TEST BANK For Marshall and Johnston, Marketing
Management 4th Edition
When consumers examine products, they often compare an observed price to an
internal price they remember. This is known as a(n) ________ price. -
ANSWER:reference
________ price refers to what the consumers feel the product should cost. -
ANSWER:fair
While shopping at the mall, Jane was asked by one of the sales representatives at
the cosmetics counter to try out a new lipstick that her company was test marketing.
The company representative asks her how much she would be willing to pay for the
lipstick. After trying it out, Jane is of the opinion that $5 is just the right price for it.
What type of a reference price is Jane using? - ANSWER:fair price
A company decided to conduct a market survey for its new MP3 player that the
company had priced at $150. In the survey, 95 percent of participants said that the
maximum they would pay for the MP3 player is $100. This is an example of which of
the following possible consumer reference prices? - ANSWER:upper-bound pricing
The minimum price that most consumers would pay for a given product is known as
the ________ price. - ANSWER:lower-bound pricing
A company has developed the prototype of a mobile phone that it plans to launch in
the next few months. The phone comes equipped with the most advanced
technological features. As part of its test marketing efforts, the company allows
customers to examine and use the prototype and also gathers feedback regarding
product features and price. The results of this test marketing effort show that
customers are willing to pay at least $500, considering the phone's various features.
As such, the company has discovered customers' ________. - ANSWER:lower-bound
pricing
Many consumers are willing to pay $100 for a perfume that contains $10 worth of
scent because the perfume is from a well-known brand. What kind of pricing is the
company depending on? - ANSWER:image pricing
Customers usually have a lower price threshold below which prices signal inferior or
unacceptable quality, as well as an upper price threshold above which prices are
prohibitive and the product appears not worth the money. - ANSWER:True
Although consumers may have fairly good knowledge of the range of prices involved,
very few can accurately recall specific prices of products - ANSWER:True
When examining products, consumers compare an observed price to an internal
reference price they remember or an external frame of reference - ANSWER:True
, Many consumers use price as an indicator of quality and value. - ANSWER:True
Pricing cues such as sale signs and prices that end in 9 are more influential when
consumers are experienced in the category - ANSWER:False
Traditionally, price was never a major determinant of buyer choice - ANSWER:False
A firm that is plagued with overcapacity, intense competition, or changing consumer
desires would do better if it pursues ________ as its major objective. -
ANSWER:survival
After estimating the demand and costs associated with alternative prices, a company
has chosen to price its product in such a way that it gains the highest rate of return
on its investment. The company is looking to ________. - ANSWER:maximum current
profit
Companies who believe that higher sales volume leads to lower unit costs and higher
long-run profits are attempting to ________. - ANSWER:maximize their market share
A company that is looking to maximize its market share would do well to follow
________ pricing. - ANSWER:market-penetration
A market-penetration pricing strategy is most suitable when ________. -
ANSWER:production and distribution costs fall with accumulated production
experience
When Apple introduced its iPhone, it was priced at $599. This allowed Apple to earn
the maximum amount of revenue from the various segments of the market. Two
months after the introduction, the price had come down to $399. What kind of a
pricing did Apple adopt? - ANSWER:market-skimming prices
Market skimming pricing makes sense under all the following conditions, EXCEPT if
________. - ANSWER:consumers are likely to delay buying the product until its price
drops
Starbucks, Aveda, and BMW have been able to position themselves within their
categories by combining quality, luxury, and premium prices with an intensely loyal
customer base. These companies are employing a ________ strategy. -
ANSWER:product quality leadership
If consumers were largely indifferent to a $0.05 increase in the price of a gallon of
milk, the price rise is said to fall within customers' ________. - ANSWER:price
indifference band
JJ pays overhead each month, including his company's bills for rent, heat, interest,
and salaries, which are examples of ________ costs. - ANSWER:fixed
Management 4th Edition
When consumers examine products, they often compare an observed price to an
internal price they remember. This is known as a(n) ________ price. -
ANSWER:reference
________ price refers to what the consumers feel the product should cost. -
ANSWER:fair
While shopping at the mall, Jane was asked by one of the sales representatives at
the cosmetics counter to try out a new lipstick that her company was test marketing.
The company representative asks her how much she would be willing to pay for the
lipstick. After trying it out, Jane is of the opinion that $5 is just the right price for it.
What type of a reference price is Jane using? - ANSWER:fair price
A company decided to conduct a market survey for its new MP3 player that the
company had priced at $150. In the survey, 95 percent of participants said that the
maximum they would pay for the MP3 player is $100. This is an example of which of
the following possible consumer reference prices? - ANSWER:upper-bound pricing
The minimum price that most consumers would pay for a given product is known as
the ________ price. - ANSWER:lower-bound pricing
A company has developed the prototype of a mobile phone that it plans to launch in
the next few months. The phone comes equipped with the most advanced
technological features. As part of its test marketing efforts, the company allows
customers to examine and use the prototype and also gathers feedback regarding
product features and price. The results of this test marketing effort show that
customers are willing to pay at least $500, considering the phone's various features.
As such, the company has discovered customers' ________. - ANSWER:lower-bound
pricing
Many consumers are willing to pay $100 for a perfume that contains $10 worth of
scent because the perfume is from a well-known brand. What kind of pricing is the
company depending on? - ANSWER:image pricing
Customers usually have a lower price threshold below which prices signal inferior or
unacceptable quality, as well as an upper price threshold above which prices are
prohibitive and the product appears not worth the money. - ANSWER:True
Although consumers may have fairly good knowledge of the range of prices involved,
very few can accurately recall specific prices of products - ANSWER:True
When examining products, consumers compare an observed price to an internal
reference price they remember or an external frame of reference - ANSWER:True
, Many consumers use price as an indicator of quality and value. - ANSWER:True
Pricing cues such as sale signs and prices that end in 9 are more influential when
consumers are experienced in the category - ANSWER:False
Traditionally, price was never a major determinant of buyer choice - ANSWER:False
A firm that is plagued with overcapacity, intense competition, or changing consumer
desires would do better if it pursues ________ as its major objective. -
ANSWER:survival
After estimating the demand and costs associated with alternative prices, a company
has chosen to price its product in such a way that it gains the highest rate of return
on its investment. The company is looking to ________. - ANSWER:maximum current
profit
Companies who believe that higher sales volume leads to lower unit costs and higher
long-run profits are attempting to ________. - ANSWER:maximize their market share
A company that is looking to maximize its market share would do well to follow
________ pricing. - ANSWER:market-penetration
A market-penetration pricing strategy is most suitable when ________. -
ANSWER:production and distribution costs fall with accumulated production
experience
When Apple introduced its iPhone, it was priced at $599. This allowed Apple to earn
the maximum amount of revenue from the various segments of the market. Two
months after the introduction, the price had come down to $399. What kind of a
pricing did Apple adopt? - ANSWER:market-skimming prices
Market skimming pricing makes sense under all the following conditions, EXCEPT if
________. - ANSWER:consumers are likely to delay buying the product until its price
drops
Starbucks, Aveda, and BMW have been able to position themselves within their
categories by combining quality, luxury, and premium prices with an intensely loyal
customer base. These companies are employing a ________ strategy. -
ANSWER:product quality leadership
If consumers were largely indifferent to a $0.05 increase in the price of a gallon of
milk, the price rise is said to fall within customers' ________. - ANSWER:price
indifference band
JJ pays overhead each month, including his company's bills for rent, heat, interest,
and salaries, which are examples of ________ costs. - ANSWER:fixed
