Chapter 20 Quiz Questions

After selecting a pricing strategy, what is the next step in the establishment of prices?

Answer: Determining a specific price​

Which of the following is true about the target market's evaluation of price?

Answer: The importance of price depends on the type of product.

Marketers at organizations engaged in nonprice competition

Answer: need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands.

A marketer is most likely to set prices according to a cash-flow objective when a

Answer: quick return on investment is desired

What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases?

Professional pricing

Which of the following characteristics is unique to pricing more so than other variables of the marketing mix? Answers: a. Flexibility b. Consistency c. Challenging d. Truthfulness e. Clarity

a

Which of the following would be used in setting the price of a new product if considerable competition is expected? Answers: a. Penetration pricing b. Price skimming c. Psychological pricing d. Prestige pricing e. Odd-even pricing

a

Pricing the basic product in a product line low while pricing related items at a higher level is called Answers: a. premium pricing. b. captive pricing. c. price lining. d. price skimming. e. bait pricing.

b

The federal government often uses ____ pricing when it grants defense contracts.

cost-plus

All of the following are psychological techniques except

customary pricing

Maintaining or increasing market share Answers: a. is directly tied to leading an industry in product quality. b. depends on the overall growth of the total industry. c. is a profit-related objective based on price. d. can be achieved even if industry sales are flat or decreasing. e. is an infrequently used pricing objective in most industries.

d

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales. Answers: a. status quo b. survival c. return on investment d. market share e. product quality

d

If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500 because it knows that at that price it will reach that goal, the firm would be using a ____ pricing method.

demand-based

A product is a price leader when

it is sold at less than cost in the hope that sales of other products will increase.

Reference pricing is

pricing a product at a moderate level and positioning it next to a more expensive model or brand

Maria recently put her house on the market at an asking price of $260,000. She realizes, however, that in order to sell the house, she may have to use Answers: a. price lining. b. negotiated pricing. c. professional pricing. d. secondary-market pricing. e. reference pricing.

b

Pricing the basic product in a product line low while pricing related items at a higher level is called Answers: a. premium pricing. b. price lining. c. price skimming. d. bait pricing. e. captive pricing.

e