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d.valuepricing
e.penetrationpricing
Challenging)
3.Priceistheonlyelementinthemarketingmixthatproduces_____.
a.revenue
b.variablecosts
c.expenses
d.fixedcosts
e.stability
a;
p.309;
4.LawnmowersofChicagoisalandscapingcompanyestablishedthroughouttheAmericanMidwest.Uponenteringanewcommunity,lowerpricesareaskedfortheirservices.Aftergainingarespectablereputationinanewarea,pricesaregraduallyincreased.Startingabusinessinthismannerisanexampleofwhichmarketingobjective?
a.currentprofitmaximization
b.marketshareleadership
c.productqualityleadership
d.survival
e.statusquoexistence
d;
5.Firmssetpricesaslowaspossibleinordertobecomethe_____.
a.productqualityleader
b.marketshareleader
c.customerqualityleader
d.profitmaximizationleader
e.priceleader
b;
6.Caterpillarcharges20percentto30percentmorethancompetitorsforitsheavyconstructionequipmentbasedonsuperiorproductandservicequality.Thisisanexampleof_____.
a.survival
b.currentprofitmaximization
c.marketshareleadership
d.productqualityleadership
e.noneoftheabove
p.310;
Moderate)
7.Companiesmaysetpriceslowforwhichofthefollowingreasons?
a.topreventcompetitionfromenteringthemarket
b.tostabilizethemarket
c.tocreateexcitementforaproduct
d.alloftheabove
8.Whichofthefollowingpricingobjectivesismostusedbyauniversity?
a.partialcostrecovery
b.fullcostrecovery
c.socialprice
d.cost-pluspricing
e.skimmingpricing
9.Swatchsurveyedthemarketandidentifiedanunservedsegmentofwatchbuyers.Usingtheseresults,theycreatedawatchatapriceconsumerswerewillingtopay.Theunorthodoxorderofthismarketingmixdecisionisanexampleof_____.
a.competition-basedpricing
c.targetcosting
d.value-basedpricing
10.Coststhatdonotvarywithproductionorsaleslevelarereferredtoas_____.
a.fixedcosts
c.targetcosts
d.totalcosts
e.unitcosts
p.313;
11.Coststhatvarydirectlywiththelevelofproductionarereferredtoas_____.
12._____arethesumofthe_____and_____foranygivenlevelofproduction.
a.Fixedcosts;
variable;
totalcosts
b.Fixedcosts;
total;
variablecosts
c.Variablecosts;
fixed;
d.Totalcosts;
e.Break-evencosts;
13.SRACisanacronymfor_____.
a.strategicreasoningandcosts
b.short-runaccountingcosts
c.short-runaveragecostcurve
d.strategicrightsandcompany
e.strategicrevenuesandcosts
p.314;
14.Fixedcosts_____asthenumberofunitsproducedincreases.
a.decrease
b.increase
c.divideinhalf
d.remainthesame
e.increaseatadiminishingrate
15.Thelong-runaveragecostcurve(LRAC)helpstheproducerunderstandwhichofthefollowing?
a.Itshowshowlargeabusinessshouldbe,tobemostefficient.
b.Itdealsmainlywithcompetitors’prices.
c.Itdealsmainlywithexternalfactors.
d.Alloftheabove.
e.Noneoftheabove.
Challenging)
16.Asproductionexperienceincreases,theaveragecostperunitdecreases.Thisdropiscalledthe_____.
a.demandcurve
b.experiencecurve
d.long-runaveragecostcurve
e.marginalutility
17.Pricesettingisusuallydeterminedby_____insmallcompanies.
a.topmanagement
b.marketingdepartments
c.salesdepartments
d.divisionalmanagers
e.cross-functionalteams
p.315;
18.Pricesettingisusuallydeterminedby_____inlargecompanies.
b.divisionalmanagers
c.productlinemanagers
d.purchasingdepartments
e.bothBandC
e;
19.Inindustrialmarkets,_____hasthefinalsayinsettingthepricingobjectivesandpoliciesofthatcompany.
a.thesalesmanager
b.topmanagement
c.theproductionmanager
d.thefinancemanager
e.thepurchasingdepartment
20.Whichofthefollowingisanexternalfactorthataffectspricingdecisions?
