Marketing Final Exam

Does this represent a prestige pricing b elite

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Unformatted text preview: oadster high because the company wanted to promote a high-quality image. What type of pricing does this represent? a. Prestige pricing b. Elite pricing c. Penetration pricing d. Quality pricing e. Complete pricing ANS: A Prestige pricing is charging a high price to help promote a high-quality image. PTS: 1 REF: 316 Thinking KEY: CB&E Model Pricing OBJ: 19-6 TOP: AACSB Reflective MSC: BLOOMS Application Specialty Cakes Imagine that you’re planning an after-symphony fund-raising party, and you need a life-size grand piano cake. Or, you are a developer proposing a new shopping center to a group of investors, and you want to serve a cake shaped like an architectural rendition of the center. Is this impossible? No, you just need to contact Cecilia Villaveces Cakes. She actually built a life-size grand piano for a gala in Macon, Georgia. You can expect to pay anywhere from $75 to $10,000 for one of Cecilia’s artistic creations, depending on complexity of design and size. She uses only the best ingredients, and no two cakes are ever quite alike. 111. Refer to Specialty Cakes. Although many factors determine the prices charged by Cecilia Villaveces Cakes, the two primary determinants are: a. costs of manufacturing and distribution costs b. stage of the product life cycle and costs to the consumers c. the demand for the good and the cost to the seller d. demand by the consumer and perceived quality e. distribution and promotion strategies used by the cake maker ANS: C If there was reduced demand, then Cecilia would have to lower prices. Also, she must charge for the time, energy, and resources that go into each cake. PTS: 1 REF: 305 Thinking KEY: CB&E Model Pricing OBJ: 19-3 TOP: AACSB Reflective MSC: BLOOMS Application 112. Refer to Specialty Cakes. Many party planners in the Southeast will only use Cecilia Villaveces Cakes at their parties––no matter what the price is. They know that Cecilia’s cakes can make a party a success. Moreover, the cakes are what people remember most about the parties. From this description, you should assume Cecilia Villaveces Cakes have a(n): a. elastic demand b. unitary elasticity c. inelastic supply d. inelastic demand e. elastic supply ANS: D Price increases do not decrease demand for cakes. PTS: 1 REF: 307 Thinking KEY: CB&E Model Pricing OBJ: 19-3 TOP: AACSB Reflective MSC: BLOOMS Application 113. Refer to Specialty Cakes. Which of the following is the BEST example of a fixed cost for Cecilia Villaveces Cakes? a. Eggs, butter, sugar b. Delivery costs c. Part-time employees d. Electricity consumption e. Food preparation licenses ANS: E Delivery costs, electricity consumption, and use of part-time employees will vary according to the job. PTS: 1 REF: 309 Thinking KEY: CB&E Model Pricing OBJ: 19-5 TOP: AACSB Reflective MSC: BLOOMS Application 114. Refer to Specialty Cakes. Which of the following is the BEST example of a variable cost for Cecilia Villaveces Cakes? a. Life insurance on Cecilia b. Flo...
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