56) Which of the following best describes product placement?
A) Placing products on the shelf where they receive the most attention
B) Identifying specific products for viral marketing campaigns
C) Placing products in movies and television shows
D) Placing a national brand next to a store brand for better comparison
E) Determining if a product should be sold only online or only in brick and mortar shops
57) Which of the following indicates a firm sold the rights to put their name on a product not
produced by them?
A) Asset brands
B) National brands
C) Licensed brands
D) Private brands
E) Private labels
58) Which of the following best describes a private label brand?
A) A retailer uses packaging as a form of advertising.
B) A retailer develops a brand name and has a manufacturer put it on a product.
C) A manufacturer puts its name on an unrelated product for a fee.
D) A brand name is used throughout a series of products made by the same manufacturer.
E) A brand is reintroduced in a new, often global, market.
59) How do customers most benefit from packaging design?
A) Increased utility
B) In-store advertisements
C) Less spoilage
D) Reduced risk of damage
E) Less theft of the product
60) A private brand is a brand name developed by a wholesaler or retailer for their product.
61) Sears’ Craftsman Tools is an example of a private brand.
62) Packaging can serve as an in-store advertisement that makes the product attractive, displays
the brand name, and identifies features and benefits.
63) Product placement includes showing actors on television shows using a name-brand product.
64) The product life cycle describes the commercial life of services as well as goods.
65) After a product has been in the maturity stage for a few years, marketers must accept that the
product will begin to decline.
66) With product adaptation, the product is modified for greater appeal in different countries.
67) Product X is just beginning to generate a profit for the first time as the manufacturer lowers
prices slightly and sees a significant increase in sales. At what stage in the product life cycle is
Product X, and how is this stage identified?
68) Describe three ways to extend a product’s life as it nears the end of the maturity stage.
69) What is branding? Explain what branding is and give an example of branding.
70) Describe the three types of brand names and give an example of each.
71) Which of the following terms refers to the monetary amount added to a product’s cost to the
seller in order to sell it at a target profit?
A) Profit margin
B) Breakeven cost
C) Revenue
D) Revenue margin
E) Markup
72) Which of the following costs refers specifically to those that change with the quantity of a
product sold or produced?
A) Annual costs
B) Variable costs
C) Fixed costs
D) Marginal costs
E) Market-adjusted costs
73) Which of the following costs refers specifically to those that are unaffected by the quantity of
a product sold or produced?
A) Annual costs
B) Variable costs
C) Fixed costs
D) Marginal costs
E) Market-adjusted costs
74) Companies who price their product low enough to attract a large number of buyers are most
likely pursuing which of the following objectives?
A) Stable market pricing
B) High profits
C) Stable market activity
D) Low market volatility
E) Market share
75) The sales price of a product is given as the product’s cost to the seller plus which of the
following quantities?
A) Breakeven price
B) Revenues
C) Variable price
D) Fixed point
E) Markup
76) Which of the following gives the correct formula for calculating markup percentage?
A) Sales price/markup
B) Sales price/fixed costs
C) Fixed costs/variable costs
D) Markup/sales price
E) Sales price/variable costs
77) Which of the following best defines fixed costs?
A) Costs that are needed to acquire a fixed market share
B) Costs that are needed to acquire fixed profits
C) Costs that are unaffected by the number of goods sold by the firm
D) Costs that remain the same from year to year
E) Costs that remain the same across all products
78) Which of the following best describes pricing objectives?
A) The need for the company to compete
B) An indication of the company’s social and ethical concerns
C) A reflection of the company’s image
D) The ability of a firm to generate revenue
E) The goals of the seller achieved by pricing products
79) Which pricing objective has the goal of establishing market share?
A) Market penetration
B) E-business
C) Brand recognition
D) Brand licensing
E) Profit-maximizing
80) How do companies achieve continuous sales of more units and higher profits, even with
lower unit prices?
A) Market penetration
B) E-business
C) Profit-maximization strategies
D) Market domination
E) Market share
81) Which of the following is a primary advantage for the consumer when using the internet for
shopping?
A) Objective customer reviews
B) Faster delivery
C) Elimination of added costs of wholesalers and retailers
D) Efficient use of corporate resources
E) Cost-oriented pricing
82) What is the amount added by a retailer to an item’s purchase cost needed to make a profit?
A) Gross
B) Variable cost
C) Breakeven
D) Markup
E) Fixed cost
83) Which of the following represents the sales volume where total costs equal total revenue?
