MBA Marketing Final questions &
answers rated A+
price - correct answer ✔✔provides a mechanism for obtaining value back from customers
-marketers must know how prices will be received and addict demand
issues for low prices - correct answer ✔✔-how do we determine costs are covered
- whether low prices are a constant strategic choice such as everyday low pricing or should we
pulse the market with price fluctuations offering temporary price discounts
break evens - correct answer ✔✔simple math computations that determine how many units we
need to sell to make money
-if fixed costs are high relative to variable costs the strategic objective is to maximize sales
volume
-if variable costs are high the strategic objective is to maximize per unit margins
-should be used for every price decision to understand the lower bounds
scanner data - correct answer ✔✔yields very precise estimates of demand and price
sensitivities at numerous price points
-includes indictors of which brands are bought, the quantities bought, the shelf price of the
object, the paid price, the price of the competitors brands that week, etc.
survey data - correct answer ✔✔you can survey people for their willingness to pay
conjoint analysis - correct answer ✔✔customers are sown products with various combinations
of features and attributes price being one of them
,systematic variations - correct answer ✔✔-price serves as a cue to quality
-consumers process absolute numbers and relative numbers differently
-contextual frame
-mood inductions
-end in 9
-mental accounting
-compromise effect
-referent pricing
price serves as a cue to quality - correct answer ✔✔sometimes if prices are higher people think
that the quality is better
-this is so strong that prices are known to contribute to the formation of expectations prior to a
purchase
mood inductions - correct answer ✔✔people feel good when they think they get a good deal
referent pricing - correct answer ✔✔comparing the price in out head or to other things to see if
we think its good
segmentation pricing - correct answer ✔✔charging different prices to different customers
quantity discounts - correct answer ✔✔the more you buy the more you save
non linear pricing - correct answer ✔✔marketers try to coordinate the pricing of multiple pieces
of their product offering
-two part tariff: a customer is charged one price for one part of the service (a concert ticket) and
another price for other parts of the service (food)
, price bundling - correct answer ✔✔the opposite of two part tariff
-aggregates prices of 2 or more complementary products for a single price
market penetration - correct answer ✔✔want to disperse your brand quickly and widely
throughout the marketplace
-the brand would be priced low at the time of its intro to stimulate sales and to encourage trial
and word of mouth
-used to acquire large market share
-with time the price normally raises
market skimming - correct answer ✔✔a high price is set because the company is seeking profit
margin not volume
-the only customers that will buy this at a high price are those that really want it
-overtime the price lowers
pricing modifications occur as the product matures - correct answer ✔✔
price fluctuations - correct answer ✔✔-competitors can imitate price cuts immediately
-price drops attract disloyal customers
-price discounts are often not profitable
-deleterious effect on the image of the brand
coupons - correct answer ✔✔are relevant only to the segment of customers who are coupon
clippers
game theory - correct answer ✔✔a structured way to think about the behavior of
interdependent players
answers rated A+
price - correct answer ✔✔provides a mechanism for obtaining value back from customers
-marketers must know how prices will be received and addict demand
issues for low prices - correct answer ✔✔-how do we determine costs are covered
- whether low prices are a constant strategic choice such as everyday low pricing or should we
pulse the market with price fluctuations offering temporary price discounts
break evens - correct answer ✔✔simple math computations that determine how many units we
need to sell to make money
-if fixed costs are high relative to variable costs the strategic objective is to maximize sales
volume
-if variable costs are high the strategic objective is to maximize per unit margins
-should be used for every price decision to understand the lower bounds
scanner data - correct answer ✔✔yields very precise estimates of demand and price
sensitivities at numerous price points
-includes indictors of which brands are bought, the quantities bought, the shelf price of the
object, the paid price, the price of the competitors brands that week, etc.
survey data - correct answer ✔✔you can survey people for their willingness to pay
conjoint analysis - correct answer ✔✔customers are sown products with various combinations
of features and attributes price being one of them
,systematic variations - correct answer ✔✔-price serves as a cue to quality
-consumers process absolute numbers and relative numbers differently
-contextual frame
-mood inductions
-end in 9
-mental accounting
-compromise effect
-referent pricing
price serves as a cue to quality - correct answer ✔✔sometimes if prices are higher people think
that the quality is better
-this is so strong that prices are known to contribute to the formation of expectations prior to a
purchase
mood inductions - correct answer ✔✔people feel good when they think they get a good deal
referent pricing - correct answer ✔✔comparing the price in out head or to other things to see if
we think its good
segmentation pricing - correct answer ✔✔charging different prices to different customers
quantity discounts - correct answer ✔✔the more you buy the more you save
non linear pricing - correct answer ✔✔marketers try to coordinate the pricing of multiple pieces
of their product offering
-two part tariff: a customer is charged one price for one part of the service (a concert ticket) and
another price for other parts of the service (food)
, price bundling - correct answer ✔✔the opposite of two part tariff
-aggregates prices of 2 or more complementary products for a single price
market penetration - correct answer ✔✔want to disperse your brand quickly and widely
throughout the marketplace
-the brand would be priced low at the time of its intro to stimulate sales and to encourage trial
and word of mouth
-used to acquire large market share
-with time the price normally raises
market skimming - correct answer ✔✔a high price is set because the company is seeking profit
margin not volume
-the only customers that will buy this at a high price are those that really want it
-overtime the price lowers
pricing modifications occur as the product matures - correct answer ✔✔
price fluctuations - correct answer ✔✔-competitors can imitate price cuts immediately
-price drops attract disloyal customers
-price discounts are often not profitable
-deleterious effect on the image of the brand
coupons - correct answer ✔✔are relevant only to the segment of customers who are coupon
clippers
game theory - correct answer ✔✔a structured way to think about the behavior of
interdependent players
