CHAP1: PRICING

1/ A good pricing strategy involves six distinct but very different choices that build upon one another. The choices are represented graphically as six points which is called the ____

• a. Value Cascade
• b. Pyramid Cascade
• c. Profit Cascade
• d. Value ladder

2/ As one of three principles of pricing strategy, - via a reverse auction) and develop strategies in advance to deal with them. ____ means that companies anticipate disruptive events (for example, a new competitive threat or a customer's decision to award business

• a. Proactive principle
• b. Value-based principle
• c. Profit-driven principle
• d. Cost-based principle

3/ A successful pricing strategy requires the support of three pillars: An effective______

• a. organization
• b. employees
• c. Marketing
• d. Sales force

4/ As one of three principles of pricing strategy, _______means that differences in pricing across customers or applications reflect differences in the value to customers.

• a. Profit-driven principle
• b. Cost-based principle
• c. Proactive principle
• d. Value-based principle

5/ ______means the coordination of otherwise independent activities to achieve a common objective-sustainable profitability.

• a. Practical pricing
• b. Strategic pricing
• c. Tactical pricing
• d. Theoretical pricing

6/ Pricing approach dictated by competitive conditions is called ______

• a. Strategic pricing
• b. Cost-plus pricing.
• c. Value (customer)-based pricing
• d. Competitor (share)-based pricing

7/ The key to creating good value is first to estimate how much value different combinations of benefits could represent to customers, then to set the target price. The target price then drives decisions about what costs to incur. This process reflects the element (point) in the value cascade.

• a. Value communication
• b. Price structure
• c. Price policy
• d. Value creation

8/ The potential market value of a product or service is composed of two parts: Value that is the same as that offered by the competitive alternatives (Reference Value) and value that differentiates it from competitive alternatives (

• a. Differentiating Value
• b. Inferior value
• c. Par value
• d. Superior value

9/ Once you understand how value is created and can be communicated for different customer segments, the next choice required for a pricing strategy is to select a way to monetize that value into revenue.We call the output of this process a _____________

• a. Value communication
• b. Value creation
• c. Price structure
• d. Price policy

10/______________ refers to rules or habits, either explicit or cultural, that determine how a company varies its prices when faced with factors other than value and cost to serve that threaten itsability to achieve its objectives.

• a. Price policy
• b. Price structure
• c. Value communication
• d. Value creation