Module 7 (Chapter 14)

The goal of a(n) ______ strategy is to generate profit and establish a new product or service in the market as quickly as possible. Multiple choice question. price skimming reference point improvement-value market penetration

market penetration

Price is one of the ______ in a consumer's purchase decision. Multiple choice question. most time-consuming factors most important factors least important factors last steps

most important factors

When a new product or service is launched, companies that use a ______ strategy will attempt to attract customers quickly by offering a very low price at first. Multiple choice question. reference point penetration pricing value-based price skimming

penetration pricing

The five Cs of pricing are examples of pricing ______. Multiple choice question. strategies ethics tactics errors

strategies

A pricing ______ is the general way a company decides how its prices will be determined over the long term, based on the five Cs of pricing. Multiple choice question. scenario tactic strategy equation

strategy

By focusing on target profit pricing, maximizing profits, or target return pricing, a firm is implementing a ______ orientation. Multiple choice question. customer profit sales competitor

profit

Firms usually implement target _________ __________ to stimulate a certain level of sales at a certain profit per unit.

profit; pricing

When a firm is aiming for a particular amount of profit as its overriding concern, it usually implements ______. Multiple choice question. target return pricing the maximizing profits strategy target profit pricing premium pricing

target profit pricing

Pricing is difficult to manage because it is the least ______ of the four Ps. Multiple choice question. relevant variable important understood

understood

Total cost equals ______. Multiple choice question. variable costs plus fixed costs variable costs times fixed costs fixed costs divided by variable costs variable costs minus fixed costs

variable costs plus fixed costs

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. Multiple choice question. demand price versus sales supply consumer

demand

A demand curve enables a firm to examine prices ______. Multiple choice question. in terms of demand and the firm's objectives in terms of supply or how many producers offer the same good or service relative to each of the orientation strategies simultaneously relative to profits

in terms of demand and the firm's objectives

According to the cross-price elasticity of demand, when the price of DVD players drops, the demand for DVDs is likely to ______. Multiple choice question. increase first increase then decrease remain unchanged decrease

increase

Price times quantity equals ______. Multiple choice question. the break-even point total revenue total variable cost total profit

total revenue

Variable cost per unit times quantity equals ______. Multiple choice question. total cost total revenue break-even point total variable cost

total variable cost

How do consumers generally describe the role of price in their purchase decisions? Multiple choice question. Somewhat important Totally irrelevant Extremely important Not very important

Extremely important

Price is the one element in the marketing mix that ______. Multiple choice question. generates costs is the least important generates revenues does not require decision making

generates revenues

***Which of the following best describes how managers have historically treated pricing? Multiple choice question. As their primary objective As an afterthought As a way to control markets As a way to trick competitors

As an afterthought

Select all that apply Assuming the economy and other factors stay the same, a downward-sloping demand curve for a product shows which of the following? (Check all that apply.) As price decreases, demand decreases. As price decreases, demand increases. As price increases, demand decreases. As price increases, demand increases.

As price decreases, demand increases. As price increases, demand decreases.

Which of the following is an example of a monetary sacrifice included in the overall price of a product or service? Multiple choice question. Effort Time Shipping Competition

Shipping

A demand curve shows that a company will sell 10,000 units if it prices its new product at $200 per unit, but it will sell 20,000 units if it reduces the price to $75. If the company wants to maximize profits, it should price the new product at ______. Multiple choice question. $50 $75 $275 $200

$200

Which is one of the five Cs of pricing? Multiple choice question. Channel dynamics Cost uniqueness Customer salaries Company objectives

Company objectives

Select all that apply Which of the following are considered part of the five Cs of pricing? (Check all that apply.) Company objectives Competition Charter membership Customers Change management Channel members

Company objectives Competition Customers Channel members

Select all that apply Break-even analysis examines the relationships between which of the following? (Choose every correct answer.) Value Unions Cost Price

Cost Price

Select all that apply Which of the following do you need to know to calculate target return price? (Check all that apply.) Expected unit sales Variable costs Fixed costs Break-even point

Expected unit sales Variable costs Fixed costs

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 Reason: Incorrect. 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.

Select all that apply Channel members include which of the following? (Choose every correct answer.) Manufacturers Retailers Wholesalers Consumers

Manufacturers Retailers Wholesalers

Which of the following is another term for target return percentage? Multiple choice question. Contribution per unit Markup Break-even point Profit

Markup

Target return pricing is an example of what type of orientation? Multiple choice question. Profit Customer Competitor Sales

Profit

Select all that apply The types of strategies that could be implemented in a profit orientation strategy include which of the following? (Choose every correct answer.) Target return pricing Status quo pricing Sales orientation strategy Maximizing profits strategy

Target return pricing Maximizing profits strategy

______ makes up one of the Cs of the five Cs of pricing. Multiple choice question. The customer Company staff Channel flexibility Council professionals

The customer

Select all that apply Which of the following accurately characterize demand curves? (Choose every correct answer.) 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. 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 relate demand to prices while assuming everything else remains unchanged.

