Final exam pool items (Chs. 9, 11, 12, 13, 14, 15 & 17 not 18)
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ANS: B By lowering prices, Bernard Hinault can attract new buyers, thus increasing market share and sales volume. PTS: 1 REF: 257 OBJ: 17-2 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Product 21. At the end of the summer, Howard Nursery reduced the price on all of its plants, fertilizer, and potting soil by 50 percent in order to liquidate this inventory. What type of pricing strategy is being used in this example?
ANS: B Sales maximization ignores profit and competition for the purpose of raising cash. PTS: 1 REF: 258 OBJ: 17-2 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy 22. Grove City Furniture Company has recently moved to a new, larger location. At this new location, it has been unable to attract sufficient customers. Frankie Alonza, its owner, does not have the cash to pay the current loan installment due on the building and inventory. Alonza has decided to reduce all merchandise prices by at least 50 percent for a weekend sale so he can earn enough to make his loan payment. His pricing objective can be classified as:
ANS: D The strategy described will maximize sales dollars, but will not maximize or improve any of the other objectives in the long term. PTS: 1 REF: 258 OBJ: 17-2 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Customer 23. As a short-term pricing objective, _____ can be effectively used on a temporary basis to sell off excessive inventory.
ANS: D
Sales maximization pricing is a short-term price reduction to increase sales. PTS: 1 REF: 258 OBJ: 17-2 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Strategy 24. If a company's pricing objective is to meet the competition or to maintain existing prices, it is using _____ pricing.
ANS: C PTS: 1 REF: 258 OBJ: 17-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy 25. Which of the following statements describes an advantage of status quo pricing?
ANS: E
Status quo pricing requires little planning because it involves just copying the competitions' pricing policies. PTS: 1 REF: 258 OBJ: 17-2 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 26. Queeg Industries sells all types of artists' paintbrushes. When the owner of Queeg learned that Patterson Art, one of its biggest competitors in the Northeast region, had lowered its prices on all synthetic brushes by 5 percent, he did the same. This is an example of _____ pricing.
ANS: A Status quo pricing is best described as meeting the competition. PTS: 1 REF: 258 OBJ: 17-2 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy 27. Although many factors can influence price, the primary determinants are:
ANS: B PTS: 1 REF: 258 OBJ: 17-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing 28. _____ is defined as the quantity of a product that will be sold at various prices for a specified period.
ANS: B PTS: 1 REF: 258 OBJ: 17-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing 29. The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:
ANS: C
The quantity of a product that people will buy depends on its price. PTS: 1 REF: 258 OBJ: 17-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 30. The quantity of a product that people will buy/demand is most dependent on its:
ANS: E PTS: 1 REF: 258 OBJ: 17-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Customer 31. Leo Bliss manages a guest souvenir shop in Florida. He has decided to graph the demand per week for fresh orange juice because its price varies as the demand of fresh oranges varies. The graph indicates a demand schedule that slopes downward and to the right. This graph indicates that the quantity of juice demanded increases as:
ANS: D The lower the price, the more goods or services will be demanded. PTS: 1 REF: 258 OBJ: 17-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy 32. Khimaira Farms sells handcrafted cookie cutters. When graphed, the demand schedule for Khimaira Farms brand cookie cutters forms a straight line. If at $3 per cutter, 500 cookie cutters are demanded, and at $4 per cutter, 450 cookie cutters are ordered, how many will be ordered at a price of $6 per cutter?
ANS: A With a linear demand curve, the slope of the line will remain constant. In this example, for every $1 that price increases, sales will decrease by 50 cookie cutters. PTS: 1 REF: 258 OBJ: 17-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy 33. Pursonal Touch produces and markets beaded purses. When graphed, the demand schedule for its purses is a straight line. If one purse costs $20, 5,000 beaded purses are sold. At $25, 4,500 purses are sold. How many beaded purses will be sold if the price per purse is increased to $30?
ANS: C With a linear demand curve, the slope of the line will remain constant. In this example, for every $5 increase in price, sales will decrease by 500 beaded purses. PTS: 1 REF: 258 OBJ: 17-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy 34. Most demand curves slope:
ANS: E
For most products when prices increase, demand will decrease. PTS: 1 REF: 258 OBJ: 17-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Strategy 35. The _____ is the quantity of a product that will be sold in the market at various prices for a specified time period, and _____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.
ANS: B PTS: 1 REF: 258-259 OBJ: 17-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Strategy 36. _____ is defined as the quantity of product offered to the market by suppliers at various prices for a specified period.
ANS: A PTS: 1 REF: 258 OBJ: 17-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Strategy 37. At a price of $6 each, 314 people want to buy sun visors designed especially for volunteers at the Peachtree Road Race, and only 314 such visors are available. In this example, a state of _____ has been achieved.
ANS: E PTS: 1 REF: 259 OBJ: 17-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy 38. The point at which there is no inclination for the price to rise or fall is called price:
ANS: A PTS: 1 REF: 259 OBJ: 17-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Strategy 39. Jon P. Farmer is the founder of Kolopua Hawaii LLC, a company that markets Pure Hawaiian Air. Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii. When a tourist shop began selling Pure Hawaiian Air, it charged $5 per bottle and could not keep up with the demand. It has since raised the price to $7. Now the shop is still selling all the bottles of Pure Hawaiian Air it carries, but the owner is not forced to reorder on a daily basis. The $7 price is probably a(n):
ANS: C When demand and supply are approximately equal, price equilibrium is reached. PTS: 1 REF: 259 OBJ: 17-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing 40. The responsiveness or the sensitivity of consumer demand to changes in price is referred to as _____ and occurs when consumers buy more or less of a product when the price changes.
ANS: E PTS: 1 REF: 259 OBJ: 17-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Strategy 41. When consumers are sensitive to price changes, _____ occurs.
ANS: C PTS: 1 REF: 259 OBJ: 17-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Customer 42. What happens when demand is elastic?
ANS: A
If demand is elastic, price increases will decrease demand by a larger amount, reducing total revenue. PTS: 1 REF: 259 OBJ: 17-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Strategy 43. While shopping, Anita found a "gardening kit" containing a pair of work gloves, a trowel, and a hand rake handsomely arranged in a clay flower pot. The items, which were sold together, retailed at $24.50, but had been marked down to $12.99. The retailer sold only one for $24.50 and six at the $12.99 price. Demand for the gardening kit package is: Directory: ~ecarter2 ~ecarter2 -> SP14 mktg 490 case analysis – product/brand strategy – samsung electronics ~ecarter2 -> The menu of mktg 490 cases [Dr. Carter] ~ecarter2 -> Real-world Download 3.11 Mb. Share with your friends:
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