Question 1

Competitive pricing focuses on ______.
A) variable pricing
B) penetration pricing
C) the marketing mix
D) skimming pricing

Accepted Answer

Competitive pricing focuses on the marketing mix, as it involves setting prices based on what competitors are charging, which is a key component of the marketing strategy.

Question 2

Setting a price relatively high compared to similar goods and then gradually lowering it is a pricing strategy called ______ pricing.
A) psychological
B) cost-based
C) skimming
D) penetration

Accepted Answer

Skimming pricing involves setting a relatively high price for a new or unique product and then gradually decreasing the price as competitors enter the market or the product becomes more common. This strategy is often used for innovative or high-quality products where customers are willing to pay a premium price. As demand decreases or competition increases, the price is lowered to maintain market share. This strategy allows businesses to maximize profits in the early stages of a product's life cycle.

Question 3

Complete the following using the terms listed below.
-The ______ is the combination of personal and nonpersonal selling to meet the needs of a firm's target customers and communicate its message to them.
A)breakeven analysis
B)promotional mix
C)volume objectives
D)institutional advertising
E)discount pricing
F)creative selling
G)point-of-purchase advertising
H)skimming pricing
I)pushing strategy
J)odd pricing
K)integrated marketing communications
L)cooperative advertising
M)penetration pricing

Accepted Answer

The promotional mix is the combination of personal and nonpersonal selling strategies used to meet the needs of a firm's target customers and communicate its message effectively.

Question 4

Walmart utilizes a pricing strategy of maintaining continuous low prices rather than relying on sales. This strategy is an example of ______.
A) skimming pricing
B) psychological pricing
C) everyday low pricing
D) penetration pricing

Accepted Answer

Walmart's pricing strategy is based on everyday low pricing, which means it offers consistent pricing without relying on sales or discounts. This approach helps the brand to gain customer loyalty as it establishes trust in the pricing policy, making customers believe they are receiving the best deal all the time.

Question 5

Complete the following using the terms listed below.
-During ______, marketers coordinate all promotional activities to execute a unified, customer-focused promotional strategy.
A)breakeven analysis
B)promotional mix
C)volume objectives
D)institutional advertising
E)discount pricing
F)creative selling
G)point-of-purchase advertising
H)skimming pricing
I)pushing strategy
J)odd pricing
K)integrated marketing communications
L)cooperative advertising
M)penetration pricing

Accepted Answer

Integrated marketing communications involves coordinating all promotional activities to execute a unified, customer-focused promotional strategy.

Question 6

Complete the following using the terms listed below.
-______ consists of displays or demonstrations that promote products when and where consumers buy them.
A)breakeven analysis
B)promotional mix
C)volume objectives
D)institutional advertising
E)discount pricing
F)creative selling
G)point-of-purchase advertising
H)skimming pricing
I)pushing strategy
J)odd pricing
K)integrated marketing communications
L)cooperative advertising
M)penetration pricing

Accepted Answer

Point-of-purchase advertising consists of displays or demonstrations that promote products when and where consumers buy them.

Question 7

The Social Club is conducting a breakeven analysis to determine how many tickets it must sell at $20 each to break even on the Holiday Dance. Fixed costs are $4,000, and the variable cost per person is $10. To break even, the Social Club must sell ______ tickets.
A) 800
B) 500
C) 400
D) 80

Accepted Answer

The answer of The Social Club is conducting a breakeven...

Question 8

Research has shown that consumers' perception of price is mostly related to ______.
A) accessibility
B) quality
C) high prices
D) ownership

Accepted Answer

Research has shown that consumers' perception of price is mostly related to the perceived quality of the product or service. If the consumer believes that a higher price indicates higher quality, they may be willing to pay more for the product or service. On the other hand, if the consumer perceives that a lower price indicates lower quality, they may be less willing to purchase the product or service. Factors such as accessibility, ownership, and high prices may also play a role in consumers' perception of price, but quality is the primary factor.

Question 9

A company sells its product for $30 and has a variable operating cost of $15 per unit and produces a $10 per unit contribution to fixed costs. If the firm has total fixed costs of $30,000, what is the quantity of units that the firm should produce in order to breakeven?
A) 2000 units
B) 3000 units
C) 2020 units
D) 1900 units

Accepted Answer

Breakeven point = Fixed costs / Contribution per unit= 30,000 / 10= 3,000 units

Question 10

Madison owns an upscale accessory boutique and drastically reduced some earrings to make room for new inventory. When the earrings didn't sell in the "discount basket," she put them back on the shelf at regular price and they sold within a month. What is her customers' perception of price?
A) value-quality
B) price-quality
C) price-prestige
D) prestige-quality

Accepted Answer

The answer of Madison owns an upscale accessory boutique and...

