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Exam 13: B: Creating and Pricing Products That Satisfy Customers

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Question 31

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One of the major dangers of competition-based pricing is that it often results in price wars.

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B) False

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Question 32

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A company's product mix usually must be changed to stay competitive.

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B) False

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Question 33

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The price floor is the lowest price at which a producer can sell its product without incurring a loss.

Psychological pricing strategies encourage purchases to be based on economically rational responses rather than on emotional responses.

Price competition occurs when a seller makes its product stand out from the competition by distinctive product quality and customer service.

Candy bars, milk, and newspapers are all examples of convenience products.

Costs incurred regardless of how many units of a product are produced or sold are called fixed costs.

The supply curve demonstrates that the quantity supplied by producers decreases as the price increases.

A men's clothing store sells ties only at $20 and $35. This type of pricing strategy is known as price lining.

The strategy of charging the highest possible price for a product during the introduction stage of its life-cycle is called price skimming.

A product may be a good or a service but not an idea.

Brands help reduce a consumer's perceived risk of purchase.

The legality of uniform geographic pricing has been challenged and so its use has been abandoned.

The branding strategy in which a firm uses the same brand for all or most of its products is called individual branding.

Because markup pricing is difficult to use, few retailers and wholesalers use it.

Appliances, stereos, and furniture are all considered specialty products.

Management must set pricing objectives based on the primary objective of making a profit.

Price is the amount of money a seller is willing to accept in exchange for a product, at a given time and under given circumstances.

A variation of an existing product, such as freeze-dried coffee, is an example of product imitation.

Generic brands are becoming more popular with today's price-conscious shoppers.