Ch 13 mkt pricing I part ii Flashcards
Three pricing objectives relate to a firm’s profit. In one known as ________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.
A. break-even strategy B. maximizing current profit C. managing for long-run profits D. minimizing risk E. target return
C. managing for long-run profits
Three different pricing objectives relate to a firm's profit. One objective, known as \_\_\_\_\_\_\_\_, is common in many firms because the targets can be set and performance measured quickly though sometimes criticized for its short-term orientation. A) managing for long-run profits B) target return C) break-even strategy D) maximizing current profit E) minimizing risk
D) maximizing current profit
A target return profit pricing objective implies that a company chooses to
A) set targets whose performance can be measured quickly.
B) give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
C) set a profit goal that is often determined by its board of directors.
D) reduce investment in any further market or product research.
E) set prices based on return on sales.
C) set a profit goal that is often determined by its board of directors.
The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as A) target return on sales. B) industry profit. C) unit volume. D) market share. E) profit.
D) market share.
Companies often pursue a market share objective when
A) industry sales are flat or declining.
B) profits are increasing.
C) industry sales are beginning to rise.
D) there is a sudden increase in production costs.
E) stockholders are seeking higher dividends.
A) industry sales are flat or declining.
Which of the following statements regarding a market share pricing objective is most accurate?
A) A market share objective is often difficult for product managers since stockholders are looking for immediate dividends (return of profits).
B) Although increased market share is a primary goal of some firms, others see it as a means to other ends, such as increased sales or profits.
C) Selecting market share as a pricing objective is particularly effective if industry sales are growing.
D) An advantage of market share as a pricing objective is that it is particularly insensitive to competitors’ actions.
E) Ironically, a market share objective is realized by raising prices in order to increase consumer confidence during the decline stage of a product’s life cycle.
B) Although increased market share is a primary goal of some firms, others see it as a means to other ends, such as increased sales or profits.
An online movie streaming service charges $14.99 per month for its basic package. However, when a competitor introduced the same service at $13.99, the firm dropped its price to $13.99. The firm most likely made this price reduction in an attempt to
A) decrease revenue but increase profit.
B) increase profit by increasing revenue.
C) maintain market share.
D) decrease market share.
E) increase efficiency.
C) maintain market share
If the CEO of the Clorox Company were to say, “We want to control 60 percent of the bleach market within the next five years,” he would have set a ________ pricing objective.
A. profit B. sales C. market share D. social responsibility E. unit volume
C. market share
Unit volume as a pricing objective refers to
A) the quantity of products to be produced or sold.
B) the ratio of price per unit to unit variable cost.
C) the ratio of production costs to the minimum sales price that would still generate profit.
D) the total quantity of product sold by a firm relative to the total quantity of product sold by all firms in the industry.
E) variable cost expressed on a per unit basis for a product.
A) the quantity of products to be produced or sold.
A negative aspect of selecting unit volume as a pricing objective is that
A) production often cannot keep up with demand.
B) there are increased carrying costs with extensive inventories.
C) if price reductions are used to achieve volume objectives, it can sometimes come at the expense of profits.
D) it can create competition between divisions within the organization itself, causing conflicts over the allocation of resources.
E) it always positively correlates with a sales revenue objective.
C) if price reductions are used to achieve volume objectives, it can sometimes come at the expense of profits.
RadioShack, an electronics retail chain, couldn't compete with the prices offered by other retailers. The company enacted price matching programs and promoted large discounts on its merchandise to raise cash and to try to stave off bankruptcy. The best pricing objective at this point for RadioShack most likely was A) profit. B) market share. C) unit volume. D) survival. E) social responsibility.
D) survival.
A firm may forgo a higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations? A) profit B) market share C) unit volume D) survival E) social responsibility
E) social responsibility
