Verified Test Bank - Price And Customer Value Chapter 13

Chapter 13 - Price and customer value

Test Bank

Type: multiple choice question

Title: Chapter 13 Question 01

01) The pricing approach where prices are set based on what competitors are charging is called the:________

a. demand-oriented approach.

b. value-oriented approach.

c. competitor-oriented approach.

d. cost-oriented approach.

Type: multiple choice question

Title: Chapter 13 Question 02

02) 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. Energy costs.

d. Cars and other vehicles.

Type: multiple choice question

Title: Chapter 13 Question 03

03) With the ­­­­­­________to pricing, the firm sets prices according to how much customers will pay. This approach is prevalent in marketing services, but again could be used in B2B or consumer marketing contexts.

a. demand-oriented approach .

b. cost-oriented approach .

c. Price differentiation.

d. Price fixing.

Type: multiple choice question

Title: Chapter 13 Question 04

04) This is when a product or service is offered together with an offering to make the price look more reasonable______

a. Odd-number pricing.

b. Pure price bundling.

c. Product pricing.

d. Price differentiation.

Type: multiple choice question

Title: Chapter 13 Question 05

05) Prices are based on customer location (e.g. pharmaceutical companies sell their prescription drugs at different prices in different countries). This pricing approach for business-to-business is known as:_______________

a. value-in-use pricing

b. geographical pricing

c. negotiated pricing

d. discount pricing

Type: multiple choice question

Title: Chapter 13 Question 06

06) ___________ act as cues by indicating to a potential customer that there is a bargain to be had.

a. Price surplus.

b. Sale signs.

c. Odd-number pricing.

d. Relative price.

Type: multiple choice question

Title: Chapter 13 Question 07

07) 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 13 Question 08

08) For emergency purchases such as funeral services or prescription pharmaceutical products for life-threatening diseases, when companies do set charges that are perceived to be unfair, they are liable to claims of __________.

a. price collusion

b. price war

c. price bundle

d. price gouging

Type: multiple choice question

Title: Chapter 13 Question 09

09) _____ refers to setting a price low relative to competition to gain market share.

a. Penetration pricing

b. Price skimming

c. Economy pricing

d. Bundling

Type: multiple choice question

Title: Chapter 13 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 13 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 13 Question 12

12) Fixed costs are costs that vary according to the number of units of product made or service sold. For instance, in the pharmaceutical market this would include plastic bottles to place the pills into.

a. True

b. False

Type: true-false

Title: Chapter 13 Question 13

13) Determining costs and prices is easier when organizations are split into separate profit centres selling onto other divisions within the same company—especially when these adopt inefficient transfer pricing mechanisms.

a. True

b. False

Type: true-false

Title: Chapter 13 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 13 Question 15

15) Proposition Quality defined as the standard of something as measured against other things of a similar kind; the degree of excellence of something; general excellence of standard or level; a distinctive attribute or characteristic possessed by someone or something.

a. True

b. False

Type: true-false

Title: Chapter 13 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 10 - Question 17

17) A cost-oriented approach allows customers to pay whatever they wish and is based on value and demand considerations.

a. True

b. False

Type: true-false

Title: Chapter 13 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 13 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 13 Question 20

20) When launching new offerings, organizations tend to adopt either penetration pricing or the price skimming strategy. In the first approach, they charge a lower price to generate a large volume of sales and recoup their research and development (R&D) investment (hence penetration pricing).

a. True

b. False

Type: multiple choice question

Title: Chapter 13 Question 21

21) A study designed to understand the relationship between price and quality when price information is available online found that US consumers believe that higher prices correspond to higher quality for _______________but less likely to perceive this with soft goods (e.g. foodstuffs).

a. non-durables

b. consumer durables

c. consumables.

d. Fast-moving consumer goods

Type: multiple choice question

Title: Chapter 13 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 13 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 13 Question 24

24) This pricing approach is used when the firm sets prices according to how much customers are prepared to pay:__________

a. Demand-oriented approach.

b. Value-oriented approach.

c. Cost-oriented approach.

d. Competitor-oriented approach.

Type: multiple choice question

Title: Chapter 13 Question 25

25) ____________, including both working capital and fixed capital, also affect prices, with lower prices tending to require higher sales volume targets to be set with correspondingly higher levels of investment.

a. Fixed costs

b. Variable costs

c. Promotion costs

d. Investment costs

Type: multiple choice question

Title: Chapter 13 Question 26

26) In reality, when setting prices, an organization trades off the different approaches by considering all the following factors except:________

a. competition.

■ Competition—How much are competitors charging for similar offerings?

■ Cost—How much do the individual components that make up our offering cost?

■ Demand—How much of this product or service will we sell at what price?

■ Value—What components of the offering does the customer value and how much are they prepared to pay for them?

b. cost.

■ Competition—How much are competitors charging for similar offerings?

■ Cost—How much do the individual components that make up our offering cost?

■ Demand—How much of this product or service will we sell at what price?

■ Value—What components of the offering does the customer value and how much are they prepared to pay for them?

c. satisfaction.

■ Competition—How much are competitors charging for similar offerings?

■ Cost—How much do the individual components that make up our offering cost?

■ Demand—How much of this product or service will we sell at what price?

■ Value—What components of the offering does the customer value and how much are they prepared to pay for them?

d. value.

■ Competition—How much are competitors charging for similar offerings?

■ Cost—How much do the individual components that make up our offering cost?

■ Demand—How much of this product or service will we sell at what price?

■ Value—What components of the offering does the customer value and how much are they prepared to pay for them?

Type: multiple choice question

Title: Chapter 13 Question 27

27) __________involves setting low prices based on cost and competition considerations. This tactic is used in supermarkets to price price-sensitive items.________

a. Loss-leader pricing.

b. Promotional pricing.

c. List pricing.

d. Segmentation pricing.

Type: multiple choice question

Title: Chapter 13 Question 28

28) __________ uses customers’ previous purchase transaction histories and data, often recognizing repeat and new consumers from the data, to offer them different prices.________

a. Behaviour-based pricing.

b. Falsereemium pricing.

c. List pricing.

d. Segmentation pricing.

Type: true-false

Title: Chapter 13 Question 29

29) There are differing views on how it should be calculated. In marketing terms, value refers to the quality of what we get for what we pay. It is often expressed as:

a. True

b. False