MKT 210 – Flashcard

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Which of the following is true with regard to price? A. Historically, price has had the least perceptible impact on buyer choice. B. Price is the least flexible element in the marketing mix. C. Unlike product features and channel commitments, prices cannot be changed quickly. D. Price is the sum of all the values that customers give up to gain the benefits of having a product. E. Prices only have an indirect impact on a firm’s bottom line.
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D. Price is the sum of all the values that customers give up to gain the benefits of having a product.
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What sets the floor for product prices? A. consumer perceptions of the product’s value B. product costs C. competitors’ strategies D. advertising budgets E. market competition
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B. product costs
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Cost-plus pricing ________. A. is a complex pricing method B. involves pricing that accurately reflects production costs C. involves adding a standard markup for profit D. aims at breaking even on the costs of making and marketing a product E. is a value-based pricing method
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C. involves adding a standard markup for profit
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Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie? A. $15 B. $25 C. $30 D. $50 E. $75
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B. $25
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Target return pricing is a variation of which of the following cost-oriented pricing approaches? A. cost-plus pricing B. break-even pricing C. markup pricing D. value-based pricing E. fixed cost pricing
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B. break-even pricing
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The break-even volume is the point at which ________. A. the total revenue and total cost curves intersect B. demand equals supply C. the production of one more unit will not lead to increase in demand D. the company can pay off all its long-term debt E. a firm exceeds the sales forecast
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A. the total revenue and total cost curves intersect
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Mansfield Pharmaceuticals markets Zipro, an antibiotic. The firm has fixed costs of $1,000,000 and variable costs of $2 per bottle of 50 tablets priced at $10 per bottle. What is the break-even volume? A. 25,000 B. 55,000 C. 100,000 D. 115,000 E. 125,000
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E. 125,000
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A manufacturer has fixed costs of $100,000, a variable cost of $10 per unit of output, and break-even volume of 50,000 units. What should the manufacturer’s unit cost be in order to break even? A. $10 B. $12 C. $14 D. $16 E. $20
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B. $12
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Which of the following is an internal factor that affects pricing decisions in a company? A. the nature of the market B. the degree of inflation in the economy C. the overall marketing strategy of the company D. the forces of demand and supply in the market E .consumers’ perception of value
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C. the overall marketing strategy of the company
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If demand hardly changes with a small change in price, the demand is ________. A. variable B. inelastic C. highly elastic D. derived E. negative
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B. inelastic
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Buyers are less price sensitive when ________. A. the product they are buying is of inferior quality B. the product they are buying is low in prestige C. substitute products are easy to find D. the product they are buying is unique E. the product they are buying is non-exclusive
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D. the product they are buying is unique
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There was a 35 percent increase in demand for a product after the seller decreased its price by 14 percent. Therefore, the price elasticity of demand is ________. A. 0.25 B. 0.4 C. -2.5 D. 2.5 E. -25
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C. -2.5
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Price elasticity of demand is represented by ________ divided by ________. A. percentage change in quantity demanded; percent change in price B. percentage change in units supplied; percentage change in price C. percentage change in price; percentage change in quantity demanded D. fixed costs; variable costs E. cost-plus price; actual cost of production
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A. percentage change in quantity demanded; percent change in price
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Which of the following is true with regard to pure competition? A. Under pure competition, no single buyer or seller has much effect on the going market price. B. In a purely competitive market, marketing research is of utmost importance. C. In a purely competitive market, product development is the focus of most firms. D. Under pure competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. E. Under pure competition, the market consists of only a few large sellers.
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A. Under pure competition, no single buyer or seller has much effect on the going market price.
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Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. A. pure competition B. monopolistic competition C. oligopolistic competition D. a pure monopoly E. the dominant firm model
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B. monopolistic competition
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Companies which set a low price for a new product in order to attract a large number of buyers and a large market share are using the ________ strategy. A. market-skimming pricing B. market-penetration pricing C. cost-plus pricing D. inclusive pricing E. exclusive pricing
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B. market-penetration pricing
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Whizz Corp. wishes to introduce a new hybrid car into mature markets in developed countries with the goal of gaining mass-market share quickly. Which of the following pricing strategies would help the firm meet its goal? A. market-skimming pricing B. market-penetration pricing C. market-segmentation pricing D. cost-plus pricing E. captive-product pricing
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B. market-penetration pricing
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Which of the following is true of product line pricing? A. The price steps take cost differences between products in the line into account. B. The pricing strategy cannot be availed of by companies in developed countries. C. The price steps do not account for the prices of similar products from competitors. D. The pricing strategy involves overpricing products so that they appeal to the elite. E. The customer’s perception of the value of different features is considered irrelevant.
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A. The price steps take cost differences between products in the line into account.
