MKTG Chapter 11 Exam Questions with Verified Solutions (Already Passed)
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MKTG Chapter 11
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MKTG Chapter 11
MKTG Chapter 11 Exam Questions with Verified Solutions (Already Passed)
Companies set not a single price, but a pricing ________ that covers different items in its
line and changes over time as products move through their life cycles.
A) by-product
B) structure
C) loop
D) cycle
E) bundle - A...
MKTG Chapter 11 Exam Questions with Verified Solutions (Already Passed)
Companies set not a single price, but a pricing ________ that covers different items in its
line and changes over time as products move through their life cycles.
A) by-product
B) structure
C) loop
D) cycle
E) bundle - Answers b
For market skimming to be successful, the costs of producing a smaller volume cannot be
so high that they cancel the advantage of charging more. - Answers True
Pricing strategies tend to change and evolve as the average product passes through its life
cycle. - Answers True
When The Candy Store sets a low initial price in order to get its "foot in the door" and to
quickly attract a large number of buyers, the company is using market-skimming pricing. - Answers False;
market penetration pricing
After entering a market by using market-penetration pricing, a company can easily raise its
price and maintain its market share. - Answers False; low price must be maintained
Companies facing the challenge of setting prices for the first time can choose between two
broad strategies: market-penetration pricing and ________ pricing.
A) comparative
B) competitive
C) market-skimming
D) market-segmentation
E) cost-plus - Answers c
A market-skimming pricing strategy should NOT be used for a new product when ________.
A) the product's quality and image support its higher price
,B) enough buyers want the products at that price
C) competitors are unable to enter the market
D) competitors can undercut prices easily
E) producing a smaller number of goods is feasible - Answers d
When a company sets a high price for a new product with the intention of reducing the price
in the future, it is using the ________ pricing strategy.
A) market-skimming
B) cost-plus
C) market-segmentation
D) market-penetration
E) competitive - Answers a
Midnight Magic, a perfume manufacturing company, plans to release a new fragrance during
the holiday season at $99 per bottle. The company intends to bring the price down to $49
within six months of its release to attract buyers who couldn't afford the initial price. Which of
the following pricing strategies is Midnight Magic using?
A) market-penetration pricing
B) market-skimming pricing
C) competitive pricing
D) cost-plus pricing
E) product-line pricing - Answers b
Which of the following is true of price skimming?
A) It is effective in situations in which competitors are able to undercut prices easily.
B) It can be profitably used when the product's quality and image support its price.
C) It involves underpricing products so that companies make larger sales.
D) It is ineffective in situations in which competitors are unable to enter the market easily.
,E) It leads to a situation in which the company completes more, though less profitable, sales. - Answers
b
Companies that set a low price for a new product in order to attract a large number of buyers
and a large market share are using the ________ strategy.
A) market-skimming pricing
B) market-penetration pricing
C) cost-plus pricing
D) inclusive pricing
E) exclusive pricing - Answers b
A market-penetration pricing policy should LEAST likely be used for a new product when
________.
A) the market is highly price sensitive
B) production and distribution costs fall as sales volume increases
C) the product's quality and image support a high price
D) a high price helps keep out the competition
E) there are few or no competitors in the market - Answers c
Which of the following is true of market-penetration pricing?
A) It should be used when the product's quality and image support a high price.
B) It involves setting a high price for a new product to appeal to the elite in society.
C) It results in drawing in large numbers of buyers quickly, winning a large market share.
D) It is best used in conjunction with a market-skimming pricing strategy.
E) It results in the company making fewer and less profitable sales. - Answers c
In a bid to attract more customers in a market that has several competitors, Barrymore's
Bakery slashed the prices of all its products by 50 percent. Managers at the firm reasoned that
lower prices would draw in even more customers, making up for the reduction in price several
times over. Which of the following pricing strategies are they using?
, A) market-skimming pricing
B) market-penetration pricing
C) captive-product pricing
D) cash discount pricing
E) by-product pricing - Answers b
Whizz Corp. wishes to introduce a new hybrid car into mature markets in developed
countries with the goal of gaining mass-market share quickly. Which of the following pricing
strategies would help the firm meet its goal?
A) market-skimming pricing
B) market-penetration pricing
C) market-segmentation pricing
D) cost-plus pricing
E) captive-product pricing - Answers b
Electrowhip, a company that manufacturers blenders and electric whisks, has decided to use
a market penetration pricing strategy. Which of the following, if true, proves their decision to
be a wise one?
A) Electrowhip's competitors utilize social media for marketing their products.
B) Electrowhip sells products whose image and quality support high prices.
C) Electrowhip operates in a market with many competitors.
D) Electrowhip does not operate in a price sensitive market.
E) Electrowhip's products are intended to appeal to the elite in society. - Answers c
For a market penetration-price strategy to succeed, which of the following is LEAST likely
to be true?
A) Production costs decrease as sales volume increases.
B) A low price triggers market growth.
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