MM 34 Exam Group 3&4

Question 1

are two different concepts that affect how consumers evaluate and purchase products or services.

Answer 1

Price and perceived value

Question 2

is the amount of money that a seller charges for a product or service

Answer 2

Price

Question 3

this is a type of price that is based on the cost of production, distribution, and marketing of a product or service, plus a desired profit margin.

This type of price is easy to calculate and implement, but it does not consider the customer’s willingness to pay or the competitive situation.

Answer 3

Cost-based pricing

Question 4

is the customer’s own assessment of the benefits and costs of a product or service, especially in comparison to other alternatives.

Answer 4

Perceived value

Question 5

this is a type of price that is based on the perceived value of a product or service to the customer, rather than the cost of production.

This type of price aims to capture the maximum value that customers are willing to pay for a product or service, and it requires a good understanding of the customer’s needs, preferences, and willingness to pay.

Answer 5

Value-based pricing

Question 6

this is a type of price that is based on the prices of similar products or services offered by competitors in the market.

This type of price aims to match or undercut the competitors’ prices, and it requires a good knowledge of the market conditions and the competitive advantages and disadvantages of the product or service.

Answer 6

Competitive pricing

Question 7

this is a type of price that is based on the psychological effects of price on customer perception and behavior.

This type of price uses various techniques, such as odd pricing (e.g., $9.99 instead of $10), prestige pricing (e.g., $999 instead of $1000), or bundle pricing (e.g., buy one get one free), to influence the customer’s perception of value and quality.

Answer 7

Psychological pricing

Question 8

this is a type of perceived value that is based on the utility and performance of a product or service.

It reflects how well a product or service meets the customer’s functional needs and expectations, such as quality, reliability, durability, convenience, etc.

Answer 8

Functional value

Question 9

this is a type of perceived value that is based on the feelings and emotions that a product or service evokes in the customer.

It reflects how a product or service makes the customer feel happy, satisfied, proud, confident, etc., or how it reduces negative emotions such as fear, anxiety, guilt, etc.

Answer 9

Emotional value

Question 10

This is a type of perceived value that is based on the social benefits and costs of a product or service.

It reflects how a product or service affects the customer’s social status, image, reputation, relationships, etc., or how it conforms to or deviates from social norms and expectations.

Answer 10

Social value

Question 11

this is a type of perceived value that is based on the curiosity and novelty of a product or service.

It reflects how a product or service satisfies the customer’s desire for new knowledge, experiences, discoveries, etc., or how it challenges or surprises the customer.

Answer 11

Epistemic value

Question 12

are three important factors that affect customer’s perception of value and their buying behavior.

Answer 12

Price, quality, and sacrifice

Question 13

is the amount of money that customers pay for a product or service.

Answer 13

Price

Question 14

is the degree to which the product or service meets or exceeds customer’s expectations.

refers to the level of excellence or superiority of a product or service.

Answer 14

Quality

Question 15

is the total cost of acquiring and using the product or service, including money, time, effort, etc.

refers to the cost or negative aspects associated with obtaining or using the product or service.

Answer 15

Sacrifice

Question 16

means providing customers with clear and consistent information about these factors and how they relate to each other.
This can help customers to compare different products or services and make informed decisions based on their preferences and needs.

Answer 16

Integrating price, quality, and sacrifice information

Question 17

In a study by Kent B.Monroe, he proposed a model for decomposing perceived product value into three components:

Answer 17

Quality, Sacrifice and Benifits

Question 18

refer to the positive aspects associated with obtaining or using the product or service

Answer 18

Benefits

Question 19

the aesthetic appeal of the physical design of a product.

Answer 19

Form utility

Question 20

the value attached to a service that saves the customer time, effort, or money.

Answer 20

Task utility

Question 21

the ease of access to a service or product.

Answer 21

Time utility

Question 22

the convenience of the location.

Answer 22

Place utility

Question 23

the ease of purchasing the product.

Answer 23

Possession utility

Question 24

is a marketing strategy that involves comparing your product or service to a competitor’s product or service.This technique can help drive brand awareness and convince consumers to do business with one brand over another.

encourages product improvement and innovation, and can lead to lower prices in the marketplace.

Answer 24

Comparative advertising

Question 25

has issued a statement of policy regarding comparative advertising. According to the FTC, comparative advertising is a source of important information to consumers and assists them in making rational purchase decisions. 

Answer 25

Federal Trade Commission (FTC)

Question 26

Is the sum of all values that consumers exchange for the benefits of having or using the product or service. Price is the only element in the marketing mix that produces revenue; the others produce cost.

Answer 26

PRCE

Question 27

are the methods and procedures companies employ to determine the rates they charge for their goods and services

Answer 27

Pricing strategies

Question 28

Companies pursue survival as their major objective if they are plagued with overcapacity, intense competition, or changing consumer wants. As long as prices cover variable costs and some fixed costs, the company stays in business.

Answer 28

Survival

Question 29

Many companies try to set a price that will maximize current profits.They estimate the demand and costs associated with alternative prices and choose the price that produces maximum current profit, cash flow, or rate of return on investment.

Answer 29

Maximum current profit

Question 30

Some companies believe a higher sales volume will lead to lower unit costs and higher long-run profit. They set the lowest price, assuming the market is price sensitive.

Answer 30

Maximum Market Share/Market-penetration Pricing

Question 31

Companies unveiling a new technology favor setting high prices to maximize market skimming, prices start high and slowly drop over time

Answer 31

Market Skimming

Question 32

A company might aim to be the product-quality leader in the market. Product or services characterized by high levels of perceived quality, taste, and status are priced just high enough not to be out of consumers' reach.

Answer 32

Product-Quality Leadership

Question 33

Nonprofit and public organizations may have other pricing objectives such as partial cost recovery knowing that it must rely on private gifts and public grants to cover its remaining costs

Answer 33

Partial Cost Recovery

Question 34

costs that don't vary with production or sales revenue.

Answer 34

Fixed costs/overhead

Question 35

vary with the level of production.

Answer 35

Variable costs

Question 36

sum of fixed and variable costs at a given level of production.

Answer 36

Total costs

Question 37

cost per unit at a given level of production = total cost/quantity of production

Answer 37

Average cost

Question 38

are also influenced by quality of offering relative to competition

Answer 38

Pricing decisions

Question 39

No possible profit at this price

Answer 39

Low Price

Question 40

No possible demand at this price

Answer 40

High Price

Question 41

is just adding a standard mark-up to the product's cost.

Answer 41

Markup Pricing

Question 42

pricing used to achieve a planned or target rate of return on investment

Answer 42

Target-Return Pricing

Question 43

* Companies base their price on the customer's perceived value * to deliver more value than the competitor and to demonstrate this to perspective buyers.

Answer 43

Perceived-value Pricing

Question 44

Win loyal customer by charging a fairly low price for a high-quality offering

Answer 44

Value Pricing

Question 45

the firm bases its price largely on competitors' prices. It is quite popular where costs are difficult to measure or competitive response is uncertain.

Answer 45

Going-Rate pricing

Question 46

One major purpose of auctions is to dispose of excess inventories or used goods.

Answer 46

Auction-Type pricing