Quiz 8: Value Through Pricing
Business
Q 1Q 1
Price is the odd-one-out of the marketing mix because of which of the following?
A)It is concerned with economics rather than marketing
B)Financial controllers control price setting rather than marketing managers
C)Price is determined by one's competitors
D)It is a revenue earner
Free
Multiple Choice
D
Q 2Q 2
When a company offers low prices, it may mean that profit margins may be tight, unless firms can find ways to drive their _______ base down or find additional product or service elements that they can charge handsomely for.
A)cost
B)profit
C)sales
D)brand
Free
Multiple Choice
A
Q 3Q 3
Price may be a core value proposition offered by some businesses. In these cases, organizations employ a combination of cost management, yield management and _______ pricing.
A)diverse
B)dynamic
C)standard
D)customer
Free
Multiple Choice
B
Q 4Q 4
Organizations can use a combination of cost management, _______ management and dynamic pricing in order to generate high profitability levels, when price is a core value proposition.
A)sales
B)employee
C)value
D)yield
Free
Multiple Choice
Q 5Q 5
Cost control is critical for firms that attempt to lead on price as their success in controlling costs has a direct impact on _______ margins.
A)purchase
B)cost
C)profit
D)competitor
Free
Multiple Choice
Q 6Q 6
Low price operators tend to engage in aggressive cost management and also seek as much _______ as possible in order that fixed costs can be spread over a larger number of units and thus reduced.
A)scale
B)scope
C)rates
D)appeal
Free
Multiple Choice
Q 7Q 7
Low price competitors often use _______ management, which is the monitoring of demand and potential demand patterns.
A)field
B)yield
C)dynamic
D)profit
Free
Multiple Choice
Q 8Q 8
Low cost service businesses such as travel and hotel accommodation, use yield management to frequently adjust the price of a product in response to various market factors, such as _______ and competition.
A)brands
B)politics
C)technology
D)demand
Free
Multiple Choice
Q 9Q 9
A key reason for the success of many low-cost operators is their flexible approach to pricing, which is known as _______ pricing.
A)static
B)dynamic
C)primary
D)secondary
Free
Multiple Choice
Q 10Q 10
Dynamic pricing means that prices are continually adjusted, based on demand and _______ demand.
A)potential
B)primary
C)express
D)secondary
Free
Multiple Choice
Free
True False
Q 12Q 12
Which of the following is helping to depress price levels?
A)Greater levels of globalization
B)Use of technology
C)Retail competition
D)All of the above are depressing sales levels
Free
Multiple Choice
Q 13Q 13
Which of the following is not a method of setting prices?
A)Competitor-orientated pricing
B)Market-led pricing
C)Sales-focused pricing
D)Cost-based pricing
Free
Multiple Choice
Q 14Q 14
Cost-based pricing gives an indication of which of the following?
A)The maximum price that can be extracted from customers
B)The minimum price that needs to be charged to break even
C)The costs involved in the production
D)The costs involved in the production, marketing and distribution of a product
Free
Multiple Choice
Q 15Q 15
Which of the following is not used in the calculation of cost-based pricing?
A)Expected Sales
B)Fixed Costs
C)Mark Up
D)Discounts
Free
Multiple Choice
Q 16Q 16
Which of the following is not a problem associated with cost-based pricing?
A)The procedure is illogical because a sales estimate is made before a price is set
B)It focuses on internal costs rather than customers' willingness to pay
C)It leads to an increase in price as sales fall
D)It attempts to undertake break even analysis
Free
Multiple Choice
Q 17Q 17
Why, in some cases, is marginal cost pricing (where companies will set prices below full costs) used?
A)To maximize profits
B)To cover direct costs plus make a contribution to overheads where supply outstrips demand
C)To beat competitors' pricing by a set marginal difference
D)To maximise the impact of price points
Free
Multiple Choice
Q 18Q 18
When companies set their prices at levels either above, the same as or below their competitors, this is called?
A)A cartel
B)Price fixing
C)Benchmarking
D)None of the above
Free
Multiple Choice
Q 19Q 19
Competitor-orientated pricing may take any of three forms. Which of the following is not one of these forms?
