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Bus Of Nonfinancial Compensation Free Media Attention – Flashcards 166 terms

Adrien Vincent

166 terms

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Bus Of Nonfinancial Compensation Free Media Attention – Flashcards

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_____ is a form of deceptive price advertising where sellers advertise items for a very low price without intending to sell any of them because they plan to pressure sales of higher-priced items.

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bait and switch

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sales-orientation

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In the classic downward-sloping demand curve, as price increases, the demand for the product or service

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decreases

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The most common form of competition is _____ where many firms compete for customers in a given market but with differentiated products.

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monopolistic competition

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Which of the following explains why the demand for Blu-ray discs increases when the demand for Blu-ray players increases?

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being complementary products

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_____ means the firm deliberately prices a product above the prices set for competing products to capture those customers who always shop for the best, or for whom price does not matter.

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Premium pricing

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____ indicates that the demand for related products can either be positively or negatively related.

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Cross-price elasticity

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A _____ pricing strategy is attractive because it attracts two distinct market segments: those who are not price sensitive along with more price-sensitive customers.

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high/low

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In addition to offering the potential to build sales, market share, and profits, _____ discourages competitors from entering the market because the profit margin is relatively low.

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penetration pricing

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Best Buy will match competitor prices for customers who bring in proof that a particular product is being sold at a lower price by a competitor, thus using

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status quo pricing.

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In terms of a pricing strategy, _____ pricing adds value by reducing consumers' search costs; consumers can spend less of their valuable time comparing prices, including sale prices, at different stores.

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everyday low

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____ involves determining the point at which the number of units sold generates just enough revenue to equal the total costs.

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Break-even analysis

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Standardized products such as grains and chemical products, where consumers perceive them as substitutable, are characteristic of

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pure competition

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In the soft drink industry only a few firms dominate, which is characterized as

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an oligopoly

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In the trucking industry, demand for fuel remains relatively stable even in times when the price of fuel increases, indicating that demand for fuel in this segment is

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inelastic

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In _____, one firm provides the product or service in a particular industry, which results in less price competition.

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a monopoly

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a reference price

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____ is used to market products to innovators who are willing to pay the very highest prices to obtain brand-new examples of technology advances, with exciting product enhancements.

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price skimming

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With _____ products and services, a higher price might lead to a greater quantity sold, but only up to a certain point.

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prestige

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When a firm sets a very low price for one or more of its products with the intent to drive its competition out of business, it is using the illegal practice of

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predatory pricing.

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__ employs irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer.

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a gray market

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A _____ orientation explicitly invokes the concept of value such as when a firm uses a no-haggle pricing structure to make the purchase process simpler and easier.

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customer

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A _____ pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.

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high/low

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The objective of _____ is to build sales, market share, and profits quickly by providing an incentive to purchase the product immediately.

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market penetration pricing

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_____measures how changes in price affect the quantity of the product demanded.

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Price elasticity of demand

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As the marketing vice president of her firm, Jana is considering implementing a company-wide pricing policy that all products must achieve a target profit margin of 15% so the firm can achieve its overall growth objectives.

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profit-orientation

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When a firm sets a very low price for one or more of its products with the intent to drive its competition out of business, it is engaged in

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predatory pricing

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Jack works for a firm in the Northwestern region that is clearly the market leader, and has determined he must implement a region-wide price reduction of all product lines to discourage new firms from entering the lucrative market. Which of the following company objectives is involved?

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competitor-orientation

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When Clarissa sells the jewelry she makes at craft fairs or on her personal website, she is utilizing a _____ marketing channel.

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direct

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As the dominant member of the channel of distribution, Coca Cola holds a lot of power in the relationship with independent grocery stores, and as such, it performs the functions of restocking merchandise, setting up special displays, and rotating merchandise. This is an example of

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an administered vertical marketing system

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Supply chain management refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their manufacturers, warehouses, transportation intermediaries, stores, and

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suppliers

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When the members of a marketing channel operate to satisfy their own objectives and maximize their own profits, often at the expense of the other members, the channel operates as

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an independent marketing channel

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In _____ marketing channels, one or more intermediaries work with manufacturers to provide goods and services to customers.

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indirect

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Purchase data collected at the point of sale is stored in

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data warehouses

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A(n) _____ involves the computer-to-computer transmission of sales data, purchase orders, invoices, and data about returned merchandise between a retailer and its vendors.

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electronic data interchange

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The international fashion retailer Zara's parent company, Inditex, owns the manufacturing plants, warehouse facilities, retail outlets, and design studios, which is an example of

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a corporate vertical marketing system.

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A _____, which may be operated by retailers, manufacturers, or distribution specialists, is a facility for the receipt, storage, and redistribution of goods to company stores or customers.

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distribution center

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When companies enter into agreements that allow them to obtain economies of scale and coordination to reduce conflict, it is an example of

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a contractual vertical marketing system.

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Firms that use a(n) _____ supply chain allocate merchandise to stores based on previous sales forecasts.

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push

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As noted in your text, each participant in a successful marketing channel adds

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value

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_____ is a practice in which merchandise cartons are prepackaged by the vendor for a specific store.

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cross-docking

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When there is disagreement among members at the same level of marketing channels such as when Best Buy and Sears engage in a price war on Maytag appliances, _____ channel conflict can occur.

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horizontal

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To create strong partnering relationships, supply chain members must develop mutual trust, openly communicate, have common goals, recognize the benefits of interdependence, and

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be willing to invest in each other's success.

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_____ is an electronic document sent by a supplier to a retailer prior to the shipment of a merchandise order.

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An advanced shipping notice

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The most common type of contractual vertical marketing system is

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franchising

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The _____ is the person who coordinates deliveries to the distribution center.

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dispatcher

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Frito Lay is an example of a company that partners with retailers by implementing _____ system, involving taking on the responsibility of managing inventory levels at the retailers where its products are sold.

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a vendor-managed inventory

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Which type of strategy is most efficient for merchandise that has steady, predictable demand, such as milk and eggs?

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push

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_____ power is when one channel member threatens to punish or punishes another channel member for not undertaking certain tasks, such as delaying payment for a late delivery.

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Coercive

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With a _____ marketing strategy, there is less likelihood of merchandise being overstocked or out of stock because the store orders merchandise as needed on the basis of consumer demand.

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pull

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_____ power is exhibited when one channel member wants to be associated with another channel member; the channel member with whom the others want to be associated has the power to get them to do what it wants.

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referent

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All of the following are examples of the value provided by a supply chain in the production of kitchen stoves EXCEPT

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the product design team develops initial drawings for a new product offering.

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JIT inventory systems are associated with all of the following EXCEPT

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more inventory to warehouse.

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In a distribution center which person would be responsible for the financial planning and analysis of merchandise and its allocation to stores?

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planner

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Radio frequency identification tags are

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tiny computer chips that transmit information about the contents of containers.

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Both Walmart and JCPenney initially had separate organizations for their Internet channel but subsequently integrated them with stores and catalogs to address the _____ challenge of multichannel retailing.

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supply chain

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_____ are large retailers (100,000-150,000 square feet) that offer a limited and irregular assortment of food and general merchandise, little service, and low prices to the general public and small businesses.

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warehouse clubs

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The old cliché claiming the three most important things in retailing are "location, location, location" corresponds to which of the following components of the retail strategy?

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place

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Offering a one-stop shopping convenience to customers, _______ combine a supermarket with a full-line discount store.

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supercenters

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Determining whether to use a multichannel strategy

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Salespeople can be particularly helpful when purchasing a(n) _____ product.

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complicated

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A brand that is developed by a national brand vendor, often in conjunction with a retailer, and is sold exclusively by the retailer is referred to as

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an exclusive co-brand.

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Offering live, online chat options to shoppers is a way of increasing the value of online shopping because it provides

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personalized customer service

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Distribution intensity is commonly divided into three levels. What are they?

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Intensive, exclusive, and selective

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If Kleenex produced a new, eco-friendly personal-sized package of tissues, which it intended to get into as many retail outlets as possible, it should choose _____ distribution intensity.

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an intensive

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Walmart, Target, and Kmart offer a broad variety of merchandise, limited service, and low prices, which would classify them as

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full-line discount stores

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Which of the following firms operates more than 3,000 supercenters in the United States, accounting for the vast majority of total supercenter sales—far outpacing its competitors?

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Walmart

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_____ distribution helps a seller maintain a particular image and control the flow of merchandise into an area, which makes this approach attractive to many shopping goods manufacturers, such as most apparel items, home items like branded pots and pans or sheets and towels, branded hardware and tools, and consumer electronics.

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selective

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Luxury goods firms such as Coach use _____ distribution strategy to limit sales to a few select, higher-end retailers in each region, because selling its product in full-line discount stores or off-price retailers would weaken its image.

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an exclusive

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Generally, the _____ and _____ sophisticated the channel member, the less likely that it will use supply chain intermediaries.

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larger; more

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Retailers may modify product, price, and/or promotion to attempt to increase their _____, which is the percentage of the customer's purchases made from that particular retailer.

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share of wallet

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_____ tailor their retail strategy toward very specific market segments by offering deep but narrow assortments and sales associate expertise.

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specialty stores

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The set of business activities that add value to products and services sold to consumers for their personal or family use is referred to as

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retailing

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Which of the following food retailers is a self-service retail food store offering groceries, meat, and produce with limited sales of nonfood items?

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Conventional supermarket

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When choosing retail partners, a high-end cosmetics manufacturer like Estée Lauder would most likely NOT choose to sell to CVS or Dollar General due to

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customer expectations.

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reduces; increases

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Which of the following falls into the category of being a general merchandise retailer?

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category specialist

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In thinking about the channel structure, the level of difficulty a manufacturer experiences in getting retailers to purchase its products is determined by all of the following EXCEPT

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the degree to which the channel is horizontally integrated.

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Which of the following is considered the greatest advantage offered to consumers by brick-and-mortar stores compared to online shopping?

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Being able to use all five of their senses

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Which of the following would qualify as being a service retailer?

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a health spa

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Stores are limited by their _____, which is generally not an issue when shopping on the Internet.

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size

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_______ offer an inconsistent assortment of brand name merchandise at a significant discount from the manufacturer's suggested retail price.

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off-price retailers

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Dollar General and Family Dollar Stores are small, full-line discount stores that offer a limited merchandise assortment at very low prices, so they would be classified as

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extreme value retailers

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expand its market presence

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When designing in-store signage, retailers often develop yellow signs and shelf tags with bold lettering to catch consumers' attention. The use of visuals in this manner represents the _____ component of the communication process.

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encoding

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Nathan gauged the level of exposure to his marketing campaign, using the percentage of the target population exposed at least once to his advertisement, representing its

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reach

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The fact that a particular advertisement might not cause a consumer to make an immediate purchase is referred to as

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a lagged effect.

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Home Depot hired an advertising agency to develop television ads for its grand opening in Southern Maine. The advertising agency represents which of the following components of the communication process?

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Transmitter

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Customers can use the Internet to share their opinions about products and services via YouTube, Facebook, and Twitter. In doing so, they can help facilitate the consumer decision process through use of

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social media

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Limitations of the _____ budgeting method include not allowing firms to exploit the unique opportunities or problems they confront in a market. If all competitors use this method to set communication budgets, their market shares will stay approximately the same over time.

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competitive parity

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direct marketing

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In the communication process, _____ refers to the process by which the receiver interprets the sender's message.

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decoding

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The U.S. government promoted public participation in the 2010 census during the televised Super Bowl game in its efforts to raise awareness of when and how the census works. This is an example of which of the following promotional elements?

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Advertising

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There are three elements in any integrated marketing communication strategy: the _______, the channels through which the message is communicated, and evaluation of the results of the communication.

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consumer being targeted

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If a sponsored link was delivered 100 times and 10 people clicked it, then the number of impressions is 100, the number of clicks is 10, and the click-through-rate (CTR) would be

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10%

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Macy's is conducting marketing research to determine whether its advertising message could be clearly understood by its customers. This relates to which component of the communication process?

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feedback loop

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To support the other promotional efforts, firms use _____ to generate free media attention.

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public relations

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The AIDA model represents a series of mental stages a consumer goes through and includes awareness, action, interest, and

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desire

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After the firm has piqued the interest of its target market, the goal of subsequent IMC messages should move the consumer from "I like it" to

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"I want it."

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The _____ method determines the budget required to undertake specific tasks to accomplish communication objectives.

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objective-and-task

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Personalized e-mail marketing is an online, passive form of persuasive communication and would be classified as an example of

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direct marketing

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Jacob determined one of the metrics he would use to gauge the level of exposure his marketing message had with his target market was the number of times the target was exposed to his message throughout the 6 weeks of the campaign, representing its

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frequency.

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Harley Davidson has _____ if a consumer responds "Harley" when asked about American-made motorcycles.

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top-of-mind awareness.

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The AIDA model is also known as the _____ model.

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think, feel, do

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Google's AdWords system provides a Quality Score as a measure of _____, which indicates the usefulness of an ad message to consumers doing a Google search.

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relevance

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the highest level of awareness is

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top-of-mind awareness.

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What factors are used in the rule-of-thumb methods to determine the communication budget?

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Prior sales and communication activities

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Which of the following formulas is accurate for calculating gross rating points (GRP)?

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reach multiplied by frequency

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Traditionally, advertising has been _____ and _____.

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passive; online

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____ is/are the number of times an ad appears in front of the user.

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impressions

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Since her firm's share of the market has increased from 2.5% to 3%, Allyson had determined she would set her share of communication expenses at 3% of sales, which is an example of the use of the _____ method.

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competitive parity

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A _____ offers an item for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing.

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premium

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The Indoor Tanning Is Out campaign is designed to raise awareness of the increased risk of melanoma, the deadliest form of skin cancer, and decrease usage of tanning salons. This is an example of a(n) _____ advertisement.

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public service

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Which of the following is NOT an aspect of Advertising?

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It is used to only sell products.

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When a company wants to create and build brand awareness, it would use _____ advertising.

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informative

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The _____ enforces truth in advertising laws and defines deceptive and unfair advertising practices.

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the federal trade commission

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Bowflex and Jenny Craig develop advertisements featuring celebrities to address their target markets' need for feeling good about themselves. This is an example of which of the following?

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emotional appeal

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A(n) _____ is a subsection of the firm's overall marketing plan that explicitly analyzes the marketing and advertising situation, identifies the objectives of the advertising campaign, clarifies a specific strategy for accomplishing those objectives, and indicates how the firm can determine whether the campaign was successful.

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advertising plan

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______ advertising generally occurs in the growth and early maturity stages of the product life cycle, when competition is most intense, and attempts to accelerate the market's acceptance of the product.

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persuasive

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Exxon Mobil uses a(n) _____ appeal when it explains technical aspects of its products, such as lithium ion batteries, hydrogen technology, biofuels, and CO2 capture technologies.

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informational

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Tostito's relationship with the Fiesta Bowl college football game is an example of which PR tool?

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event sponsorship

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The slogans "Coolest Video Game" and "World's Best Hamburgers" are examples of _____, which is the legal exaggeration of praise, stopping just short of deception, lavished on a product.

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puffery

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When introducing new products, Quaker Oats uses a _____ strategy by offering retailers discounts on the products along with point-of-purchase displays to motivate them to highlight the product.

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push

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As a means to reach large numbers of anonymous audience members, USA Today newspapers are considered to be which of the following types of media?

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mass media

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It is in the _____ step of the process of developing an advertising campaign that the metrics are articulated against which advertising success or failure of the campaign is measured.

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set the advertising objectives

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A form of sales promotion that offers prizes based on a chance drawing of entrants' names is referred to as a

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sweepstake

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As a product in the maturity stage of its life cycle, chewing gum brands would most likely require the use of _____ advertising to prompt purchases.

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reminder

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HGTV and Home and Gardens magazine fall into which of the following categories of media?

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niche media

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In a print advertisement, items used to identify the sponsor of the ad, such as the company logo or USP, are referred to as

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brand elements

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An example of _____ is when Tom Hanks is shown stranded on an island with a FedEx box in the movie Cast Away.

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product placement

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In many cases, _____ activities support other promotional efforts by generating free media attention and general goodwill.

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public relations

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IKEA advertises throughout the year, but significantly increases its advertising during the back-to-school time frame, thus implementing a(n) _____ advertising schedule.

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pulsing

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Firms often use _____ advertising to convince consumers to take action such as switching brands, trying a new product, or even continuing to buy the advertised product.

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persuasive

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Assessing the effectiveness of an advertising campaign while it is running by monitoring key indicators is referred to as

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tracking

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Which of the following is the first step in planning and executing an advertising campaign?

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Identify the target market.

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The "Beef, It's What's for Dinner" campaign to encourage beef consumption is an example of _____ advertising.

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institutional

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J. Crew teaming up with several famous brands, including Belstaff and Timex, to offer exclusive products in the J. Crew stores and on its website is an example of

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cross-promoting

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The Holiday Inn Priority Club is an example of _____, which is specifically designed to retain customers by offering premiums or other incentives to customers who make multiple purchases over time.

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a loyalty program

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As a type of sales promotion, _____ encourage trial and reduce consumer risk, although they may negatively affect perceptions of brand value.

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deals

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Coppertone uses a _____ advertising schedule, where it advertises heavily in the months leading up to and during the summer, with no advertising after the season ends.

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fighting

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If an insurance company encourages its salespeople to intentionally mislead potential customers about damage from flooding due to hurricane damage, who could be susceptible to legal action for the deceptive practice?

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The insurance company and the salesperson

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The sales philosophy and process that emphasizes a commitment to maintaining customer relationships over the long term and investing in opportunities that are mutually beneficial to all parties is known as _______ selling.

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relationship

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Evaluating a list of prospective customers and assessing their potential to purchase a product is called

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qualifying leads

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A desirable personal trait of good salespeople is _____, where they care about their customers, their issues, and their problems.

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empathy

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Which of the following is an effective form of nonfinancial compensation provided to salespeople?

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awards

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To maintain trustworthy customer relationships, companies must take care that they respect the _____ comfort zone, that is, the amount of information a customer feels comfortable providing.

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information

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When Best Buy customers experience computer problems, the company offers its Geek Squad for door-to-door service as well as in-store assistance. The Geek Squad fulfills the role of

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sales support personnel

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Equal employment opportunity laws make it unlawful to discriminate against a person in hiring, promotion, or firing because of race, religion, nationality, sex, or

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age

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A(n) _____ is a salesperson whose primary responsibility is to process routine orders, reorders, or rebuys for products.

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order taker

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Managers and sales experts have identified each of the following personal traits as most important when recruiting salespeople. Which of the following is NOT one of those traits?

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speaking skills

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_____ is the two-way flow of communication between a buyer or buyers and a seller that is designed to influence the buyer's purchase decision.

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personal selling

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Salespeople who sell a manufacturer's products on an extended contract basis but are not employees of the manufacturer are known as

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manufacturer's reps.

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Although reservations on the part of the buyer can arise during each stage of the selling process, they are very likely to occur during the

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sales presentation.

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The planning, direction, and control of personal selling activities, including recruiting, selecting, training, motivating, compensating, and evaluating, as they apply to the sales force is part and parcel of

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sales management

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Most important in dealing with ethical and legal issues between the customer and the salesperson is for sales managers to

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lead by example

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When the National Association of Realtors' national awareness campaign emphasizes that realtors know how to more efficiently market a client's property than an owner can by himself, it is highlighting which value of personal selling?

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Saving time and simplify buying

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A salesperson whose primary responsibilities are identifying potential customers and engaging those customers in discussions to attempt to make a sale are called

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order getters.

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Which of the following is a form of salesperson compensation whereby payment is based on sales volume or profitability?

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commission

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Jack attempted to close a sale with a new customer. Unfortunately, the customer did not purchase anything from Jack, however, he learned some valuable information about this customer and is determined to continue calling on him until he finally does get a sale. Which personality trait is Jack most likely exhibiting?

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resilience

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The _____ step in the selling process is often stressful for salespeople, since one of the possible outcomes is that the salesperson goes away empty-handed.

