mkt311 tb chap13

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ch13
Student: ___________________________________________________________________________ 1.
Price is the cash expenditure plus taxes that consumers have to pay for a good or service.   
True    False
 
2.
The key to successful pricing is to match the product with the consumer's perception of value.   
True    False
 
3.
Price is the only part of the marketing mix that does not generate costs.   
True    False
 
4.
If Brandon buys hats for his store for $5 each and sells them for $15 each, he is using a keystoning pricing strategy.   
True    False
 
5.
Rarely is the lowest-price product offering the dominant brand in a given market.   
True    False
 
6.
A demand curve shows the relationship between income and demand.   
True    False
 
7.
Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.   

True    False
 
8.
Brands that have developed loyal customers have a higher price elasticity of demand.   
True    False
 
9.
In U.S. markets, there are many substitute products for Fruit Loops cereal, suggesting the price elasticity of demand for Fruit Loops is elastic.   
True    False
 
10.
In general, prices should not be based on costs because consumers make their purchase decisions based on perceived value, not the cost of production.   
True    False
 
11.
At the break-even point, profits are maximized. 
 
True    False
 
12.
In addition to the product-specific and firm-specific factors that affect pricing, there are two broader factors - the Internet and sociocultural factors.   
True    False
 
13.
A gray market employs irregular but not necessarily illegal methods of distributing products.   
True    False
 
14.
Economic trends that affect pricing decisions include increases in disposable income and status consciousness, a trend for customers to shop cheap, global economic conditions, and local economic conditions.   

True    False
 
15.
The Internet has decreased consumers' price sensitivity. 
 
True    False
 
16.
Diana owns a boutique specializing in ball gowns. Sales are stable and Diana feels it is time she had a 20% increase in her salary. If Diana takes this increase in compensation, it will decrease the breakeven quantity of gowns she needs to sell on a monthly basis.   

True    False
 
17.
If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.   
True    False
 
18.
When Sony released their PlayStation 3 game machines, they charged a high price, attracting the most avid game players. This was a market penetration pricing strategy.   
True    False
 
19.
Cheryl wants to quickly establish a dominant market share for her new line of ergonomic pens. To do this, she will likely use a market penetration pricing strategy.   
True    False
 
20.
Proving that a company has engaged in the deceptive bait and switch practice is easy.   
True    False
 
21.
The Robinson-Patman Act does NOT apply to end consumers, at which point many forms of price discrimination occur.   
True    False
 
22.
If a furniture store sets reasonable prices but rarely offers special discounts or sales, this is an example of an "everyday low pricing" strategy.   
True    False
 
23.
Price is the __________ a consumer is willing to make to acquire a specific product or service.   

A. 
amount of money

B. 
overall sacrifice

C. 
fixed cost

D. 
target return

E. 
variable cost

 
24.
Earl was known for driving 30 miles to save a dollar on the price for his favorite beverage. Earl perceived price as __________, while most consumers recognize price as the __________ made to acquire a good or service.   

A. 
money paid; overall sacrifice

B. 
variable cost; fixed cost

C. 
fixed cost; variable payment

D. 
overall sacrifice; monetary...
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