Marketing The Core 8th Edition By Roger Kerin – Test Bank

Chapter 11 Pricing Products and Services

1) The largest US-based TV maker is
A) Sharp.
B) Panasonic.
C) LG.
D) Sony.
E) VIZIO.

Answer: E
Explanation: VIZIO, Inc., an entrepreneurial Irvine, California, company is the largest US-based TV company.
Difficulty: 1 Easy
Topic: Pricing Strategy
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

2) VIZIO is the market leader in the North American ________ market.
A) designer eyewear
B) virtual media
C) smart TV
D) 3-D video game
E) exotic travel

Answer: C
Explanation: VIZIO is the Smart TV market leader in North America.
Difficulty: 1 Easy
Topic: Pricing Strategy
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

3) VIZIO’s HDTVs are sold through all of the following types of retailers except which?
A) Amazon.com
B) mass merchandisers, such as Target
C) its own brick and mortar stores
D) wholesale club stores such as Sam’s Club
E) electronics stores such as Best Buy

Answer: C
Explanation: VIZIO flat panel HDTVs are sold through Costco, Walmart, BJ’s Wholesale, Best Buy, Sam’s Club, and Target stores nationwide, along with authorized online partners such as Amazon. It does not sell directly to consumers through company-owned stores like Apple does.
Difficulty: 2 Medium
Topic: Pricing Strategy
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

4) In order to deliver a product that the average consumer can afford, VIZIO
A) handles product design and marketing in the United States and relies on contract manufacturers in other countries to build the product.
B) uses mass customization in other countries and then ships the HDTVs to the United States.
C) purchased a small company in China to distribute its products under the VIZIO name.
D) purchased a small company in Japan to distribute its products under the VIZIO name.
E) relies solely on recycled materials to build high-quality, no-frills products.

Answer: A
Explanation: Vizio’s ability to deliver affordable flat-panel HDTVs to the average consumer is based on a novel strategy. Instead of investing in expensive manufacturing facilities, VIZIO relies on contract manufacturers to build its products. Product development and marketing specialists in the United States handle product design and marketing.
Difficulty: 2 Medium
Topic: Pricing Strategy
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

5) The ________ paid for products and services goes by many names, like tuition for your education, rent for an apartment, interest on a bank credit card, and a premium for car insurance.
A) fee
B) value
C) cost
D) price
E) exchange rate

Answer: D
Explanation: The price paid for products and services goes by many names. You pay tuition for your education, rent for an apartment, interest on a bank credit card, and a premium for car insurance.
Difficulty: 1 Easy
Topic: Setting Prices
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

6) All of the following are alternate names for the price you pay on goods and services except which?
A) rent
B) interest
C) tuition
D) a premium
E) profit

Answer: E
Explanation: The price paid for products and services goes by many names. You pay tuition for your education, rent for an apartment, interest on a bank credit card, and a premium for car insurance.
Difficulty: 2 Medium
Topic: Setting Prices
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

7) Which of the following is an example of a price?
A) tuition
B) operating costs
C) liquidity
D) value
E) brand equity

Answer: A
Explanation: The price paid for products and services goes by many names. A student pays tuition for education.
Difficulty: 2 Medium
Topic: Setting Prices
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

8) Insurance premiums, entrance fees, train fares, and organization dues are all examples of
A) charges.
B) countertrade.
C) profit.
D) price.
E) currency.

Answer: D
Explanation: Tuition, rent, interest, premiums, fees, dues, fares, salaries, commissions, and wages are all synonyms for price.
Difficulty: 3 Hard
Topic: Setting Prices
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

9) All of the following statements about price are true except which?
A) Small changes in price can have big effects on both the number of units sold and company profit.
B) The price for a product or service must earn a profit for the company.
C) For most products and services, there is an agreed-upon price range set by makers.
D) The price must be right—in the sense that customers must be willing to pay it.
E) The price must generate enough sales dollars to pay for the cost of developing, producing, and marketing the product.

Answer: C
Explanation: A product’s price must be “right”—in the sense that customers must be willing to pay it; it must generate enough sales dollars to pay for the cost of developing, producing, and marketing the product; and it must earn a profit for the company. Small changes in price can have big effects on both the number of units sold and company profit.
Difficulty: 2 Medium
Topic: Setting Prices
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

10) Susan hired an attorney to represent her in a court case involving an auto accident. The attorney charged her a $2,000 retainer fee for the services. Terry needed a haircut; the local stylist charged him $22 for his services. Aaron mowed his neighbor’s lawn; in exchange, the neighbor repaired his gutters. The attorney fees, the $12 charged by the hair stylist, and the exchange of lawn mowing for gutter repair are all examples of
A) premiums.
B) barter.
C) the profit motive.
D) price.
E) outlays.

Answer: D
Explanation: In marketing, price is the money, products, or services exchanged for the ownership or use of a product or service and it goes by many names.
Difficulty: 3 Hard
Topic: Setting Prices
Learning Objective: 11-01 Describe the nature and importance of pricing and the approaches used to select an approximate price level.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation