BUS5113 Marketing Management Unit 5 Graded Quiz — 25 Q&A
Verified Answers 2025
Course:
BUS5113 Marketing Management — University of the People (UoPeople)
Level:
MBA
Year:
2025/2026
Format:
Graded Quiz Solutions — 25 Q&A with Verified Answers
BUS5113 Unit 5 Graded Quiz — Pricing Strategy
25 Questions with Verified Answers | Score: 96/100
Question 1:
When a company is facing intense competition, changing consumer wants, or sudden economic
downturns, which pricing objective is it most likely to prioritize in the short term?
A) Profit maximization
B) Market-share leadership
C) Product-quality leadership
D) Survival
Answer: D
Explanation:
Survival becomes the primary objective when a firm is distressed, prompting them to drop prices
merely to cover variable costs and some fixed costs to keep the business running. While profit
maximization (A) and market-share leadership (B) are common long-term goals, they are
secondary when immediate cash flow is required to avoid bankruptcy. Product-quality leadership
(C) typically requires higher prices, which contradicts a distressed pricing strategy.
Question 2:
, Unlike cost-based pricing, which starts with the design of a good product and calculates costs
before setting a price, value-based pricing reverses this process. What is the fundamental starting
point of value-based pricing?
A) Analyzing competitor pricing structures
B) Assessing customer needs and value perceptions
C) Determining the firm's target return on investment (ROI)
D) Calculating the break-even volume
Answer: B
Explanation:
Value-based pricing begins by analyzing how much value the target customer perceives the
product to deliver, which sets the price ceiling before the product is even designed. Competitor
pricing (A) is the focus of competition-based pricing, while ROI (C) and break-even calculations
(D) are strictly internal, cost-driven metrics that ignore the buyer's willingness to pay.
Question 3:
A regional construction firm bids on government contracts by estimating the total material, labor,
and overhead costs for a project, and then adding a standard 15% to ensure profitability. Which
pricing strategy is this firm utilizing?
A) Cost-plus pricing
B) Target return pricing
C) Going-rate pricing
D) Dynamic pricing
Answer: A
Explanation:
Cost-plus (or markup) pricing is the practice of adding a standard percentage markup to the total
cost of the product or service, making it highly common in construction and professional services.
Target return pricing (B) relies on achieving a specific total ROI rather than a simple markup,
going-rate pricing (C) relies strictly on competitor benchmarks, and dynamic pricing (D) fluctuates
continuously based on real-time demand.
Question 4:
A pharmaceutical company produces a life-saving medication with no generic substitutes. When
the company increases the price of this medication by 20%, they observe only a 2% drop in the
Verified Answers 2025
Course:
BUS5113 Marketing Management — University of the People (UoPeople)
Level:
MBA
Year:
2025/2026
Format:
Graded Quiz Solutions — 25 Q&A with Verified Answers
BUS5113 Unit 5 Graded Quiz — Pricing Strategy
25 Questions with Verified Answers | Score: 96/100
Question 1:
When a company is facing intense competition, changing consumer wants, or sudden economic
downturns, which pricing objective is it most likely to prioritize in the short term?
A) Profit maximization
B) Market-share leadership
C) Product-quality leadership
D) Survival
Answer: D
Explanation:
Survival becomes the primary objective when a firm is distressed, prompting them to drop prices
merely to cover variable costs and some fixed costs to keep the business running. While profit
maximization (A) and market-share leadership (B) are common long-term goals, they are
secondary when immediate cash flow is required to avoid bankruptcy. Product-quality leadership
(C) typically requires higher prices, which contradicts a distressed pricing strategy.
Question 2:
, Unlike cost-based pricing, which starts with the design of a good product and calculates costs
before setting a price, value-based pricing reverses this process. What is the fundamental starting
point of value-based pricing?
A) Analyzing competitor pricing structures
B) Assessing customer needs and value perceptions
C) Determining the firm's target return on investment (ROI)
D) Calculating the break-even volume
Answer: B
Explanation:
Value-based pricing begins by analyzing how much value the target customer perceives the
product to deliver, which sets the price ceiling before the product is even designed. Competitor
pricing (A) is the focus of competition-based pricing, while ROI (C) and break-even calculations
(D) are strictly internal, cost-driven metrics that ignore the buyer's willingness to pay.
Question 3:
A regional construction firm bids on government contracts by estimating the total material, labor,
and overhead costs for a project, and then adding a standard 15% to ensure profitability. Which
pricing strategy is this firm utilizing?
A) Cost-plus pricing
B) Target return pricing
C) Going-rate pricing
D) Dynamic pricing
Answer: A
Explanation:
Cost-plus (or markup) pricing is the practice of adding a standard percentage markup to the total
cost of the product or service, making it highly common in construction and professional services.
Target return pricing (B) relies on achieving a specific total ROI rather than a simple markup,
going-rate pricing (C) relies strictly on competitor benchmarks, and dynamic pricing (D) fluctuates
continuously based on real-time demand.
Question 4:
A pharmaceutical company produces a life-saving medication with no generic substitutes. When
the company increases the price of this medication by 20%, they observe only a 2% drop in the
