1. Product strategy primarily focuses on:

• A) Setting promotional budgets
• B) Developing plans for product lines, product mix, and branding
• C) Hiring new employees
• D) Pricing strategies
  Answer: B) Developing plans for product lines, product mix, and branding

2. Product mix refers to:

• A) The variety of distribution channels
• B) The set of all products and services offered by a company
• C) The pricing strategy for one product
• D) Competitor analysis
  Answer: B) The set of all products and services offered by a company

3. Product line refers to:

• A) A single product in a company’s portfolio
• B) A group of related products offered by a company
• C) A marketing budget
• D) A geographic market
  Answer: B) A group of related products offered by a company

4. A company’s product length refers to:

• A) The total number of products within a product line
• B) The total number of product lines
• C) The physical size of the product
• D) The time taken to develop a product
  Answer: A) The total number of products within a product line

5. Line stretching in product strategy refers to:

• A) Reducing the product mix
• B) Expanding a product line by adding products at different price points or quality levels
• C) Focusing only on one product
• D) Ignoring new market opportunities
  Answer: B) Expanding a product line by adding products at different price points or quality levels

6. Line filling is the process of:

• A) Expanding into new markets
• B) Adding more items within the existing range of a product line
• C) Introducing an entirely new product line
• D) Reducing the product portfolio
  Answer: B) Adding more items within the existing range of a product line

7. Product line depth refers to:

• A) The total number of products in a product line
• B) The range of product variations within a specific product line
• C) The number of product lines
• D) The pricing strategy for each product
  Answer: B) The range of product variations within a specific product line

8. Product life cycle (PLC) describes:

• A) The number of times a product is sold
• B) The stages a product goes through from introduction to decline
• C) The competitors’ response to the product
• D) The price changes over time
  Answer: B) The stages a product goes through from introduction to decline

9. In the introduction stage of the product life cycle:

• A) The product is launched, and sales grow slowly
• B) Competitors enter the market
• C) The product is removed from the market
• D) Prices are reduced
  Answer: A) The product is launched, and sales grow slowly

10. The growth stage of the product life cycle is characterized by:

• A) High levels of competition
• B) Increasing sales, market acceptance, and profit growth
• C) Declining sales
• D) Reducing marketing efforts
  Answer: B) Increasing sales, market acceptance, and profit growth

11. Maturity stage in the product life cycle refers to:

• A) A decline in sales and profits
• B) Sales growth slowing down as the product reaches widespread market penetration
• C) The introduction of the product to the market
• D) High investment in product development
  Answer: B) Sales growth slowing down as the product reaches widespread market penetration

12. Decline stage in the product life cycle occurs when:

• A) Sales peak
• B) Sales decrease as the market becomes saturated or new competitors emerge
• C) The product is introduced
• D) Marketing efforts are increased
  Answer: B) Sales decrease as the market becomes saturated or new competitors emerge

13. Product differentiation is achieved by:

• A) Offering the same product as competitors
• B) Creating unique product features or attributes that set the product apart from competitors
• C) Reducing the price
• D) Expanding into new markets
  Answer: B) Creating unique product features or attributes that set the product apart from competitors

14. Packaging plays a role in product strategy because:

• A) It is unrelated to product success
• B) It affects customer perceptions, brand image, and can serve as a tool for differentiation
• C) It only impacts pricing
• D) It has no impact on sales
  Answer: B) It affects customer perceptions, brand image, and can serve as a tool for differentiation

15. Branding in product strategy refers to:

• A) Offering discounts on products
• B) Creating a unique identity and image for a product in the minds of consumers
• C) Focusing only on product pricing
• D) Expanding into international markets
  Answer: B) Creating a unique identity and image for a product in the minds of consumers

Designing and Managing Services

16. Services differ from products because they are:

• A) Tangible
• B) Intangible, inseparable, variable, and perishable
• C) Easily stored
• D) Produced in mass quantities
  Answer: B) Intangible, inseparable, variable, and perishable

17. Intangibility of services means that:

• A) Services can be easily seen and touched
• B) Services cannot be touched or physically measured
• C) Services are easily produced
• D) Services have no impact on customer satisfaction
  Answer: B) Services cannot be touched or physically measured

