MKT 300 Exam questions with
answers well defined and graded A+
In the fall of 2014, Coca-Cola brought back Surge, its answer to PepsiCo's Mountain Dew. It had first
offered Surge for sale in 1996 but had stopped production in 2002. Surge was marketed as a novelty,
a revival of the brand for nostalgic consumers. Assuming that buyers would want this specialty,
limited-production item quickly in order to show it off to friends, the company also featured next-
day delivery, exclusively from Amazon.
Which of the following price levels was most likely associated with the Surge revival?
a. a value pricing level
b. a reentry level
c. a volume discount level
d. a parity level
e. a prestige item level - ANS✅✅a prestige item level
The following statements link various changing circumstances (causes) with effects on the breakeven
point. Which of these statements is inaccurate?
a. When a recession cuts demand, breakeven point increases.
b. When automation replaces workers, fixed cost increases while variable cost decreases; the effect
on breakeven point varies.
c. A price increase results in a breakeven point decrease.
d. When a price war forces a price cut, breakeven point increases.
e. Hiring extra staff causes breakeven point to increase. - ANS✅✅When a recession cuts demand,
breakeven point increases.
You have a colleague who swears by using breakeven analyses. He or she has not been on the job
long enough to be able to understand the reasons why this tool isn't always reliable.
Which of the following reasons should you share with him or her?
a. Breakeven analysis is outdated.
b. Breakeven analysis is hard to calculate; and it is difficult to explain how the results are derived.
c. The company's accounting system does not clearly distinguish between fixed and variable costs.
d. Not everyone in the company understands or uses breakeven analyses. - ANS✅✅The company's
accounting system does not clearly distinguish between fixed and variable costs.
,Selena is embarrassed. After explaining to her boss how the company's CVP (cost-volume-profit)
relationship affects its pricing strategy, she realizes that she left out a key variable. Reviewing her
notes, she sees that she included price, sales volume, and profit margin.
What did Selena leave out?
a. price sensitivity of consumers
b. pricing regulations
c. breakeven margin
d. past pricing history - ANS✅✅price sensitivity of consumers
Company A and Company B both raised their prices by 30 percent. While A enjoyed a substantial
increase in profits, B's profits plunged downward.
Based on this information, which of the following is the most likely explanation for the companies'
different outcomes?
a. A's product offers better value than B's.
b. A has more customers than B.
c. A's product is higher quality than B's.
d. B's customers are more price sensitive than A's customers.
e. A has a history of high prices, while B has only charged low prices. - ANS✅✅B's customers are
more price sensitive than A's customers.
Company X is enjoying a spurt in sales of the stuffed animals it manufactures. To meet demand, the
firm is spending more than ever before on cotton stuffing. However, its marketers note that they are
spending less for stuffing per toy than in the past.
Based on this information, what is the most likely explanation for the difference between overall
spending and per-toy spending?
a. Competition has increased.
b. Competition has decreased.
c. The factory is operating less efficiently.
d. The firm is importing cotton stuffing from abroad.
e. The factory is operating more efficiently. - ANS✅✅The factory is operating more efficiently.
Which of the following is not among the three foundations of pricing strategy?
a. costs
b. competition
, c. margin
d. potential demand - ANS✅✅margin
Which of the following is not typically a fixed cost?
a. Wi-Fi access
b. equipment leases
c. raw materials
d. rent
e. insurance policies - ANS✅✅raw materials
As a restaurant marketer, you are responsible for setting prices on each menu item.
Your new appetizer is a fruit-and-nut salad, with a total ingredient cost of $5. The industry's standard
markup is 25 percent.
What should you charge for this appetizer?
a. $6.00
b. $5.75
c. $5.25
d. $6.25
e. $6.50 - ANS✅✅$6.25
You work in the marketing department of a household cleaning products manufacturer. When the
CEO found that online purchase of consumer-packaged goods had reached only 1 percent of the
$666 billion in sales in 2013, he or she charged your team with devising a plan to change that
picture. Your research has shown that home delivery of cleaning supplies becomes economically
feasible only when the total price hits $20 to $30.
