Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
Test Bank
Chapter 11: International Pricing
1. Which of the following factors is NOT a factor that complicates the task of setting prices in
foreign markets?
a. payment systems
b. discounting programs
c. currency types and value fluctuations
d. methods of payment
e. promotion cost
2. Which of the following three factors influence consumer price perceptions as discussed in the
text?
a. value considerations, distribution considerations, and emotional considerations
b. value considerations, situational factors, and emotional considerations
c. value considerations, situational factors, and distribution considerations
d. situational factors, emotional considerations, and image considerations
e. image considerations, situational factors, and distribution considerations
3. Which of the following is NOT a common pricing objective?
a. profitability
b. market share
c. enticing new customers
d. retaining current customers
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
e. estimating brand awareness
4. Which of the following is NOT one of the pricing methods that may be used to help a firm
reach its pricing goals?
a. cost-based pricing
b. demand/supply pricing
c. competition-based pricing
d. distribution-plus pricing
e. profit-based pricing
5. If the fixed costs associated with a product is 80,000,000 KES (Kenya shilling), the price per
unit is 10,000 KES, and the variable costs per unit is 6000 KES, then the break-even point would
be ______.
a. 5000 units
b. 10,000 units
c. 15,000 units
d. 20,000 units
e. 25,000 units
6. Using a cost-plus pricing strategy, and given the following information, what would be the
final unit selling price for a product if a manufacturer believes that it can sell 5000 units of a
product and desires a margin of 18%? Assume total fixed costs = 50,000,000 Rp and total
variable costs = 12,200,000 Rp.
a. 10,000 + 60 + 1810.8 = 11,870.80 Rp
b. 10,000 + 2440 + 1810.8 = 14,250.80 Rp
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
c. 10,000 + 2440 + 2239.2 = 14,679.20 Rp
d. 12,000 + 3600 + 12,440 = 28,040.00 Rp
e. 12,000 + 6000 + 12,440 = 30,440.00 Rp
7. Which pricing technique offers a straightforward pricing method that adds a standard markup
to costs assigned to a product?
a. cost-based pricing
b. cost-plus pricing
c. markup pricing
d. demand/supply-based pricing
e. target ROI pricing
8. What reflects the intersection of the demand and supply curves?
a. demand point
b. break-even point
c. equilibrium point
d. supply-based point
e. market intersection point
9. Which of the following reveals that consumers are not strongly affected by price?
a. elastic demand
b. inelastic demand
c. market demand
d. supply-based demand
e. supply-market demand
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
10. What occurs when consumers are extremely price-sensitive?
a. highly elastic demand
b. highly inelastic demand
c. market equilibrium demand
d. market-based demand
e. price-based demand
11. If the percentage change in quantity demanded is 10% and the percentage change in price is
20%, what is the price elasticity?
a. 2
b. 1.5
c. 1
d. .5
e. .25
12. If the percentage change in quantity demanded is 20% and the percentage change in price is
10%, what is the price elasticity?
a. 2
b. 1.5
c. 1
d. .5
e. .25
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
13. A value below 1 indicates ______.
a. inelastic demand
b. unitary demand
c. elastic demand
d. perfect demand
e. perfect elasticity
14. Big-box retailers such as Carrefour often price using which technique?
a. below-industry-average pricing
b. at industry-average pricing
c. above-industry-average pricing
d. supplier-based pricing
e. market equilibrium pricing
15. Which technique represents an attempt to recover start-up costs as quickly as possible?
a. skimming pricing
b. penetration pricing
c. cost-plus pricing
d. markup pricing
e. cost-based pricing
16. By pricing products as high as the market would bear, Sony used which method when pricing
its PlayStation consoles internationally?
a. skimming pricing
b. penetration pricing
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
c. cost-plus pricing
d. markup pricing
e. cost-based pricing
17. What technique is used when an international marketer sets the lowest possible price in order
to end a market?
a. skimming pricing
b. penetration pricing
c. cost-plus pricing
d. markup pricing
e. cost-based pricing
18. By pricing items as low as possible, Zeebo, the low-cost, emerging-market gaming devise
marketer, selected which strategy when it introduced its product into the Brazilian market?
a. skimming pricing
b. penetration pricing
c. cost-plus pricing
d. markup pricing
e. cost-based pricing
19. Which pricing strategy makes it more difficult for the international marketer to recover start-
up costs quickly?
a. skimming pricing
b. penetration pricing
c. cost-plus pricing
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
d. markup pricing
e. cost-based pricing
20. Which of the following is a condition that favors the use of profit-based pricing in
international markets?
a. The company operates in an oligopolistic environment.
b. The company does not seek to recover start-up costs quickly.
c. Prices are set to achieve a balance between demand and costs.
d. The company operates in a monopolistic environment.
e. Information on elasticity has been gathered.