18. Inseparability in services refers to:

• A) The ability to produce services in advance
• B) The fact that services are produced and consumed simultaneously
• C) Services being difficult to price
• D) Services being tangible
  Answer: B) The fact that services are produced and consumed simultaneously

19. Perishability in services means:

• A) Services can be stored for later use
• B) Services cannot be stored and must be consumed when offered
• C) Services can be mass-produced
• D) Services do not impact customer satisfaction
  Answer: B) Services cannot be stored and must be consumed when offered

20. Service variability refers to:

• A) Services being standardized
• B) Services being inconsistent in quality due to factors such as the provider and conditions
• C) Services always being produced at the same quality
• D) Services having a long shelf life
  Answer: B) Services being inconsistent in quality due to factors such as the provider and conditions

21. The service-profit chain links:

• A) Employee satisfaction to product development
• B) Internal service quality to employee satisfaction, customer satisfaction, and profitability
• C) Product quality to sales growth
• D) Customer complaints to service innovation
  Answer: B) Internal service quality to employee satisfaction, customer satisfaction, and profitability

22. Customer experience management (CEM) is important for services because:

• A) It has no impact on service quality
• B) It focuses on managing all customer touchpoints to ensure a positive experience
• C) It reduces marketing costs
• D) It focuses only on pricing
  Answer: B) It focuses on managing all customer touchpoints to ensure a positive experience

23. Service blueprinting is a tool used to:

• A) Create marketing campaigns
• B) Design and visualize the service delivery process, including customer interactions and service provider activities
• C) Analyze competitor services
• D) Set product prices
  Answer: B) Design and visualize the service delivery process, including customer interactions and service provider activities

24. Managing customer expectations in services is crucial because:

• A) Customers always have low expectations
• B) Customer satisfaction is influenced by the gap between customer expectations and service performance
• C) It reduces marketing efforts
• D) It has no impact on customer loyalty
  Answer: B) Customer satisfaction is influenced by the gap between customer expectations and service performance

25. Moment of truth in services refers to:

• A) The point at which a customer decides to stop using the service
• B) The crucial moments when customers interact with the service provider and form perceptions of service quality
• C) The marketing strategy used by the company
• D) The pricing of the service
  Answer: B) The crucial moments when customers interact with the service provider and form perceptions of service quality

27. Service recovery is defined as:

• A) Ignoring customer complaints
• B) The actions taken by a company to resolve service failures and restore customer satisfaction
• C) Reducing service quality
• D) Offering discounts
  Answer: B) The actions taken by a company to resolve service failures and restore customer satisfaction

28. Internal marketing in service firms focuses on:

• A) Promoting products to customers
• B) Treating employees as internal customers and ensuring their satisfaction to improve service quality
• C) Reducing service offerings
• D) Ignoring employee satisfaction
  Answer: B) Treating employees as internal customers and ensuring their satisfaction to improve service quality

29. Interactive marketing refers to:

• A) Marketing services through online channels only
• B) The quality of the interaction between service employees and customers during service delivery
• C) Promoting products through social media
• D) Managing pricing strategies
  Answer: B) The quality of the interaction between service employees and customers during service delivery

30. Service differentiation is achieved by:

• A) Lowering prices
• B) Providing unique features or superior service quality that sets the service apart from competitors
• C) Reducing the service offerings
• D) Focusing solely on product quality
  Answer: B) Providing unique features or superior service quality that sets the service apart from competitors

31. Customer loyalty in services is built by:

• A) Reducing service quality
• B) Providing consistent, high-quality services and exceeding customer expectations
• C) Increasing prices
• D) Ignoring customer feedback
  Answer: B) Providing consistent, high-quality services and exceeding customer expectations

Introducing New Market Offerings

32. New product development (NPD) is:

• A) Reducing the product portfolio
• B) The process of bringing a new product or service to the market
• C) Focusing only on existing products
• D) Ignoring market research
  Answer: B) The process of bringing a new product or service to the market

