Marketing Ch 14 Quiz

The point at which the number of units sold generates enough revenue to equal the costs of running and operation is known sa the

Break-even point

Diane owns a bakery where she sells cupcakes. Two blocks down there is another bakery, CCs Bakery, who sells cupcakes for $1 less than Diane. Diane decides to lower her price and match CC's Bakery prices, what type of pricing strategy is this?

Competitor-oriented pricing

Julia's is an upscale women's clothing store. Prices are based on customers' beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia's is using a ________ pricing strategy.

Customer-oriented

What situation is occurring if a 1% decrease in price results in more than a 1% increase in quantity demand?

Demand is price elastic

Margaret has been invited to afancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she was going to use the price as

Indicator of quality

With a ________ pricing strategy, marketers set a low initial price for the introduction of a new product or service.

Market penetration

What strategy invovles accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen?

Maximizing profits

For which of the following is demand likely to be least sensitive to price increases?

Prescription drugs

A reference price is

Price against which buyers compare the actual selling price

Because there are only a few firms in markets with oligopolistic competition

Price wars may occur

At the break even point...

Profits are zero

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products by

Reducing the price elasticity of demand

David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following except

Rent on the restaurant building

Many years ago Honda's Accord and Ford's Taurus were the two top selling cars in the US. As the year was coming to an end, Ford cut the price of the Taurus, hoping to outsell the accord, allow Ford to claim that "Taurus is the best selling car in America". Ford was using a _______________ pricing strategy

Sales orientation

When the price for Blu-ray players dropped, the demand for DVD players went down, so DVD players and Blu-ray players are

Substitute products

Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of ______________ on demand for his service.

The income effect

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Earl perceived price as ________ for a good or service, while most consumers recognize price as the ________ made to acquire a good or service.

The money paid; overall sacrifice

In developing marketing strategies, why is price often the most challenging of the four Ps to manage?

because it is the least understood element of the marketing mix

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products by

reducing the price elasticity of demand

One problem in relying on price elasticity and demand curves when setting prices is

the way a product or service is marketed can have a profound impact on price elasticity