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closing the sale

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_____ is a method of prospecting where sales people telephone or go to see potential customers without appointments.

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cold calling

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During the follow-up stage, what service quality dimension is being addressed when customers are given adequate guarantees that their purchases will perform as expected?

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assurance

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Salespeople who already have an established relationship with a customer will skip this step; it is not used extensively in retail settings, but it is in B2B situations.

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generate and qualify leads

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According to your text, which of the following may be the most important part of the entire selling process because it allows the salesperson to establish exactly where the customer is in his or her buying process?

answer

at the beginning of the sales presentation

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The annual International Consumer Electronics Show (CES) in Las Vegas is an example of a(n) _____ show, which is an event attended by buyers who choose to be exposed to products and services offered by potential suppliers in an industry.

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trade

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The _____ offers a prime opportunity for a salesperson to solidify the customer relationship through great service quality.

answer

follow-up

STUDY

Break Even Point In Units Contribution Per Unit Marketing Principles Of Marketing Status Quo Pricing

marketing chapter 20&21 – Flashcards 64 terms

Jill Lopez

64 terms

Preview

marketing chapter 20&21 – Flashcards

question

that which is given up in an exchange to acquire a good or service

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price

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the price charged to customers multiplied the number of units sold

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revenue

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revenue minus expenses

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profit

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net profit after taxes divided by total assets

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revenue on investment

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a company's product sales as a percentage of total sales for that industry

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market share

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a pricing objective that maintains existing prices or meets the competition's prices

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status quo pricing

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the quantity of a product that will be sold in the market at various prices for a specified period

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demand

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the quantity of a product that will be offered to the market by a supplier at various prices for a specified period

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supply

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price at which demand and supply are equal

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price equilibrium

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consumer's responsiveness or sensitivity to changes in price

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elasticity of demand

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situation in which consumer demand is sensitive to changes in price

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elastic demand

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situation in which an increase or a decrease in price will not significantly affect demand for the product

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inelastic demand

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a situation in which total revenue remains the same when prices change

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unitary elasticity

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a strategy whereby prices are adjusted over time to maximize a company's revenues

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dynamic pricing

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technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity

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yield management system

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a cost that varies with changes in level of output

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variable cost

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cost that does not change as output is increased or decreased

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fixed cost

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total variable costs divided by quantity of output

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average variable cost

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total costs divided by quantity of output

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average total cost

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total fixed costs divided by quantity of output

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average fixed cost

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the change in total costs associated with a one unit change in output

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marginal cost

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cost of buying the product from the producer, plus amounts rom profit and for expenses not otherwise accounted for

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markup pricing

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practice of marketing up prices by 100 percent, or doubling the cost

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keystoning

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a method of setting prices that occurs when marginal revenue equals marginal cost

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profit maximization

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the extra revenue associated with selling an extra unit of output or the change in total revenue with a one-unit change in output

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marginal revenue

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a method of determining what sales volume must be reached before total revenue equals total cost

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break even analysis

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stocking well known branded items at high prices to sell more brands at discounted prices

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selling against the brand

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private electronic network that links a company with its suppliers and customers

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extranet

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charging a high price to help promote a high quality image

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prestige pricing

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long term pricing framework that establishes the initial price for a product and the intended direction for the price

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price strategy

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pricing policy whereby a firm charges a high introductory price

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price skimming

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pricing policy whereby a firm charges a relatively low price for a product when it is first rolled out

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penetration pricing

question

agreement between two or more firms on the price they will charge for a product

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price fixing

question

practice of charging a very low price for a product with the intent of driving competitors out of business

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predatory pricing

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general price level at which the company expects to sell the good or service

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base price

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a price reduction offered to buyers buying in multiple units or above a specified dollar amount

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quantity discount

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deduction from list price that applies to the buyer's total purchases made during a specific period

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cumulative quantity discount

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deduction from list price that applies to single order

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noncumulative quantity discount

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price reduction offered in return for prompt payment of a bill

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cash discount

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a discount to wholesalers and retailers for performing channel functions

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functional discount

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price reduction for buying merchandise out of season

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seasonal discount

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payment to a detailer for promoting the manufacturer's product

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promotional allowance

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cash refund given for the purchase of a product during a specific period

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rebate

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setting the price at a level that seems to the customer to be a good price compared to the prices of other options

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value based pricing

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price tactic that requires buyer to absorb freight costs

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FOB origin pricing

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pricing tactic in which seller pays the actual freight chargers and bills every purchases a flat charge

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uniform delivered pricing

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modification of uniform delivered pricing that divided US into segments and charges flat fee for zones

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zone pricing

question

price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer

answer

freight absorption pricing

question

price tactic that charges freight from a given point regardless of the city from which the goods are shipped

answer

basing point pricing

question

price tactic that offers all goods and services the same price

answer

single price tactic

question

price tactic in which customers pay different prices for essentially the same merchandise bought in equal quantities

answer

flexible pricing

question

practice of offering a product line with several items at specific price points

answer

price lining

question

price tactic in which a product is sold near or below cost in hope that shoppers will buy other items once they are in the store

answer

leader pricing

question

price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high pressure selling to persuade consumers to buy more expensive merchandise

answer

bait pricing

question

price tactic that uses odd number prices to connate bargains and even number price to imply quality

answer

odd even pricing

question

marketing two or more product in a single package for a special price

answer

price bundling

question

reducing the bundle of services that comes with the basic product

answer

unbundling

question

price tactic that charges two separate amounts to consume a single good or service

answer

two part pricing

question

extra fee paid by consumer for violating terms of purchase agreement

answer

consumer penalty

question

setting prices for an entire line of products

answer

product line pricing

question

costs that are shared in the manufacturing and marketing of several products in a product line

answer

joint costs

question

price tactic used for industrial installations and many accessory items in which a firm price is not set until item is finished or delivered

answer

delayed quotation pricing

question

price tactic in which the final selling price reflects cost increases incurred between the time the order is placed and the time delivery is made

answer

escalator pricing

question

use of discounts by salespeople to increase demand for one or more products in a line

answer

price shading

STUDY

Contribution Per Unit Marketing Principles Of Marketing Variable Cost Per Unit

MKTG 370 Exam #3 Practice Quizzes – Flashcards 311 terms

Marvel Brown

311 terms

Preview

MKTG 370 Exam #3 Practice Quizzes – Flashcards

question

Which of the following is not one of the five Cs of pricing? A. Company objectives B. Competition C. Commissions D. Costs E. Channel members

answer

C (commissions)

question

As the marketing vice president of her firm, Jana is considering implementing a companywide pricing policy that all products must achieve a target profit margin of 15 percent so the firm can achieve its overall growth objectives. What type of company objective is this? A. Profit-orientation B. Sales-orientation C. Competitor-orientation D. Customer-orientation E. Market-orientation

answer

A (profit-orientation)

question

Jana's firm is entering a new market and she plans to set prices to take sales away from the established market leader even though it will mean profits might suffer. This corresponds to which of the following company objectives? A. Profit-orientation B. Sales-orientation C. Competitor-orientation D. Customer-orientation E. Market-orientation

answer

B (sales-orientation)

question

_____ is a tactic in which a firm deliberately prices a product above the prices set for competing products to capture those customers who always shop for the best, or for whom price does not matter. A. Target return pricing B. Target profit pricing C. Status quo pricing D. Competitive parity E. Premium pricing

answer

E (premium pricing)

question

Best Buy will match competitor prices for customers who bring in proof that a particular product is being sold at a lower price by a competitor, thus using A. premium pricing. B. competitive parity. C. status quo pricing. D. target return pricing. E. target profit pricing.

answer

C (status quo pricing)

question

Jack works for a firm in the northwestern region that is clearly the market leader, and has determined he must implement a regionwide price reduction of all product lines to discourage new firms from entering the lucrative market. Which of the following company objectives is involved? A. Profit orientation B. Sales orientation C. Competitor orientation D. Customer orientation E. Market orientation

answer

C (competitor orientation)

question

A _____ orientation explicitly invokes the concept of value such as when a firm uses a "no-haggle" pricing structure to make the purchase process simpler and easier. A. profit B. sales C. competitor D. customer E. market

answer

D (customer)

question

A _______ shows how many units of a product or service consumers will demand during a specific period of time at different prices. A. price point analysis B. break-even analysis C. demand curve D. product curve E. price elasticity curve

answer

C (demand curve)

question

In the classic downward-sloping demand curve, as price increases, the demand for the product or service A. increases. B. stays the same. C. decreases. D. levels off. E. doubles.

answer

C (decreases)

question

With _____ products and services, a higher price might lead to a greater quantity sold, but only up to a certain point. A. status quo B. prestige C. predatory D. price elastic E. substitute

answer

B (prestige)

question

_____ measures how changes in price affect the quantity of the product demanded. A. Break-even analysis B. Competitive parity C. Target return pricing D. Market-oriented pricing E. Price elasticity of demand

answer

E (price elasticity of demand)

question

In the trucking industry, demand for fuel remains relatively stable even in times when the price of fuel increases, indicating that demand for fuel in this segment is A. elastic. B. inelastic. C. price sensitive. D. expandable. E. flexible.

answer

B (inelastic)

question

In a(n) _______ demand scenario, relatively small changes in price will generate fairly large changes in the quantity demanded. A. elastic B. inelastic C. target profit D. target return E. competitive parity

answer

A (elastic)

question

Airlines that offer lower fares on seats shortly before the flight's departure date to fill empty seats are utilizing what type of pricing tactic? A. Status quo pricing B. Premium pricing C. Cross-pricing D. Complementary pricing E. Dynamic pricing

answer

E (dynamic pricing)

question

In the past, Jaleel's vacation time has been spent at home catching a few local attractions when she could afford them. This year, she received a big bonus at work and has decided to finally take the trip to Europe that she has always dreamed about. Jaleel's purchasing behavior has changed due to A. the income effect. B. the substitution effect. C. cross-price elasticity. D. the complementary products effect. E. the substitute products effect.

answer

A (the income effect)

question

Which of the following explains why the demand for Blu-ray discs increases when the demand for Blu-ray players increases? A. The income effect B. The substitution effect C. Cross-price elasticity D. The complementary products effect E. The substitute products effect

answer

D (complementary products effect)

question

_____ indicates that the demand for related products can either be positively or negatively related. A. The income effect B. The substitution effect C. Cross-price elasticity D. Complementary products effect E. The supply curve

answer

C (cross-price elasticity)

question

Variable costs are affected by A. profit margins. B. production levels. C. marketing outlays. D. contribution per unit. E. the break-even point.

answer

B (production levels)

question

Marta estimates that the fixed costs associated with opening her new hair salon are $100,000. She expects the salon to attract 500 new customers in the first year, each of which will cost $25 to service. Marta expects to generate $50,000 per year in revenue. For Marta, the total cost of opening her hair salon and staying in business for one year will be A. $50,000. B. $87,500. C. $100,000. D. $112,500. E. $150,000.

answer

D ($112,500)

question

In break-even analysis, when the break-even point is reached _______ is (are) zero. A. profits B. demand C. supply D. the contribution per unit E. costs

answer

A (profits)

question

If the fixed costs of manufacturing a new jet ski are $24,000, the sales price is $9,000, and the variable cost per unit is $1,000, the break-even point is A. 1 unit. B. 2 units. C. 3 units. D. 4 units. E. 5 units

answer

C (3 units)

question

The _____ is the price less the variable cost per unit. A. profit margin B. break-even point C. target return price D. contribution per unit E. fixed cost

answer

D (contribution per unit)

question

_____ involves determining the point at which the number of units sold generates just enough revenue to equal the total costs. A. Contribution margin analysis B. Break-even analysis C. Predatory pricing D. Total cost calculation E. Fixed cost analysis

answer

B (break-even analysis)

question

In _____, one firm provides the product or service in a particular industry, which results in less price competition. A. a monopoly B. an oligopoly C. monopolistic competition D. oligopolistic competition E. pure competition

answer

A (monopoly)

question

In the soft drink industry only a few firms dominate, which is characterized as A. a monopoly. B. an oligopoly. C. pure competition. D. competitive parity. E. monopolistic competition.

answer

B (an oligopoly)

question

When a firm sets a very low price for one or more of its products with the intent to drive its competition out of business, it is engaged in A. monopolistic competition. B. gray market pricing. C. predatory pricing. D. competitive parity. E. the substitution effect

answer

C (predatory pricing)

question

The most common form of competition is _____ where many firms compete for customers in a given market but with differentiated products. A. oligopolistic competition B. market saturation C. pure competition D. competitive parity E. monopolistic competition

answer

E (monopolistic competition)

question

Standardized products such as grains and chemical products, where consumers perceive them as substitutable, are characteristic of A. monopolies. B. oligopolies. C. pure competition. D. competitive parity. E. monopolistic competition.

answer

C (pure competition)

question

_____ employs irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer. A. A monopoly B. A gray market C. Pure competition D. A black market E. A price war

answer

B (a gray market)

question

What tactic have manufacturers taken to reduce gray market distribution? A. Refusing to grant distribution rights to companies overseas B. Nullifying warranties on products that are not purchased from authorized dealers C. Bringing lawsuits against distributors that carry competing product lines D. Engaging in price wars with manufacturers of competing products E. Refusing to allow substitute products

answer

B (Nullifying warranties on products that are not purchased from authorized dealers)

question

_____ pricing methods do not recognize the role that consumers or competitors' prices play in the marketplace. A. Value-based B. Improvement value C. Cost-based D. Cost of ownership E. Competitor-based

answer

C (cost-based)

question

Some grocery retailers have invested in their own private brands, charging just slightly lower than national brands to signal the quality of the products is good, involving the use of A. variable costing. B. cost-based pricing. C. value-based pricing. D. competitor-based pricing. E. predatory pricing.

answer

D (competitor-based pricing)

question

Improvement value and cost of ownership are two approaches to which method of pricing? A. Mark-up pricing B. Cost-based pricing C. Value-based pricing D. Competitor-based pricing E. Price elasticity

answer

C (value-based pricing)

question

Using the _____ pricing method, consumers may be willing to pay more for a particular product because, over its entire lifetime, it will eventually be less expensive to own than a cheaper alternative. A. cost of ownership B. improvement value C. premium D. competitor-based E. cost-based

answer

A (cost of ownership)

question

In terms of a pricing strategy, _____ adds value by reducing consumers' search costs; consumers can spend less of their valuable time comparing prices, including sale prices, at different stores. A. cost-based pricing B. high/low pricing C. predatory pricing D. EDLP E. competitor-based pricing

answer

D (EDLP)

question

A(n) _____ strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases. A. predatory pricing B. high/low pricing C. cost-based pricing D. EDLP E. competitor-based pricing

answer

B (high/low pricing)

question

A(n) _____ strategy is attractive because it attracts two distinct market segments: those who are not price sensitive along with more price-sensitive customers. A. cost-based pricing B. high/low pricing C. predatory pricing D. EDLP E. competitor-based pricing

answer

B (high/low pricing)

question

Retailers using a high/low pricing strategy often communicate this through the creative use of _____, which is the price against which buyers compare the actual selling price of the product and that facilitates their evaluation process. A. price lining B. the improvement value C. prices ending in odd numbers D. a reference price E. the cost of ownership

answer

D (a reference price)

question

The objective of _____ is to build sales, market share, and profits quickly by providing an incentive to purchase the product immediately. A. price lining B. price skimming C. market penetration pricing D. price fixing E. experience curve effects

answer

C (market penetration pricing)

question

When using a market penetration strategy, as sales continue to grow, the costs continue to drop, allowing even further reductions in the price. This is due to A. markdowns. B. price lining. C. seasonal discounts. D. improvement value. E. experience curve effects.

answer

E (experience curve effects)

question

People who are considered "innovators" in that they are willing to pay a higher price to obtain a new product or service, would likely not object to a _______ strategy. A. price lining B. price skimming C. predatory pricing D. price fixing E. bait-and-switch pricing

answer

B (price skimming)

question

In addition to offering the potential to build sales, market share, and profits, _____ discourages competitors from entering the market because the profit margin is relatively low. A. price lining B. price skimming C. predatory pricing D. penetration pricing E. experience curve effects

answer

D (penetration pricing)

question

_____ is used to market products to innovators who are willing to pay the very highest prices to obtain brand-new examples of technology advances, with exciting product enhancements. A. Price lining B. Price skimming C. Penetration pricing D. Price fixing E. High/low pricing

answer

B (price skimming)

question

For _____ to work, the product or service must be perceived as breaking new ground in some way, offering consumers new benefits currently unavailable in alternative products. A. price lining B. loss leader pricing C. penetration pricing D. price fixing E. price skimming

answer

E (price skimming)

question

Manufacturers like _____ because it allows them to offer price cuts to consumers directly, rolling them out and shutting them off quickly. A. markdowns B. quantity discounts C. seasonal discounts D. coupons E. rebates

answer

E (rebates)

question

When Suddenlink Communications offers its customers a discount when they order their television, Internet, and phone service all with Suddenlink on just one bill, it is an example of A. leader pricing. B. quantity discounting. C. price bundling. D. a markdown. E. a rebate.

answer

C (price bundling)

question

The most common implementation of a quantity discount at the consumer level is the _______ discount. A. size B. MSRP C. slotting D. zone E. premium

answer

A (size)

question

Consumers who shop after-Christmas sales to stock-up on wrapping paper and bows at deep discounts are taking advantage of A. size discounts. B. seasonal discounts. C. predatory pricing. D. rebates. E. price bundling.

answer

B (seasonal discounts)

question

A beauty products manufacturer packages its face wash and facial moisturizer together for a price lower than what it would cost to buy the products separately. This tactic is referred to as A. price lining. B. price bundling. C. leader pricing. D. predatory pricing. E. markdown pricing.

answer

B (price bundling)

question

Supermarket chains often implement _____, a pricing tactic of selling leading brands of products below their own cost to build store traffic. A. price lining B. value-in-use C. leader pricing D. predatory pricing E. cost-based pricing

answer

C (leader pricing)

question

_____ are expressed in the form of a percentage, such as "3/10, n/30," or "3%, 10 days, net 30." A. Cash discounts B. Seasonal discounts C. Noncumulative quantity discounts D. Advertising allowances E. Cumulative quantity discounts

answer

A (cash discounts)

question

Criticized by small manufacturers of grocery products, _____ are fees paid to retailers simply to get new products into stores or to gain more or better shelf space for their products. A. seasonal allowances B. cash discounts C. advertising allowances D. slotting allowances E. quantity discounts

answer

D (slotting allowances)

question

Savvy consumers often purchase automobiles from dealerships at the end of the quarter or at year-end since dealers who meet their quotas during a particular time period earn _____ in the form of rebates on all the cars they purchased from the manufacturer. A. seasonal discounts B. advertising allowances C. slotting allowances D. cumulative quantity discounts E. noncumulative quantity discounts

answer

D (cumulative quantity discounts)

question

When a manufacturer based in New York City charges more to ship to customers in Los Angeles and less to ship to customers in Memphis, it is using A. zone pricing. B. variable pricing. C. uniform delivered pricing. D. flexible delivered pricing. E. inflated pricing.

answer

A (zone pricing)

question

With use of _______ pricing, a shipper charges one rate no matter where the buyer is located. A. zone B. even C. uniform delivered D. category delivered E. cost-based

answer

C (uniform delivered)

question

_____ is a form of deceptive price advertising where sellers advertise items for a very low price without intending to sell any of them because they plan to pressure sales of higher-priced items. A. Deceptive reference pricing B. Loss leader pricing C. Bait and switch D. Predatory pricing E. Price discrimination

answer

C (bait and switch)

question

When a firm sets a very low price for one or more of its products with the intent to drive its competition out of business, it is using the illegal practice of A. deceptive reference pricing. B. loss leader pricing. C. bait and switch. D. predatory pricing. E. price discrimination.

answer

D (predatory pricing)

question

A local pizza parlor located on campus offers a student rate for its pizza lunch special. This is a form of A. predatory pricing and is legal. B. predatory pricing and is illegal. C. bait-and-switch pricing and is legal. D. price discrimination and is illegal. E. price discrimination and is legal.