33. Idea generation in NPD refers to:

• A) Evaluating product prices
• B) The process of creating, collecting, and developing new product ideas
• C) Reducing marketing budgets
• D) Setting product distribution channels
  Answer: B) The process of creating, collecting, and developing new product ideas

34. Concept testing in NPD is used to:

• A) Evaluate competitors’ strategies
• B) Present the product idea to potential consumers to gauge their reactions
• C) Reduce product prices
• D) Test marketing campaigns
  Answer: B) Present the product idea to potential consumers to gauge their reactions

35. Business analysis in NPD involves:

• A) Reviewing the market segmentation
• B) Assessing the product’s financial viability, including estimated costs, sales, and profits
• C) Creating a new brand identity
• D) Conducting service blueprinting
  Answer: B) Assessing the product’s financial viability, including estimated costs, sales, and profits

36. Test marketing is conducted to:

• A) Launch the product globally
• B) Introduce the product on a limited scale to test its success in the market
• C) Reduce product features
• D) Focus on customer loyalty programs
  Answer: B) Introduce the product on a limited scale to test its success in the market

37. Commercialization is the final stage of NPD, involving:

• A) Reducing the marketing budget
• B) Bringing the product to market through full-scale production, distribution, and promotion
• C) Focusing on existing products
• D) Testing the product with a small audience
  Answer: B) Bringing the product to market through full-scale production, distribution, and promotion

38. Disruptive innovation occurs when:

• A) A company focuses on incremental improvements
• B) A new product significantly changes the market by offering a breakthrough solution that disrupts established competitors
• C) Competitors launch similar products
• D) Market conditions remain stable
  Answer: B) A new product significantly changes the market by offering a breakthrough solution that disrupts established competitors

39. Diffusion of innovation refers to:

• A) The rapid decline of new products
• B) The process by which a new product is adopted by the market over time
• C) Reducing the product development cycle
• D) Focusing only on early adopters
  Answer: B) The process by which a new product is adopted by the market over time

40. Product life cycle extension strategies include:

• A) Ignoring market trends
• B) Introducing product modifications or entering new markets to extend the product’s maturity stage
• C) Reducing the number of product features
• D) Increasing product prices
  Answer: B) Introducing product modifications or entering new markets to extend the product’s maturity stage

41. Incremental innovation refers to:

• A) Completely redesigning a product
• B) Making small, gradual improvements to an existing product
• C) Ignoring customer feedback
• D) Launching a disruptive product
  Answer: B) Making small, gradual improvements to an existing product

42. Open innovation in NPD is:

• A) Developing new products without external input
• B) Using external ideas and collaborations with partners to accelerate innovation
• C) Focusing on reducing product features
• D) Reducing the number of new products
  Answer: B) Using external ideas and collaborations with partners to accelerate innovation

43. Adoption process in NPD refers to:

• A) The company’s internal product testing
• B) The stages consumers go through in accepting a new product, from awareness to final adoption
• C) Setting product prices
• D) Analyzing competitor strategies
  Answer: B) The stages consumers go through in accepting a new product, from awareness to final adoption

44. First-mover advantage in NPD is:

• A) Entering the market after competitors
• B) Being the first to introduce a new product, gaining early market share before competitors
• C) Reducing the marketing budget
• D) Ignoring customer demand
  Answer: B) Being the first to introduce a new product, gaining early market share before competitors

45. Crowdsourcing in NPD refers to:

• A) Conducting internal research only
• B) Seeking input, ideas, and feedback from a large group of people, often customers, to help develop new products
• C) Reducing the number of product lines
• D) Focusing solely on product pricing
  Answer: B) Seeking input, ideas, and feedback from a large group of people, often customers, to help develop new products

Developing Pricing Strategies and Programs

46. Pricing strategy in marketing is critical because:

• A) It has no impact on customer decisions
• B) It directly affects the company’s revenue and profitability, as well as customer perception of the product
• C) It focuses only on competitors
• D) It reduces production costs
  Answer: B) It directly affects the company’s revenue and profitability, as well as customer perception of the product

47. Cost-based pricing is:

• A) Setting prices based on competitor prices
• B) Determining the product price by adding a fixed markup to the cost of producing the product
• C) Ignoring product costs
• D) Setting prices based on customer demand
  Answer: B) Determining the product price by adding a fixed markup to the cost of producing the product

