Chapter 12

Question 1

What is an integral element of the retail marketing mix?

Answer 1

Price

Question 2

What are the considerations in setting retail pricing?

Answer 2

Customer price sensitivity, Competition, Price discrimination

Question 3

Which of the following is an example of legal and ethical pricing issue?

Answer 3

Price discrimination

Question 4

According to the statement, “Pricing is a function of benefits and cost, much more than the issue of supply and
demand,” what primarily influences pricing?

Answer 4

Benefits and cost

Question 5

How are prices established?

Answer 5

Price, Counter trade

Question 6

Which term describes the price paid for a college education?

Answer 6

Tuition fee

Question 7

What are some other terms to describe prices?

Answer 7

Premium, Taxes, Salary or wage

Question 8

What are common objectives that guide pricing decisions?

Answer 8

Ensure market survival, Enhance sales growth, profitability

Question 9

What are the 5 Cs of Pricing?

Answer 9

Costs, Customers, Channels of Distribution, Competition, Compatibility

Question 10

What is perceived monetary price?

Answer 10

The customer’s perception of the monetary value of the product/service

Question 11

What does the price/quality relationship attempt to describe?

Answer 11

The extent to which customers associate price with quality

Question 12

What is the relationship between prices and quantity demanded known as?

Answer 12

Demand curve

Question 13

When does inelastic demand exist?

Answer 13

When price changes do not result in significant changes in quantity demanded

Question 14

What is markup pricing?

Answer 14

Adding a percentage to the cost of an item to determine its retail price

Question 15

Which pricing strategy involves offering different prices to different customer segments?

Answer 15

Differential pricing

Question 16

It is a guide for a successful pricing strategy.

Answer 16

• Pricing objectives

Question 17

A strategy used by businesses to attract customers to a new product or service by offering lower price.

Answer 17

Penetration Pricing

Question 18

The portion or percentage that the company owns out of the total revenue/sales of the product in the industry.

Answer 18

Market Share

Question 19

A good understanding of cost and demand relationship is a requirement in making pricing decision that will maximize profit. -

Answer 19

Profitability

Question 20

A strategy for profit maximization where businesses set high price for their product before reducing it gradually as their way of attracting price-sensitive customers. -

Answer 20

Price skimming

Question 21

A pricing strategy where the price is set to match or beat competitors’ prices to remain competitive in the market.

Answer 21

Competitive Pricing

Question 22

The perceived value of a product/service in the eyes of the customer, which influences their willingness to pay.

Answer 22

Perceived Value

Question 23

The pricing strategy where different prices are set for different segments of customers based on factors such as location, time, or customer demographics.

Answer 23

Differential Pricing

Question 24

The pricing strategy where prices are set at a level that covers costs and ensures a reasonable profit margin. -

Answer 24

Cost-Plus Pricing

Question 25

The pricing strategy where the product is initially offered at a high price to target the premium segment of the market.

Answer 25

Premium Pricing

Question 26

Enumerate the 5 Cs of Pricing

Answer 26

Costs, Customers, Channels of Distribution, Competition, Compatibility

Question 27

Enumerate the 5 Elements of Perceived Monetary Price :

Answer 27

Perceived Value, Price/Quality Relationship, Price Setting Decision Process, Demand Curve, Price Elasticity of Demand

Question 28

Give at least 3 examples of competitive pricing :

Answer 28

• penetration pricing,
• limit pricing,
• price signaling
• product-line pricing,
• bundling
  -premium pricing
• psychological pricing,
• odd-even pricing,
• customary pricing

Question 29

Enumerate the 3 examples of Pricing Strategy :

Answer 29

• differential pricing,
• second-market discounting , - periodic discounting