Tag: marketing mix - 4 p's

Questions Related to marketing mix - 4 p's

The capitalization rate of a company whose market price per share is Rs.28, net income is Rs.20 lakhs and the number of outstanding shares is 5.6 lakh is _____________.

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

  1. 0.039

  2. 0.078

  3. 0.127

  4. 0.156

  5. 0.254

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Correct Option: C
Explanation:

Capitalization rate = earning per share / market price of the share
Earnings per share = 20 lakh / 5.6 lakh = Rs. 3.5714 per share.

When a firm charges different prices for different groups of customers, it may be accused of _________.

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

  1. cultural relativism

  2. money laundering

  3. facilitating payments

  4. price discrimination

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Correct Option: D
Explanation:
Price discrimination is a pricing strategy that charges customers different prices for the same product or service. In pure price discrimination, the seller charges each customer the maximum price he or she will pay. In more common forms of price discrimination, the seller places customers in groups based on certain attributes and charges each group a different price.
Price discrimination is most valuable when the profit from separating the markets is greater than the profit from keeping the markets combined. This depends on the relative elasticity of demand in the sub-markets. Consumers in the relatively inelastic sub-market pay a higher price, while those in the relatively elastic sub-market pay a lower price.

The _______ represents the sum of value exchange for the benefit of having or using the product.

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

  1. Price

  2. Product

  3. Cost

  4. Package

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Correct Option: A
Explanation:

Price is a value that will purchase a finite quantity, weight or other measure of a good or services. Price is a consideration given in exchange for transfer of ownership. Price forms the essential bases for commercial transactions. It may be fixed by a contract, left to be determined by an agreed upon formula at a future date, or discovered or negotiated during the course of dealings between the parties involved.  

Price of the product also depends upon the target customer.

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

  1. True

  2. False

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Correct Option: A
Explanation:

Price is a value that will purchase a finite quantity, weight or other measure of a good or services. Price is a consideration given in exchange for transfer of ownership. The price of a product may increase when the demand increases or reduce when the demand decreases. When the marketer wants to target the niche market, offering a high end product, the price for that product would increase, Where as when the marketer wants to target the lower class or middle class consumers, the prices would be set low. 

Which of the following factors do not affect the fixation of the price of a product?

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

  1. The utility and demand

  2. Cost of the product

  3. Extent of competition in the market

  4. Social culture

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Correct Option: D
Explanation:

Price is a value that will purchase a finite quantity, weight or other measure of a good or services. Price is a consideration given in exchange for transfer of ownership. The price of a product may increase when the demand increases or reduce when the demand decreases. The cost of production plays the main role while fixing the price for a product as the price is almost always cost+ profit margin. To compete with the other companies in the market, price has to be around or lower than the price offered by the competitor. 

Government and legal regulations do not affect the price of a product.

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

  1. True

  2. False

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Correct Option: B
Explanation:

Price is a value that will purchase a finite quantity, weight or other measure of a good or services. Price is a consideration given in exchange for transfer of ownership. The taxes and duties imposed on the goods and services by the government affects the final price of the goods that a consumer has to pay for the product.

Which of the following is not a pricing objective?

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

  1. Surviving in competitive market

  2. Attaining product quality

  3. Obtaining market share leadership

  4. Informing the masses about the product

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Correct Option: D

Price discrimination is defined as ___________.

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

  1. The practice of charging different prices to different consumers for the goods or services by slightly altering the packaging or features for the different groups

  2. Disregarding the profit motive by favoring one group of buyers over another by charging that group a lower price

  3. The practice of charging different prices to different consumers for the same goods or services

  4. The practice of selling a goods or services for the same to different groups of consumers group but slightly altering, quantity or features of the goods or services for each group

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Correct Option: C
Explanation:

Price discrimination refers to the charging of different price by the monopolist for the same product.  The differences maybe on the basis of brand wrapper etc. This policy of the monopolist is called price discrimination.

"Price discrimination refers strictly to the practice by a seller of charging different prices from different buyers for the same good" -J.S. Bian

Defraction is a situation where:

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

  1. prices are falling

  2. value of money is rising

  3. output is falling

  4. all of the above

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Correct Option: D

Price is the value of a good in terms of:

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

  1. quality

  2. money

  3. substitutes value

  4. none of the above

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Correct Option: B