48. Value-based pricing focuses on:

• A) Setting prices based on competitors’ strategies
• B) Setting prices based on the perceived value of the product to the customer
• C) Ignoring customer demand
• D) Reducing marketing budgets
  Answer: B) Setting prices based on the perceived value of the product to the customer

49. Skimming pricing is used when:

• A) A company wants to set a low price to enter the market
• B) A company sets a high price for a new product initially to maximize profit from early adopters, then gradually lowers the price
• C) Competitors reduce their prices
• D) The product is at the decline stage
  Answer: B) A company sets a high price for a new product initially to maximize profit from early adopters, then gradually lowers the price

50. Penetration pricing is defined as:

• A) Setting a high price to recover development costs quickly
• B) Setting a low price for a new product to attract a large number of customers and gain market share quickly
• C) Increasing prices over time
• D) Ignoring competitors’ pricing strategies
  Answer: B) Setting a low price for a new product to attract a large number of customers and gain market share quickly

 

51. Price elasticity of demand refers to:

• A) The impact of product quality on demand
• B) The degree to which changes in price affect the quantity of a product demanded
• C) The effect of competitor actions on product pricing
• D) The relationship between supply and demand
  Answer: B) The degree to which changes in price affect the quantity of a product demanded

52. Break-even pricing involves:

• A) Setting a price that allows the company to cover its costs but not make a profit
• B) Setting prices based on competitor strategies
• C) Offering the lowest possible price
• D) Ignoring production costs
  Answer: A) Setting a price that allows the company to cover its costs but not make a profit

53. Psychological pricing focuses on:

• A) Setting prices based on production costs
• B) Setting prices to create a perception of value or using pricing techniques that affect customer perceptions (e.g., $9.99 vs. $10)
• C) Offering the highest possible price
• D) Reducing marketing budgets
  Answer: B) Setting prices to create a perception of value or using pricing techniques that affect customer perceptions (e.g., $9.99 vs. $10)

54. Prestige pricing is effective when:

• A) The product is low quality
• B) A company wants to signal high quality or exclusivity by setting a higher price
• C) The company offers discounts
• D) Competitors reduce their prices
  Answer: B) A company wants to signal high quality or exclusivity by setting a higher price

55. Dynamic pricing refers to:

• A) Setting the same price for all customers
• B) Adjusting prices based on real-time demand, market conditions, or customer segments (e.g., airline tickets)
• C) Offering a fixed price
• D) Ignoring customer preferences
  Answer: B) Adjusting prices based on real-time demand, market conditions, or customer segments (e.g., airline tickets)

56. Bundle pricing involves:

• A) Setting a single price for individual products
• B) Offering several products together at a lower combined price than if purchased separately
• C) Reducing the number of product offerings
• D) Focusing only on premium products
  Answer: B) Offering several products together at a lower combined price than if purchased separately

57. Optional-product pricing refers to:

• A) Setting a fixed price for a product and its accessories
• B) Pricing optional or accessory products separately from the main product (e.g., car add-ons)
• C) Ignoring additional features
• D) Offering one product only
  Answer: B) Pricing optional or accessory products separately from the main product (e.g., car add-ons)

58. Captive-product pricing is used when:

• A) A company offers products at a premium price
• B) A product requires complementary products, and the company sets a low price for the main product but higher prices for the accessories (e.g., printers and ink cartridges)
• C) Competitors lower their prices
• D) The product is sold at a discount
  Answer: B) A product requires complementary products, and the company sets a low price for the main product but higher prices for the accessories (e.g., printers and ink cartridges)

59. Geographical pricing is based on:

• A) Offering the same price across all regions
• B) Setting different prices for different geographic locations based on factors such as transportation costs or market demand
• C) Ignoring regional differences
• D) Reducing product variety
  Answer: B) Setting different prices for different geographic locations based on factors such as transportation costs or market demand

60. Penetration pricing is most effective when:

• A) The market is highly price-sensitive
• B) The product is a luxury good
• C) Competitors offer lower prices
• D) Customers are not price-sensitive
  Answer: A) The market is highly price-sensitive

