Test Bank Answers Ch7 Pricing And Value Creation - Marketing Fundamentals 2e | Test Bank Baines by Paul Baines. DOCX document preview.
Chapter 7: Pricing and value creation
Test Bank
Type: multiple choice question
Title: Chapter 07 Question 01
1) This approach is fairly standard for high-technology offerings or for those offerings that require substantial research and development cost input initially.
a. Market penetration pricing.
b. Customer-centric pricing.
c. Price-skimming
d. None of the options given above is correct.
Type: multiple choice question
Title: Chapter 07 Question 02
2) Fixed costs do not vary according to the number of units of product made or service sold. Which of the following is not an example of a fixed cost?
a. Office buildings.
b. Salaries.
c. Product packaging.
d. Cars and other vehicles.
Type: multiple choice question
Title: Chapter 07 Question 03
3) ________ is an assumption that quality increases as price increases and that, in general, price reflects quality.
a. Perceived quality
b. Perceived value
c. Perceived price
d. Perceived risk
Type: multiple choice question
Title: Chapter 07 Question 04
4) This is the price band against which customers judge the purchase price of offerings in their own minds.
a. Sale prices.
b. Reference prices.
c. Luxury prices.
d. Odd-number prices.
Type: multiple choice question
Title: Chapter 07- Question 05
5) These act as cues, usually indicating to a potential customer that there is a bargain to be had. Consequently this entices the customer to purchase.
a. Reference prices.
b. Sale signs.
c. Sales promotions.
d. Odd-number pricing.
Type: multiple choice question
Title: Chapter 07 Question 06
6) Sunday newspapers (in Britain, France, Thailand, Sweden) often contain numerous supplements (e.g. fashion, entertainment, property) to make the newspaper appear greater value for money. These are called:
a. Pricing cues.
c. Odd-number pricing.
d. Reference prices.
Type: multiple choice question
Title: Chapter 07 Question 07
7) The setting of prices depends on a number of factors. Which of the following is not a factor?
a. How price affects demand.
b. How sales revenue is linked to price.
c. How cost is linked to price.
d. All of the options given above are correct.
Type: multiple choice question
Title: Chapter 07 Question 08
8) There are four types of pricing approaches. Which of the following is not a pricing approach?
a. Cost-oriented.
1. The cost-oriented approach (where prices are set based on costs).
2. The demand-oriented approach (where prices are based on price sensitivity and levels of demand).
3. The competitor-oriented approach (where prices are set based on what competitors are charging).
4. The value-oriented approach (where prices are set based on what customers believe to offer value).
b. Demand-oriented.
1. The cost-oriented approach (where prices are set based on costs).
2. The demand-oriented approach (where prices are based on price sensitivity and levels of demand).
3. The competitor-oriented approach (where prices are set based on what competitors are charging).
4. The value-oriented approach (where prices are set based on what customers believe to offer value).
c. Value-oriented.
1. The cost-oriented approach (where prices are set based on costs).
2. The demand-oriented approach (where prices are based on price sensitivity and levels of demand).
3. The competitor-oriented approach (where prices are set based on what competitors are charging).
4. The value-oriented approach (where prices are set based on what customers believe to offer value).
d. Luxury-oriented.
1. The cost-oriented approach (where prices are set based on costs).
2. The demand-oriented approach (where prices are based on price sensitivity and levels of demand).
3. The competitor-oriented approach (where prices are set based on what competitors are charging).
4. The value-oriented approach (where prices are set based on what customers believe to offer value).
Type: multiple choice question
Title: Chapter 07 Question 09
9) This occurs in very large organizations where there is considerable internal dealing between different divisions of the company and across national boundaries.
a. Transfer pricing.
b. EVC pricing.
c. Relationship pricing.
d. Value-in-use pricing.
Type: multiple choice question
Title: Chapter 07 Question 10
10) This term is associated with the winning bidder obtains an unprofitable contract that she or he is duty-bound to deliver because their bid price was set so low so that they won the contract.
a. Winner’s curse.
b. Bidding curse.
c. Pitch chase.
d. Black bid.
Type: true-false
Title: Chapter 07 Question 11
11) Pricing refers to ‘the amount of money expected, required, or given in payment for something; an unwelcome experience or action undergone or done as a condition of achieving an objective; decide the amount required as payment for something offered for sale; and discover or establish the price of something for sale’.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 12
12) Fixed costs are costs that vary according to the number of units of product made or service sold. For example, with the production of Burger King cheeseburger meals, when sales and demand decrease, fewer raw goods such as cheeseburger ingredients, product packaging, and novelty items such as toys are required.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 13
13) The general idea that price indicates quality assumes that the prices are objectively determined by market force. This is referred to as ‘perceived value’.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 14
14) When customers assess prices, they estimate value using pricing cues, because they do not always know the true cost and price of the item that they are purchasing.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 15
15) Value is defined as ‘the regard that something is held to deserve; importance, worth or usefulness of something; principles or standards of behaviour; one’s judgement of what is important in life; the numerical amount denoted by an algebraic term; a magnitude, quantity, or number’.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 16
16) Odd-Number pricing is when marketers highlight their prices to customers by bundling other products and services into an offering to make the price look more reasonable.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 17
17) A cost-oriented approach is where prices are based on price sensitivity and levels of demand.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 18
18) Negotiated pricing is when prices are set according to specific agreements between a company and its clients or customers.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 19
19) Discount pricing focuses our attention upon customer perceptions of product attributes and away from cost-oriented approaches.
a. True
b. False
Type: true-false
Title: Chapter 07 Question 20
20) The market penetration pricing approach is used for fast-moving consumer goods and consumer durables, where the new offering introduced is not demonstrably different from existing formulations.
a. True
b. False
Type: multiple choice question
Title: Chapter 07 Question 21
21) These are costs which vary according to the number of units of product made or service sold.
a. Fixed costs.
b. Variable costs.
c. Less costs.
d. Capital costs.
Type: multiple choice question
Title: Chapter 07 Question 22
22) This is a notion is where the winning bidder obtains an unprofitable contract that she or he is duty-bound to deliver because their bid price was set so low so that they won the contract.
a. Winner’s blessing.
b. Loser’s blessing.
c. Winner’s curse.
d. Loser’s curse.
Type: multiple choice question
Title: Chapter 07 Question 23
23) Which of the following is not the pricing approach used in the business-to-business setting?
a. Competitor-oriented approach.
b. Geographical approach.
c. Negotiated approach.
d. Value-in-use approach.
Type: multiple choice question
Title: Chapter 07 Question 24
24) The pricing approach where prices are set based on costs is called:
a. The cost-oriented approach.
b. The demand-oriented approach.
c. The competitor-oriented approach.
d. The value-oriented approach.
Type: multiple choice question
Title: Chapter 07 Question 25
25) The pricing approach where prices are set based on what customers believe to offer value is called:
a. The cost-oriented approach.
b. The competitor-oriented approach.
c. The demand-oriented approach.
d. The value-oriented approach.