Question 1

Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?
A) Status quo
B) Return on investment
C) Market share
D) Survival
E) Cash flow

Accepted Answer

Status quo pricing objectives focus on maintaining existing prices or meeting the competition's prices rather than competing on price. This approach can lead to a focus on nonprice factors such as product quality, service, and brand image.

Question 2

Maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability are all associated with a ____ pricing objective.
A) product quality
B) market share
C) survival
D) profit
E) status quo

Accepted Answer

The pricing objective of maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability is associated with a status quo pricing objective. This objective focuses on maintaining the current market position rather than pursuing growth or profit maximization.

Question 3

A marketer is most likely to set prices according to a cash-flow objective when a
A) trial-and-error approach to the market is acceptable.
B) certain market share must be maintained.
C) quick return on investment is desired.
D) higher price is acceptable to the firm.
E) product is expected to have a long life cycle.

Accepted Answer

Setting prices according to a cash-flow objective means that the marketer is primarily concerned with generating revenue quickly to cover costs and earn a return on investment. This objective is most likely to be relevant when a quick return on investment is desired, as stated in option C.

Question 4

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?
A) Return on investment
B) Cash flow
C) Profit
D) Status quo
E) Survival

Accepted Answer

The pricing objective of "status quo" would be the best choice in this scenario because the organization is in a favorable position and does not require any changes to its pricing strategy. This objective would maintain the organization's current pricing and would not aim to increase profits or market share. It is also important to note that this pricing objective is not always suitable for all organizations and may not be effective in the long term.

Question 5

The three primary bases for developing prices are
A) profit, demand, and competition.
B) supply, demand, and marketing objectives.
C) demand, competition, and cost.
D) markup, cost, and cost-plus.
E) negotiation, periodicity, and randomness.

Accepted Answer

The three primary bases for developing prices are demand (what customers are willing to pay), competition (what prices are being charged by competitors), and cost (what it costs to produce and distribute the product). Therefore, option C is the best choice. Options A, B, and D each leave out one of these essential factors. Option E is not a valid choice as negotiation, periodicity, and randomness are not the primary bases for developing prices.

Question 6

If an organization sets prices to recover research and development expenses and establish a premium quality image for its product, it would be using a ____ pricing objective.
A) survival
B) return on investment
C) market share
D) product quality
E) cash flow

Accepted Answer

The organization is using a product quality pricing objective. This involves setting prices higher to convey a premium quality image and to recover the expenses incurred in research and development.

Question 7

The pricing of Clinique makeup considerably higher than brands such as Cover Girl, Revlon, and Maybelline is used to communicate ____, which is the company's primary pricing objective.
A) market share
B) product quality
C) status quo
D) profitability
E) cash flow

Accepted Answer

The answer of The pricing of Clinique makeup considerably higher...

Question 8

Which of the following pricing objectives sets prices to recover cash as quickly as possible?
A) Market share
B) Profit
C) Cash flow
D) Return on investment
E) Product quality

Accepted Answer

The pricing objective that sets prices to recover cash as quickly as possible is cash flow. This pricing objective is focused on generating enough revenue to cover operating expenses and ensure that the business has enough cash on hand to meet its obligations, such as paying vendors or purchasing inventory. Market share, profit, return on investment, and product quality are all important pricing objectives, but they do not specifically address the need for cash flow.

Question 9

Competitors' prices, along with the marketing variables they emphasize, are determining factors in
A) the instability of prices in a particular industry.
B) using markup pricing for consumer goods.
C) how much marketing research a firm needs to collect.
D) using differential pricing to demonstrate quality differences.
E) how important price will be to customers.

Accepted Answer

Competitors' prices and the marketing variables they emphasize can significantly influence how important price is to customers, as these factors affect customers' perceptions of value and their purchasing decisions.

Question 10

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.
A) Return on investment
B) Survival
C) Product quality
D) Market share
E) Status quo

Accepted Answer

Under Armour's pricing objective of maintaining or increasing its product's sales in relation to total industry sales indicates a focus on market share.

Question 11

Gambrell Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as
A) market share.
B) cash flow.
C) profit.
D) product quality.
E) status quo.

Accepted Answer

When a company anticipates a short product life cycle for a product, setting cash flow as the primary pricing objective is strategic. This approach aims to quickly recover investment and generate liquidity, as the product may not be in the market for a long time to sustain prolonged profit margins or market share growth.

Question 12

Kendra has been doing research for a smartphone manufacturing company. She has just been reviewing the results of several focus groups and has found that for customers, value is a function of the product's
A) quality attributes.
B) price and brand name.
C) price and durability.
D) quality and functional attributes.
E) quality relative to the quality of competing brands.

Accepted Answer

The answer of Kendra has been doing research for a...

Question 13

Some grocery stores collect data on competitive prices
A) by calling their competitors.
B) on a quarterly basis.
C) through stores' purchase data.
D) from their resellers.
E) by using full-time comparison shoppers.

