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Exam 20: Pricing Concepts

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Question 21

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The perception of price depends on a

A) product's actual price and consumers' expectations regarding price.
B) consumer's analysis of competitive prices.
C) consumer's reference price.
D) consumer's expectation of price.
E) product's actual price in comparison with the manufacturer's suggested price.

F) A) and B)
G) None of the above

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Question 22

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Lucy buys a new dress at T.J. Maxx that has a price tag with "Compare at $150.00. Our Price $89.99." This is an example of the use of

A) internal referencing.
B) cumulative discounts.
C) seasonal discounts.
D) base-point pricing.
E) an external reference price.

F) D) and E)
G) A) and C)

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Question 23

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Total costs are influenced by quantities sold.

Which of the following is not a method used to determine transfer prices?

Seasonal discounts provide price incentives to customers during peak selling seasons.

Suppose that the frozen foods division of Swanson purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called

Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted.

A price developed in the consumer's mind through experience with the product is called a(n)

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

Electricity is an example of a product that is price elastic.

Price competition is a very flexible marketing strategy.

Which of the following is not a discount provided to business customers?

A seller can change prices quickly in a price-competition situation.

What equation shows organizations the relationship between price and profit?

Duds and Suds is a bar with a country and western atmosphere. In addition to the bar, Duds and Suds has a gift shop that sells western clothing with its logo. Norman is the owner of the business and has recently enacted temporary price reductions through clearance sales, discounts, and nightly drink specials. What is Norman most likely trying to do?

Marketers have more difficulty adjusting their prices than they do any other marketing mix variable.

Scenario 20.2 Use the following to answer the questions. The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. -Refer to Scenario 20.2. BASF is considering the problem of actual distance in delivering its product from the plant in Germany to some of its customers in China. Which pricing strategy would help overcome this problem?

What are reference prices and how do customers use them? What is the difference between internal and external reference prices?

When Cadillac buys headlights from Delco (both of which are divisions of General Motors) , ____ pricing occurs.

If fixed costs = $6,000, selling price = $10, and variable costs per unit = $5, what is the breakeven point in units and in dollar sales volume?