21. Using a target ROI pricing strategy, and given the following information, what would be the
final unit selling price for a product if a manufacturer invests $1,000,000 (U.S.) in a product with
unit costs of $10 each, expected sales of 20,000 units, and has a desire to achieve 8% ROI?
a. $11
b. $12
c. $13
d. $14
e. $15
22. Using a target ROI pricing strategy, and given the following information, what would be the
final unit selling price for a product if a manufacturer invests ₤2,000,000 (U.K.) in a product
with unit costs of ₤20 each, expected sales of 10,000 units, and has a desire to achieve 6% ROI?
a. ₤24
b. ₤30
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
c. ₤32
d. ₤35
e. ₤42
23. Which of the following is NOT one of the major pricing discount methods used by
international marketers?
a. loss leaders
b. seasonal discounts
c. quantity discounts
d. early-payment discount
e. differentiation discounts
24. Which pricing technique relies on regular prices for other products in order for an overall
profit to be realized?
a. loss leader
b. seasonal
c. quantity
d. early discount
e. differentiation
25. Which term refers to the power to use goods and services in the satisfaction of wants and
needs?
a. capacity to buy
b. capacity to use
c. capacity to consume
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
d. capacity to need
e. capacity to want
26. Seasonal discounts are often associated with what kinds of industries in international
marketing?
a. manufacturing and producing
b. financial and accounting
c. medical and personal health
d. tourism and hospitality
e. distribution and logistics
27. Manufacturers most often offer quantity discounts to which groups?
a. customers and consumers
b. governments and affinity groups
c. wholesalers and retailers
d. buying groups and wholesale clubs
e. loyalty groups and membership clubs
28. The phrase “2/10 net 30” reflects which of the following?
a. early payment discount
b. consumer club discount
c. wholesale distribution discount
d. prompt action discount
e. accounting terms discount
29. A price discount provided to all countries of the Pacific Rim based on shipping costs
represents what type of discount?
a. early payment discount
b. channel discount
c. quantity-based discount
d. seasonal discount
e. loss leader discount
30. Which of the following factors is NOT included in the text as a factor that should be
considered when changing prices in international markets?
a. actions or reactions of competitors
b. company status
c. impact on brand image
d. impact on revenues and gross margin
e. impact on company reputation
31. The finding that it takes a price change of 10% in order for consumers to notice the change
and to act is called which of the following?
a. Pavlov’s law
b. Skinner’s law
c. Madrid’s law
d. Weber’s law
e. Thomson’s law
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
32. In international markets, if an oligopoly sets prices at a uniform level, the members are likely
to be found guilty of which of the following?
a. loss leader pricing
b. price setting
c. collusion
d. predatory pricing
e. monopolization
33. Smaller companies in an international market can sometimes be forced out of the market if a
competitor uses which of the following?
a. loss leader pricing
b. price setting
c. predatory pricing
d. price determination policy
e. price discrimination
34. When an international marketer promotes one price but does not include hidden charges and
add-ons, the company is guilty of which of the following?
a. loss leader pricing
b. price setting
c. predatory pricing
d. price discrimination
e. deceptive pricing
35. The practice of selling goods in a foreign country at prices that are below cost is:
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
a. price fixing
b. price discrimination
c. predatory pricing
d. dumping
e. pricing stabilizing
36. Which Indian company is the world’s largest producer of steel?
a. Mottel Limited
b. Mittal Steel
c. Moffit Limited
d. Morlan Steel
e. Mittalle Limited
37. If Sony introduces a new television in Nigeria at a price below its production and shipping
costs, in order to gain in-roads against local manufacturers, the company is guilty of ______.
a. price fixing
b. price discrimination
c. predatory pricing
d. dumping
e. pricing stabilizing
38. Which of the following early payment terms would offer the smallest price reduction?
a. 1/10, net 20
b. 2/5, net 20
c. 2/4, net 30
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
d. 3/8, net 30
e. 3/10, net 30
39. Which of the following early payment discounts would offer the biggest overall price
reduction?
a. 1/10, net 20
b. 1/20, net 40
c. 2/10, net 30
d. 2/10, net 40
e. 3/10, net 20
40. What kind of price discount in international markets takes the form of a price reduction
associated with a holiday?
a. loss leader
b. predatory
c. introductory
d. promotional
e. reduced
41. What kinds of packages match the needs of bottom-of-the-pyramid consumers well?
a. family sized
b. single serve
c. multi-unit
d. bulk
e. containerized