A)Where companies set prices to average industry costs
B)Where firms follow the prices charged by leading competitors
C)Where contracts are awarded through a competitive bidding process
D)Where producers take the going rate price
Free
Multiple Choice
Q 20Q 20
Going rate prices typically affect which type of product?
A)Fast moving consumer goods
B)Commodities
C)Luxury items
D)Industrial products
Free
Multiple Choice
Q 21Q 21
Which of the following is a weakness associated with competitor-oriented pricing?
A)It is risky where a firm's cost position is weaker than its competitors
B)It lets competitors dictate prices, therefore a loss of reputation as a market leader may emerge
C)It doesn't take into account economic conditions that may affect pricing decisions
D)It is too simplistic and easy to use
Free
Multiple Choice
Q 22Q 22
Which of the following is not used as a useful technique for uncovering customers' value perceptions?
A)Trade-off analysis
B)Break even analysis
C)Economic value to the customer analysis
D)Experimentation
Free
Multiple Choice
Q 23Q 23
Trade-off analysis is also known as which of the following?
A)Traffic analysis
B)Value analysis
C)Customer analysis
D)Conjoint analysis
Free
Multiple Choice
Q 24Q 24
Trade-off analysis measures which of the following?
A)The trade-off between competitors' brands, so that price leaders can be established and monitored
B)The trade-off between price and other product features so that their effects on product preference can be established
C)The trade-off between brands in similar product categories, so that price differentials can be assessed
D)The trade-offs the customers undertake every time that they consider during the consumer decision process
Free
Multiple Choice
Q 25Q 25
The limitation of trade-off analysis is which of the following?
A)The trade-off between competitors' brands is irrelevant due to different features and benefits being available with various competing brands
B)Product preference is not established
C)Profiles do not give an accurate representation of the consumer decision process
D)Respondents are not asked to back up their preferences with cash expenditure
Free
Multiple Choice
Q 26Q 26
Experimental pricing research uses which of the following?
A)Test marketing to determine prices
B)Market segmentation to determine prices
C)Positioning to determine prices
D)Laboratory setting to determine prices
Free
Multiple Choice
Q 27Q 27
EVC analysis stands for which of the following?
A)Equivalent value to the customer analysis
B)Economic variation to the customer analysis
C)Economic value to the customer analysis
D)Equivalent variation to the customer analysis
Free
Multiple Choice
Q 28Q 28
The main advantage of market-led pricing is that it takes into consideration_______.
A)customers' perceptions and needs
B)competitors' prices
C)industry costs
D)all of the above
Free
Multiple Choice
Q 29Q 29
Coupled with the basic dimensions of cost, competitive prices and customer value, which of the following factors influence pricing strategy?
A)New product launches strategies, segmentation strategies, international marketing strategies and competitive marketing strategies
B)Product & service marketing strategies, promotional strategies, competitive marketing strategies and marketing research
C)Positioning strategies, new product launch strategies, product line strategies, competitive marketing strategies, channel management strategies and international marketing strategies
D)Marketing research, positioning strategies, channel management strategies and promotional strategies
Free
Multiple Choice
Q 30Q 30
A combination of high price and high promotion expenditure is called which of the following?
A)Rapid penetration strategy
B)Slow skimming strategy
C)Rapid skimming strategy
D)Slow penetration strategy
Free
Multiple Choice
Q 31Q 31
A low price with low promotional expenditure is an example of which of the following?
A)Rapid penetration strategy
B)Slow skimming strategy
C)Rapid skimming strategy
D)Slow penetration strategy
Free
Multiple Choice
Q 32Q 32
A high price with low levels of promotional expenditure is an example of which of the following?
A)Rapid penetration strategy
B)Slow skimming strategy
C)Rapid skimming strategy
D)Slow penetration strategy
Free
Multiple Choice
Q 33Q 33
Companies that combine low prices with heavy promotional expenditure are practicing which of the following?
A)Rapid penetration strategy
B)Slow skimming strategy
C)Rapid skimming strategy
D)Slow penetration strategy
Free
Multiple Choice
Q 34Q 34
Which of the following product categories typically use a slow penetration strategy?
