logo image

Marketing Test 4

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.
f
The key to successful pricing is to match the product with the consumer’s perception of value.
t
Price is the only part of the marketing mix that does not generate costs.
t
If Brandon buys hats for his store for $5 each and sells them for $15 each, he is using a keystoning pricing strategy.
f
Rarely is the lowest-price product offering the dominant brand in a given market.
t
A demand curve shows the relationship between income and demand.
f
Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.
t
Brands that have developed loyal customers have a higher price elasticity of demand.
f
In U.S. markets, there are many substitute products for Fruit Loops cereal, suggesting the price elasticity of demand for Fruit Loops is high.
t
In general, prices should not be based on costs because consumers make their purchase decisions based on perceived value, not the cost of production.
t
At the break-even point, profits are maximized.
f
In addition to the product-specific and firm-specific factors that affect pricing, there are two broader factors: the Internet and sociocultural factors.
f
A gray market employs irregular but not necessarily illegal methods of distributing products.
t
Economic trends that affect pricing decisions include increases in disposable income and status consciousness, a trend for customers to shop cheap, global economic conditions, and local economic conditions.
t
The Internet has decreased consumers’ price sensitivity.
f
Diana owns a boutique specializing in ball gowns. Sales are stable and Diana feels it is time she had a 20 percent increase in her salary. If Diana takes this increase in compensation, it will decrease the breakeven quantity of gowns she needs to sell on a monthly basis.
f
If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.
t
Firm A has set very low prices for its products in an attempt to drive its competitor, Firm B, out of business. This is known as monopolistic pricing.
f
In addition to knowing more about the products, services, manufacturers, and retailers, Internet users know more about prices. These consumers are becoming more

price insensitive.

price observant.

price neutral.

price sensitive.

adept at price negotiation for all kinds of products.

d
The break-even point is estimated by

multiplying revenue per unit times the quantity sold.

dividing fixed contribution per unit by variable costs.

multiplying fixed costs by contribution per unit.

dividing fixed costs by contribution per unit.

dividing variable costs by fixed costs.

d
One of the limitations associated with break-even analysis is that

it assumes fixed costs are zero.

it cannot adjust for high variable costs.

it only tells marketers what price is needed to break even.

it assumes that there is only one price.

it assumes that demand is extremely inelastic.

d
One of the limitations associated with break-even analysis is that

it assumes fixed costs are zero.

it cannot adjust for high variable costs.

it only tells marketers what price is needed to break even.

it assumes that there is only one price.

it assumes that demand is extremely inelastic.

d
The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

most consumers cannot remember what price they paid the last time they bought a particular product.

it is easier to lose customers with a price increase than to gain customers with a price decrease.

most consumers would rather skip buying a product than pay a higher price.

most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes.

firms gain more customers with price decreases than they lose with price increases.

b
A _________________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

sales orientation

target profit

target return

status quo

maximizing profits

e
Frank’s Heating and Air Conditioning Company specializes in electric heat pumps. Frank keeps track of the price of natural gas, knowing that

natural gas creates more environmental greenhouse effects than coal.

an increase in the price of natural gas will increase demand for his electrical heating systems.

gas heating systems and electrical heating systems are complementary goods.

when the price of natural gas goes up, the quantity demanded also rises.

the demand for natural gas is price elastic.

b
One problem in relying on price elasticity and demand curves when setting prices is

the way a product or service is marketed can have a profound impact on price elasticity.

the underlying ideas of the demand curve and elasticity are less relevant in the modern economy.

only economists can properly analyze demand curves and set prices using this tool.

competitors can construct the same demand curves, so there is no advantage in using them.

marketing split from economics over the ideas of demand and elasticity.

a
A customer orientation toward pricing implicitly invokes the concept of

knowing the dimensions of the target market.

positioning.

the income effect.

value.

None of these.

d
Internet comparison shopping sites like Shopping.com and Pricegrabber.com allow consumers to compare prices of substitute products much more easily than is possible without the Internet. These sites have

reduced the price elasticity demand for individual products.

increased the cross-price elasticity for substitute products.

increased the income effect on price elasticity of demand.

reduced the cross-price elasticity of demand for complementary goods.

decreased the price elasticity of demand for groups of similar products.

b
The contribution per unit is

price minus total costs.

price minus total variable cost.

price minus variable cost per unit.

total revenue minus total cost.

break-even quantity divided by total fixed costs.

c
_________________ measures consumers’ sensitivity to price changes.

Cross-price elasticity of demand

Price elasticity of demand

Income elasticity of demand

Competitive profit elasticity of demand

Inelastic demand price parity

b
Julia’s is an upscale women’s clothing store. Prices are based on customers’ beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia’s is using a ________________ pricing strategy.

customer-oriented

target profit

target return

status quo

maximizing profits

a
Winston’s Ice Cream Shop has been in the same location for two decades. Last week, a new ice cream shop opened up just one block down the street. Winston’s decides to sell ice cream below cost in order to drive the new shop out of business. What kind of pricing is Winston’s using?

Predatory pricing

Competitive pricing

Ceiling pricing

Inelastic pricing

Keystoning

a
Price elasticity of demand is the

percentage change in quantity demanded divided by the percentage change in price.

percentage change in price divided by percentage change in quantity demanded.

change in price divided by change in quantity demanded.

change in quantity demanded divided by the change in price.

change in quantity demanded multiplied by the change in price.

a
A major hotel chain found that if it was to reduce the cost of the ice cream it currently served, it would be able to save over 400 employees’ jobs. Therefore, it switched from a high priced brand of ice cream to a more moderate priced ice cream. This is known as the

substitution effect.

income effect.

brand effect.

commercial effect.

value effect.

a
Gary is the marketing manager for an automobile dealership. His boss tells him the firm’s primary goal is to increase their local market share from 15 to 30 percent. Gary’s pricing strategy will focus on

increasing profits.

increasing sales.

decreasing competition.

building customer satisfaction.

product development.

b
At the break-even point,

costs are zero.

price is maximized.

profits are zero.

fixed costs are zero.

contribution per unit is zero.

c
Many years ago Honda’s Accord and Ford’s Taurus were the top two selling cars in the United States. As the year was coming to an end, Ford cut the price of the Taurus, hoping to outsell the Accord and allow Ford to claim that “Taurus is the best-selling car in America.” Ford was using a ___________________ pricing strategy.

maximizing profits

target profit

sales orientation

status quo

target return

c
s
s
Which of the following is the most logical example of complementary products?

