According to the text, price is best described as:
a. the perceived value of a good or service
b. money exchanged for a good or service
c. the psychological results of purchasing
d. the cost in dollars for a good or service as set by the producer
e. the value of a barter good in an exchange
a. equals quantity sold times profit margin
b. equals price minus costs
c. equals return on investment
d. is synonymous with profit
e. equals price of goods times quantity sold
_____ pay for every activity of the company.
a. Revenues
b. Investments
c. Retained earnings
d. Profits
e. Prices
Money that is left over after paying for company activities is called:
a. return on investment
b. a contribution margin
c. profit
d. net worth
e. a current asset
At Wal-Mart, Randi saw a bag of daffodil flower bulbs and a box of plant fertilizer. The items, which were sold together, retailed at $28.50, but were marked down to $19.99. The $19.99 is the:
a. revenue
b. price
c. profit
d. liquidity value
e. amortized value
Which of the following statements about price is true?
a. Price can relate to anything with perceived value, not just money.
b. Price is that which is given up in an exchange to acquire a product.
c. Customers are interested in obtaining a perceived reasonable price.
d. The price paid is based on the satisfaction consumers expect to receive from a product.
e. All of these statements about price are true.
Which of the following statements about price is true?
a. Price and revenue are synonyms.
b. Price always equals some monetary figure.
c. Price is not necessarily based on the satisfaction consumers receive from a product.
d. High prices result in high profits.
e. All of these statements about price are true.
Why are marketing managers finding it more difficult to set prices in today’s environment?
a. Inflationary and recessionary periods have made customers less price-sensitive.
b. Fewer dealer and generic brands are available because the competition has been eliminated.
c. The high rate of new-product introductions has led to careful reevaluation by consumers.
d. Marketing managers are finding it difficult to compare prices between suppliers.
e. Buyers are less informed and are less price-sensitive.
For convenience, pricing objectives can be divided into three categories. They are:
a. refundable, competitive, and attainable
b. perceived, actual, and unique-situational
c. differentiated, niche, and undifferentiated
d. profit oriented, sales oriented, and status quo
e. monopolistic, fixed, and variable
An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.
a. profit maximization
b. market share pricing
c. demand-oriented pricing
d. sales maximization
e. status quo pricing
The pricing policy used by Middleton Industries, manufacturer of Renaissance charms for bracelets and necklaces, is to set prices so its retail prices are as high as the market will tolerate. Additionally, Middleton strives to keep its costs at an industry low by using silver and gold overlays over charms made of cheap base metal. This is an example of a _____ policy
a. market share pricing
b. profit maximization
c. demand-oriented
d. sales maximization
e. status quo pricing
Hal Macini owner of Evergreen Landscaping is more interested in earning customer goodwill than striving for maximum profit. He determines his prices by maintaining the company’s profitability at a level that gives him a good living but will never make him a rich man. Macini is basing his pricing policy on:
a. maintaining stable sales levels
b. earning satisfactory profits
c. creating retained earnings
d. creating the most sales possible
e. decreasing consumer demand
_____ measures the overall effectiveness of management in generating profits with its available assets.
a. Return on investment
b. Economic order quantity
c. Target-on-sales
d. Retained earnings
e. Efficiency maximization
Franz Hall wants to open a business selling cotton candy from a mobile cart. He cannot decide whether to base his pricing objectives on market share, dollar sales, or unit sales. Regardless of which he chooses, his firm’s pricing objective can be categorized as:
a. status quo
b. profit oriented
c. need oriented
d. cost oriented
e. sales oriented
The Fenton Company produces memorial bricks, which veterans’ organizations, Chambers of Commerce, and other service organizations sell as fund raisers. The company has a target return on investment of 13 percent. This means that the Fenton Company has a(n) _____ pricing objective.
a. profit-oriented
b. market share maximization
c. status quo
d. sales maximization
e. supply-demand equalization
A company using market share pricing has a _____ pricing objective.
a. profit-oriented
b. sales-oriented
c. demand-oriented
d. supply-oriented
e. status quo
Under which of the following conditions will companies with low market share be most likely to fail?
a. competing in a slow-growth industry
b. competing in an industry that makes frequently purchased items
c. competing in an industry with few product changes
d. competing in an industry requiring market power and economies of scale
e. competing in none of these industries
Bernard Hinault makes the most expensive bicycles in the world. Its target market is people who willingly pay $8,000 or more for their bicycles. If Bernard Hinault were to lower prices to target customers who want a good bike but who can’t or won’t spend that much for one, it would most likely use a(n) _____ pricing objective.
a. inelastic or supply-oriented
b. market share or sales maximization
c. profit maximization or target return on investment
d. status quo or satisfactory profits
e. demand-oriented or supply-oriented
At the end of the summer, Howard Nursery reduced the price on all of its plants, fertilizer, and potting soil by 50 percent in order to liquidate this inventory. What type of pricing strategy is being used in this example?
a. supply oriented
b. sales maximization
c. target return on investment
d. satisfactory profit
e. profit maximization
Grove City Furniture Company has recently moved to a new, larger location. At this new location, it has been unable to attract sufficient customers. Frankie Alonza, its owner, does not have the cash to pay the current loan installment due on the building and inventory. Alonza has decided to reduce all merchandise prices by at least 50 percent for a weekend sale so he can earn enough to make his loan payment. His pricing objective can be classified as:
a. market share maximization
b. satisfactory profits
c. asset maximization
d. sales maximization
e. target ROI
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