Chapter 9 Of Marketing
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The amount of money charged to a customer for a product or service is called
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Price
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Discount
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Sale
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Profit
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This quiz in Chapter 9 of Marketing focuses on key pricing strategies and concepts. It assesses understanding of various pricing models like value-based, high-low, and everyday low pricing, crucial for effective marketing management.
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- 2.
Veggie Chipotle burritos cost $4.70 in Portland but $7.10 in Manhattan. Chipotle is practicing
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Product bundling pricing
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By product pricing
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Optional product pricing
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Location pricing
Correct Answer
A. Location pricingExplanation
The given correct answer is "Location pricing". This is because the price difference for the Veggie Chipotle burritos in Portland and Manhattan indicates that Chipotle is practicing location pricing. Location pricing involves charging different prices for the same product or service based on the geographical location. In this case, Chipotle is adjusting the price of the Veggie Chipotle burritos based on the different costs and market conditions in Portland and Manhattan.Rate this question:
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- 3.
Hy Top milk increased its milk price by 1%, it led to 10% reduction in demand. In this example the milk demand is
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Elastic
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Inelastic
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Non elastic
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Quasi elastic
Correct Answer
A. ElasticExplanation
The demand for milk is elastic in this example because a 1% increase in price led to a significant 10% reduction in demand. This indicates that consumers are responsive to changes in price and are willing to decrease their consumption when the price increases.Rate this question:
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- 4.
Which of these is not a variable cost to Toyota for producing cars
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Cost of steering wheel
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Salary of managers
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Cost of seats
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Cost of paint
Correct Answer
A. Salary of managersExplanation
The cost of salary for managers is not a variable cost for Toyota in producing cars because it remains constant regardless of the number of cars produced. Variable costs, on the other hand, fluctuate with the level of production. The cost of steering wheel, seats, and paint are all examples of variable costs as they vary based on the number of cars being produced.Rate this question:
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- 5.
Kia sells its new model cars at prices much lower than competition. Kia is practicing
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Market skimming pricing
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Market penetration pricing
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Product line pricing
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Value added pricing
Correct Answer
A. Market penetration pricingExplanation
Kia is practicing market penetration pricing because they are selling their new model cars at prices much lower than the competition. Market penetration pricing involves setting low prices to attract customers and gain market share. This strategy is often used by companies entering a new market or launching a new product to quickly gain a foothold and increase sales volume. By offering lower prices, Kia aims to attract customers away from their competitors and establish themselves in the market.Rate this question:
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- 6.
If demand hardly changes with small changes in price, the demand is
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Elastic
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Inelastic
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Quasielastic
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Non-elastic
Correct Answer
A. InelasticExplanation
If demand hardly changes with small changes in price, it means that the demand is not sensitive to price fluctuations. This indicates that the demand is inelastic. Inelastic demand means that consumers are not very responsive to changes in price and their purchasing behavior remains relatively constant, regardless of price changes.Rate this question:
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- 7.
It cost $5000 to by training manuals from Aivea. It costs $3000 to hire an instructor to train. However it costs $6000 to get both manuals and instructor. This is an example of
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Target costing
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By product pricing
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Product bundling pricing
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Market skimming pricing
Correct Answer
A. Product bundling pricingExplanation
Product bundling pricing refers to the practice of offering multiple products or services together as a package at a discounted price compared to buying them separately. In this scenario, the cost of purchasing training manuals separately from Aivea is $5000, and the cost of hiring an instructor separately is $3000. However, when both the manuals and instructor are purchased together, the cost is $6000. This indicates that there is a discount or special pricing offered when the manuals and instructor are bundled together, making it an example of product bundling pricing.Rate this question:
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- 8.
If a company starts with an ideal selling price based on customer value considerations and then targets cost that will ensure that the price is met it is practicing
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Target costing
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Cost plus pricing
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Value based pricing
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Low costing
Correct Answer
A. Target costingExplanation
Target costing is a pricing strategy where a company determines the ideal selling price based on customer value considerations and then works backwards to determine the target cost that will ensure the price is met. This approach focuses on understanding customer needs and preferences and aligning the cost structure accordingly to achieve the desired profit margin. By setting the target cost, the company can identify areas where costs can be reduced or eliminated without compromising product quality or customer satisfaction. This allows the company to effectively manage costs and optimize profitability while delivering value to customers.Rate this question:
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- 9.
