LSUS Chen- MBA 706 Module 4 Questions and Answers 100% Accurate
Question : Cost reductions
Correct answer: Products are modified to provide similar
performance but at a lower cost: ex: iphone XS vs Iphone XR
Question : Price
Correct answer: Pricing decisions are hard to make due to the
complexity of interaction among consumers, competitors, and
the distribution network: and decisions are made quickly
without testing - usually there is a large and aggressive company who determines the prices from the industry, and almost all other companies are obliged to follow, except a few niche companies
Question : Pricing strategy
Correct answer: Price takers: - follow the prices set by other
firms Price makers: - Possess the market power to determine
the levels and patterns of price that others follow
Question : Price takers
Correct answer: - follow the prices set by other firms
Question : Price makers
Correct answer: - Possess the market power to determine the
levels and patterns of price that others follow
Question : Meeting or following competition
Correct answer: Follow competitor's prices until establishing
a good reputation
Question : Single segment concentration
Correct answer: - firms focus on a single segment - very high-
risk strategy, but usually works well for small companies - this type of concentrated marketing efforts can develop a strong market position ( brand image of specialist)
Question : Survival
Correct answer: Prices are reduced to below cost in order to
maintain a sufficient cash flow
Question : Return on Investment
Correct answer: Prices are set to achieve a predetermined
level of return on investment
Question : Market stabilization
Correct answer: Firms set prices to minimize the possibility
of market leader retaliation and to ensure market stability
Question : Maintenance and improvement of market position
Correct answer: Prices are set to increase market share and
minimize the possibility of price wars
Question : Pricing to reflect product differentiation
Correct answer: Prices are set differently for each market
segment and to create different perceptions of their product's
value ex: car manufacturers
Question : Market skimming
Correct answer: Firms enter the market with a high price nd
gradually lowers the price to gain more customer's ex: high-
tech products
Question : Market penetration
Correct answer: Prices are set low to generate high sales
revenue and keep competitors away ex: Japanese car
manufacturers selling low-priced but reliable cars in US during 60s-70s
Question : Early cash recovery
Correct answer: Prices are set to generate a high cash flow to
solve problems of liquidity
Question : Discouraging others from entering the market
Correct answer: Prices are set low as a barrier to entry which
also signals the possibility of price war
Question : Place: Channel management - key decision areas