61. Freemium pricing involves:

• A) Offering products at full price
• B) Providing basic services or products for free while charging for premium features or services
• C) Offering products at a discount
• D) Reducing product features
  Answer: B) Providing basic services or products for free while charging for premium features or services

62. Price skimming is most effective when:

• A) The market is saturated with competitors
• B) The product is innovative, and there is little competition, allowing the company to set a high initial price
• C) Customers are highly price-sensitive
• D) Competitors offer lower prices
  Answer: B) The product is innovative, and there is little competition, allowing the company to set a high initial price

63. Promotional pricing involves:

• A) Setting a fixed price
• B) Temporarily lowering prices to increase short-term sales (e.g., discounts, rebates, or special promotions)
• C) Increasing prices for premium products
• D) Reducing product offerings
  Answer: B) Temporarily lowering prices to increase short-term sales (e.g., discounts, rebates, or special promotions)

64. Reference pricing is a strategy where:

• A) A company sets prices based on production costs
• B) A company displays a higher price alongside a discounted price to make the lower price more appealing to consumers
• C) A company offers no discounts
• D) A company ignores competitor prices
  Answer: B) A company displays a higher price alongside a discounted price to make the lower price more appealing to consumers

65. Two-part pricing involves:

• A) Charging customers one fixed fee
• B) Charging a fixed fee plus a variable usage fee (e.g., cell phone plans)
• C) Offering one product at a time
• D) Ignoring customer usage
  Answer: B) Charging a fixed fee plus a variable usage fee (e.g., cell phone plans)

66. Yield management is a pricing strategy used by:

• A) Setting fixed prices for all customers
• B) Adjusting prices based on demand to maximize revenue from available capacity (e.g., hotels and airlines)
• C) Offering no discounts
• D) Focusing only on product availability
  Answer: B) Adjusting prices based on demand to maximize revenue from available capacity (e.g., hotels and airlines)

67. Dynamic pricing is common in:

• A) The airline, hospitality, and e-commerce industries where prices are adjusted in real-time based on demand and supply conditions
• B) The manufacturing sector where prices remain fixed
• C) Grocery stores where prices are set once
• D) The retail industry where discounts are rare
  Answer: A) The airline, hospitality, and e-commerce industries where prices are adjusted in real-time based on demand and supply conditions

68. Price discrimination occurs when:

• A) The same price is offered to all customers
• B) Different prices are charged to different customers based on factors such as time, location, or customer characteristics
• C) Customers are offered discounts
• D) Competitors lower their prices
  Answer: B) Different prices are charged to different customers based on factors such as time, location, or customer characteristics

69. Odd-even pricing is based on:

• A) Setting prices based on customer demand
• B) Setting prices just below a round number (e.g., $19.99 instead of $20) to make the price seem lower
• C) Offering high-end products
• D) Charging one price for all products
  Answer: B) Setting prices just below a round number (e.g., $19.99 instead of $20) to make the price seem lower

70. Price wars can result in:

• A) Increased profits for all competitors
• B) Reduced profitability for all players as companies lower prices to undercut each other
• C) Improved brand loyalty
• D) Increased customer satisfaction
  Answer: B) Reduced profitability for all players as companies lower prices to undercut each other

71. Price lining is a strategy where:

• A) All products are offered at one price
• B) Different products within a product line are set at different price points based on their features or benefits
• C) The same price is charged for all products in a category
• D) Products are discounted equally
  Answer: B) Different products within a product line are set at different price points based on their features or benefits

72. Seasonal pricing involves:

• A) Offering the same price year-round
• B) Setting different prices depending on the season or time of year (e.g., higher prices during peak seasons)
• C) Reducing prices in off-seasons
• D) Ignoring market conditions
  Answer: B) Setting different prices depending on the season or time of year (e.g., higher prices during peak seasons)

73. Geographic pricing allows companies to:

• A) Charge the same price worldwide
• B) Adjust prices for different regions or countries based on local market conditions, taxes, or shipping costs
• C) Reduce product features
• D) Focus solely on domestic markets
  Answer: B) Adjust prices for different regions or countries based on local market conditions, taxes, or shipping costs