A)Commodities
B)Own- Label Brands
C)Manufacturer Brands
D)Industrial Goods
Free
Multiple Choice
Q 35Q 35
A skimming strategy is most suitable where _______.
A)consumers are less price sensitive
B)consumers are more price sensitive
C)there are few competitors present in the segment
D)there are many competitors present in the segment
Free
Multiple Choice
Q 36Q 36
A penetration pricing strategy is likely where a company_______.
A)seeks to dominate the market
B)seeks to create a barrier to entry for competitors
C)seeks to dominate the market and to create a barrier to entry for competitors
D)none of the above
Free
Multiple Choice
Q 37Q 37
Four strategic objectives are relevant to pricing, these are to _______.
A)build, to harvest, to skim and to maximize
B)harvest, to reposition, to maximize, to skim
C)build, to hold, to harvest and to reposition
D)harvest, to skim, to hold and to maximize
Free
Multiple Choice
Q 38Q 38
The "build objective" for price sensitive markets implies which of the following?
A)Implies price lower than competition
B)Implies price higher than competition
C)Implies prices following the market leader
D)Implies prices set at market rates
Free
Multiple Choice
Q 39Q 39
The "hold objective" relates to which of the following strategic objectives?
A)Holding prices
B)Holding sales
C)Holding profits
D)Holding costs
Free
Multiple Choice
Q 40Q 40
The "harvest objective" implies _______.
A)the maintenance or raising of profit margins as sales and/or market share are rising
B)the reduction of prices, so as stock of product in the decline stage of their product life cycle is reduced
C)the reduction of prices, so as to maintain sales
D)the maintenance or raising of profit margins even though sales and/or market share are falling
Free
Multiple Choice
Q 41Q 41
In which of the following circumstances would you initiate a price cut?
A)Rising costs
B)Excess demand
C)Mature market
D)Price war unlikely
Free
Multiple Choice
Q 42Q 42
In which of the following circumstances would you initiate a price rise?
A)Pre-emptive competitive entry
B)Rising costs
C)Excess supply
D)None of the above
Free
Multiple Choice
Q 43Q 43
Where products destined for an international market are re-imported back into the home market and sold through unauthorized channels at levels lower than the company wishes to charge, this is known as _______.
A)stock purging
B)parallel importing
C)product dumping
D)price discrimination
Free
Multiple Choice
Q 44Q 44
Price fixing is an ethical concern as companies _______ with each other to ensure that everyone charges the same or similar prices.
A)argue
B)disagree
C)compete
D)collude
Free
Multiple Choice
Q 45Q 45
Which of the following is not an ethical pricing issue?
A)Deceptive pricing
B)Parallel importing
C)Price fixing
D)Slow skimming
Free
Multiple Choice
Q 46Q 46
One common ethical pricing issue is price _______, which involved companies colluding with each other to ensure that everyone charges the same or similar prices.
A)forcing
B)fixing
C)skimming
D)penetration
Free
Multiple Choice
Q 47Q 47
Low-cost airlines have been significant users of _______ pricing, where the prices are not the same as they may first appear.
A)deceptive
B)fixing
C)skimming
D)penetration
Free
Multiple Choice
Q 48Q 48
Price fixing is most likely to be found in industries where brand _______ is difficult, such as oil, paper, glass and chemicals.
A)protection
B)standardization
C)differentiation
D)penetration
Free
Multiple Choice
Q 49Q 49
Which of the following circumstances may indicate a price increase?
A)Harvest objective
B)Excess supply
C)Build objective
D)Pre-empt competitive entry
Free
Multiple Choice
Q 50Q 50
Which of the following circumstances may indicate a price decrease?
A)Higher value placed on product by customers
B)Build objective
C)Excess demand
D)Harvest objective
Free
Multiple Choice
Q 51Q 51
Which of the following tactics may indicate a price increase?
A)Higher discounts
B)Escalator clauses
C)Introduction of a fighter brand
D)Price bundling
Free
Multiple Choice
Q 52Q 52
Which of the following tactics may indicate a price decrease?
