Which of the following best defines price in marketing?
A) The sum of all values that buyers exchange for the benefits of having or using a product or service
B) The cost of manufacturing the product
C) The total of production and distribution costs
D) The value sellers receive from suppliers
Answer: A

Which pricing objective focuses on capturing market share quickly?
A) Market skimming pricing
B) Market penetration pricing
C) Premium pricing
D) Loss leader pricing
Answer: B

The concept of “value-based pricing” means pricing is based on:
A) Competitor’s costs
B) Customer’s perceived value
C) Company’s profit targets
D) Manufacturing efficiency
Answer: B

Which pricing method begins with determining the desired profit margin?
A) Cost-plus pricing
B) Value-based pricing
C) Break-even pricing
D) Target-return pricing
Answer: D

The “psychological pricing” approach mainly focuses on:
A) Production costs
B) Competitor’s reactions
C) Customer perception of price
D) Market share goals
Answer: C

Which of the following is an example of promotional pricing?
A) Charging the same price in all markets
B) Temporarily reducing price to boost sales
C) Setting prices based on customer lifetime value
D) Using dynamic pricing software
Answer: B

Price elasticity of demand measures:
A) How cost changes with production volume
B) The sensitivity of demand to price changes
C) The rate of market growth
D) The distribution channel efficiency
Answer: B

A company that sets high initial prices to skim maximum revenue layer by layer is using:
A) Penetration pricing
B) Skimming pricing
C) Parity pricing
D) Competitive pricing
Answer: B

Which term refers to selling products below cost to attract customers?
A) Value pricing
B) Loss leader pricing
C) Prestige pricing
D) Differential pricing
Answer: B

Which is not a factor affecting pricing decisions?
A) Costs
B) Brand positioning
C) Employee satisfaction
D) Competitors’ prices
Answer: C

The “reference price” concept refers to:
A) Government-mandated prices
B) Prices customers expect to pay
C) Prices quoted by competitors
D) Prices derived from cost analysis
Answer: B

What is the main purpose of sales promotion?
A) To increase long-term loyalty
B) To provide immediate incentive to buy
C) To improve production efficiency
D) To reduce distribution costs
Answer: B

Which of the following is a consumer promotion tool?
A) Trade allowance
B) Advertising
C) Coupons
D) Personal selling
Answer: C

A temporary price reduction used to stimulate short-term sales is known as:
A) Value discount
B) Price pack
C) Promotional discount
D) Trade-in allowance
Answer: B

“Trade promotions” are primarily targeted at:
A) Consumers
B) Retailers and wholesalers
C) Competitors
D) Media agencies
Answer: B

Which sales promotion tool offers customers the chance to win prizes?
A) Coupons
B) Contests
C) Rebates
D) Premiums
Answer: B

A rebate is best defined as:
A) A cash refund after purchase
B) A discount before purchase
C) A long-term price reduction
D) A free sample with purchase
Answer: A

The term “price discrimination” refers to:
A) Charging different prices to different buyers for the same product
B) Charging all customers the same price
C) Setting prices based on competitor cost
D) Offering seasonal discounts
Answer: A

Which pricing strategy adjusts prices continually to meet market conditions?
A) Dynamic pricing
B) Skimming pricing
C) Psychological pricing
D) Bundle pricing
Answer: A

Which of the following is a type of business promotion?
A) Coupons
B) Trade shows
C) Rebates
D) Sweepstakes
Answer: B

“Everyday low pricing (EDLP)” aims to:
A) Maximize profit per sale
B) Maintain consistently low prices to build trust
C) Use frequent discounts to increase sales
D) Set the highest market price possible
Answer: B

What is the goal of “high-low pricing”?
A) Keep prices low at all times
B) Alternate between high regular prices and frequent promotions
C) Price below competitors permanently
D) Avoid promotions altogether
Answer: B

A company that sells a base product cheaply but charges heavily for accessories uses:
A) Captive product pricing
B) Bundle pricing
C) Value pricing
D) Prestige pricing
Answer: A

Which of the following is an advantage of price bundling?
A) It reduces customer perceived value
B) It simplifies decision making for customers
C) It increases inventory costs
D) It discourages repeat purchase
Answer: B

