IBM Exam 3 Questions & Answers 2024/2025
price skimming (profit maximization) - ANSWERSsetting a relatively high price for a period of time after the product launches.
Market Penetration - ANSWERSemphasizes selling more of existing goods and services to existing customers.
Odd Pricing - ...
price skimming (profit maximization) - ANSWERSsetting a relatively high price for a period of time after
the product launches.
Market Penetration - ANSWERSemphasizes selling more of existing goods and services to existing
customers.
Odd Pricing - ANSWERSa pricing tactic in which a firm prices products a few cents below the next dollar
amount.
Off-Season Pricing - ANSWERSPrice reductions given to customers purchasing goods or services out of
season
Prestige Pricing - ANSWERSpricing strategy that involves pricing a product higher than competitors to
signal that it is of higher quality.
Price Bundling - ANSWERStwo or more products are packaged together and sold at a single price.
Dynamic Pricing - ANSWERSinvolves constantly updating prices to reflect changes in supply, demand, or
market conditions.
Fixed Cost - ANSWERSCosts that remain constant and do not vary based on the number of units
produced or sold
Variable Cost - ANSWERSCosts that vary depending on the number of units
produced or sold
Compute Elasticity of Demand - ANSWERS
, Inelastic Demand - ANSWERSa specific change in price causes only a small change in the amount
purchased.
Elastic Demand - ANSWERSa small change in price causes a big change in the amount purchased.
Reference Price - ANSWERSthe price against which buyers compare the actual selling price of the
product and that facilitates their evaluation process.
Price Discrimination - ANSWERSThe practice of charging different customers different prices for the same
product.
Cannibalization - ANSWERSWhen new products take sales away from the firm's existing products rather
than generating additional revenues or profits through new sales.
Calculate Break-Even Point in Units - ANSWERS$fixed cost / ($selling price per unit - $variable cost per
unit) = ___ widgets
What does a strong brand image or high brand equity do for a firm? What is brand equity -
ANSWERSThey can increase margins, improve customer loyalty to the brand, provide expansion
opportunities, provide negotiating power, and provide a competitive advantage.
Brand Equity- The Value the firm derives from consumers' positive perception of its products
Private label brand VS manufacturer's brand - ANSWERSPRIVATE: Products developed by a retailer and
sold only by that specific retailer.
MANUFACTURER: Brands that are managed and owned by the manufacturer rather than a reseller.
Brand extensions - ANSWERSThe process of broadening the use of an organization's current brand to
include new products.
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