Chapter 10 Quiz

What is the first thing marketers must do when using​ value-based pricing? A. Determine product costs. B. Convince buyers that the​ product's value at a given price justifies the purchase. C. Design a quality product. D. Assess customer needs and value perceptions. E. Set the target price to match customer perceived value.

Assess customer needs and value perceptions.

Which of the following statements is true regarding​ costs? A. Variable costs vary directly with the level of sales. B. Average cost tends to decrease with accumulated production experience. C. Totals costs are the sum of​ long-run average costs and​ short-run average costs. D. Costs do not vary with different levels of production. E. Experience curve pricing is a low risk strategy.

Average cost tends to decrease with accumulated production experience.

Which of the following correctly identifies the three major pricing strategies used by​ marketers? A. Customer value-based ​pricing, cost-based​ pricing, and​ revenue-based pricing B. Customer value-based ​pricing, cost-based​ pricing, and​ profit-based pricing C. Customer value-based ​pricing, revenue-based​ pricing, and​ profit-based pricing D. Customer value-based ​pricing, cost-based​ pricing, and​ competition-based pricing E. Customer value-based ​pricing, revenue-based​ pricing, and​ competition-based pricing

Customer value-based ​pricing, cost-based​ pricing, and​ competition-based pricing

Which factor sets the ceiling on setting a​ product's price? A. Revenue B. Competitors C. Company costs D. ​Customer's value perceptions E. Demand

Customer's value perceptions

Which of the following statements about price is​ correct? A. Prices have no impact on a​ firm's bottom line. B. Customers have put increasing pricing pressures on many companies. C. Price is not an important competitive asset. D. Pricing is not a problem for marketing executives. E. Marketers do not a have lot of flexibility in setting and changing price.

Customers have put increasing pricing pressures on many companies.

Which of the following is true regarding the price-demand ​relationship? A. If demand is​ inelastic, a small change in price will result in a large change in demand. B. Demand and price are directly related—the higher the​ price, the greater the demand. C. If demand is​ elastic, sellers will consider lowering their price. D. Price elasticity measures how responsive price will be to a change in demand. E. A demand curve shows the number of units a company will produce in a given time period at different prices that might be charged.

If demand is​ elastic, sellers will consider lowering their price.

Which of the following statements regarding customer value-based pricing is​ correct? A. Customer value-based strategy begins with determining product costs. B. Using this​ strategy, marketers first design the product and marketing​ program, then set the price. C. In using this​ strategy, companies often find it hard to measure the value customers attach to their product. D. This strategy is seldom used because buyers rarely consider perceived value when evaluating a​ product's price. E. Using this​ strategy, marketers must convince buyers that the​ product's value at that price justifies its purchase.

In using this​ strategy, companies often find it hard to measure the value customers attach to their product.

Which type of market consists of many buyers and sellers trading over a range of prices rather than a single market​ price? A. Pure monopoly B. Uniform commodities C. Monopolistic competition D. Oligopolistic competition E. Pure competition

Monopolistic competition

Which factor sets the floor on setting a​ product's price? A. Product costs B. Competitors C. Revenue D. Demand E. ​Customer's value perceptions

Product costs

In which type of market does no buyer or seller have much impact on setting the going market​ price? A. Oligopolistic competition B. Pure competition C. Pure monopoly D. B2B market E. Monopolistic competition

Pure competition

Beyond the nature of the​ market, demand, and the​ economy, what other factors in a​ firm's external environment must a company consider when setting​ prices? A. The​ company's overall marketing strategy and selecting target markets B. ​Resellers, the​ government, and social concerns C. The​ government, resellers, and profit objectives D. ​Resellers, the​ government, and the marketing mix E. The​ company's overall marketing strategy and marketing mix

Resellers, the​ government, and social concerns

What is target​ costing? A. Setting a price and then setting costs that will ensure that the price is met B. Designing a​ product, then determining its cost and price C. Basing price on customer perceptions of cost D. Pricing products without any consideration to costs E. Setting acceptable costs and then setting the price

Setting a price and then setting costs that will ensure that the price is met

How is price determined using​ cost-plus pricing? A. The price is set based on​ competitor's prices. B. The price is set by determining the​ customer's value perceptions. C. The price is set by adding a standard​ mark-up to the cost of the product. D. The price is set so that total revenue covers total costs. E. The price is set based on demand.