The breakeven point occurs when:
A) Fixed costs equal variable costs
B) Total costs equal total revenue
C) Revenue equals marginal cost
D) Sales equal gross profit
Answer: B

The practice of setting prices below cost with intent to drive competitors out is called:
A) Predatory pricing
B) Loss leader pricing
C) Promotional pricing
D) Dumping
Answer: A

The “fair price” concept is most closely tied to:
A) Customer perceived value
B) Industry regulation
C) Production efficiency
D) Internal cost accounting
Answer: A

Which pricing method uses competitors’ prices as the main reference point?
A) Value-based pricing
B) Competition-based pricing
C) Cost-plus pricing
D) Psychological pricing
Answer: B

Which is a characteristic of effective sales promotion?
A) Long-term impact only
B) Easily measurable short-term results
C) No effect on consumer behavior
D) It replaces advertising
Answer: B

The term “allowance” in trade promotion refers to:
A) Discount given to consumers directly
B) Incentive to retailers for promotional efforts
C) Compensation for salespersons
D) Refund to end buyers
Answer: B

Premiums in sales promotion are:
A) Free or low-cost items offered as incentives
B) Coupons for discounts
C) Refund certificates
D) Sweepstakes entries
Answer: A

A “push strategy” in promotions primarily targets:
A) Final consumers
B) Distribution channel members
C) Competitors
D) Media agencies
Answer: B

“Pull strategy” promotions mainly target:
A) Wholesalers
B) Retailers
C) Consumers
D) Distributors
Answer: C

The “price-quality inference” occurs when:
A) Consumers assume higher price means higher quality
B) Consumers ignore price information
C) Firms increase prices to clear inventory
D) Competitors set the same price
Answer: A

Which of the following is a risk of frequent price promotions?
A) Strengthening brand equity
B) Encouraging price sensitivity
C) Increasing customer loyalty
D) Enhancing value perception
Answer: B

Price lining means:
A) Offering products at several price points within a range
B) Pricing all items equally
C) Using different brands for different segments
D) Setting random prices
Answer: A

A company offering discounts for off-season purchases is using:
A) Seasonal pricing
B) Captive pricing
C) Dynamic pricing
D) Premium pricing
Answer: A

Which is a trade-oriented sales promotion tool?
A) Free samples
B) Display allowances
C) Coupons
D) Sweepstakes
Answer: B

Which of the following is a key objective of pricing strategy?
A) Reducing perceived value
B) Matching brand positioning
C) Ignoring competition
D) Maximizing distribution costs
Answer: B

The law that restricts price fixing between competitors is called:
A) Sherman Antitrust Act
B) Robinson-Patman Act
C) Clayton Act
D) Lanham Act
Answer: A

The “reference value” concept in pricing means:
A) Comparing price to cost
B) Evaluating a price against perceived alternatives
C) Fixing price by regulation
D) Using only cost-based formula
Answer: B

A common disadvantage of price promotion is:
A) Short-term sales lift
B) Customer retention
C) Brand erosion
D) Increased profitability
Answer: C

The most common objective of sales promotions is to:
A) Maintain long-term relationships
B) Stimulate immediate sales
C) Support production scheduling
D) Reduce distribution complexity
Answer: B

Which is a form of business-to-business sales promotion?
A) Samples
B) Trade fairs
C) Coupons
D) Sweepstakes
Answer: B

Which is an internal factor influencing price setting?
A) Cost structure
B) Exchange rate
C) Government regulation
D) Competitor behavior
Answer: A

Which of the following reflects “prestige pricing”?
A) High price to signal superior quality
B) Price matching competitors
C) Continuous discounts
D) Bundle offers
Answer: A

Which of the following represents an unethical pricing practice?
A) Penetration pricing
B) Predatory pricing
C) Value pricing
D) Psychological pricing
Answer: B

What is the main objective of promotional allowances?
A) Reward retailers for promoting products
B) Compensate consumers for complaints
C) Reduce transportation costs
D) Encourage bulk production
Answer: A

“Channel stuffing” is an unethical practice involving:
A) Forcing excessive inventory into the channel
B) Offering fair trade allowances
C) Discounting obsolete goods
D) Offering coupons for trial
Answer: A

