Marketing Learn Smart Activity

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For a firm, rent, landscaping and insurance are best examples of:
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Fixed Costs
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A firm may set low prices to:
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-Encourage current firms to leave the market – take market share away from competitors -discourage firms from entering the market
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In many geographic areas, utilities such as water and electricity are available from only one provider. This is an example of a level of competition called a:
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monopoly
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Firms engage in competitor orientation might use which of the following strategies
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Competitive parity status quote pricing
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The percent change in the quantity of one product demanded compared with the percent change in price in another product is:
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cross-price elasticity
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Total cost is:
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variable cost plus fixed costs
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The ________ makes up one of the Cs of the fice Cs of pricing
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customer
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Demand curves can be described as
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curved or straight
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a down-ward sloping demand curve for a product like teeth-whitening kits show
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as price increases, demand decreases
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Some specialty retailers attempt to compete, not by setting low prices, but by justifying higher prices through high levels of personalized service. This is an example of a _____ orientation to pricing
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customer
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Employing _______ pricing, a firm sets a very low price for one or more of its products with the specific intent to drive its competition out of business
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predatory
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A ________ price is the benchmark price against which buyers compare the actual selling price of the product
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reference
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The types of strategies that could be implemented in a profit orientation strategy include:
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-target return pricing – maximizing profits strategy
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What are monetary sacrificing included in the overall price?
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Shipping & Travel Costs
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The Five Cs of pricing are: Company objectives, customers, channel partners, competition, and __________
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costs
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Some retailers prefer a __________ strategy which relied on the promotion of sales, during which prices are temporarily reduced to encourage purchases
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high/ low pricing
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if a firm sells the same product to different re-sellers at different prices it can be considered ________ ____________. However, in some cases, such as offering quantity discounts, is considered acceptable by law.
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Price Discrimination
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By reducing consumers’ search costs, ____ adds value because consumers can spend less time comparing prices, including sale prices, at different stores
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everyday low pricing (EDLP)
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Channel members include which of the following
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Manufacturers, Retailers, Wholesalers
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Profit alone _______ how many units should be sold before a firm breaks even
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does not indicate
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When only a few firms dominate, it is known as __________ competition
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oligopolistic
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break-even analysis examines the relationships between which of the following?
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cost, profit, and price
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Manufacturers often set a (n) ______ and attempt to require retailers to sell their merchandise at this price
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MSRP manufacturer’s suggested retail price.
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A useful technique that enables managers to examine the relationship among cost, price, revenue, and profit over different levels of production and sales is called _______.
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break-even-analysis
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Variable costs _______ production volume
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change with
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When a new product is similar to what already appears on the market _____ is somewhat easier because the product’s approximate Value has already been established
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pricing
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in the customer orientation strategy, firms might sell their products or services at high prices in order to:
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-Enhance the company’s reputation and image – enhance the value of the products in consumers’ minds – communicate exclusivity
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Price is the one element in the marketing mix that:
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generates revenue
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Firms that believe increasing sales will help the firm more than increasing profits use the:
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sales orientation strategy
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What are the characteristics of horizontal price fixing?
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-Competitors that produce and sell competing products collude – Price is taken out of the decision making process for consumers
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The saying, “you get what you pay for” indicates that price provides information about:
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The quality of product or service
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When consumers perceive that different companies sell products that are commodities, it is known as:
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pure competition
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Although it is not always the case, many firms expect the unit cost to drop significantly as the accumulated volume sold increases, an effect known as the _______ ________effect.
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experience curve
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A break even analysis graph contains which of the following
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Fixed costs, Total Revenue, and Total Costs
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Some states prohibit ____ pricing, where items are sold at a price below the store’s cost, by requiring some minimum markup
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Loss Leader Pricing
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Firms using a ________ Strategy set the initial price low for the introduction of the new product or service
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Market Penetration strategy
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When there are many firms competing for customers in a given market, but the products are differentiated, it is known as:
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monopolistic competition
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some limitations to break-even analysis are:
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-That it represents an average price to account for variances – it cannot predict how many units will sell – that firms have to perform several analyses at different quantities
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When sellers advertise items for a very low price without the intention of selling any of those items, it is known as:
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balt and switch
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When developing a pricing strategy, channel members should:
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clearly communicate their pricing goals to one another
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potential drawbacks of a market penetration pricing strategy
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-“leaving money on the table” – Need large production capacity – Low quality perception
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Price fixing is the practice of colluding with other firms to _______ prices
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control
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Price is ________ of the four Ps to manage
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the most challenging
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The five Cs of pricing include
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company objectives
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What is essential to prove a complaint for predatory pricing in the market?
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-Evidence that the firm intends to drive out competition -Evidence that the prices charged are below the store’s average cost
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Benefits of a market penetration pricing strategy
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-Discourages potential competitors – potential to build sales -potential to gain market share -potential to earn profits
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A _______ pricing strategy can be used when innovators and early adopters are willing to pay a higher price to obtain a new product or service
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price skimming
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The equation for elasticity of demand is the percentage change in quantity demanded, divided by percentage change in:
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price
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Strategies that can be used as part of the profit orientation strategy include:
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-Target profit pricing -target return pricing -maximizing profits strategy
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Advertisements should never ________ the consumer to the point of causing harm
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deceive
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What are the benefits of the high/low pricing strategy.
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-attracts consumers at both ends of the price-sensitivity scale -it serves two different market segments -it creates excitement due to the limited duration of sales
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There are many forms of price discrimination, but only some of them are considered illegal under the following legislation
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Robinson-Patman Act & Clayton Act
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Price times quantity is:
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total revenue
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When a firm is able to use mathematical mode that can explain and predict sales, it is able to implement the:
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Maximizing profits strategy
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When incomes drop, the demand for an elastic product:
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tends to decrease
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if a firm initially sets prices similar to major competitors’ prices, this is an example of ______ pricing
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competitive parity
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contribution per unit
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the price, minus the variable cost per unit

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