Question 1

Market share is the ratio of the ________ to those of the industry, including the firm itself.
A) target return on sales
B) marginal profit of the firm
C) firm's sales revenues or unit sales
D) marketing expenses of the firm
E) profits of the firm

Accepted Answer

Market share is the proportion of the total industry sales or unit sales that a particular firm has. It is calculated by dividing the firm's sales revenues or unit sales by the total sales revenues or unit sales of the industry.

Question 2

Pricing objectives involve
A) reconciling the prices charged by an organization to the values set forth in its business mission.
B) taking specific steps to capitalize on an organization's internal strengths as they apply to price.
C) specifying the role of price in an organization's marketing and strategic plans.
D) taking specific steps to compensate for an organization's weaknesses as they apply to price.
E) subjectively setting intrinsic values to all products and services offered by an organization.

Accepted Answer

Pricing objectives involve setting specific goals for the role of price in an organization's marketing and strategic plans. This includes determining how pricing will support the overall business mission and align with the organization's strengths and weaknesses. It is essential to have clear pricing objectives to guide pricing decisions and ensure that pricing supports the organization's broader goals. Options A, B, D, and E are not accurate descriptions of pricing objectives.

Question 3

Which of the following statements regarding a market share pricing objective is most accurate?
A) A market share objective is often difficult for product managers since stockholders are looking for immediate dividends (return of profits).
B) Although increased market share is a primary goal of some firms, others see it as a means to other ends, such as increased sales or profits.
C) Selecting market share as a pricing objective is particularly effective if industry sales are growing.
D) An advantage of market share as a pricing objective is that it is particularly insensitive to competitors' actions.
E) Ironically, a market share objective is realized by raising prices in order to increase consumer confidence during the decline stage of a product's life cycle.

Accepted Answer

Although increasing market share can be a primary goal for some firms, it is often seen as a means to an end, such as increasing sales or profits. The other statements are either inaccurate (A, D, E) or too broad (C).

Question 4

Three different objectives relate to a firm's profit. One objective, known as ________, is common in many firms because the targets can be set and performance measured quickly.
A) managing for long-run profits
B) target return
C) break-even strategy
D) maximizing current profit
E) minimizing risk

Accepted Answer

Maximizing current profit is a short-term objective that focuses on generating as much profit as possible in the current period. This objective can be easily measured and evaluated against targets, which makes it a common objective for many firms. The other objectives listed (managing for long-run profits, target return, break-even strategy, and minimizing risk) are more long-term in nature and may not be as easily measured or evaluated in the short-term.

Question 5

A maximizing current profit pricing objective implies that a company chooses to
A) set targets for which performance can be measured quickly.
B) give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
C) set a profit goal that is often determined by its board of directors.
D) reduce investment in any further market or product research.
E) set prices based on return on sales.

Accepted Answer

The answer of A maximizing current profit pricing objective implies...

Question 6

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as ________, occurs when a firm sets a profit goal, usually determined by its board of directors.
A) maximizing current profit
B) managing for long-run profits
C) target return
D) break-even strategy
E) minimizing risk

Accepted Answer

The objective of setting a profit goal, determined by the board of directors, is known as target return. This goal is typically set in terms of a specific percentage return on investment. Maximizing current profit, managing for long-run profits, and break-even strategy are all valid objectives but do not specifically align with a pre-determined profit goal. Minimizing risk is another objective but is not directly tied to maximizing profits.

Question 7

Three pricing objectives relate to a firm's profit. In one known as ________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.
A) maximizing current profit
B) target return
C) break-even strategy
D) minimizing risk
E) managing for long-run profits

Accepted Answer

Managing for long-run profits involves sacrificing immediate profits to gain a larger market share, with the expectation that this will lead to greater profitability in the future.

Question 8

Which of the following statements regarding pricing objectives is most accurate?
A) Pricing objectives are similar to core values in that there is little to no change in them over time.
B) Pricing objectives may change depending on the segments in which a company is doing business.
C) Pricing objectives may change depending upon the cost of advertising.
D) Pricing objectives are established exclusively by the marketing department.
E) Pricing objectives are extremely sensitive to even the slightest change in the local economy.

Accepted Answer

Pricing objectives may change depending on the segments in which a company is doing business because different market segments may have different needs, competitive environments, and price sensitivities.

Question 9

Specifying the role of price in an organization's marketing and strategic plans is referred to as
A) choosing a pricing plan.
B) defining a profit mission.
C) developing pricing constraints.
D) setting pricing objectives.
E) determining the list or quoted price.

Accepted Answer

Setting pricing objectives involves specifying the role of price in an organization's marketing and strategic plans. This includes determining the profit margins, market share, and sales that the organization aims to achieve through its pricing strategy.

Question 10

Managing for long-run profits as a pricing objective implies that a company will
A) give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
B) maintain a given price range to ensure there is no loss of customers over time, even if the profit margin declines.
C) invest excess cash in bonds and certificates of deposit in order to counteract any inflationary economic changes in the future.
D) reinvest all profits into market research or product research rather than returned to shareholders.
E) drop all products, product lines, or divisions that cannot maintain their pricing goals.

Accepted Answer

Managing for long-run profits as a pricing objective implies that a company is willing to give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. This involves investing in research and development, marketing, and quality control to ensure that the company can sustain its competitiveness in the long run.

Question 11

All of the following are examples of pricing objectives except which?
A) market share
B) survival
C) unit sales
D) social responsibility
E) product obsolescence

Accepted Answer

Pricing objectives include profit,sales,market share,unit volume,survival,and social responsibility.Pricing constraints include demand for the product class,product,or brand,cost of producing and marketing the product,newness of the product (stage in its life cycle),whether there is a single product versus a product line,the cost of changing prices and/or the time periods they apply,the type of competitive market,and competitors' prices.

