Deck 15: Price,the Only Revenue Generator

Question 1

Price is a signal of _____.

A) revenue
B) individuality
C) growth
D) value
E) economic power

Answer 1

D

Question 2

Before pricing a product,an organization must determine its _____.

A) marketing strategy
B) pricing objectives
C) marketing goals
D) product pricing strategy
E) long-term strategies

Answer 2

B

Question 3

Maximizing sales is typically a short-term objective since profitability is not considered.

Answer 3

True

Question 4

The price,product,promotion,and placement of a good or service should:

A) convey a consistent image.
B) be developed by the head marketer.
C) result from strong research.
D) generate extensive revenue.
E) execute marketing operations.

Question 5

Maximizing profits involves both large revenues and cutting costs.

Question 6

Tim's book company sets an expected profit of 15% in the first two years on all newly published books in relation to the money invested in the author and publication.This is an example of what type of pricing objective?

A) Maximizing profits
B) Maintaining the status quo
C) Targeted return on investment
D) Maximizing market share
E) Maximizing sales

Question 7

A product's low price can provide a company with a sustainable competitive advantage.

Question 8

A firm that sets out to maintain its current prices and/or its competitors' prices is utilizing which type of pricing objective?

A) Maximizing profits
B) Maintaining the status quo
C) Targeted return on investment
D) Maximizing market share
E) Maximizing sales

Question 9

Price is the _____ marketing variable to change and the _____ to copy.

A) easiest; easiest
B) easiest; longest
C) easiest; hardest
D) hardest; easiest
E) hardest; hardest

Question 10

Firms typically want to accomplish the same objectives with their pricing strategies.

Question 11

ROI is not a common pricing objective for many firms.

Question 12

A company that implements programs to encourage customer loyalty is utilizing what type of pricing objective?

A) Maximizing profits
B) Maintaining the status quo
C) Targeted return on investment
D) Maximizing market share
E) Maximizing sales

Question 13

A company that is trying to generate cash quickly to pay off debt would most likely utilize what type of pricing objective?

A) Maximizing profits
B) Maintaining the status quo
C) Targeted return on investment
D) Maximizing market share
E) Maximizing sales

Question 14

Companies can utilize weak economic markets to increase their profits.

Question 15

_____ state what a company wants to accomplish with its pricing.

A) Marketing objectives
B) Pricing objectives
C) ROI statements
D) Profit optimizers
E) Market shares

Question 16

A company trying to set prices in a way that allows them to capture a large share of the sales in their industry is utilizing which type of pricing objective?

A) Maximizing profits
B) Maintaining the status quo
C) Targeted return on investment
D) Maximizing market share
E) Maximizing sales

Question 17

Capturing more market share means a firm will earn higher profits.

Question 18

Large revenues translate to into higher profits.

Question 19

Price is the only marketing mix variable or part of the offering that generates revenue.

Question 20

ROI refers to the amount of profit an organization hopes to make given the amount of assets it has tied up in a product.

Question 21

List and describe the types of pricing objectives from which a company can choose.

Question 22

Maximizing sales typically:

A) utilizes a long-term strategy.
B) involves profitability considerations.
C) stems from the belief that remaining small means failure.
D) looks at revenues and costs.
E) is a short-term objective.

Question 23

How did Walmart utilize a maximizing profit strategy?

Question 24

Demand for essential products is affected more by price changes than the demand for nonessential goods.

Question 25

_____ is utilized when a firm sets their prices in a way that allows them to capture a larger share of the sales in their industries.

Question 26

_____ refers to what an organization wants to accomplish with its pricing.

Question 27

Competitor pricing has an impact on a firm's pricing decisions.

Question 28

Product,communication,and distribution _____ organizations money.

Question 29

If consumers do not perceive that a product has a high degree of _____,they probably will not pay a(n)_____ for it.

Question 30

What are the steps in the pricing framework?

Question 31

Buyers relate price to _____.

Question 32

Price elasticity is equal to the percentage of change in quantity demanded times the percentage change in price.

Question 33

Many companies believe capturing a maximum amount of market share is:

A) important in terms of matching competitor's pricing.
B) a short-term objective.
C) necessary for survival.
D) about increasing revenues and decreasing costs.
E) a waste of resources.

Question 34

ROI is the amount of _____ an organization hopes to make given the amount of _____ it has tied up in the product.

Question 35

_____ is an objective a firm sets to maintain its current prices and/or its competitors' prices.

Question 36

When consumers are very sensitive to the price change of a product,the demand for it is price elastic.

Question 37

Companies monitor their _____ prices closely when they adopt a status quo pricing objective.

Question 38

What must a company do prior to pricing a product?

Question 39

Maximizing sales involves pricing products to _____,regardless of what it does to a firm's profits.

Question 40

Cutting costs cannot be a(n)_____ if a company wants to maintain its image and position in the marketplace.

Question 41

When firms assess the marketplace,indirect competitors and substitutes do not influence the pricing strategies of a firm because they do not carry the same merchandise.Thus,companies focus on direct competitors when making pricing decisions.