Hot dogs and hamburgers

VCRs and DVD players

Hot dogs and hot dog buns

Honda cars and Toyota cars

A university and a corporation

c
Marketers of products and services associated with the wedding industry know that customers often do not care what the price is. They just want the wedding to be perfect. For these customers, demand is likely to be

cross-price elastic.

derived demand elastic.

price elastic.

status quo elastic.

price inelastic.

e
A strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy

leads the marketer to being the low-cost seller.

is supported by consistent advertising and distribution strategies.

challenges consumers to discard their perceptions of value.

is consistent with a competitive target return strategy.

does all of these.

b
s
s
Near the end of the summer season, Sergio still has a large inventory of bathing suits. He needs to sell them rather than holding them over till next season, because colors and styles often change. He plans to offer them at 30 percent off the retail price. Sergio hopes that demand for bathing suits at the end of the season is

cross-price elastic.

price inelastic.

price elastic.

status quo elastic.

derived demand inelastic.

c
When Ursula decides how to price new products in her gift store, she measures the value of her product offerings against those of the other stores in her area. Ursula uses a __________________ pricing strategy.

maximizing profits

target profit

target return

competitor-oriented

sales oriented

d
Rodi owns Hallman’s auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of ______________ on demand for his service.

breakeven points

the price inelasticity ratio

the income effect

target profit pricing

cross-price elasticity

c
If the fixed costs of manufacturing a new cell phone are $10,000, the sales price is $60, and variable cost per unit is $20, the break-even point is

100 units.

4,000 units.

20 units.

1,000 units.

250 units.

e
The more substitutes that exist in a market,

the lower the price elasticity for each product.

the greater the income elasticity for each product.

the easier it will be to utilize a target profit pricing strategy.

the more sensitive consumers will be to changes in the price of a particular product.

the more likely the market will be characterized as an oligopoly.

d
Price is often the most challenging of the four Ps to manage, partly because it is often ___________________________ in developing marketing strategies.

the least important aspect

treated as an afterthought

calculated by senior consultants

difficult to calculate markups

the subject of cross-shopping differentiation

b
A demand curve is built assuming that

income is derived from demand.

price remains the same, and fixed costs change.

everything but price and demand remains the same.

a change in quantity demanded causes a change in price.

the firm does not advertise.

c
Cindy went shopping for a new outfit. She bought a low-priced shirt at a discount store, and combined it with an expensive designer skirt. Which of the following terms best describes Cindy’s actions?

Cross-shopping

The income effect

Cross-price elasticity

The substitution effect

Specialty shopping

a
For which of the following is demand likely to be least sensitive to price increases?

Spring break vacations.

A specific brand of cereal.

Prescription drugs.

Theater tickets.

Restaurant meals.

c
Jason rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20. His fixed costs are $100,000 and his target profit is $20,000. For Jason, to earn his target profit, he will need to rent out ________ rooms.

100

1,500

20,000

1,000

It cannot be determined from the information provided.

b
Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue. For Raymond, the total cost of opening the new branch and remaining open for one year will be:

$500,000.

$550,000.

$650,000.

$450,000.

$605,000.

b
In _______________, many firms provide similar products that are considered substitutes for each other.

pure competition

oligopolistic competition

monopolistic competition

a monopoly

a duopoly

a
Gray markets can be a challenge to marketers because

they are just as illegal as black markets.

they may tarnish the manufacturer’s image.

they are legal in some states and illegal in others.

consumers are against them, but retailers support them.

they may result in price increases across the board.

b
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

price sensitive.

price elastic.

price inelastic.

income elastic.

cross-price elastic.

c
If a 1 percent decrease in price results in more than a 1 percent increase in quantity demand, demand is

cross-price elastic.

price inelastic.

price elastic.

status quo elasticity.

derived demand inelastic.

c
Chet knows the pro shops selling his golf photography will “keystone” his products. He also knows sales will decline significantly if the retail price is greater than $200. The maximum wholesale price Chet can charge is

$200.

$100.

$50.

$10.

It cannot be determined from this information.

b
If firms price their products too low, it may

result in lower costs.

create a premium pricing effect.

increase contribution per unit.

result in inelastic demand.

signal poor quality.

e
Assume the demand for electricity, a necessity with few substitutes, is -0.2. If the electric company raised its rates by 10 percent, we would expect

a 10 percent decrease in quantity demanded.

a 2 percent increase in quantity demanded.

a 10 percent increase in quantity demanded.

a 2 percent decrease in quantity demanded.

a 5 percent decrease in quantity demanded.

d
In a market with _______________, there are many firms providing differentiated products.

pure competition

oligopolistic competition

monopolistic competition

a monopoly

a duopoly

c
Marketers can deliver high value through high or low prices, depending on

profit contribution per unit.

the bundle of benefits the product or service delivers.

monopolistic competition.

target return pricing that is greater than variable cost per unit.

the income effect.

b
Sharon knew that her established customers liked her product much better than the competitors. She was planning to expand into new markets, and she was considering pricing. She was leaning toward charging a higher price than competitors to help demonstrate that hers was a high-quality product. Sharon was considering

a top of market strategy.

the value of quality.

advantageous pricing.

premium pricing.

differential pricing.

d
Dean runs a woodworking business specializing in kitchen cabinets. He knows there are other firms with top-of-the-line machinery that make better quality cabinets, but he does well and has a constant flow of business. Dean obviously has

figured out how to produce cheap products.

priced his products well.

reduced his variable costs by investing in fixed costs.

avoided monopolistic competition, and is instead in a market with pure competition.

learned how to use status quo pricing.

b
Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy.

sales orientation

target profit

target return

status quo

competitive parity

c
Diane owns a bakery where she sells cupcakes. Two blocks down there is another bakery, CC’s Bakery, that sells cupcakes for $1 less than Diane. Diane decides to lower her price and match CC’s Bakery prices. What type of pricing strategy is Diane implementing?

Internal pricing

Profit-oriented pricing

Competitor-oriented pricing

Customer-oriented pricing

Sales-oriented pricing

c
Unlike product, promotion, or place, price is the only part of the marketing mix

that offers the opportunity for an oligopoly.

that is subject to gray market manipulation.

that leads to competition.

that generates revenue.

that is determined by the consumer.

d
Liz and Sarah watched the prices of all the ingredients in their line of specialty sauces go up and up. Now, transportation costs are going through the roof. Liz suggested they could raise prices to cover these expenses because customers would understand. Which of these is the most important factor Liz and Sarah should consider before raising prices?

