Deck 11: Pricing Strategy

Question 1

Which of the following is the final step in selecting a pricing strategy?

A) Setting pricing objectives
B) Determining specific prices and policies
C) Selecting pricing strategy
D) Analyzing the pricing situation

Answer 1

Determining specific prices and policies

Question 2

The competitor is the frame of reference for demand-oriented pricing methods.

Answer 2

False

Question 3

 Price strategy is always related to competition whether firms use a higher,lower,or equal price.

Answer 3

True

Question 4

_____ is the percentage change in the quantity sold of a brand when the price changes,divided by the percentage change in price.

A) Price distribution
B) Price band
C) Price point
D) Price elasticity

Question 5

Price cuts in economic downturns are primarily aimed at:

A) increasing short-term profits.
B) defending a firm's position vigorously.
C) compensating for low quality products.
D) capturing market share.

Question 6

_____ indicates whether costs and prices for various products decline by a given amount each time the number of units produced doubles.

A) Economic value modeling
B) Activity-based costing
C) Customer value mapping
D) Learning-curve analysis

Question 7

Both revenues and costs need to be taken into account in selecting pricing strategies.

Question 8

Customer value mapping estimates are based on the differentiated benefits that a customer receives from a product.

Question 9

A high-active pricing strategy:

A) values superiority.
B) emphasizes nonprice competitive factors.
C) offers discounts.
D) avoids price comparisons.

Question 10

Which of the following distribution approaches is most likely to call for more competitive pricing?

A) Exclusive
B) Selective
C) Intensive
D) Narrow

Question 11

 The underlying logic of economic value modeling (EVM) is that using the price/benefit ratio is a more realistic view of value than "dollar worth of benefits minus price."

Question 12

The second step in selecting a pricing strategy is analyzing the pricing situation.

Question 13

 Competitive bidding is an example of demand-oriented approach of pricing.

Question 14

Which of the following is the first step in selecting a pricing strategy?

A) Setting pricing objectives
B) Analyzing the pricing situation
C) Selecting pricing strategy
D) Determining specific prices and policies

Question 15

 The core issue in pricing is finding out what value requirements (benefits-costs) the buyer places on the product or brand.

Question 16

Lowering prices generally eliminates potential price wars.

Question 17

Which of the following is the first step in cost analysis for pricing decisions?

A) Estimating how cost varies with the volume of sales
B) Analyzing the cost competitive advantage of the product
C) Determining the components of the cost of the product
D) Estimating how much control management has over costs

Question 18

Value using _____ consists of the financial savings and gains provided to customers due to purchase of the firm's brand instead of competitors' brands.

A) customer value mapping
B) economic value modeling
C) user lifetime value
D) customer value proposition

Question 19

 Reverse auction pricing involves sellers bidding for organizational buyers' purchases.

Question 20

_____ estimates value as the perceived quality buyers obtain per unit of price.

A) Customer value mapping
B) Customer equity
C) User lifetime value
D) Customer value proposition

Question 21

When using markup pricing,which of the following formulas determines the selling price?

A) Price = Average unit cost divided by Markup percentage
B) Price = Average unit cost divided by 1 minus Markup percentage
C) Price = Unit cost minus Markup price
D) Price = Total fixed costs divided by Unit price minus Unit variable cost

Question 22

A low-active pricing strategy:

A) emphasizes nonprice competitive factors.
B) is mainly used to gain margins in small market targets.
C) is most effective for discount retailers.
D) is an attractive strategy when competition for market target is high.

Question 23

Which of the following types of pricing is considered a cost-oriented approach of pricing?

A) Break-even pricing
B) Reverse auction pricing
C) Demand-oriented pricing
D) Internet auction pricing

Question 24

Give an account of predatory pricing.What are its ethical implications?

Question 25

Which of the following is true of high-passive strategy pricing?

A) It is used when competition for the market target is very high.
B) It emphasizes nonprice competitive factors.
C) It is primarily used by discount retailers.
D) It is used by producers whose brands are not familiar to the market.

Question 26

What are the steps in selecting a pricing strategy?

Question 27

 Explain the various roles of price in the marketing program.

Question 28

Which of the following types of price determination methods uses the price of producing and marketing the product as the basis for determining price?

A) Cost-oriented
B) Supply-oriented
C) Competition-oriented
D) Demand-oriented

Question 29

A low-passive pricing strategy:

A) emphasizes superior value of the product.
B) emphasizes nonprice competitive factors.
C) offers discounts.
D) avoids price comparisons.

Question 30

 _____ pricing methods consider estimated market response to alternative prices.

A) Cost-oriented
B) Supply-oriented
C) Competition-oriented
D) Demand-oriented

Question 31

 Charging a very low price for a product with the intent of driving competitors out of business is referred to as _____.

A) cannibalization
B) price fixing
C) predatory pricing
D) deceptive pricing

Question 32

When two or more competitors collude to explicitly or implicitly set prices,this practice is referred to as _____.

A) horizontal price fixing
B) price discrimination
C) deceptive pricing
D) predatory pricing

Question 33

 Explain the role of price in the distribution strategy.

Question 34

Give an account of the impact of emerging markets on pricing.

Question 35

 _____ is the practice of charging different prices to different buyers for goods of similar grade and quality.

A) Price fixing
B) Price discrimination
C) Deceptive pricing
D) Predatory pricing