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multiple ques data bank general

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Question;Chapter 14: Developing Pricing Strategies;and Programs;GENERAL;CONCEPT QUESTIONS;Multiple;Choice;1. ________ communicates to the market the;company?s intended value positioning of its product or brand.;a. Packaging;b. Price;c. Place;d. Promotion;e. Product features;2. Traditionally, ________ has operated as the;major determinant of buyer choice.;a. promotion;b. packaging;c. placement;d. distribution;e. price;3. Today, ________ is partially reversing the;fixed pricing trend.;a. volume discounting;b. big-box retailing;c. the Internet;d. high-margin niching;e. all of the above;4. Executives often complain that pricing is a;big headache. Common mistakes include: price is not revised often enough to;capitalize on market changes, price is set ________ of the rest of the;marketing mix rather than an intrinsic element of a market-positioning;strategy.;a. divergently;b. too high;c. intrinsically;d. independently;e. concurrently;5. Purchase decisions are based on how;consumers perceive prices and what they consider to be the ________ price?notthe marketer?s stated price.;a. current actual;b. last purchased price;c. current sale price;d. referent price;e. none of the above;6. The definition of ________ prices is: In;considering an observed price, consumers often compare it to an internal memory;reference price or an external frame of reference (such as a posted ?regular;retail price?).;a. historical;b. reference;c. promotional;d. everyday low price;e. none of the above;7. The last price paid, competitors? prices;and the expected future price all serve as customer ________.;a. given prices;b. odd prices;c. reference prices;d. price-quality inferences;e. market skimmings;8. Many consumers use price as an indicator of;Image pricing is especially effective with ego-sensitive products;such as perfumes and expensive cars.;a. status;b. quality;c. ability;d. capability;e. size;9. Pricing cues such as sale signs and prices;that end in 9 become more influential when ________.;a. consumer price knowledge is poor;b. items are purchased frequently;c. items have been on the market a long time;d. prices are consistent year-round;e. they are employed frequently;10. A firm must set a price for the first time;when it develops a new product, when it introduces its regular product into a;new distribution channel or geographical area, and when it ________.;a. needs to increase bottom-line results;b. raises prices due to cost escalation;c. rolls out an improved product;d. enters bids on new contract work;e. changes styles;11. A firm must consider many factors in;setting its pricing policy. We list these as a six-step process. Which of the;following is NOT one of these steps?;a. Determining demand;b. Selecting the pricing objective;c. Researching reference prices in the target;market;d. Selecting the final price;e. Selecting a pricing method;12. A firm first decides where it wants to;position its market offering. A company can pursue any of five major objectives;through pricing. Which of the following is NOTone of these objectives?;a. Predatory pricing;b. Survival;c. Maximum current profit;d. Maximum market share;e. Product-quality leadership;13. Companies pursue survival as their major;objective if they are plagued with ________.;a. legal prosecution;b. weak competition;c. static consumer wants;d. shareholder activism;e. overcapacity;14. In market-penetration pricing, the;company?s objective is to ________, believing that higher sales volume will;lead to lower unit costs and higher long-run profits.;a. block competitive launches;b. maximize their market share;c. minimize their market share;d. maximize volume;e. none of the above;15. To maximize market share, a firm;may use _____________ pricing, which is based on the theory that as sales volume;increases, unit costs will decrease.;a. market-penetration;b. market-skimming;c. value pricing;d. demand pricing;e. price bands;16. Market-skimming prices make sense under the;following conditions EXCEPT ________.;a. the high price communicates high value;b. the high initial price blocks competition;from entering the market;c. the unit costs of producing a small number;of units are not too high;d. the product is a ?me-too? and contains no;new technology or points of difference;e. a sufficient number of buyers have a high;current demand;17. The first step in estimating demand is to;understand what affects price sensitivity. Generally speaking, customers are;most price sensitive to products that cost a lot or are ________.;a. priced low to begin with;b. low cost;c. bought frequently;d. bought infrequently;e. none of the above;18. Consumers ________ low-cost products or;items they buy