A) Fixed costs
B) Pricing analysis
C) Skimming
D) Variable costs
E) Breakeven point
84) If prices are set too high, the company will make a large profit on each item, but will sell
fewer units.
85) One advantage to marketers of selling online is that it is easier for sellers to hide prices and
enjoy a large markup.
86) Variable costs of a product are those costs that change with the quantity of a product
produced and sold.
87) The breakeven point is the price at which a company earns the maximum profits.
88) The only goal of determining prices is to maximize profit for the firm.
89) How has e-business contributed to lower prices?
90) Differentiate between fixed costs and variable costs.
91) What is cost-oriented pricing?
92) Describe a situation in which a company might adopt a pricing objective other than profit
maximization.
93) Odd-even pricing falls under the category of which of the following?
A) Price fixing
B) Psychological pricing
C) Market pricing
D) Price lining
E) Price skimming
94) Which of the following pricing strategies has stimulation of sales as a higher priority than
maximization of profits?
A) Price fixing
B) Penetration pricing
C) Price skimming
D) Price pointing
E) Price lining
95) Which of the following strategies is involved with price skimming?
A) Setting an initial low price to establish a new product in the market
B) Setting an initial low price to cover new product costs and still generate a profit
C) Setting a limited number of prices for certain categories or products
D) Setting an initial high price to establish a new product in the market
E) Setting an initial high price to cover new product costs and still generate a profit
96) Which of the following strategies is involved with penetration pricing?
A) Setting an initial low price to establish a new product in the market
B) Setting an initial low price to cover new product costs and still generate a profit
C) Setting a limited number of prices for certain categories or products
D) Setting an initial high price to establish a new product in the market
E) Setting an initial high price to cover new product costs and still generate a profit.
97) Which of the following pricing strategies is used by many e-tailers in order to provide
flexibility between buyers and sellers in setting a price?
A) Penetration pricing
B) Psychological pricing
C) Breakeven pricing
D) Fixed pricing
E) Dynamic pricing
98) Which of the following pricing strategies BEST describes price lining?
A) Setting an initial low price to establish a new product in the market
B) Setting an initial high price to cover new product costs and generate a profit
C) Setting individually negotiated prices for certain categories of products
D) Setting a limited number of prices for certain categories of products
E) Setting individually negotiated prices for all categories of products
99) Which of the following assumptions is the strategy of pricing above the market based on?
A) Higher price implies higher quality.
B) Higher price means higher customer support.
C) Higher prices mean higher customer satisfaction.
D) Higher price creates higher demand.
E) Higher price means easier distribution.
100) Which of the following scenarios would allow a firm to price below prevailing market price
and still succeed?
A) The public does not learn that the firm’s product is indeed inferior.
B) The firm can offer a product of acceptable quality.
C) The firm can offer an entirely new product.
D) The firm can effectively copy competitors’ promotional tactics and marketing strategies.
E) The firm can effectively criticize its competitors’ products and quality.
101) Which of the following options BEST describes an example of price lining?
A) Having the price of each individual song on an online music store be determined by length of
song
B) Having the price of each individual song on an online music store be determined by
popularity of the band
C) Having the price of each individual song on an online music store be determined by user
auction
D) Having the price of each individual song on an online music store be determined by reverse
auction
E) Having the price of each individual song on an online music store be determined by which of
several categories the song falls into
102) How can a good or service provider stimulate demand during off-peak seasons?
A) Price lining
B) Discounts
C) Skimming
D) Odd-even pricing
E) Bundling
103) What is the practice of selling products in a foreign market for less than in its home
country?
A) Countervailing duties
B) Skimming
C) Odd-even pricing
D) Dumping
E) Price lining
104) If a company offers several products that are similar in nature, how could the company
increase sales while saving the consumer money?
A) Use a bundling strategy
B) Incorporate dynamic pricing
C) Sell at a reverse auction
D) Use a penetration pricing strategy
E) Incorporate a price skimming option
105) Why would a company use a bundling strategy when selling goods or services?
A) To decrease packaging costs
B) To increase the sales of bundled items
C) To introduce a new product to the market
D) To offer all products at a limited range of prices
E) To take advantage of psychological pricing
106) Price skimming occurs when a company sets an initially low price to establish a new
product in the market.
107) Companies using price lining offer all items in certain categories at a limited number of
prices.
108) Products priced above the market play on the common assumption that a higher price
means higher quality.
109) Using the odd-even psychological pricing strategy, a restaurant would price an entree at
$10.00 rather than $9.95.
110) Why would a firm want to set its price above competitors’ prices?