The costs might go back down again.

They will have to adjust their promotional literature.

Customers do not care about the company’s costs; they care about value.

Rental costs for their production facility might go up next.

Consumers do not think about the cost of additional items; they are concerned mostly with the total cost for a visit to a store.

c
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% so the firm can achieve its overall growth objectives. What type of company objective is this?

profit-orientation

sales-orientation

competitor-orientation

customer-orientation

market-orientation

a
Joe’s Boathouse uses a profit-oriented company objective, but the ultimate goal is to generate a profit margin of at least 12% rather than maximizing profits. This involves

premium pricing.

competitive parity.

status quo pricing.

target return pricing.

target profit pricing.

d
Jana’s firm is entering 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?

profit-orientation

sales-orientation

competitor-orientation

customer-orientation

market-orientation

b
_____ 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.

Target return pricing

Target profit pricing

Status quo pricing

Competitive parity

Premium pricing

e
Everyone in town knows that Designer’s Edge coffee costs twice as much as the average cup of coffee, but it still attracts a large following of loyal customers looking for the best. Designer’s Edge uses

premium pricing.

competitive parity.

status quo pricing.

target return pricing.

target profit pricing.

a
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

premium pricing.

competitive parity.

status quo pricing.

target return pricing.

target profit pricing.

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

profit-orientation

sales-orientation

competitor-orientation

customer-orientation

market-orientation

c
A(n) _____ orientation explicitly invokes the concept of value such as when a firm uses a “no-haggle” price structure to make the purchase process simpler and easier.

profit

sales

competitor

customer

market

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

increases.

stays the same.

decreases.

levels off.

doubles.

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

status quo

prestige

predatory

price elastic

substitute

b
_____ measures how changes in price affect the quantity of the product demanded.

Break-even analysis

Competitive parity

Target return pricing

Market-oriented pricing

Price elasticity of demand

e
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

elastic.

inelastic.

price sensitive.

expandable.

flexible.

b
_____ reflects that the greater the availability of substitute products, the higher the price elasticity of demand for any given product will be.

The income effect

The substitution effect

Cross-price elasticity

Complementary products effect

Sustainability of products

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

The income effect

The substitution effect

Cross-price elasticity

Complementary products effect

The supply curve

c
The _____ is the price less the variable cost per unit.

profit margin

break-even point

target return price

contribution per unit

fixed cost

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

Contribution margin analysis

Break-even analysis

Predatory pricing

Total cost calculation

Fixed cost analysis

b
In _____, one firm provides the product or service in a particular industry, and as such results in less price competition.

a monopoly

an oligopoly

monopolistic competition

oligopolistic competition

pure competition

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

a monopoly.

an oligopoly.

pure competition.

competitive parity.

monopolistic competition.

b
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 considered to be

monopolistic.

oligopolistic.

engaging in predatory pricing.

engaging in competitive parity.

using the substitution effect.

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

oligopolistic competition

market saturation

pure competition

competitive parity

monopolistic competition

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

monopolies.

oligopolies.

pure competition.

competitive parity.

monopolistic competition.

c
_____ 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 monopoly

A gray market

Pure competition

A black market

A price war

b
Jamal was interested in getting a new flat screen television. He went to his local electronics store to view the various models and discuss the features and benefits with the sales associate, but then bought the product online from another retailer for a lower price. Jamal was engaged in

showrooming.

cross-shopping.

competitive parity.

reference shopping.

target profit pricing.

a
The pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers is referred to as

showrooming.

cross-shopping.

mixed competition.

overlap shopping.

double-dipping.

b
Because market and operating conditions are all very similar, marketers’ pricing strategies should be uniform.
f
Cost-based pricing assumes costs will not vary much for different levels of production.
t
Value-based pricing necessitates a great deal of consumer research to be implemented successfully.
t
Odd prices suggest low quality.
t
When Sony released its PlayStation 3 game machines, it charged a high price, attracting the most avid game players. This was a market penetration pricing strategy.
f
Cheryl wants to quickly establish a dominant market share for her new line of ergonomic pens. To do this, she will likely use a market penetration pricing strategy.
t
Slotting allowances are used to get retailers to feature a manufacturer’s product in their advertising and promotional efforts.
f
3/10, n/30 means a 3 percent discount if paid in full within 10 days, or the net amount is due in 30 days.
t
Price lining is setting a price floor and a price ceiling for a line of products and then setting price points in between to represent differences in quality.
t
Kristina sells sports equipment and wants to get customers into her store. She knows from past experience that sales generate customer traffic, particularly when she puts children’s baseball equipment on sale. She may consider a leader pricing strategy.
t
Coupons may confuse customers and therefore do little to increase store loyalty.
t
Manufacturers like rebates because it provides them with information they can use in developing new products.
f
Proving that a company has engaged in the deceptive bait and switch practice is easy.
f
The Robinson-Patman Act does NOT apply to end consumers, at which point many forms of price discrimination occur.
t
The methods used to develop pricing strategies are cost-based pricing, competitor-based pricing, and value-based pricing.
t
Competitor-based pricing is when a company determines the final price of a good based on the cost.
f
When a retail store rarely sells deeply discounted or sale products, it is known as “everyday low pricing.”
t
One of the reasons a manufacturer may decide to sell its products in a bundle is to encourage trial of a new product.
t
When Apple Computer Company introduced the iPhone—a combination phone, MP3 player, and Internet access device—in 2007, it was priced at $499, considerably higher than either the iPod or competing cell phones. Apple was probably pursuing a __________ pricing strategy.

market penetration

slotting allowance

price fixing

reference price

skimming

e
__________ occurs when members of the marketing channel collude to control the prices passed on to consumers.

