Marketing Exam Quiz Questions! Practice Test!

Explanation
Cost-based pricing is a pricing strategy where a firm calculates the cost of producing or providing its product and then adds a fixed amount to that cost to determine the selling price. This fixed amount is typically used to cover overhead expenses and generate a desired profit margin. By using cost-based pricing, the firm ensures that it covers its costs and earns a profit on each unit sold. This strategy is commonly used in industries with high competition and where pricing is primarily determined by production costs.

Explanation
The given answer, "cost-based," is correct because the pricing strategy described in the question is based on the cost of the book. The bookstore purchases the book at the publisher's wholesale price and then adds a standard markup of 35 percent. This means that the price of the book is determined by its cost, rather than factors such as demand or competition.

Explanation
Competitor-based pricing is a pricing strategy where a firm sets its prices below, at, or above its competitors' offerings. This strategy takes into account the prices set by competitors and aims to position the firm's prices in relation to them. By pricing below competitors, a firm can attract price-sensitive customers. Pricing at the same level as competitors helps the firm maintain market share, while pricing above competitors may imply higher quality or exclusivity. Competitor-based pricing allows firms to adjust their prices based on market conditions and the actions of their competitors.

Explanation
The given pricing strategy of pricing the top 10 books on the New York Times bestseller list $2 less than its primary competitors prices is an example of a competitor-based pricing strategy. This strategy involves setting prices based on the prices charged by competitors in the market. By offering a lower price compared to competitors, the bookstore aims to attract customers and gain a competitive advantage in the market.

Explanation
Value-based pricing is a pricing strategy that involves determining the perceived value of a product or service from the customer's perspective and then setting the price accordingly. This approach focuses on the value that customers place on the product rather than the cost of production or the prices set by competitors. By aligning the price with the perceived value, firms can capture a higher share of the value they create for customers and maximize their profitability. This strategy is particularly effective when a firm offers unique or differentiated products that provide significant value to customers.

Explanation
The given correct answer is value-based. This is because the bookstore is using its prior experience to understand the attitudes of students towards textbooks and their price. By considering the value that students place on textbooks, the bookstore can set prices that align with the perceived value of the product. This strategy focuses on pricing based on the perceived worth or value of the product to the customer, rather than solely considering costs or competition.

Explanation
Competitive intelligence refers to the practice of collecting and analyzing information about competitors in order to gain insights into their strategies, strengths, and weaknesses. By doing so, firms can better understand their position in the market and make informed decisions to anticipate and respond to market developments. This allows companies to be proactive rather than reactive in their approach, giving them a competitive advantage.

Explanation
Maslow's Hierarchy of Needs is a theory that suggests that people have a hierarchy of needs, starting from basic physiological and safety needs, and progressing to higher level needs such as social and personal fulfillment. This theory argues that once lower-level needs are met, individuals are motivated to fulfill higher-level needs.