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Question;101.;Identify;and discuss the six steps of the pricing procedure.;102.;Under;what conditions is demand likely to be less elastic for a product?;103.;What;is experience-curve pricing and what risks does it carry?;104.;An;increasing number of companies are basing their prices on the customer?s;perceived value. Explain the concept of ?perceived value? and identify the key;to pricing in this manner.;105.;Explain;why ?value pricing? is not just a matter of simply setting lower prices.;106.;In a;classic study, Farris and Reibstein examined the relationships among relative;price, relative quality, and relative advertising for 227 consumer businesses.;List and briefly explain their findings.;107.;For;price discrimination to work, certain conditions must exist. List and briefly;explain these conditions.;108.;In;responding to a competitor?s price cut, a firm in a nonhomogeneous market has;more latitude and should consider what four issues before responding?;APPLICATION;QUESTIONS;Multiple;Choice;109.;When a consumer buys a $100;bottle of perfume containing $10 worth of materials, the gift giver is;communicating their high regard to the receiver, and this represents the;concept of ________ in pricing.;a. maximum current profit;b. price?quality relationship;c. reference prices;d. price cues;e. price leadership;110.;When a retailer puts a sign on;a product that says ?reduced? or a retailer puts a sign on a product that says;?compare toXXX at $10.00 more,? the retailer is encouraging what kind of pricing;psychology for its shoppers?;a.;Reference pricing;b.;Price cues;c.;Price leadership;d.;Going-rate pricing;e. None of;the above;111.;Research has shown that;consumers tend to process prices in a ?left-to-right? manner rather than by;rounding. With this knowledge, which of the following prices would seem to be a;better physiological price?;a. $101.99;b. $109.50;c. $99.99;d. $100.00;e. none of the above;112.;You;are introducing a new product to the market, in fact, you are first with this;new product to the marketplace. In developing your pricing strategy, it was;decided that the price of the product should be at the maximum the market would;bear. This is an example of what type of pricing strategy?;a. Product-quality leadership;b. Market-skimming pricing;c. Market-penetration pricing;d. Going-rate pricing;e. Prestige pricing;113.;Texas;Instruments builds a large plant to produce a great quantity of products;hoping that as prices decline, sales volume increases and thus costs decline.;This market-penetration pricing is dependent upon three conditions existing in;the marketplace. Which one of the following is NOT one of these conditions?;a. Low price discourages competition from;entering the market.;b. Production and distribution costs actually;fall with increases in production.;c. Low prices does not increase consumer;demand but increases retailer;competition.;d. The market is stimulated by lower prices.;e. The market is highly price sensitive.;114.;Starbucks;coffee, Aveda shampoo, and BMW cars have been able to position themselves;within their categories by combining quality, luxury, and premium prices with;an intensely loyal customer base. These;companies are employing a ________ strategy.;a. market-skimming;b. short-term profit maximization;c. survival;d. market share maximization;e. product-quality leadership;115.;If;consumers were largely indifferent to a $0.10 increase in the price of a gallon;of milk, the rise can be said to fall within customers? ________.;a. price indifference band;b. price elasticity zone;c. price inelasticity range;d. coefficient of ambivalence;e. none of the above;116.;The;demand for your product fell 66% when the price increased by 50%. This is an;example of what type of demand?;a. Coefficient;b. Inelastic;c. Elastic;d. Unitary;e. none of the above;117.;The;quantity demanded of your firm?s product increased only 5% when the price of;each unit was reduced by 33%. This is an example of what type of demand?;a. Elastic;b. Coefficient;c. Unitary;d. Inelastic;e. None of the above;118.;Manufacturing;costs such as rent, utilities, interest expense, and some salaries are;considered ________ and these costs do not vary with the production or sale of;the item.;a. corporate overhead;b. division overhead;c. overhead;d. fixed costs;e. variable;119.;At;1,000 calculators per day, Texas Instrument?s factory is running at full;capacity. This means that the cost of each calculator is now at its;cost.;a. total;b. average;c. lowest;d. highest;e. undetermined;120.;If variable costs are $10 per;unit, fixed costs are $300,000, and expected unit sales are 50,000, the unit;cost is ________.;a. $16.00;b. $6.00;c. $20.00;d. $10.00;e. none of the above;121.;Following the industry average;your firm accepts a 20% markup on sales. If the unit cost of your product is;$20.00, then the retail price would be ________.;a. $48.00;b. $40.00;c. $44.00;d. $22.00;e. $24.00;122.;Your;company has invested $1,000,000 in plant and equipment and wants to ensure that;it receives a 20% ROI on the pricing of its products. This 20% translates into;$200,000. At a $16.00 cost and a 50,000 expected sales volume, at what price;must your product ?go out the door? to satisfy this ROI return?;a. $24.00;b. $20.00;c. $40.00;d. $44.00;e. none