Question 1

All of the following are examples of pricing objectives EXCEPT:
A)market share.
B)survival.
C)unit sales.
D)social responsibility.
E)competitors' prices.

Accepted Answer

Competitors' prices are not a pricing objective; they are a factor considered when setting prices. Pricing objectives are goals that guide how a company sets its prices, such as increasing market share, ensuring survival, maximizing unit sales, or fulfilling social responsibility.

Question 2

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

Accepted Answer

The third profit-oriented objective is achieving a target return, which involves setting a specific profit goal and using pricing to achieve that goal. This may involve adjusting prices to balance sales volume and profit margins to meet the targeted return.

Question 3

Which of the following statements would most likely be spoken during Step 3 in the price-setting process?
A)"In order to break even,we will need to sell at least 500,000 units."
B)"We have to try to achieve an 8% profit share."
C)"The starting price should be $4.99 and we can raise the price again in six months."
D)"But,if we increase the price even by one dollar,how many customers will we lose?"
E)"We should probably price the extra large version somewhere between $600 and $650."

Accepted Answer

The answer of Which of the following statements would most...

Question 4

Managing for long-run profits 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 involves strategic planning that may sacrifice immediate profits in order to gain a larger market share and establish a stronger competitive position for the future. This approach prioritizes sustainability and long-term growth over short-term gains.

Question 5

Selecting an approximate price level would occur during __________ of the price-setting process.
A)Step 1
B)Step 2
C)Step 3
D)Step 4
E)Step 5

Accepted Answer

The answer of Selecting an approximate price level would occur...

Question 6

Setting list or quoted prices would occur during __________ of the price-setting process.
A)Step 1
B)Step 2
C)Step 3
D)Step 4
E)Step 5

Accepted Answer

The answer of Setting list or quoted prices would occur...

Question 7

A target return profit 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

A target return profit objective is a predetermined level of profit that a company wishes to achieve. This profit goal is often set by the company's board of directors and serves as a benchmark for measuring financial performance. Therefore, choice C is the best answer for this question.

Question 8

While pricing objectives frequently reflect corporate goals,pricing constraints often relate to
A)stockholder demands.
B)political ideology.
C)conditions existing in the marketplace.
D)an organization's code of ethics.
E)the financial realities within the organization itself.

Accepted Answer

Pricing constraints typically relate to the conditions existing in the marketplace, such as competition, consumer demand, and supplier prices. While pricing objectives may be tied to corporate goals, constraints are often external factors that the company must navigate in order to achieve those objectives. Other options listed, such as stockholder demands or a code of ethics, may sometimes impact pricing decisions, but they are not as consistently relevant as market conditions.

Question 9

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.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)breakeven strategy
D)maximizing current profit
E)minimizing risk

Accepted Answer

Maximizing current profit is a short-term objective that is commonly used by firms as it allows them to set targets and measure their performance quickly. This objective focuses on generating as much profit as possible in the short term without considering long-term sustainability.

Question 10

A maximizing current profit 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 maximizing current profit objective implies that...

Question 11

A firm's profit objective is often measured in terms of ROA.The acronym ROA stands for __________.
A)return on assets
B)risk opportunity assessment
C)return of allowances
D)return on average equity
E)risk opportunity analysis

Accepted Answer

ROA stands for Return on Assets, which is a measure of a company's profitability calculated by dividing its net income by its total assets.

Question 12

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." It is a financial metric used to measure the profitability of an investment by calculating the percentage of the return on the investment relative to its cost.

Question 13

Making special adjustments to the list or quoted price would occur during __________ of the price-setting process.
A)Step 2
B)Step 3
C)Step 4
D)Step 5
E)Step 6

Accepted Answer

The answer of Making special adjustments to the list or...

Question 14

Which of the following statements regarding pricing objectives is most accurate?
A)Pricing objectives should never change.
B)Pricing objectives may change depending on the financial position of the company.
C)Pricing objectives may change depending upon the relative market share of competitors.
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 financial position of the company. Pricing objectives should always be aligned with the overall business strategy, but they may need to be adjusted as financial circumstances change. For example, if the company is facing financial difficulties, the pricing objective may shift from maximizing profits to simply covering costs. Similarly, if the company is in a strong financial position, the pricing objective may shift to capturing market share or increasing brand loyalty.

Question 15

Pricing objectives refer to
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 refer to specifying the role of price in an organization's marketing and strategic plans. This means defining the goals that the pricing strategy aims to achieve, such as maximizing profitability, increasing market share, or maintaining a certain image in the market. It is an important aspect of the overall marketing strategy of an organization.

Question 16

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)breakeven strategy
E)minimizing risk

Accepted Answer

Target return is the objective in which a firm sets a profit goal, usually determined by its board of directors. The other options refer to different profit objectives, but do not specifically involve setting a profit goal.

Question 17

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as __________,is where 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

The objective described in the question is known as a "managing for long-run profits" strategy, where a company sacrifices immediate profits to gain market share and position themselves for long-term success. This aligns with the idea of maximizing ROI over the long-term rather than focusing solely on short-term profits.

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

Managing for long-run profits involves focusing on sustained profitability over time, rather than just maximizing short-term profits. This objective implies a pricing strategy that is not solely focused on maximizing revenues or minimizing costs in the short-term, but takes into account the long-term impact on customer loyalty and brand reputation. The other options (A, C, D, E) may also be profit-oriented objectives, but they do not necessarily have the same implications for pricing strategy as managing for long-run profits.

Question 19

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. It involves determining what the organization wants to achieve with its pricing strategy, such as maximizing profits or increasing market share. This helps guide pricing decisions and ensure they align with overall business goals.

Question 20

The break-even point for a large grain farming operation was calculated to be 2 million bushels of corn.Break-even analysis would take place during which step of the price-setting process?
A)identify pricing objectives and constraints
B)determine cost,volume,and profit relationships
C)estimate demand and revenue
D)select an approximate price level
E)make special adjustments to list or quoted price

Accepted Answer

The break-even analysis is used to determine the cost, volume, and profit relationships, which is the second step in the price-setting process. This analysis helps to determine the minimum quantity of sales required to cover all costs, including fixed and variable costs. Once this is determined, the company can set its price accordingly to create the desired profit margin.

Quiz 13: Building the Price Foundation

All of the following are examples of pricing objectives EXCEPT:

Three different objectives relate to a firm's profit,which have different implications for pricing strategy.The three profit-oriented objectives include managing for long-run profits,maximizing current profit objectives,and __________.

Which of the following statements would most likely be spoken during Step 3 in the price-setting process?

Managing for long-run profits implies that a company will

Selecting an approximate price level would occur during __________ of the price-setting process.

Setting list or quoted prices would occur during __________ of the price-setting process.

A target return profit objective implies that a company chooses to

While pricing objectives frequently reflect corporate goals,pricing constraints often relate to

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as _________,is common in many firms because the targets can be set and performance measured quickly.

A maximizing current profit objective implies that a company chooses to

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

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

Making special adjustments to the list or quoted price would occur during __________ of the price-setting process.

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

Pricing objectives refer 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 different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as __________,is where a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

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.

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

The break-even point for a large grain farming operation was calculated to be 2 million bushels of corn.Break-even analysis would take place during which step of the price-setting process?