Which of the following pricing objectives should the team use for its action plan?
a. Volume objectives
b. Prestige objectives
c. Meeting competition objectives
d. Profitability objectives - ANS✅✅Volume objectives
Sal is currently in the market for a new car. He considers various factors before making his purchase;
for example, he considers gas mileage, power-train warranty, safety records, status, price, and
answers well defined and graded A+
In the fall of 2014, Coca-Cola brought back Surge, its answer to PepsiCo's Mountain Dew. It had first
offered Surge for sale in 1996 but had stopped production in 2002. Surge was marketed as a novelty,
a revival of the brand for nostalgic consumers. Assuming that buyers would want this specialty,
limited-production item quickly in order to show it off to friends, the company also featured next-
day delivery, exclusively from Amazon.
Which of the following price levels was most likely associated with the Surge revival?
a. a value pricing level
b. a reentry level
c. a volume discount level
d. a parity level
e. a prestige item level - ANS✅✅a prestige item level
The following statements link various changing circumstances (causes) with effects on the breakeven
point. Which of these statements is inaccurate?
a. When a recession cuts demand, breakeven point increases.
b. When automation replaces workers, fixed cost increases while variable cost decreases; the effect
on breakeven point varies.
c. A price increase results in a breakeven point decrease.
d. When a price war forces a price cut, breakeven point increases.
e. Hiring extra staff causes breakeven point to increase. - ANS✅✅When a recession cuts demand,
breakeven point increases.
You have a colleague who swears by using breakeven analyses. He or she has not been on the job
long enough to be able to understand the reasons why this tool isn't always reliable.
Which of the following reasons should you share with him or her?
a. Breakeven analysis is outdated.
b. Breakeven analysis is hard to calculate; and it is difficult to explain how the results are derived.
c. The company's accounting system does not clearly distinguish between fixed and variable costs.
d. Not everyone in the company understands or uses breakeven analyses. - ANS✅✅The company's
accounting system does not clearly distinguish between fixed and variable costs.
,Selena is embarrassed. After explaining to her boss how the company's CVP (cost-volume-profit)
relationship affects its pricing strategy, she realizes that she left out a key variable. Reviewing her
notes, she sees that she included price, sales volume, and profit margin.
What did Selena leave out?
a. price sensitivity of consumers
b. pricing regulations
c. breakeven margin
d. past pricing history - ANS✅✅price sensitivity of consumers
Company A and Company B both raised their prices by 30 percent. While A enjoyed a substantial
increase in profits, B's profits plunged downward.
Based on this information, which of the following is the most likely explanation for the companies'
different outcomes?
a. A's product offers better value than B's.
b. A has more customers than B.
c. A's product is higher quality than B's.
d. B's customers are more price sensitive than A's customers.
e. A has a history of high prices, while B has only charged low prices. - ANS✅✅B's customers are
more price sensitive than A's customers.
Company X is enjoying a spurt in sales of the stuffed animals it manufactures. To meet demand, the
firm is spending more than ever before on cotton stuffing. However, its marketers note that they are
spending less for stuffing per toy than in the past.
Based on this information, what is the most likely explanation for the difference between overall
spending and per-toy spending?
a. Competition has increased.
b. Competition has decreased.
c. The factory is operating less efficiently.
d. The firm is importing cotton stuffing from abroad.
e. The factory is operating more efficiently. - ANS✅✅The factory is operating more efficiently.
Which of the following is not among the three foundations of pricing strategy?
a. costs
b. competition
, c. margin
d. potential demand - ANS✅✅margin
Which of the following is not typically a fixed cost?
a. Wi-Fi access
b. equipment leases
c. raw materials
d. rent
e. insurance policies - ANS✅✅raw materials
As a restaurant marketer, you are responsible for setting prices on each menu item.
Your new appetizer is a fruit-and-nut salad, with a total ingredient cost of $5. The industry's standard
markup is 25 percent.
What should you charge for this appetizer?
a. $6.00
b. $5.75
c. $5.25
d. $6.25
e. $6.50 - ANS✅✅$6.25
You work in the marketing department of a household cleaning products manufacturer. When the
CEO found that online purchase of consumer-packaged goods had reached only 1 percent of the
$666 billion in sales in 2013, he or she charged your team with devising a plan to change that
picture. Your research has shown that home delivery of cleaning supplies becomes economically
feasible only when the total price hits $20 to $30.
Which of the following pricing objectives should the team use for its action plan?
a. Volume objectives
b. Prestige objectives
c. Meeting competition objectives
d. Profitability objectives - ANS✅✅Volume objectives
Sal is currently in the market for a new car. He considers various factors before making his purchase;
for example, he considers gas mileage, power-train warranty, safety records, status, price, and