a.thesalariesofproductionmanagement
b.competition
c.thesalariesoffinancemanagement
d.fundsexpensedtocleanproductionequipment
e.A,B,andC
21.Under_____,themarketconsistsofmanybuyersandsellerstradinginauniformcommoditysuchaswheat,copper,orfinancialsecurities.
a.purecompetition
b.monopolisticcompetition
c.anoligopoly
d.puremonopoly
e.anti-trustagreements
22.InLima,Peru,20storesspecializinginsellingthesamequalityandbrandofwheatproductsarelocatedononestreet.Anindividualsellercannotchargemorethanthegoingpricewithouttheriskoflosingbusinesstotheotherstoresthatarestillsellingtheproductatitsuniformprice.Thisisanexampleofwhattypeofmarket?
c.oligopolisticcompetition
e.socialist
23.Under_____,themarketconsistsofmanybuyersandsellerswhotradeoverarangeofpricesratherthanasinglemarketprice.
24.Under_____,themarketconsistsofafewsellerswhoarehighlysensitivetoeachother’spricingandmarketingstrategies.
c.anoligopoly
e.capitalism
p.316;
25.Nonregulatedmonopoliesarefreetopriceatwhatthemarketwillbear.However,theydonotalwayschargethefullpriceforanumberofreasons.WhatisNOToneofthosereasons?
a.Theydesiretoattractcompetition.
b.Theydesiretopenetratethemarketfasterwithalowprice.
c.Theyhaveafearofgovernmentregulation.
d.Theywanttoencouragegovernmentregulations.
e.Theywanttopleasealargegroupofconsumers.
26.Ifcustomersperceivethatthepriceisgreaterthantheproduct’svalue,theywillbuyit,butthesellerloses_____.
a.targetcost
b.priceelasticity
c.profitopportunities
d.break-evenpricing
e.marketshare
27.Therelationshipbetweenthepricechargedandtheresultingdemandlevelcanbeshownasthe_____.
b.variablecost
c.targetcost
e.experiencecurve
p.317;
28.WhenGibsonGuitarCorporationlowereditspricestocompetemoreeffectivelywithJapaneserivals,whydidtheynotsellmoreguitars?
a.TheGibsonguitarswerenotaswellmadeastheJapaneseguitars.
b.Themarketwasalreadyfloodedwithguitars.
c.ThesoundoftheGibsonguitarwasnotasgoodastheJapaneseguitars.
d.CustomerswereunabletodistinguishthesuperiorityoftheGibsonguitarwhenitwasatalowerprice.
e.CustomershadcometoexpectahigherpriceforaGibsonguitar.
p.318;
29._____ishowresponsivedemandwillbetoachangeinprice.
a.Priceelasticity
b.Break-evenpricing
c.Demandcurve
d.Targetcost
e.Supply
30.Buyersarelesspricesensitiveforallofthefollowingreasonsexcept_____.
a.whentheproducttheyarebuyingisunique
b.whentheproducttheyarebuyingisinhighdemand
c.whensubstituteproductsarehardtofind
d.whenthetotalexpenditureforaproductishighrelativetotheirincome
e.whentheproductisaspecialtyproduct
31.Whensettingprices,thecompanyalsomustconsiderotherfactorsinitsexternalenvironment._____canhaveastrongimpactonthefirm’spricingstrategies.Thisincludesfactorssuchasboomorrecession,inflation,andinterestratesaffectingpricingdecisions.
a.Demandcurve
b.Economicconditions
c.Targetcosting
d.Value-basedpricing
e.Competitors
p.319;
32.Whensettingprices,thecompanyalsomustconsiderotherfactorsinitsexternalenvironment.Howwill_____reacttovariousprices?
Thecompanyshouldsetpricesthatwillallowthesepeopletoreceiveafairprofit.
a.resellers
b.producers
c.consumers
d.theelderly
e.competitors
33.Whencompaniessetprices,thegovernmentandsocialconcernsaretwo_____affectingpricingdecisions.
a.externalfactors
b.internalfactors
c.economicconditions
d.demandcurve
e.temporaryinfluences
34.Productcostsseta(n)_____totheprice.
c.floor
d.learningcurve
e.break-evencost
p.320;
35.Con