Loss leader price fixing

Bait and switch price fixing

Horizontal price fixing

Vertical price fixing

Predatory pricing

d
Yurgen is opening a financial consulting service for high-income retirees in his area. This target market is used to paying for quality and associates high quality with high prices. Yurgen should probably NOT use a market penetration pricing strategy because

he might be missing out on customers who would pay more for his products.

there are moderate barriers to competitive entry in the market.

a low price might signal low quality.

he would have to determine zone pricing discounts.

the experience curve effect would drop unit costs too rapidly.

c
A pricing strategy is

a long-term approach to setting prices in a companywide integrated effort.

the use of one-time seasonal discounts to reduce inventory.

the use of slotting allowances to gain access to distribution channels.

a short-term approach to setting prices.

associated with competitive threats in the marketplace.

a
An everyday low pricing strategy stresses the continuity of retail prices

at a level above regular retail prices and below deep-discount prices.

based on horizontal price fixing.

bundled with cost-based, cash discounts.

at a level somewhere between the regular price and the deep-discount sale prices competitors may offer.

at a price skimming level.

d
B2B quantity discounts are legal if

the discounts are available to all customers.

they do not exceed 25 percent of the regular price.

they are not short term.

new customers can “buy up” to reach the minimum quantity.

cumulative discounts do not run for more than a calendar year.

a
s
s
Marketers advertising an artificially high “regular price” are unethically attempting to influence consumers’__________ perceptions.

fixed price

reference price

seasonal price

leader price

cost-based price

b
3/10, n/30 means

a 10 percent discount if paid in full within 3 days, or the net amount is due in 30 days.

a 3 percent discount if paid in full within 10 days, or the net amount is due in 30 days.

a 3 percent discount if paid in full within 3 days, or the net amount is due in 10 days.

a 3 percent discount if paid in full within 30 days, or the net amount is due in 10 days.

no discount is available on this order; the net amount is due between 10 and 30 days.

b
Bill desperately needed tires for his car, and he found an ad with an incredibly low price. When he got there, he found out that those had been sold out, and he was pressured into buying tires that were more expensive than he wanted. Bill found out later that Marcelo had had the same experience at the store a few weeks earlier. It’s quite possible that both Bill and Marcelo had become the victim of a deceptive pricing tactic known as

loss leader pricing.

desperation selling.

bait and switch.

off-season deceptions.

inventory reduction pricing.

c
A reference price is

the actual price.

the price against which buyers compare the actual selling price.

the manufacturer’s cost.

a cumulative quantity discount price.

the external horizontal fixed price.

b
With a __________ pricing strategy, marketers set a low initial price for the introduction of a new product or service.

market penetration

bundling

price fixing

reference

skimming

a
With a price skimming strategy, a marketer will NOT benefit from

increased consumer value associated with price increases.

the ability to use seasonal discounts.

the opportunity to offer advertising allowances.

economies of scale associated with a larger volume of production.

market substitution price elasticity.

d
Which of the following is NOT a common business-to-business pricing tactic?

seasonal discounts

slotting allowances

quantity discounts

loss leader pricing

advertising allowances

d
A major airline sells an aggressively low priced ticket compared to a new low-fare airline, which is trying to enter the market. The airline may be accused of engaging in the unethical practice of

predatory pricing.

price fixing.

leader pricing.

price skimming.

deceptive reference prices.

a
The advantage of zone pricing to the seller is the shipping charges typically

are not marked down during the off season.

complement the advertising allowances.

reflect more closely the cost of delivery.

result in a cumulative quantity discount.

are the same for all shipments, making it easy to calculate total price.

c
When HP first introduced their inkjet printers, consumers could only buy refill cartridges from HP. HP made significant profits from the sale of replacement cartridges. In this situation, HP logically used a __________ pricing strategy for their printers.

market penetration

loss leader

price fixing

reference

skimming

a
One of the difficulties associated with value-based pricing is that

the way consumers perceive value constantly changes.

only the creator of a new product can fully understand its value to consumers.

value depends on variable costs and not fixed costs.

everyday low pricing has neutralized the impact of price on consumers’ purchase decisions.

costs are invaluable.

a
s
s
When the first hybrid automobiles became available on the market, manufacturers had only minimal production capacity. They used a price skimming strategy primarily to

recoup high research and development costs.

signal high quality.

limit demand.

penetrate a market.

test consumers’ price sensitivity.

c
Developing pricing strategies for __________ is one of the most challenging tasks a manager can undertake.

cost-based pricing

seasonal rebate items

new products

zone pricing products

quantity discounts

c
One of the difficulties associated with value-based pricing is that

costs are impossible to compute.

only the creator of a new product can fully understand its value to consumers.

value depends on variable costs and not fixed costs.

everyday low pricing has neutralized the impact of price on consumers’ purchase decisions.

it necessitates a great deal of consumer research to be implemented successfully.

e
A weakness associated with cost-based pricing methods is that they

are too difficult to calculate.

infer a cost-price ratio.

do not recognize the role that consumers or competitors’ prices play in the marketplace.

do not allow for predatory pricing.

are structurally inflexible and ignore vertical price fixing alternatives.

c
Pricing __________ products is especially challenging because little or nothing is known about consumers’ perceptions of value.

cost-based

seasonal

large-quantity

new-to-the-world

zone pricing

d
Supermarket A always waits until Thursday to price their canned beans in an effort to match Supermarket B’s prices, which are advertised on Wednesday. This demonstrates what type of pricing strategy?

Value-based pricing

Competitor-based pricing

Cost-based pricing

Everyday low pricing

High/low pricing

b
One of the benefits of offering a size discount to consumers is they will purchase more of a marketer’s product and

earn a cash discount.

experience the experience curve effect.

will not fall prey to predatory pricing.

will be less likely to switch brands.

will be able to take advantage of zone pricing benefits.

d
Price skimming focuses on selling products to __________ and __________ in the consumer adoption process model.

innovators and early adopters

early adopters and early majority

early majority and late majority

late majority and laggards

laggards and innovators

a
The manufacturers of the early electric cars are charging relatively high prices to consumers who are willing to pay the price. They need to use a price skimming strategy because of

the relatively high emissions produced by electric cars.

the potential benefits of price bundling.

the high costs associated with producing a small volume of cars.

the slotting allowances needed to gain greater distribution.

a vertical price fixing arrangement among vendors supplying the needed components.

c
Cosmetic retailers often have one price for each item but another price for three or four similar items with the same brand, all attractively packaged together. These retailers are using

price lining.

slotting allowances.

cumulative quantity discounts.

loss leaders.

price bundling.

e
Ben owns a lawn care business. From experience, Ben has found that John Deere equipment lasts almost twice as long as competitors’ machines. For John Deere, Ben’s perception about its products makes __________ pricing possible.

improvement value

odd-even

everyday low pricing

reference-based

cost of ownership

e
Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering

when the product is produced.

as recognized by competitors.

as perceived by the consumer.

in order to minimize bundling charges.

relative to production costs.

c
Yvonne estimates the average cost of her floral arrangements is $14 regardless of whether she is doing 5 or 20 arrangements that day. She adds a standard markup to the $14 estimate to determine her price. Yvonne is using a(n) __________ pricing method.