answer

E (price discrimination)

question

Manufacturers attempt to reduce retail price competition among retailers and support the manufacturer's merchandise by encouraging retailers to A. engage in predatory pricing whenever possible. B. offer slotting allowances to customers. C. offer loss leader pricing whenever possible. D. sell their merchandise at the MSRP. E. refrain from offering cash discounts.

answer

D (sell their merchandise at the Manufacturer Suggested Retail Price)

question

____ occurs when parties at different levels of the same marketing channel (e.g., manufacturers and retailers) agree to control the prices passed on to consumers. A. Horizontal price fixing B. Vertical price fixing C. Loss leader pricing D. Predatory pricing E. Price discrimination

answer

B (vertical price fixing)

question

Supply chain management refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their manufacturers, warehouses, transportation intermediaries, stores, and A. suppliers. B. customers. C. competitors. D. buying centers. E. top-level executives.

answer

A (suppliers)

question

As noted in your text, each participant in a successful marketing channel adds A. time. B. overhead. C. inefficiencies. D. value. E. pricing pressure.

answer

D (value)

question

All of the following are examples of the value provided by a supply chain in the production of kitchen stoves except A. the transportation company gets the stove to the retailer. B. the retailer educates the customer about product features, and delivers and installs the stove. C. the product design team develops initial drawings for a new product offering. D. the stove maker turns the components into the stove. E. the components manufacturer helps the stove manufacturer by supplying parts and materials.

answer

C (the product design team develops initial drawings for a new product offering)

question

A _____, which may be operated by retailers, manufacturers, or distribution specialists, is a facility for the receipt, storage, and redistribution of goods to company stores or customers. A. logistics center B. fulfillment center C. distribution center D. marketing channel E. supply chain

answer

C (distribution center)

question

When Clarissa sells the jewelry she makes at craft fairs or on her personal website, she is utilizing a(n) _____ marketing channel. A. modified B. indirect C. secondary D. ancillary E. direct

answer

E (direct)

question

In _____ marketing channels, one or more intermediaries work with manufacturers to provide goods and services to customers. A. modified B. indirect C. secondary D. ancillary E. direct

answer

B (indirect)

question

When supply chain members that buy and sell to one another are not in agreement about their goals, _____ channel conflict can occur. A. vertical B. independent C. competitive D. horizontal E. administered

answer

A (vertical)

question

When there is disagreement among members at the same level of marketing channels such as when Best Buy and Sears engage in a price war on Maytag appliances, _____ channel conflict can occur. A. vertical B. independent C. competitive D. horizontal E. administered

answer

D (horizontal)

question

When the members of a marketing channel operate to satisfy their own objectives and maximize their own profits, often at the expense of the other members, the channel operates as A. a vertical marketing system. B. an independent marketing channel. C. a corporate vertical marketing system. D. a contractual vertical marketing system. E. an administered vertical marketing system.

answer

B (independent marketing channel)

question

As the dominant member of the channel of distribution, Coca-Cola holds a lot of power in the relationship with independent grocery stores, and as such, it performs the functions of restocking merchandise, setting up special displays and rotating merchandise. This is an example of A. an independent marketing channel. B. a horizontal marketing system. C. an administered vertical marketing system. D. a contractual vertical marketing system. E. a corporate vertical marketing system.

answer

C (an administered vertical marketing system)

question

answer

B (referent)

question

_____ power is when one channel member threatens to punish or punishes another channel member for not undertaking certain tasks, such as delaying payment for a late delivery. A. Coercive B. Referent C. Expertise D. Legitimate E. Information

answer

A (coercive)

question

When companies enter into agreements that allow them to obtain economies of scale and coordination to reduce conflict, it is an example of A. information power. B. legitimate power. C. an administered vertical marketing system. D. a contractual vertical marketing system. E. a corporate vertical marketing system.

answer

D (a contractual vertical marketing system)

question

The most common type of contractual vertical marketing system is A. franchising. B. a joint venture. C. just-in-time inventory. D. exporting. E. vendor-managed inventory.

answer

A (franchising)

question

The international fashion retailer Zara's parent company, Inditex, owns the manufacturing plants, warehouse facilities, retail outlets, and design studios, which is an example of A. an independent marketing channel. B. a vertical marketing system. C. an administered vertical marketing system. D. a contractual vertical marketing system. E. a corporate vertical marketing system.

answer

E (corporate vertical marketing system)

question

To create strong partnering relationships, supply chain members must develop mutual trust, openly communicate, have common goals, recognize the benefits of interdependence, and A. maximize market share. B. set out to make the most profits. C. be willing to invest in each other's success. D. minimize transportation expenditures for suppliers. E. maximize the profitability of the largest channel member.

answer

C (be willing to invest in each other's success)

question

_____ is an electronic document sent by a supplier to a retailer prior to the shipment of a merchandise order. A. A universal product code B. A radio frequency identification tag C. An advanced shipping notice D. An electronic data interchange E. A merchandise shipping confirmation

answer

C (advanced shipping notice)

question

Purchase data collected at the point of sale are stored in A. RFID tags. B. data warehouses. C. ASN documents. D. electronic data interchanges. E. JIT inventory management systems.

answer

B (data warehouses)

question

A(n) _____ involves the computer-to-computer transmission of sales data, purchase orders, invoices, and data about returned merchandise between a retailer and its vendors. A. electronic data interchange B. electronic data warehouse C. stock keeping unit D. universal product code E. radio frequency identification tag

answer

A (electronic data interchange)

question

Frito-Lay is an example of a company that partners with retailers by implementing _____ system, involving taking on the responsibility of managing inventory levels at the retailers where its products are sold. A. a stock-keeping unit B. an independent marketing channel C. an electronic data warehouse D. a vendor-managed inventory E. a radio frequency identification tag

answer

D (a vendor-managed inventory)

question

_______ is an approach for improving marketing channel efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its stores. A. EDI B. VMI C. ASN D. UPC E. JIT

answer

B (VMI)

question

In a distribution center, which person would be responsible for the financial planning and analysis of merchandise, and its allocation to stores? A. Planner B. Dispatcher C. Supervisor D. Shipping manager E. Warehouse manager

answer

A (planner)

question

The _____ is the person who coordinates deliveries to the distribution center. A. planner B. dispatcher C. supervisor D. shipping manager E. warehouse manager

answer

B (dispatcher)

question

_______ is the process of going through the goods upon receipt to make sure they arrive undamaged and that the merchandise ordered was the merchandise received. A. Receiving B. Checking C. Cross-docking D. Marking E. Ticketing

answer

B (checking)

question

Radio frequency identification tags are A. demand scheduling data tags. B. information tags used on floor-ready merchandise. C. shipping tags used to record weight limits of different types of trucks. D. tiny computer chips that transmit information about the contents of containers. E. electronic discount information tags used to provide reduced prices to select customers.

answer

D (tiny computer chips that transmit information about the contents of containers)

question

_____ is a practice in which merchandise cartons are prepackaged by the vendor for a specific store. A. Pick-ticketing B. Just-in-time inventory C. Radio-frequency identification D. Checking E. Cross-docking

answer

E (cross-docking)

question

What two additional tasks are required in order to make merchandise "floor-ready"? A. Receiving and checking B. Scanning and stocking C. Uncrating and checking D. Ticketing and marking E. Picking and scanning

answer

D (ticketing and marking)

question

A forklift operator in a warehouse who needs to know how much of each item to get from specific storage areas would consult A. an RFID tag. B. an ASN document. C. a checking slip. D. a UPC label. E. a pick ticket.

answer

E (a pick ticket)

question

JIT inventory systems are associated with all of the following except A. frequent deliveries of less merchandise. B. reduced lead time. C. more inventory to warehouse. D. increased product availability. E. lower inventory investment.

answer

C (more inventory to warehouse)

question

The amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store ready for sale is referred to as A. just-in-time. B. quick time. C. pick time. D. down time. E. lead time.

answer

E (lead time)

question

How can a company find its way out of a market characterized by pure competition? A. Differentiate the product in some way, even by packaging, so customers will see it as distinct B. Consistently offer the lowest price until other competitors leave the market C. Increase prices and attract different, quality-oriented customers D. Increase the amount of available product to flood the market E. Decrease the amount of available product until the market reacts

answer

A (Differentiate the product in some way, even by packaging, so customers will see it as distinct) (The difference between pure competition and monopolistic competition is that in pure competition, products are not differentiated, but in monopolistic competition, they are, so the way to move out of a purely competitive market is to differentiate the product in some way)

question

Historically, prices were A. the center of attention in almost all marketing strategies. B. rarely changed except in response to radical shifts in market conditions. C. allowed to vary seasonally as cross-shopping tendencies fluctuated. D. calculated to minimize contribution per unit. E> analyzed and changed constantly.

answer

B (rarely changed except in response to radical shifts in market conditions)

question

One reason Taco Bell raised its prices was the result of an increase in _____. A. profits B. sales to loyal customers C. market share D. competitors' prices E. costs

answer

E (costs) (Taco Bell found its costs rising and felt it needed to raise prices accordingly, although cost should not be the sole factor considered in setting prices, it is one of the five Cs of pricing)

question

The quick service restaurant (QSR) market is considered a(n)_______. A. pure competition B. monopoly C. commodities competition D. monopolistic competition E. oligopoly

answer

D (monopolistic competition) (The quick service restaurant, QSR, market has monopolistic competition, this occurs when there are many competitors with differentiated offerings, different QSRs have established distinct brands that differentiate them from competitors)

question

Taco Bell's predominant pricing strategy is _______. A. profit-oriented B. volume-oriented C. customer-oriented D. competitor-oriented E. sales-oriented

answer

C (customer oriented) (Taco Bell is concerned about providing value to its customers, which is the hallmark of a customer-oriented pricing strategy)

question

Giving consumers larger quantities at a low price would help Taco Bell regain _____. A. status quo pricing B. a competitive advantage C. prestige product status D. word-of-mouth advertising E. the highest profit margin in fast food

answer

B (a competitive advantage) (Taco Bell's research indicated that consumers did not want to trade off between low price and large quantity, Taco Bell can improve its value and thus its competitive advantage by meeting both of those needs at once instead of forcing customers to choose)

question

According to the typical demand curve, lower prices will result in _____ being sold. A. a smaller variety of items B. similar quantities C. a greater variety of items D. larger quantities E. smaller quantities

answer

D (larger quantities) (Most demand curves show that demand rises—and larger quantities are sold—at lower prices)

question

_______ measures consumers' sensitivity to price changes. A. Income elasticity of demand B. Cross-price elasticity of demand C. Price elasticity of demand D. Competitive profit elasticity of demand E. Inelastic demand price parity

answer

C (Price elasticity of demand) (Price elasticity of demand measures how changes in price affect the quantity of the product demanded)

question

One problem in relying on price elasticity and demand curves when setting prices is A. the way a product or service is marketed can have a profound impact on price elasticity. B. competitors can construct the same demand curves, so there is no advantage in using them. C. marketing split from economics over the ideas of demand and elasticity. D. only economists can properly analyze demand curves and set prices using this tool. E. the underlying ideas of the demand curve and elasticity are less relevant in the modern economy.

answer

A (the way a product or service is marketed can have a profound impact on price elasticity) (Demand curves and price elasticity are the result of many factors, not the least of which is the nature of the marketing mix)

question

What characterizes a market with oligopolistic competition? A. The absence of competition B. Many firms selling differentiated products C. Many sellers of commodities D. A few dominant firms E. One firm controlling the market

answer

D (a few dominant firms)

question

U.S. Cellular sets prices based on adding value to its products and services. Which pricing orientation does this reflect? A. Breakeven orientation B. Profit orientation C. Customer orientation D. Competitor orientation E. Sales orientation

answer

C (customer orientation) (A customer orientation is when a firm sets its pricing strategy based on how it can add value to its products or services)

question

Though confusing to customers, U.S. Cellular priced its bundles very similar to its competitor's prices. Which competitor-oriented pricing strategy did U.S. Cellular use in this example? A. Competitive parity B. Premium C. Elastic D. Breakeven E. Status quo

answer

A (competitive parity) (Competitive parity means firms set prices that are similar to those of their major competitors)

question

If the market is elastic, relatively ____ changes in price generate fairly _____ changes in the quantity demanded. A. small; large B. small; equal C. small; small D. large; small E. large; equal

answer

A (small; large) (If demand is elastic, relatively small changes in price will generate fairly large changes in the quantity demanded, so if a firm is trying to increase its sales, it can do so by lowering prices)

question

What does U.S. Cellular need to consider in setting prices for its various data plans? A. All of these B. Costs C. Customers D. Competitors E. Company objectives

answer

A (all of these)

question

Which of the following markets is most likely to be characterized by oligopolistic competition in the United States? A. pens and pencils B. soybeans C. smartphone service providers D. men's clothing E. electrical service to the home

answer

c (smartphone service providers) (Soybeans are a purely competitive market; pens and pencils have elements of pure competition, for basic pencils, and of monopolistic competition, for particular types of pens, Men's clothing exhibits monopolistic competition due to the large number of providers, and electrical service is often a monopoly, there are only a handful of smartphone service providers that dominate the market, which would characterize this category as oligopolistic competition)

question

According to a typical demand curve, the higher the price, A. the lower the output of producers. B. the greater the production costs. C. the lower the quantity consumers will buy. D. the greater the income effect. E. the lower the cross-price elasticity.

answer

C (the lower quantity consumers will buy) (A typical demand curve shows quantity purchased decreasing as price increases)

question

Barry customizes Harley-Davidson motorcycles. No two cycles are alike. He notices that very few customers even ask the price of his motorcycles before they decide to purchase them. Demand for his motorcycles is probably A. price elastic. B. cross-price elastic. C. income elastic. D. price sensitive. E. price inelastic.

answer

E (price inelastic) (Since Barry's customers don't seem to care about the price, we would not expect to see demand change much as price changes. This describes a situation where demand is price inelastic)

question

The full price of a product or service includes all of the following except A. the price of alternative products and services. B. taxes. C. value of the consumer's time. D. travel costs. E. shipping.

answer

A (the price of alternative product and services) (Taxes, shipping, travel costs, and the value of the consumer's time are all elements of the full price of a product)

question

_______ products are products whose demands are positively related and as such, they rise or fall together. A. Premium B. Elastic C. Inelastic D. Substitute E. Complementary

answer

E (complementary) (Complementary products are things that are used together and as such, their demands are positively related; In other words, a percentage increase in the quantity demanded for Product A results in a percentage increase in the quantity demanded for Product B)

question

For which of the following is demand likely to be most sensitive to price increases? A. prescription drugs B. electricity C. college tuition for last-semester seniors D. hospital care E. a specific brand of soft drink

answer

E (a specific brand of soft drink) (A specific brand of soft drink has many substitutes, and so demand is likely to be sensitive to price increases, one exception would be extremely brand-loyal consumers)

question

Variable costs change with A. changes in target return pricing. B. competitive parity. C. changes in the quantity being produced. D. changes in fixed costs. E. changes in cross-price elasticity.

answer

C (changes in the quantity being produced)

question

The more substitutes that exist in a market, A. the more sensitive consumers will be to changes in the price of a particular product. B. the easier it will be to utilize a target profit pricing strategy. C. the lower the price elasticity for each product. D. the greater the income elasticity for each product. E. the more likely the market will be characterized as an oligopoly.

answer

A (the more sensitive consumers will be to changes in the price of a particular product) (Substitutes, by offering reasonable alternatives, typically make consumers more sensitive to price changes)

question

Sell below store's cost

answer

Loss Leader Pricing

question

Push on sale items only

answer

Bait and Switch

question

Harm competitor's business

answer

Predatory Pricing

question

Manufacturer favors one retailer

answer

Price Discrimination

question

Horizontal collusion

answer

Price Fixing

question

In determining the price for his company's new personal computer photography printer, Raymond is assessing the total cost of owning his printer as compared to alternative products available in the market. Raymond is using _______ pricing. A. EDLP B. premium C. reference-based D. improvement value E. cost of ownership

answer

E (cost of ownership) (Cost of ownership pricing considers, not just the price initially paid, but the cost of owning the product across its lifetime, the costs of owning a printer would include supplies like ink, whose cost might vary across different printers)

question

Verizon offered a lower data rate for its new 4G service ($50 per month) than for its existing 3G service ($60 per month). This pricing strategy is called ___________. A. cost-based pricing B. high/low pricing C. leader pricing D. market penetration pricing E. price skimming

answer

D (market penetration pricing) (Verizon priced its new 4G service low to capture market share from its competitors, this is known as a market penetration strategy)

question

To capture market share, all the companies in the case used the same basic strategy, which was to _________. A. reduce prices B. use leader pricing C. raise prices D. engage in price fixing E. raise costs

answer

A (reduce prices) (With no new customers to attract, the major phone companies sought to increase their share of the market, accomplishing that goal meant attracting customers from competitors with pricing reductions)

question

When the cellular providers began offering 4G service, they needed to estimate how much more (or less) consumers would be willing to pay for the product relative to other comparable products. This pricing consideration is the ___________ method. A. competition-based B. EDLP C. improvement value D. cost of ownership E. cost-based

answer

C (improvement value) (The improvement value method represents an estimate of how much more, or less, consumers are willing to pay for a product relative to other comparable products)

question

If any of the companies in the case set a very low price for one or more of its products with the intent to drive its competition out of business, they would be guilty of the illegal pricing practice known as _______. A. price discrimination B. horizontal price fixing C. bait-and-switch D. predatory pricing E. vertical price fixing

answer

D (predatory pricing) (When a firm sets a very low price for one or more of its products with the intent to drive its competition out of business, it is using predatory pricing, which is illegal)

question

One pricing tactic Verizon could offer consumers is to issue a refund as a portion of the purchase price returned to the buyer in the form of cash. This tactic is called a(n) _________. A. coupon B. allowance c. seasonal discount D. rebate E. quantity discount

answer

D (rebate) (Rebates provide a form of discounts for consumers off the final selling price, in this case, the manufacturer, instead of the retailer, issues the refund as a portion of the purchase price returned to the buyer in the form of cash)

question

Most cellular providers now offer a free phone when you subscribe to their advanced data services. This is a pricing tactic called ________. A. price bundling B. leader pricing C. an allowance D. a quantity discount E. price lining

answer

A (price bundling) (The practice of selling more than one product for a single, lower price, such as a phone and data service, is called price bundling)

question

Pricing voice plans very low in hopes of enrolling customers in higher margin data plans is essentially a form of the pricing tactic called ______. A. leasing B. leader pricing C. price lining D. a slotting allowance E. seasonal discounting

answer

B (leader pricing) (Leader pricing is a tactic which aggressively prices and advertises a regularly purchased item, often priced at or just above cost, the rationale behind this tactic argues that the consumer will probably purchase other items, which sell at a higher margin, while more typical in retail, the tactic outlined in the case is a form of leader pricing)

question

Which of the following is NOT a reason high-end stores such as Chanel would use price skimming? A. Their customers are interested in the status afforded by names like "Chanel." B. Their customers make decisions based on convenience and practicality. C. Their customers like costly details that are not easily imitated. D. Their customers want the latest styles as soon as they come out. e. Their customers are not price-sensitive.

answer

B (Their customers make decisions based on convenience and practicality) (The customers of high-end stores do not usually make decisions based on convenience and practicality)

question

Why do companies such as H&M and Zara use penetration pricing? A. They can build profits quickly. B. They can raise prices over time. C. Their customers are willing to pay more for their products. D. They cannot satisfy a rapid rise in demand. E. Their competitors are unable to enter the market easily.

