MKT 300 Exam questions with
answers well graded A+
3 internal pricing factors - ANS✅✅1) Marketing Objectives- maximize profit, gain market share etc.
2) Marketing Mix strategy- price consistent with 3Ps
3) Costs
3 EXTERNAL pricing factors - ANS✅✅1) demand for your product
2) competition (competitors prices, strength of competition)
3) economy- cost of components, economic conditions
Inelastic demand - ANS✅✅means that an increase or decrease in price will not significantly affect
demand. products that do not have many substitutes`
Pricing Objectives - ANS✅✅1) Profit- identify price and cost levels that allow the firm to maximize
profit per product
2) status-quo: identify price levels similar to competitor average
3) Market share: adjust price levels so that the firm can maintain or increase sales relative to
competitors sales
cost-plus pricing - ANS✅✅adding a specified dollar amount to the sellers costs.
-markup: adding to the price of the product a predetermined percentage of the variable cost
-margin: adding to the price a predetermined percentage of the total price
break even quantity - ANS✅✅total fixed costs / (selling price - variable cost)
demand-based pricing - ANS✅✅customers pay a higher price when demand for the product is
strong and a lower price when demand is weak.
-also known as Flexible or Variable pricing
-off peak cheaper prices *happy hour*, different segments pay different rates *kids eat free*
, competition based pricing - ANS✅✅pricing influenced primarily by competitors prices.
Method importance increases when:
-competing products are homogeneous resulting in elastic demand.
-organization is serving markets in which price is a key consideration
new product pricing - ANS✅✅Price skimming- charging the highest possible price that buyers who
desire the product will pay
Penetration pricing- setting prices below those of competing brands to penetrate a market and gain
a significant market share quickly
Premium strategy - ANS✅✅like Porsche. it has high quality so you think its premium, higher
quality, higher price
overcharging strategy - ANS✅✅customers think the price is too high for the quality of the product-
low quality, high price
good-value strategy - ANS✅✅lower price, higher quality. and economic strategy is lower price,
lower quality.
Stages for establishing prices - ANS✅✅1) develop pricing objectives
2) assess target market's evaluation of price
3) evaluate competitors prices
4) select a basis for pricing
5) select a pricing strategy
6) determine a specific price
Pricing strategies - ANS✅✅-everyday low prices:
-reference pricing:
-portfolio pricing
-bundle pricing:
-multiple unit pricing:
answers well graded A+
3 internal pricing factors - ANS✅✅1) Marketing Objectives- maximize profit, gain market share etc.
2) Marketing Mix strategy- price consistent with 3Ps
3) Costs
3 EXTERNAL pricing factors - ANS✅✅1) demand for your product
2) competition (competitors prices, strength of competition)
3) economy- cost of components, economic conditions
Inelastic demand - ANS✅✅means that an increase or decrease in price will not significantly affect
demand. products that do not have many substitutes`
Pricing Objectives - ANS✅✅1) Profit- identify price and cost levels that allow the firm to maximize
profit per product
2) status-quo: identify price levels similar to competitor average
3) Market share: adjust price levels so that the firm can maintain or increase sales relative to
competitors sales
cost-plus pricing - ANS✅✅adding a specified dollar amount to the sellers costs.
-markup: adding to the price of the product a predetermined percentage of the variable cost
-margin: adding to the price a predetermined percentage of the total price
break even quantity - ANS✅✅total fixed costs / (selling price - variable cost)
demand-based pricing - ANS✅✅customers pay a higher price when demand for the product is
strong and a lower price when demand is weak.
-also known as Flexible or Variable pricing
-off peak cheaper prices *happy hour*, different segments pay different rates *kids eat free*
, competition based pricing - ANS✅✅pricing influenced primarily by competitors prices.
Method importance increases when:
-competing products are homogeneous resulting in elastic demand.
-organization is serving markets in which price is a key consideration
new product pricing - ANS✅✅Price skimming- charging the highest possible price that buyers who
desire the product will pay
Penetration pricing- setting prices below those of competing brands to penetrate a market and gain
a significant market share quickly
Premium strategy - ANS✅✅like Porsche. it has high quality so you think its premium, higher
quality, higher price
overcharging strategy - ANS✅✅customers think the price is too high for the quality of the product-
low quality, high price
good-value strategy - ANS✅✅lower price, higher quality. and economic strategy is lower price,
lower quality.
Stages for establishing prices - ANS✅✅1) develop pricing objectives
2) assess target market's evaluation of price
3) evaluate competitors prices
4) select a basis for pricing
5) select a pricing strategy
6) determine a specific price
Pricing strategies - ANS✅✅-everyday low prices:
-reference pricing:
-portfolio pricing
-bundle pricing:
-multiple unit pricing:
