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Welcome to...
A Game of X’s and O’s
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2
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Scoreboard
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X
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O
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Click Here if
X Wins
Click Here if
O Wins
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1
One advantage of non-price competition is that
a. a firm can react quickly to competitive
efforts.
b. market share becomes less important.
c. a firm can build customer loyalty.
d. marketing efforts are completely eliminated
e. pricing is no longer a factor.
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c. a firm can build customer loyalty.
(p. 243)
2
Which of the following is most likely to have an
inelastic demand curve?
a. automobile
b. vacation
c. nonelective surgery
d. recreational vehicle
e. computer
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c. nonelective surgery
(pp. 245-246)
3
Running a big sale in order to generate enough cash
flow to pay creditors is typical in a situation in which a
firm’s primary pricing objective is
a. status quo
b. profit
c. survival
d. market share
e. recovery
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c. survival (p. 266)
4
The pricing of Clinique makeup, considerably higher than brand such
as Cover Girl, Revlon, and Maybelline, is used to communicate
_______________, which is the company’s primary pricing objective.
a. market share
b. product quality
c. status quo
d. profitability
e. cash flow.
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b. product quality (p. 268)
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If PepsiCo sets its six-pack price at $1.25 to match the
price charged by Coca-cola, Pepsi is using which of the
following pricing methods?
a. demand-based
b. cost-based
c. reference pricing
d. competition based
e. price leader
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d. competition based (p. 272)
6
True or False:
Differential pricing means different buyers pay
different prices for the same quality and quantity of
product.
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True: Differential pricing can occur in several ways: it can be negotiated; it can involve
secondary markets, or periodic or random discounting. Pages 274-275
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7
True or False: Price skimming is designed to yield
maximum unit sales volume.
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False: Price skimming, charging the highest possible price,
is designed to maximize initial cash flow and cover
development costs for new products. Page 274
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True or False: Captive pricing, premium pricing, bait
pricing, and price lining are all strategies aimed at
maximizing the profits of an entire product line rather
than an individual product.
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True: A thorough answer to this question should explain how
each of the above strategies maximizes overall profit of the
line. Page 276
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True or false: . A psychological price is designed to
encourage purchases on the basis rational
response rather than on the basis of emotional
reactions.
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False: psychological price strategies such as reference pricing,
bundle pricing, multiple-unit pricing, edlp, odd-even pricing,
customary pricing and prestige pricing try to influence the
perception of price. Pages 277-278