Marketing Pricing Strategies Quiz

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Questions and Answers

What is the primary goal of retail (or resale) price maintenance?

To encourage competitive pricing among retailers

To allow retailers to charge any price they want

To ensure uniform pricing across different retailers (correct)

To decrease product demand among consumers

Which of the following best describes deceptive pricing?

Stating misleading prices or savings that are not real (correct)

Encouraging a price match policy to increase competitiveness

Providing accurate information about true price savings

Offering promotions that are transparent to consumers

How can companies effectively respond to price changes from competitors?

By reducing customer service quality

By increasing production costs to boost perceived value

By reducing their price to match the competition (correct)

By ignoring competitors and expecting consumer loyalty

What is a primary benefit of cost-plus pricing?

Minimizes price competition Signup and view all the answers

What does the term 'upstream' refer to in the context of marketing channels?

Firms providing raw materials and components for production Signup and view all the answers

Which pricing strategy involves charging a constant low price with few or no discounts?

Everyday Low Pricing (EDLP) Signup and view all the answers

Which factor is considered a part of downstream marketing channels?

Retailers distributing products to consumers Signup and view all the answers

Which pricing approach focuses on attaching additional features to justify higher prices?

Value-added Pricing Signup and view all the answers

What is a significant disadvantage of good-value pricing?

It ignores demand and competitor prices Signup and view all the answers

Which external factor can significantly influence pricing strategies?

Government regulations Signup and view all the answers

Which type of pricing strategy focuses on competitor analysis?

Competition-based Pricing Signup and view all the answers

In break-even pricing, what is the primary goal?

Ensure target return on investment Signup and view all the answers

Which strategy combines high everyday prices with occasional sales?

High-low Pricing Signup and view all the answers

What is the primary focus of business analysis in the context of new product development?

Reviewing sales, costs, and profit projections Signup and view all the answers

What does product development aim to achieve?

Transform an idea into a physical product Signup and view all the answers

In what situation is test marketing most likely to occur?

For new products with significant investment and uncertainty Signup and view all the answers

What is a key characteristic of successful commercialization?

Determining the timing and location of the product launch Signup and view all the answers

Which of the following is a potential risk in turbulent market times?

Reducing spending on new product initiatives Signup and view all the answers

How can innovation management contribute to a company's culture?

By creating an innovation-oriented atmosphere Signup and view all the answers

Which factor is unlikely to prompt test marketing?

A straightforward line extension Signup and view all the answers

What does marketing primarily aim to create for customers?

Strong relationships and value Signup and view all the answers

What is psychological pricing primarily focused on?

Considering the psychological impact of prices on buyers Signup and view all the answers

What does freight-absorption pricing imply for the seller?

The seller pays all or part of the shipping costs Signup and view all the answers

Which type of pricing is designed to boost sales in the short-run?

Promotional pricing Signup and view all the answers

What is a key characteristic of dynamic pricing?

Prices are adjusted based on individual customer needs Signup and view all the answers

In FOB-origin pricing, who pays for the shipping costs to the customer's area?

The seller Signup and view all the answers

What does geographical pricing primarily consider?

The location of customers Signup and view all the answers

Which of the following reflects international pricing?

Adjusting prices based on regional economic conditions Signup and view all the answers

What type of promotion involves limited-time offers or cash rebates?

Promotional pricing Signup and view all the answers

What is considered personal communication?

Face-to-face conversations Signup and view all the answers

What role do opinion leaders play in buzz marketing?

They spread information about products in their communities. Signup and view all the answers

Which of the following is NOT a step in the communication process?

Create product design Signup and view all the answers

Which component is involved in the design of a message?

How to hold interest Signup and view all the answers

What does the 'A' in the AIDA model stand for?

Awareness Signup and view all the answers

What type of media is classified as non-personal communication?

Television ads Signup and view all the answers

Which of the following is a goal of the communication objectives?

Enhance awareness Signup and view all the answers

What is the purpose of collecting feedback in the communication process?

To assess message impact and perception Signup and view all the answers

What is the main focus of the supply chain?

Transforming raw materials into final products Signup and view all the answers

Which of the following describes a vertical marketing system (VMS)?

A unified system among producers, wholesalers, and retailers Signup and view all the answers

How do channel members add value to products?

By transforming assortments of products into desired assortments for consumers Signup and view all the answers

What distinguishes multichannel distribution systems?

A firm using multiple marketing channels to reach different consumer segments Signup and view all the answers

What best describes disintermediation?

Cutting out intermediaries from the marketing channel Signup and view all the answers

Which channel system exclusively allows one distributor to operate within a specified territory?

Exclusive Distribution Signup and view all the answers

What is the main purpose of channel flow connections?

To manage the movement of products, ownership, payment, information, and promotion Signup and view all the answers

What distinguishes a contractual vertical marketing system from other types?

It involves independent firms at different production levels linked by contracts Signup and view all the answers

In the context of evaluating channel alternatives, what does 'channel power dynamics' refer to?

The control and influence one channel member holds over others Signup and view all the answers

What is the role of retailers within the distribution system?

To directly sell products or services to final consumers Signup and view all the answers

What does 'omnichannel retailing' primarily focus on?

Integrating various sales channels for a seamless customer experience Signup and view all the answers

Which responsibility must channel members agree upon?