Honda offers higher end cars under Acura brand. They typically do not discount price to match competitors, rather highlight the value that customer receives from an Acura. Acura is practicing
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Cost plus pricing
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Break even pricing
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Value added pricing
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Profit focus pricing
Correct Answer
A. Value added pricingExplanation
Honda's Acura brand practices value added pricing. This means that instead of discounting prices to match competitors, Acura focuses on highlighting the value that customers receive from their cars. By emphasizing the additional features, quality, and overall customer experience, Acura justifies their higher prices and positions themselves as a premium brand in the market. This strategy allows Acura to differentiate themselves from competitors and attract customers who are willing to pay a premium for the added value they offer.Rate this question:
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- 10.
It cost Aivea $400 to hire a consultant for a day. Aivea wants to make 20% profit ($80) on this service and hence invoice the client $480. Aivea is practicing
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Good value pricing
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Value based pricing
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Break even pricing
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Cost plus pricing
Correct Answer
A. Cost plus pricingExplanation
Aivea is practicing cost plus pricing because they are adding a certain percentage (20%) of profit to the cost of hiring the consultant. This pricing strategy involves determining the cost of producing a product or service and then adding a markup to cover the desired profit margin. In this case, Aivea is calculating the cost of hiring the consultant ($400) and adding the desired profit of $80 (20% of $400) to arrive at the invoice amount of $480.Rate this question:
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- 11.
WalMart offers lowest possible values and hold very few promotion to lower prices. Wal Mart is practicing
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Cost plus pricing
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Everyday low pricing
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Break even pricing
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Low - low pricing
Correct Answer
A. Everyday low pricingExplanation
WalMart's strategy of offering the lowest possible prices and rarely having promotions aligns with the concept of Everyday low pricing. This approach focuses on consistently offering low prices to customers, rather than relying on temporary discounts or sales. By adopting this strategy, WalMart aims to attract customers who value affordability and convenience, while also maintaining a competitive edge in the market.Rate this question:
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- 12.
If a company uses buyer's perceptions of value not the seller's cost as key to pricing what kind of pricing model is it using?
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Value based pricing
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Cost based pricing
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Discount based pricing
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Perception based pricing
Correct Answer
A. Value based pricingExplanation
Value-based pricing is a pricing model where the company determines the price of a product or service based on the perceived value it provides to the buyer, rather than the cost of producing it. This approach focuses on understanding the customer's perception of value and pricing the product accordingly, which allows the company to capture a fair share of the value it delivers. By considering the buyer's perception of value, the company can align its pricing strategy with the customer's willingness to pay, leading to increased customer satisfaction and potentially higher profits.Rate this question:
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- 13.
Charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items is called
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Cost plus pricing
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Good value pricing
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Break even pricing
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High - low pricing
Correct Answer
A. High - low pricingExplanation
High-low pricing is a strategy where a company sets higher prices for its products on a regular basis but frequently offers promotions or discounts to lower the prices temporarily on selected items. This approach aims to create a perception of value by giving the impression of getting a good deal during the promotional periods. By using this strategy, companies can attract customers with lower prices while still maintaining higher profit margins during non-promotional periods.Rate this question:
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- 14.
IPhones were introduced at $500, since their price has fallen to $200. At iPhone's launch Apple was trying which strategy?
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Cost plus pricing
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Product line pricing
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Penetration pricing
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Market skimming pricing
Correct Answer
A. Market skimming pricingExplanation
Apple was using market skimming pricing strategy when they introduced iPhones at $500 and then gradually reduced the price to $200. Market skimming pricing involves setting a high initial price for a product and then gradually lowering it over time. This strategy is often used for innovative products with high demand, allowing the company to maximize profits from early adopters before targeting a broader market with lower prices. In this case, Apple aimed to attract early adopters who were willing to pay a premium price for the latest technology, and then adjusted the price to appeal to a wider range of customers.Rate this question:
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- 15.
