MKTG 409 Exam 3 TAMU Pride Fall 2026 MindTap Study Guide – Product, Pricing
& Promotion Review
What is the general nature of pricing? - ANS ✔✔Indicator/representation of quality (to some
degree)
Major concerns to buyers & sellers - ANS ✔✔what does a high price mean?
what does a low price mean?
what does a high price mean? - ANS ✔✔high quality (consumer perception)
what does a low price mean? - ANS ✔✔low quality or good value (consumer perception)
too low & it might run off the customer
value pricing - ANS ✔✔high quality + low price
What are the 8 major steps in setting prices? - ANS ✔✔1. selecting price objectives
2. identify target market's evaluation of price & its ability to purchase
3. determine demand
4. understanding costs, volume, & profit relationships
5. analyze competitors' prices
6. select a basis for pricing
7. select a pricing strategy
8. determine a specific price`
What are the 6 objectives to selecting price - ANS ✔✔survival
,profit
return on investment (ROI)
market share
cash flow
product quality image
selecting price objectives: survival - ANS ✔✔setting prices relative to competitors
short term
(might be lower)
selecting price objectives: profit - ANS ✔✔acceptable level of profit (to management)
not necessarily "max profit level"
selecting price objectives: ROI - ANS ✔✔org will first determine a certain ROI goal & then "back
into" the pricing structure needed to achieve that goal
many forecasts/assumptions will be made about how much (qty) product will need to be sold at
a certain ($) profit level in order to reach the ROI goal
selecting price objectives: market share - ANS ✔✔what proportion of TOTAL SALES for the
industry does a particular firm/brand own
maintain/increase market share = prices set low
ex: Pepsi & Cola compete by using sales
, selecting price objectives: cash flow - ANS ✔✔setting prices low (aggressive pricing) for a short
period of time in order to generate traffic/cash
ex: (retailer) 3 day sale for 50% off whole store
selecting price objectives: quality product image - ANS ✔✔Trying to price the product at a level
a little above competitors' to represent premium product
(premium product = premium price)
must actually be a premium-level product or else it will fail
what does "ability to purchase" mean? - ANS ✔✔marketers have to consider what proportion
of their target market has a certain buying power
buying power - ANS ✔✔what people have to use in order to purchase products
i.e. income, wealth, assets, credit, etc.
what does "buyer's range of acceptability" mean? - ANS ✔✔the range of prices that customers
will pay under a set of circumstances
the customer's evaluation of price
i.e. paying $2 for a cup of coke on campus vs. paying $5 for a cup of coke at the movie theatre
how is demand determined? - ANS ✔✔"How much of the product can be sold at __ price?"
Toying with different price points & product volumes
what are the challenges in determining demand? - ANS ✔✔the large variety of factors can
quickly change the determined demand
Must consistently continue to redetermine it
& Promotion Review
What is the general nature of pricing? - ANS ✔✔Indicator/representation of quality (to some
degree)
Major concerns to buyers & sellers - ANS ✔✔what does a high price mean?
what does a low price mean?
what does a high price mean? - ANS ✔✔high quality (consumer perception)
what does a low price mean? - ANS ✔✔low quality or good value (consumer perception)
too low & it might run off the customer
value pricing - ANS ✔✔high quality + low price
What are the 8 major steps in setting prices? - ANS ✔✔1. selecting price objectives
2. identify target market's evaluation of price & its ability to purchase
3. determine demand
4. understanding costs, volume, & profit relationships
5. analyze competitors' prices
6. select a basis for pricing
7. select a pricing strategy
8. determine a specific price`
What are the 6 objectives to selecting price - ANS ✔✔survival
,profit
return on investment (ROI)
market share
cash flow
product quality image
selecting price objectives: survival - ANS ✔✔setting prices relative to competitors
short term
(might be lower)
selecting price objectives: profit - ANS ✔✔acceptable level of profit (to management)
not necessarily "max profit level"
selecting price objectives: ROI - ANS ✔✔org will first determine a certain ROI goal & then "back
into" the pricing structure needed to achieve that goal
many forecasts/assumptions will be made about how much (qty) product will need to be sold at
a certain ($) profit level in order to reach the ROI goal
selecting price objectives: market share - ANS ✔✔what proportion of TOTAL SALES for the
industry does a particular firm/brand own
maintain/increase market share = prices set low
ex: Pepsi & Cola compete by using sales
, selecting price objectives: cash flow - ANS ✔✔setting prices low (aggressive pricing) for a short
period of time in order to generate traffic/cash
ex: (retailer) 3 day sale for 50% off whole store
selecting price objectives: quality product image - ANS ✔✔Trying to price the product at a level
a little above competitors' to represent premium product
(premium product = premium price)
must actually be a premium-level product or else it will fail
what does "ability to purchase" mean? - ANS ✔✔marketers have to consider what proportion
of their target market has a certain buying power
buying power - ANS ✔✔what people have to use in order to purchase products
i.e. income, wealth, assets, credit, etc.
what does "buyer's range of acceptability" mean? - ANS ✔✔the range of prices that customers
will pay under a set of circumstances
the customer's evaluation of price
i.e. paying $2 for a cup of coke on campus vs. paying $5 for a cup of coke at the movie theatre
how is demand determined? - ANS ✔✔"How much of the product can be sold at __ price?"
Toying with different price points & product volumes
what are the challenges in determining demand? - ANS ✔✔the large variety of factors can
quickly change the determined demand
Must consistently continue to redetermine it