Question 11

Texaco and Shell are located directly across the street from one another. Texaco lowers its price for regular unleaded by 5 cents, and Shell quickly follows suit. What pricing objective is Shell using?
A) competitive pricing
B) skimming pricing
C) odd pricing
D) penetration pricing

Accepted Answer

Shell is using competitive pricing, which involves setting prices based on what the competition is charging. By matching Texaco's price reduction, Shell is attempting to remain competitive and not lose customers to Texaco.

Question 12

Cocina Mas Fina makes all its menu items from scratch and uses authentic Mexican herbs in its dishes. As a result of the restaurant's focus on using specialty ingredients, prices are 75 percent higher than the competition's. Cocina Mas Fina knows ______.
A) the higher the price, the better its perceived quality
B) people always pay more for items that are unfamiliar to them
C) people think that the competition's food is priced too low
D) experience has taught consumers to ignore prices

Accepted Answer

Cocina Mas Fina believes that higher prices imply better quality, indicating that they may rely on the price-quality heuristic to attract customers.

Question 13

Pure Products is introducing a new paper coffee filter at a dramatically reduced cost. Pure Products expects that competitors will come out with similar products within a short period of time. Which pricing strategy will enable Pure Products to discourage competitors?
A) skimming pricing
B) penetration pricing
C) psychological pricing
D) cost-based pricing

Accepted Answer

Penetration pricing involves setting a low price for a new product to quickly attract customers and gain a foothold in the market. This strategy is effective in discouraging competitors because it makes it difficult for them to match the low price, especially if Pure Products has achieved economies of scale and cost advantages. Competitors may be hesitant to enter the market and compete on price if they anticipate low profit margins. Furthermore, if Pure Products can establish a customer base and generate brand loyalty through this pricing strategy, customers may be less willing to switch to a competitor's product even if it is similarly priced.

Question 14

Which of the following statements regarding price and quality is supported by research?
A) The higher the price, the greater the sales volume.
B) Consumers' perception of product quality is related closely to the item's price.
C) Perception of quality has no relationship to price.
D) Quality and price always go hand-in-hand.

Accepted Answer

Research has shown that consumers often equate price with quality, meaning they perceive higher-priced products as having better quality. However, this does not mean that the relationship between price and quality is always positive or that quality and price always go hand-in-hand. There are examples of lower-priced products that are perceived as high-quality and vice versa. Therefore, option A and D are incorrect. Additionally, option C is also incorrect as research suggests that there is a relationship between perception of quality and price.

Question 15

A local bakery wanted to attract more customers during the week, so it began offering a dozen bagels for $5 every Wednesday. The bakery utilized ______ pricing to increase its volume of sales.
A) discount
B) skimming
C) odd
D) everyday low

Accepted Answer

The bakery utilized discount pricing by offering a lower than usual price for a limited time in order to increase sales volume.

Question 16

T-shirts Unlimited is conducting a breakeven analysis on unbleached cotton tops. Fixed costs are $100,000 and the per-unit contribution to fixed costs is $20. To break even, the company must sell ______ units.
A) 20,000
B) 5,000
C) 500
D) 200

Accepted Answer

To calculate the breakeven point, we divide the fixed costs by the per-unit contribution to fixed costs:

Breakeven Point = Fixed Costs / Per-unit Contribution to Fixed Costs 
Breakeven Point = $100,000 / $20 per unit 
Breakeven Point = 5,000 units

Therefore, the company must sell 5,000 units to break even.

Question 17

Complete the following using the terms listed below.
-______ involves messages that promote concepts, ideas, philosophies, or goodwill for industries, companies, organizations, or government entities.
A)breakeven analysis
B)promotional mix
C)volume objectives
D)institutional advertising
E)discount pricing
F)creative selling
G)point-of-purchase advertising
H)skimming pricing
I)pushing strategy
J)odd pricing
K)integrated marketing communications
L)cooperative advertising
M)penetration pricing

Accepted Answer

Institutional advertising involves messages that promote concepts, ideas, philosophies, or goodwill for industries, companies, organizations, or government entities.