improvement value

value-based

everyday low pricing

reference-based

cost-based

e
Supermarkets often offer great deals on milk, beef, or eggs to get customers into their stores, knowing that many customers will also purchase items that have higher markups for the store. These supermarkets are using a __________ pricing tactic.

leader

bundling

price lining

cumulative quantity discount

seasonal allowance

a
s
s
When a new product is not being sold at the rate originally forecasted, the retailer may reduce the price in order to reduce the inventory of the product. This reduction is known as a

markdown.

rebate.

quantity discount.

coupon.

cash discount.

a
Firms using a(n) ____________ pricing method set their prices relative to what other firms are charging.

improvement value

value-based

competitor-based

reference-based

cost-based

c
Everyday low pricing (EDLP) provides value to consumers by

continually offering items on sale.

minimizing the number of options a consumer can evaluate.

noncumulative quantity discounts.

reducing their search costs.

creative use of referencing pricing.

d
Because market and operating conditions are different in each target market

all consumers will react similarly to the firm’s pricing strategy.

the choice of a pricing strategy is specific to the target market.

prices need to be held constant because everything else is changing.

only horizontal price fixing should be used.

external reference prices will always be the best strategy.

b
The major objectives associated with a market penetration pricing strategy are to

capture the high end of the market demand curve and lower introduction costs.

quickly build sales and market share.

minimize customer dissatisfaction and maximize reference price value.

provide an incentive to purchase a less desirable product in order to obtain a more desirable product.

match competitors’ prices and communicate high quality.

b
Clark Manufactured Housing Company charges $500 for deliveries within 50 miles and $800 for deliveries 51 to 100 miles away from their factory. The company is using a ____________ pricing tactic.

uniformed delivered

zone

cumulative

horizontal

noncumulative

b
Each generation of cell phones has provided greater clarity, range, and multi-functionality. Marketers of cell phones can use these upgrades in __________ pricing.

everyday low pricing

odd-even

improvement value

reference-based

cost-based

c
When Greenbelt Construction Company began building houses in a large subdivision with many other builders, they priced their homes slightly higher than their competitors and promoted the added quality features in their homes. Greenbelt was using a(n) __________ pricing strategy.

improvement value

value-based

everyday low pricing

reference-based

competitor-based

e
Betty’s Bird Seed Company charges $50 for 10 pounds of bird feed, including shipping. Betty is using __________ to determine shipping costs.

uniform delivered pricing

zone pricing

advertising allowances

predatory pricing

vertical price fixing

a
A pricing tactic is

a long-term and broad-based approach to pricing.

an integrative pricing approach based on the 5 Cs.

an approach that can be used only with consumers.

a short-term approach that often is a response to a competitive threat.

an approach that can only be used in a business-to-business setting.

d
The saying “leaving money on the table” is associated with

the use of odd pricing to force consumers to use their coins in making purchases.

loss leader pricing.

a predatory pricing strategy that results in excessive seasonal discounts.

using a market penetration strategy when there is an opportunity for price skimming.

vertical price fixing in markets where horizontal price fixing would be more appropriate.

d
One of the problems associated with an everyday low pricing (EDLP) strategy is that

stores may have to offer too many noncumulative wholesale discounts.

some consumers may associate EDLP with lower quality goods.

the retailer may be accused of price discrimination.

too many coupons may be redeemed.

it may conflict with price-based cost calculations.

b
Odd prices often suggest __________ to consumers.

low quality

superior quality

uniqueness

expired merchandise

foreign-made goods

a
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.

improvement value

odd-even

everyday low pricing

reference-based

cost of ownership

e
Cost-based pricing assumes costs

vary with the level of prices.

are used to estimate value.

will not vary much for different levels of production.

are calculated based on historical consumer perceptions of what things should cost.

will continue to decrease as production increases.

c
The most common form of a quantity discount for consumers is a

cash discount.

markdown.

size discount.

coupon.

rebate.

c
_____ pricing methods do not recognize the role that consumers or competitors’ prices play in the marketplace.

Value-based

Improvement value

Cost-based

Cost of ownership

Competitor-based

c
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

variable costing.

cost-based pricing.

value-based pricing.

competitor-based pricing.

predatory pricing.

d
Airlines often engage in price wars in an attempt to steal customers away from other airlines. This is an example of which pricing method?

Cost of ownership

Cost-based pricing

Value-based pricing

Competitor-based pricing

Predatory pricing

d
Improvement value and cost of ownership are two approaches to which method of pricing?

Mark-up pricing

Cost-based pricing

Value-based pricing

Competitor-based pricing

Price elasticity

c
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.

cost of ownership

improvement value

value-based

competitor-based

cost-based

a
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.

cost-based

high/low

predatory

everyday low

competitor-based

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

predatory

high/low

cost-based

everyday low

competitor-based

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

cost-based

high/low

predatory

everyday low

competitor-based

b
When retailers use _____ pricing, it can create excitement and attract customers through the “get them while they last” atmosphere that occurs.

high/low

predatory

cost-based

everyday low

competitor-based

a
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.

price lining

the improvement value

prices ending in odd numbers

a reference price

the cost of ownership

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

price lining

price skimming

market penetration pricing

price fixing

experience curve effects

c
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

markdowns.

price lining.

seasonal discounts.

improvement value.

experience curve effects.

e
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.

price lining

price skimming

predatory pricing

penetration pricing

experience curve effects

d
_____ 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.

Price lining

Price skimming

Penetration pricing

Price fixing

High/low pricing

b
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.

price lining

loss leader pricing

penetration pricing

price fixing

price skimming

e
Manufacturers like _____ because it allows them to offer price cuts to consumers directly, rolling them out and shutting them off quickly.

markdowns

quantity discounts

seasonal discounts

coupons

rebates

e
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

leader pricing.

quantity discounting.

price bundling.

a markdown.

a rebate.

c
Supermarket chains often implement _____, a pricing tactic of selling leading brands of products below their own cost in order to build store traffic.

price lining

value-in-use

leader pricing

predatory pricing

cost-based pricing

c
_____ are expressed in the form of a percentage, such as “3/10, n/30,” or “3%, 10 days, net 30.”

Cash discounts

Seasonal discounts

Noncumulative quantity discounts

Advertising allowances

Cumulative quantity discounts

a
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.

seasonal allowances

cash discounts

advertising allowances

slotting allowances

quantity discounts

d
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.

seasonal discounts

advertising allowances

slotting allowances

cumulative quantity discounts

noncumulative quantity discounts

d
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

zone pricing.

variable pricing.

uniform delivered pricing.

flexible delivered pricing.

inflated pricing.

a
_____ 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.

