Ch. 12 marketing

Markum Industries determines that, for its air compressors, the following results are achieved at a price of $250: total costs = $250; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at ____ units

1,167

If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point?

2,000

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) ____ price

F.O.b origin pricing

If a firm currently produces 2,500 products per month and decides to produce 2,501, it will incur:

a marginal cost

If Kroger Food Stores advertises 2-liter bottles of Pepsi for 89 cents to generate store traffic that will purchase other items at regular prices, the grocer is using:

a price leader

A concession in price in business markets to achieve a desired goal is called a(n):

allowance

Jared is developing a business plan for a new type of bicycle helmet. He is interested in finding the point at which the costs of producing the helmet will equal the revenue earned from selling the product. Jared is interested in finding the:

break-even point

When Mia and Shane are planning their honeymoon, their travel agent tells them that if they buy a special package, their trip to Paris will include meals, tickets to the theater, and a rental car in addition to airfare and a hotel. This is an example of the use of:

bundle pricing

Pricing the basic product in a product line low, while pricing related items at a higher level is called:

captive pricing

When a company that produces computer printers prices them low, but the ink required to operate the printer is priced higher per relative usage, it is using:

captive pricing

If PepsiCo sets its twelve-pack price to match the price charged by Coca-Cola, Pepsi is using ____ pricing methods?

competition based

For custom-made equipment or commercial construction projects, which pricing method is most likely used?

cost plus

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

cost plus

If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used

demand based

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of:

demand based pricing

A graph of the quantity of products marketers expect to sell at various prices if other factors remain constant is a:

demand curve

The three primary bases for developing prices are:

demand, competition, and cost

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

develop pricing objectives

The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ____ pricing

differential

If Carnival Cruise Lines increased the price of its seven-day cruise package by 10 percent and, as a result, experienced a 20 percent decline in customer bookings, Carnival's demand would be:

elastic

If Pacific Power and Light increased its rates by 10 percent and the demand for power remained the same, the demand would be:

inelastic

For most products, a(n) ____ relationship exists between the price of a particular product and the quantity demanded

inverse

Under Armor is establishing a ____ pricing objective to maintain or increase its product's sales in relation to total industry sales

market share

Sellers that emphasize distinctive product features to encourage brand preferences among customers are practicing:

non price competition

If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use:

penetration pricing

A problem associated with ____ is that consumers can predict when prices will be lowered and delay purchases until that time

periodic discounting

A product that has more features than those of its competition, or that is perceived to be of higher quality, warrants using:

premium pricing

Breyer's produces a variety of ice cream flavors and of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using ____ to price its ice cream.

premium pricing

French Quarter Inns reduces the price of a suite from $225 to $195 per night and experiences a reduction in the quantity of rooms demanded by an average of five per night. This is an indication that suites at this hotel are an example of a(n) ____ product

prestige

When marketers emphasize price as an issue and match or beat the prices of other companies, they are engaging in:

price competition

To attract customers into a store, Safeway advertises its milk at a lower cost, hoping that customers will purchase other groceries as well. This pricing strategy is called:

price leader pricing

When an organization sets a number of prices for selected groups of merchandise, this is commonly referred to as:

price lining

To determine the break-even point in units, divide the fixed costs by:

price minus variable costs

If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as:

price-skimming

The pricing of Clinique makeup, considerably higher than brands such as Cover Girl, Revlon, and Maybelline, is most likely used to communicate ____

product quality

Westin Hotels, Inc. has an objective of achieving a 25 percent return from its overall sales. This is an example of a ____ pricing objective

profit

Price leaders, comparison discounting, and special-event pricing are examples of:

promotional pricing

If Ralph Lauren offers to reduce the price of its women's blazers when retailers buy more than 100 pieces, the designer is offering a ____ discount

quantity

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the:

quantity demanded goes down

Showing a product's price along with its previous price, the price of a competing brand, or the price at another retail outlet is called:

reference pricing

A Macy's manager designs the casual clothing department such that one of Macy's private label pairs of jeans, priced at $24.99, is positioned next to a national brand of jeans, such as Levi's, priced at $39.99. Which of the following strategies is the manager attempting to accomplish?

reference pricing strategy

Executives in Japan decided to price Lexus luxury cars in the United States at $55,000 while pricing them at $66,000 in their own country. This is an example of:

secondary market pricing

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?

status quo

Price is a key element in the marketing mix because it relates directly to:

the generation of total revenue

At the break-even point:

the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit

If a product has an inelastic demand and the manufacturer raises its price:

total revenue will incraese

When Cadillac buys headlights from Delco, both of which are divisions of General Motors, ____ pricing occurs

transfer