Strategy and Policy: Chapter 6 – Flashcards
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_________ refers to the strategic combination of the four basic marketing mix elements
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The marketing program
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Most firms today compete in mature markets characterized by commoditization. In these cases, the __________ typically becomes incapable of differentiating the product offering from those of the competition
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core product
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Although the product is at the heart of the marketing program, it is important to remember that product offerings in and of themselves have little value to customers. An offering's real value comes from:
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its ability to deliver benefits that solve a customer's problems.
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Mallory is an avid collector of antiques. In fact, she spends practically every weekend traveling to small towns and antique shops in search of unique antique treasures. For Mallory, antiques are a perfect example of a:
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specialty product
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Which of the following is the best example of an unsought product?
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insurance
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For laptop computers, processor chips, memory chips, and hard drives are examples of __________ because they are finished items that become a part of the computer after assembly
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component parts
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Firestone carefully watches the automotive market to ascertain the demand for cars, SUVs, and trucks. Firestone does this because the demand for its products is dependent on the demand for automobiles. This situation describes __________.
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derived demand
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Why would a firm offer a deep assortment of products in its product portfolio?
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To attract a wide range of customers and market segments
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Why would a firm offer a wide variety of products in its product portfolio?
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To diversify its risk.
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Why is the demand for most services — such as popular restaurants — extremely time-and- place dependent?
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Because customers must be present for service to be delivered
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Which of the following IS NOT an important benefit of offering a large product portfolio?
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package differentiation
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Unlike tangible goods, virtually all services are susceptible to inconsistency and variations in quality. Why is this so?
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Because services depend on people for their delivery
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The phrase "Unused service capacity is lost forever" refers to which major challenge associated with the marketing of services?
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perishability
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To compete in the fast-growing hybrid segment, Honda introduced the Civic Hybrid with unique styling and great fuel economy. The Civic Hybrid was based on the traditional Honda Civic. Which product development strategy has Honda implemented?
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product line extension
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Assume Kia has developed a new product idea to launch a midsize pickup. Currently, Kia is developing a prototype and working on projected costs, revenues, and profit potential. Kia is currently at what stage of the new product development process?
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screening and evaluation
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Why are firms so obsessed with the pricing element of the marketing mix?
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Because the firm's pricing has a direct bearing on its ability to increase revenue
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Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firm's cost structure, they should never be the driving force behind pricing strategy. Why?
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Because different firms have different cost structures
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__________ is defined as a customer's subjective evaluation of benefits relative to costs to determine the worth of a firm's product offering relative to other product offerings.
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Value
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Which of the following statements is TRUE with respect to the relationship between price and revenue?
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Price cuts must be offset by an increase in sales volume to keep the same level of revenue
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Which pricing objective is associated with the phrase "charging what the market will bear"?
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market demand
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Price elasticity is defined as
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customers' responsiveness or sensitivity to changes in price
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Which of the following IS NOT a situation that can cause customers to be less sensitive to price increases?
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When the total expenditure is high.
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The inherent goal of product differentiation is to make the demand curve for a product more inelastic. This happens because increased differentiation
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reduces the number of perceived substitutes for a product.
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Because service capacity is perishable and service demand is highly time dependent, service firms employ yield management strategies in an effort to:
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balance price and revenue considerations with their need to fill unused capacity.
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The goal of __________ is to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price
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penetration pricing
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The Fairmont Hotel is widely known for its exceptional quality and impeccable customer service. Not surprisingly, the Fairmont sets prices at the top end of all competing hotels. Which pricing strategy is the Fairmont using?
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prestige pricing
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Firms such as IKEA and The Home Depot are known for their use of __________ because they set reasonably low prices but still offer high-quality products and adequate customer services
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value-based pricing
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The Club is a local hair salon and day spa that caters to an upper-middle class clientele. Although price competition in the local area has been increasing, the owners of The Club have decided to focus their marketing efforts on quality, service, and value, and to resist the temptation to compete on price. In pursuing this non-price strategy, managers of The Club are ascribing to which of the following assumptions?
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It is difficult for competitors to copy The Club's differentiating characteristics
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Retailers use __________ extensively. This occurs when the retailer compares sale prices to regular prices, such as when Best Buy promotes a DVD player as "Regularly $99, Now $49."
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referencing prices
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In business markets, __________ is used to quote prices in terms of reductions or increases based on transportation costs or the actual physical distance between the buyer and the seller.