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Which of the following companies uses product line pricing? A. Photo Genie, which sells inexpensive cameras that run only on their own expensive batteries B. Mobile Point, which launched a range of cell phone models, each priced according to its features C. Penguin’s Parlor, which offers customers a 20% discount on their birthdays and certain holidays D. Green Thumb, which gives away free watering cans with the purchase of certain potted plants E. Panizza, whose combo meals are priced lower than the individual components sold together
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B. Mobile Point, which launched a range of cell phone models, each priced according to its features
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Which of the following is true of optional product pricing? A. It involves capitalizing on low value by-products. B. It involves pricing accessory products sold with the main product C. It is used to price a company’s main product. D. It involves setting geographically-specific prices. E. It is used to price products that must be used with the company’s main product.
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B. It involves pricing accessory products sold with the main product
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Multiprint, a printer manufacturing firm, sells ink cartridges for each of its specific models. Only Multiprint cartridges are compatible with Multiprint printers, and no two of the firm’s models share the same specifications. What type of pricing does Multiprint use? A. product line pricing B. optional product pricing C. captive product pricing D. by-product pricing E. product bundle pricing
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C. captive product pricing
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Using ________ pricing, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive. A. product bundle B. optional product C. captive product D. by-product E. product line
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D. by-product
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Which of the following product mix pricing strategies involves pricing multiple products to be sold together? A. product line pricing B. product bundle pricing C. optional product pricing D. by-product pricing E. captive product pricing
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B. product bundle pricing
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Which of the following is a price adjustment strategy? A. product bundle pricing B. by-product pricing C. product line pricing D. optional product pricing E. discount and allowance pricing
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E. discount and allowance pricing
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Which of the following price adjustment strategies offers a price reduction to buyers who pay their bills promptly? A. cash discount B. season discount C. quantity discount D. trade discount E. functional discount
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A. cash discount
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A(n) ________ refers to promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer’s products in some way. A. allowance B. sample C. discount D. tax credit E. tax exemption
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A. allowance
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________ allowances are payments or price reductions that reward dealers for participating in advertising and sales support programs. A. Promotional B. Trade-in C. Segmented D. Functional E. Dynamic
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A. Promotional
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Which term refers to prices that buyers carry in their minds and check with when they look at a given product? A. product line prices B. reference prices C. location-based prices D. product-form prices E. time-based prices
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B. reference prices
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What type of pricing is being used when a company temporarily prices its product below the list price to create buying excitement and urgency? A. segmented pricing B. international pricing C. reference pricing D. promotional pricing E. basing-point pricing
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D. promotional pricing
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The Internet offers ________, where the price can easily be adjusted to meet changes in demand. A. captive pricing B. dynamic pricing C. basing-point pricing D. price bundling E. cost-plus pricing
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B. dynamic pricing
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Which of the following is true of FOB-origin pricing? A. It is a strategy in which the company charges the same price plus freight to all customers. B. It is a costly option for customers who are located near the company. C. It charges all customers the freight cost from a base city to the customer location. D. It is an expensive alternative for customers in distant locations. E. It is a strategy in which the seller absorbs all or part of the freight charges
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D. It is an expensive alternative for customers in distant locations.
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When a competitor cuts its price, a company should ________ if it believes it will not lose much market share or would lose too much profit by cutting its own prices. A. reduce its production costs B. reduce its marketing costs C. maintain its current prices and profit margin D. increase its marketing budget to raise the perceived value of the product E. increase its production costs to improve the quality of the product
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C. maintain its current prices and profit margin
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When sellers set prices after talking to competitors and engaging in collusion, they are involved in ________. A. interstate commerce B. comparative pricing C. price fixing D. skimming pricing E. price bundling
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C. price fixing
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If a large retailer sold numerous items below cost with the intention of punishing small competitors and gaining higher long-run profits by putting those competitors out of business, the retailer would be guilty of ________. A. price collusion B. price fixing C. predatory pricing D. competitive pricing E. penetration pricing
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C. predatory pricing
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________ occurs when a seller states price savings that are not actually available to consumers. A. Comparative pricing B. Scanner fraud C. Deceptive pricing D. Market skimming E. Price collusion
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C. Deceptive pricing
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Thinking Cap Corp. prices its various cap designs at different price levels, ranging from $2.05 to $5.95. This is an example of optional product pricing. A. True B. False
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B. False
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Consumers who have no past experience with a product are especially likely to judge it by its price. A. True B. False
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A. True
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In segmented pricing, the difference in prices is based on differences in costs. A. True B. False
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B. False
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A ________ is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. A. product line B. product delivery network C. marketing channel D. consumer base E. resource bank
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C. marketing channel
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________ play an important role in matching supply and demand by providing consumers with a broad assortment of products in small quantities. A. Virtual banks B. Intermediaries C. Price consultants D. Uniform-delivery networks E. Upstream partners
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B. Intermediaries
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Lifebelt Insurance sells insurance only through its door-to-door salespeople. What type of marketing channel does Lifebelt use? A. inclusive B. multitiered C. indirect D. direct E. selective
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D. direct
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Plasticine Palace supplies its products exclusively to Arts & Crafts, a chain of stationery stores across the country. The chain then makes the plasticine available to end-consumers. This is an example of ________. A. a direct marketing channel B. intensive distribution C. an indirect marketing channel D. disintermediation E. extensive distribution
