Q1. ________ involves charging a constant low price with few or no temporary price discounts.
a. High-low pricing
b. Penetration pricing
c. Cost-plus pricing
d. Everyday low pricing (EDLP)
e. Target return pricing
Q2. General Motors prices its automobiles to achieve a 15 to 20 percent profit on its investment. This approach is called ________.
a. target return pricing
b. value-based pricing
c. cost-plus pricing
d. low-price image
e. going-rate pricing
Q3. Which of the following statements about a break-even chart is true?
a. It is a tool marketers use to examine the relationship between supply and demand.
b. It is used to determine how the customer-perceived value changes with value-added pricing.
c. It uses variable costs, the unit price, and fixed costs.
d. It is a tool used to calculate fixed costs.
e. It shows the level of earnings a company has during an accounting period.
Q4. The simplest pricing method is ________.
a. going-rate and sealed-bid pricing
b. cost-plus pricing
c. break-even analysis
d. target return pricing
e. value-based pricing
Q5. It is most typical for producers who use captive-product pricing to set the price of the main product ________
and set ________ on the supplies necessary to use the product.
a. high; low markups
b. moderately; moderate markups
c. low; high markups
d. high; high markups
e. low; low markups
Q6. Mach 3 razor blades must be used in the Mach 3 razor. Which type of pricing is most likely used?
a. optional-product pricing
b. captive-product pricing
c. by-product pricing
d. allowance pricing
e. product line pricing
Q7. When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________.
a. target return pricing
b. product line pricing
c. market-penetration pricing
d. break-even pricing
e. market-skimming pricing
Q8. Busch Stadium in St. Louis charges different prices for seats in different areas of the ballpark, even though their costs are
the same. What is this form of pricing called?
a. penetration
b. location-based
c. skimming
d. product-form
e. time-based
Q9. Under which type of geographic pricing strategy does each customer pay the exact freight for the product from the factory
to its destination?
a. freight-absorption pricing
b. FOB-origin pricing
c. basing-point pricing
d. zone pricing
e. dynamic pricing
Q10. ________ are the sum of the ________ and ________ for any given level of production.
a. Fixed costs; variable; total costs
b. Break-even costs; fixed; total costs
c. Total costs; fixed; variable costs
d. Fixed costs; total; variable costs
e. Variable costs; fixed; total costs
Q11. When using price steps, the seller must establish perceived ________ that support the price differences among the
products in the line.
a. images
b. nonprice competition
c. value differences
d. quantity levels
e. strategies
Q12. Value-based pricing is the reverse process of ________ pricing.
a. variable cost
b. value-added
c. good-value
d. cost-plus
e. cost-based
Q13. Proud Pets, a producer of clothing and accessories for pets, has recently partnered with a regional chain of pet stores.
Which of the following would Proud Pets be LEAST likely to expect from its new channel member?
a. identifying raw materials and other productive inputs
b. promoting its products through advertising
c. distributing relevant marketing research information
d. negotiating on its products’ prices
e. assembling and packaging its products for final sale
Q14. A distribution channel is more than a collection of firms connected by various flows; it is a(n) ________ in which people and
companies interact to accomplish individual, company, and channel goals.
a. multichannel system
b. vertical marketing system
c. complex behavioral system
d. corporate marketing system
e. added value chain
Q15. In choosing a transportation mode for a product, shippers must balance the considerations of speed, dependability, cost,
and ________.
a. customer choice
b. availability
c. weight
d. distance
e. company reputation
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