Deceptive reference pricing

Loss leader pricing

Bait and switch

Predatory pricing

Price discrimination

c
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

deceptive reference pricing.

loss leader pricing.

bait and switch.

predatory pricing.

price discrimination.

d
_____ 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.

Horizontal price fixing

Vertical price fixing

Loss leader pricing

Predatory pricing

Price discrimination

b
In the four Ps of marketing, Place refers to all the activities required to get the right products to the right customer when that customer wants it.
t
Marketing channel management creates value by getting products to customers efficiently.
t
A marketing channel and a supply chain are virtually the same.
t
CPFR refers to cost, profit, frequency, and return in an inventory management system.
f
Radio frequency identification tags (RFIDs) automatically transmit information about a container’s contents or individual products.
t
Quick response systems allow retailers to maximize their inventory holdings.
f
Marketing channel relationships evolve when the parties have complementary goals.
t
Conflicts within a supply chain tend to be more pronounced when the members are part of a corporate vertical marketing system.
f
Universal product codes (UPC) are used to describe products for inventory taxation purposes.
f
Retailers generally have no prior knowledge of the merchandise they will be receiving from suppliers in any particular shipment.
f
Which of the following is NOT required to build a successful strategic relationship?

mutual trust

open communications

creation of a joint venture

common goals

credible commitments

c
Retailers often perform ticketing and marking functions in their distribution centers rather than in their retail stores because ticketing and marking is often

the responsibility of the dispatcher.

too complex for sales personnel to manage.

done in conjunction with supply chain promotional allowances.

the responsibility of the logistics department and not the marketing department.

inefficient and distracting.

e
A(n) __________ is a supply chain whose members act like a unified system.

vertical marketing system

independent marketing system

concentrated marketing system

conventional marketing system

strategic marketing system

a
For a JIT system to be successful, the firm and its vendors must

cooperate.

compete.

participate in a vertical marketing system.

put a VMI system in place.

be located within 500 miles of each other.

a
CPFR refers to _________ inventory management systems.

collective preferential forecasting and returns

collection, partnering, franchising, and receiving

collaborative planning, forecasting, and replenishment

corporate partnering, facilitation, and replenishment

centralized planning, factoring, and receiving

c
Because manufacturers with JIT systems produce merchandise closer to the time of sale, they can

organize cooperative agreements among competing manufacturers to reduce oversupply.

reduce inventories needed to satisfy retailers’ demand.

use exclusive geographic territories to centralize production.

effectively eliminate the need for a dispatcher.

replace independent supply chains with corporate supply chains.

b
In a(n) __________ marketing channel, none of the participants has any control over the others.

cooperative

corporate

contractual

administered

conventional

e
Leona is the logistics manager for the Barnes & Noble bookstore chain. She is weighing the many benefits of the company’s JIT system, but will need to consider that just-in-time inventory management systems increase

sales force labor costs.

transportation costs.

promotional costs.

advertising costs.

new product development costs.

b
Getting merchandise floor-ready entails

distributing and dispatching.

ticketing and marking.

vertical supply chain wholesaling.

intensive cross-docking.

selective checking.

b
In an administered vertical marketing system,

no individual participant has control over the others, since a third party administrator oversees the entire supply chain.

transaction selling is the norm, with the invisible hand guiding the overall functioning.

there is no common ownership, and the dominant member has significant power to impose its ideas and objectives.

independent firms join together formally to decide as a group how the marketing channel will operate.

participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain.

c
One of the benefits of shortened lead times associated with a JIT system is

increased production efficiency.

economies of scale through larger production runs.

better forecasting because firms are not forecasting as far into the future.

lower ticketing and marking costs.

reduced tax liability.

c
In marketing’s four Ps, Place refers to all activities required to get

the design of the terminal location for products accomplished.

the right products to the right customer when that customer wants it.

access to the physical space within a retail establishment.

consumers to the destination.

demand chain management functionally operable.

b
Stores like Home Depot and Costco act as wholesalers when they

take delivery in whole-lot quantities.

select limited product lines and only market them to consumers who purchase the whole line.

sell products for distributors.

sell to contractors or restaurant owners.

compete with each other.

d
At the BMW plant in Spartanburg, South Carolina, suppliers deliver parts every four hours when the plant is in operation and are responsible for removing any packaging or pallets used to deliver their products. BMW uses a ______________ inventory control system.

cross-docking

lead time

JIT

CPFR

UPC

c
Amazon.com was an early leader in online retailing. Part of the firm’s success was due to a well-designed and efficient EDI system with book publishing companies, allowing just-in-time delivery. Even with a well-designed EDI system, Amazon.com would not have been successful without

a customer rebate program.

a commitment to partnering with publishing companies.

cooperative advertising with brick and mortar retailers.

support from government regulators.

acceptance from local education unions.

b
A _______________ is a facility for the receipt, storage, and redistribution of goods to company stores or customers.

circulation center

distribution center

supply chain hub

collaborative replenishment office

floor-ready franchising center

b
A(n) __________ is a document used by a forklift driver indicating how much of each item to get from specific storage areas.

pick ticket

warehouse receipt

bill of lading

certificate of origin

RFID tag

a
Although conflict is likely to occur in any supply chain, it is generally more pronounced when

the supply chain members are geographically too close to each other.

manufacturers pressure retailers.

retailers pressure manufacturers.

the supply chain members are independent entities.

the economy is booming.

d
In a __________ distribution center, merchandise moves from vendors’ trucks to retailers’ delivery trucks in a matter of hours.

traditional

combination

cross-docking

vertical

horizontal

c
______________ systems are designed to deliver smaller shipments of merchandise on a more frequent basis to retailers.

Cross-docking

UPC

JIT

CPFR

Lead time

c
Flora is frustrated with her company’s supply chain management information system. She wants to be able to receive sales data, initiate purchase orders, send and receive invoices, and receive returned merchandise documentation. Flora needs a(n)

cross-docking exchange.

electronic data interchange system.

floor-ready bundling system.

vertical conflict reduction system.

radio frequency identification system.

b
In vendor-managed inventory systems,

corporations send information to retail customers, bypassing wholesalers and retailers.

companies send information to cooperatives.

customers send information to retailers.

manufacturers send sales information to the retailer.

retailers send sales information to the manufacturer.

e
A(n) __________ is a 13-digit code retailers can use to track inventory.

