Question 1

Which one of the following terms is not synonymous with price?&#10;A) premium&#10;B) fee&#10;C) seller's investment&#10;D) rent

Accepted Answer

Premium, fee, and rent are all charges that apply to a transaction or exchange of goods/services. However, seller's investment does not necessarily have a direct relation to the price of the product or service being offered.

Question 2

The single most important decision in evaluating a business is ______.&#10;A) purchasing power&#10;B) pricing power&#10;C) product power&#10;D) sales power

Accepted Answer

Pricing power is the most important decision in evaluating a business as it determines a company's ability to generate profits and sustain growth in the long term. A company with strong pricing power has the ability to charge higher prices for its products or services without losing customers to competitors, resulting in higher profit margins and better financial performance.

Question 3

Price strategy is designed to achieve all of the following objectives EXCEPT ______.&#10;A) sales&#10;B) margin&#10;C) product trial&#10;D) brand identity

Accepted Answer

Price strategy primarily focuses on sales, margin, and product trial. Brand identity, while influenced by pricing, is more directly shaped by marketing, branding strategies, and product quality.

Question 4

At what level of price management is price strategy determined?&#10;A) product market level&#10;B) industry level&#10;C) transaction level&#10;D) supply level

Accepted Answer

Price strategy is determined at the product market level, where the company analyzes the market conditions and competitive landscape to set a price that will maximize profits while also taking into consideration consumer demand and perceived value of the product. Industry level and supply level may impact pricing decisions, but the final price strategy is set at the product market level. The transaction level refers to individual sales transactions and may involve dynamic pricing or discounts, but it is not where the overall price strategy is determined.

Question 5

Which pricing objective drops sets prices to optimize earnings?&#10;A) maximize profit&#10;B) maximize revenue&#10;C) maximize sales growth&#10;D) maximize profit margin

Accepted Answer

The answer of Which pricing objective drops sets prices to...

Question 6

Which type of pricing orientation relies upon benchmarking?&#10;A) cost-based pricing orientation&#10;B) customer value-based pricing orientation&#10;C) competition-based pricing orientation&#10;D) price-based pricing orientation

Accepted Answer

Competition-based pricing orientation relies upon benchmarking of competitor prices to determine the price point for a product or service. Cost-based pricing orientation uses internal costs to determine price, customer value-based pricing orientation uses the perceived value to customers to determine price, and price-based pricing orientation is not a commonly recognized pricing orientation.

Question 7

Which of the following factors do companies utilizing a combined pricing orientation not consider?&#10;A) substitutable alternatives&#10;B) competitive intensity&#10;C) gross profitability of the transaction&#10;D) attributes and benefits customers value

Accepted Answer

A combined pricing orientation involves considering multiple factors such as competition, cost, customer value, and market demand. However, it does not specifically focus on the gross profitability of a single transaction, as this approach integrates broader considerations to set prices.

Question 8

Which of the following pricing tactics sets price at double the cost?&#10;A) target-return pricing&#10;B) keystone pricing&#10;C) cost-plus pricing&#10;D) prestige pricing

Accepted Answer

Keystone pricing sets the price at double the cost.

Question 9

How do organization's using customer-value based pricing score on price orientation?&#10;A) weak&#10;B) medium&#10;C) semi-strong&#10;D) strong

Accepted Answer

Organizations using customer-value based pricing are generally strong in price orientation as they base their prices on the perceived value customers receive from their products or services. This approach allows them to optimize pricing to achieve maximum customer satisfaction and profitability.

Question 10

Which one of the following does not encourage price leaks?&#10;A) cash discounts for prompt payment&#10;B) the cost of carrying accounts payable&#10;C) freight expenses&#10;D) cooperative advertising allowances

Accepted Answer

The cost of carrying accounts payable does not directly relate to pricing strategies or incentives that could lead to price leaks, unlike the other options which involve discounts or allowances that can affect pricing transparency.

Question 11

While shopping for shoes, you can use the assortment in the store as ______.&#10;A) internal reference prices&#10;B) price transparency&#10;C) price cues&#10;D) external reference prices

Accepted Answer

The answer of While shopping for shoes, you can use...

Question 12

Which of the following harm a buyer's ability to make an optimized purchase decision?&#10;A) belief and perception&#10;B) emotion and value&#10;C) substitutes and alternatives&#10;D) price and quality

Accepted Answer

The answer of Which of the following harm a buyer's...

Question 13

A brands position in the market in relative to its ______.&#10;A) marketing channel&#10;B) perceived value&#10;C) competition&#10;D) psychological influence on customers

Accepted Answer

The answer of A brands position in the market in...

Question 14

Which variable is not used in dynamic pricing algorithms?&#10;A) product supply&#10;B) competitor prices&#10;C) demographics&#10;D) current spending patterns

Accepted Answer

The answer of Which variable is not used in dynamic...

Question 15

Which dynamic pricing model estimates how much each product affects consumer price perception, using actual market data?&#10;A) long-tail model&#10;B) omnichannel model&#10;C) KVI model&#10;D) competitive-response model

Accepted Answer

The answer of Which dynamic pricing model estimates how much...

Deck 7: Offering Value: Price