IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 1081:

  Market-skimming pacing strategies are saprophyte when

  A. No buyers want the product at a high place

  B. The costs of producing a small volume are low.

  C. Competitors can easily enter the market.

  D. The product is of poor quality.

  Correct Answer: B

  Market-skimming pricing is used when a new product is introduced at the highest price possible given the benefits of the product. For market skimming to work, the product must appear to be worth its price, the costs of producing a small volume cannot be so high that they eliminate the advantage of charging more, and competitors cannot enter the market and undercut the price.

• Question 1082:

  Several surveys show that most managers use full product costs, including unit fixed costs and unit variable costs, in developing cost-based pricing. Which one of the following is least associated with cost-based pricing?

  A. Price stability,

  B. Pricejustdication.

  C. Target pricing..

  D. Fixed-cost recovery.

  Correct Answer: C

  A target price is the expected market price of a product, given the fimi's knowledge of its customers and competitors. Hence, under target pricing, the sales price is known before the product is developed. Subtracting the unit target proflt margin determines the long- term unit target cost. If cost-cutting measures do not permit the product to be made at or below the target cost, it will be abandoned.

• Question 1083:

  Which form of product-mix pricing applies to products that must be used with a main product?

  A. Captive-product pricing.

  B. By-product pricing.

  C. Product-bundle pricing

  D. Optional-product pricing.

  Correct Answer: A

  Captive-product placing applies to products that must be used with a main product, such as razor blades with a razor. Often, the main product is relatively cheap, but the captive products have high markups.

• Question 1084:

  During which stage of the product life cycle will prices most like' be reduced to the lowest possible level?

  A. Introductory stage.

  B. Growth stage.

  C. Maturity stage.

  D. Dechnestage

  Correct Answer: C

  During the maturity stage, many competitors are in market, Given a decline in absence of growth or negative growth, the industry also may have excess capacity. For these and other reasons, competitive rivalry will be strong. Firms may attempt to modify the market, the product, or the marketing mix. Thus, price competition (an lament of the marketing mix) will be most intense during the maturity stage

• Question 1085:

  Internal factors that influence the prices charged include

  A. Price sensitivity.

  B. Desire for market-share leadership.

  C. Price elasticity.

  D. Competitors' capacity.

  Correct Answer: B

  Internal factors that influence the prices charged include such marketing objectives as scrawl, current-profit maximization, market-share leadership, and product-quality leadership.

• Question 1086:

  A firm considering entry into a market abroad may make its selection based on many criteria. For example, a Portuguese firm aping a psychic proximity criterion will most likely choose to enter which market'?

  A. Poland

  B. China

  C. India

  D. Brazil

  Correct Answer: D

  Psychic proximity means the nearness of the markets culture, language, and laws to those `the firm's home country. For example1 Portuguese is spoken in Brazil.

• Question 1087:

  Which pricing objective is stated as a percentage ratio of profits to sales?

  A. Image enhancement

  B. Stabilization.

  C. Target margin maximization.

  D. Achievement of market share.

  Correct Answer: C

  Pricing objectives include profit maximization. Classical economic theory assumes all firms a Lays select the price that results in the highest profit. An alternative objective is target margin moralization. This objective is stated as a percentage ratio of profits to sales.

• Question 1088:

  The inherent attractiveness of a national market is most like' increased by which factor?

  A. The harms strategic position.

  B. The markets exclusion from a regional free trade zone.

  C. Unmet needs of a developing nation.

  D. Product adaptation is costly.

  Correct Answer: C

  Attractiveness is a function of such factors as geography, income, climate, population, and the product. Another major factor is the unmet needs of a developing nation, for exam, China or India.

• Question 1089:

  A firm that sells in foreign markets should consider all aspects of how products move from me firm to ultimate users. Where in the toile charnel are marketing mix decisions most likely made?

  A. Export department of the seller firm.

  B. Import department of the barer firm.

  C. Channels within nations.

  D. Charnels between nations.

  Correct Answer: A

  Distribution channels are a necessity to ensure that goods are successful transferred from the production facility end users. These channels include three district links that must work smoothly together. I,. The international marketing headquarters (export department of international division) is where decisions are made with regard to the subsequent channels and other aspects of the marketing mix

  2. Channels between nations carry goods to foreign borders,. They include air, land, sea, or rail transportation channels. At this stage, in addition to transportation methods, intermediaries are selected (e g.' agents or trading companies) and financing and ask management decisions are reached. 3, Channels within nations take the goods from the border or entry point to the ultimate users of the products Among nations, the number of levels of distribution, the types of channels, and the size of retag*leers vary substantially.

• Question 1090:

  A global firm establishes a cost-based price for its product in each country. The most likely negative outcome is that this pricing strategy will

  A. Set too high a price in countries where the firm's costs are high.

  B. Overprice the product in some markets and under price it in others.

  C. Create a gray market.

  D. Result in dumping.

  Correct Answer: A

  A firm may set a cost-based price in each market with a standard markup. In a region or country where costs are high, this strategy may result in prices that are too high to be competitive within the local market.