MKTG 409 Chapter 20 Practice Tests
Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price?
25%
Kara Thrace operates a service business that engages in systematically collecting data on brands and prices at competitors' stores. For which stage of the price establishment process would this service be most appropriate?
Evaluating Competitors Prices
Adidas is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.
Market share
Which of the following objectives is likely to be more expensive for a firm as the cost of materials and research may be greater?
Product Quality
Which of the following pricing objectives can reduce a firm's risks by helping to stabilize demand for its products?
Status Quo
If Albertsons Market advertise 2-liter bottles of Coke for 89 cents to generate store traffic so that shoppers will purchase other items at regular prices, the grocer is using
a price leader
Which of the following should be accomplished after developing pricing objectives?
assessing the target market's evaluation of price.
Which of the following pricing strategies sets the basic product line low, but the price on the items required to operate or enhance it are higher?
captive pricing
Which of the following pricing objectives set prices to recover cash as quickly as possible?
cash-flow
The Federal Trade Commission has established guidelines for ______. If the higher price against which the comparison is made is the price formerly charged for the product, the seller must have made the previous price available to customers for a reasonable time period.
comparison discounting
Which of the following is often used by producers of relatively homogenous products, especially when the target market considers price to be an important purchase considerations?
competition-based pricing
When determining markup as a percentage of cost, divide the markup amount by
cost
When a seller's costs are usually determined during or after a product is made and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using ____ pricing.
cost-plus
Which of the following prices bases is mostly likely to be used for commercial construction projects or custom-made equipment?
cost-plus pricing
The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ___________ pricing. a) price-line b) promotional c) professional d) differential e) psychological
differential
In the absence of government controls, pricing is a(n) ______ and ______ way to adjust the marketing mix.
flexible; convenient
ACME Corp. has a pricing objective to increase its primary product's sales relative to total industry sales. This is best described as a(n) _______.
market share objective
Which of the following bases for pricing is most commonly used by retailers?
markup pricing
All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except
penetration pricing
If Kashi wants to gain a large market share quickly with its new reduced-fat crackers, it should use
penetration pricing
Chevrolet's president's day sales are an example of _________.
periodic discounting
Which of the following pricing strategies often results in a retailer losing money on the product?
price leader
When Texas Instruments first introduced its line of graphing calculators, it set the price quite high; it has lowered the price as competitors have entered the market. The pricing strategy initially used is called
price skimming
Which pricing strategy provides the most flexible introductory base price?
price skimming
Reference pricing is
pricing a product at a moderate level and positioning it next to a more expensive model or brand.
Which of the following product line pricing strategies is NOT generally used for business products?
psychological pricing
______ is pricing a product at a moderate level and positioning it next to more expensive models or brands.
reference pricing
Maintaining a certain market share, meeting competitors' prices. Maintaining favorable image, and achieving price stability are all associated with a _______ pricing objective.
status quo
When pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?
status quo
A price skimming strategy assumes that
the initial demand will be highly inelastic
Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _____.
yield management