Question 1

If consumers perceive less value relative to competing products, a company should attempt to change customer perceptions to justify a higher price.

Accepted Answer

If consumers perceive less value, changing their perception can help justify a higher price by aligning perceived value with the price point.

Question 2

Unlike the other marketing mix elements, price plays a minor role in creating customer value and building customer relationships.

Accepted Answer

Price plays a significant role in creating customer value and building customer relationships. It affects the perception of the product or service and influences customers' purchasing decisions. The pricing strategy also communicates the brand's positioning and value proposition to the target market. Therefore, price is an essential element of the marketing mix in creating customer value and building customer relationships.

Question 3

Retailers like Winners and Marshalls carry less-expensive versions of established brand name products or new lower-price lines. They have adopted a pricing strategy.
A) cost-plus
B) market-skimming
C) target return
D) high-low
E) good-value

Accepted Answer

Retailers like Winners and Marshalls use a good-value pricing strategy, which involves offering the right combination of quality and good service at a fair price.

Question 4

Which of the following sets the price floor lower limit for a product's pricing?
A) competition
B) profits
C) elements of the product mix
D) consumer perceptions of value
E) product costs

Accepted Answer

Product costs set the price floor because they represent the minimum amount a company must charge to cover production expenses and avoid losses.

Question 5

When establishing prices, it's important for a manager to understand that "good value" is not the same as .
A) "perceived value"
B) "high price"
C) "low price"
D) "everyday value"
E) "bargain basement"

Accepted Answer

"Good value" does not necessarily mean "low price." It refers to the balance between the benefits received and the price paid, which can be achieved at various price points.

Question 6

Break-even pricing involves setting prices based on competitors' strategies, costs, prices, and market offerings.

Accepted Answer

Break-even pricing involves setting prices to cover costs and achieve a break-even point, not based on competitors' strategies or market offerings.

Question 7

is the only element in the marketing mix that produces revenue.
A) Place
B) Promotion
C) Price
D) Profit
E) Product

Accepted Answer

Price is the only element in the marketing mix that directly generates revenue, as it is the amount customers pay for a product or service.

Question 8

Providing extra amenities to differentiate and support high-priced products is referred to as _ pricing.
A) high-low
B) value-added
C) cost-plus
D) everyday low
E) target return

Accepted Answer

Value-added pricing involves adding extra features or services to differentiate and justify higher prices for products.

Question 9

The Fashion Store, a new startup, sets product prices so that revenues will equal manufacturing and marketing costs. The pricing strategy used by the company is referred to as pricing.
A) competition-based
B) target return
C) good-value
D) value-added
E) cost-plus

Accepted Answer

The answer of The Fashion Store, a new startup, sets...

Question 10

is the sum of all the values that customers exchange for the benefits of having or using a product or service.
A) Salary
B) Profit
C) Cost
D) Payroll
E) Price

Accepted Answer

Price is the term used to describe the sum of all the values that customers exchange for the benefits of having or using a product or service.

Question 11

Lovely Skin is establishing a pricing strategy for a new moisturizer. The total cost to produce each unit is $3.50. The company has decided to add a $1.50 markup, so the unit price to distributors will be $5. Lovely Skin is
Using a approach to price the new moisturizer.
A) good-value
B) value-added
C) cost-plus
D) break-even
E) competitor-based

Accepted Answer

The cost-plus pricing approach involves adding a fixed markup to the cost of producing a product, which is what Lovely Skin is doing by adding a $1.50 markup to the $3.50 production cost.

Question 12

Costs that change directly with the level of production are referred to as costs.
A) fixed
B) payroll
C) target
D) variable
E) capital

Accepted Answer

Variable costs change directly with the level of production, as they increase or decrease depending on the amount of goods or services produced.

Question 13

uses buyers' perceptions of what a product is worth as the key to pricing.
A) Cost-plus pricing
B) Customer value-based pricing
C) Psychological pricing
D) Target return pricing
E) Competition-based pricing

Accepted Answer

Customer value-based pricing focuses on setting prices based on the perceived value of the product to the customer rather than on the cost to produce it.