A)Price bundling
B)Price unbundling
C)Lower discounts
D)Escalator clauses
Free
Multiple Choice
Q 53Q 53
Where a contract allows the supplier to stipulate price increases in line with a specified index, this is called which of the following?
A)Escalator clause
B)Price inflation
C)Wage inflation
D)Price parity
Free
Multiple Choice
Q 54Q 54
Competitive price increases are more likely to be followed by a company when _______.
A)falling cost levels occur
B)excess supply exist
C)build or hold objective exist
D)rising cost levels occur
Free
Multiple Choice
Q 55Q 55
Competitive price decreases are more likely to be followed by a company when _______.
A)excess demand exists
B)brand fall compatible with image
C)there are price insensitive customers
D)harvest or hold objective exist
Free
Multiple Choice
Q 56Q 56
Competitive price increases are more likely to be followed by a company when _______.
A)price sensitive customers are present
B)price insensitive customers are present
C)falling costs levels occur
D)excess supply exists
Free
Multiple Choice
Q 57Q 57
Competitive price increases are more likely to be ignored by a company when _______.
A)price rise is compatible with brand image
B)price rise is incompatible with brand image
C)harvest objective exists
D)none of the above
Free
Multiple Choice
Q 58Q 58
Competitive price decreases are more likely to be ignored by a company when _______.
A)excess supply exists
B)there are price sensitive customers
C)build objective exists
D)none of the above
Free
Multiple Choice
Q 59Q 59
Competitive price decreases are more likely to be ignored by a company when _______.
A)excess demand exists
B)falling costs occur
C)build objective exists
D)none of the above
Free
Multiple Choice
Q 60Q 60
A quick response to a competitor's price fall will _______.
A)nullify competitor's potential sales gains
B)help ward off a competitive threat
C)build the company's image as value conscious
D)all of the above
Free
Multiple Choice
Q 61Q 61
Price setting can be based on which of the following?
A)Market-orientated
B)Cost-orientated
C)Competitor-orientated
D)All of the above
Free
Multiple Choice
Q 62Q 62
A firm adopting an aggressive pricing strategy is in danger when _______.
A)faced with competitors who are in a cartel
B)faced by a competitor who has huge resources and market share
C)they do not have a cost advantage
D)all of the above
Free
Multiple Choice
Q 63Q 63
Which of the following is the most criticized ethical issue affecting pricing?
A)Product dumping
B)Price fixing
C)Fair trade
D)Predatory pricing
Free
Multiple Choice
Q 64Q 64
Which of the following is a disadvantage associated with experimentation in assessing consumers willingness to pay?
A)Fails to take into account customer preferences
B)The test needs to back up their preferences with cash expenditure
C)The test needs to be long enough so that trial and repeat purchase at each price can be measured
D)Fails to impact pricing strategies
Free
Multiple Choice
Q 65Q 65
Pricing the calculation of only those costs that are likely to rise as output increases is referred to as which of the following?
A)Output cost
B)Variable costs
C)Full cost
D)Marginal cost
Free
Multiple Choice
Q 66Q 66
Going rate pricing is which of the following?
A)An approach to pricing which takes a range of marketing factors into account when setting prices
B)Pricing at the rate generally applicable in the market, focusing on competitors offerings rather than on company costs
C)Pricing strategy that follows the market leaders set price, rather than focus on customer value or costs
D)An approach to pricing which takes costs, competitors prices and what consumers perceive as true value
Free
Multiple Choice
Q 67Q 67
The amount a customer would have to pay to make the total life cycle costs of a new and a reference product the same is referred to as which of the following?
A)Referral Pricing
B)Lifecycle costs
C)Economic value to customer
D)Trade off analysis
Free
Multiple Choice
Q 68Q 68
Positioning refers to which of the following?
A)The choice of pricing and the quality associations that arise as a result
B)The choice of target market and differential advantage
C)The choice of pricing and how the company wishes to compete
D)Where the company wishes to compete and pricing strategy
Free
Multiple Choice
Q 69Q 69
Price _______ refers to the fact that additional cots of shipping and transportation costs to a foreign market, may lead to the price charged in a foreign market being very different to that charged in the home market.
