Question 1

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

Accepted Answer

The answer of Steinway produces concert grand pianos, often using...

Question 2

When determining markup as a percentage of cost, divide the markup amount by:

Accepted Answer

Markup as a percentage of cost is calculated by dividing the markup amount by the cost, which gives the markup rate as a percentage of the cost. This helps in determining the selling price of the product.

Question 3

Markup is measured either as a percentage of or a percentage of .

Accepted Answer

Markup is calculated as a percentage of either the selling price or the cost of the product. In option A, markup is measured as a percentage of the selling price or the cost. Therefore, option A is the best choice.

Question 4

Kohl's pays $16.50 for a six­ounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately percent for this product.

Accepted Answer

To find the markup percentage, we need to find the difference between the selling price and the cost price, and then divide that difference by the cost price, and finally, multiply the result by 100 to get the percentage.

Markup = Selling price - Cost price
Markup percentage = (Markup / Cost price) x 100

Here, the cost price of the cologne is $16.50 and the selling price is $25.95.

Markup = $25.95 - $16.50 = $9.45
Markup percentage = ($9.45 / $16.50) x 100 = 57.27 (rounded to nearest whole number)

Therefore, the markup percentage is approximately 57%, which is closest to option D (57).

Question 5

Marketers at organizations engaged in price competition:

Accepted Answer

Marketers in price competition need competitive price information to ensure their products are priced similarly to competing brands to remain competitive.

Question 6

Marketers generally view as the minimum price a product can be sold for.

Accepted Answer

Costs are generally viewed as the minimum price a product can be sold for, as selling below cost would result in a loss.

Question 7

When a seller's costs are usually determined during or after a product is made, and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using pricing.

Accepted Answer

This strategy is called cost-plus pricing, where the price is calculated by adding a markup to the cost of producing a product.

Question 8

Which of the following statements about markup pricing is correct?

Accepted Answer

The use of similar markups by competitors can result in less price competition as all prices are relatively the same.

Question 9

The three primary bases for developing prices are:

Accepted Answer

The three primary bases for developing prices are demand, competition, and cost. Demand refers to the willingness of customers to pay a certain price for a product or service. Competition refers to the prices being charged by other businesses offering similar products or services. Cost refers to the expenses incurred in producing or providing the product or service. Together, these three factors help determine what price a business should charge for its offerings.

Question 10

Marketers improve their ability to establish prices appropriately when:

Accepted Answer

Knowing the prices charged for competing brands allows marketers to set competitive prices that can attract customers while ensuring profitability.

Question 11

If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500. The firm knows that at that price it will achieve its goal. Therefore, the firm would be using a pricing method.

Accepted Answer

The firm is using demand-based pricing because it sets the price based on the quantity it wants to sell, ensuring that the price will achieve the sales goal of 200,000 units.

Question 12

For custom-made equipment or commercial construction projects, which pricing method is most likely used?

Accepted Answer

For custom-made equipment or commercial construction projects, the most appropriate pricing method is cost-plus pricing. This method involves calculating the total cost of production and then adding a percentage markup as profit. This ensures that the company will not only recover its production costs, but also earn a profit for the efforts put in.

Question 13

If a product is priced based on how many or how few people want it at a particular time and place, pricing is being used.

Accepted Answer

Pricing based on demand is referred to as demand-based pricing, which takes into account the level of interest or demand for a product at a particular time and location. The price is set higher when the demand is high because customers are willing to pay more, and it is set lower when there is a low demand because the seller wants to increase sales.

Question 14

When products in an industry are relatively homogeneous and price is a key purchase consideration:

Accepted Answer

When products are homogeneous and price is a key consideration, firms often rely on competition-based pricing to remain competitive, as consumers can easily compare prices across similar products.

Question 15

If PepsiCo sets its twelve-pack price to match the price charged by Coca-Cola, Pepsi is using pricing methods?

Accepted Answer

PepsiCo is using competition-based pricing by setting its price to match that of Coca-Cola, a direct competitor.

Question 16

Amtrak is considering two pricing strategies for its service. One is to price its train tickets so that it is less expensive to travel on weekends than during the week when there is business travel, which illustrates pricing. The second is to price its train tickets so that the further away the travel date, the greater the discount, which is best described as .

Accepted Answer

The first strategy is demand-based pricing, as it adjusts prices based on expected demand (higher on weekdays due to business travel). The second strategy is differential pricing, offering discounts based on the timing of the purchase relative to the travel date.

Question 17

A retailer of Real Dry deodorant prices it at $2.00, while it costs the retailer $1.40. What is the approximate markup as a percentage of selling price?

Accepted Answer

The answer of A retailer of Real Dry deodorant prices...

Question 18

If local Shell gasoline stations look at BP stations' prices as the primary method of determining its own prices, Shell is most likely using:

Accepted Answer

Shell is using competition-based pricing, which focuses on setting prices based on competitors' prices rather than costs.

Question 19

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of:

Accepted Answer

The answer of During July and August, Lakewood Links Golf...

Question 20

Competition-based pricing is:

Accepted Answer

Competition-based pricing is used when costs and revenues are secondary to competitors' prices.

Quiz 12: Pricing Concepts and Management

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

When determining markup as a percentage of cost, divide the markup amount by:

Markup is measured either as a percentage of or a percentage of .

Kohl's pays $16.50 for a sixounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately percent for this product.

Marketers at organizations engaged in price competition:

Marketers generally view as the minimum price a product can be sold for.

When a seller's costs are usually determined during or after a product is made, and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using pricing.

Which of the following statements about markup pricing is correct?

The three primary bases for developing prices are:

Marketers improve their ability to establish prices appropriately when:

If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500. The firm knows that at that price it will achieve its goal. Therefore, the firm would be using a pricing method.

For custom-made equipment or commercial construction projects, which pricing method is most likely used?

If a product is priced based on how many or how few people want it at a particular time and place, pricing is being used.

When products in an industry are relatively homogeneous and price is a key purchase consideration:

If PepsiCo sets its twelve-pack price to match the price charged by Coca-Cola, Pepsi is using pricing methods?

A retailer of Real Dry deodorant prices it at $2.00, while it costs the retailer $1.40. What is the approximate markup as a percentage of selling price?

If local Shell gasoline stations look at BP stations' prices as the primary method of determining its own prices, Shell is most likely using:

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of:

Competition-based pricing is:

Quiz 12: Pricing Concepts and Management

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

When determining markup as a percentage of cost, divide the markup amount by:

Markup is measured either as a percentage of or a percentage of .

Kohl's pays $16.50 for a six­ounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately percent for this product.

Marketers at organizations engaged in price competition:

Marketers generally view as the minimum price a product can be sold for.

When a seller's costs are usually determined during or after a product is made, and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using pricing.

Which of the following statements about markup pricing is correct?

The three primary bases for developing prices are:

Marketers improve their ability to establish prices appropriately when:

If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500. The firm knows that at that price it will achieve its goal. Therefore, the firm would be using a pricing method.

For custom-made equipment or commercial construction projects, which pricing method is most likely used?

If a product is priced based on how many or how few people want it at a particular time and place, pricing is being used.

When products in an industry are relatively homogeneous and price is a key purchase consideration:

If PepsiCo sets its twelve-pack price to match the price charged by Coca-Cola, Pepsi is using pricing methods?

A retailer of Real Dry deodorant prices it at $2.00, while it costs the retailer $1.40. What is the approximate markup as a percentage of selling price?

If local Shell gasoline stations look at BP stations' prices as the primary method of determining its own prices, Shell is most likely using:

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of:

Competition-based pricing is:

Kohl's pays $16.50 for a sixounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately percent for this product.