Amazon.com
B)   mass merchandisers, such as Target
C)   its own brick and mortar stores
D)   wholesale club stores such as Sam's Club
E)   electronics stores such as Best BuyF) B) and E)
G) A) and D)

Question 14

A demand curve is a graph that relates

Accepted Answer

A)   the quantity sold and price, which shows the maximum number of units that will be sold at a given price.
B)   revenues and costs, which shows the minimum number of units that must be sold to break even.
C)   the quantity sold and revenues, which shows the minimum number of units that must be sold in order to make a profit.
D)   total production costs to various price points in order to determine how many units must be sold in order to realize a predetermined profit.
E)   primary demand to selective demand, which shows the growth of the market compared to change in market share.F) C) and D)
G) D) and E)

Question 15

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Accepted Answer

A)   cost-plus-fixed-percentage fee pricing.
B)   target pricing.
C)   cost-plus-percentage-of-cost pricing.
D)   experience curve percentage pricing.
E)   target return on investment pricing.F) A) and B)
G) A) and C)

Question 16

Another name for a one-price policy is

Accepted Answer

A)   customary pricing.
B)   fixed pricing.
C)   dynamic pricing.
D)   standard markup pricing.
E)   uniform pricing.F) B) and C)
G) C) and D)

Question 17

The practice of exchanging products and services for other products and services rather than for money is referred to as

Accepted Answer

A)   barter.
B)   reciprocal pricing.
C)   virtual pricing.
D)   balance of payments.
E)   value-pricing.F) A) and D)
G) All of the above

Question 18

Setting prices a few dollars or cents under an even number is referred to as

Accepted Answer

A)   odd-even pricing.
B)   prestige pricing.
C)   price lining.
D)   above-, at-, or below-market pricing.
E)   every day fair pricing.F) A) and E)
G) A) and D)

Question 19

Standard markup pricing refers to

Accepted Answer

A)   adjusting the price of a product so it is "in line" with that of its largest competitor.
B)   setting the price of a line of products at a number of different price points.
C)   setting prices to achieve a profit that is a specified percentage of the sales volume.
D)   increasing the price slightly to protect against undue profit losses from unforeseen environmental forces.
E)   adding a fixed percentage to the cost of all items in a specific product class.F) A) and B)
G) B) and D)

Question 20

To encourage retailers to pay their bills quickly, manufacturers offer them

Accepted Answer

A)   quantity discounts.
B)   cash discounts.
C)   flexible pricing policies.
D)   promotional allowances.
E)   manufacturer's inducements.F) A) and C)
G) B) and D)

Exam 11: Pricing Products and Services

Target profit pricing refers to

Correct AnswerverifiedShow Answer

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Correct AnswerverifiedShow Answer

Standard markup pricing refers to

Correct AnswerverifiedShow Answer

To reward wholesalers and retailers for marketing functions they will perform in the future, a manufacturer often gives ________ discounts.

Correct AnswerverifiedShow Answer

Setting prices a few dollars or cents under an even number is referred to as

Correct AnswerverifiedShow Answer

The ratio of perceived benefits to ________ is referred to as value.

Correct AnswerverifiedShow Answer

Target return-on-investment (ROI) is frequently used by

Correct AnswerverifiedShow Answer

A reference value involves comparing the costs and benefits of

Correct AnswerverifiedShow Answer

Manufacturers of private brands use which method of competition-oriented pricing?

Correct AnswerverifiedShow Answer

The practice of exchanging products and services for other products and services rather than for money is referred to as

Correct AnswerverifiedShow Answer

A demand curve is a graph that relates

Correct AnswerverifiedShow Answer

To encourage retailers to pay their bills quickly, manufacturers offer them

Correct AnswerverifiedShow Answer

Another name for a one-price policy is

Correct AnswerverifiedShow Answer

VIZIO's HDTVs are sold through all of the following types of retailers except which?

Correct AnswerverifiedShow Answer

All of the following statements about price are true except which?

Correct AnswerverifiedShow Answer

Prestige pricing is a ________ approach to pricing.

Correct AnswerverifiedShow Answer

Cost-plus-percentage-of-cost pricing refers to

Correct AnswerverifiedShow Answer

Most consumers realize that the quality of diamonds varies, and most believe the higher the price of a diamond, the higher its quality. This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Correct AnswerverifiedShow Answer

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box B includes standard markup and cost-plus so it represents which approach?

Correct AnswerverifiedShow Answer

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Correct AnswerverifiedShow Answer

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