Marketing Chpt 20

(C) Market share objective

ACME Corp. has a pricing objective to increase its primary product's sales relative to total industry sales. This is best described as a(n) _______. (A) Status quo objective (B) Return-on-investment objective (C) Market share objective (D) Product quality objective (E) Cash flow objective

(C) 25%

Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price? (A) 50% (B) 100% (C) 25% (D) 33% (E) 5%

(A) A fixed amount of available resources that are perishable

Demand-based pricing is best used when the company has _______. (A) A fixed amount of available resources that are perishable (B) Heterogeneous products that are difficult to value (C) A product line with great diversity in quality (D) Different products that can be substituted for one another (E) A large amount of variable costs for product development

(D) Dynamic pricing

Disney is implementing a new type of pricing. When demand increases and more customers visit the parks, the price will increase. When demand dips during the slow season, prices will decrease. This is a way to help balance out supply and demand. What is another name for the type of pricing that Disney is using? (A) Cost-plus pricing (B) Competition-based pricing (C) Markup pricing (D) Dynamic pricing (E) Cost-based pricing

(B) Yield management

Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _______. (A) Cost-plus pricing (B) Yield management (C) Markup pricing (D) Cost-based pricing (E) Competition-based pricing

(B) Product quality

If Apple seeks to lead the electronics industry in innovation, what type of pricing objectives will it most likely adopt? (A) Survival (B) Product quality (C) Return on investment (D) Status quo (E) Cash flow

(C) 65%; 39.4%

If a retailer purchases a can of soup for 60 cents and sells it for 99 cents, what is the markup as the percentage of cost? The percentage of selling price? (A) 60%; 90% (B) 99%; 60% (C) 65%; 39.4% (D) 39.4%; 65% (E) 69%; 45.3%

(E) Status quo

Procter & Gamble's (P&G) Bounty paper towels are a cash cow for P&G. Assume that Procter & Gamble is adjusting the prices of Bounty paper towels sold in the United States. Viewing the United States as a saturated market, the marketing manager of Bounty believes that P&G should adopt a pricing strategy that will serve to maintain their current market share. What type of objective is this manager adopting? (A) Cash flow (B) Product quality (C) Survival (D) Profit (E) Status quo

(C) Cash flow

Scenario 20.1 Bert's company is about to release a new electronics product. The electronics product is estimated to have a short life cycle before it is replaced by an upgraded one. The company would like to recover the capital spent to produce the product. It therefore decides to charge the highest possible price for the product upon release. Bert's firm recognizes this might provide an advantage to competitors who may release the product at a lower price, but it believes customers will feel that the higher price signals higher quality. Refer to Scenario 20.1. What type of pricing objective has Bert's firm adopted? (A) Product quality (B) Status quo (C) Cash flow (D) Survival (E) Profit

(B) Cost-plus

Valerie is attempting to price a piece of custom-made equipment for a gym. The production costs of the equipment are hard to assess. She decides it would just be easier to add a specified dollar amount to the total cost. What type of pricing is Valerie using? (A) Markup (B) Cost-plus (C) Demand-based (D) Yield management (E) Dynamics

(D) Competition-based pricing

Which of the following is often used by producers of relatively homogeneous products, especially when the target market considers price to be an important purchase consideration? (A) Cost-plus pricing (B) Markup pricing (C) Cost-based pricing (D) Competition-based pricing (E) Demand-based pricing

(D) Product quality

Which of the following objectives is likely to be more expensive for a firm as the cost of materials and research and development may be greater? (A) Profit (B) Status quo (C) Market share (D) Product quality (E) Cash flow

(C) Cost-plus pricing

Which of the following price bases is mostly likely to be used for commercial construction projects or custom-made equipment? (A) Competition-based pricing (B) Markup pricing (C) Cost-plus pricing (D) Yield management (E) Demand-based pricing

(B) Status quo

Which of the following pricing objectives can reduce a firm's risks by helping to stabilize demand for its products? (A) Product quality (B) Status quo (C) Market share (D) Cash flow (E) Profit

(D) Price skimming

Which pricing strategy provides the most flexible introductory base price? (A) Penetration pricing (B) Premium pricing (C) Periodic discounting (D) Price skimming (E) Captive pricing