Conditions of sale and territory rights Signup and view all the answers

What is the purpose of marketing logistics?

To plan, implement, and control physical product flow Signup and view all the answers

Which type of distribution sells products in as many places as possible?

Intensive Distribution Signup and view all the answers

Study Notes

Course Information

Professor: Fernando Soria Prados
Number of sessions: 25
Duration of homework/materials viewing: 10 days
Intermediate grades: 1 - 3%, 2 - 3%, 3 - 3%
Practical case studies: 1, 2

Part I: Introduction to the Course (Session 1)

Part II: The Four Pillars of Marketing Mix (Session 2 - 16)

Strategic planning crucial before working on the 4Ps

8.1 What is a Product?

Product encompasses anything offered in a market for purchase, use, or consumption satisfying needs/wants.
Levels of a product:
Core Customer Value: the fundamental need the customer is fulfilling.
Actual Product: The tangible product with its characteristics (brand name, quality, packaging, design, and features).
Augmented Product: Additional features like warranty, delivery, and after-sale service.

8.2 Product & Service Decisions

Product attributes: Key characteristics impacting a product's ability to satisfy customer needs.
Quality: Crucial aspect influencing customer satisfaction.
Total quality management
Return on quality
Performance quality
Conformance quality
Brand: Differentiates a product.
Managing a brand is vital.
Positioning: Various levels, including attributes, benefits, beliefs, and values.
Brand selection and protection: Considerations like ease of pronunciation, memorability, extendibility, and ability for legal registration.

8.3 Services Marketing

Types: Government, private NGOs, business organizations.
Characteristics:
Intangibility
Inseparability
Variability
Perishability

8.4 Brand Strategy: Building Strong Brands

Brand equity: Indicates a brand's ability to capture consumer preference and loyalty.
Brand Value: Total financial value of a brand, which is the difference between balance sheet value and market capitalization value.

9.1 New Product Development Strategy

Acquisition, patent/license, and product modifications/improvements.

9.2 New Product Development Process

Idea generation
Idea screening
Concept development and testing
Marketing strategy, development
Business analysis.
Product development
Commercialization

10.1 What is a Price?

Price: Amount charged for a product or service. Value customers exchange for the benefit of owning/using the product/service.
Good to follow trends.

10.2 3 Major Price Strategies

Cost-based pricing: Sets prices based on production, distribution, and sales costs.
Customer value-based pricing: Adjusts prices according to customer perceptions of product value.
Competition-based pricing: Sets prices relative to competitors' strategies, costs, and market offerings.

10.3 External and Internal Factors

Balancing consumer needs with costs and price preferences.
Various types of competition include pure, monopolistic, oligopoly, and monopoly.
Demand-price relationship: Price elasticity of demand.

11.1 Major Strategies for New Products

Market skimming: Initial high prices to skim revenue from segments.
Market penetration: Low prices to attract buyers.

11.2 Maximize Profit

Product line pricing: Differentiating products within a line.
Optional product pricing: Offering add-ons to products.
Captive pricing: Offering products dependent on others.
By-product pricing: Pricing secondary products.
Product bundle pricing: Combining products at a reduced price.

11.3 Price Adjustment

Price discounting: Reduction to match customer response
Discount and Allowance pricing

11.4 Responding to Price Changes

Initiating price changes
Buyer's reactions to changes: Product and Company Greed
Competitor reactions

12.1 Why Companies Use Marketing Channels

Supply Chain and value delivery networks
Upstream, downstream, and demand chain
Value delivery network
Marketing Channels
Interdependent organizations
How members add value- transforming assortment
Importance of channels, direct vs. indirect

12.2 How Channel Members Interact - Channel Behavior

Conventional vs. Vertical Marketing Systems (VMS)
Multi-channel distribution systems
Disintermediation

12.3 Alternatives - Marketing Channel Design

Analyzing consumer needs
Setting channel objectives

12.4 Select, Motivate, Evaluate

13.1 Role of Retailers

Retailing activities selling directly to final customers
Omnichannel retailing- combining online, in-store, and mobile shopping.

14.1 5 Promotion Mix Tools

Promotion mix: Specific blend of promo used to communicate value and build customer relationships.
Advertising tools
Sales promotion tools
Personal selling tools
Public relations tools
Direct & digital marketing tools

14.2 Changing Communications Landscape

Changing communications landscape
New marketing communications model. New opportunities in marketing from old media to digital (social and mobile).
Integrating the firm's various communication channels.

14.3 Communication Process

Steps in the process: Identify target audience, determine communications objectives, design message, select message source, collect feedback.
Structure and format: How to say it

14.4 Setting Promotion Budget

Methods: Affordable, Percentage-of-Sales, Competitive-Parity, and Objective-and-Task

15.1 Role of Advertising

Advertising as a Paid form of Nonpersonal presentation
Different types of advertising (informative, persuasive, and reminder)
Objectives setting, communication, sales budget, message, media, evaluations, and returns

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Description

Test your knowledge of various pricing strategies used in marketing. This quiz covers concepts such as retail price maintenance, deceptive pricing, and various pricing approaches, providing insight into how companies can effectively position their products in the market. Challenge yourself with questions on pricing strategies and their implications.