answer

A (they can build profits quickly) (Companies who use penetration pricing can build profits quickly)

question

Based on _________, Chanel may set high prices for its winter coats because its customers are willing to pay more for a product that will last a lifetime. A. high/low pricing B. the competitor-based pricing method C. the improvement value method D. the cost of ownership method E. everyday low pricing

answer

D (the cost of ownership method) (Using the cost of ownership method, consumers may be willing to pay more for a particular product because, over its entire lifetime, it will eventually cost less to own than a cheaper alternative)

question

Suppose Zara wants to know how much more consumers are willing to pay for its clothing line relative to other comparable clothing stores. The company performs research to determine how its customers value Zara's clothing—in terms of quality, style, and versatility—compared with similar clothing that the customers have purchased elsewhere. Which method is Zara using to determine pricing in this scenario? A. Everyday low pricing B. Cost of ownership method C. Reference pricing D. High/low pricing E. Improvement value method

answer

E (improvement value method)

question

Suppose Zara features in its advertisements and in signs around the store both the original prices and sale prices of certain items. This is an example of ___________. A. cost of ownership pricing B. everyday low pricing C. horizontal price fixing D. high/low pricing E. improvement value pricing

answer

D (high/low pricing) (Sellers using a high/low pricing strategy often communicate their strategy through the use of a reference price, which is the price against which buyers compare the actual selling price of the the product, in Zara's case, the "original" price is the reference price, and buyers will compare the sale price of the item to this original, or reference, price)

question

Charging a relatively high price for new and innovative products to those consumers most willing and able to pay the high price is called price A. fixing. B. referencing. C. penetration. D. bundling. E. skimming.

answer

E (skimming) (There are two primary new product pricing strategies: skimming, which focuses on selling at a high price to the innovators and early adopters on the diffusion of innovation curve; and market penetration, which focuses on selling at a low price in order to gain market share as quickly as possible)

question

Fees paid to retailers simply to get new products into stores or to gain more or better shelf space for their products are called _______ allowances. A location B. space C. placement D. shelf E. slotting

answer

E (slotting) (This is the definition of slotting allowance, some argue that slotting allowances are unethical because they put small manufacturers that cannot readily afford allowances at a competitive disadvantage)

question

Which of the following is not a common business-to-business pricing tactic? A. quantity discounts B. slotting allowances C. seasonal discounts D. advertising allowances E. loss leader pricing

answer

E (loss leader pricing) (Business pricing tactics include seasonal discounts, cash discounts, advertising allowances, slotting allowances, quantity discounts, and uniform delivered vs zone pricing, loss leader pricing is an unethical practice in which a retailer sells a product at a price below its costs)

question

The improvement value method and the cost of ownership method are two approaches for setting prices that are _______ methods. A. cost-based B. value-based C. competitor-based D. production-based E. market-based

answer

B (value-based) (Value-based pricing methods consider the consumers' perceived value, with the improvement value approach, the manager tries to estimate how much more or less consumers are willing to pay for a product relative to other comparable products; the cost of ownership method determines the total cost of owning the product over its useful life)

question

A weakness associated with cost-based pricing methods is that they A. are too difficult to calculate. B. are structurally inflexible and ignore vertical price-fixing alternatives. C. do not consider profit when calculating. D. do not recognize the role consumers or competitors' prices play in the marketplace. E. do not consider fixed or variable costs.

answer

D (do not recognize the role consumers or competitors' prices play in the marketplace) (Cost-based pricing methods primarily consider the firm, and not its customers or competitors)

question

Retailers use _______ to get rid of slow-moving or obsolete merchandise. A. price lining B. seasonal allowances C. slotting allowances D. markdowns E. rebates

answer

D (markdowns) (Markdowns are the reductions retailers take on the initial selling price of the product or service and enable retailers to get rid of slow-moving or obsolete merchandise, sell seasonal items after the appropriate season, and match competitor's prices on specific merchandise)

question

In which of the following tactics does a consumer pay a fee to purchase the right to use a product for a specific amount of time? A. bundling B. lease C. lay-away D. bait and switch E. rebate

answer

B (lease) (For some products, discounts, coupons, and rebates may not be sufficient to bring the price to within consumers' reach, with a lease, consumers pay a fee to purchase the right to use a product for a specific amount of time, they never own the product; they are just renting it)

question

In this scenario Beth represents the _____. A. wholesaler B. consumer C. supplier D. retailer E. distributor

answer

D (retailer) (Beth runs a retail store that has received a large order from a group that she is trying to fill)

question

In this scenario Bill represents the ______. A. consumer B. retailer C. supplier D. credit bureau E. shipping company

answer

C (supplier) (Bill represents the supplier, who is probably the manufacturer of the jackets)

question

This is a ____ type of interaction. A. B2C B. C2B C. C2C D. B2B E. B2G

answer

D (B2B) (Both participants in the conversation are businesses, so this is a B2B interaction)

question

In order to find out what retailers might have unsold G23 jackets, Bill will probably use _______. A. a dispatcher B. a JIT system C. cross-docking D. a push supply chain E. EDI

answer

E (EDI) (It would probably take too long to call every retailer to see if any of them have G23 jackets in their inventory, Bill will no doubt use EDI information-sharing capabilities to check inventory levels at different retailers)

question

Where does the predominant supply chain issue occur in this scenario? A. Transportation B. Raw materials C. Merchandise flow D. Pricing E. Information flow

answer

E (information flow) (At the moment, merchandise availability is the major problem, but the problem was originally caused by difficulties in information flow, Beth was not informed that her order had been rejected until much too long after it was placed, leading her to believe that the order was on its way)

question

One of the ways that Walmart has been able to reduce the prices of its products, and add value to its customers, is by its continuing focus on streamlining all its _____ functions. A. sales B. RFID C. marketing D. supply chain management E. production management

answer

D (supply chain management) (Walmart has focused its efforts on streamlining its supply chain management functions. This includes storage, transportation, delivery, and distribution as well as building collaborative relationships with its suppliers)

question

By combining their resources and developing shared goals, Procter & Gamble and Walmart were able to increase the value to the final consumer. Their relationship is considered _________. A. strategic B. contentious C. conflicting D. combined E. balanced

answer

A (strategic) (Strategic relationships occur when supply chain members are committed to maintaining a relationship over the long term and investing in opportunities that are mutually beneficial)

question

Walmart and Procter & Gamble effectively implemented ________, which allowed for information to flow directly from Walmart's store to Procter & Gamble's production facilities. This streamlined production as well as distribution, thus reducing costs and getting products to Walmart's customers sooner. A. ticketing and marking B. a corporate vertical marketing system C. horizontal channel conflict D. a new franchise E. electronic data interchange

answer

E (electronic data interchange) (The CFPR system discussed in the case is an example of electronic data interchange, EDI, which reduces the time between the decision to place an order and the receipt of merchandise, these increased efficiencies can result in lower costs and lower prices)

question

The strategic relationship between Walmart and Procter & Gamble is based on __________ because both firms realize that investments in supply chain management will create savings for consumers. A. interdependence B. conflict C. logistics D. channel management E. independence

answer

A (interdependence) (Interdependence between the supply chain members, Walmart and Procter & Gamble, is based on mutual benefits and is key to developing a sustainable strategic relationship)

question

Zara has developed the practice of delivering less merchandise to its stores on a more frequent basis. This quick response system is called a(n) ________. A. just-in-time inventory system B. consignment system C. vertical marketing system D. conventional marketing channel E. indirect marketing channel

answer

A (just-in-time inventory system) (Zara uses a just-in-time inventory system which is an inventory management system that delivers less merchandise on a more frequent basis than traditional inventory systems)

question

As the case indicated, over time some stores had stockouts of popular merchandise while other stores were overstocked with the same item. This could lead to disagreements between the stores and Zara's corporate headquarters, which is a form of ______. A. horizontal channel conflict B. channel efficiency C. disintermediation D. vertical channel conflict E. multi-channel conflict

answer

D (vertical channel conflict) (Vertical conflict occurs between members at different levels of the channel, in this case retailers and corporate headquarters)

question

Zara owns its factories, distribution centers, and retail stores. This is the ______ form of a ________. A. contractual; vertical marketing system B. corporate; conventional marketing channel C. administered; vertical marketing system D. corporate; vertical marketing system E. administered; conventional marketing channel

answer

D (corporate; vertical marketing system) (In a corporate vertical marketing system, the parent company, in this case Zara, has complete control and can dictate the priorities and objectives of the marketing channel because it owns multiple segments of the channel, such as manufacturing plants, warehouse facilities, and retail outlets)

question

Zara's store managers use hand held devices to immediately pass purchase information back to its corporate headquarters in Spain. This is a form of _______. A. EDI B. ASN C. RFID D. consignment E. VMI

answer

A (EDI) (Electronic data interchange, EDI, is the computer-to-computer exchange of business documents from a retailer to a vendor and back)

question

One problem that occurred for Zara was that individual store managers were ordering too much inventory on popular items. One way Zara addressed this was to implement _________, whereby Zara used mathematical processes and assumed responsibility for managing each store's inventory. A. RFID B. ASN C. cross docking D. VMI E. EDI

answer

D (VMI) (Vendor-managed inventory (VMI) is an approach for improving marketing channel efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its stores)

question

Place the six information flows in their proper place on the timeline

answer

1.) Customer to Store (DVD player purchased) 2.) Store to Buyer (POS terminal sends data) 3.) Buyer to Manufacturer (Corporate Inventory order) 4.) Store to Manufacturer (frequent, direct reorder) 5.) Store to Distribution Center (request delivery schedule) 6.) Manufacturer to Distribution Center and Buyer (advanced shipping notice)

question

What type of retailer is Nordstrom Rack? A. Full-line discount store B. Extreme-value retailer C. Off-price retailer D. Department store E. Specialty store

answer

C (off-price retailer) (An off-price retailer offers an inconsistent assortment of brand-name merchandise at significant discounts, which describes Nordstrom Rack)

question

Suppose that a luxury brand chose to sell its products only through Nordstrom stores. This would be an example of what level of distribution intensity? A. Private-label distribution B. Intensive distribution C. Premium distribution D. Exclusive distribution E. Selective distribution

answer

D (exclusive distribution Exclusive distribution refers to selling a product through a single retailer or, at least, a single retailer in a particular geographic area)

question

Nordstrom Rack sells its products in physical stores, on its website, and using its mobile app, in order to make its products available to customers when and where they want to buy them. This is part of Nordstrom's _________ strategy. A. store-focused B. omnichannel C. cooperative D. pricing E. private-label

answer

B (omnichannel) (An omnichannel, or multichannel retail strategy offers consumers multiple channels through which to shop, it is especially common for retailers to adopt a multichannel strategy by offering their products both in stores and online)

question

Forty-eight of the fifty brands sold by Nordstrom department stores are also offered at Nordstrom Rack. This is a key element of Nordstrom Rack's __________ strategy. A. private-label B. co-op advertising C. product D. place E. price

answer

C (product) (Since this deals with the merchandise offered at Nordstrom Rack, this is an element of Nordstrom Rack's product strategy, by carrying the same brands, Nordstrom Rack assures customers that they will find the same high-quality brands they)

question

The mobile apps for both Nordstromrack.com and HauteLook allow customers to request notifications when specific merchandise is available for sale. This is an example of what benefit of the Internet as a retailing channel? A. Risk reduction B. Expanded market presence C. Browsing D. Immediate gratification E. Personalization

answer

E (personalization) (This is an example of personalization, where the customer can received notifications about the particular products that interest them)

question

Andy purchased a number of books from Amazon.com, and he learned to trust the recommendations made to him. More than once he was pleasantly surprised at the books and authors he discovered this way. In this case, Amazon.com was creating value for Andy through A. interactive offerings. B. rapid delivery. C. expanded market presence. D. repeat business. E. personalized offerings.

answer

E (personalized offerings) (Amazon is creating a personalized offering for Andy, recommending books he might enjoy based on his past purchases and other interaction with the site)

question

Today, retailers like Walmart, Home Depot, and Kroger dictate to their suppliers all of the following except A. how products should be configured. B. when products should be delivered. C. what products should cost. D. which competitors they should collaborate with. E. what should be made.

answer

D (which competitors they should collaborate with) (Large retailers cannot dictate competitive dynamics to retailers, but they typically dictate the other factors listed)

question

Target would be categorized as which type of retailer? A. Department store B. Convenience store C. Specialty store D. Full-line discount store E. Big box store

answer

D (Full-line discount store) (Target is a full-line discount store, it offers a broad variety of merchandise, limited service, and low prices)

question

The Shops at Target features different independently owned specialty stores. Which of the following is NOT true of a specialty store? A. Sales associate expertise B. Limited but complementary categories C. Deep but narrow assortment D. Very specific target segment E. Very low prices

answer

E (very low prices) (Specialty stores concentrate on a limited number of complementary merchandise categories and are targeted toward very specific market segments by offering deep but narrow assortments and sales associate expertise, specialty stores are not characterized by any one price level)

question

The Shops at Target adds almost 400 new items to Target's already extensive inventory. In retail terms, a unique item of inventory is called a(n) _____. A. SKU B. co-op C. cookie D. UPC E. RFID

answer

A (SKU) (Stock keeping units, SKUs, represent a unique inventory item)

question

Gwen Stefani designed a line of Harajuku Mini kids clothing which can only be found at Target. In retailing terms this represents a(n) _______. A. exclusive brand B. multichannel strategy C. brand dilution strategy D. category killer E. intensive distribution strategy

answer

A (exclusive brand) (An exclusive brand is a brand that is developed by a national brand vendor, often in conjunction with a retailer, and is sold exclusively by the retailer)

question

Which of the following would NOT be a benefit of in-store shopping for consumers? A. Browsing B. Personalized promotions C. Touching and feeling products D. Risk reduction E. Cash and credit payment

answer

B (personalized promotions) (The interactive nature of the Internet provides an opportunity for retailers to personalize its offerings for each of its customers, some multichannel retailers are able to personalize promotions on the basis of several attributes tied to the shopper's current or previous web sessions)

question

Before deciding on a retail partnership, Apple and Target should evaluate all of the following EXCEPT: A. Channel member characteristics B. Customer expectations C. Number of SKUs in inventory D. Distribution intensity E. Channel structure

answer

C (Number of SKUs in inventory) (There are four important considerations in choosing a retail partner: basic channel structure, customer expectations, channel member characteristics, and distribution intensity)

question

By offering the exclusive products produced by its retail partners in stores and through its website, Target is using a(n) _______ strategy. A. multichannel B. extreme value C. co-op D. category killer E. selective distribution

answer

A (multichannel) (A multichannel strategy involves selling in more than one channel, eg, store, catalog, and Internet)

question

Example Retailer: Save-A-Lot Sam's Club Walmart Staples Sephora Macy's TJMaxx

answer

Type of Retailer: Supermarket Warehouse Club Full-Line Discount Store Category Specialist Specialty Store Department Store Off-Price Retailer

question

Staples has been successful using a multichannel approach. One of the contributors to this success is that the consumer sees the shopping experience as being __________ across the different retail channels. A. challenging B. sustainable C. focused D. integrated E. difficult

answer

D (integrated) (It is important for multichannel retailers to provide an integrated shopping experience for customers, by making the process as seamless as possible, Staples has been able to capitalize on multichannel success)

question

The multichannel approach has enabled Staples to __________. A. increase its productivity B. increase the number of products held in retail stores C. increase prices D. reduce attention to customer service E. provide only more popular items online

answer

A (increase its productivity) (The multichannel approach allows Staples to increase its productivity by stocking only more popular items in stores but not sacrificing product availability)

question

Staples has expanded its __________ efforts to sell to companies such as Wells Fargo or IBM. A. consumer-to-business B. unreachable C. international D. business-to-consumer E. business-to-business

answer

E (business-to-business) (Staples has expanded its business-to-business efforts to sell to companies such as Wells Fargo or IBM)

question

Although the online and catalog channels are very successful for Staples, why it is important for the company to continue to operate its retail locations? A. All of these B. Retail locations are more successful. C. Some customers like the anonymity. D. Many customers do not have computers. E. Many customers like to browse products and also ask questions of the sales associates.

answer

E (Many customers like to browse products and also ask questions of the sales associates) (Retailers use multiple channels to provide customers with different shopping options that are convenient to them, many customers prefer the retail location because they like to browse products and also get recommendations and advice from sales associates)

question

Which component of IMC was NOT used in the Jay-Z and Microsoft campaign described in the case? A. Search engine marketing B. Online marketing C. Personal selling D. Direct marketing E. Outdoor advertising

answer

C (personal selling) (There is no evidence or information in the case that personal selling was used in the campaign)

question

A dedicated website was created where fans could post photos of the pages from Decoded that they found. In the communication process, this represented _______. A. a feedback loop B. noise C. decoding D. the receiver E. encoding

answer

A (a feedback loop) (A feedback loop allows the receiver to communicate with the sender and thereby informs the sender whether the message was received and decoded properly, the photos on the website were feedback for Droga5 that their messages were understood and properly decoded, ie, that the book pages were actually being found)

question

Which component of IMC was used when the New York Times and New York Observer ran articles on the campaign? A. Personal selling B. Advertising C. Sales promotions D. Direct marketing E. Public relations

answer

E (public relations) (Free media attention is a form of public relations)

question

Once the campaign generated interest, it next had to create _______ before the target audience would actually be moved to purchase Jay-Z's book or use the Bing search engine. A. a lagged effect B. clarity C. awareness D. a feedback loop E. desire

answer

E (desire) (The AIDA model of marketing communication suggests that awareness leads to interest, which leads to desire, which leads to action, in this case the ultimate actions were to use the Bing search engine and purchase Jay-Z's memoir, this would not occur without desire, the feeling that "I want it")

question

Online marketing was used extensively in this campaign. To measure the effectiveness of the online component of the campaign, Droga5 would use all of the following metrics EXCEPT: A. Which website the viewer came from B. GRP C. Time spent on a page D. Click through tracking E. Number of pages viewed

answer

B (GRP) (Although GRP is an adequate measure for television and radio advertisements, assessing the effectiveness of any web-based communication efforts in an IMC campaign generally requires web tracking software to measure how much time viewers spend on particular webpages, the number of pages they view, how many times users click on banner ads, which website they came from, and so on)

question

One metric that could be used to measure the effectiveness of the campaign is ________, which is computed by subtracting the advertising costs from sales revenue, then dividing by the advertising costs. A. relevance B. ROI C. CTR D. impressions E. GRP

answer

B (ROI) (Return on investment ROI = sales revenue - advertising cost / advertising cost, It is a metric used to evaluate advertising effectiveness)

question

Decoded did become a national bestseller, but it was released sometime after the campaign had concluded. This represents ______, which makes it difficult if not impossible to assess the specific impact of the campaign on book sales. A. the lagged effect B. a feedback loop C. a lack of metrics D. budgeting problems E. communication noise

answer

A (the lagged effect) (Sometimes consumers don't act immediately after receiving a marketing communication because of the lagged effect—a delayed response to a marketing communication campaign, in this case there was a lag time to the actual publication of the book, making it practically impossible to isolate the effect of the campaign on book sales)

question

In recent years, the component of IMC that has received the greatest increase in aggregate spending is A. sales promotions. B. direct marketing. C. public relations. D. media advertising. E. publicity.

answer

B (Direct marketing) (Direct marketing has received the greatest recent increase in aggregate spending)

question

In the IMC communication process, the __________ encodes the marketing communication message. A. receiver B. communication channel C. instructor D. transmitter E. sender

answer

D (The transmitter) (The transmitter converts the sender's ideas into a message, which could be verbal, visual, or both)

question

In the AIDA model, the do stage is the __________ stage. A. action B. interest C. desire D. awareness E. intentions

answer

A (action) (The action stage is the final stage of the AIDA model)

question

When using the objective-and-task method of IMC budgeting for multiple products and services, how often must the process be repeated? A. once, for each individual product and service B. once, by each management team member C. when the prior year's budget is exceeded D. only when a product is removed from the line E. never, after the first product/service

answer

A (once, for each individual product and service) (his process—set objectives, choose media, and determine costs—must be repeated for each product or service)

question

In the communication process of marketing communications, the marketing department often functions in the role of transmitter. True False

answer

True (In marketing communications, the marketing department or external agency receives the information and transforms it for use in its role as the transmitter)

question

__________ is any interference in the IMC process. A. Excessive reach B. Feedback C. Looping D. Noise E. Translation

answer

D (noise) (Interference in the IMC process is referred to as noise, It can be caused by competing messages, a lack of clarity in the message, or a flaw in the medium)

question

In the movie Field of Dreams, one of the memorable phrases is, "If you build it, he will come." The AIDA model would suggest that after marketers "build" a product or service and create awareness among consumers, they need to A. determine the level of desire needed to sustain action. B. offer discounts to increase purchase intentions. C. create interest among consumers, persuading them to investigate further. D. take steps to encourage immediate purchase. E. promote sufficiently to gain global attention.