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C. an indirect marketing channel
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The greater the number of channel levels in a marketing channel, the ________. A. less distance between producer and end-consumer B. greater the channel complexity C. less time it takes for products to reach end-consumers D. greater the control producers have over the distribution of their products E. greater the control producers have over the demand of their products
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B. greater the channel complexity
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Conflict which occurs among firms at the same level of the marketing channel is known as ________ conflict. A. multitiered B. horizontal C. vertical D. equilateral E. exterior
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B. horizontal
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Managers at the Imperial Hotel-Chicago complained that the chain’s overall image was hurt because Imperial Hotel-Dallas was overcharging guests and providing poor service. The Imperial Hotel was experiencing ________ conflict. A. equilateral B. vertical C. multitiered D. communal E. horizontal
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E. horizontal
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When KFC came into conflict with its franchisees over the brand’s “Unthink KFC” repositioning, which emphasized grilled chicken over its traditional Kentucky fried chicken, KFC experienced ________ conflict. A. equilateral B. vertical C. multitiered D. communal E. horizontal
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B. vertical
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Which of the following is true of conventional distribution channels? A. Channel members have complete control over each other. B. Channel members seek to maximize their own profits. C. Channel conflict is governed by formal mechanisms. D. Channel members are assigned roles according to a clearly defined framework. E. Channel members work exclusively for the good of the organization
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B. Channel members seek to maximize their own profits.
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A(n) ________ marketing system consists of producers, wholesalers, and retailers acting as a unified system. A. horizontal B. vertical C. multitiered D. communal E. equilateral
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B. vertical
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Movie Giants offers DVD rentals through its Web site. It also offers DVD rentals via Star City stores. This is an example of a(n)________ distribution system. A. conventional B. inclusive C. intensive D. extensive E. multichannel
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E. multichannel
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Which of the following is a disadvantage of adding new channels in a multichannel distribution system? A. decreasing complexity of markets B. decreasing control over the system C. reducing opportunities for franchising D. lowering sales and market coverage E. minimizing publicity needs
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B. decreasing control over the system
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________ occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones. A. Extensive distribution B. Multichannelization C. Disintermediation D. Inclusive distribution E. Cross merchandising
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C. Disintermediation
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The Bookworm began delivering books directly to customers through mail instead of selling through “brick-and-mortar” companies. This is an example of ________. A. indirect marketing B. disintermediation C. franchising D. exclusive distribution E. intensive distribution
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B. disintermediation
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________ distribution is a strategy in which producers of convenience products and raw materials stock their products in as many outlets as possible. A. Direct B. Intensive C. Inclusive D. Exclusive E. Selective
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B. Intensive
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Whitelight stocks its toothpastes in all convenience stores across the country. This is an example of ________ distribution. A. exclusive B. selective C. hybrid D. intensive E. normal
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D. intensive
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With which of the following strategies would a company give only a limited number of dealers the right to distribute its products in their territories? A. exclusive distribution B. extensive distribution C. moderate distribution D. primary distribution E. intensive distribution
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A. exclusive distribution
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For which of the following would a company use an exclusive distribution strategy? A. luxury cars B. newspapers C. chewing gum D. dairy products E. soft drinks
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A. luxury cars
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When a seller requires its dealers to abstain from handling competitors’ products, it is called ________. A. subjective distribution B. exclusive dealing C. selective distribution D. exclusive pricing E. disintermediation
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B. exclusive dealing
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________ management refers to the management of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers. A. Cross B. Supply chain C. Price D. Product cycle E. Customer
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B. Supply chain
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Which of the following is NOT a major logistics function? A. inventory management B. product designing C. warehousing D. transportation E. packaging
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B. product designing
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Producers use intermediaries because they create greater efficiency in making goods available to target markets. A. True B. False
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A. True
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pricing continuum
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the cost-based pricing strategy
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fixed costs
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variable costs
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competition-based pricing strategy
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going rate pricing
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value based pricing strategy
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price elasticity of demand
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monopoly
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monopolistic competition
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oligopolistic competition
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pure competition
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market skimming
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market penetration
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product line
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optional product
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captive product
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by-product
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product bundle pricing
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discounts
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cash terms
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promotional allowances
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price fixing
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predatory pricing
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price discrimination
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retail price maintenance
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deceptive pricing
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direct channels
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indirect channels
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marketing intermedaries
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conventional distribution channels
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vertical marketing systems
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horizontal marketing systems
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franchise
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upstream channel partners
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downstream channel partners
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