 |
PPM712S- PRODUCT PRICING MANAGEMENT- 2ND OPP- JULY 2024 |
|
|
1 Page 1 |
▲back to top |
n Am I B I A u n IVE Rs I TY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF MARKETING, LOGISTICS AND SPORT MANAGEMENT
QUALIFICATION : BACHELOR OF MARKETING
QUALIFICATION CODE: 07MARB
LEVEL: 7
COURSE CODE: PPM712S
COURSE NAME: PRODUCT PRICING MANAGEMENT
SESSION: JULY 2024
PAPER: THEORY
DURATION: 3 HOURS
MARKS: 100
SECOND OPPORTUNITY EXAMINATION PAPER
EXAMINER(S)
MR. C. KAZONDOVI
DR. E. SIMATAA
MODERATOR:
MS. L. PRINZONSKY
INSTRUCTIONS
1. Answer ALL the questions.
2. Write clearly and neatly.
3. Number the answers clearly.
4. Use the table provided on page [SJto answer Questions 5 and
Questions 6 : Detach and insert into your answer booklet
5. Write as legible as possible, and as precise as possible
6. Read each question carefully
7. Use a non-programmable calculator (STRICTLYNO USEOF
CELLPHONE/MOBILE CALCULATOR)
8. Round of your answers to two (2) Decimal places.
THIS QUESTION PAPER CONSISTS OF 5 PAGES (Including this front page)
|
|
2 Page 2 |
▲back to top |
Question 1
[20 marks]
Discussfive (5) factors that influence how Price plays a Role in the:
1.1) Product Strategy of the Marketing Mix, with examples from any company of your choice. (10 marks)
1.2) Promotion Strategy of the Marketing Mix, with examples from any company of your choice.
(10 marks)
Question 2
[20 marks]
2.1) In their book, The Strategy and Tactics of Pricing, Thomas Nagle and Reed Holden outline nine "laws"
or factors that influence price-sensitivity.
a.) Explain the Concept of price-sensitivity.
(2 marks)
b.) Discussthe nine (9) laws with examples to support your discussion
{9 x 2 = 18 marks)
2.2) Discuss the importance of Price to an organisation while taking into consideration the other
Marketing Mix Elements with relevant examples.
(20 marks)
Question 3 (Show all calculations)
[10 marks]
Peter John, owner of T-shirts Incorporated, knows his customer will pay no more than N$150-00 for a
T-shirt. Peter John wants to advertise the T-shirt as percent markup on cost.
What is the equivalent rate of percent markup on cost compared to the 40% markup on selling price?
Show all calculations including the conversions on how the percent markup on cost is equivalent to the
40% markup on selling price.
(10 marks)
Question 4 (Show all calculations)
[20 marks]
Use the available data to complete the table below, round of to two (2) decimal places.
Price (N$)
Marginal Cost
(N$)
Mark-up on cost
(%)
Mark-up on price
(%)
4.1
170
?
4.2
153
42
4.3
?
172
4.4
666
?
4.5
1455
?
4.6
?
1756
4.7
?
3991
4.8
2881
?
4.9
7124
?
4.10
?
5544
49.00
?
?
58.00
?
23.44
?
?
19.28
?
?
?
45.00
?
38.00
?
61.00
33.00
?
38.00
2
|
|
3 Page 3 |
▲back to top |
Question 5
[15 marks]
True or False Questions
Use the table provided on [page 5] to answer these questions, detach and insert it into your
answer booklet. 1.5 mark will be awarded for each correct answer.
5.1 Converting percent markup on cost to percent markup on selling price:
% Ms = % markup on cost
---------
X 100%
100% - % markup on cost
5.2 Converting percent markup on selling price to percent markup on cost:
% Mc= % markup on selling price
----------
X 100%
100% - Markup on cost
5.3 There are a lot of examples of perfect competition and pure monopoly.
5.4 Conditions necessary for a monopoly includes being a single seller of product, having no
close substitutes and having significant barriers to entry.
5.5 Price Discrimination has identifiable customer groups with differing price inelasticities.
5.6 Limit pricing set prices low as signal to possible entrants or other competitors of your
willingness and ability to defend your market share.
5.7 The Oligopolist does not recognise interdependence in pricing and output decisions.
5.8 The inverse relationship between the quantity of a good desired by people in a market and
the factors that affect that the quantity desired is referred to as the demand for the product.
5.9 In price competition, a seller rarely offers products priced as low as possible and
accompanied by a minimum of services.
5.1O Many firms would prefer to engage in non-price competition by building brand equity and
relationships with customers.
Question 6
[15 marks]
Multiple Choice Questions
Use the table provided on [page 5] to answer these questions, detach and insert it into your
answer booklet. 1.5 mark will be awarded for each correct answer.
6.1 The relationship between the quantity supplied of a good and the price of that good is
referred to as the ___
curve
A) supply
B) demand
C) sales
D) costs
E) None of the above
3
|
|
4 Page 4 |
▲back to top |
6.2 Which of the following factors is spurring a new movement in pricing toward
dynamic pricing?
A) the federal government
B) strong retailers
C) the Internet
D) strong wholesalers
E) all of the above
6.3 Before setting price, the company must decide on its strategy most likely for:
A) distribution
B) promotion
C) the environment
D) the product
E) all of the above
6.4 Companies set ______
as their major objective if they are troubled by too
much capacity, heavy competition, or changing consumer wants.
A) current profit maximization
B) survival
C) market share leadership
D) product quality leadership
E) all of the above
6.5 Pricing to cover variable costs and some fixed costs, as in the case of some
automobile distributorships that sell below total costs, is typical of which of the
following pricing objectives?
A) current profit maximization
B) product quality leadership
C) market share leadership
D) survival
E) none of the above
6.6 When a company sets a price for a new product on the basis of what it thinks the
product should cost, then develops estimates on what each component should cost to
meet the proposed price with an acceptable profit margin, the company is practicing:
A) predatory pricing
B) target costing
C) strategic pricing
D) low cost leadership
E) none of the above
6. 7 With respect to the demand curve (in the normal case), demand and price are:
A) directly related
B) parallel
C) inversely related
D) related only through "the invisible hand" of the market place
E) none of the above
6.8 All of the following are considered to be forms of a cost-based approach to pricing
EXCEPT:
A) cost-plus pricing
B) break-even analysis
C) going-rate pricing
D) target profit pricing
E) none of the above
4
|
|
5 Page 5 |
▲back to top |
6.9 Markup pricing remains popular in the marketplace. Which of the following is most likely a
reason for this popularity?
A) Cost-plus pricing favors the best price.
B) Standard markups make the most sense.
C) Cost-plus pricing is fairer to both buyers and sellers.
D) The method focuses on demand as its base.
E) All of the above
6.1OWhich of the following would be considered to be one of the major faults of
break-even analysis and target profit pricing?
A) They do not take into account the price-demand relationship.
B) They are very complicated to calculate.
C) There are serious time lags in the calculations.
D) Most managers do not have confidence in the methods.
E) All of the above
THE END
ANSWER SHEET
Question 5
5.1
5.2
5.3
5.4
5.5
'
5.6
5.7 -
5.8
5.9
5.10
True
False
[Total: 10 X 1.5 = 15 Marks]
Question 6
[Total: 10 X 1.5 = 15 Marks]
..
A
B
C
'D
E
6.1
6.2
6.3
6.4
6.5
6.6
.,.,
6.7
6.8 - -
6.9
6.10
STUDENT NAME & STUDENT NO: _________________
_
LECTURER NAME: _________________
_
5
|
|
6 Page 6 |
▲back to top |