74. Price fixing is illegal because:

• A) It raises profits
• B) It involves agreements between competitors to set prices at certain levels, which restricts competition and harms consumers
• C) It improves brand equity
• D) It encourages customer loyalty
  Answer: B) It involves agreements between competitors to set prices at certain levels, which restricts competition and harms consumers

75. Price sensitivity refers to:

• A) The degree to which a change in price affects consumer demand for a product or service
• B) The impact of competitors on pricing
• C) How prices affect supplier relationships
• D) Reducing product costs
  Answer: A) The degree to which a change in price affects consumer demand for a product or service

76. Markup pricing is calculated by:

• A) Adding a percentage to the cost of the product to determine the selling price
• B) Setting prices based on competitor actions
• C) Ignoring production costs
• D) Offering discounts to customers
  Answer: A) Adding a percentage to the cost of the product to determine the selling price

77. Target return pricing focuses on:

• A) Setting a price to achieve a specific return on investment or profit goal
• B) Matching competitors’ prices
• C) Reducing production costs
• D) Increasing product features
  Answer: A) Setting a price to achieve a specific return on investment or profit goal

78. Cost-plus pricing involves:

• A) Setting prices based on market demand
• B) Adding a standard markup to the product’s cost to determine the selling price
• C) Offering products at a loss
• D) Ignoring competitor strategies
  Answer: B) Adding a standard markup to the product’s cost to determine the selling price

79. Price leadership occurs when:

• A) A company sets prices that are followed by competitors in the industry
• B) A company offers the lowest price
• C) Competitors avoid price competition
• D) Prices are set based on production costs
  Answer: A) A company sets prices that are followed by competitors in the industry

80. Discount pricing refers to:

• A) Charging the highest price possible
• B) Offering price reductions to encourage immediate purchase or bulk buying
• C) Ignoring market demand
• D) Raising prices to cover costs
  Answer: B) Offering price reductions to encourage immediate purchase or bulk buying

81. Loss-leader pricing involves:

• A) Setting the price of a product above its competitors
• B) Selling a product at a loss to attract customers, hoping they will purchase additional items at full price
• C) Ignoring customer preferences
• D) Focusing solely on high-margin products
  Answer: B) Selling a product at a loss to attract customers, hoping they will purchase additional items at full price

82. Transfer pricing is used in:

• A) Consumer transactions
• B) Pricing goods or services sold between divisions within the same company, often in different countries
• C) Setting retail prices
• D) Offering promotional discounts
  Answer: B) Pricing goods or services sold between divisions within the same company, often in different countries

83. Dual pricing occurs when:

• A) A company charges the same price in all markets
• B) A company sets different prices for the same product in different markets or through different channels
• C) Prices remain fixed
• D) Competitors agree on pricing strategies
  Answer: B) A company sets different prices for the same product in different markets or through different channels

84. Promotional allowances are:

• A) Discounts given to consumers
• B) Price reductions offered to retailers or wholesalers to promote a product
• C) Reductions in production costs
• D) Temporary price increases
  Answer: B) Price reductions offered to retailers or wholesalers to promote a product

85. Volume discount refers to:

• A) A price increase for larger orders
• B) A reduction in price for purchasing in larger quantities
• C) Ignoring market demand
• D) Reducing the number of products
  Answer: B) A reduction in price for purchasing in larger quantities

86. Seasonal discounts are used to:

• A) Reduce the price of products during specific times of the year to encourage purchases
• B) Increase prices during peak seasons
• C) Offer discounts only on high-end products
• D) Focus on reducing product features
  Answer: A) Reduce the price of products during specific times of the year to encourage purchases

87. Everyday low pricing (EDLP) is a strategy where:

• A) Prices fluctuate frequently
• B) A company sets low prices consistently rather than offering temporary discounts
• C) Prices are set high to signal quality
• D) Discounts are offered for a limited time
  Answer: B) A company sets low prices consistently rather than offering temporary discounts