answer

C (create interest among consumers, persuading them to investigate further) (The steps in the AIDA model are awareness, interest, desire, and action)

question

What type of marketing uses a variety of forms to communicate directly with target customers to generate a response or transaction? A. Sales B. Public Relations C. Publicity D. Place E. Direct

answer

E (Direct) (By directly communicating with its targeted customers, Frito-Lay was using direct marketing)

question

Frito-Lay increased its emphasis on _____ customers online to build its brand image. A. negotiating with B. grouping with C. persuading D. interacting with E. informing

answer

D (interacting with) (The video states that Frito-Lay wished to interact with customers in order to engage them with the brand)

question

"Crash the Super Bowl" was designed to attract customers with similar interests, also known as _______. A. mass customization B. community building C. public relations D. personal selling E. direct marketing

answer

B (community building) (Community building is an activity bringing together individuals with shared interests)

question

Some innovative firms entertain consumers with ______; these consumers then interact with the brand. A. email B. instant messaging C. online games D. blog posts E. catalogs

answer

C (online games) (Online games can be an effective way to reach consumers and to encourage them to engage with the brand)

question

Suppose Scion is trying to reach the under 25 age group to make them long-term customers. For Scion, this group would be its' __________. A. niche market B. transmitter C. target market D. communication channel E. only buyer

answer

C (target market) (Scion is trying to reach the under 25 market to make them long-term customers, this demographic is Scion's target market)

question

Suppose many young consumers that Scion was targeting with the company's nontraditional ads had never heard of the Scion. The main goal of Scion's initial communications would have been to build _________. A. attention B. desire C. placement D. action E. awareness

answer

E (awareness) (When customers are unfamiliar with a brand, a firm should try to first create awareness of the brand)

question

Integrated marketing communications programs aim to have all communications work together to deliver a concise message to the consumer. What is a potential problem Toyota might face with using nontraditional media? A. It might generate more interest in its brand. B. Its current customers might get confused or the media might send the wrong message. C. It will not reach its target market. D. It will not reach new customers. E. Consumers might actively seek out the brand.

answer

B (Its current customers might get confused or the media might send the wrong message) (Sometimes using nontraditional methods can confuse consumers or send the wrong message about the brand, however, using nontraditional media allows Toyota to reach new customers and generate interest in the brand)

question

Scion's communication methods included skywriting and projecting images onto the sides of buildings. These are examples of which integrated marketing communications element? A. Direct marketing B. Advertising C. Sales promotion D. Mobile marketing E. Personal selling

answer

B (advertising) (These are examples of advertising)

question

When using the rule-of-thumb method for IMC budgeting, prior sales and communication activities are used for guidance. True False

answer

True (The rule-of-thumb methods, competitive parity, percentage of sales, available budget, use prior sales and communication activities to determine the present communication budget)

question

The _____________ loop allows the receiver to communicate with the sender in the IMC process. A. feedback B. precoding C. pretesting D. decoding E. encoding

answer

A (feedback) (A feedback loop permits the receiver to respond to the sender)

question

Carlos owns a chain of retail electronic stores. He is evaluating how he allocates his firm's IMC budget. He receives offers from a variety of advertising media, spends money on his firm's public relations efforts, and is considering electronic media alternatives. Carl must recognize that each IMC alternative A. is dictated by the nature of the supply chain. B. is part of the whole. C. will stand on its own. D. is part of noncommercial free speech. E. doesn't help communicate value to the consumer.

answer

B (Is part of the whole) (An integrated marketing communication strategy will have many components that must be coordinated into an integrated whole)

question

The "Indoor Tanning Is Out" campaign is designed to raise awareness of the increased risk of melanoma, the deadliest form of skin cancer, and decrease usage of tanning salons. This is an example of a(n) _____ advertisement. A. attribute-based B. relational C. institutional D. product-focused E. Public service

answer

E (public service) (Public service advertisements, PSAs, focus on public welfare; generally they are sponsored by nonprofit institutions, civic groups, religious organizations, trade associations, or political groups)

question

The "Beef, It's What's for Dinner" campaign to encourage beef consumption is an example of _____ advertising. A. public service B. institutional C. attribute-based D. relational E. product-focused

answer

B (Institutional) (Institutional advertisements inform, persuade, or remind consumers about issues related to places, politics, or an industry)

question

When introducing new products, Quaker Oats uses a(n) _____ strategy by offering retailers discounts on the products along with point-of-purchase displays to motivate them to highlight the product. A. informative B. push C. reminder D. persuasive E. pull

answer

B (Push) (Push strategies are designed to increase demand by focusing on wholesalers, retailers, or salespeople, these campaigns attempt to motivate the seller to highlight the product, rather than the products of competitors, and thereby push the product to consumers)

question

When a company wants to create and build brand awareness, it would use _____ advertising. A. informative B. reminder C. push D. pull E. persuasive

answer

A (informative) (Informative advertising is a communication used to create and build brand awareness, with the ultimate goal of moving the consumer through the buying cycle to a purchase)

question

The Holiday Inn Priority Club is an example of _____, which is specifically designed to retain customers by offering premiums or other incentives to customers who make multiple purchases over time. A. a premium B. a rebate C. a loyalty program D. cross-promotion E. a sampling program

answer

C (a loyalty program) (Loyalty programs are specifically designed to retain customers by offering premiums or other incentives to customers who make multiple purchases over time)

question

Bowflex and Jenny Craig develop advertisements featuring celebrities to address their target markets' need for feeling good about themselves. This is an example of which of the following? A. Utilitarian appeal B. Informational appeal C. Social appeal D. Emotional appeal E. Relational appeal

answer

D (emotional appeal) (Emotional appeals focus on feelings about the self, so advertisements for Bowflex and Jenny Craig use emotional appeals to feature celebrities or regular people talking about how much better they feel about themselves after they've joined the program and lost weight)

question

A _____ offers an item for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing. A. sweepstakes B. premium C. POP display D. rebate E. loyalty program

answer

B (premium) (A premium offers an item for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing)

question

As a type of sales promotion, _____ encourage trial and reduce consumer risk, although they may negatively impactperceptions of brand value. A. rebates B. deals C. premiums D. coupons E. samples

answer

B (deals) (Deals encourage trial and reduce consumer risk, but they may reduce perception of value)

question

In many cases, _____ activities support other promotional efforts by generating "free" media attention and general goodwill. A. pulsing B. direct marketing C. personal selling D. public relations E. sales promotion

answer

D (Public relations) (Public relations, PR, involves managing communications and relationships to achieve various objectives, such as building and maintaining a positive image of the firm, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media, in many cases, public relations activities support other promotional efforts by generating "free" media attention and general goodwill)

question

An example of _____ is when Tom Hanks is shown stranded on an island with a FedEx box in the movie Cast Away. A. product placement B. a premium C. a loyalty program D. event sponsorship E. cross-marketing

answer

A (product placement) (When marketers use product placement, they pay to have their product included in nontraditional situations, such as in a scene in a movie or television program)

question

Which of the following is not an aspect of advertising? A. It is used to sell only products. B. Legally, the source of the message must be known or knowable. C. It must be carried by some medium. D. It is not free. E. It is a persuasive form of communication.

answer

A (it is used to sell only products) (There are important distinctions between advertising and other forms of promotion: advertising is not free; it must be carried by some medium; legally, the source of the message must be known or knowable; and it represents a persuasive form of communication designed to get the consumer to take some action, but not necessarily to buy a product, the action could also be for a public service message such as "Don't drink and drive")

question

Firms often use _____ advertising to convince consumers to take action such as switching brands, trying a new product, or even continuing to buy the advertised product. A. informative B. push C. pull D. persuasive E. reminder

answer

D (persuasive) (When a product has gained a certain level of brand awareness, firms use persuasive advertising to motivate consumers to take action, such as switching brands, trying a new product, or even continuing to buy the advertised product)

question

The slogans "Coolest Video Game" and "World's Best Hamburgers" are examples of _____, which is the legal exaggeration of praise, stopping just short of deception, lavished on a product. A. puffery B. cross-promoting C. inflated advertising D. flighting E. pulsing

answer

A (Puffery) (Puffery is the legal exaggeration of praise, stopping just short of deception, lavished on a product, in this example the words coolest and best are subjective measures)

question

_______ is a tool used to communicate the distinct attributes of a product; it can be used as a slogan or a theme and often becomes a snapshot of the entire advertising campaign. A. A headline B. An informational appeal C. The media mix D. Puffery E. A unique selling proposition

answer

E (unique selling proposition) (A common strategy used by marketers is to differentiate a product by establishing its unique benefits through a unique selling proposition USP, which is often the common theme or slogan in an advertising campaign, a good USP communicates the unique attributes of the product and thereby becomes a snapshot of the entire campaign, for example, Oreo Milk's Favorite Cookie)

question

When two or more firms join to reach a specific target market, it is referred to as A. cross-promoting. B. product highlighting. C. product placement. D. pulsing. E. flighting.

answer

A (cross-promoting) (To achieve a successful cross-promotion, the two products must appeal to the same target market and together create value for consumers)

question

IKEA advertises throughout the year, but significantly increases its advertising during the back-to-school time frame, thus implementing a _____ advertising schedule. A. flighting B. seasonal C. continuous D. status quo E. pulsing

answer

E (pulsing) (Pulsing combines the continuous and flighting schedules by maintaining a base level of advertising but increasing advertising intensity during certain periods, for example, the furniture retailer IKEA advertises throughout the year but boosts its advertising expenditures to promote school supplies in August)

question

As a means to reach large numbers of anonymous audience members, USA Today newspapers are considered to be which of the following types of media? A. Mass media B. Emotional media C. Utilitarian media D. Transatlantic media E. Niche media

answer

A (mass media) (Mass media channels include national newspapers, magazines, radio, and television and are ideal for reaching large numbers of anonymous audience members)

question

Assessing the effectiveness of an advertising campaign while it is running by monitoring key indicators is referred to as A. cross-checking. B. flighting. C. tracking. D. pulsing. E. sampling.

answer

C (tracking) (The effectiveness of an advertising campaign must be assessed before, during, and after the campaign has run, tracking includes monitoring key indicators, such as daily or weekly sales volume, while the advertisement is running to shed light on any problems with the message or the medium)

question

answer

C (advertising plan) (An advertising plan is a subsection of the firm's overall marketing plan that explicitly analyzes the marketing and advertising situation, identifies the objectives of the advertising campaign, clarifies a specific strategy for accomplishing those objectives, and indicates how the firm can determine whether the campaign was successful)

question

_______ advertising generally occurs in the growth and early maturity stages of the product life cycle, when competition is most intense, and attempts to accelerate the market's acceptance of the product. A. Persuasive B. Push C. Pull D. Reminder E. Informative

answer

A (persuasive) (When a product has gained a certain level of brand awareness, generally in the growth and early maturity stages of the product life cycle, firms use persuasive advertising to motivate consumers to take action)

question

In a print advertisement, items used to identify the sponsor of the ad, such as the company logo or USP, are referred to as A. advertising sponsorship. B. copy elements. C. headlines. D. brand elements. E. subheads.

answer

D (brand elements) (The use of brand elements, such as a logo or a unique selling proposition, helps identify the sponsor of the ad)

question

HGTV and Home and Gardens magazine fall into which of the following categories of media? A. Specialty media B. Mass media C. DIY media D. Utilitarian media E. Niche media

answer

E (niche media) (Specialty television channels like HGTV and specialty magazines such as Home and Garden are examples of niche media—channels that are more focused and generally used to reach a narrower audience)

question

ExxonMobil uses a(n) _____ appeal when it explains technical aspects of its products, such as lithium ion batteries, hydrogen technology, biofuels, and CO2 capture technologies. A. contemporary B. informational C. engineering D. candid E. emotional

answer

B (informational) (ExxonMobil attempts to explain some technical aspects of its products, such as lithium ion batteries, hydrogen technology, biofuels, and CO2 capture technologies, in an attempt to convince consumers that the company is environmentally friendly, efficient, innovative, and responsible)

question

Coppertone uses a _____ advertising schedule, where it advertises heavily in the months leading up to and during the summer, with no advertising after the season ends. A. continuous B. pulsing C. flighting D. status quo E. seasonal

answer

C (flighting) (Flighting refers to an advertising schedule implemented in spurts, with periods of heavy advertising followed by periods of no advertising, this pattern generally functions for products whose demand fluctuates, such as suntan lotion, which manufacturers may advertise heavily in the months leading up to and during the summer)

question

Which of the following is the first step in planning and executing an advertising campaign? A. Determine the advertising budget. B. Create the advertisements. C. Convey the message. D. Identify the target market. E. Set the advertising objectives.

answer

D (identify the target market) (The first step in planning and executing an advertising campaign is for firms to identify their target audience, so they can set the tone for the advertising program and help them select the media they will use to deliver the message to that audience)

question

he set of business activities that adds value to products and services sold to consumers for their personal or family use is referred to as A. retailing. B. marketing. C. wholesaling. D. distribution. E. supply chain management.

answer

A (Retailing)

question

When developing strategies for working with retailers, manufacturers must consider whether they should sell in more than one outlet (e.g., store, catalog, and Internet). Which of the following factors for establishing a relationship with retailers deals with this? A. Choosing retail partners that will carry the products B. Identifying the appropriate types of retailers to carry the products C. Developing a retail strategy that implements the four Ps D. Determining whether or not to use an omnichannel strategy E. Allocating inventory throughout the channel of distribution

answer

D (Determining whether or not to use an omnichannel strategy)

question

In thinking about the channel structure, the level of difficulty a manufacturer experiences in getting retailers to purchase its products is determined by all of the following except A. the degree to which the channel is horizontally integrated. B. the degree to which the channel is vertically integrated. C. the degree to which the manufacturer has a strong brand. D. the degree to which the manufacturer is desirable in the market. E. the relative power of the manufacturer and retailer.

answer

A (the degree to which the channel is horizontally integrated)

question

When choosing retail partners, a high-end cosmetics manufacturer like Estée Lauder would most likely not choose to sell to CVS or Dollar General due to A. channel structure. B. customer expectations. C. channel member characteristics. D. distribution intensity. E. networking capabilities.

answer

B (customer expectations)

question

Generally, the _____ and _____ sophisticated the channel member, the less likely that it will use supply chain intermediaries. A. smaller; less B. smaller; more C. larger; more D. shorter; more E. larger; less

answer

C (larger; more)

question

Distribution intensity is commonly divided into three levels. What are they? A. Primary, secondary, and tertiary B. Intensive, exclusive, and selective C. Local, regional, and national D.. Minimal, acceptable, and preferred E. Standard, limited, and exclusive

answer

B (Intensive, exclusive, and selective)

question

If Kleenex produced a new, eco-friendly personal-sized package of tissues, which it intended to get into as many retail outlets as possible, it should choose _____ distribution strategy. A. variable B. a selective C. an intensive D. an exclusive E. a collective

answer

C (an intensive)

question

Luxury goods firms such as Coach use _____ distribution strategy to limit sales to one or only a few select, higher-end retailers in each region, because selling its product in full-line discount stores or off-price retailers would weaken its image. A. a collective B. an exclusive C. an intensive D. a selective E. a variable

answer

B (an exclusive)

question

_____ distribution helps a seller maintain a particular image and control the flow of merchandise into an area which makes this approach attractive to many shopping goods manufacturers, such as most apparel items, home items like branded pots and pans or sheets and towels, branded hardware and tools, and consumer electronics. A. Variable B. Selective C. Intensive D. Exclusive E. Collective

answer

B (selective)

question

Which of the following food retailers is a self-service retail food store offering groceries, meat, and produce with limited sales of nonfood items? A. Convenience store B. Conventional supermarket C. Category specialist D. Supercenter E. Warehouse club

answer

B (Conventional supermarket)

question

Offering a one-stop shopping convenience to customers, _______ combine a supermarket with a full-line discount store. A. specialty stores B. big box retailers C. category specialists D. supercenters E. warehouse clubs

answer

D (supercenters)

question

Which of the following firms operates more than 3,000 supercenters in the United States accounting for the vast majority of total supercenter sales—far outpacing its competitors? A. Meijer B. Target C. Kmart D. Walmart E. Kroger

answer

D (Walmart)

question

_____ are large retailers (100,000 to 150,000 square feet) that offer a limited and irregular assortment of food and general merchandise, little service, and low prices to the general public and small businesses. A. Convenience stores B. Conventional supermarkets C. Category specialists D. Supercenters E. Warehouse clubs

answer

E (warehouse clubs)

question

Walmart, Target, and Kmart offer a broad variety of merchandise, limited service, and low prices, which would classify them as A. department stores. B. full-line discount stores. C. specialty stores. D. category specialists. E. supercenters.

answer

B (full-line discount stores)

question

_____ tailor their retail strategy toward very specific market segments by offering deep but narrow assortments and sales associate expertise. A. Warehouse clubs B. Full-line discount stores C. Specialty stores D. Category specialists E. Supercenters

answer

C (specialty stores)

question

Which of the following falls into the category of being a general merchandise retailer? A. Bank B. Category specialist C. Supermarket D. Convenience store E. Warehouse club

answer

B (category specialist)

question

Dollar General and Family Dollar stores are small, full-line discount stores that offer a limited merchandise assortment at very low prices, so they would be classified as A. supercenters. B. extreme value retailers. C. specialty stores. D. category specialists. E. warehouse clubs.

answer

B (extreme value retailers)

question

_______ offer an inconsistent assortment of brand name merchandise at a significant discount from the manufacturer's suggested retail price. A. Extreme value retailers B. Category specialists C. Off-price retailers D. Department stores E. Warehouse clubs

answer

C (off-price retailers)

question

Which of the following would qualify as being a service retailer? A. A supermarket B. A drug store C. An off-price retailer D. A health spa E. A convenience store

answer

D (a health spa)

question

A brand that is developed by a national brand vendor, often in conjunction with a retailer, and is sold exclusively by the retailer is referred to as A. a category specialist. B. a selective brand. C. a category killer. D. an exclusive brand. E. a co-op brand.

answer

D (an exclusive brand)

question

Retailers may modify product, price, and/or promotion to attempt to increase their _____, which is the percentage of the customer's purchases made from that particular retailer. A. share of wallet B. consumer position C. distribution intensity D. retail position E. share of market

answer

A (share of wallet)

question

The old cliché claiming the three most important things in retailing are "location, location, location" corresponds to which of the following components of the retail strategy? A. Price B. Product C. Promotion D. Place E. Product placement

answer

D (place)

question

Which of the following is considered the greatest advantage offered to consumers by brick-and-mortar stores compared to online shopping? A. Being able to browse for products B. Being able to use all five of their senses C. Having personal service D. Having both cash and credit payment options E. Enjoying the entertainment value of shopping in stores

answer

B (being able to use all five of their senses)

question

Salespeople can be particularly helpful when purchasing a(n) _____ product. A. inexpensive B. standard C. complicated D. easy-to-find E. frequently purchased

answer

C (complicated)

question

When customers purchase merchandise in stores, the physical presence of the store _____ their perceived risk of buying and _____ their confidence that any problems with the merchandise will be corrected. A. reduces; increases B. heightens; reduces C. increases; increases D. reduces; reduces E. increases; reduces

answer

A (reduces; increases)

question

Stores are limited by their _____, which is generally not an issue when shopping on the Internet. A. ability to reduce shopper's perception of risk B. size C. sales staff D. inability to accept cash payments E. ability to provide a social experience

answer

B (size)

question

Offering live, online chat options to shoppers is a way of increasing the value of online shopping because it provides A. enhanced browsing. B. entertainment value. C. personalized offerings. D. deeper and broader selection. E. personalized customer service.