Accepted Answer

Using full-time comparison shoppers is the most effective and accurate way for grocery stores to collect data on competitive prices as it involves physically visiting the competitors' stores and gathering firsthand information on prices and promotions. Other methods such as calling competitors or relying on quarterly data may not be as reliable or up-to-date.

Question 14

A market share objective
A) is not recommended when sales for the total industry are declining.
B) is not especially useful when sales for the total industry are increasing.
C) is not especially useful when sales for the total industry are flat.
D) is useful primarily in an industry where total sales are increasing.
E) can be used effectively whether total industry sales are rising or falling.

Accepted Answer

Market share objectives focus on increasing a company's portion of sales within its industry, regardless of whether the industry's total sales are rising or falling. This strategy can be effective in both scenarios, as it aims at capturing a larger slice of the market pie, which can lead to increased revenues and competitive advantage.

Question 15

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?
A) Status quo
B) Market share
C) Survival
D) Cash flow
E) Return on investment

Accepted Answer

Status quo pricing aims to stabilize demand by maintaining current prices or meeting competitors' prices, reducing the risk of price wars and demand fluctuations.

Question 16

When consumers are making do with less expensive products and shopping more selectively, manufacturers and retailers must focus on the ____ of their products.
A) price
B) quality
C) availability
D) value
E) image

Accepted Answer

When consumers are choosing less expensive products and being more selective in their shopping, it is important for manufacturers and retailers to focus on providing value for their products. Value goes beyond just the price of the product and takes into consideration the quality, availability, and overall image of the product. By providing value, manufacturers and retailers can assure consumers that they are getting the most for their money and encourage continued purchasing in the future.

Question 17

Marketers improve their ability to establish prices appropriately when
A) there is nonprice competition.
B) they know prices charged for competing brands.
C) their products are of better quality than the competition's.
D) the main objective is image building.
E) using psychological pricing.

Accepted Answer

Knowing prices charged for competing brands helps marketers to establish prices appropriately by setting a price that is competitive with other brands in the market. This allows them to avoid pricing themselves out of the market, while still making a profit.

Question 18

Marketers at organizations engaged in nonprice competition
A) are more concerned about knowing competitors' prices than are marketers in organizations that are engaged in price competition.
B) are not concerned about the prices of competing brands.
C) need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands.
D) rely on customers to help them gather information regarding the prices of competing brands.
E) experience high levels of price instability.

Accepted Answer

Marketers at organizations engaged in nonprice competition need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands. This is important because their competition is not solely based on price, but rather on other factors such as quality or unique features. Therefore, they need to ensure that their prices are competitive but also reflect the value of their product compared to that of their competitors.

Question 19

Maintaining or increasing market share
A) can be achieved even if industry sales are flat or decreasing.
B) is an infrequently used pricing objective in most industries.
C) depends upon the overall growth of the total industry.
D) is a profit-related objective based on price.
E) is directly tied to leading an industry in product quality.

Accepted Answer

Maintaining or increasing market share can be achieved even if industry sales are flat or decreasing by taking market share away from competitors.

Question 20

Nabisco is considering two pricing objectives. The first is to sell one out of every three crackers consumed in the world, an objective based on _______; the second is to meet, but not beat, competitor's prices of cookie products, which is a _____ objective.
A) cash flow; market share
B) market share; cash flow
C) survival; status quo
D) market share; survival
E) market share; status quo.

Accepted Answer

The answer of Nabisco is considering two pricing objectives. The...

Quiz 12: Pricing Concepts and Management

Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?

Maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability are all associated with a ____ pricing objective.

A marketer is most likely to set prices according to a cash-flow objective when a

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?

The three primary bases for developing prices are

If an organization sets prices to recover research and development expenses and establish a premium quality image for its product, it would be using a ____ pricing objective.

The pricing of Clinique makeup considerably higher than brands such as Cover Girl, Revlon, and Maybelline is used to communicate ____, which is the company's primary pricing objective.

Which of the following pricing objectives sets prices to recover cash as quickly as possible?

Competitors' prices, along with the marketing variables they emphasize, are determining factors in

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

Gambrell Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as

Kendra has been doing research for a smartphone manufacturing company. She has just been reviewing the results of several focus groups and has found that for customers, value is a function of the product's

Some grocery stores collect data on competitive prices

A market share objective

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?

When consumers are making do with less expensive products and shopping more selectively, manufacturers and retailers must focus on the ____ of their products.

Marketers improve their ability to establish prices appropriately when

Marketers at organizations engaged in nonprice competition

Maintaining or increasing market share

Nabisco is considering two pricing objectives. The first is to sell one out of every three crackers consumed in the world, an objective based on ___; the second is to meet, but not beat, competitor's prices of cookie products, which is a _ objective.