Question 1

Price is a signal of _____.
A) revenue
B) individuality
C) growth
D) value
E) economic power

Accepted Answer

Price is a signal of value. The price that a consumer is willing to pay for a product or service is an indication of how much they value it. Similarly, a high price for a product can signal that it is of high quality or is in demand, while a low price can suggest that it is of lower quality or is not as desirable.

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

Accepted Answer

Before pricing a product, an organization must determine its pricing objectives, which set the intended level of profit and market share the company wishes to achieve with the product. Without clear pricing objectives, it is difficult to set an appropriate price for the product. Marketing strategy, marketing goals, product pricing strategy, and long-term strategies are also important factors in pricing decisions, but pricing objectives are the most essential.

Question 3

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

Accepted Answer

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.

Accepted Answer

The price, product, promotion, and placement should convey a consistent image to the target market. This creates a unified message and strengthens the marketing efforts of the company.

Question 5

Maximizing profits involves both large revenues and cutting costs.

Accepted Answer

Maximizing profits requires increasing revenues through sales, as well as reducing expenses and cutting costs to increase profit margins. A focus on both revenue growth and cost management is essential for achieving maximum profitability.

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

Accepted Answer

The expected profit of 15% is a targeted return on investment, as Tim's book company has a specific financial goal in mind when pricing their newly published books.

Question 7

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

Accepted Answer

A product's low price alone is not a sustainable competitive advantage as competitors can easily adjust their prices to match or beat it. Other factors such as quality, unique features, brand awareness, and customer service are also crucial in creating 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

Accepted Answer

The firm is trying to maintain its current position in the market without increasing or decreasing the prices, hence it is using the maintaining the status quo pricing objective.

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

Accepted Answer

Price is often the easiest marketing variable to change as it only involves adjusting numbers. In addition, price can also be the easiest marketing variable to copy as competitors can simply match or undercut the prices of their rivals.

Question 10

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

Accepted Answer

Firms have different objectives with their pricing strategies, such as maximizing profit, increasing market share, entering new markets, or positioning themselves as a premium or budget brand.

Question 11

ROI is not a common pricing objective for many firms.

Accepted Answer

ROI (Return on Investment) is a common pricing objective for many firms as it focuses on achieving a specific return on the investment made in the product or service.

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

Accepted Answer

The answer of A company that implements programs to encourage...

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

Accepted Answer

Maximizing sales would be the best pricing objective in this scenario because it focuses on generating revenue quickly, which is necessary for paying off debt. This objective may involve temporarily lowering prices or offering promotions to stimulate demand and increase sales volume.

Question 14

Companies can utilize weak economic markets to increase their profits.

Accepted Answer

During weak economic markets, companies may be able to acquire assets at lower prices or negotiate better deals with suppliers due to increased competition. They may also cut costs and become more efficient in their operations. All of these actions can lead to increased 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

Accepted Answer

Pricing objectives state what a company wants to accomplish with its pricing, such as maximizing profits, increasing market share, or maintaining a certain level of price competitiveness. Marketing objectives may include pricing strategies, but they encompass the broader goals of promoting and selling products or services. ROI statements and profit optimizers focus on financial outcomes, while market shares are a specific metric for measuring a company's position in the market.

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

Accepted Answer

The objective of capturing a large share of the sales in their industry is maximizing market share.

Question 17

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

Accepted Answer

Capturing more market share does not necessarily mean a firm will earn higher profits, as profitability depends on various factors such as cost structure, pricing strategy, and competitive dynamics.

Question 18

Large revenues translate to into higher profits.

Accepted Answer

Large revenues do not automatically translate into higher profits because profits are determined by subtracting all expenses from the revenue. High revenues can still result in low or negative profits if the expenses are equally high or higher.

Question 19

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

Accepted Answer

Price is the only element in the marketing mix that generates revenue for a company. The other variables - product, promotion, and place - are important in building brand awareness and creating demand, but they do not directly generate 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.

Accepted Answer

ROI stands for Return on Investment, which is the amount of profit (or loss) an organization expects to receive in relation to the amount of money or assets it has invested in a product or campaign.

Quiz 15: Price,the Only Revenue Generator

Price is a signal of _____.

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

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

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

Maximizing profits involves both large revenues and cutting costs.

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

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

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

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

ROI is not a common pricing objective for many firms.

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

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

Companies can utilize weak economic markets to increase their profits.

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

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?

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

Large revenues translate to into higher profits.

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

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