Honda accord base model comes at $16,000. Honda then charges extra for moon roof, CD player and other options. This is an example of
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Product line pricing
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Captive product pricing
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Cost plus pricing
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Optional product pricing
Correct Answer
A. Optional product pricingExplanation
Optional product pricing is the correct answer because it refers to the strategy of offering optional features or accessories for an additional price. In this case, Honda is offering the base model of the Accord at $16,000 but charges extra for features like a moon roof and CD player. This allows customers to customize their car by choosing the optional features they desire, while also generating additional revenue for Honda.Rate this question:
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- 16.
Dell sells its printers for very low price, but sells printer ink at a premium. This is an example of
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Product line pricing
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Captive product pricing
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By product pricing
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Value added pricing
Correct Answer
A. Captive product pricingExplanation
Captive product pricing is the correct answer because Dell sells its printers at a low price to attract customers, but then charges a premium price for printer ink. This strategy is aimed at creating a dependence on their ink products, as customers who purchase their printers will need to continue buying Dell ink cartridges. By offering a low initial price for the printer and making profits from the higher-priced ink, Dell employs captive product pricing to maximize their revenue.Rate this question:
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- 17.
Selling below cost with the intention of punishing a competitor or gaining higher market share by driving competition out of business is called
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Price collusion
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Predatory pricing
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Cost cut pricing
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De value pricing
Correct Answer
A. Predatory pricingExplanation
Predatory pricing refers to the strategy of selling products or services below cost with the intention of harming competitors or driving them out of business. This can be done to gain a higher market share and ultimately establish a monopoly. By offering prices that are unsustainable for competitors to match, the predatory firm aims to eliminate competition and then raise prices to recoup losses. This anti-competitive behavior is illegal in many jurisdictions as it can harm consumers and stifle innovation.Rate this question:
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- 18.
Which of these is not an example of Fixed or over head cost
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Rent
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Utilities
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Cartons to pack products
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Interest on debt
Correct Answer
A. Cartons to pack productsExplanation
Cartons to pack products is not an example of fixed or overhead cost because it is a variable cost that changes based on the quantity of products being packed. Fixed or overhead costs, on the other hand, remain constant regardless of the level of production or sales. Rent, utilities, and interest on debt are all examples of fixed or overhead costs as they do not vary with the level of production.Rate this question:
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- 19.
In pure competition firms are
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Price setters
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Price takers
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Price moderators
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Price manipulators
Correct Answer
A. Price takersExplanation
In pure competition, firms are considered price takers because they have no control over the market price. They must accept the prevailing market price for their products or services, as determined by the forces of supply and demand. This means that individual firms have no ability to influence or manipulate prices, and they must adjust their production and pricing decisions based on the market conditions. Price takers have a perfectly elastic demand curve, meaning that any increase in price would result in a loss of all customers, and any decrease in price would result in an influx of customers.Rate this question:
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- 20.
Pankaj Shuchi is pyar karta hai kitna?
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Jitne aasmaan main hain taare
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Jitna sagar main hai paani
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Jitna Rajasthan main hai sand
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Jitne jungle main hain jugnu
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In sab se bhi zayada
Correct Answer
A. In sab se bhi zayada -
- 21.
Airlines vary their cost every hour or less. This phenomenon can be described by all of the terms below EXCEPT
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Allowance pricing
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Revenue management
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Time pricing
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Yield management
Correct Answer
A. Allowance pricingExplanation
The given question asks for the term that does not describe the phenomenon of airlines varying their cost every hour or less. Allowance pricing does not accurately describe this phenomenon as it typically refers to offering discounts or allowances on the regular price of a product or service. On the other hand, revenue management, time pricing, and yield management all relate to the practice of adjusting prices based on factors such as demand, time, and maximizing revenue.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
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Feb 25, 2010Quiz Created by
Pmathur
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