Question 18

The method of pricing that uses uneven amounts to make prices appear to be less than they really are, is known as ______.
A) everyday pricing
B) discount
C) odd pricing
D) skimming pricing

Accepted Answer

Odd pricing is the method of pricing that uses uneven amounts to make prices appear to be less than they really are. For example, pricing a product at $9.99 instead of $10.00. This is a common pricing strategy used by retailers to make prices more attractive to customers.

Question 19

______formulas calculates total costs per unit and then add markups to cover overhead costs and generate profits.
A) Breakeven
B) Cost-based pricing
C) Skimming pricing
D) Discount

Accepted Answer

Cost-based pricing formulas calculate the total cost per unit and then add markups to cover overhead costs and generate profits. Break-even formulas calculate the minimum amount of sales needed to cover all costs with no profit. Skimming pricing strategies set high initial prices for new products to generate maximum profit before competitors enter the market. Discount strategies reduce the price of a product or service to boost sales.

Question 20

Chris is allowed to purchase a reasonably priced notebook computer for graduation. He sees one in Best Buy for $999.99 and calls his parents to assure them the computer costs "less than a thousand." Both Chris and Best Buy are using ______ to downplay the price of the computer.
A) cost-based pricing
B) personal selling
C) price fixing
D) odd pricing

Accepted Answer

Both Chris and Best Buy are using odd pricing to downplay the price of the computer. They are pricing the computer just below $1000 to make it seem like it costs less than $1000.

Quiz 13: Promotion and Pricing Strategies

Competitive pricing focuses on ______.

Setting a price relatively high compared to similar goods and then gradually lowering it is a pricing strategy called ______ pricing.

Complete the following using the terms listed below. -The ______ is the combination of personal and nonpersonal selling to meet the needs of a firm's target customers and communicate its message to them.

Walmart utilizes a pricing strategy of maintaining continuous low prices rather than relying on sales. This strategy is an example of ______.

Complete the following using the terms listed below. -During ______, marketers coordinate all promotional activities to execute a unified, customer-focused promotional strategy.

Complete the following using the terms listed below. -______ consists of displays or demonstrations that promote products when and where consumers buy them.

The Social Club is conducting a breakeven analysis to determine how many tickets it must sell at $20 each to break even on the Holiday Dance. Fixed costs are $4,000, and the variable cost per person is $10. To break even, the Social Club must sell ______ tickets.

Research has shown that consumers' perception of price is mostly related to ______.

A company sells its product for $30 and has a variable operating cost of $15 per unit and produces a $10 per unit contribution to fixed costs. If the firm has total fixed costs of $30,000, what is the quantity of units that the firm should produce in order to breakeven?

Madison owns an upscale accessory boutique and drastically reduced some earrings to make room for new inventory. When the earrings didn't sell in the "discount basket," she put them back on the shelf at regular price and they sold within a month. What is her customers' perception of price?

Texaco and Shell are located directly across the street from one another. Texaco lowers its price for regular unleaded by 5 cents, and Shell quickly follows suit. What pricing objective is Shell using?

Cocina Mas Fina makes all its menu items from scratch and uses authentic Mexican herbs in its dishes. As a result of the restaurant's focus on using specialty ingredients, prices are 75 percent higher than the competition's. Cocina Mas Fina knows ______.

Pure Products is introducing a new paper coffee filter at a dramatically reduced cost. Pure Products expects that competitors will come out with similar products within a short period of time. Which pricing strategy will enable Pure Products to discourage competitors?

Which of the following statements regarding price and quality is supported by research?

A local bakery wanted to attract more customers during the week, so it began offering a dozen bagels for $5 every Wednesday. The bakery utilized ______ pricing to increase its volume of sales.

T-shirts Unlimited is conducting a breakeven analysis on unbleached cotton tops. Fixed costs are $100,000 and the per-unit contribution to fixed costs is $20. To break even, the company must sell ______ units.

Complete the following using the terms listed below. -______ involves messages that promote concepts, ideas, philosophies, or goodwill for industries, companies, organizations, or government entities.

The method of pricing that uses uneven amounts to make prices appear to be less than they really are, is known as ______.

______formulas calculates total costs per unit and then add markups to cover overhead costs and generate profits.

Chris is allowed to purchase a reasonably priced notebook computer for graduation. He sees one in Best Buy for $999.99 and calls his parents to assure them the computer costs "less than a thousand." Both Chris and Best Buy are using ______ to downplay the price of the computer.