Question 1

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?

Accepted Answer

Maximizing market share as a pricing objective means setting prices in a way that aims to capture the largest possible share of sales within an industry, often by making products more attractive to a larger number of consumers.

Question 2

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

Accepted Answer

Price is the easiest marketing variable to change because it can often be adjusted without significant delays or costs. It is also the easiest to copy because competitors can quickly match price changes.

Question 3

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

Accepted Answer

Maximizing sales focuses on increasing revenue without necessarily considering costs, which can lead to lower profitability in the short term.

Question 4

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

Accepted Answer

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

Question 5

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

Accepted Answer

Pricing objectives specifically outline what a company aims to achieve through its pricing strategies, such as maximizing profit, increasing market share, or penetrating a new market.

Question 6

Companies can utilize weak economic markets to increase their profits.

Accepted Answer

During weak economic markets, companies can capitalize on lower competition, reduced costs for materials and labor, and potentially acquire assets or other businesses at lower prices, all of which can lead to increased profits.

Question 7

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 (product, price, place, promotion) that directly generates revenue; the other elements incur costs.

Question 8

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 9

Maximizing profits involves both large revenues and cutting costs.

Accepted Answer

Maximizing profits requires not only increasing revenues through sales and other income but also minimizing expenses to ensure that the net income, or profit, is as high as possible.

Question 10

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

Accepted Answer

Maximizing sales is the most likely pricing objective for a company trying to generate cash quickly to pay off debt. This approach focuses on increasing sales volume, which can lead to more immediate cash flow to cover financial obligations.

Question 11

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 12

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

Accepted Answer

A low price alone is not typically a sustainable competitive advantage because competitors can often lower their prices as well, eroding the advantage. Sustainable competitive advantages are more often derived from unique resources, high levels of service, brand reputation, technological innovation, or network effects.

Question 13

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 14

Price is a signal of _____.

Accepted Answer

Price is often considered a signal of the value of goods or services in the market, reflecting their perceived worth or quality to consumers.

Question 15

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

Accepted Answer

Maintaining the status quo as a pricing objective means the firm aims to keep its prices stable, often to match competitors' prices, avoiding price wars and maintaining current market dynamics.

Question 16

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

Accepted Answer

The four Ps of marketing (price, product, promotion, and placement) should convey a consistent image to ensure that the marketing strategy aligns with the brand's identity and message.

Question 17

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 18

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?

Accepted Answer

This is an example of a targeted return on investment (ROI) pricing objective, where the company aims for a specific return (15% in this case) on the money invested in the author and publication process.

Question 19

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

Accepted Answer

Pricing objectives are essential for an organization to determine before setting a product's price, as they guide the pricing strategy to align with the company's overall goals.

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 is a measure of the profit an organization makes relative to the amount of assets it has invested in a product.

Quiz 15: Price, the Only Revenue Generator