Marketing Management Chapter Fourteen
Which of the following do you need to know to calculate target return price? (Check all that apply.) - fixed costs - variable costs - break-even point - expected unit sales
- fixed costs - variable costs - expected unit sales
Channel members include which of the following? (Check all that apply). - consumers - manufacturers - retailers - wholesalers
- manufacturers - retailers - wholesalers
Which of the following accurately characterize demand curves? - they relate demand to prices while assuming everything else remains unchanged. - they show how much consumers will demand during a specific period at different prices. - they are identical for all products and services in a given industry. - they are completely accurate prediction models over long periods of time.
- they relate demand to prices while assuming everything else remains unchanged. - they show how much consumers will demand during a specific period at different prices.
Which of the following are considered part of the five Cs of pricing? - competition - charter membership - channel members - customers - company objectives - change management
-competition - channel members - customers - company objectives
What percentage of the value equation is represented by price? - 25% - 90% - 50% - 5%
50%
True or false: a firm with a primary objective of very high sales growth will have the same pricing strategy as a firm with a primary objective of being a quality leader.
False: Pricing strategies should support and allow the firm to reach its overall objectives, which in this case are different. The different objectives should lead to different pricing strategies.
Price fixing is the illegal tactic of cooperating with other firms to ______ prices. - discretely hide - publicly list - artificially establish - constantly reduce
artificially establish
What is a useful technique that enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales? - cross-price elasticity - fixed costs - cost-benefit analysis - break-even analysis
break-even analysis
Which is one of the five Cs of pricing? - cost uniqueness - company objectives - customer salaries - channel dynamics
company objectives
The percentage change in the quantity of one product demanded compared with the percentage change in price in another product is called ______-price elasticity.
cross
In the United States, it is considered unethical and illegal for advertisements to _____ the consumer so much that the person is harmed.
deceive
The graph that shows how many units of a product or service consumers will want during a specific period at different prices is known as the ________ curve.
demand
Using predatory pricing, a firm sets a very low price for one or more of its products with the goal of _______. - making its annual sales report look better - driving up the value of the company's stock - capturing market share with competitive advantage - driving its competition out of business
driving its competition out of business
If a restaurant reduces the price of a hamburger by 25% and sales increase by more than 50%, which of the following describe the demand for the hamburger? (Choose every correct answer.) - inelastic - elastic - price insensitive - price sensitive
elastic, price sensitive
When a new product or service is launched, what type of pricing strategy attempts to attract customers quickly by offering a very low price at first? - everyday low pricing - odd pricing - high/low pricing - reference pricing
everyday low pricing
Which pricing strategy appeals to consumers because it reduces their need to spend time comparing prices at various stores? - loss leader pricing - image pricing - odd/even pricing - benchmark reference pricing - everyday low pricing
everyday low pricing
Which pricing strategy should retailers use to tap into consumer excitement about buying something at a special low price for a limited time? - reference pricing - everyday low pricing - high/low pricing - predatory pricing
high/low pricing
According to the cross-price elasticity of demand, when the price of DVD players drops, the demand for DVDs is likely to ______.
increase
Who usually benefits from price discrimination? - large firms - individual customers - small firms - employees
large firms
Which of the following is another term for target return percentage? - break-even point - markup - profit -contribution per unit
markup
When a new product or service is launched, what type of pricing strategy attempts to attract customers quickly by offering a very low price at first? - reference point - price skimming - value-based pricing - penetration pricing
penetration pricing
The overall sacrifice a consumer makes to acquire a product or service is known as _________.
price
What term describes scheming with other companies to control prices? - price discrimination - price fixing - uniform delivered pricing - leader pricing
price fixing
Competition, channel members, costs, customers, and company objectives are the five critical components of ______.
pricing
What type of orientation is exemplified by target return pricing? - sales - customer - competitor - profit
profit
What term describes the slightly exaggerated claims made my retailers? - libel - ethics - puffery - deception
puffery
Firms that are less concerned with the level of profits and more interested in the rate at which profits are generated relative to their investments tend to use ________.
target return pricing
Which is the best definition of price? - the overall sacrifice a consumer will make to obtain one of the five Cs - the last element of the marketing mix a consumer will always agree with - the consumer's break- even point - the overall sacrifice a consumer is willing to make to buy a product or service
the overall sacrifice a consumer is willing to make to buy a product
What information is gained by adding variable and fixed costs together? - break-even point - total cost - net contribution per unit - profit margin
total cost
How is total cost calculated?
variable costs + fixed costs