Question 14

pricing involves setting prices based on the expenses involved in producing, distributing, and selling a product plus a fair rate of return for a company's effort and risk.
A) Demand-based
B) Good-value
C) Competition-based
D) Cost-based
E) Value-added

Accepted Answer

Cost-based pricing involves setting prices based on the costs of production, distribution, and selling, plus a fair rate of return.

Question 15

Rent, electricity, and executive salaries that do not vary with production or sales level are referred to as costs.
A) break-even
B) fixed
C) promotional
D) variable
E) target

Accepted Answer

Fixed costs are expenses that do not change with the level of production or sales, such as rent, electricity, and executive salaries.

Question 16

pricing is an approach whereby a firm tries to determine the price at which it will break even or earn the profit it is seeking.
A) Cost-plus
B) Good-value
C) Target return
D) Value-added
E) Competition-based

Accepted Answer

Target return pricing is a method where a firm sets prices to achieve a specific return on investment or profit level, effectively determining the price at which it will break even or earn the desired profit.

Question 17

A pricing strategy for an offering begins with an assessment of customer needs and perceptions. Then a target price is set based on customer perceptions of worth.
A) value-based
B) competition-based
C) target costing
D) cost-based
E) value-added

Accepted Answer

Value-based pricing starts with an assessment of customer needs and perceptions to set a price based on the perceived value to the customer.

Question 18

costs refer to the sum of the fixed and variable costs for any given level of production.
A) Target
B) Total
C) Value-based
D) Marginal
E) Break-even

Accepted Answer

Total costs are the sum of fixed and variable costs for any given level of production.

Question 19

Which of the following statements about break-even analysis is most likely true?
A) It fails to consider customer value and the relationship between price and demand.
B) It is used to determine the maximum price that can be set on a product.
C) It is a tool used to calculate fixed costs.
D) It determines how customer-perceived value changes with value-added pricing.
E) It is a tool marketers use to examine the relationship between supply and demand.

Accepted Answer

Break-even analysis primarily focuses on costs and revenues to determine the point at which a business neither makes a profit nor a loss, without considering customer value or the price-demand relationship.

Question 20

Which of the following sets the price ceiling for a product's pricing?
A) profits
B) elements of the product mix
C) product costs
D) consumer perceptions of value
E) competition

Accepted Answer

Consumer perceptions of value set the price ceiling because the price cannot exceed what consumers perceive as the product's value.

Quiz 9: Pricing: Understanding and Capturing Customer Value

If consumers perceive less value relative to competing products, a company should attempt to change customer perceptions to justify a higher price.

Unlike the other marketing mix elements, price plays a minor role in creating customer value and building customer relationships.

Retailers like Winners and Marshalls carry less-expensive versions of established brand name products or new lower-price lines. They have adopted a pricing strategy.

Which of the following sets the price floor lower limit for a product's pricing?

When establishing prices, it's important for a manager to understand that "good value" is not the same as .

Break-even pricing involves setting prices based on competitors' strategies, costs, prices, and market offerings.

is the only element in the marketing mix that produces revenue.

Providing extra amenities to differentiate and support high-priced products is referred to as _ pricing.

The Fashion Store, a new startup, sets product prices so that revenues will equal manufacturing and marketing costs. The pricing strategy used by the company is referred to as pricing.

is the sum of all the values that customers exchange for the benefits of having or using a product or service.

Lovely Skin is establishing a pricing strategy for a new moisturizer. The total cost to produce each unit is $3.50. The company has decided to add a $1.50 markup, so the unit price to distributors will be $5. Lovely Skin is Using a approach to price the new moisturizer.

Costs that change directly with the level of production are referred to as costs.

uses buyers' perceptions of what a product is worth as the key to pricing.

pricing involves setting prices based on the expenses involved in producing, distributing, and selling a product plus a fair rate of return for a company's effort and risk.

Rent, electricity, and executive salaries that do not vary with production or sales level are referred to as costs.

pricing is an approach whereby a firm tries to determine the price at which it will break even or earn the profit it is seeking.

A pricing strategy for an offering begins with an assessment of customer needs and perceptions. Then a target price is set based on customer perceptions of worth.

costs refer to the sum of the fixed and variable costs for any given level of production.

Which of the following statements about break-even analysis is most likely true?

Which of the following sets the price ceiling for a product's pricing?