answer

E (personalized customer service)

question

Although the number of their physical stores is limited, L.L.Bean is widely known for offering unique, high-quality merchandise. Adding an Internet channel was particularly attractive because it allowed the company to _____ without having to build new stores. A. integrate its CRM B. personalize offerings C. gain consumer insights D. increase customer satisfaction and loyalty E. expand its market presence

answer

E (expand its market presence)

question

Patagonia reinforces its image of selling high-quality, environmentally friendly sports equipment in its stores, catalogs, and website. Which of the following omnichannel challenges has Patagonia overcome by emphasizing function, not fashion, in the descriptions of its products in all of its channels? A. Integrated CRM B. Brand image C. Pricing D. Supply chain E. Cannibalization

answer

B (brand image)

question

answer

C (supply chain)

question

There are three elements in any integrated marketing communication strategy: the _______, the channels through which the message is communicated, and evaluation of the results of the communication. A. product being marketed B. promotion strategy used C. consumer being targeted D. message being delivered E. cost of the communication

answer

C (consumer being targeted)

question

Home Depot hired an advertising agency to develop television ads for its grand opening in southern Maine. The advertising agency represents which of the following components of the communication process? A. Sender B. Transmitter C. Communication channel D. Receiver E. Feedback

answer

B (transmitter)

question

answer

D (encoding)

question

Based on the recommendation of its advertising agency, Home Depot chose to advertise on HGTV. In this situation, HGTV represents which component of the communication process? A. Transmitter B. Communication channel C. Receiver D. Feedback E. Noise

answer

B (communication channel)

question

In the communication process, _____ refers to the process by which the receiver interprets the sender's message. A. encoding B. decoding C. feedback D. aided recall E. noise

answer

B (decoding)

question

Macy's is conducting marketing research to determine whether or not its advertising message could be clearly understood by its customers. This relates to which component of the communication process? A. Sender B. Receiver C. Encoding D. Feedback loop E. Communication channel

answer

D (feedback loop)

question

The AIDA model is also known as the _____ model. A. think, feel, say B. think, say, do C. think, feel, do D. feel, like, do E. like, think, feel

answer

C (think, feel, do)

question

The AIDA model represents a series of mental stages a consumer goes through and includes awareness, action, interest, and A. desire. B. decision making. C. decoding. D. deliberation. E. debate.

answer

A (desire)

question

Harley Davidson has _____ if a consumer responds "Harley" when asked about American-made motorcycles. A. limited recall B. interest C. prompted recall D. limited awareness E. top-of-mind awareness

answer

E (top-of-mind awareness)

question

The highest level of awareness is A. interest. B. aided recall. C. lagged effect. D. brand awareness. E. top-of-mind awareness

answer

E (top-of-mind awareness)

question

After the firm has piqued the interest of its target market, the goal of subsequent IMC messages should move the consumer from "I like it" to A. "I am aware of it." B. "What is it?" C. "I need more information." D. "I want it." E. "I know what it is."

answer

D ("I want it")

question

The fact that a particular advertisement might not cause a consumer to make an immediate purchase is referred to as A. delayed interest. B. unaided recall. C. a lagged effect. D. delayed awareness. E. top-of-mind awareness.

answer

C (lagged effect)

question

From the consumer's perspective, the elements of an IMC strategy can be viewed as being either A. direct or indirect. B. passive or interactive. C. simple or complex. D. general or specific. E. personal or impersonal.

answer

B (passive or interactive)

question

The U.S. government promoted public participation in the 2010 census during the televised Super Bowl game in its efforts is to raise awareness of when and how the census works. This is an example of which of the following promotional elements? A. Advertising B. Public relations C. Sales promotions D. Personal selling E. Direct marketing

answer

A (advertising)

question

Traditionally, advertising has been _____ and _____. A. passive; reciprocal B. passive; online C. interactive; offline D. interactive; online E. passive; offline

answer

E (passive; offline)

question

To support the other promotional efforts, firms use _____ to generate "free" media attention. A. direct marketing B. public relations C. personal selling D. sales promotion E. advertising

answer

B (public relations)

question

According to your text, sales promotions such as free samples and point-of-purchase displays are designed to build A. long-term sales. B. short-term sales. C. customer loyalty. D. brand awareness. E. brand attitudes.

answer

B (short-term sales)

question

Personalized e-mail marketing is an online, passive form of persuasive communication and would be classified as an example of A. advertising. B. direct marketing. C. personal selling. D. public relations.

answer

B (direct marketing)

question

Omaha Steaks sending e-mail coupons for items that customers have purchased previously and mailing slick pictures of gourmet steaks and meal packages to addresses that have received orders in the past is an example of A. advertising. B. public relations. C. personal selling. D. direct marketing. E. sales promotions.

answer

D (direct marketing)

question

Customers can use the Internet to share their opinions about products and services via YouTube, Facebook and Twitter. In doing so, they can help facilitate the consumer decision process through use of A. e-commerce. B. social media. C. computer-driven shopping. D. mobile marketing. E. free advertising.

answer

B (social media)

question

The _____ method determines the budget required to undertake specific tasks to accomplish communication objectives. A. task B. available budget C. objective-and-task D. rule-of-thumb E. competitive parity

answer

C (objective-and-task)

question

What factors are used in the rule-of-thumb methods to determine the communication budget? A. Prior sales and communication activities B. Type of media and its associated cost C. Communication objectives and target audience D. Gross profit and type of media E. Market share and gross profit

answer

A (prior sales and communication activities)

question

Since her firm's share of the market has increased from 2.5 to 3 percent, Allyson had determined she would set her share of communication expenses at 3 percent of sales, which is an example of the use of the _____ method. A. objective B. rule-of-thumb C. objective-and-task D. competitive parity E. percentage of sales

answer

D (competitive parity)

question

answer

E (competitive parity)

question

answer

B (frequency)

question

Nathan gauged the level of exposure to his marketing campaign using the percentage of the target population exposed at least once to his advertisement, representing its A. reach. B. frequency. C. relevance. D. gross rating points. E. return on investment.

answer

A (reach)

question

Which of the following formulas is accurate for calculating gross rating points (GRP)? A. Impressions multiplied by frequency B. Reach multiplied by impressions C. Reach multiplied by frequency D. Reach divided by impressions E. Reach divided by frequency

answer

C (reach multiplied by frequency)

question

Google's AdWords system provides a Quality Score as a measure of _____, which indicates the usefulness of an ad message to consumers doing a Google search. A. reach B. frequency C. impressions D. relevance E. cost per click

answer

D (relevance)

question

_____ is (are) the number of times an ad appears in front of the user. A. Frequency B. Reach C. Impressions D. Relevance E. Clicks

answer

C (impressions)

question

If a sponsored link was delivered 100 times and 10 people clicked on it, then the number of impressions is 100, the number of clicks is 10, and the click-through-rate (CTR) would be A. 10 percent. B. 100 percent. C. 1 percent. D. 0 percent. E. 15 percent.

answer

A (10 percent)

question

Which of the following is not an aspect of advertising? A. It must be carried by some medium. B. Legally, the source of the message must be known or knowable. C. It is a persuasive form of communication. D. It is used to sell only products. E. It is not free.

answer

D (It is used to sell only products)

question

Which of the following is the first step in planning and executing an advertising campaign? A. Convey the message. B. Create the advertisements. C. Determine the advertising budget. D. Identify the target market. E. Set the advertising objectives.

answer

D (Identify the target market)

question

answer

B (advertising plan)

question

It is in the _____ step of the process of developing an advertising campaign that the metrics are articulated against which advertising success or failure of the campaign is measured. A. convey the message B. identify the target market C. create the advertisements D. set the advertising objectives E. determine the advertising budget

answer

D (set the advertising objectives)

question

When introducing new products, Quaker Oats uses a(n) _____ strategy by offering retailers discounts on the products along with point-of-purchase displays to motivate them to highlight the product. A. pull B. push C. reminder D. persuasive E. informative

answer

B (push)

question

When a company wants to create and build brand awareness, it would use _____ advertising. A. informative B. persuasive C. reminder D. push E. pull

answer

A (informative)

question

Firms often use _____ advertising to convince consumers to take action such as switching brands, trying a new product, or even continuing to buy the advertised product. A. pull B. push C. reminder D. persuasive E. informative

answer

D (persuasive)

question

_______ advertising generally occurs in the growth and early maturity stages of the product life cycle, when competition is most intense, and attempts to accelerate the market's acceptance of the product. A. Informative B. Persuasive C. Reminder D. Push E. Pull

answer

B (persuasive)

question

As a product in the maturity stage of its life cycle, chewing gum brands would most likely require the use of _____ advertising to prompt purchases. A. informative B. persuasive C. reminder D. push E. pull

answer

C (reminder)

question

The "Beef, It's What's for Dinner" campaign to encourage beef consumption is an example of _____ advertising. A. relational B. institutional C. public service D. attribute-based E. product-focused

answer

B (institutional)

question

The "Indoor Tanning Is Out" campaign is designed to raise awareness of the increased risk of melanoma, the deadliest form of skin cancer, and decrease usage of tanning salons. This is an example of a(n) _____ advertisement. A. relational B. institutional C. public service D. attribute-based E. product-focused

answer

C (public service)

question

_______ is a tool used to communicate the distinct attributes of a product; it can be used as a slogan or a theme and often becomes a snapshot of the entire advertising campaign. A. The media mix B. A unique selling proposition C. An informational appeal D. Puffery E. A headline

answer

B (a unique selling proposition)

question

ExxonMobil uses a(n) _____ appeal when it explains technical aspects of its products, such as lithium ion batteries, hydrogen technology, biofuels, and CO2 capture technologies. A. candid B. emotional C. engineering D. informational E. contemporary

answer

D (informational)

question

Bowflex and Jenny Craig develop advertisements featuring celebrities to address their target markets' need for feeling good about themselves. This is an example of which of the following? A. Social appeal B. Utilitarian appeal C. Relational appeal D. Emotional appeal E. Informational appeal

answer

D (emotional appeal)

question

As a means to reach large numbers of anonymous audience members, USA Today newspapers are considered to be which of the following types of media? A. Mass media B. Niche media C. Utilitarian media D. Emotional media E. Transatlantic media

answer

A (mass media)

question

HGTV and Home and Gardens magazine fall into which of the following categories of media? A. DIY media B. Mass media C. Niche media D. Specialty media E. Utilitarian media

answer

C (niche media)

question

Coppertone uses a _____ advertising schedule, where it advertises heavily in the months leading up to and during the summer, with no advertising after the season ends. A. status quo B. pulsing C. flighting D. seasonal E. continuous

answer

C (flighting)

question

KEA advertises throughout the year, but significantly increases its advertising during the back-to-school time frame, thus implementing a _____ advertising schedule. A. seasonal B. pulsing C. flighting D. continuous E. status quo

answer

B (pulsing)

question

In a print advertisement, items used to identify the sponsor of the ad, such as the company logo or USP, are referred to as A. brand elements. B. subheads. C. headlines. D. copy elements. E. advertising sponsorship.

answer

A (brand elements)

question

Assessing the effectiveness of an advertising campaign while it is running by monitoring key indicators is referred to as A. pulsing. B. flighting. C. cross-checking. D. sampling. E. tracking.

answer

E (tracking)

question

The _____ enforces truth in advertising laws and defines deceptive and unfair advertising practices. A. U.S. Postal Service B. Federal Trade Commission C.Federal Communications Committee D. Federal Communications Commission E. Food and Drug Administration

answer

B (federal trade commission)

question

The slogans "Coolest Video Game" and "World's Best Hamburgers" are examples of _____, which is the legal exaggeration of praise, stopping just short of deception, lavished on a product. A. flighting B. pulsing C. puffery D. inflated advertising E. cross-promoting

answer

C (puffery)

question

In many cases, _____ activities support other promotional efforts by generating "free" media attention and general goodwill. A. direct marketing B. public relations C. personal selling D. sales promotion E. pulsing

answer

B (public relations)

question

When two or more firms join to reach a specific target market, it is referred to as A. cross-promoting. B. pulsing. C. flighting. D. product placement. E. product highlighting.

answer

A (cross-promoting)

question

As a type of sales promotion, _____ encourage trial and reduce consumer risk, although they may negatively impact perceptions of brand value. A. coupons B. deals C. premiums D. samples E. rebates

answer

B (deals)

question

A _____ offers an item for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing. A. sweepstakes B. loyalty program C. premium D. POP display E. rebate

answer

C (premium)

question

A form of sales promotion that offers prizes based on a chance drawing of entrants' names is referred to as a A. contest. B. rebate. C. sweepstake. D. premium. E. deal.

answer

C (sweepstake)

question

The Holiday Inn Priority Club is an example of _____, which is specifically designed to retain customers by offering premiums or other incentives to customers who make multiple purchases over time. A. a sampling program B. a rebate C. a premium D. cross-promotion E. a loyalty program

answer

E (a loyalty program)

question

An example of _____ is when Tom Hanks is shown stranded on an island with a FedEx box in the movie Cast Away. A. event sponsorship B. product placement C. a premium D. a loyalty program E. cross-marketing

answer

B (product placement)

question

J. Crew teaming up with several famous brands, including Belstaff and Timex, to offer exclusive products in the J. Crew stores and on its website is an example of A. sampling. B. POP displays. C. cross-promoting. D. dual marketing. E. product placement.

answer

C (cross-promoting)

STUDY

Contribution Per Unit Marketing Principles Of Marketing

marketing 2101 chapter 10 – Flashcards 74 terms

Ethan Carter

74 terms

Preview

marketing 2101 chapter 10 – Flashcards

question

the assignment of value, or the amount the consumer use exchange to receive the offering

answer

price

question

the most popular and fastest-growing digital currency

answer

Bitcoin

question

the percentage change in unit sales that results from a percentage change in price

answer

price elasticity of demand

question

demand in which changes in price have large effects on the amount demanded

answer

elastic demand

question

demand in which changes in price have little or no effect on the amount demanded

answer

inelastic demand

question

when changes in the price of one product affect the demand for another item

answer

cross elasticity of demand

question

the costs of production(raw and processed materials, parts and labor) that are tied to and vary, depending on the number of units produced

answer

variable cost

question

costs of production that do not change with the number of units produced

answer

fixed costs

question

the fixed cost per unit produced

answer

average fixed costs

question

the total of the fixed costs and the variable costs for a set number of units produced

answer

total costs

question

a method for determining the number of units that a firm must produce and sell at a given price to cover all its costs

answer

break-even analysis

question

the point at which the total revenue and total costs are equal and beyond which the company makes a profit, below that point the firm suffers a loss

answer

break-even point

question

the difference between the price the firm charger for a product and the variable costs

answer

contribution per unit

question

an amount added to the cost of a product to create the price at which a channel member will sell the product

answer

markup

question

the markup amount added to the cost of a product to cover the fixed costs of the retailer or wholesaler and leave an amount for a product

answer

gross margin

question

the margin added to the cost of a product by a retailer

answer

retailer margin

question

the price that the manufacturer sets as the appropriate price for the end consumer to pay

answer

list price

question

the combining of manufacturing operations with channels of distribution under a single ownership to reduce costs and increase profits

answer

vertical integration

question

a method of setting prices in which the seller totals all the costs for the product and then adds an amount to arrive at the selling price

answer

cost-plus pricing

question

retaining price strategy in which the relater doubles the cost of the item (100 percent markup) to determine the price

answer

keystoning

question

a price setting method based on estimates of demand at different prices

answer

demand-based pricing

question

a process in which firms identify the quality and functionality needed to satisfy customers and what price they are willing to pay before the product is designed; the product is manufactured only if the firm can control costs to meet the required price

answer

target costing

question

a practice of charging different prices to different customers to management capacity while maximizing revenues

answer

yield management pricing

question

a pricing strategy in which one firm first sets its price and other firms in the industry follow with the same or similar prices

answer

price leadership

question

a retail pricing strategy in which the retailer prices merchandise at list price but runs frequent, often weekly, promotions that heavily discount some products

answer

high/low pricing

question

a very high, premium price that a firm charges for its new, highly desirable product

answer

skimming price

question

a pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it

answer

penetration pricing

question

pricing a new product low for limited period of time to lower the risk for a customer

answer

trial pricing

question

the practice of charging different prices to different market segments for the same product

answer

price segmentation

question

a pricing plan that raises prices of a product as demand goes up and lowers it as demand slides

answer

surge pricing

question

innovative pricing that will appeal to consumers with the lowest incomes by brands that wish to get a foothold in bottom of the pyramid countries

answer

bottom of the pyramid pricing

question

pricing that requires two separate types of payments to purchase this product

answer

two-part pricing

question

a pricing tactic that breaks up the total price into smaller amounts payable over time

answer

payment pricing

question

a pricing strategy where a seller offers at least three similar products, two have comparable but more expensive prices and one of these two is less attractive to buyers, thus causing more buyers to buy the higher priced more attractive item

answer

decoy pricing

question

selling two or more goods or services as as single package for one price

answer

price bundling

question

a pricing tactic for two items that must be used together; one item in priced very low and the firm makes it profit on the other,, high-margin item essential to the cooperation of the first item

answer

captive pricing

question

a pricing tactic in which the cost of loading and transpiring the product to the customer is included in the selling price and is paid by the manufacturer

answer

FOB delivered pricing

question

a pricing tactic in which a firm adds a standard shipping charge to the price for all customers regardless of the location

answer

uniform delivered pricing

question

a pricing tactic in which the seller absorbs the total cost of transportation

answer

freight absorption pricing

question

discounts off list price of products to members of the channel of distribution who perform various marketing functions

answer

trade discounts

question

a discount offered to a customer to entice them to pay their bill quickly

answer

cash discounts

question

price reductions offered only during certain times of the year

answer

seasonal discounts

question

a pricing strategy in which the price can easily be adjusted to meet changes in the marketplace

answer

dynamic pricing

question

e-commerce that allows shoppers to purchase products through online bidding

answer

online auctions

question

a business strategy in which a product in its most basic version is provided free of charge but the company charges money for upgraded versions of the product with more features, greater functionality

answer

freemium pricing

question

the practice of setting a limited number of different specific prices called price points for items in a product line

answer

price lining

question

a pricing strategy used by luxury goods marketers in which they keep the price artificially high to maintain a favorable image of the product

answer

prestige pricing

question

an illegal marketing practice in which an advertised price special is used as bait to get customers into the store with the intention of switching them to a higher priced item

answer

bait and switch

question

the collaboration of two or more firms in setting prices usually to keep prices high

answer

price fixing

question

bait and switch

answer

Which of the following refers to a deceptive pricing tactic in which an advertised price special is used as bait to get customers into the store with the intention of selling them a higher-priced item?

question

price bundling

answer

_____ means selling two or more goods or services as a single package for one pricelong dash—a price that is often less than the total price of the items if bought individually.

question

price

answer

Which of the following refers to the assignment of value, or the amount the consumer must exchange to receive the offering or product?

question

market share

answer

Which of the following refers to the percentage of a market, defined in terms of either sales units or revenue, accounted for by a specific firm, product lines, or brands?

question

step 4

answer

In which step of the price planning process does a firm analyze the economy, competition, government regulations, consumer trends, and the internal environment?

question

bitcoin

answer

Which of the following refers to the most popular and fastest growing digital currency?

question

skimming

answer

_____ pricing means that the firm charges a high, premium price for its new product with the intention of reducing it in the future in response to market pressures.

question

elastic demand

answer

Which of the following refers to demand in which changes in price have large effects on the amount demanded?

question

fixed cost

answer

Which of the following refers to the costs of production that do not change with the number of units produced?

question

demand based pricing

answer

Which of the following pricing strategies would be used if a firm bases the selling price on an estimate of volume or quantity that it can sell in different markets at different prices?

question

price leadership

answer

Which of the following pricing strategies is usually the rule in an oligopolistic industry that a few firms dominate, which might be in the best interest of all players because it minimizes price competition?

question

dynamic pricing

answer

Which of the following refers to a pricing strategy in which the price can easily be adjusted to meet changes in the marketplace?

question

2000

answer

Assume that for a given product, the total fixed costs are $100,000 and the contribution per unit to fixed costs is $50. What is the break-even point expressed in the number of units?

question

variable cost

answer

Which of the following refers to the costs of production that fluctuate depending on the number of units produced?

question

price lining

answer

Marketers often apply their understanding of the psychological aspects of pricing in a practice they call ________, whereby items in a product line sell at different prices, or price points.

question

prestige

answer

A Rolex watch, a Louis Vuitton handbag, and a Rolls Royce automobile are all examples of _____ products.

question

seasonal discounts

answer

Which of the following pricing tactics is used when price reductions are offered only during a certain time of the year?

question

yield management pricing

answer

Which of the following pricing strategies is heavily used by hospitality companies like airlines, hotels, and cruise lines because these businesses charge different prices to different customers in order to manage capacity while they maximize revenues?

question

internal reference

answer

If you see a loaf of bread that is priced at $14.99, your past experience tells you that that price is substantially higher than a normal loaf of bread would be. If you feel that a loaf of bread should be less than $2.00, then this is your _____ price.

question

internet price discrimination

answer

Which of the following refers to an online strategy in which the price can easily be adjusted to meet changes in the marketplace?

question

markup

answer

Which of the following refers to an amount added to the cost of a product to create the price at which a channel member will sell the product?

question

freemium pricing

answer

Which of the following is a business strategy in which a product in its most basic version is provided free of charge but the company charges money for upgraded versions of the product with more features, greater functionality, or greater capacity?

question

online auctions

answer

eBay, eCrater, Bonanzle, eBid, and CQou all utilize which of the following models to allow shoppers to bid on everything from bobbleheads to health-and-fitness equipment to a Sammy Sosa home-run ball?

question

price fixing

answer

Which of the following occurs when two or more companies conspire to keep prices at a certain level?

question

loss leader pricing

answer

When retailers advertise products at very low prices or even below cost in the hopes that customers will purchase other items at regular prices, they are engaging in _____.

