Principles of Marketing Quiz

What is price according to the text?

• The value of the company's assets

• The cost of producing a product

• The number of units sold in a given period

• The amount of money charged for a product or service

What is the main difference between value-based pricing and cost-based pricing?

• Value-based pricing is set to match competitor prices

• Value-based pricing is always higher than cost-based pricing

• Value-based pricing is product driven, while cost-based pricing is customer driven

• Value-based pricing uses buyers' perceptions of value, while cost-based pricing uses the seller's cost

What is good-value pricing?

• Offering the right combination of quality and good service at a fair price

• Charging a high price for premium products

• Setting prices based on competitors' prices

• Offering discounts on all products

What is everyday low pricing (EDLP)?

• Involves setting high prices with frequent promotions

• Involves changing prices daily based on demand

• Involves charging a constant everyday low price with few or no temporary price discounts

• Involves setting prices based on competitors' prices

What is high-low pricing?

• Involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items

• Involves setting prices based on demand only

• Involves charging the same price for all products

• Involves setting prices based on cost only

What does value-added pricing involve?

• Offering discounts on all products

• Setting prices based on cost only

• Setting prices based on competitors' prices

• Attaching value-added features and services to differentiate the company's offers and justify higher prices

What is cost-based pricing?

• Sets prices based on demand only

• Sets prices based on competitors' prices

• Sets prices based on the costs for producing, distributing, and selling the product plus a fair rate of return

• Sets prices based on value perception

What is cost-plus pricing?

• Sets prices based on demand only

• Adds a standard markup to the cost of the product

• Sets prices based on value perception

• Sets prices based on competitors' prices

What are the benefits of cost-plus pricing?

• Sellers can change prices frequently, buyers are confused, competition is high

• Sellers have no control over costs, buyers feel prices are unfair, competition is low

• Sellers can charge any price they want, buyers always get the lowest price, competition is high

• Sellers are certain about costs, price competition is minimized, buyers feel it is fair

What is break-even pricing?

• Setting price to break even on costs or to make a target return

• Setting price to match demand

• Setting price to maximize profits

• Setting price to match competitor prices