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geographic pricing
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A __________ is an organized system of marketing institutions through which products, resources, information, funds and/or product ownership flow from the point of production to the final user
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marketing channel
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Ensuring the availability of products in the right place in the right quantities at the right time in a cost efficient manner is the main focus of:
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physical distribution
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The creation of an extended enterprise in the supply chain depends heavily on the ability of channel members to integrate their operations. Which of the following IS NOT a key factor in successful supply chain integration?
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coercive power
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The most basic benefit of marketing channels is __________ where channels reduce the number of contacts necessary to exchange products
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contact efficiency
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In terms of marketing channel functions, which of the following statements describes the concept of discrepancy of quantity?
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Manufacturers produce large quantities; customers usually want only one item.
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Which member of the marketing channel has the primary responsibility of fulfilling the channel's main functions?
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it does not matter
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In the Mercedes dealer network, individual dealers are given the sole right to sell Mercedes vehicles within a defined geographic area. What type of distribution does Mercedes employ?
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exclusive distribution
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hat is the most appropriate type of distribution to use when customers need the opportunity to comparison shop, or when after-sale services are important?
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selective distribution
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Many products, such as candy, soft drinks, and gum are sold via intensive distribution. However, this strategy has a major drawback. What is it?
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The manufacturer must give up a good degree of control over pricing and product display
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Because the company was angered by the actions of its resellers, Acme Manufacturing decided to slow down deliveries and postpone product availability to these resellers. What type of power is Acme wielding in the channel?
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coercive power
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Which of the following statements best describes the term "slotting allowances"?
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A fee, paid by manufacturers to retailers, to get a product placed on retail shelves.
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In most marketing channels for consumer products, the balance of power has shifted to __________ due to their size and buying power.
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mass merchandise retailers
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Today, though cutting expenses is still a main factor, the desire of many firms to focus on core competencies is a driving force behind the increase in:
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outsourcing
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Hallmark is a good example of a company that uses __________ distribution as a means of offering two or more lines of the same merchandise through two or more channels
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dual
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Overall, the trends occurring in marketing channels today (growth in e-commerce, outsourcing, growth of nontraditional channels) have one major theme in common. What is that theme
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Increasing channel efficiency by reducing waste, overhead, and other costs
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Which of the following statements about integrated marketing communications (IMC) is FALSE?
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The role of mass television advertising is growing more important to IMC strategy.
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To be successful, firms must move potential customers beyond mere interest in the product. Good promotion will stimulate __________ by convincing potential customers of the product's superiority and its ability to satisfy specific needs
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desire
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In terms of the AIDA model, mass communication elements such as advertising and public relations tend to be very effective at
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stimulating awareness of and interest in a product.
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When firms use a(n) __________ strategy, they focus their promotional efforts toward stimulating demand among final customers, who then exert pressure on the supply chain to carry the product.
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pull
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In launching its new line of power tools, Black and Decker spent a considerable amount of time and resources to educate, motivate, and compensate members of its supply chain. By investing heavily in these types of promotions, Black and Decker hopes its __________ strategy will lead to a more effective product launch.
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push
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Which of the following is perhaps the main advantage associated with the use of advertising?
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It is an extremely cost efficient way to reach a large number of people
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In the context of IMC strategy, what is the difference between public relations and publicity?
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Publicity is more narrowly defined and focused on gaining media attention
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Overall, what is the major disadvantage associated with the use of public relations and publicity?
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The firm has limited control over how the message will be delivered or interpreted.
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__________ is paid personal communication that attempts to inform customers about products and persuade them to purchase those products
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personal selling
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In today's economy, personal selling has evolved to take on elements of customer service and marketing research. Why is this the case?
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Personal selling focuses more on developing customer relationships than on generating transactions
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Which sales force compensation system is best suited to situations where salespeople are responsible for pre- and post-sale service and sales managers want maximum control over selling expenses?
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straight salary
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Despite conventional thinking, __________ accounts for the bulk of promotional spending in many firms. This is especially true for firms selling consumer products in grocery stores and mass-merchandise retailers.
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sales promotion
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Which of the following statements best represents the universal goal of all sales promotion activities?
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To induce product trial and purchase
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Which of the following sales promotion methods would you recommend to a packaged goods marketer who wants to stimulate trial of a new product?
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a free sample of the product
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A price reduction offered to channel intermediaries for purchasing specified quantities of a product at a single time is called a:
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buying allowance