Question 12

Companies often pursue a market share objective when
A) industry sales are flat or declining.
B) profits are increasing.
C) industry sales are beginning to rise.
D) there is a sudden increase in production costs.
E) stockholders are seeking higher dividends.

Accepted Answer

Pursuing a market share objective is often seen as a way to increase sales and maintain a competitive edge in a stagnant or declining market. By capturing a larger share of the market, companies can offset the effects of flat or declining industry sales.

Question 13

A target return profit pricing objective implies that a company chooses to
A) set targets whose performance can be measured quickly.
B) give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
C) set a profit goal that is often determined by its board of directors.
D) reduce investment in any further market or product research.
E) set prices based on return on sales.

Accepted Answer

The answer of A target return profit pricing objective implies...

Question 14

Which of the following statements regarding sales goals is most accurate?
A) For marketing managers, sales revenue or unit sales can be easily translated into meaningful targets for a product line or brand.
B) Cutting prices for a single product in a product line to raise unit sales often results in an increase in sales for related products in the line.
C) Very often, cutting prices results in a decrease in market share.
D) Setting unit volume sales as a pricing objective results in price wars with competitors, so the practice is limited to industries with few competitors.
E) An advantage of increasing unit volume sales is that it always results in an increase in profits.

Accepted Answer

Sales revenue or unit sales are the most common and easily measurable targets for marketing managers to set goals for a product line or brand. They are an effective means of measuring the success of a marketing campaign and identifying where improvements can be made.

Question 15

If the CEO of the Clorox Co. were to say, "We want to control 60 percent of the bleach market within the next five years," he would have set a ________ pricing objective.
A) profit
B) sales
C) unit volume
D) market share
E) social responsibility

Accepted Answer

The CEO's statement indicates a desire to capture a specific percentage of the market share, which is a market share pricing objective.

Question 16

If a firm's profit is high enough for it to remain in business, a pricing objective may be to ________, which will in turn may lead to increases in market share and profit.
A) increase the commitment to social responsibility
B) increase dollar sales revenue
C) decrease unit volume while maintaining price
D) increase research and development funding for new product line extensions
E) continue with previous policies that seem to be working

Accepted Answer

If a firm's profit is already high enough, the logical next pricing objective would be to increase dollar sales revenue. This can be achieved by either increasing prices, increasing unit volume, or both. By increasing dollar sales revenue, the firm may also be able to increase its market share and profit. The other options presented do not necessarily relate to pricing objectives that would result in increased profit or market share.

Question 17

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as
A) target return on sales.
B) industry profit.
C) unit volume.
D) market share.
E) profit.

Accepted Answer

The ratio of the firm's sales revenues or unit sales to those of the industry is referred to as market share. Market share is an important metric for businesses to gauge their success and level of competitiveness within their industry. It indicates how much of the total market the firm is capturing compared to its competitors.

Question 18

Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include ________, managing current profit, and achieving a target return.
A) accumulating profits
B) managing for long-run profits
C) reinvesting profits
D) redistributing profits
E) maximizing gross margin

Accepted Answer

The answer of Three different objectives relate to a firm's...

Question 19

An online movie streaming service charges $14.99 per month for its basic package. However, when a competitor introduced the same service at $13.99, the firm dropped its price to $13.99. The firm most likely made this price reduction in an attempt to
A) decrease revenue but increase profit.
B) increase profit by increasing revenue.
C) maintain market share.
D) decrease market share.
E) increase efficiency.

Accepted Answer

The firm most likely reduced its price to maintain market share and remain competitive with the new competitor offering a similar service at a lower price. By doing this, the firm hopes to retain its existing customers and attract new ones, thereby maintaining its market share.

Question 20

A firm's profit objective is often measured in terms of ROI. The acronym ROI stands for
A) risk opportunity investment.
B) revised organizational incentives.
C) return on investment.
D) regulated organizational investments.
E) replenishment of organizational inventories.

Accepted Answer

ROI stands for "return on investment," which is a measure of the profitability of an investment. It is calculated by dividing the net profit of an investment by the total cost of the investment. A company's profit objective is often measured in terms of achieving a certain ROI.

Quiz 11: Pricing Products and Services

Market share is the ratio of the ________ to those of the industry, including the firm itself.

Pricing objectives involve

Which of the following statements regarding a market share pricing objective is most accurate?

Three different objectives relate to a firm's profit. One objective, known as ________, is common in many firms because the targets can be set and performance measured quickly.

A maximizing current profit pricing objective implies that a company chooses to

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as ________, occurs when a firm sets a profit goal, usually determined by its board of directors.

Three pricing objectives relate to a firm's profit. In one known as ________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Which of the following statements regarding pricing objectives is most accurate?

Specifying the role of price in an organization's marketing and strategic plans is referred to as

Managing for long-run profits as a pricing objective implies that a company will

All of the following are examples of pricing objectives except which?

Companies often pursue a market share objective when

A target return profit pricing objective implies that a company chooses to

Which of the following statements regarding sales goals is most accurate?

If the CEO of the Clorox Co. were to say, "We want to control 60 percent of the bleach market within the next five years," he would have set a ________ pricing objective.

If a firm's profit is high enough for it to remain in business, a pricing objective may be to ________, which will in turn may lead to increases in market share and profit.

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include ________, managing current profit, and achieving a target return.

An online movie streaming service charges $14.99 per month for its basic package. However, when a competitor introduced the same service at $13.99, the firm dropped its price to $13.99. The firm most likely made this price reduction in an attempt to

A firm's profit objective is often measured in terms of ROI. The acronym ROI stands for