UPC

CFPR

pick ticket

ASN

EDI

a
Felicia had just taken over her family’s business after spending ten years in the marketing department of a large corporation. She met with a representative from one of her firm’s biggest customers, who told her, “We should think about how we can make the pie bigger rather than fighting over the size of the slices.” She had expected a more cutthroat approach rather than this call for a

partnering relationship.

shared mission statement.

common marketing system.

corporate vertical marketing system.

linked supply chain.

a
The basic motivating factor in designing supply chains is that

collaboration creates transactional relationships.

the most powerful member of the supply chain always wins.

each party wants something from the others.

the participants must create the best possible EDI system.

retail floor salespeople need emotional support from management.

c
If a firm declared that it wanted to develop a strategic relationship, but was unwilling to commit funds or any effort to make it succeed, there would be an obvious lack of

mutual trust.

common goals.

a contractual arrangement.

credible commitments.

open communication.

d
s
s
Franchising involves a(n) __________ marketing system.

cooperative

corporate

contractual

administered

conventional

c
Especially in the fashion industry where styles and trends change rapidly, a quick response system can

allow retailers to better forecast long-term demand.

reduce logistical overlay.

increase cross-docking promotional effectiveness.

align deliveries more closely with actual sales.

allow manufacturers to introduce unpopular styles and still be successful.

d
RFID offers participants in the supply chain a powerful tool for tracking inventories and reducing handling. The main reason why it has NOT been more widely adopted is

the FCC has only recently allocated a frequency for RFID transmission.

there are concerns that the transmissions might cause health problems if use were widespread.

manufacturing capacity is limited at this time.

RFID is risky and expensive to use.

consumers object to their use.

d
In retailing, a just-in-time delivery system is called a _____________ system.

cross-docking

quick response

UPC

CPFR

lead time

b
With more frequent shipments associated with quick response (QR) systems, a retailer is

likely to have lower shipping costs.

more likely to add extra floor-ready merchandise.

less likely to use radio frequency identification tags.

more likely to engage in predatory pricing behavior.

more likely to have what customers want.

e
Students of marketing often overlook or underestimate the importance of Place in the marketing mix simply because

it happens behind the scenes.

it conflicts with promotion.

it occurs after making pricing decisions.

no one is directly in charge of place decisions.

the product itself is so much more important.

a
After installing an electronic data interchange, Kay Jewelers was able to reduce ___________, the amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise.

quick time

latency

lead time

currency float time

supply chain conflict time

c
Some retailers require their suppliers to ship merchandise ___________, thus eliminating the time and expense associated with ticketing and marking.

floor-ready

flattened

lead time synchronized

aggregated

synthesized

a
In a corporate vertical marketing system,

conflict tends to be a major problem.

transaction selling is the norm, with the invisible hand guiding the overall functioning.

there is no common ownership, and the dominant member has significant power to impose its ideas and objectives.

independent firms join together formally to decide how the marketing channel will operate.

participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain.

e
By reducing the number of transactions needed to move a product from the manufacturer to the consumer, wholesalers and retailers make a supply chain

longer.

floor-ready.

vertically integrated.

selectively collaborative.

more efficient.

e
s
s
Each time a politician or celebrity writes a book, bookstores can expect at least some customers to want the book, but whether or not it will become a bestseller is less certain. The bookstore’s primary inventory management challenge is

how to get the author to sign copies of the book.

whether to price the books in the distribution center or at the retail store.

which other books to promote along with this book.

whether or not to display the book at the checkout counter.

having enough books to satisfy customer demands versus the cost of having the inventory.

e
Steven managed an auto parts store in the 1990s. At that time, stock-outs—failure to have the parts auto mechanics needed to do their work that day—increased the likelihood of the mechanics becoming customers of competing auto supply stores. To avoid this problem and keep his business customers, Steven most likely

canceled orders and shifted the business to competitors.

increased promotional outlays to overcome customer dissatisfaction.

used exclusive geographic territories to reduce supply chain inefficiencies.

stockpiled inventory, adding to the cost of providing auto parts.

returned to traditional distribution center logistics.

d
Naomi knows she has to order her store’s Christmas holiday merchandise in April to ensure delivery before the holiday season. Naomi is concerned with the supply chain management goal of

providing products at the right time.

providing products at the right locations.

providing the right quantities.

satisfying the service levels supply chain participants expect.

minimizing system-wide costs.

a
Today, when a customer orders merchandise from an online vendor, the vendor usually sends an immediate order confirmation message by e-mail. Usually within a day or two, a second message arrives stating that the order is in the mail. This second message is a type of

vertical contractual notice.

CPFR requirement.

advanced shipping notice.

universal product code report.

RFID tag.

c
Manufacturers trying to implement a just-in-time delivery system need to start with

routing software.

shipping schedules.

distribution center design.

information about customer demand.

intensive distribution.

d
Roland has just received notification from a vendor that his clothing merchandise order has been processed and dispatched. Roland has just received a(n)

horizontal contractual notice.

vendor-managed inventory alert.

advanced shipping notice.

universal product code report.

CPFR tag.

c
Shorter lead times allow retailers

to better forecast demand.

access to a more diverse supply chain.

to replace intensive distribution with franchise distribution.

to skip advanced shipping notices.

to reduce the needed level of inventories.

e
When Cynthia’s Boutique receives dresses, they already have price tags and are on hangers. Cynthia’s Boutique receives __________ merchandise.

floor-ready

repurposed

just in time

quick response

horizontal channel

a
A distribution center is typically operated by

the marketing department.

vertically integrated consumer networks.

retailers, manufacturers, or distribution specialists.

corporate-government joint ventures.

electronic data interchange services.

c
In addition to merchandise and payments, information flows throughout a supply chain. Which of the following is NOT a good characterization of the flow of information in a supply chain?

A manufacturer will send and receive information from buyers, stores, and distribution centers.

Stores will send and receive information from manufacturers, buyers, distribution centers, and customers.

Distribution centers will send and receive information from stores and manufacturers.

Customers will send and receive information from stores and manufacturers.

Buyers will send and receive information from stores and manufacturers.

d
Yesterday, Lorinda overheard a surprisingly unpleasant encounter between the manager of the hardware store where she works and a sales rep who sells a well-known line of tools. The rep insisted that his tools should be more prominently displayed and that a better assortment would mean more sales. The manager had other plans and told him so, and the conversation turned into a loud argument. What Lorinda observed was an example of

sales tactics.

channel conflict.

retail strategy tension.

passive aggressive behavior.

a failure of CPFR processes.

b
With a pull marketing strategy,

orders for merchandise are generated at the store level based on sales data captured at POS terminals.

there is a greater likelihood of being overstocked or out of stock than in a push supply system.

merchandise is allocated to stores on the basis of demand forecasts.

inventory management is less responsive to customer demand.

it is more difficult to manage conditions of high uncertainty than in a push supply chain.

a
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

suppliers.

customers.

competitors.

buying centers.

top-level executives.

