Question 1

_____ pricing calls for pricing exports according to the dynamic conditions of the marketplace.
A) Marginal
B) Market-differentiated
C) Isolation
D) Cost-plus

Accepted Answer

Market-differentiated pricing adjusts the price of exports based on the specific conditions of the market in which they are being sold. This includes taking into consideration things like competition, exchange rates, and customer demand. Marginal pricing focuses on setting prices based on the incremental cost of production, while isolation pricing involves setting prices independent of market forces. Cost-plus pricing involves setting prices based on the cost of production plus a desired profit margin.

Question 2

_____ pricing is set regardless of the buyer or may be based on average unit costs of fixed,variable,or export-related costs.
A) Dual
B) Export variable
C) Standard worldwide
D) Market-differentiated

Accepted Answer

Standard worldwide pricing is set regardless of the buyer or may be based on average unit costs of fixed, variable or export-related costs. This pricing approach is used when companies want to maintain consistent pricing globally, regardless of market conditions or individual customer needs.

Question 3

When _____ is used,the product is offered at a low price intended to generate volume sales and achieve high market share,which would compensate for a lower per-unit return.
A) market pricing
B) skimming
C) penetration pricing
D) isolation pricing

Accepted Answer

Penetration pricing is when a product is offered at a low price to attract customers and gain a higher market share. This strategy may result in lower profit margins per unit sold, but the goal is to make up for it through higher sales volume.

Question 4

For an exporter to use the _____ approach,the product has to be unique,and some segments of the market must be willing to pay the high price.
A) extinction pricing
B) skimming
C) penetration pricing
D) market pricing

Accepted Answer

Skimming pricing is used when the product is unique and some segments of the market are willing to pay a high price for it. It involves setting a high price initially and then gradually reducing it over time as competition enters the market. This strategy is often used for luxury goods, niche products or cutting-edge technologies. Extinction pricing refers to setting a price so high that it effectively eliminates demand for the product, while penetration pricing involves setting a low price to attract customers and gain market share. Market pricing refers to setting a price based on competition and market conditions.

Question 5

Which of the following can marketers use to discourage other marketers from entering the market?
A) Cost-plus pricing
B) Changing pricing
C) Multiple-product pricing
D) Penetration pricing

Accepted Answer

Penetration pricing involves setting a low initial price to attract customers and gain market share, which can make it difficult for other marketers to enter the market and compete on price. By using this strategy, marketers can discourage others from entering the market or force them to enter at a disadvantage. Cost-plus pricing, changing pricing, and multiple-product pricing do not necessarily discourage other marketers from entering the market.

Question 6

Which of the following is considered as an internal factor in setting the export price?
A) Nature of demand
B) Exchange rate stability
C) Distribution system
D) Company's customers

Accepted Answer

Distribution system is an internal factor in setting the export price as it is controlled by the company and can be adjusted to optimize pricing.

Question 7

Which of the following allows an exporter to be refunded up to 99 percent of duties paid on imported goods when they are incorporated in articles that are subsequently exported within five years of the importation?
A) Foreign sourcing
B) Skimming
C) Duty drawbacks
D) Forfaiting

Accepted Answer

Duty drawbacks allow an exporter to be refunded up to 99 percent of duties paid on imported goods when they are incorporated in articles that are subsequently exported within five years of the importation. Foreign sourcing refers to the practice of obtaining materials, products, or services from foreign countries. Skimming is the pricing strategy whereby a company charges a high price for its product or service at launch and then lowers the price over time. Forfaiting is a financing technique used in international trade to eliminate risks involved in credit transactions.

Question 8

_____ system differentiates between domestic and export prices.
A) Dual pricing
B) Bilateral pricing
C) Semi-pricing
D) Isolation pricing

Accepted Answer

Dual pricing is a system that differentiates between domestic and export prices. This practice is common in countries where the government wants to protect domestic producers and consumers from high international prices. Dual pricing allows the government to control the flow of goods and protect the economy from external shocks.

Question 9

Which of the following is a strategy to compensate for price escalation?
A) Weeding out government controls and avoiding them by entering markets through third parties
B) Reorganizing the channel of distribution
C) Reassessing customer needs by conducting market research
D) Assembling products made with domestic components

Accepted Answer

Reorganizing the channel of distribution can help compensate for price escalation by eliminating unnecessary intermediaries and reducing distribution costs. This can help to keep prices competitive while still maintaining profitability.

Question 10

Price changes are called for when:
A) the value of the billing currency is stable.
B) there is a change in the internal situation.
C) a change occurs in a particular market segment.
D) the costs of production are relatively constant.

Accepted Answer

The answer of Price changes are called for when:
A) the...

Question 11

The combined effect of both clear-cut and hidden costs results in export prices that far exceed domestic prices.This cause is known as:
A) cost overrun.
B) seamless integration.
C) relationship pricing.
D) price escalation.

Accepted Answer

The term "price escalation" specifically refers to the phenomenon where export prices are higher than domestic prices due to the addition of various extra costs, including both clear-cut and hidden costs. Other options such as "cost overrun" and "seamless integration" are not directly related to this concept, while "relationship pricing" refers to the practice of adjusting prices based on the buyer-seller relationship, which is not particularly relevant to the issue of export pricing.

Question 12

Cost-driven and market-driven approaches to pricing products for export are associated with:
A) standard worldwide pricing.
B) dual pricing.
C) market-differentiated pricing.
D) single pricing.