STUDY

Accounting Break Even Analysis Break Even Point In Sales Contribution Per Unit Finance Financial Accounting

UPenn Marketing 101 Quiz 1 – Flashcards 37 terms

Ashlynn Thompson

37 terms

Preview

UPenn Marketing 101 Quiz 1 – Flashcards

question

Unit Contribution Formula

answer

Revenue per Unit - Variable Costs per Unit

question

Contribution Margin Formula

answer

Unit Contribution/Revenue per Unit (in %)

question

Break-Even Volume Formula

answer

Fixed Costs/Unit Contribution

question

Market Share Formula

answer

Firm Sales/Total Market Sales

question

Profit Formula

answer

(Unit Contribution*Units Sold) - Fixed Costs

question

Customer Lifetime Value Formula

answer

Annual Contribution per Customer*Years as Customer

question

Annual Contribution Formula

answer

Unit Contribution*Units per Customer per Year

question

Five Cs of Marketing (Strategic)

answer

Company, Customers, Collaborators, Competitors, Context

question

SWOT

answer

Strengths, Weaknesses, Opportunities, Threats

question

Four Ps of Marketing Mix (Tactical)

answer

Product, Promotion, Price, Place

question

Need

answer

A discrepancy between actual and ideal state

question

Four Basic Needs

answer

Esteem, Control, Belonging, Meaningfulness

question

Multi-Attribute Model

answer

Attitude Towards Brand = Sum(Belief Strength*Importance of Attributes)

question

Scale: Belief Strength

answer

-3 to 3

question

Scale: Importance of Attributes

answer

1 to 7

question

Heuristics

answer

Rules of thumb; Price, habit, normative, more is better

question

Satisfaction Formula

answer

f(Perceived Performance - Expectation)

question

Disconfirmation

answer

A +/- discrepancy between expectations and a product's performance

question

Cost per Mille (CPM)

answer

(Cost/No. of Viewers)*1000

question

Segmentation

answer

Breaking down an audience into various groups to better target each, improve satisfaction, etc.

question

Types of Segmentation

answer

Geographic, Demographic, Psychological, Psychographic (Lifestyle), Sociocultural, Behavioral, Hybrid

question

Criteria for Good Segments

answer

Homogeneous within, heterogeneous between, substantial, operational

question

Targeting

answer

Directing a marketing campaign at a specific segment(s)

question

Positioning

answer

To (target segment and need), our (brand) is the (concept) that (point to difference)

question

Goal of STP

answer

Target a group, extract max value from customers, retain customers, improve CLV

question

Variable Costs

answer

Change with volume of production (e.g. - manufacturing, shipping, sales commissions)

question

Fixed Costs

answer

Stay the same regardless of level of production (e.g. - executive salaries, rent, insurance, overhead)

question

Contribution Margin

answer

Relative measure of assessing unit contribution compared to selling price (expressed as a percentage)

question

Break Even Volume

answer

The number of units you need to sell to cover total fixed costs

question

Sales/Revenue/Volume Market Share

answer

The percentage of (sales or units) accounted for by that firm within the product category

question

Customer Market Share

answer

The percentage of customers the firm has relative to the total customers

question

Profit Impact

answer

Impact of a product on company profits

question

Customer Lifetime Value

answer

The value of the entire stream of purchases that the customer would make over a lifetime of patronage

question

Annual Contribution

answer

Average amount that a typical customer would spend with the business, with expenses subtracted

question

Sunk Costs

answer

Money spent on items that is considered unrecoverable (e.g. - market research, R&D, past expenses)

question

Return on Investment

answer

Measures the profits generated by investments in marketing activities

question

Return on Investment Formula

answer

Net return from an investment/Costs of investment

STUDY

Contribution Per Unit Direct Response Advertising Marketing Principles Of Marketing Sports Marketing

Marketing DSM Chapter 10 – Flashcards 42 terms

Patricia Smith

42 terms

Preview

Marketing DSM Chapter 10 – Flashcards

question

break-even point

answer

the point at which a firm doesn't lose any money but doesn't make any profit

question

trade discounts

answer

discounts off list price of products to members of the channel of distribution who perform various marketing functions

question

quantity discounts

answer

pricing tactic of charging reduced prices for purchases of larger quantities of a product

question

cash discount

answer

offered to entice a customer to pay a bill quicly

question

seasonal discount

answer

a price reduction offered only during certain times of the year

question

penetration pricing

answer

the pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it

question

trail pricing

answer

occurs when a new product is priced low for a limited amount of time in order to lower the risk for the customer

question

captive pricing

answer

pricing tactic for two items that must be used together: one is priced much lower, and the firm makes its profit on the other, high-margin item essential to the operation of the first item

question

uniform-delivered pricing

answer

pricing tactic in which a firm adds a standard shipping charge to the price for all customers regardless of location

question

cost-plus pricing

answer

a method of setting prices in which the seller totals all the costs for the product and then adds an amount to arrive at the selling price

question

demand-based pricing

answer

price-setting method based on estimates of demand at different prices

question

yield management pricing

answer

a practice of charging different prices to different customers in order to manage capacity while maximizing revenues

question

value pricing or everyday low pricing (EDLP)

answer

pricing strategy in which a firm sets prices that provide ultimate value to customer

question

loss-leader pricing

answer

the pricing policy of setting prices very low or even below cost to attract customers into a store

question

surge pricing

answer

pricing strategy in which the price of a product is raised as demand for that product goes up and lowered as demand goes down

question

predatory pricing

answer

an illegal pricing strategy in which a company sets a very low price for the purpose of driving competitors out of business

question

dynamic pricing

answer

pricing strategy in which the price can easily be adjusted to meet changed in the marketplace

question

bait-and-switch

answer

an illegal marketing practice -an advertised price special is used to get customers into the store with the the intention of switching them to a higher-priced item

question

unfair sales acts

answer

state laws that prohibit suppliers from selling products below cost to protect small businesses from larger companies

question

price fixing

answer

the collaboration of two or more firms in setting prices, usually to keep prices high

question

markup

answer

the amount added to the cost of a product to create the price at which a channel member will sell the product

question

wholesaler margin

answer

the amount added to the cost of a product by a wholesaler

question

retailer margin

answer

the margin added to the cost of a product by a retailer

question

gross margin

answer

the markup amount added to the cost of product to cover the fixed costs of the retailer or wholesaler and leave an amount for a profit

question

average fixed costs

answer

the fixed costs per unit produced

question

internal reference price

answer

set price or price range in consumers' minds to which they refer in evaluating a product's price

question

price lining

answer

the practice of setting a limited number of different specific prices, called price points, for items in a product line

question

price fixing

answer

the collaboration of two or more firms in setting prices, usually to keep prices high

question

demand curve

answer

used to show the quantity of a product that customers will buy in a given time period, at different prices that might be charged

question

break-even analysis

answer

a method for determining the number of units that a firm must produce and sell at a given price to cover all its costs

question

price elasticity of demand

answer

the percentage change in unit sales that results from a percentage change in price

question

contribution per unit

answer

the difference between the price the firm charges for a product and the variable costs

question

dynamic pricing

answer

a pricing strategy in which the price can easily be adjusted to meet changes in the marketplace

question

online auctions

answer

method of e-commerce that allows shoppers to purchase a product through online bidding

question

freemium strategy

answer

question

skimming price

answer

a very high, premium price that a firm charges for its new, highly desirable product

question

elastic demand

answer

When customers are sensitive to changes in prices, and a change in price results in a substantial change in demand

question

variable costs

answer

costs of production that are tied to and vary depending on the number of units produced

question

profit

answer

When pricing strategies are determined by ___________ objectives, the focus is on a target level of profit growth or a desired net profit margin.

question

customer satisfaction

answer

When pricing strategies are determined by ___________ objectives, a firm believes that profit will result from making customer satisfaction the primary objective

question

image enhancement

answer

When pricing strategies are determined by ___________ objectives, the firm uses price to communicate product quality and image.

question

sales or market share

answer

When pricing strategies are determined by ___________ objectives, the focus is on maximizing sales or increasing market share.

STUDY

Business Business Buying Process Contribution Per Unit International Marketing Marketing Principles Of Marketing Vertical Marketing System

BA 370 Ch 7 – Flashcards 30 terms

Lesly Nixon

30 terms

Preview

BA 370 Ch 7 – Flashcards

question

_____ reflects the link between consumers' demand for a company's product and the company's purchase of necessary inputs to manufacture or assemble that particular product.

answer

Derived demand

question

In B2B markets, _____ are firms that buy and reprocess products and services before selling them again to the next buyer.

answer

manufacturers

question

Which of the following is an example of a reseller?

answer

Wholesaler

question

In terms of business markets, organizations like hospitals that provide goods and services to people in their care are classified as

answer

institutions.

question

With its estimated outlay of over $500 billion for fiscal year 2014, the Pentagon represents which type of B2B organization?

answer

Government

question

Which of the following statements regarding the B2B buying process is true?

answer

In the B2B buying process, the search for information and evaluation of alternatives is more formal and structured.

question

The business-to-business buying process is initiated by which of the following steps?

answer

Need recognition

question

The acronym RFP, when used by those involved in business-to-business buying, stands for

answer

request for proposals.

question

Used by many smaller companies to help streamline procurement or distribution processes, _____ is an Internet site whose purpose is to be a major starting point for users when they connect to the web.

answer

a web portal

question

In the B2B buying process, _____ can provide tremendous cost savings for firms because they eliminate periodic negotiations and routine paperwork, and offer the means to form a supply chain that can respond quickly to the buyer's needs.

answer

web portals

question

In this stage of the business-to-business buying process, firms are likely to narrow their selection to a few suppliers, often those with which they have existing relationships, and discuss key terms of the sale.

answer

Proposal analysis, vendor negotiation, selection

question

What is the final stage in the business-to-business buying process?

answer

Vendor performance assessment

question

Which of the following is not one of the six buying center roles?

answer

Advisor

question

John is involved in the buying center of a large organization. He ultimately will determine whether to buy, what to buy, how to buy, or where to buy. What role does John play in this situation?

answer

Decider

question

The individual who controls the flow of information or access to important decision makers serves as the _____ in the buying center.

answer

gatekeeper

question

Pharmaceutical companies have been criticized for direct-to-consumer television ads promoting the use of their brands of medication for specific medical conditions. With respect to buying centers, the pharmaceutical company plays the role of _____ in this situation.

answer

influencer

question

Although she wasn't told this when hired, at her new job Dana noticed that the employees eat lunch at their desks while continuing to work and that on Fridays most everyone dresses casually. These behaviors are most likely part of the

answer

organizational culture.

question

A firm's _____ reflects the set of values, traditions, and customs that guide its employees' behavior.

answer

organizational culture

question

In a(n) _____ buying center, there may be many participants, but one person makes the decision alone.

answer

autocratic

question

In a(n) _____ buying center, one person is authorized to make a decision, but input from others is gathered before doing so.

answer

consultative

question

In _____ buying centers, all members of the team must reach a collective agreement that they can support a particular purchase.

answer

consensus

question

Autocratic buying centers are characterized by

answer

a single decision maker.

question

Which of the following social media tools is mainly used for professional networking in the B2B marketplace?

answer

question

Although social media are used to build relationships in B2B contexts, the majority of B2B marketers use _____ for their marketing efforts.

answer

white papers

question

Most B2B buying situations can be categorized into three types: new buys, straight rebuys, and

answer

modified rebuys.

question

The purchase of capital equipment by a company, which would likely be quite an involved process, is an example of a _____ situation.

answer

new buy

question

In a _____ situation, the buying center is likely to proceed through all six steps in the buying process and involve many people in the buying decision.

answer

new buy

question

The university will purchase new computers during the summer to update its computer labs. Although the new computers will be more advanced in terms of their technology, the purchase itself will involve some of the same considerations as those used for previous purchases. This is an example of which of the following types of buying situation?

answer

Modified rebuy

question

When Kinko's replenishes its supply of copy paper, it most likely involves a _____ situation.

answer

straight rebuy

question

In _____, the buyer is often the only member of the buying center involved in the process.

answer

straight rebuys

STUDY

Contribution Per Unit High Low Pricing Marketing Principles Of Marketing Sports Marketing

FINC 200 Chapter 1 – Flashcards 40 terms

Malcolm Bright

40 terms

Preview

FINC 200 Chapter 1 – Flashcards

question

Finance

answer

Essentially the study of pricing and pricing relationships

question

Financial management

answer

Concentrates on valuation from the firms perspective

question

Personal finance

answer

Focuses on maintaining and expanding individual wealth

question

Successful financial markets

answer

allow a flow of funds from individuals looking to increase wealth to businesses who want to expand their operations

question

Borrower-lender relationship

answer

The relationships between the individual holding funds and the businesses who want to expand

question

Liquidity

answer

The property of a strong financial system connecting the two groups (lenders and borrowers) quickly and at low costs

question

What does high liquidity lead to?

answer

growth in the economy and employment opportunities once a firm has expanded

question

Strong economies have __________ financial systems.

answer

Strong

question

4 types of of individuals in a theoretical financial system

answer

Type 1: no money, no ides Type 2: Money, no ideas Type 3: No money, ideas Type 4: money and ideas Firms or individuals can more between groups through time

question

Type 2

answer

Money, no ideas Want to invest in companies and individuals that will be profitable Look to asses the value of future cash flows, which is payments made to the firm for products or services lend their money to type 3 can be individual investors, banks, or even other corporations by lending money, type 2s inherently take on risks and want to be compensated for those risks

question

Firm cash flow expectations

answer

high expected cash flows= safe investment low or uncertain cash flows= risky

question

Type 3

answer

Ideas, no money (think shark tank pitchers) can be individuals entrepreneurs or large companies with R and D departments

question

Type 4

answer

All companies and individuals want to be type 4 this is part of the reason companies hold retained earnings.

question

Retained earnings

answer

Profits that are held by the company and no distributed to share holders If a company has retained earnings, it can invest in projects without issuing debt or equity

question

What does the value of a financial asset depend on?

answer

cash lows, but they are typically uncertain in the beginning financial assets can be grouped into asset classes based on return characteristics

question

Sole propreitership

answer

a single business owner that takes on unlimited liability most common type of business in the US relatively easy to start due to lighter regulation and paperwork owner has complete control over business activities and is responsible for all firms profits and losses considered unlimited liability because there is no distinction between business assets and personal assets businesses do not typically lend to sole proprietorship due to the riskiness involved S.P.s can raise capital from venture capitalists in exchange for a percentage of the firm (equity)

question

General partnership

answer

Partners own the business together and are personally liable for legal actions and debts unlimited liability for the partners partners can own different percentages of company and are entitled to that percentage of profit banks are more likely to lend to partnerships multiple individuals are responsible for paying back debt in order to raise substantial capital, partners may have to give up equity

question

Public corporation

answer

A legally independent entity separate from its owners. Corporations tend to have many owners in the form of shareholders. Corporate owners are stockholders, but day to day responsibilities are given to managers (CEO) Considered limited liability since shareholders can own lose the amount paid for their stock

question

Maximization of shareholder wealth philosophy

answer

View that management's primary consideration is to consider the interest of shareholders in decision making Academics favor this shareholder wealth maximization

question

Stakeholder maximization

answer

business should maximize total satisfaction (includes bondholders, consumers, etc)

question

Adam Smith's invisible hand

answer

individuals acting in own self interest leads to efficient outcome

question

Who is a firm's highest level financial manager?

answer

Chief financial officer

question

What type of business organization is relatively easy to start, and it is subject to much lighter regulatory and paperwork burden than other business forms?

answer

Sole proprietership

question

What type of business organization is entirely legally independent from its owners?

answer

Public corporations

question

As individual legal entities, corporations assume liability for their own debts, so the shareholders hold:

answer

only limited liabilty

question

For corporations, maximizing the value of owner's equity can also be stated as:

answer

maximizing the stock price

question

This should be the primary objective of a firm as it may actually be beneficial for society in the long run

answer

Maximizing shareholder value

question

This is the set of laws, policies, incentives, and monitors designed to handle the issues arising from the separation of ownership and control

answer

Corporate governance

question

This group is elected by stockholders to oversee management in a corporation

answer

Board of directors

question

These individuals help firms access capital markets and advise managers about how to interact with those capital markets

answer

investment bankers

question

These individuals examine a firms financial strength for debt holders

answer

Credit analysts

question

Individuals who provide small amounts of capital and expert business advice to small firms in exchange for ownership in the firm

answer

angel investors

question

The portion of a company's profits that are kept by the company rather than distributed to the stockholders as cash dividends

answer

retained earnings

question

The overall goal of the financial manager is to

answer

maximize shareholder weath

question

Maximizing owner's equity value means carefully considering:

answer

how to best bring additional funds into the firm which projects to invest in how best to return profits from those projects to the owners over time DOES NOT INCLUDE: how best to increase the firm's risk

question

The most common type of business in the US

answer

Sole propreitership

question

The biggest disadvantage of the sole proprietorship

answer

unlimited liability

question

Advantages to organizing a corporation as a business organization

answer

limited liability easy access to capital easy to transfer ownership

question

Which of the following statements are correct: 1. Sole proprietorship are easy to start. 2. If the sole proprietorship gets sued, the owner is not liable. 3. It is relatively easy for sole proprietorship to raise money. 4. Profits from the sole proprietorship are subject to double taxation

answer

sole proprietorship are easy to start

question

From a taxation perspective, the form of business organization with the highest level of taxes is the:

answer

corporation

STUDY

Break Even Point In Units Contribution Per Unit Marketing Principles Of Marketing Status Quo Pricing

Flashcards About Marketing Final Multiple Choice 130 terms

Ray Collins

130 terms

Preview

Flashcards About Marketing Final Multiple Choice

question

33. Price is best described as:

answer

that which is given up in exchange to acquire a good or service

question

At Walmart, Randi saw a bag of daffodil flower bulbs... 19.99 is the

answer

price

question

35. Which of the following statements is NOT true about price?

answer

Price means the same thing to the consumer and the seller.