infrequently.;a. prefer the lowest total cost of;ownership of;b. remember prices of;c. are ambivalent to prices of;d. are more price sensitive to;e. are less price sensitive to;19. The concept of the lowest ________ means;that a seller can charge a higher price if they can convince the customers that;price is only a small part of the total cost of obtaining, operating, and;servicing the product over its lifetime.;a. prestige pricing;b. total cost of ownership;c. convenience pricing;d. key price points;e. none of the above;20. If demand hardly changes with a small;change in price, we say that the demand is ________.;a. equal;b. marginal;c. inelastic;d. elastic;e. none of the above;21. If demand changes considerably, we;say that the demand is ________.;a.;equal;b. elastic;c. inelastic;d. marginal;e. none of the above;22. Price elasticity depends on the;magnitude and direction of the price change. If may differ for a price cut;versus a price increase. When the price changes have little or no effect, there;might exist a ________ for your product.;a. selective price;b. price indifference band;c. substitute product;d. promotional price;e. collective price;23. ________ sets a ceiling on the;price the company can charge for its products.;a. Government regulations;b. Market forces;c. Costs;d. Demand;e. Competition;24. A company?s costs take two forms.;are costs that do not vary with production or sales revenue.;a. Fixed costs;b. Variable costs;c. Adjusted costs;d. Attributed costs;e. Unknown costs;25. ________ differ greatly depending upon the;level of production.;a. Fixed costs;b. Adjusted costs;c. Attributed costs;d. Unknown costs;e. Variable costs;26. ________ consist of the sum of the fixed;and variable costs for any given level of production.;a. Total costs;b. Manufacturing costs;c. Delivery costs;d. Fixed costs;e. Variable costs;27. Today?s companies try to adapt their offers;and terms to different buyers. ________ accounting tries to identify the real;costs associated with serving each customer. It allocates indirect costs to the;activities that use them and are tagged back to each customer.;a. Cost;b. Experience cost;c. Target costing;d. Direct product profitability;e. Activity-based cost;28. The decline in the average cost of;production with accumulated production experience is called the ________.;a. demand curve;b. cost curve;c. learning curve;d. cost target;e. indifference band;29. ________ is the result of a concentrated;effort by designers, engineers, and purchasing agents to reduce the product?s;overall costs.;a. Learning curve;b. Target costing;c. Least cost producer;d. Experience curve;e. None of the above;30. Your competitor has reduced prices on his;entire line of products. You can interpret these price cuts by assuming that;your competitor is trying to gain market share, is doing poorly and wants to;increase revenue quickly, or ________.;a. signals an end to price/promotion wars;b. signals that price is no longer a;competitive advantage;c. wants the whole industry to reduce prices;d. wants you to reduce your prices below his;e.;none;of the above;31. The three major considerations in price;setting are: costs set the floor price, ________, and customers? assessment of;unique features establishes the price ceiling.;a. competitors? prices and the price of;substitutes provide an orientation point;b. competitors? prices establishes a ?target;price? goal;c. the price of substitutes establishes a;?target price?;d. the price of competitors and substitutes;does not enter into the pricing considerations.;e. none of the above;32. The most elementary pricing method is to;add a standard ________ to the product?s cost.;a. target margin;b. target price;c. markup;d. margin;e. target-return;33. Despite its weaknesses, markup pricing;remains popular for which of the following reasons?;a. Sellers can determine demand much more;easily than they can estimate costs.;b. By tying the price to cost, sellers make;the pricing task more nuanced.;c. When all firms in the industry use markup;pricing, price competition flourishes.;d. Sellers take advantage of buyers when the;latter?s demand becomes acute.;e. Many people feel that cost-plus pricing is;fairer to both buyers and sellers.;34. An increasing number of companies now base;their price on the customer?s ________ of their products.;a. usage;b. EDLP pricing;c. everyday value pricing;d. perceived value;e. value proposition;The key to perceived-value pricing is to deliver more;value than your competitors and to ________ this to prospective buyers.;f. demonstrate;g. communicate;h. advertise;i.;promote;j.;convince;35. In recent years, companies have adopted;trying to win loyal customers by charging a fairly low price for a high-quality;offering.;a. EDLP;b. high-low pricing;c. value pricing;d. everyday low pricing;e. none