Accepted Answer

Dual pricing involves setting different prices for the same product in different markets, which aligns with both cost-driven and market-driven approaches to pricing products for export.

Question 13

The marginal cost method of pricing considers the direct costs of producing and selling products for export as the floor beneath which prices cannot be set.What costs need to be excluded in these direct costs?
A) Variable costs and product costs
B) Shipment costs and manufacturing costs
C) Fixed costs, R&D, and domestic overhead
D) Inventory costs and production costs

Accepted Answer

The marginal cost method only considers the direct costs of production and excludes fixed costs, research and development costs, and domestic overhead. These costs are not directly related to the production and selling of products for export and thus should not be factored into the pricing calculation.

Question 14

Which of the following is a reactive approach that may lead to problems if sales volumes never rise to sufficient levels to produce a satisfactory return?
A) Market pricing
B) Penetration pricing
C) Multiple-product pricing
D) Isolation pricing

Accepted Answer

The answer of Which of the following is a reactive...

Question 15

Which of the following statements about pricing is true?
A) It cannot determine the long-term viability of an enterprise.
B) It should be determined in isolation from the other marketing mix elements.
C) It is a major competitive tool in meeting and beating close rivals and substitutes.
D) It is the only element in the marketing mix that produces fixed costs.

Accepted Answer

Pricing is a major competitive tool that can help a business meet and beat its close rivals and substitutes. The pricing strategy a business uses can have a significant impact on its market share and profitability. While pricing should not be determined in isolation from the other marketing mix elements, it is one of the most important factors that businesses need to consider when developing their marketing strategies.

Question 16

In first-time pricing,the objective of _____ is to achieve the highest possible contribution in a short time period.
A) market pricing
B) skimming
C) penetration pricing
D) predatory pricing

Accepted Answer

Skimming pricing is aimed at achieving high contribution margins for the product in a relatively short period of time. It involves setting a high price initially to maximize profits before competitors enter the market. This pricing strategy is usually applied to new and innovative products that have a competitive advantage, and it signals high quality to customers.

Question 17

Market-differentiated pricing calls for export pricing according to the dynamic conditions of the marketplace.What are the three changes which might affect this type of pricing?
A) Pre-, present, or post-fluctuations
B) Competition, exchange rates, or environment
C) Space, time, or utility
D) Operations, media, or markets

Accepted Answer

Market-differentiated pricing requires exporters to constantly adjust prices based on changes in the marketplace, such as competition, fluctuations in exchange rates, and changes in the business environment. While factors such as space, time, and utility may have an impact on pricing, they are not as directly related to market conditions as competition, exchange rates, and the environment. Operations, media, and markets may also influence export pricing, but they are related to specific business strategies and do not necessarily reflect the dynamic conditions of the marketplace.

Question 18

Which of the following is a drawback of the cost-plus method?
A) The final price may be so high that the firm's competitiveness is compromised.
B) It is so variable that the actual price cannot be substantiated.
C) There is a high turnover of product resulting in cost fluctuations.
D) It is a time-consuming method.

Accepted Answer

The cost-plus method may result in a final price that is so high that the firm's competitiveness is compromised, as it is based solely on the firm's costs and may not take into account market factors such as demand and competitors' prices.

Question 19

In setting export prices,which of the following is an attribute of pricing policy determination?
A) Flexibility
B) Decision control
C) Competitive posture
D) Market-based differentiation

Accepted Answer

The answer of In setting export prices,which of the following...

Question 20

Which of the following is considered as an external factor in setting the export price?
A) Promotion needs
B) Overall price position of firm
C) Distribution system
D) Exchange rate stability

Accepted Answer

Exchange rate stability is considered as an external factor in setting the export price as it depends on the market forces beyond the control of the exporting firm. Promotion needs, overall price position of the firm, and distribution system are internal factors as they are within the control of the exporting firm.

Quiz 14: Pricing Strategies and Tactics

_____ pricing calls for pricing exports according to the dynamic conditions of the marketplace.

_____ pricing is set regardless of the buyer or may be based on average unit costs of fixed,variable,or export-related costs.

When _____ is used,the product is offered at a low price intended to generate volume sales and achieve high market share,which would compensate for a lower per-unit return.

For an exporter to use the _____ approach,the product has to be unique,and some segments of the market must be willing to pay the high price.

Which of the following can marketers use to discourage other marketers from entering the market?

Which of the following is considered as an internal factor in setting the export price?

Which of the following allows an exporter to be refunded up to 99 percent of duties paid on imported goods when they are incorporated in articles that are subsequently exported within five years of the importation?

_____ system differentiates between domestic and export prices.

Which of the following is a strategy to compensate for price escalation?

Price changes are called for when:

The combined effect of both clear-cut and hidden costs results in export prices that far exceed domestic prices.This cause is known as:

Cost-driven and market-driven approaches to pricing products for export are associated with:

The marginal cost method of pricing considers the direct costs of producing and selling products for export as the floor beneath which prices cannot be set.What costs need to be excluded in these direct costs?

Which of the following is a reactive approach that may lead to problems if sales volumes never rise to sufficient levels to produce a satisfactory return?

Which of the following statements about pricing is true?

In first-time pricing,the objective of _____ is to achieve the highest possible contribution in a short time period.

Market-differentiated pricing calls for export pricing according to the dynamic conditions of the marketplace.What are the three changes which might affect this type of pricing?

Which of the following is a drawback of the cost-plus method?

In setting export prices,which of the following is an attribute of pricing policy determination?

Which of the following is considered as an external factor in setting the export price?