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Question 26

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A fundamental pricing objective is:

Select one:

a. survival

b. market share

c. return on investment

d. all of above

Question 27

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A pricing objective designed to encourage rapid sales is often based on:

Select one:

a. profit maximization

b. cash flow

c. competitors

d. status quo

Question 28

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In marketing it is imperative to know yourself, your competition, and your customer.
      This implies that marketers:

Select one:

a. accurately assess customer’s expectations of price

b. situational influences of price i.e. popcorn at a movie theater

c. both A and B

d. neither A nor B

Question 29

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Mark up as a % of cost always will be __________ the mark up as a % of retail for
      profitable products.

Select one:

a. less than

b. equal to

c. more than

d. independent of

Question 30

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Shaving razors are often sold at a low price, however, the replacement blades are
      very expensive. This is an example of:

Select one:

a. price skimming

b. penetration pricing

c. product line pricing

d. captive pricing

Explanation / Answer

Q26: d. all of the above

(A company may price its products based on its needs. These needs will vary from business to business and it could be survival, need to capture the market share in which case the price will be kept low or high pricing to increase the ROI)

Q27: b. Cash flow

(One way to get cash flow quickly is through seasonal discounts. This increases the sales volume and improves the cash flow position)

Q28: c. Both A and B

(Knowing yourself, competitor and customer allows the business to price the products rightly. It also allows the business to discriminate the prices based on situational influences on the customers)

Q29: a. higher than

(Say cost = 100, Mark up of 10% on cost = $10, Retain price = $110. Mark up on retail price = 10/110* 100 = 9.09% which is lower)

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