of the above;123.;The;formula for the break-even volume calculation is ________.;a. (price ? variable costs)/fixed costs;b. fixed costs/(price ? variable costs);c. fixed costs/unit sales;d. fixed costs/(variable costs ? price);e. fixed costs X (variable costs ? price);124.;In oligopolistic industries;that sell a commodity, firms base their prices largely on competitors?;prices. This is an example of ________.;a.;EDLP;b.;countertrade;c.;price discrimination;d.;going-rate pricing;e.;high-low pricing;125.;Baxter Healthcare, a leading;medical products firm, was able to secure a contract for an information management;system from Columbia/HCA, a leading health care provider, by guaranteeing the;firm several million dollars in savings over an eight-year period. This is an example of ________.;a.;market-skimming pricing;b.;geographical pricing;c.;auction-type pricing;d.;going-rate pricing;e.;gain-and-risk-sharing pricing;126.;In exchange for the;distribution of your products overseas, your firm has accepted to receive a;shipment of imported products in trade. This is an example of what type of;countertrade?;a. Offset;b. Barter;c. Compensation deal;d. Buyback agreement;e. None of the above;127.;Florida;hotels discount the cost of their hotel rooms during the hot summer months. On;the other hand, during the winter months, the price of these rooms increases.;This is an example of what type of discount?;a. Seasonal;b. Functional;c. Quantity;d. Promotional allowance;e. None of the above;128.;The;popularity of ?early-bird? specials at restaurants is an example of what type;of price discrimination?;a. Time pricing;b. Channel pricing;c. Image pricing;d. Product-form pricing;e. Customer-segment pricing;Short;Answer;129.;Your company is considering;employing a ?freemium? strategy.;Identify five guidelines for success using this strategy.;130.;Explain how Armani uses;consumer psychology to charge at least 20 times more for a black T-shirt than;do Gap or H&M.;131.;What is market skimming and;where might you see market-skimming pricing practiced in consumer goods?;132.;When the salesperson at the;local luxury car dealer pitches a customer on the dealer?s ?free maintenance;for 36 months or 36,000 miles whichever comes first,? the salesperson is trying;to overcome the car?s initial high cost by using what method?;133.;Identify;and describe three methods companies can use to attempt to measure their demand;curves.;134.;How;can the Internet impact consumer price sensitivity?;How would you explain the concept of ?price;elasticity? to a co-worker?;135.;Explain;the relationship between fixed costs, variable costs, total cost, and average;cost.;136.;As a;newly hired marketing associate, you have been given the responsibility to;reduce the costs of your product by utilizing a process called ?target;costing.? Explain how you would go about implementing a target costing program.;137.;Explain;the difference between everyday low pricing (EDLP) and high-low pricing.;138.;How do;EDLP and high-low pricing strategies affect consumer price judgments?;139.;As a;small firm in a commodity industry, you are often faced with a pricing policy;that can best be described as ?going-rate pricing.? Explain how this pricing;policy works.;140.;Your;local retailer has instituted an EDLP pricing program for his stores. What;would one of the reasons be for the retailer to adopt an EDLP pricing policy?;141.;IKEA;and Southwest Airlines are among the best practitioners of value pricing?win;loyal customers by charging a fairly low price for a high-quality offering. Why;is value pricing not a matter of simply lowering prices?;142.;As the;marketing manager for your product, you have been forced to take a price;increase due to cost pressures from your suppliers. After adjusting for;customer and consumer demand fluctuations and elasticity, you feel that you;have accounted for all possible reactions. Your boss, however, feels;differently and says that your recommendations are not complete. What other;factors, besides consumer/customers, are affected by price changes?;143.;Your;company has recently sold its resin-producing plant in India to a;local concern. As part of the sales price, your company agrees to accept as;partial payment the production of the resin at an agreed upon price for six;years. This is an example of what type of countertrade?;144.;In;attempt to ?rein in? the continued discounting by the sales force, you;implement a net price analysis program to arrive at the ?real price? of your products.;Describe the steps necessary to implement such a program.;145.;Movie;matinees are priced lower than the evening shows, afternoon ball games are;sometimes priced cheaper than the evening games, television advertising costs;less when run after midnight. These are examples of what type of price;discrimination?;Suggested;Answer:These are examples;of time pricing discrimination.;146.;When;is price discrimination legal?;147.;When a;company initiates a price cut in an attempt to dominate the market through lower;costs (such as the $1.00 special lunch menus at key fast-food restaurants), the;company must ensure that it does not fall into certain low-cost traps. List;these four ?traps.?

 

Paper#47285 | Written in 18-Jul-2015

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