Marketing 4.01 Multiple Choice Questions

The determination of an exchange price acceptable to both the buyer and the seller of a product is called

• pricing

• promotion

• place decision.

• product decision.

In which of the following businesses is the business owner usually responsible for setting prices:

• Walmart

• Sears

• Java Joe’s Coffee Shop

• Macy’s

In which of the following businesses would a separate department most likely be responsible for establishing prices:

• Small boutique

• Local clothing store

• Large national chain store like Lowes or Best Buy.

• Hair salon

A hair care company cannot afford to spend millions of dollars on research for the new, inexpensive shampoo it is developing, so the company must choose a less expensive form of research. This is an example of how pricing affects which of the following elements of the marketing mix:

• Profit

• Place

• Promotion

• Product

Does pricing affect the amount of money a business spends on product research?

• No; companies will spend a large amount on research regardless of the product’s price.

• No; there is no relationship between the amount spent on research and the product’s price.

• Yes; companies will not spend as much on research for lower priced products.

• Yes; companies spend more money on research for lower priced products.

When companies increase the quality of materials used in the production of their products, their prices will tend to be

• reduced

• the same.

• higher

• lower

A company with a high profit margin decides to advertise with a full-page, high-cost magazine ad. This is an example of how pricing influences

• product

• promotion

• physical inventory.

• place

Which area of promotion will pricing affect?

• Choice of transportation channels

• Advertising budget

• Where the product is offered

• Where the product is offered

A company decides to save money by shipping its products by truck instead of by plane. Which marketing mix element is pricing influencing in this example?

• Promotion

• Problem solving

• Product

• Place

Covering all of a businesses costs is a pricing objective related to

• profitability

• sales

• competition

• image