The main difference between advertising and sales promotion is that:
A) Advertising is short-term, promotions are long-term
B) Sales promotions aim for immediate results, advertising builds brand image
C) Both are identical in goals
D) Advertising always includes discounts
Answer: B

Price is the only element in the marketing mix that directly produces
A) Revenue
B) Cost
C) Brand equity
D) Customer loyalty
Answer: A

When demand hardly changes with a small change in price, demand is said to be
A) Elastic
B) Inelastic
C) Unitary
D) Derived
Answer: B

In value-based pricing, the starting point for setting price is
A) Customer perceived value
B) Competitor price
C) Cost of production
D) Target profit
Answer: A

The strategy of pricing optional or accessory products along with the main product is called
A) Product-line pricing
B) Captive-product pricing
C) Optional-product pricing
D) By-product pricing
Answer: C

The term “price ceiling” refers to
A) The lowest price consumers will accept
B) The highest price customers perceive as fair
C) The cost floor
D) The government-regulated minimum
Answer: B

When companies offer several products at a reduced combined price, it is known as
A) Bundle pricing
B) Dynamic pricing
C) Skimming pricing
D) Psychological pricing
Answer: A

Which pricing approach ignores current demand and competition?
A) Cost-plus pricing
B) Value-based pricing
C) Competition-based pricing
D) Target-return pricing
Answer: A

The relationship between price and perceived quality is strongest for
A) Convenience goods
B) Shopping goods
C) Specialty goods
D) Unsought goods
Answer: C

A “two-part pricing” strategy typically includes
A) Fixed fee plus variable usage fee
B) Base price plus delivery fee
C) Dealer markup plus trade discount
D) Seasonal discount plus volume discount
Answer: A

Price sensitivity tends to decrease when
A) There are many substitutes
B) The product is a necessity
C) The purchase is large
D) Switching costs are low
Answer: B

A “geographical pricing” policy that charges all customers the same delivered price is called
A) FOB-origin pricing
B) Uniform-delivered pricing
C) Zone pricing
D) Basing-point pricing
Answer: B

The term “transfer price” refers to
A) Price charged between divisions of the same company
B) Price charged to final consumers
C) Freight cost to distributors
D) Import duty cost
Answer: A

The Robinson-Patman Act in the U.S. primarily addresses
A) Predatory pricing
B) Price discrimination
C) Dumping practices
D) Price fixing
Answer: B

Which promotion tool directly reduces the price to buyers?
A) Coupon
B) Cash refund
C) Price pack
D) Rebate
Answer: C

The total cost curve includes
A) Only fixed costs
B) Only variable costs
C) Both fixed and variable costs
D) Marginal cost only
Answer: C

“Odd-even pricing” is used to
A) Simplify accounting
B) Convey psychological value perception
C) Avoid competition
D) Equalize taxes
Answer: B

In “penetration pricing,” a low price is set to
A) Maximize profit per unit
B) Enter the market quickly and deeply
C) Maintain exclusivity
D) Discourage price-sensitive buyers
Answer: B

A promotional tool used to encourage repeat purchase by rewarding customers is
A) Loyalty program
B) Rebate
C) Contest
D) Price pack
Answer: A

Which of the following is a risk of using coupons excessively?
A) Increases brand equity
B) Creates dependency and reduces regular buying
C) Raises perceived value
D) Improves shelf positioning
Answer: B

Trade-in allowances are typically used to
A) Encourage retailers to display the brand
B) Encourage consumers to exchange old items
C) Provide cash refunds
D) Reduce shipping cost
Answer: B

“Seasonal discounts” are used to
A) Even out production and sales over time
B) Reward quick payments
C) Reward large-volume buyers
D) Reduce shipping cost
Answer: A

What is the term for pricing multiple products to ensure profitability of the entire line?
A) Target-return pricing
B) Product-line pricing
C) Prestige pricing
D) Psychological pricing
Answer: B

Which of the following helps measure promotion effectiveness?
A) Breakeven analysis
B) Redemption rate
C) Cost-plus markup
D) ROI on advertising
Answer: B

“Dealer loader” in trade promotions means
A) Free gifts to dealers for purchase of certain quantities
B) Advertising allowance
C) Display discount
D) Volume-based rebate
Answer: A

Which pricing method adds a standard markup to the cost?
A) Value-based
B) Cost-plus
C) Demand-based
D) Dynamic
Answer: B

