Marketing - Chapter 17 Price Objectives and Policies

Based on Exhibit 17-4, which of the following pricing objectives are sales oriented? (Check all that apply.) 1. Dollar or unit sales growth 2. Meeting competition 3. Growth in market share 4. Nonprice competition

1. Dollar or unit sales growth 3. Growth in market share

Instead of competing on price, online retailers often pursue a competitive advantage over local retailers by offering which of the following? (Check all that apply.) 1. Free shipping 2. A superior in-store experience 3. Greater selection 4. Excellent customer service

1. Free shipping 3. Greater selection 4. Excellent customer service

The tuition that Jane pays to attend her local community college is an example of which part of the marketing mix? 1. Price 2. Promotion 3. Place 4. Product

1. Price

True or false: In order to avoid price wars, firms sometimes adjust their prices only when firms that offer similar products or services do the same. 1. True 2. False

1. True Reason: When firms make price changes carefully and only if others follow their lead, it can help prevent a price war.

Prices that are consciously set and not based on daily market forces are known as ______. 1. administered prices 2. cooperative prices 3. supply channel prices 4. competitive prices

1. administered prices

Organizations have moved increasingly to flexible-price policies with the advent of ______. 1. big data 2. international markets 3. shopping centers 4. customized services

1. big data Reason: Flexible price policies have increased with the advent of big data.

Increasing market share helps firms reduce costs by improving their ______. 1. economies of scale 2. ability to reduce wages 3. marketing mix 4. production schedules

1. economies of scale Reason: It reduces costs by improving economies of scale.

Firms must be careful because for each dollar of a price cut, that also means one dollar less in ______. 1. profit 2. taxes 3. wages 4. commission

1. profit

Managers who pursue sales growth rather than focusing on maximizing profits believe sales lead to ______. 1. profits 2. logistics 3. consistency 4. promotions

1. profits

Which of the following would have a direct impact on dynamic pricing? (Check all that apply.) 1. Purchasing parity 2. Current demand 3. Consumer type 4. Supply chain issues

2. Current demand 3. Consumer type

Place is what a customer must give up in order to receive the benefits offered by the rest of a firm's marketing mix. 1. True 2. False

2. False Reason: Customers must give up price, not place, in order to receive the benefits offered by the rest of a firm's marketing mix.

Which of these companies is using a profit maximization objective? 1. Martin's Microphones uses the cheapest parts to make its products in order to create a higher profit margin. 2. Karl's Kleats charges the highest price customers will pay as it wants to make as much profit as possible. 3. Sarah's Sneakers focuses on product innovation to draw customers away from the competition. 4. Natalie's Noodles releases four new product lines at the same time to meet the need of every customer.

2. Karl's Kleats charges the highest price customers will pay as it wants to make as much profit as possible.

What two policies do marketing managers typically choose between when deciding how to price their goods? (Check all that apply.) 1. Status quo policy 2. One-price policy 3. Flexible-price policy 4. Zero-price policy

2. One-price policy 3. Flexible-price policy

Which of the following are examples of price in different settings? (Check all that apply.) 1. rebates offered by retailers 2. Southwest Airline fares 3. Marriott hotel room rates 4. Chase mortgage interest 5. lottery winnings

2. Southwest Airline fares 3. Marriott hotel room rates 4. Chase mortgage interest

Administered prices are set by ______. 1. the market 2. firms 3. buyers 4. a bidding process

2. firms

The "surge pricing" model used by Uber is an example of _____ pricing. 1. one-price 2. flexible 3. stable

2. flexible

Temporarily cutting a product's price in order to hasten new products into a market is known as ______. 1. growth price dealing 2. introductory price dealing 3. mature price dealing 4. penetration price dealing

2. introductory price dealing

Firms that aim to charge as much as their customers will pay desire to earn a rapid return on ______. 1. profit 2. investment 3. revenue 4. branding

2. investment Reason: Companies receive a return on investment.

When firms direct their marketing strategy on something other than price, they engage in ______. 1. exclusive competition 2. nonprice competition 3. cost competition 4. assertive competition

2. nonprice competition

When firms set a single price for all customers, regardless of how much they buy or under what conditions they make their purchase, the firm is operating under a ______. 1. target price policy 2. one-price policy 3. non-difference policy 4. flexible-price policy

2. one-price policy

Firms that engage in flexible pricing have to be careful that customers don't know ______. 1. a new version of the product is available 2. that others paid lower prices 3. there is a delay in delivery 4. that the product is out of stock

2. that others paid lower prices

Which of the following would have a direct impact on dynamic pricing? (Check all that apply.) 1. Supply chain issues 2. Purchasing parity 3. Consumer type 4. Current demand

3. Consumer type 4. Current demand

Using Exhibit 17-4, which of the following pricing objectives are profit oriented? (Check all that apply.) 1. Growth in market share 2. Meeting competition 3. Maximize profits 4. Target return 5. Dollar or unit sales growth

3. Maximize profits 4. Target return

As part of a flexible-pricing policy, which of the following remain the same even as prices shift? (Check all that apply.) 1. The cost to the consumer 2. The customers purchasing the product 3. The kind of product 4. The product's quantity

3. The kind of product 4. The product's quantity

Websites that reveal a firm's flexible pricing policies often receive ______. 1. praise from business groups 2. lower rates of internet traffic 3. complaints from those charged more 4. threats from hackers

3. complaints from those charged more

Another term for status quo objectives is _______________ objectives. 1. a-price-saved-is-a-price-earned 2. look-before-you-price-leap 3. don't-rock-the-pricing-boat 4. don't-look-a-price-horse-in-the-mouth

3. don't-rock-the-pricing-boat

Firms that adjust prices rapidly as a result of changing demand and conditions are engaging in ______ 1. pricing. 2. flexible 3. dynamic 4. consistent 5. one-price

3. dynamic Reason: Flexible pricing means offering the same product and quantities to different customers at different prices.

When firms direct their marketing strategy on something other than price, they engage in ______. 1. cost competition 2. exclusive competition 3. nonprice competition 4. assertive competition

3. nonprice competition

Marketing managers should determine objectives that will lead to a ______. 1. high price 2. deficit 3. profit 4. capital expenditure program

3. profit

When a firm's managers set a(n) ______ objective, they describe their goals in terms of sales or market share rather than in terms of profit. 1. share-oriented 2. customer-oriented 3. sales-oriented 4. cash-oriented

3. sales-oriented

What occurs in a "surge pricing" model in the service industry? 1. When demand for a service decreases, more services are made available. 2. When demand for a service increases, more services are made available. 3. When demand for a service decreases, prices go up. 4. When demand for a service increases, prices go up.

4. When demand for a service increases, prices go up.

Price-cutting can lead to ______. 1. increased salespersons 2. increased profits 3. fewer salespersons 4. lower profits

4. lower profits

When a firm seeks to sell the entire market at one low price, they adopt a ______. 1. skimming price policy 2. target price policy 3. flexible-price policy 4. penetration price policy

4. penetration price policy Reason: They are adopting a penetration price policy.

In addition to place, promotion, and product, marketing managers also must make major strategy decisions about _____. 1. prey 2. press 3. price 4. privacy

4. price

Companies with a long-run view aim for increased _____________________ (increased/decreased) market share when the market is growing.

increased

Firms that sell their products at a high price before lowering them for more price-sensitive customers are engaging in a ____________ price policy.

skimming

When a firm sets a desired profit level, it establishes a(n) ______________ return objective.

target