question

36. When goods and services are exchanged, the trade is called:

answer

barter

question

37. Revenue:

answer

equals price of goods times quantity sold

question

_____ pay for every activity of the company.

answer

Revenues

question

39. Money that is left over after paying for company activities is called:

answer

profit

question

At Walmart, Randi saw a bag of daffodil flower bulbs... Sold one at 28.50 and five at 19.99. The retailers revenue is

answer

128.45

question

41. Which of the following is not a real trend that has affected the consumer market?

answer

Many firms are trying to maintain or regain their market share by raising prices.

question

42. For convenience, pricing objectives can be divided into three categories. They are:

answer

profit oriented, sales oriented, and status quo

question

43. An organization is using ______ when it sets its prices so that total revenue is as large as possible relative to total costs.

answer

profit maximization

question

44. When Apple, Inc. originally introduced its iPhone, it was priced at what many believed to be about as high as the market would allow. Within weeks, Apple lowered the price of the iPhone. It appears that Apple entered the market with a____approach to pricing the iPhone.

answer

profit maximization

question

45. When Insight Research Associates quotes a marketing research project, management will first estimate the cost to conduct the research and produce and deliver the final client report. The next step in determining the price is to add 30 percent to that cost estimate. This becomes the price estimate given to the potential research client. This suggests that Insight Research Associates uses a(n) ___ pricing objective.

answer

profit-oriented

question

46. Thompson Pool and Patio is known for quality pool installations, excellent customer service, and reasonable prices. If you want to have a Thompson pool, you will have to wait about six months due to demand for their product. While Thompson could probably price its product higher, given the demand, they don't. Instead, the company sets its price so that it will earn a reasonable level of profits. Thompson seems to base its pricing policy on:

answer

earning satisfactory profits.

question

47. ____ is equal to net profit after taxes divided by total assets.

answer

Return on investment

question

What was the actual ROI for Peirre's Ice Cream Company?

answer

10 percent

question

49. Britney is fifteen years old and wants to open her own business selling cupcakes to local coffee shops and restaurants. She is having a tough time deciding whether to base her pricing objectives on market share, dollar sales, or unit sales. Regardless of which she chooses, her pricing objective can be categorized as:

answer

sales oriented.

question

50. A company using market share pricing has a____pricing objective.

answer

sales-oriented

question

51. ____is a company's product sales as a percentage of total sales for that industry.

answer

Market share

question

52. At a price of $1,192,057, the Bugatti Veyron may be the most expensive street-legal car on the market today. Obviously, Bugatti is NOT using a(n)_____pricing objective in setting the price for this car.

answer

market share or sales maximization

question

53. At the end of the summer, the Bloomin' Garden Center reduced the price on all of its plants, fertilizer, and potting soil by 50 percent in order to liquidate this inventory. What type of pricing strategy is being used in this example?

answer

Sales maximization

question

54. Dixie Furniture Company has recently moved to a new, larger location. At this new location, it has been unable to attract sufficient customers. Its owner did not have the cash to pay the current loan installment due on the building and inventory, so he decided to reduce all merchandise prices by at least 50 percent for a weekend sale to earn enough to make his loan payment. His pricing objective can be classified as:

answer

sales maximization.

question

55. As a short-term pricing objective, ____ can be effectively used on a temporary basis to sell off excessive inventory.

answer

sales maximization

question

56. If a company's pricing objective is to meet the competition or to maintain existing prices, it is using pricing.

answer

status quo

question

57. When the local Shell station raises or lowers its prices on its gasoline, the Marathon station across the street makes the same changes in its pricing. This is an example of____pricing.

answer

status quo

question

58. Which of the following statements describes an advantage of status quo pricing?

answer

Status quo pricing requires little planning.

question

59. Although many factors can influence price, the primary determinants are:

answer

the demand for the good and the cost to the seller

question

60. The quantity of a product that will be sold in the market at various prices for a specified period is called:

answer

demand.

question

61. The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

answer

demand.

question

62. Most demand curves slope:

answer

downward and to the right

question

63. Peggy's Twist Shack sells softserve ice cream. Peggy graphed the demand per week for vanilla ice cream cones. The graph indicates a demand schedule that slopes downward and to the right. This graph indicates that the quantity of vanilla ice cream cones demanded increases as:

answer

price decreases.

question

64. The ____ is the quantity of a product that will be sold in the market at various prices for a specified period, and ____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.

answer

demand; supply

question

65. ____ is the quantity of a product that will be offered to the market at various prices for a specified period.

answer

Supply

question

66. When the price of a product is set at a level where demand and supply are the same, price ____ has been achieved.

answer

equilibrium

question

67. At a price of $6,000, only 191 of the Moulton 60 model bicycle are being made. If Moulton sells each one of the bicycles at that price, then a state of has been achieved.

answer

price equilibrium

question

68. Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii. When a tourist shop began selling Pure Hawaiian Air, it charged $5 per bottle and could not keep up with the demand. It has since raised the price to $7. Now the shop is still selling all the bottles of Pure Hawaiian Air it carries, but the owner is not forced to reorder on a daily basis. The $7 price is probably a(n):

answer

price equilibrium.

question

69. Consumers' responsiveness or sensitivity to changes in price is known as:

answer

elasticity of demand.

question

70. When consumers are sensitive to price changes, ____occurs.

answer

elastic demand

question

71. While the sales of the Apple iPhone have been great from the beginning, when Apple released its iPhone 4S and cut the price of the iPhone 4 from $399 to $199, sales exploded with one million iPhone 4 models sold the first weekend. Demand for the iPhone appears to be:

answer

elastic.

question

72. What happens when demand is elastic?

answer

As price goes up, revenue goes down.

question

73. If price____and revenue ____, demand is elastic.

answer

goes down; goes up

question

74. ____occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

answer

Unitary elasticity

question

75. When price decreases and total revenue falls, demand is:

answer

inelastic.

question

76. If price goes up or down and revenue stays the same:

answer

elasticity is unitary.

question

77. When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,125, demand doubled from four units sold per month to eight units per month. However, total revenue dropped. This is an example of:

answer

inelastic demand

question

78. When Nesco brand food hydrators sold for $59.99, Nesco sold 90 dehydrators. When the company dropped the price of its dehydrators to $44.95, it sold 145 dehydrators. Demand for the food dehydrators appears to be:

answer

elastic.

question

79. Demand for which of the following products or services is most likely inelastic?

answer

Wheat bread

question

80. All of the following factors directly affect the elasticity of demand EXCEPT:

answer

inputs needed to manufacture the product.

question

81. Which of the following would imply elastic demand?

answer

Many substitute products

question

82. The greater the number of different uses for a product, the more____demand tends to be.

answer

elastic

question

83. What does "YMS" stands for?

answer

Yield management systems.

question

84. Yield management systems were first developed by which industry?

answer

The airline industry.

question

85. Yield management systems are used to:

answer

profitably fill unused capacity

question

86. ____use complex mathematical software to profitably fill unused capacity.

answer

Yield management systems

question

87. Allstate has more than 1,500 price levels determined by complex algorithms that analyze 16 credit report variables, including late payments and card balances. Allstate is using a _____to set prices.

answer

yield management system

question

88. Which of the following statements about yield management systems (YMS) is true?

answer

YMS are mathematically complex systems to make use of underutilized capacity and reduce the cost of perishability.

question

89. Chad has calculated the sales volume at which his lemonade stand's costs equal revenue. Over dinner, he announced to his family that he only needed to sell 50 glasses of lemonade at $5 per glass to cover all his costs (such as lumber and nails for the stand, lemons, and sugar). Which important factor has Chad excluded from his analysis?

answer

Consumer demand

question

90. Total variable costs divided by quantity of output equals:

answer

average variable cost

question

91. The two types of costs a marketer needs to consider when setting prices are:

answer

variable and fixed.

question

92. A cost that changes with the level of output is called a(n) cost.

answer

variable

question

93. Which of the following is most likely to be a variable cost for an Internet retailer that sells spices, herbs, and seasonings to consumers?

answer

Postage for shipping spices and herbs

question

94. For a nail salon, the costs associated with the purchase of nail polish and other products like nail polish remover, sterilized equipment, laundry service for the towels, and the beverages given to customers, are all examples of _____ costs.

answer

variable

question

95. _____costs do not change as output is increased or decreased.

answer

Fixed

question

96. Central Bark is a dog resort where pets are pampered. Which of the following is the BEST example of one of its fixed costs?

answer

Payment on the building used by Central Bark

question

97. Mitch owns an accounting agency. The monthly payment on the land he purchased for his business, the mortgage on his small office building, and his business license are all examples of _____costs.

answer

fixed

question

98. ______cost is the change in total costs associated with a one-unit change in output.

answer

Marginal

question

99. Monthly output at Leisure-Time, Inc. changed from 12 to 13 prefabricated gazebos, and the total costs changed from $9,000 to $10,500. What is the marginal cost for this company?

answer

$1,500

question

100. When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for, the seller is using_____pricing.

answer

markup

question

101. The most popular method used by wholesalers and retailers in establishing a sales price is____pricing.

answer

markup

question

102. Cowboy Malone's Electric City pays a wholesaler $700 for a television and sells it to a customer for $1,500. The markup on the television is:

answer

$800

question

103. An office supply store can buy a desk for $300. If the store owner sells the desk for $450, what is the markup based on cost?

answer

50 percent

question

104. An office supply store can buy a desk for $300. If the store owner sells the desk for $450, what is the markup based on the selling price?

answer

33 percent

question

105. The difference between the retailer's cost and the selling price is the:

answer

gross margin.

question

106. The owner of specialty kitchen retail store wants to determine what price she should put on a set of mixing bowls. They cost her $7. She desires a markup of 30 percent based on selling price. Which of the following is closest to the price she should charge her customers?

answer

$10

question

107. _____is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price).

answer

Keystoning

question

108. Keystoning is:

answer

the practice of marking up prices by 100 percent.

question

109. The Nest is a retail store owned and operated by an interior designer. The markup on all items in the store is 100 percent over cost (or double the cost). In this case, we would say the designer uses:

answer

keystoning.

question

110. Profit maximization occurs when:

answer

marginal revenue equals marginal cost.

question

111. ____is the extra revenue associated with selling an additional unit of output.

answer

Marginal revenue

question

112. As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold, a firm should:

answer

continue manufacturing.

question

113. The point at which marginal cost and marginal revenue are equal always results in:

answer

maximization of profits.

question

114. ____determine what sales volume must be reached before the company's total revenue equals total costs and no profits are earned.

answer

Break-even analyses

question

115. The typical break-even model assumes a given fixed cost and a:

answer

constant average variable cost.

question

116. Fixed cost contribution equals:

answer

price minus the average variable cost.

question

117. Your Memory Lane creates custom art prints that use graphs and icons in a street scene to commemorate special occasions. Suppose that Your Memory Lane has priced its product at $350 per print. Further, it has determined that the company's fixed cost is $12,500, with average variable costs per print of $250. What is the fixed cost contribution per print?

answer

$100

question

118. Your Memory Lane produces custommade art prints that include graphics and icons to celebrate life's special moments. For example, on his wedding anniversary, David had an art print produced that celebrated highlights of his ten years with his wife, Kathy. Suppose that Your Memory Lane sells the custom artwork for $500. It estimates its average variable costs to be $200 per unit produced. It figures its fixed costs to be $900,000 per year. How many prints does it have to sell to break even?

answer

3,000 prints

question

119. Pet's Eye View Digital Camera is a small, durable digital camera that pet owners can clip to their pets' collars. A programmable timer takes pictures every few minutes, recording a photographic diary of the pet's day. The camera sells for $25. The average variable cost for each camera is $10 and the total annual fixed costs for plant operation are $45,000. What is the break-even point in units?

answer

3,000

question

120. Regency, Inc. makes disposable cap and gown sets for graduations. Each cap and gown set sells for $15. The average variable cost for manufacturing ten cap and gown sets is $100. Total fixed costs for the year equal $65,000. Calculate the break-even point in units.

answer

13,000

question

What is the annual break-even point in units for the company?

answer

250,000

question

122. Which of the following statements describes a limitation associated with break-even analysis?

answer

It is sometimes difficult to ascertain whether a cost is fixed or variable.

question

123. Which of the following statements about pricing strategies throughout the product life cycle is NOT true?

answer

With inelastic demand, price will be set low during the introduction stage.

question

124. Prices generally begin to stabilize:

answer

as a product enters the growth stage.

question

125. When Apple, Inc. developed and introduced the iPad, it was unique as it essentially combined a touch-based portable computer, a wireless marketplace, and an eBook reader. As such, in the short run, it seemed that demand for the product would be inelastic, with no real existing competition. The recommend pricing strategy in such a situation would be:

answer

high initial price, falling slightly when entering the growth stage.

question

126. As a product enters the growth stage, prices generally begin to stabilize. One reason for this is that:

answer

the product has begun to appeal to a broader market.

question

127. Kroger supermarkets will place well-known brands on the shelves at high prices while offering their own Kroger brand at lower prices. This practice is an example of:

answer

selling against the brand.

question

128. Manufacturers can do all of the following to regain some control over the price their products are sold for at the retail level EXCEPT:

answer

require resellers to maintain prices in line with competitors' prices.

question

129. Shopping bots:

answer

search the Web for the best price.

question

130. Which of the following statements about the Internet is true?

answer

Business-to-business auctions on the Internet are likely to be more important than consumer auctions in the future.

question

131. During the hot summer months, or the week before a new class starts if there is still space available, the Nick Price golf school in Orlando, Florida, offers a 25 percent reduction to get golfers during the off-season or those making a last-minute decision. This is an example of pricing strategy used as a(n):

answer

promotion strategy.

question

132. Many consumers, especially when faced with an uncertain purchase decision, think that a high price:

answer

is a signal of quality.

question

133. David likes New Balance running shoes. However, when he stopped by the Foot Locker to buy a new pair of running shoes, he noticed that Nike had a new pair of running shoes that cost $350. To David, the higher price of the Nike shoe indicated that it would be a better pair of running shoes. This is an example of:

answer

prestige pricing.

question

134. When the Apple iPhone 3G was introduced, users could buy the "I Am Rich" app for a price of $1,000. The app did nothing but display a red gem on the iPhone's screen. The description of the app stated that this red icon would remind you (and others you show it to) "that you were rich enough to afford this." Six of the applications were sold before Apple, Inc. removed the app from iTunes. At the $1,000 price, the author of the app was using _____pricing as part of his marketing approach.

answer

prestige

question

135. Marketing managers who attempt to raise the quality image of their product by selling it at high prices are following a(n) _____ strategy.

answer

prestige pricing

question

136. Laurie knows little about cooking and does not want to spend the time to learn how to make a quiche. However, she has been asked to bring a quiche to an office retirement party. Not wanting to make a poor choice, she is likely to:

answer

buy the most expensive pre-made quiche (perhaps paying too much), guessing that the price is related to quality.

question

137. When Jerry took delivery of his brand new (and very expensive) Jaguar automobile, he was filled with pleasure and excitement. This is an example of the_____effect associated with the price-quality relationship.

answer

hedonistic

question

138. The dimensions of quality that are important to consumers include:

answer

all of these choices.

question

139. Refer to Tesla Motors. The price of the Roadster was set so that the marginal revenue equals marginal cost. This represents a approach.

answer

profit maximization

question

140. Refer to Tesla Motors. If Tesla had assets of $5 million and net profits after taxes of $550,000, what is Tesla's return on investment?

answer

11 percent

question

141. Refer to Tesla Motors. What is the fixed cost contribution for the Roadster given average variable costs of $50,500?

answer

$78,000

question

142. Refer to Tesla Motors. If total fixed costs are $23,400,000 and the average variable cost is $50,500, how many Roadsters must Tesla sell to break even?

answer

300

question

143. Refer to Tesla Motors. Say Tesla set the price of the Roadster high because the company wanted to promote a high-quality image. What type of pricing does this represent?

answer

Prestige pricing

question

144. Refer to Specialty Cakes. Although many factors determine the prices charged by Cecilia Villaveces Cakes, the two primary determinants are:

answer

the demand for the good and the cost to the seller.

question

145. Refer to Specialty Cakes. Many party planners in the Southeast will only use Cecilia Villaveces Cakes at their parties--no matter what the price is. They know that Cecilia's cakes can make a party a success. Moreover, the cakes are what people remember most about the parties. From this description, you should assume Cecilia Villaveces Cakes have a(n):

answer

inelastic demand.

question

146. Refer to Specialty Cakes. Which of the following is the BEST example of a fixed cost for Cecilia Villaveces Cakes?

answer

Food preparation licenses

question

147. Refer to Specialty Cakes. Which of the following is the BEST example of a variable cost for Cecilia Villaveces Cakes?

answer

Flour and sugar

question

148. Refer to Specialty Cakes. To set the price of her cakes, Cecilia simply doubles her costs, which often include several hours of labor and expensive raw materials. This method of price setting is called:

answer

keystoning.

question

149. Refer to Specialty Cakes. There are many occasions for which people may need to buy a cake, but most people do not have the time or interest to learn about cakes and their bakers. These people who do not know about the quality of the Cecilia Villaveces Cakes might choose them because they:

answer

equate price and quality.

question

150. Refer to American Girl Doll. What is the revenue to American Girl if it sells 20 basic Kristen dolls?

answer

$1,800.00

question

151. Refer to American Girl Doll. American Girl is the primary seller of historically accurate dolls with accompanying books in a market where there is very little competition. It has no cash flow problems and is not interested in maximizing its sales. From this information, you should know American Girl has ______pricing objectives.

answer

profit-oriented

question

152. Refer to American Girl Doll. The popularity of the American Girl dolls is so great that an increase in the price of the basic Kristen doll and books by 5 percent will not significantly affect the demand for the product. The means that the demand for the American Girl doll is:

answer

inelastic.

question

153. Refer to American Girl Doll. Based on the information in the narrative, which of the following factors is most likely to affect the elasticity of demand for the doll?

answer

The absence of substitutes

question

154. Refer to American Girl Doll. In terms of the costs of producing the doll and its accessories, the salary of the graphic designer who does the layout for the American Girl catalog is a(n):

answer

fixed cost.

question

155. Refer to American Girl Doll. In terms of producing the doll and its accessories, the calico fabric used to make Kristen's dress is an example of a(n):

answer

variable cost.

question

156. Refer to American Girl Doll. You can buy a doll at Walmart for $5.99. The high price of the American Girl doll is used to promote a high-quality image. American Girl uses a_____pricing strategy.

answer

prestige

question

157. Refer to Smelly Fruit. If it cost a Thai farmer $100 to produce and $25 to market the Kan Yao durian that she sells for $200 at the marketplace, her revenue, for each durian sold, would be:

answer

$200

question

158. Refer to Smelly Fruit. Suppose that a Thai farmer sells ten Kan Yao durians in the marketplace at the going rate of $200 each. If it cost a Thai farmer $125 to produce and market the Kan Yao durian that she has sold, the difference between these two numbers ($75), times the number sold (ten), represents the farmer's:

answer

profit

question

159. Refer to Smelly Fruit. Suppose that you have decided to buy land in Thailand and become a durian producer. You see that the customary price for a Kan Yao is $200, so that is the price you decide to charge for your durian crop. This suggests you are using a _____ approach to setting your price.

answer

status quo

question

160. Refer to Smelly Fruit. At $200 per Kan Yao, demand for the fruit appears to be higher than supply. Suppose that at a price of $225, the amount demanded exactly meets the amount farmers are willing and able to supply. In this case, the $225 price would be considered the_____price.

answer

price equilibrium

question

161. Refer to Smelly Fruit. Over the past two years, the price for Kan Yao durian fruit has increased by 50 percent. If the amount sold has remained almost constant, we would say that demand is:

answer

inelastic

question

162. Refer to Smelly Fruit. The durian fruit is a unique product. To many people in Thailand, no other fruit tastes or smells anything like the durian. Its uniqueness, in the eyes of the customer, would tend to have which of the following?

answer

It would tend to make the durian more price inelastic.

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