How do managers use break-even analysis? Multiple choice question. To identify the elements of the marketing plan that will generate the best results To find a production quantity where, for a given price, costs are equal to revenues To see how costs will change as a manufacturer gains experience producing a product To estimate demand for a product at different prices

To find a production quantity where, for a given price, costs are equal to revenues

True or false: Customers are one of the five Cs of pricing.

True

A useful technique that enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales is called ______. Multiple choice question. break-even analysis cost-benefit analysis fixed costs cross-price elasticity

break-even analysis

The point at which the number of units sold generates enough revenue to equal total costs is known as the ______. Multiple choice question. price elasticity point break-even analysis break-even point value

break-even point

One of the five Cs of pricing is ______. Multiple choice question. competition customer advantage cost saving company knowledge

competition

The five Cs of pricing are company objectives, customers, cost, channel members, and __________.

competition

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

Profit alone ______ how many units should be sold before a firm breaks even. Multiple choice question. does illustrate calculates does not indicate indicates

does not indicate

For most products, demand increases as the price decreases. Because of this general trend, demand curves usually have a(n) ______ slope. Multiple choice question. upward vertical downward horizontal

downward

Prestige products or services do not follow the ______ curve. Multiple choice question. downward-sloping demand unitary demand upward-sloping demand elastic demand

downward-sloping demand

When a 10% decrease in price produces more than a 10% increase in quantity sold, the product or service is responsive to price changes and is considered to be ______. Multiple choice question. inelastic in high demand elastic unaffected

elastic

***With the ______ pricing strategy, a company adopts retail prices that are typically somewhere between the product's regular price and the sharply discounted sale prices that competitors occasionally offer. Multiple choice question. odd reference everyday low high/low

everyday low Reason: High/low pricing relies on the promotion of sales, but not based on competitors' sale prices.

The strategy of ______ appeals to consumers because it reduces their need to spend time comparing prices at various stores. Multiple choice question. image pricing everyday low pricing (EDLP) loss leader pricing benchmark reference pricing odd/even pricing

everyday low pricing (EDLP)

***When consumers relish the challenge of getting the lowest price and are willing to expend the time and effort to seek out the lowest price every time, retailers should use the ______ pricing strategy. Multiple choice question. reference everyday low predatory high/low

high/low

The ______ pricing strategy features frequent sales, during which prices are lowered for a short time. Multiple choice question. reference everyday low odd high/low

high/low

Products that cost a lot of money but that people buy anyway because of the status and exclusivity that they project to others are called _____ products.

prestige

The contribution per unit is the ________ minus the variable cost per unit.

price

The overall sacrifice a consumer makes to acquire a product or service is known as ________.

price

Select all that apply If McDonald's reduces the price of a Big Mac by 25% and sales increase by more than 50%, the firm could describe demand as which of the following? (Choose every correct answer.) inelastic price sensitive elastic price insensitive

price sensitive elastic

Competition, channel members, costs, customers, and company objectives are the five critical components of _____. Multiple choice question. promotion quality pricing variety

pricing

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 ______. Multiple choice question. target return pricing contribution per unit calculations premium pricing competitive parity

target return pricing

Price minus the variable cost per unit equals ______. Multiple choice question. the break-even point profit revenue the contribution per unit

the contribution per unit

Price is best defined as ______. Multiple choice question. the consumer's break-even point the overall sacrifice a consumer will make to obtain one of the five Cs the overall sacrifice a consumer is willing to make to acquire a specific product or service the last element of the marketing mix a consumer will always agree with

the overall sacrifice a consumer is willing to make to acquire a specific product or service

An example of a nonmonetary sacrifice made in acquiring a product or service is ______. Multiple choice question. time taxes travel expenses shipping and handling

time

The _____ is fixed costs plus the sum of the variable costs. Multiple choice question. break-even point total cost profit margin net contribution per unit

total cost

The _____ is fixed costs plus the sum of the variable costs. Multiple choice question. total cost net contribution per unit profit margin break-even point

total cost

Other elements in the marketing mix may or may not be perfect, but if the price is wrong, revenue ______. Multiple choice question. might accrue will be optimal will not accrue will accrue

will not accrue

At the break-even point, profits on the sale of a product are ______. Multiple choice question. optimal enough to justify launching the product sufficient to meet the firm's goals zero

zero