“Cash discounts” are mainly offered to
A) Encourage early payment
B) Increase list price
C) Reduce purchase frequency
D) Reward brand loyalty
Answer: A

When a company charges different prices to different customers based on order size or location, it is using
A) Variable pricing
B) Differential pricing
C) One-price policy
D) Bundle pricing
Answer: B

Which of the following is not a consumer-oriented sales promotion?
A) Coupons
B) Price packs
C) Dealer contest
D) Samples
Answer: C

Which sales promotion tool offers delayed rewards?
A) Premiums
B) Rebates
C) Coupons
D) Contests
Answer: B

“Bonus pack” offers are designed to
A) Increase profit margins
B) Provide more quantity at the same price
C) Increase price perception
D) Reduce loyalty
Answer: B

A “price war” can lead to
A) Higher profits for all
B) Long-term brand equity improvement
C) Erosion of industry profitability
D) Stable market shares
Answer: C

“Event marketing” as a promotion tool involves
A) Hosting or sponsoring events to engage consumers
B) Distributing price coupons
C) Creating online ads
D) Conducting sales contests
Answer: A

Which of the following is true for direct price promotions?
A) They increase long-term brand loyalty
B) They generate immediate sales responses
C) They are purely public-relations activities
D) They have no effect on brand image
Answer: B

“Trade contests” are aimed at
A) Final consumers
B) Salespeople or retailers
C) Competitors
D) Distributors only
Answer: B

A marketing manager lowering prices in response to a competitor’s move is practicing
A) Reactive pricing
B) Cost-based pricing
C) Penetration pricing
D) Value pricing
Answer: A

When a company offers multiple price levels for different versions of a product, it uses
A) Tiered pricing
B) Psychological pricing
C) Promotional pricing
D) Parity pricing
Answer: A

“Dumping” refers to
A) Selling abroad below cost or market price
B) Selling obsolete goods domestically
C) Pricing lower for loyal customers
D) Giving trade discounts
Answer: A

A high-price, high-promotion combination usually aims at
A) Mass-market penetration
B) Selective niche building
C) Cost leadership
D) Volume sales
Answer: B

Which promotion tool provides the highest short-term sales boost?
A) Advertising
B) Sales promotion
C) Public relations
D) Direct marketing
Answer: B

The objective of “price signaling” in oligopolistic markets is to
A) Manipulate consumers
B) Indirectly coordinate competitor pricing
C) Reduce elasticity
D) Increase production
Answer: B

When a company prices its product to match or beat competitor prices, it uses
A) Parity pricing
B) Competitive pricing
C) Dynamic pricing
D) Target-return pricing
Answer: B

The difference between list price and actual selling price after discounts is called
A) Price spread
B) Net price
C) Allowance margin
D) Contribution margin
Answer: B

“Dealer incentive programs” are designed to
A) Encourage brand switching by consumers
B) Motivate intermediaries to push a brand
C) Increase production capacity
D) Lower promotional costs
Answer: B

When firms adjust prices for different customer segments, it is known as
A) Segmented pricing
B) Uniform pricing
C) Seasonal pricing
D) Dynamic pricing
Answer: A

“Free sample” promotions are primarily used for
A) Mature products
B) New product trials
C) Premium brands
D) Price-sensitive markets only
Answer: B

The risk of “deal proneness” among consumers arises due to
A) Frequent exposure to promotions
B) Poor quality perception
C) Lack of competition
D) Overpricing
Answer: A

A firm lowering prices to gain temporary market share and then raising them is practicing
A) Predatory pricing
B) Penetration pricing
C) Bait-and-switch
D) Price skimming
Answer: A

“Invoicing terms” specifying responsibility for freight and insurance relate to
A) Geographical pricing
B) Psychological pricing
C) Dynamic pricing
D) Transfer pricing
Answer: A

Which sales promotion objective aims at gaining new distribution outlets?
A) Consumer pull
B) Trade push
C) Loyalty reinforcement
D) Brand repositioning
Answer: B

The most appropriate measure for evaluating trade promotion success is
A) Retailer participation rate
B) Advertising recall
C) Coupon redemption
D) Market awareness score
Answer: A

