Ch 13 mkt pricing I part i

Question 1

Which of the following are elements involved in Step 1 of the price-setting process?
A) identifying prices objectives and constraints
B) estimation of demand, sales revenue, and price elasticity
C) cost estimation, marginal analysis, and break-even analysis
D) demand for the product class and brand, newness of the product, and competition
E) market segmentation targeting, and positioning

Answer 1

A) identifying prices objectives and constraints

Question 2

An analysis of a prospective product shows that sales for it are expected to grow by at least 10 percent each year over the next five years before it enters the maturity phase of its product life cycle. This type of analysis would provide useful information in which step of the price-setting process?
A) identifying pricing objectives and constraints
B) determining cost, volume, and profit relationships
C) estimating demand and revenue
D) selecting an appropriate (approximate) price lining strategy
E) making special adjustments to list or quoted price

Answer 2

identifying pricing objectives and constraints

Question 3

Which of the following represent elements of Step 2 of the price-setting process?
A) constraints and objectives
B) estimation of demand, sales revenue, and price elasticity
C) cost estimation, marginal analysis, and break-even analysis
D) demand for the product class and brand, newness of the product, and competition
E) market segmentation, targeting, and positioning

Answer 3

B) estimation of demand, sales revenue, and price elasticity

Question 4

George and Alice Renfro decided to start a family business in 1990 to produce chowchow, a Southern regional food. To determine how they would price the chowchow, the Renfros had to examine (1) the demand for the product the cost to distribute the product to area grocery stores. The Renfros are doing which step of the price-setting process?
A) identifying pricing constraints
B) estimating break-even points and revenue points
C) setting the list price
D) selecting an approximate price level
E) determining cost, volume, and profit relationships

Answer 4

A) identifying pricing constraints

Question 5

Which statement would most likely be spoken by someone in the midst of estimating demand and revenue in the price-setting process?
A) “It’s important to offer discounts to seniors.”
B) “We have to try to achieve an 8 percent profit share.”
C) “The starting price should be $4.99 and we can raise the price again in six months.”
D) “But, if we increase the price even by $1, how many customers will we lose?”
E) “We should probably price the extra-large version somewhere between $600 and $650.”

Answer 5

D) “But, if we increase the price even by $1, how many customers will we lose?”

Question 6

Which of these are elements of determining cost, volume, and profit relationships in the price-setting process?
A) objectives and constraints
B) estimation of demand, sales revenue, and price elasticity
C) cost estimation, marginal analysis, and break-even analysis
D) demand for the product class and brand, newness of the product, and competition
E) market segmentation targeting, and positioning

Answer 6

C) cost estimation, marginal analysis, and break-even analysis

Question 7

The break-even point for a large grain farming operation was calculated to be 2 million bushels of corn. Break-even analysis would take place during which step of the price-setting process?
A) identify pricing objectives and constraints
B) determine cost, volume, and profit relationships
C) estimate demand and revenue
D) select an approximate price level
E) make special adjustments to list or quoted price

Answer 7

B) determine cost, volume, and profit relationships

Question 8

76. Which of the following statements regarding pricing objectives is most accurate?
    A. Pricing objectives should never change.
    B. Pricing objectives may change depending upon the relative market share of competitors.
    C. Pricing objectives are established exclusively by the marketing department.
    D. Pricing objectives may change depending on the financial position of the company.
    E. Pricing objectives are extremely sensitive to even the slightest change in the local economy.

Answer 8

D. Pricing objectives may change depending on the financial position of the company.

Question 9

All of these are examples of pricing objectives except which?
A) market share
B) survival
C) unit sales
D) social responsibility
E) product obsolescence

Answer 9

E) product obsolescence

Question 10

A firm’s profit objective is often measured in terms of ROI. The acronym ROI stands for
A) risk opportunity investment.
B) revised organizational incentives.
C) return on investment.
D) regulated organizational investments.
E) replenishment of organizational inventories.

Answer 10

C) return on investment.