Tag: marketing mix - 4 p's

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Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

Which method is suitable when the producer is not sure of market reactive for a price?

  1. Skimming pricing

  2. Administered pricing

  3. Accepted pricing

  4. Sealed bid pricing
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Accepted pricing (or going-rate pricing) is used when a firm follows the industry standard or the price set by competitors because they are uncertain about how the market will react to a unique price.

Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

The total cost consists of the cost of materials and one or more of the following:-

  1. Order cost

  2. Carrying cost

  3. Shortage cost

  4. All the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Total inventory cost typically includes the cost of the items themselves, the cost of placing orders, the cost of holding/carrying inventory, and the potential cost of shortages.

Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

A firm producing a large number of products will follow the pricing strategy known as _______.

  1. cost plus pricing

  2. differential pricing

  3. product line pricing

  4. price leadership
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A product line is a group of related products under the single brand sold by the same company. Product line pricing refers to the process of setting prices for multiple products that a company offers in coordination to one another. Product line pricing aims to maximize the sales of different products by creating more complementary rather than competitive products. 

Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

Which cost is taken into consideration for 'make or buy' decisions?

  1. Prime cost

  2. Total cost

  3. Cost of Production

  4. Relevant cost
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Make or buy decision is the production decision made by the company i.e whether to buy the product or to manufacture the product. The cost of buying and manufacturing are both taking into consideration while making the decision. Hence, the cost of production is considered for 'make or buy' decision.

Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

Which of the following pricing strategies are used when adopting a penetration pricing strategy?

  1. Charging high price

  2. Charging low price

  3. Charging competitive price

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Penetration pricing strategy is a strategy where initially the prices are set low to rapidly reach a vast section of the market. This strategy initiates word of mouth and also attracts target consumers with the help of the low price set by the company. It gives the marketer a competitive advantage and also inceases the customer base of the company.

Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

If the material is priced at the value that is realizable at the time of issue such a pricing method is referred to as   _________________.

  1. Standard price method

  2. Replacement method

  3. LIFO method

  4. Weighted average cost method

  5. FIFO method
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If the material is priced at the value that is realizable at the time of issue, such pricing method is called replacement method. This method is also called constant market price method.