Price is often considered a cue for quality when
A) Product differences are easy to assess
B) Consumers lack information about quality
C) Brand image is weak
D) Market is price-sensitive
Answer: B

A company that sells software subscriptions with monthly payments uses
A) Captive pricing
B) Subscription pricing
C) Prestige pricing
D) Skimming pricing
Answer: B

The “cost floor” in pricing decisions refers to
A) The maximum price customers will pay
B) The minimum price the firm can charge without loss
C) The average industry price
D) The competitor’s lowest price
Answer: B

When customers perceive higher price as higher status, it demonstrates
A) Reference pricing
B) Prestige pricing
C) Dynamic pricing
D) Value-based pricing
Answer: B

A firm that sets different prices for the same product in different regions follows
A) Geographical pricing
B) Uniform-delivered pricing
C) Psychological pricing
D) Seasonal pricing
Answer: A

A “bait-and-switch” promotion is considered
A) Ethical value pricing
B) Deceptive pricing
C) Dynamic discounting
D) Competitive pricing
Answer: B

Which factor is external in pricing decisions?
A) Marketing objectives
B) Cost structure
C) Demand elasticity
D) Distribution strategy
Answer: C

The key advantage of “price lining” is
A) Simplifies customer choices
B) Reduces elasticity
C) Hides price differences
D) Discourages comparison
Answer: A

A “loss-leader” strategy is most effective for
A) Premium luxury brands
B) Increasing store traffic
C) Long-term price stability
D) Building brand loyalty
Answer: B

In global pricing, “dumping” refers to
A) Selling abroad at below domestic or cost price
B) Charging a premium in foreign markets
C) Avoiding export duties
D) Exporting obsolete goods
Answer: A

A price-setting process that relies heavily on analytics and AI is called
A) Value-based pricing
B) Algorithmic pricing
C) Cost-plus pricing
D) Price signaling
Answer: B

Which strategy uses temporary price reductions to boost short-term sales?
A) Everyday low pricing
B) Promotional pricing
C) Value pricing
D) Prestige pricing
Answer: B

A firm pricing complementary products such as printers and cartridges applies
A) Captive-product pricing
B) Optional-product pricing
C) Product-bundle pricing
D) Cost-plus pricing
Answer: A

When a product is priced low to prevent new competitors from entering, it’s
A) Predatory pricing
B) Penetration pricing
C) Skimming pricing
D) Value pricing
Answer: A

Which of the following is NOT a sales promotion tool?
A) Coupons
B) Premiums
C) Publicity
D) Rebates
Answer: C

What is the key objective of “push money”?
A) Encourage consumers to try the brand
B) Motivate salespeople or dealers to sell more
C) Provide free samples
D) Promote online traffic
Answer: B

“High-low pricing” mixes which two elements?
A) Constant discounts and low margins
B) Regular high prices with frequent promotions
C) Seasonal high pricing only
D) Permanent low prices
Answer: B

A company offering 10% off to customers who pay within 30 days provides
A) Quantity discount
B) Cash discount
C) Trade allowance
D) Functional discount
Answer: B

A “functional discount” compensates
A) Retailers for performing certain channel functions
B) Customers for bulk orders
C) Consumers for early payment
D) Distributors for geographic distance
Answer: A

The “price corridor” represents
A) Range between minimum acceptable and maximum perceived value
B) Competitor pricing benchmark
C) Average of historical prices
D) Government-approved range
Answer: A

Price elasticity is likely to be higher when
A) Product has many substitutes
B) Product is a necessity
C) Switching cost is high
D) Brand loyalty is strong
Answer: A

“Everyday low pricing (EDLP)” minimizes
A) Advertising cost
B) Frequent discounting and customer confusion
C) Channel conflicts
D) Product differentiation
Answer: B

A “reverse auction” system allows
A) Buyers to compete by lowering prices
B) Sellers to bid for buyer’s business
C) Price fixing among sellers
D) Governments to set prices
Answer: B

When a company charges one price domestically and another internationally, it practices
A) Dual pricing
B) Transfer pricing
C) Zone pricing
D) Value pricing
Answer: A

The “breakeven chart” visually represents the relationship between
A) Price, demand, and competition
B) Cost, volume, and profit
C) Sales, advertising, and market share
D) Supply, demand, and elasticity
Answer: B