A)collusion
B)fixing
C)escalation
D)control
Free
Multiple Choice
Q 70Q 70
While most firms seek to standardize as many elements of the marketing mix as possible when operating internationally, pricing is one of the most difficult to standardize due to _______.
A)price escalation
B)parallel importing
C)differing exchange rates
D)all of these factors
Free
Multiple Choice
Q 71Q 71
How competitors react to pricing changes depends on which of the following?
A)Their past reputation for price changes
B)Depends on their competitive situation
C)Their strategic objectives
D)All of the above
Free
Multiple Choice
Q 72Q 72
Pricing strategies which have a strong internal orientation are usually which of the following?
A)Market based
B)Competitor based
C)Cost based
D)Customer based
Free
Multiple Choice
Q 73Q 73
Price setting and price management influences which of the following?
A)Fixed costs
B)Marginal costs
C)Profitability
D)Average costs
Free
Multiple Choice
Q 74Q 74
Price settings send which of the following signals to customers?
A)Durability Cues
B)Quality Cues
C)Technology Cues
D)Satisfaction Cues
Free
Multiple Choice
Q 75Q 75
Which of the following is a problem associated with cost-based pricing?
A)Time consuming & difficult to calculate fixed and variable costs
B)Focuses on external issues rather than those internal
C)May be hard to allocate costs in multi-product firms
D)All of the above
Free
Multiple Choice
Q 76Q 76
Which of the following is the most common form of "competitive bidding"?
A)Auctions
B)Sales
C)Price bundling
D)Putting out to tender
Free
Multiple Choice
Q 77Q 77
Companies usually "benchmark" their prices against which of the following?
A)Government price regulations
B)World class manufacturers
C)Major competitors
D)Customers
Free
Multiple Choice
Q 78Q 78
Which of the following is the core difficulty for companies involved in "competitive bidding"?
A)Leads to price inflation
B)May have to guess where their competitors' prices are set
C)Competitors may price fix, setting up a cartel to control prices
D)All of the above
Free
Multiple Choice
Q 79Q 79
During competitive bidding, companies draw up and submit detailed specifications for the requested product and which of the following?
A)Discount structure
B)Escalator clauses
C)Legal Contracts
D)Sealed bids
Free
Multiple Choice
Q 80Q 80
Which of the following is a major risk associated with competitor-orientated pricing?
A)Can lead to a price war with competitors, which can impact the overall bottom line
B)Can lead to allegations of price fixing from government regulators and consumer groups
C)Fails to take into account general economic conditions, such as wage inflation
D)Fails to take into account any differential advantages that may exist
Free
Multiple Choice
Q 81Q 81
Which of the following statements is true?
A)The more value that a product gives compared to the competition, the price should be the same as competitors' prices
B)The less value that a product gives compared to the competition, the higher the price that can be charged
C)The more value that a product gives compared to the competition, the lower the price that can be charged
D)The more value that a product gives compared to the competition, the higher the price that can be charged
Free
Multiple Choice
Q 82Q 82
Where product profiles consisting of product features and price are described to consumers and respondents are asked to name their preferred profile, this is called which of the following?
A)Product profiling
B)Experimentation
C)Trade off analysis
D)Price profiling
Free
Multiple Choice
Q 83Q 83
When products are sold through intermediaries such as distributors or retailers, which of the following must be reflected in the list price to the customer?
A)Their costs
B)Their margins
C)Their market share
D)Their buying power
Free
Multiple Choice
Q 84Q 84
In order to secure distribution channels when a product is being launched, organizations must ensure that retailers obtain which of the following?
A)Reduced costs
B)Good value to the customer
C)Good margins
D)Reduced variable costs
Free
Multiple Choice
Q 85Q 85
Penetration pricing strategies are more likely in which of the following situations:
A)Where the company is seeking to dominate the market
B)Where they are comfortable to establish a position in the market initially and make money later
C)Where they seek to create a barrier to entry by competitors
D)All of the above situations are more likely
Free
Multiple Choice
Q 86Q 86
Price increases are likely when _______.