The price is set by adding a standard​ mark-up to the cost of the product.

Which of the following statements is correct regarding different types of​ markets? A. In a pure​ monopoly, the market consists of many buyers and sellers trading over a range of prices. B. Under oligopolistic​ competition, the market consists of many buyers and sellers trading in a uniform commodity and sellers do not spend much time on marketing strategy. C. Under oligopolistic competition each seller is alert and responsive to​ competitors' pricing strategies and marketing moves. D. Under monopolistic competition the market is dominated by one seller. E. Under pure competition sellers spend considerable time on marketing strategy and pricing decisions.

Under oligopolistic competition each seller is alert and responsive to​ competitors' pricing strategies and marketing moves.

New, premium movie theaters offer features such as online reserved​ seating, high-backed leather executive chairs with armrests and​ footrests, the latest in digital sound and​ super-wide screens, and other amenities for which they charge a higher price. This is an example of which type of​ pricing? A. ​High-low pricing B. ​Break-even pricing C. ​Cost-plus pricing D. ​Value-added pricing

Value-added pricing

On a​ break-even chart, the​ break-even volume is located​ __________. A. at the intersection of total revenue and variable costs B. at the intersection of total revenue and total costs C. at the intersection of total revenue and fixed costs D. at the intersection of target profit and total costs E. at the intersection of total revenue and target profit

at the intersection of total revenue and total costs

Two external factors which must be considered in pricing decisions are​ __________. A. the marketing mix and the economy B. company objectives and the marketing mix C. the marketing mix and the nature of the market D. demand and the nature of the market E. the marketing mix and demand

demand and the nature of the market

​A(n) __________ shows the number of units the market will buy in a given time period at different prices. A. supply curve B. perceptual map C. value curve D. production schedule E. demand curve

demand curve

The strategy of​ __________ means that the firm attempts to offer the right combination of quality and good service at a fair price. A. everyday low pricing B. ​customer-based pricing C. ​value-added pricing D. ​cost-based pricing E. ​good-value pricing

good-value pricing

Retailers such as​ Macy's and JC Penney charge higher prices on an everyday​ basis, but run frequent promotions to lower prices temporarily on selected items. This is an example of​ __________. A. ​high-low pricing B. ​value-added pricing C. EDLP pricing D. ​break-even pricing E. ​cost-plus pricing

high-low pricing

The amount of money charged for a product is its​ __________. A. revenue B. price C. breakeven point D. cost E. profit

price

Price is the only part of the marketing mix that​ __________. A. incurs costs B. is defined by the consumer C. attracts buyers D. does not play a role in creating customer value E. produces revenue

produces revenue

Internal factors that affect pricing include​ __________. A. the​ company's overall marketing​ strategy, objectives, and the nature of the market B. the​ company's overall marketing​ strategy, objectives, and demand C. the​ company's overall marketing​ strategy, the nature of the​ market, and demand. D. the​ company's overall marketing​ strategy, objectives, and marketing mix E. the nature of the​ market, demand, and the economy.

the​ company's overall marketing​ strategy, objectives, and marketing mix

Luxury automobile manufacturers typically add​ quality, services, and other features to differentiate their offers and thus support their higher price. This is an example of​ __________. A. ​cost-based pricing B. ​value-added pricing C. ​good-value pricing D. everyday low pricing E. ​customer-based pricing

value-added pricing

Which of the following is a​ cost-based pricing​ approach? A. ​Value-added pricing B. ​High-low pricing C. EDLP pricing D. ​Break-even pricing E. ​Competition-based pricing

​Break-even pricing