In trade promotions, “slotting allowances” refer to
A) Fees paid to retailers for shelf space
B) Discounts for large orders
C) Cash refunds to customers
D) Incentives for advertising support
Answer: A

A price reduction used to move slow-moving inventory is
A) Seasonal discount
B) Clearance pricing
C) Trade allowance
D) Psychological discount
Answer: B

Price discrimination is acceptable when
A) It is intended to harm competition
B) It reflects cost differences
C) It deceives consumers
D) It violates antitrust law
Answer: B

“Dynamic pricing” is most commonly used in
A) Airlines and ride-sharing industries
B) Food retailing
C) Pharmaceuticals
D) Manufacturing
Answer: A

“Coupon redemption rate” is a measure of
A) Distribution efficiency
B) Promotion effectiveness
C) Channel loyalty
D) Advertising recall
Answer: B

The “price perception index” measures
A) Brand equity
B) How consumers view price fairness
C) Market share
D) Sales growth
Answer: B

“Trade loading” occurs when
A) Manufacturers push excessive inventory on intermediaries
B) Consumers buy more than needed
C) Competitors raise prices simultaneously
D) Wholesalers offer rebates
Answer: A

The purpose of “by-product pricing” is to
A) Reduce waste and recover cost
B) Increase core product price
C) Segment markets
D) Boost perceived value
Answer: A

The “zero-price effect” explains that
A) Consumers overvalue free offers
B) Demand becomes zero beyond high prices
C) Elasticity turns negative
D) Premium pricing fails
Answer: A

Which act prohibits deceptive pricing in the U.S.?
A) Sherman Antitrust Act
B) Robinson-Patman Act
C) Wheeler-Lea Amendment
D) Lanham Act
Answer: C

“Instant redeemable coupons” are applied
A) At the time of purchase
B) Post-purchase via mail
C) As online codes
D) Through loyalty cards
Answer: A

Price sensitivity decreases when
A) Purchase is infrequent or prestige-oriented
B) Switching cost is low
C) Alternatives are abundant
D) Income is low
Answer: A

The “anchoring effect” in pricing means
A) Initial prices influence later judgments of value
B) Customers compare only competitors’ prices
C) Price changes affect supply chain
D) Discounts create loyalty
Answer: A

A “market-skimming” strategy is most suitable when
A) Product is easily copied
B) Demand is price-sensitive
C) Early adopters value innovation
D) Market is saturated
Answer: C

“Loyalty rebates” reward
A) Retailers stocking competitors
B) Customers for repeated purchases
C) Suppliers for on-time delivery
D) Wholesalers for credit terms
Answer: B

The key drawback of heavy couponing is
A) Lower redemption rates
B) Reduced brand loyalty and profitability
C) Increased market penetration
D) Better tracking data
Answer: B

“Reference pricing” in marketing means
A) Comparing current price to an internal or external standard
B) Government-regulated price listing
C) Uniform pricing across products
D) Standardized markup practice
Answer: A

“Freemium” pricing is common in
A) Physical retail
B) Software and digital services
C) Automotive sales
D) Manufacturing
Answer: B

A company’s ability to raise prices without losing customers is called
A) Pricing power
B) Market elasticity
C) Brand flexibility
D) Value leverage
Answer: A

When customers buy due to urgency created by discounts, it’s an example of
A) Transactional promotion
B) Scarcity effect
C) Loyalty discount
D) Pull strategy
Answer: B

The combination of advertising and short-term incentives is known as
A) Integrated marketing communication
B) Hybrid promotion
C) Brand activation
D) Promotion mix synergy
Answer: A

“Cents-off labels” are an example of
A) Price pack deals
B) Premiums
C) Sweepstakes
D) Loyalty reward
Answer: A

A “pull” strategy in promotion seeks to
A) Convince wholesalers to stock more
B) Encourage end customers to demand the product
C) Reward trade partners
D) Increase retail margins
Answer: B

“Fair-trade pricing” emphasizes
A) Ethical sourcing and social responsibility
B) Price matching competitors
C) Maximizing shareholder return
D) Dynamic price optimization
Answer: A

In digital marketing, “real-time bidding” is a form of
A) Dynamic pricing for ad space
B) Auction for physical goods
C) Loyalty program
D) Skimming strategy
Answer: A