Question 1

Pricing objectives need not be explicitly stated.

Accepted Answer

Pricing objectives should be explicitly stated because they have a direct effect on pricing policies as well as the methods used to set prices.

Question 2

A sales-oriented pricing objective seeks some level of unit sales,dollar sales,or share of market-without referring to profit.

Accepted Answer

A sales-oriented pricing objective seeks some level of unit sales,dollar sales,or share of market without referring to profit.

Question 3

A profit maximization pricing objective may lead to relatively low prices,especially if demand is very elastic.

Accepted Answer

Low prices may expand the size of the market and result in greater sales and profits.

Question 4

The price paid by students to colleges is called tuition.

Accepted Answer

Price is the amount of money that is charged for "something" of value.Of course,price may be called different things in different settings.Colleges charge tuition.Landlords collect rent.Motels post a room rate.Magazines have subscriptions.Country clubs get dues.Banks ask for interest when they loan money.Airlines have fares.Doctors set fees.Employees want a wage.People may call it different things,but almost every business transaction in our modern economy involves an exchange of money-the Price-for something.

Question 5

Defining price in real-life situations is easy because price reflects many dimensions.

Accepted Answer

It's not easy to define price in real-life situations because price reflects many dimensions.People who don't realize this can make big mistakes.

Question 6

Sales-oriented pricing objectives always refer to profit.

Accepted Answer

A sales-oriented pricing objective seeks some level of unit sales,dollar sales,or share of market without referring to profit.

Question 7

Profit maximization objectives lead to high prices and monopolies and are generally not in the public interest.

Accepted Answer

Profit maximization objectives can be socially responsible,and pricing to achieve profit maximization doesn't always lead to high prices.

Question 8

Any business transaction can be thought of as an exchange of "something" of value for money-where money is the price.

Accepted Answer

Almost every business transaction in our modern economy involves an exchange of money-the Price-for something.

Question 9

Almost every business transaction in our modern economy involves an exchange of money.

Accepted Answer

Almost every business transaction in our modern economy involves an exchange of money-the Price-for something.

Question 10

Many nonprofit organizations try to set a price level that will earn a target return figure of zero.

Accepted Answer

Many private and public nonprofit organizations set a price level that will just recover costs,making the target return figure zero.

Question 11

Sales-oriented pricing objectives are sensible because sales growth almost guarantees higher profits.

Accepted Answer

Sales growth doesn't necessarily mean big profits.

Question 12

Pricing to achieve profit maximization always leads to high prices.

Accepted Answer

Profit maximization objectives can be socially responsible,and pricing to achieve profit maximization doesn't always lead to high prices.

Question 13

A target return pricing objective seeks to obtain a specific level of profit,which is often stated as a percentage of sales or return on investment.

Accepted Answer

A target return objective sets a specific level of profit as an objective that is stated as a percentage of sales or of capital investment.

Question 14

Price plays an indirect role in shaping customer value.

Accepted Answer

Price is what a customer must give up to get the benefits offered by the rest of a firm's marketing mix,so it plays a direct role in shaping customer value.

Question 15

A lawyer's advice does not have a price.

Accepted Answer

Price is the amount of money that is charged for "something" of value.Of course,price may be called different things in different settings.Lawyers charge for their advice.

Question 16

The target return figure is zero for an organization that sets a price level that will just recover costs.

Accepted Answer

Many private and public nonprofit organizations set a price level that will just recover costs,making the target return figure zero.

Question 17

Pricing objectives and policies should flow from company-level objectives.

Accepted Answer

Pricing objectives should flow from,and fit within,company-level and marketing objectives.

Question 18

A target return pricing objective has administrative advantages in a large company where there are many divisions to compare.

Accepted Answer

A target return objective has administrative advantages in a large company.Performance can be compared against the target.

Question 19

The target return objective and profit maximization objective are both profit-oriented objectives.

Accepted Answer

A target return objective sets a specific level of profit as an objective,and a profit maximization objective seeks to get as much profit as possible.Both are profit-oriented objectives.

Question 20

Pricing decisions affect both the number of sales a firm makes and how much money it earns.

Accepted Answer

Price is one of the four major strategy decision variables that a marketing manager controls.Pricing decisions affect both the number of sales a firm makes and how much money it earns.Price is what a customer must give up to get the benefits offered by the rest of a firm's marketing mix,so it plays a direct role in shaping customer value.

Quiz 17: Pricing Objectives and Policies

Pricing objectives need not be explicitly stated.

A sales-oriented pricing objective seeks some level of unit sales,dollar sales,or share of market-without referring to profit.

A profit maximization pricing objective may lead to relatively low prices,especially if demand is very elastic.

The price paid by students to colleges is called tuition.

Defining price in real-life situations is easy because price reflects many dimensions.

Sales-oriented pricing objectives always refer to profit.

Profit maximization objectives lead to high prices and monopolies and are generally not in the public interest.

Any business transaction can be thought of as an exchange of "something" of value for money-where money is the price.

Almost every business transaction in our modern economy involves an exchange of money.

Many nonprofit organizations try to set a price level that will earn a target return figure of zero.

Sales-oriented pricing objectives are sensible because sales growth almost guarantees higher profits.

Pricing to achieve profit maximization always leads to high prices.

A target return pricing objective seeks to obtain a specific level of profit,which is often stated as a percentage of sales or return on investment.

Price plays an indirect role in shaping customer value.

A lawyer's advice does not have a price.

The target return figure is zero for an organization that sets a price level that will just recover costs.

Pricing objectives and policies should flow from company-level objectives.

A target return pricing objective has administrative advantages in a large company where there are many divisions to compare.

The target return objective and profit maximization objective are both profit-oriented objectives.

Pricing decisions affect both the number of sales a firm makes and how much money it earns.