Question

48.   A penetration pricing strategy is generally characterized by:
-   status, uniqueness, and profit goals.
-   high price elasticity, early cash recovery objectives, and high brand loyalty.
-   high inventory costs, many product alternatives, and low price elasticity.
-   low costs, low prices, and mass market appeal.

49.   Reebok has developed a marketing strategy designed to produce inelastic cross-elasticity for their brand. What is the major reason Reebok is attempting to accomplish this?
-   it wants to show the value of each brand attribute and relate it to the price of its brand.
-   it wants to have more success when it puts its products on sale at season or year-end.
-   it wants price to be less important to buyers than other brand attributes.
-   it wants to be able to use price as a key tool to take market share away from Nike.

50.   The price-quality association is most likely to occur when buyers:
-   know the names of the major brands in a product category.
-   can readily judge the overall quality of a product.
-   have little experience in judging quality.
-   perceive small differences in quality among brands.

51.   Phoebe is the marketing manager for a fast food restaurant chain. She uses a target return pricing strategy because her firm’s primary objective is to:
-   build customer satisfaction.
-   increase profits.
-   increase sales.
-   decrease competition.

Answer 1

48. The answer is Low costs, low prices and mass market appeal. Penetration pricing strategy is a pricing strategy in which the price is intially set low to reach wide markets.

49. The answer is, it wants to show the value of each brand attribute and relate it to the price of its brand.

Here mainly reebok is concentrating to provide a realistic essence to the brand attributes and then link it to the price, which can come in handy where upon adding additional attributes there is scope for price increase too.

50. The answer is - perceive small differences in quality among brands. When buyers have sound knowledge on the quality difference among brands it creates a healthy price - quality association with in them to look after while making a purchase.

51.answer is build customer satisfaction.

Here in this return pricing strategy, phoebe returns a part back to customer which in turn make the customer delighted. Hence the option build customer satisfaction suits more in this context.