of the above;36. In ________, the retailer charges higher;prices on an everyday basis but then runs frequent promotions in which prices;are temporarily lowered below the EDLP level.;a. going-rate pricing;b. EDLP pricing;c. value pricing;d. high-low pricing;e. everyday low pricin;37. Value pricing is not a matter of simply;setting lower prices, it is a matter of reengineering the company?s operations;to become a low-cost producer without sacrificing quality and lowering prices;significantly to attract a large number of ________ customers.;a. expert;b. price-orientated;c. value-conscious;d. product-orientated;e. none of the above;38. Auction-type pricing is becoming very;popular due to the Internet. The three types of auction pricing include;sealed-bid auctions, descending bids auctions, and ________.;a. EDLP auctions;b. ascending bid auctions;c. high-low bid auctions;d. going-rate bidding auctions;e. value pricing auctions;In one type of ________, the auctioneer announces a high price for a product;and then slowly decreases the price until a bidder accepts the price.;f. ascending auction;g. English auction;h. sealed-bid auction;i.;going-rate;auction;j.;Dutch;auction;Pricing methods narrow the range from which the company;selects its final price. In selecting that price, the company must consider;additional factors, including the impact of other marketing activities, company;pricing policies, gain-and-risk-sharing pricing, and the impact of price on;k. other parties;l.;channels;of distribution;m. channel partners;n. marketing activities;o. none of the above;39. In ________ pricing, the company decides;how to price its products to different customers in different locations and;countries.;a. specialty;b. geographical;c. offset;d. regional;e. none of the above;40. ________ is the direct exchange of goods;with no money and no third party involved.;a. Co-optation;b. Buyback;c. Barter;d. Offset;e. Compensation;41. A British aircraft manufacturer sold planes;to Brazil;for 70% cash and the rest in coffee. This;is an example of ________.;a. bartering;b. a compensation deal;c. a buyback arrangement;d. an offset;e. a price allowance;The seller sells a plant, equipment, or technology to another country and;agrees to accept as partial payment products manufactured with the supplied;equipment in a ________.;f. buyback arrangement;g. co-optation;h. barter;i.;offset;j.;none;of the above;42. Most companies will ________ their list;price and give discounts and allowances for early payments, volume purchases;and off-season buying.;a. raise;b. increase;c. reduce;d. adjust;e. none of the above;43. A(n) ________ is offered by a manufacturer;to trade-channel members if they will perform certain functions, such as;selling, storing, and record keeping.;a. functional discount;b. quantity discount;c. allowance;d. cash discount;e. none of the above;44. ________ occurs when a company sells a;product or service at two or more prices that do not reflect a proportional;difference in costs.;a. Psychological pricing;b. Loss-leader pricing;c. Product-form pricing;d. Customer-segment pricing;e. Price discrimination;45. When supermarkets and department stores;drop the price on well-known brands to stimulate store traffic, this is called;a. EDLP;b. loss-leader pricing;c. special-event pricing;d. net pricing;e. none of the above;46. Companies often adjust their basic price to;accommodate differences in customers, products, locations, and so forth.;Examples of these differentiated prices include all of the following EXCEPT ________.;a. new-product pricing;b. customer-segment pricing;c. product-form pricing;d. channel pricing;e. none of the above;47. When different customer groups are;charged different prices for the same product or service, it is called;a. price discrimination;b. customer-segment pricing;c. illegal;d. product-form pricing;e. channel pricing;48. Varying prices by time of the day, the;season of the year, or the day of the week is called ________.;a. discounting;b. time pricing;c. price discrimination;d. product-form pricing;e. channel pricing;49. One of the traps of instituting a price;decrease is when that low price buys market share in the short term. The same;customers will shift to any lower-priced product that may come along. This trap;is called ________.;a. low-price trap;b. market-loyalty trap;c. shallow-pockets trap;d. low-quality trap;e. fragile-market-share trap;50. Companies sometimes initiate price cuts in;a drive to dominate the market through lower costs. One of the possible traps;of a price-cutting strategy is ________.;a. secure target market customer;b. consistent high-quality consumer;c. dependence on a firm market;d. loyal customer market;e. shallow pockets

 

Paper#47305 | Written in 18-Jul-2015

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