Home

Chapter 12

Multiple Choice

Multiple Choice


This activity contains 12 questions.

	________ targets a certain return on investment.   Cost-plus pricing Break-even pricing Target profit pricing Standard markup pricing

	All of the following statements are true, except:   The simplest pricing method is cost-plus pricing. Sellers are more certain about demand than about costs. Standard markups ignore current demand. Cost as a percentage of selling price is another commonly used pricing technique in the restaurant industry.

	All of the following statements are true, except:   Value-based pricing uses the buyers' perceptions of value as the key to pricing. One method of identifying how much customers are willing to pay involves using a technique called trade-off analysis. Going-rate pricing is the establishment of price based largely on those of competition, with much attention paid to costs or demand. The information from the trade-off analysis provides managers with an idea of which features add more value than they cost.

	Which of the following is not a new-product pricing strategy?   prestige pricing market-skimming pricing yield management market-penetration pricing

	_________ is setting a high price when the market is price insensitive.   Market-skimming pricing Prestige pricing Market-penetration pricing Promotional pricing

	__________ combines several products and offers the bundle at a reduced price.   Discount pricing Discriminatory pricing Promotional pricing Product-bundle pricing

	___________pricing refers to segmentation of the market and pricing differences based on price elasticity characteristics of these segments.   Discounting Promotional Discriminatory Psychological

	All of the following statements are true, except:   Low variable costs combined with fluctuations in demand make price discrimination a useful tool for smoothing demand and bringing additional revenue and profits. The purpose behind fencing is to keep price-inelastic customers from using rates designed for price-elastic segments. Price Sensitivity Measurement (PSM) helps to establish a balance of price with product or service value based on costs. Customers tend to simplify price information by ignoring end figures.

	The concept behind yield management is to manage_______ effectively by pricing differences based on the elasticity of demand for selected customer segments.   costs and sales capacity and demand revenue and inventory reservation and occupancy

	All of the following statements are true, except:   Excess capacity may lead to price cuts. Companies may cut prices in a drive to dominate the market. Cost inflation is a major factor for price cuts. Price changes will affect buyers, competitors, distributors, and suppliers.

	All of the following are internal factors influencing pricing decisions except:   Marketing objectives Costs Competition Marketing mix strategy

	All of the following are external factors influencing pricing decisions except:   Economy Costs Competition Nature of the market and demand

Copyright © 1995-2008, Pearson Education, Inc., publishing as Pearson Prentice Hall Legal and Privacy Terms