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. competitors’ prices

B. consumers’ preferences

C. desired profit

Question #2

How is Price unique among the 4 Ps of marketing?

A. It focuses on the content of advertising.

B. It costs the company money.

C. It generates income for the company.

Question #3

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

A. consistent

B. different

C. unpredictable

Question #4

What is the first step of the pricing framework?

A. Set pricing objectives.

B. Determine costs.

C. Estimate demand.

Question #5

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

A. They set ROI only at 5 percent.

B. They set ROI at a certain percentage.

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 price is fair.

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

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 sales

B. maximizing market share

C. maximizing profits

Question #8

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

A. price elasticity

B. price inelasticity

C. price sensitivity

Question #9

Which of the following products is price elastic?

A. a loaf of bread

B. a pack of diapers

C. a laptop computer

Question #10

Why do companies match their competitors’ prices?

A. to maintain a relationship with competitors

B. to make sure their prices are legal

C. to keep customers

Question #11

What does the Robinson-Patman Act limit?

A. price fixing

B. price discrimination

C. price competition

Question #12

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

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

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

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

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. predatory pricing

B. bait-and-switch pricing

C. price fixing

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 is always the same

B. because the price for labels and packaging could change

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. 24 percent

B. 44 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 research all their options before buying a product

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

Question #18

What is the goal of using a penetration pricing strategy?

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

B. to match competitors’ price changes as they occur

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

Question #19

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

A. a standard vacuum cleaner

B. a one-of-a-kind perfume

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. markdown

C. markout

Question #21

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

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

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

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

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. prestige pricing

B. leader pricing

C. markdown pricing

Question #23

What is a forward auction?

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

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

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

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. going-rate pricing

B. captive pricing

C. price bundling

Question #25

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

A. captive pricing

B. product mix pricing

C. prestige pricing

Question #26

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

A. price skimming

B. captive pricing

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) transportation

B. FOB (free on board) origin

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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