88. Auction pricing is commonly used for:

• A) Mass-produced products
• B) Unique or scarce items, where prices are determined by competitive bidding
• C) Reducing the price of everyday goods
• D) Ignoring customer preferences
  Answer: B) Unique or scarce items, where prices are determined by competitive bidding

89. Price matching is a policy where:

• A) A company ignores competitor prices
• B) A company agrees to match the lower price offered by a competitor
• C) Prices are set above competitors
• D) Discounts are rarely offered
  Answer: B) A company agrees to match the lower price offered by a competitor

90. Dynamic pricing can be risky because:

• A) It offers the same price to all customers
• B) Customers may feel prices are unfair if they fluctuate too frequently
• C) It increases customer loyalty
• D) It ignores market demand
  Answer: B) Customers may feel prices are unfair if they fluctuate too frequently

91. Trade-in allowances are:

• A) Discounts given to customers for trading in old products when purchasing new ones
• B) Price increases for premium products
• C) Temporary reductions in price
• D) Reducing product variety
  Answer: A) Discounts given to customers for trading in old products when purchasing new ones

92. Flexible pricing means:

• A) Setting the same price for all products
• B) Allowing prices to vary based on factors like customer negotiation or purchase conditions
• C) Offering fixed prices
• D) Reducing the number of product lines
  Answer: B) Allowing prices to vary based on factors like customer negotiation or purchase conditions

93. Freemium pricing works best in industries like:

• A) Grocery retail
• B) Software and digital services, where basic services are free, and premium features are available for a fee
• C) Automotive
• D) Heavy manufacturing
  Answer: B) Software and digital services, where basic services are free, and premium features are available for a fee

94. Markup percentage is calculated by:

• A) Dividing the cost of goods by the selling price
• B) Dividing the profit margin by the selling price
• C) Dividing the selling price by the cost of goods and multiplying by 100
• D) Ignoring product costs
  Answer: C) Dividing the selling price by the cost of goods and multiplying by 100

95. Unit pricing helps consumers by:

• A) Confusing price comparisons
• B) Displaying the price per unit of measure (e.g., per ounce, per liter), making it easier to compare prices across different package sizes
• C) Offering fixed prices
• D) Reducing product availability
  Answer: B) Displaying the price per unit of measure (e.g., per ounce, per liter), making it easier to compare prices across different package sizes

96. Price bundling is effective when:

• A) Customers are willing to pay more for individual products
• B) Products are sold together at a discount, encouraging customers to purchase more items
• C) Competitors offer lower prices
• D) The company focuses solely on premium products
  Answer: B) Products are sold together at a discount, encouraging customers to purchase more items

97. Premium pricing targets:

• A) Price-sensitive customers
• B) Customers who are willing to pay more for high-quality or exclusive products
• C) Customers who prefer discounts
• D) Customers who are looking for basic goods
  Answer: B) Customers who are willing to pay more for high-quality or exclusive products

98. Bait-and-switch pricing is considered unethical because:

• A) It offers consistent prices
• B) It involves advertising a low-priced product to attract customers, but then pushing them to buy a higher-priced alternative
• C) It offers discounts for bulk purchases
• D)Here is the final part of Developing Pricing Strategies and Programs from Philip Kotler’s “Marketing Management”:

98. Bait-and-switch pricing is considered unethical because:

• A) It offers consistent prices
• B) It involves advertising a low-priced product to attract customers, but then pushing them to buy a higher-priced alternative
• C) It offers discounts for bulk purchases
• D) It provides product bundles
  Answer: B) It involves advertising a low-priced product to attract customers, but then pushing them to buy a higher-priced alternative

99. Price adjustment strategies are used to:

• A) Keep prices the same across all markets
• B) Adjust prices for different market conditions, customer segments, or geographical locations
• C) Increase customer complaints
• D) Offer only premium pricing
  Answer: B) Adjust prices for different market conditions, customer segments, or geographical locations

100. Promotional pricing can be risky because:

• A) It increases long-term brand loyalty
• B) It may erode brand equity and lead customers to expect ongoing discounts
• C) It reduces production costs
• D) It improves profitability in all cases
  Answer: B) It may erode brand equity and lead customers to expect ongoing discounts