Marketing Exam Final Chp 17 & 18
Some producers give _____ to retailers to pass on to the retailers' salesclerks in return for aggressively selling particular items or lines.
"push money" allowances
The total cost of producing 200 units of a product is $4,000, including a total fixed cost of $1,800. This means that the average variable cost per unit is
$11
Randy's Convenience Mart buys Lemon Fizz, a cold beverage, in 2-liter plastic bottles for $1.00. They use a 50 percent selling price markup, meaning that consumers pay Randy's ________ per bottle.
$2.00
Pulaski Plumbing Supply is planning to bring a new type of valve to market and is conducting a break-even analysis. For this analysis they are assuming a selling price of $2.50 per valve. The total fixed cost associated with producing the valve is $10,000. The variable cost to produce each valve is $2.10. In this analysis, what is the break-even point (BEP) for the valve?
25,000 units
Which of the following statements is true of a cumulative quantity discount?
A cumulative quantity discount encourages a customer to consolidate buying from a single supplier.
Which of the following statements is true about how firms use markups to set prices?
A markup is usually expressed as a percentage, rather than a dollar amount.
Which of the following statements is true of a one-price policy?
A one-price policy makes pricing easier.
Which of the following statements is true of rebates?
A rebate is a refund paid to a consumer after a purchase
Which of the following statements is true of average-cost pricing?
Average-cost pricing works well if the firm actually sells the quantity it used to calculate the average-cost price.
Which of the following is true of the various demand-oriented approaches for setting prices?
Demand-backward pricing starts with a price that consumers are willing to pay and then figures out what a producer can charge.
Which of the following describes subscription pricing?
For $10.99 a month, customers can stream any movie in Netflix's catalog
Which of the following is a disadvantage of a rigid one-price policy?
It allows competitors to undercut one's price.
Which of the following statements about introductory price dealing is accurate?
It is used to speed a new product into the market.
Which of the following is true of marginal analysis?
Marginal analysis focuses on the price that earns the highest profit, but a slight miss does not mean failure because demand estimates do not have to be completely accurate.
Which of the following explains why firms may incur losses with average-cost pricing?
The average-cost approach does not consider how costs change as output changes
HB Corporation does site work for large-scale industrial buildings. For a large multiyear project, HB needs a certain type of excavator that would cost a fortune to own, maintain, and store over the winter months. Instead, HB enters into a contract with Machines Limited to use one of their machines for the duration of the project. Machines Limited continues to own the excavator. Which of the following is HB using in this scenario?
a lease
A producer of sports equipment offers its retailers a 2 percent price reduction on all purchases if the dealer advertises its products locally. In this scenario, the producer is using a(n)
advertising allowance
Which of the following is an example of a cost-oriented price setting approach?
break-even analysis
Some firms sell computer printers at a relatively low suggested retail price and sell the ink cartridges required to run the printers at a relatively high price. This form of pricing is called
complementary product pricing.
Frisky Flights is a regional airline based in El Paso. Frisky uses a computer system to set prices for its tickets. The price for any given flight changes over time based on demand. This is an example of
dynamic pricing.
Prices are "administered" when
firms consciously set their own prices.
In the United States, selling the same product to different buyers at different prices is
illegal if it injures competition.
Average-cost pricing
involves adding a "reasonable" markup to the average cost of a product.
A primary reason that a firm would use average-cost pricing is that it
is easy to do.
The best pricing tool marketers have for looking at costs and revenue (demand) at the same time is
marginal analysis.
Which of the following options is a type of sales oriented objective?
market share
Loraine is a marketing manager responsible for a line of five different dishwasher models. The line includes a basic dishwasher, several models with progressively more and better features, and a high-end model with a fashionable appearance and several unique features. Loraine should use ________ pricing when setting the prices for these refrigerators.
market-oriented full-line
When a product moves through several levels within a channel between being produced and its final sale at retail to a consumer, the price that the consumer pays is likely the result of a(n)
markup chain.
With respect to markups and turnovers, a marketing manager should be aware that
markup combines with stockturn rate to determine what the product actually earns.
The stockturn rate is the
number of times the average inventory is sold in a year.
A(n) _____ policy tries to sell the whole market at one low price and is typically used when a firm expects strong competition very soon after introduction.
penetration pricing
Which of the following is a demand-oriented approach to pricing?
prestige pricing
The amount of money that is charged for "something" of value, or _____, is one of the four major strategy decision variables that a marketing manager controls.
price
A major timber exporting firm meets with competing timber exporters where they agree to not sell below certain prices. These exporting firms are engaging in
price fixing.
Holly's Candle Shop sells scented candles. The shop offers hundreds of different types of candles, but they are all priced at either $10, $8, or $6. In this case, Holly's Candle Shop appears to be using
price lining.
It is cheaper for a cable company's customers to sign up for a package that includes cable, Internet, and phone service than for them to purchase each of these services individually. This is an example of
product-bundle pricing.
Nora is the marketing manager for a pharmaceutical firm that has just been approved to sell a unique new drug that cures the common cold. Nora decides to set a low price, reasoning that if the price is too high then many potential customers will be unable to unwilling to purchase the drug. Which pricing objective is most likely to be guiding Nora's decision?
profit maximization
When Royal Blue Airlines began flying between Los Angeles and San Francisco, the airline offered individual travel agents a bonus of $5 each time they sold a Royal Blue ticket on the route. Royal Blue appears to be using a _____ allowance to encourage retail travel agents to promote its flights over the competition.
push money
The price that a consumer expects to pay for a product is known as its
reference price.
Trying to find the most profitable price and quantity to produce
requires an estimate of the firm's demand curve.
Aster Co. has introduced a new product and set the price to help achieve "the 10 percent share we need to be in the game." This is an example of a
sales-oriented objective.
When a firm follows a value pricing policy, it attempts to
set a fair price level for a marketing mix that provides superior customer value.
Cellphones with unique new technology are usually released in the market at a high price since there is no immediate competition for the product. Gradually, the prices are reduced to capture more customers and to compete with competitors who copy the new technology. This type of pricing strategy is known as a _____ policy.
skimming price
Meeting competition and nonprice competition are types of _____ pricing objectives.
status quo-oriented
A(n) ________ is intended to reassure retailers or other intermediaries that they will make some profit on a new product even if consumers do not buy it, and thereby convince them to carry it.
stocking allowance
A marketing manager for a large company sets a specific amount of profit as an objective, which is stated as a percentage of sales. The manager compares the performance of each division of the firm against this objective and drops those divisions that are not yielding the specified profit. Which of the following pricing objectives is the marketing manager using in this scenario?
target return objective
Firms operating in monopolistic competition implies that
there are pricing options.
Customers tend to be more price-sensitive when
they have substitute ways of meeting a need.
Mukesh is the marketing manager for a line of laundry products sold throughout the country. While there are many customers who are willing to pay the list price for his products, he wants to attract additional customers as well. What strategy would be most effective for Mukesh?
using coupons and rebatesCorrect
An equipment producer produces a new type of paint sprayer for automobile body-repair shops. The sprayer not only saves labor time on the actual painting, but also reduces the need for polishing after the painting is done. The producer considers the money that auto-body repair shops will save on labor and polishing if they buy its new sprayer and sets a price for it that makes it cheaper for them to buy and use the new sprayer than to continue with their existing equipment. Which of the following price setting approaches is the producer using in this scenario?
value in use pricing