Tut Q CHP 9 Pricing

Volunteerism is the practice of providing time and skills for the benefit of other
people and causes rather than for financial help. Come and see my world is a
project that emphasizes the world of impoverished children. Although they
have their own situation, they can still maintain the optimism, surprise and
hope of childhood.World Vision is an international Christian humanitarian
organisation dedicated to working with children and families to overcome extreme
poverty and injustice. ABDT2043 FUNDAMENTALS OF MARKETING
TUTORIAL CHAPTER 9
PRICING: UNDERSTANDING AND CAPTURING CUSTOMER
VALUE Multiple-choice questions
1) ________ is the amount of money charged for a product or service.

A) Experience curve
B) Demand curve
C) Price
D) Wage
E) Salary
2) ________ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key
to pricing.
A) Value-based pricing
B) Target return pricing
C) Variable costs
D) Price elasticity
E) Product image
3) When there is price competition, many companies adopt ________ rather than cutting prices to
match competitors.
A) pricing power
B) value-added pricing strategies
C) fixed costs
D) price elasticity
E) image pricing
4) Product costs set a(n) ________ to a product's price.

A) demand curve
B) experience curve
C) floor
D) ceiling
E) break-even cost
5) A value-based pricing strategy most likely begins with ________.

A) setting a price based on perceived value
B) designing a stylish product
C) evaluating the product's costs
D) promoting the product's benefits
E) assessing customer needs
1
6) Costs that change directly with the level of production are referred to as ________ costs.
A) fixed
B) variable
C) target
D) capital
E) payroll
7) Each of the following economic factors can have a strong impact on a firm's pricing strategy
EXCEPT ________.
A) an economic boom
B) the reseller's reaction to price changes
C) an economic recession
D) inflation
E) interest rates
8) When companies set prices, the government and social concerns are two ________ affecting
pricing decisions.
A) external factors
B) internal factors
C) economic conditions
D) demand curves
E) temporary influences
9) Which of the following would NOT support a market-skimming policy for a new product? A)
The product's quality and image must support its higher price.
B) Enough buyers must want the products at that price.
C) Competitors are not able to undercut the high price.
D) Competitors can enter the market easily.
E) The cost of producing a smaller volume is not so high that it negates the advantage of
charging more per unit.
10) Companies involved in deciding which items to include in the base price and which to offer
as options are engaged in ________ pricing.
A) product bundle
B) optional-product
C) captive-product
D) by-product
E) skimming
An
swer: B Page Ref: 300
11) It is most typical for producers who use captive-product pricing to set the price of the main
product ________ and set ________ on the supplies necessary to use the product. A) low;
low markups
B) high; low markups
C) low; high markups
D) high; high markups
E) moderately; moderate markups
2
12) The New Age Gallery has different admission prices for students, adults, and seniors. All
three groups are entitled to the same services. This form of pricing is called ________. A)
time-based pricing
B) location pricing
C) customer-segment pricing
D) revenue management pricing
E) generational pricing
13) What type of pricing is being used when a company temporarily prices its product below the
list price or even below cost to create buying excitement and urgency? A) segmented
pricing
B) psychological pricing
C) referent pricing
D) promotional pricing
E) dynamic pricing
14) The Internet offers ________, where the price can easily be adjusted to meet changes in
demand.
A) captive pricing
B) dynamic pricing
C) basing-point pricing
D) price bundling
E) cost-plus pricing
15) Rent, electricity, and executive salaries are examples of ________ costs.
A) fixed
B) variable
C) total
D) accumulated
E) marketing
True/False questions
16) Consumers perceptions of the product's value set the ceiling; demand set a floor to a
product's price. F
17) Overhead cost is another term for variable cost. F fixed cost
18) In industrial markets, salespeople outrank top management in determining the sales price of
products, as well as pricing objectives and policies. F
Ref: 282
19) Pricing a product mix is often difficult because various products have related demand and
costs, and they face different degree of competitions. T
20) When Johnny On the Spot, a house mover, sells boxes and pads that must be used in moving
a household’s furniture, the company is practicing by-product pricing.F
optional product pricing
3
Essay questions
21) Companies bringing out a new product can choose between two broad strategies: market
skimming pricing and market-penetration pricing. Distinguish between the two.
22) What is customer value-based pricing? Describe the two types of value-based pricing.
23) Discuss the three major pricing strategies.
24) Discuss the product mix pricing strategies.
25) Discuss the types of segmented pricing strategies.

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Volunteerism is the practice of providing time and skills for the benefit of other

PRICING: UNDERSTANDING AND CAPTURING CUSTOMER

VALUE Multiple-choice questions

1) ________ is the amount of money charged for a product or service.

4) Product costs set a(n) ________ to a product's price.

5) A value-based pricing strategy most likely begins with ________.

23) Discuss the three major pricing strategies.

24) Discuss the product mix pricing strategies.

25) Discuss the types of segmented pricing strategies.

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