A)price bundling is being used
B)a price war is unlikely
C)a build objective is being followed
D)a harvest objective is being followed
Free
Multiple Choice
Q 87Q 87
Price decreases are likely when there is _______.
A)price unbundling
B)escalator clauses
C)a build objective
D)a harvest objective
Free
Multiple Choice
Q 88Q 88
When estimating a competitor's reaction to a price change which of the following should be assessed?
A)Their strategic objectives
B)Their past history
C)Their self interest
D)All of the above should be considered
Free
Multiple Choice
Q 89Q 89
"Fighter brands" are which of the following?
A)When a brand continues to be a success, even though it has reached the maturity phase of its product life cycle
B)When a company is defending a premium-priced brand that is under attack from a cut-price competitor, they may choose to launch a brand to directly compete against the cut-price brand
C)When a new brand is competing against a dominant brand leader that has been well established
D)None of the above
Free
Multiple Choice
Q 90Q 90
Marketing-orientated companies need to take account of where the price of a new product fits into its existing _______ line.
A)brand
B)product
C)company
D)competitive
Free
Multiple Choice
Q 91Q 91
By producing a range of brands at different price points, companies can cover the varying price _______ of consumers and encourage them to trade up to the more expensive, higher-margin brands.
A)supply
B)specialities
C)sensitivities
D)causes
Free
Multiple Choice
Q 92Q 92
How can discount terms be made more attractive?
A)By increasing the number of discounts
B)By decreasing the percentage
C)By lowering the qualifying levels
D)All of the above
Free
Multiple Choice
Q 93Q 93
It may be necessary to follow a competitor's price rise when there is(are) _______.
A)falling costs
B)excess demand
C)excess supply
D)price insensitive customers
Free
Multiple Choice
Q 94Q 94
It may be necessary to ignore a competitor's price rise when there is(are) _______.
A)rising costs
B)excess demand
C)excess supply
D)price sensitive customers
Free
Multiple Choice
Q 95Q 95
Which of the following is crucial to a company's image when a competitor undertakes a price change?
A)Pre-empting the competitor's price change
B)Matching the competitor's price change
C)The timing of the response
D)Not following the competitor's price change
Free
Multiple Choice
Q 96Q 96
Which of the following influences price levels?
A)Competitive marketing strategies
B)New product launch strategies
C)Positioning strategies
D)All of the above
Free
Multiple Choice
Q 97Q 97
Trade-off analysis (otherwise known as conjoint analysis) measures the trade-off between price and other product features so that their effects on product preference can be established.
Free
True False
Q 98Q 98
Competitor-orientated pricing is risky where a firm's cost position is stronger than its competitors.
Free
True False
Q 99Q 99
Greater price competition is due to the use of technology helping to drive down costs and greater levels of globalization and retail competition is helping to depress price levels.
Free
True False
Q 100Q 100
Competitor-oriented pricing may take any of three forms, namely, where firms follow the prices charged by leading competitors, where producers take the going rate price or where contracts are awarded through a competitive bidding process.
Free
True False
Q 101Q 101
It is sensible for a company to adopt an integrated approach to pricing, paying attention not only to customer needs but also to cost levels and competitor prices.
Free
True False
Q 102Q 102
A combination of high price and high promotion expenditure is called a rapid penetration strategy.
Free
True False
Free
True False
Q 104Q 104
A "build objective" implies the maintenance or raising of profit margins even though sales and/or market share are falling.
Free
True False
Q 105Q 105
Price cuts are likely to be pursued when the company has a build or hold strategic objective.
Free
True False
Free
True False
Q 107Q 107
A price rise is less likely to be followed when a company is pursuing a harvest or hold objective because, in both cases, the emphasis is more on profit margin than sales/market share gain.
Free
True False
Q 108Q 108
Price unbundling allows each element in the offering to be separately priced in such a way that the total price is raised.
Free
True False
Q 109Q 109
Price cuts are likely to be ignored in conditions of rising costs, excess demand and when servicing price insensitive customers.
Free
True False
Q 110Q 110
Many organizational purchases are motivated by economic value considerations since reducing costs and increasing revenue are prime objectives of many companies.
Free
True False