Marketing Final Exam

330 obj 20 3 key cbe model pricing 26 private golf

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Unformatted text preview: TOP: AACSB Reflective Thinking MSC: BLOOMS Application REF: 330 OBJ: 20-3 KEY: CB&E Model Pricing 26. Private golf courses charge members an initial membership fee and monthly green fees. This is an example of two-part pricing. ANS: T PTS: 1 TOP: AACSB Reflective Thinking MSC: BLOOMS Application REF: 331 OBJ: 20-3 KEY: CB&E Model Pricing 27. Rag fibers for paper and cotton seeds for cottonseed oil are two by-products of the cotton textile industry. Because these products are produced together, they are complementary products. ANS: F Complementary products are those that are consumed together, whereby the sale of one causes an increase in the sale of the other. PTS: 1 REF: 332 Thinking KEY: CB&E Model Pricing OBJ: 20-4 TOP: AACSB Reflective MSC: BLOOMS Application 28. Costs that are shared in the manufacturing and marketing of several products in a product line are called joint costs. ANS: T PTS: 1 TOP: AACSB Reflective Thinking MSC: BLOOMS Knowledge REF: 332 OBJ: 20-4 KEY: CB&E Model Pricing 29. Escalator pricing and price shading are two examples of cost-oriented pricing tactics. ANS: F Escalator pricing is an example of a cost-oriented pricing tactic; price shading is an example of a demand-oriented pricing tactic. PTS: 1 REF: 333 Thinking KEY: CB&E Model Pricing OBJ: 20-5 TOP: AACSB Reflective MSC: BLOOMS Comprehension 30. Many businesses find recessions to be an excellent time to build market share through the use of price shading. ANS: F Recessions are an excellent time to build market share through value-based pricing, bundling, and unbundling. PTS: 1 REF: 334 Thinking KEY: CB&E Model Pricing OBJ: 20-5 TOP: AACSB Reflective MSC: BLOOMS Comprehension MULTIPLE CHOICE 1. The marketing manager of Icruise.com (a travel Web site targeted to consumers who want a luxury vacation) finds that the firm can gain market share and become the industry leader if it slashes prices by 50 percent during the month of December. However, the VP of finance is committed to reporting a 25 percent return on investment at all times. This conflict illustrates: a. a need to eliminate low-profit products b. a lack of corporate concentration on the marketing concept c. how pricing operates in a mature marketplace d. the need for trade-offs in pricing objectives e. how target markets can be ignored ANS: D Different individuals in an organization may have pricing objectives that are not mutually compatible and will involve trade-offs. PTS: 1 REF: 319 Thinking KEY: CB&E Model Pricing OBJ: 20-1 TOP: AACSB Reflective MSC: BLOOMS Application 2. After establishing pricing goals, managers should estimate total revenue at a variety of prices. Next, they should _____. Only after performing this task are they are ready to estimate how much profit and how much market share can be earned at each possible price. a. choose the ROI target b. determine corresponding costs for each price c. estimate industry supply d. implement pricing segmentation e. establish...
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