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Marketing Management 3rd Edition By Greg Marshall 9781259637155 Chapter 1-14 Complete Guide .
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Test Bank For Marketing Management 3rd Edition By GregMarshall 9781259637155 Chapter 1-14 Complete Guide .
When consumers examine products, they often compare an observed price to an internal price they
remember. This is known as a(n) ________ price. - ANSWER: reference
________ price refers to what the consumers feel the product should cost. - ANSWER: fair
While shopping at the mall, Jane was asked by one of the sales representatives at the cosmetics
counter to try out a new lipstick that her company was test marketing. The company representative
asks her how much she would be willing to pay for the lipstick. After trying it out, Jane is of the
opinion that $5 is just the right price for it. What type of a reference price is Jane using? - ANSWER:
fair price
A company decided to conduct a market survey for its new MP3 player that the company had priced
at $150. In the survey, 95 percent of participants said that the maximum they would pay for the MP3
player is $100. This is an example of which of the following possible consumer reference prices? -
ANSWER: upper-bound pricing
The minimum price that most consumers would pay for a given product is known as the ________
price. - ANSWER: lower-bound pricing
A company has developed the prototype of a mobile phone that it plans to launch in the next few
months. The phone comes equipped with the most advanced technological features. As part of its test
marketing efforts, the company allows customers to examine and use the prototype and also gathers
feedback regarding product features and price. The results of this test marketing effort show that
customers are willing to pay at least $500, considering the phone's various features. As such, the
company has discovered customers' ________. - ANSWER: lower-bound pricing
Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the
perfume is from a well-known brand. What kind of pricing is the company depending on? - ANSWER:
image pricing
Customers usually have a lower price threshold below which prices signal inferior or unacceptable
quality, as well as an upper price threshold above which prices are prohibitive and the product
appears not worth the money. - ANSWER: True
Although consumers may have fairly good knowledge of the range of prices involved, very few can
accurately recall specific prices of products - ANSWER: True
When examining products, consumers compare an observed price to an internal reference price they
remember or an external frame of reference - ANSWER: True
Many consumers use price as an indicator of quality and value. - ANSWER: True
Pricing cues such as sale signs and prices that end in 9 are more influential when consumers are
experienced in the category - ANSWER: False
Traditionally, price was never a major determinant of buyer choice - ANSWER: False
A firm that is plagued with overcapacity, intense competition, or changing consumer desires would do
better if it pursues ________ as its major objective. - ANSWER: survival
, After estimating the demand and costs associated with alternative prices, a company has chosen to
price its product in such a way that it gains the highest rate of return on its investment. The company
is looking to ________. - ANSWER: maximum current profit
Companies who believe that higher sales volume leads to lower unit costs and higher long-run profits
are attempting to ________. - ANSWER: maximize their market share
A company that is looking to maximize its market share would do well to follow ________ pricing. -
ANSWER: market-penetration
A market-penetration pricing strategy is most suitable when ________. - ANSWER: production and
distribution costs fall with accumulated production experience
When Apple introduced its iPhone, it was priced at $599. This allowed Apple to earn the maximum
amount of revenue from the various segments of the market. Two months after the introduction, the
price had come down to $399. What kind of a pricing did Apple adopt? - ANSWER: market-skimming
prices
Market skimming pricing makes sense under all the following conditions, EXCEPT if ________. -
ANSWER: consumers are likely to delay buying the product until its price drops
Starbucks, Aveda, and BMW have been able to position themselves within their categories by
combining quality, luxury, and premium prices with an intensely loyal customer base. These
companies are employing a ________ strategy. - ANSWER: product quality leadership
If consumers were largely indifferent to a $0.05 increase in the price of a gallon of milk, the price rise
is said to fall within customers' ________. - ANSWER: price indifference band
JJ pays overhead each month, including his company's bills for rent, heat, interest, and salaries, which
are examples of ________ costs. - ANSWER: fixed
When ConAgra foods decided to cut $250 million in costs to return to a $1 price point (after sales
dropped as a result of raising prices $0.25 to cover higher commodity costs), it was using ________. -
ANSWER: targeting cost
A manufacturer has invested $750,000 in a new product and wants to set a price to earn a 15 percent
ROI. The cost per unit is $18 and the company expects to sell 50,000 units in the first year. Calculate
the company's target-return price for this product. - ANSWER: $20.25
) An umbrella manufacturing company's fixed costs are $275,000. The variable cost per unit is $5 and
each umbrella is sold at $10. How many units should the firm sell in order to break even? - ANSWER:
55,000
________ pricing takes into account a host of inputs, such as the buyer's image of the product
performance, the channel deliverables, the warranty quality, customer support, and attributes such as
the supplier's reputation, trustworthiness, and esteem. - ANSWER: perceived value
Matt's retail store offers all products at $2 less than its competitors. The store never runs promotional
campaigns or offers special discounts. Matt's retail store is following a(n) ________ pricing policy. -
ANSWER: everyday low
In which of the following auctions does the auctioneer first announce a high price for a product and
then slowly decreases the price until a bidder accepts? - ANSWER: a Dutch auction with one seller and
many buyers
In a(n) ________, the buyer announces something he or she wants to buy, and potential sellers
compete to offer the lowest price. - ANSWER: Dutch auction with one buyer and many sellers
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