Question 42

Price elasticity equals the percentage in _____ divided by the percentage change in _____.

Question 43

A mattress company that advertises high quality mattresses for an extremely low price while carrying a very low quantity of them is utilizing a _____ pricing strategy by them trying to up-sell customers on a more expensive mattress.

A) loss leader
B) price discrimination
C) leader
D) predatory
E) bait-and-switch

Question 44

Predatory pricing involves setting prices low to drive competitors out of business.

Question 45

Amanda purchased a washing machine from Best Buy.She was informed by Best Buy that she had a 30-day window to receive price matching from Best Buy or other local retailers if the washing machine went on sale.This is because firms are influenced by _____ when making pricing decisions.

A) competitors
B) government regulations
C) customers
D) product costs
E) the economy

Question 46

Price fixing is an uncommon practice.

Question 47

Durable goods such as TVs and refrigerators are _____.

A) loss leaders
B) variable costs
C) price elastic
D) reverse auctioned
E) price inelastic

Question 48

Bait-and-switch pricing involves selling products below cost to attract customers to the store.

Question 49

The intent of the Robinson-Patman act is to protect small businesses from larger businesses that try to extract special discounts and deals for themselves in order to eliminate their competitors.

Question 50

Price elasticity is calculated by:

A) multiplying the change in quantity demanded times the percentage change in price.
B) dividing the change in quantity demanded by the percentage change in price.
C) adding the percentage change in price plus the change in quantity demanded.
D) dividing the percentage change in price by the change in quantity demanded.
E) multiplying the percentage change in price times the change in quantity demanded.

Question 51

Unfair trade laws:

A) are illegal under some state codes.
B) prevent companies from trading with certain countries.
C) prohibit selling certain goods to consumers under a particular age.
D) require sellers to keep a minimum price level for similar products.
E) lure customers in with an incredibly low-priced product.

Question 52

Price elasticity is impacted by all of the following EXCEPT:

A) the number of competing products available.
B) the percentage of a person's budget allocated to different products and services.
C) the number of substitute products available.
D) the amount of fixed versus variable costs involved in producing the product or service.
E) whether a person considers product a necessity or a luxury.

Question 53

_____ refers to people's sensitivity to price changes.

Question 54

_____ is an illegal practice that involves firms colluding about price.

A) Leader pricing
B) Prestige pricing
C) Price fixing
D) Loss leader pricing
E) Price adjusting

Question 55

The Robinson-Patman Act:

A) regulates how marketers advertise their products on television.
B) limits a seller's ability to charge different customers different prices for the same products.
C) deems unsupported claims on labels to be unfair competition.
D) restricts the amount of puffery utilized in marketing claims.
E) prohibits monopolies in the marketplace.

Question 56

Price elastic refers to consumers who are very sensitive to price changes and buy _____ at _____ prices and _____ at _____ prices.

Question 57

Demand is said to be _____ when the demand for a product stays relatively the same and buyers are not sensitive to changes in its price.

A) gaining market share
B) price elastic
C) lost
D) price sensitive
E) price inelastic

Question 58

Price elasticity affects:

A) the demand for a product.
B) the product production limits.
C) the sponsorship potential.
D) customer service.
E) the zone of tolerance.

Question 59

The point where total costs equal total revenue is known as the breakeven point.

Question 60

Price inelastic refers when buyers are not sensitive to price changes and demand is relatively _____.

Question 61

How does the economy and government impact a firm's pricing decisions?

Question 62

Prestige pricing involves pricing a group of similar products at a few different price levels.

Question 63

How do customers affect a firm's pricing decisions?

Question 64

Cost-plus pricing ensures that a company's products' costs are covered and the firm earns a certain amount of profit.

Question 65

Companies will match competitors' prices because they want to establish and maintain _____ customers.

Question 66

_____ costs are costs that change with a company's level of product and sales,while _____ costs are costs that a company must pay regardless of its level of production or level of sales.

Question 67

Cost differences,market conditions,and _____ by other suppliers can justify price differences in some situations.

Question 68

Unfair trade laws are state laws preventing large businesses from selling products _____.

Question 69

How do product costs impact a firm's pricing decisions?

Question 70

A price skimming strategy involves setting a low initial price.

Question 71

Odd-even pricing utilizes a psychological appeal.

Question 72

How do competitors affect a firm's pricing decisions?

Question 73

Bait-and-switch pricing occurs when a business tries to lure in customers with an incredibly _____.

Question 74

After a pricing objective has been solidified,what else must a firm look at prior to finalizing pricing decisions?

Question 75

Leader pricing is legal.

Question 76

_____ occurs when firms get together and agree to charge the same prices.

Question 77

Loss leader pricing is legal in the United States.

Question 78

Pricing strategies are often dependent upon the stage of life cycle the offerings are in currently.

Question 79

Price bundling occurs when different offerings are sold together at a price that's typically lower than the total price a customer would pay buy buying each offering separately.

Question 80

Potential markups should be considered when deciding on a starting price.