South New Hampshire University » Marketing » Marketing 205 - Applied Marketing Strategies » Winter 2023

Marketing 205 - Applied Marketing Strategies » Winter 2023 » Chapter 4

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Question #1

What should be foremost in the mind of the marketer when establishing a pricing strategy?

A. consumers’ preferences

B. competitors’ prices

C. desired profit

Question #2

How is Price unique among the 4 Ps of marketing?

A. It generates income for the company.

B. It focuses on the content of advertising.

C. It costs the company money.

Question #3

What should the Price, Product, Promotion, and Place of a good or service always be?

A. different

B. unpredictable

C. consistent

Question #4

What is the first step of the pricing framework?

A. Determine costs.

B. Set pricing objectives.

C. Estimate demand.

Question #5

How do companies typically set ROI for a product’s first year on the market?

A. They set ROI at a certain percentage.

B. They set ROI only at 5 percent.

C. They set ROI to return the full cost of the investment.

Question #6

What do consumers need to perceive to pay a high price for a product?

A. Consumers need to perceive that the product has a high degree of value.

B. Consumers need to perceive that the price is fair.

C. Consumers need to perceive that they will get a good return on their investment.

Question #7

The Galder Corporation is struggling financially and has decided to temporarily cut prices on its offerings to its price-sensitive target market to help pay off some of its financial debts in the short-term. Which pricing objective are they using?

A. maximizing profits

B. maximizing market share

C. maximizing sales

Question #8

Which of these refers to the people’s sensitivity to price changes?

A. price sensitivity

B. price inelasticity

C. price elasticity

Question #9

Which of the following products is price elastic?

A. a loaf of bread

B. a laptop computer

C. a pack of diapers

Question #10

Why do companies match their competitors’ prices?

A. to keep customers

B. to maintain a relationship with competitors

C. to make sure their prices are legal

Question #11

What does the Robinson-Patman Act limit?

A. price fixing

B. price competition

C. price discrimination

Question #12

Why is Crandall’s suggestion an example of price fixing?

A. because it would involve two companies agreeing to charge the same price

B. because it would involve two companies earning money from their sales

C. because it would involve two companies competing to win over customers

Question #13

City Mattress Company advertises a special $100 mattress deal. When customers arrive, they find that they can only purchase the $100 mattress in a bundle with other items, bringing the total cost to $500. What is this an example of?

A. price fixing

B. predatory pricing

C. bait-and-switch pricing

Question #14

Which of these refers to costs that a company must pay regardless of its level of production or level of sales?

A. total costs

B. variable costs

C. fixed costs

Question #15

Why would labels and packaging be considered a variable cost?

A. because the price for labels and packaging could change

B. because the price for labels and packaging is always the same

C. because the price for labels and packaging is not known

Question #16

According to the chart, what percentage of consumers are willing to pay more for breakfast options that are made with no artificial ingredients?

A. 44 percent

B. 24 percent

C. 40 percent

Question #17

Which consumers are targeted by the skimming price strategy?

A. consumers who are budget-conscious but want high-quality products

B. consumers who will pay a high price right when a product is released

C. consumers who research all their options before buying a product

Question #18

What is the goal of using a penetration pricing strategy?

A. to get as much of the market as possible to try the product

B. to start out with a high price and then lower it as competitors enter the market

C. to match competitors’ price changes as they occur

Question #19

Which of the following products would fit with a premium pricing strategy?

A. a one-of-a-kind perfume

B. a standard vacuum cleaner

C. a pack of cotton T-shirts

Question #20

What is the name for the amount of money taken off the price of a product?

A. markup

B. markout

C. markdown

Question #21

Which of these choices accurately describes the concept of price lining?

A. grouping of a similar line of products at a few different price levels

B. pricing a line of products at the same price level

C. charging very low prices to get people into a store

Question #22

Nash’s Office Supplies offers reams of printer paper for a very low price to get customers into their stores. Nash hopes that these customers will buy its other products too. Which of the following explains Nash’s pricing strategy?

A. leader pricing

B. markdown pricing

C. prestige pricing

Question #23

What is a forward auction?

A. when a buyer lists an item they want, along with what they will pay for it, and a seller accepts the price

B. when a buyer lists an item they want to purchase and sellers enter bids at various prices

C. when a seller lists an item for sale and buyers negotiate with each other over the price

Question #24

McDonald’s frequently sells multiple offerings together for cheaper than the price of each individual offering. What is the term for this pricing approach?

A. price bundling

B. captive pricing

C. going-rate pricing

Question #25

Which pricing strategy pressures consumers to buy a given product because they are at a certain event or location?

A. product mix pricing

B. prestige pricing

C. captive pricing

Question #26

Which pricing strategy allows customers to break down product payments into smaller increments?

A. captive pricing

B. price skimming

C. payment pricing

Question #27

What is the name for the pricing adjustment in which the buyer pays shipping charges?

A. FOB (free on board) origin

B. FOB (free on board) transportation

C. FOB (free on board) destination

Question #28

What is the name for an agreement whereby businesses agree to advertise one another’s offerings?

A. joint agreement

B. mutual agreement

C. reciprocal agreement

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