Self-test Questions

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1		In the marketing mix three of the 4P’s add to company costs. Which is the only P directly concerned with producing revenues?
			A)	Promotion
			B)	Place
			C)	Product
			D)	Price
2		Full cost pricing and marginal cost pricing are two examples of:
			A)	Marketing-oriented pricing
			B)	Cost-oriented pricing
			C)	Tactical pricing
			D)	Product line pricing
			E)	Value pricing
3		An alternative name for direct cost pricing is:
			A)	Competitive pricing
			B)	Negotiation
			C)	Full cost pricing
			D)	Going rate pricing
			E)	Marginal cost pricing
			F)	Tactical pricing
4		Going rate pricing and competitive bidding are examples of marketing-oriented pricing.
			A)	True
			B)	False
5		Why must a product's price be set in line with the marketing strategy?
			A)	It's easier to explain to sales staff
			B)	Profits can be assessed before a product is launched
			C)	To avoid confusion in the customer's mind and the market place
			D)	Sales people can advise on a price that is likely to sell well
			E)	Price lists can be printed at the same time as brochures
6		In relation to a product launch strategy, a company engaged in high levels of promotion while selling at a high price is following a:
			A)	Rapid penetration strategy
			B)	Rapid skimming strategy
			C)	Slow skimming strategy
			D)	Slow penetration strategy
7		In setting the price of a product by its perceived value, the company decides on the value of the product.
			A)	True
			B)	False
8		In industrial marketing price setting the initials E.V.C. stand for:
			A)	Economic value to the company analysis
			B)	Economic value to the customer analysis
			C)	Enhanced value to the customer analysis
			D)	Economic viability to the customer analysis
			E)	External valuation of the competition analysis
9		An established company with respected brands might introduce which one of the following options to compete against low price rivals?
			A)	Price cuts
			B)	A price skimming strategy
			C)	Value pricing
			D)	A fighter brand
			E)	Special sales promotion
			F)	Higher quality products
10		To overcome the problems associated with Price Waterfall, marketing-oriented companies might protect profitability by building what into their quoted prices?
			A)	Fees to cover hospitality for D.M.U. members in the purchasing company
			B)	Negotiating margins
			C)	Legal fees
			D)	Directors' bonuses
			E)	Sales staff bonuses
11		Three key issues with regard to initiating price changes are the circumstances, the tactics and the:
			A)	Stock levels
			B)	Bad publicity
			C)	Raw material costs
			D)	Competitor reactions
			E)	Sales targets
			F)	Length of time since last price change
12		Excessive demand for a product in an industry is likely to lead to:
			A)	Supplier bankruptcies
			B)	Price wars
			C)	Price increases
			D)	Falling sales
			E)	Increased advertising
13		The short-term practices of price fixing, predatory pricing and deceptive pricing can be prevented by adopting:
			A)	High profitability objectives
			B)	Sales orientation
			C)	New product introductions
			D)	Tactical price setting
			E)	Price skimming
			F)	Ethical marketing
14		Product dumping, when used to sell off faulty goods, will damage a company's reputation and possibly lead to legal action against the company.
			A)	True
			B)	False