Marketing Chapter 9 Quizzes

Greater

A change in price in an elastic market is likely to show _______ change in demand when compared to a similar change in an inelastic market. - Smaller - Greater - Variable - Equal

$4.29

A grocer has purchased a truckload of frozen dinners for $3 each. The grocer operates on a margin of 30% for frozen food items. What is the retail price to the consumer? - $2.60 - $4.29 - $3.35 - $5.78

Breakeven Point

Assume that Netflix has introduced a new bundle service for their streaming services. Bundle 1 includes a base price of $9 to cover 25 hours of streaming for the month and variable price of $0.10 for every 30 minutes over that 25 hours. Bundle 2 includes no base price, but a variable price of $0.25 for every 30 minutes of streaming per month. When a consumer attempts to decide which bundle to use, what is he or she determining? - Value of the brand - Effectiveness of bundling - Breakeven point - Price elasticity

True

Mark-up can be greater than 100%. - True - False

false

Small changes in price do not have a very large impact on bottom line profits. True False

customer

The "value created" of a product or service is determined from the perspective of the: - customer - employer - competition - stockholders

Solve for Retail price, then Wholesale price, then Manufacturer price

The competitive retail price for a stereo system is $300. Retail stores normally have a margin of 30% for such items. Wholesalers normally have a margin of 20% for such items. The manufacturer's price is unknown. What steps should be taken to determine the manufacturer's highest price? - Solve for Manufacturer price, then Wholesale price, then Retail price - Solve for Retail price, then Manufacturer price, then Wholesale price - Solve for Wholesale price, then Manufacturer price, then Retail price - Solve for Retail price, then Wholesale price, then Manufacturer price

true

Value-based pricing will always be more profitable than cost-based pricing. - True - False

Price Elasticity

What is defined as responsiveness of demand to changes in price? - Price variation - Cost benefit - Demand sensitivity - Price elasticity

variable rate for each customer

What is dynamic pricing? - standard, flat rate for each customer - price determined from bargaining - price set to change with stock prices - variable rate for each customer

single rate per time period

What is flat-rate pricing? - price set to fluctuate with treasury bonds - setting a low rate to penetrate the market - different rate for each customer - single rate per time period

setting a high price for a new product to skim maximum revenues

What is price skimming? - setting a low price to penetrate the market - reintroducing an old product at a different price - offering customization at a price premium - setting a high price for a new product to skim maximum revenues

where profits just cover costs

What is the breakeven point? - where profits just cover costs - where variable costs only are covered - the most desirable point for profits - where fixed costs only are covered

what is exchanged for the product, service, or idea

What is the definition of Price? - the treasury-backed ultimate value of a product - what is exchanged for the product, service, or idea - what is provided as a good or service - the combination of values for all raw values

Knowing how your industry behaves

What is the first step in strategic pricing? - Increasing the marketing budget - Knowing how your industry behaves - Knowing the price of your competitors - Financing large projects

where you start the process

What is the key difference between cost-based pricing and value-based pricing? - where you start the process - focus on quantity vs. focus on quality - weight placed on customer service - how you value each layer of business

Margin is (Price - Cost)/Price and Mark-up is (Price - Cost)/Cost

What is the main difference between the equations for margin and mark-up? - There is no difference, they are synonyms - Margin is (Price - Competition)/Price and Mark-up is Price - Competition - Margin is (Price - Cost)/Price and Mark-up is (Price - Cost)/Cost - Margin is (Price - Cost)/Cost and Mark-up is (Price - Cost)/Price

variable rate depending on time of day or week

Which of the following describes peak load or congestion pricing? - price assembled as you add options - variable price based on region or county - variable rate depending on time of day or week - charging the peak industry price at all times

companies fight with price only

Which of these does not happen in a "smart industry"? - companies fight with price only - greater subtlety of pricing options - more complex pricing - greater use of techniques from other fields

False

You do not need to understand margin and markup if you are using value-based pricing. True False

value

_______ is not about what we put into our product, it's what our customers get out of it. - Marketing - Evaluation - Value - Price