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

time.

overhead.

inefficiencies.

value.

pricing pressure.

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

the transportation company gets the stove to the retailer.

the retailer educates the customer about product features, and delivers and installs the stove.

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

the stove maker turns the components into the stove.

the components manufacturer helps the stove manufacturer by supplying parts and materials.

c
As the number of transactions in the supply chain falls and transactions are eliminated, the channel and supply chain becomes _____, which impacts customers by making it _____ to purchase merchandise.

less efficient; more expensive

more efficient; less expensive

more efficient; more difficult

less efficient; convenient

more complex; more difficult

b
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.

logistics center

wholesaler

distribution center

marketing channel

supply chain

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

modified

indirect

secondary

ancillary

direct

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

modified

indirect

secondary

ancillary

direct

b
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.

vertical

independent

competitive

horizontal

administered

d
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 vertical marketing system.

an independent marketing channel.

a corporate vertical marketing system.

a contractual vertical marketing system.

an administered vertical marketing system.

b
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

an independent marketing channel.

a horizontal marketing system.

an administered vertical marketing system.

a contractual vertical marketing system.

a corporate vertical marketing system.

c
_____ 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.

Coercive

Referent

Expertise

Legitimate

Information

a
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

an independent marketing channel.

a vertical marketing system.

an administered vertical marketing system.

a contractual vertical marketing system.

a corporate vertical marketing system.

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

maximize market share.

set out to make the most profits.

be willing to invest in each other’s success.

minimize transportation expenditures for suppliers.

maximize the profitability of the largest channel member.

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

A universal product code

A radio frequency identification tag

An advanced shipping notice

An electronic data interchange

A merchandise shipping confirmation

c
Purchase data collected at the point of sale is stored in a data warehouse and can be accessed on three dimensions:

age, gender, and total sales.

point in time, merchandise aggregation, and level of the company.

SKU, UPC, and RFID.

total number of items, total dollar amount spent, type of payment.

sales associate, store number, and time of transaction.

b
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.

electronic data interchange

electronic data warehouse

stock keeping unit

universal product code

radio frequency identification tag

a
EDI reduces _____, or the time between the decision to place an order and the receipt of merchandise.

cross-docking

the lead time

the cycle time

Just-in-time inventory

channel conflict

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

stock keeping unit

universal product code

electronic data warehouse

vendor-managed inventory

radio frequency identification tag

d
In _____ a manufacturer owns the merchandise in a retail store until it is sold by the retailer, at which time the retailer pays for the merchandise, thus reducing inventory levels and generating sales.

collaborative selling

programmed selling

consignment selling

electronic data interchange

data warehouse management

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

pull

push

distributed

continuous

programmed

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

pull

push

distributed

continuous

programmed

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

planner

dispatcher

foreman

shipping manager

warehouse manager

b
Radio frequency identification tags are

demand scheduling data tags.

information tags used on floor-ready merchandise.

shipping tags used to record weight limits of different types of trucks.

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

electronic discount information tags used to provide reduced prices to select customers.

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

Pick-ticketing

Just-in-time inventory

Radio-frequency identification

Cycle time

Cross-docking

e
JIT inventory systems are associated with all of the following EXCEPT

frequent deliveries of less merchandise.

reduced lead time.

more inventory to warehouse.

increased product availability.

lower inventory investment.

c
It is primarily the retailer’s responsibility to make sure customers’ expectations are fulfilled.
t
Retailers who advertise that they sell at wholesale prices are wholesalers.
f
Today, large retailers dictate to their suppliers what should be made.
t
Many retailers and some manufacturers are exploring the use of a multichannel strategy in which they sell in more than one channel, for example, the Internet and stores.
t
Manufacturers might use selective distribution by granting exclusive geographic territories to a few retailers so no other retailers in the territory can sell a particular brand.
t
Supercenters—stores that combine a supermarket with a full-line discount store—are among the fastest growing food retailer formats.
t
Category specialists are also known as category killers.
t
Dollar General and Family Dollar are examples of full-price discount retailers.
f
Off-price retailers specialize in having a consistent line of merchandise available at discount prices.
f
One of retailers’ most fundamental activities is providing the right mix of merchandise and services that satisfies the needs of the target market.
t
The only consumer advantages to shopping in a brick-and-mortar store are browsing and the ability to touch and feel the products.
f
Consumers prefer to research complicated products on the Internet rather than talking directly to sales associates in a retail store.
f
One significant potential benefit of the Internet channel is its ability to enable retailers to provide personalized information about products and services for each customer.
t
Effective multichannel operations require an integrated CRM (customer relationship management) system with a centralized customer data warehouse.
t
Choosing the right retailing partners and knowing where target customers expect to find products are key to a manufacturer’s success.
t
When retailers extend their services to the Internet and become multichannel retailers, they are able to satisfy a broader range of customers’ needs and wants.
t
Multichannel retailers are able to simply charge the same prices across all channels.
f
Mira purchased some eyeliner from an Internet-based beauty supply house, and now she often receives online recommendations for other products from the same cosmetics line. These recommendations were probably the result of

the purchases she had made.

purchases other customers had made that day.

manufacturer clearances and overruns.

products she may have returned to the company.

items the retailer no longer carries.

a
__________ are combating competitive pressures by increasing the amount of exclusive and private label merchandise, strengthening customer loyalty programs, and expanding their online presence.

Convenience stores

Department stores

Full-line discount stores

Extreme value stores

Off-price retailers

b
Kohl’s, JCPenney, and Bloomingdales are examples of

department stores.

off-price retailers.

discount stores.

extreme value stores.

category specialist stores.

a
Because of the way __________ buy merchandise, customers can never be confident that the same merchandise will be in stock each time they visit the store.

department stores

off-price retailers

discount stores

services retailers

category specialist stores

b
Retailers focusing on increasing sales to their best customers are attempting to

slay the category killers.

compete with off-price retailers.

drive their supply chain.

increase their share of wallet.

combat the inroads made by big-box specialty retailers.

d
It is often difficult for retailers to distinguish themselves from their competitors through the merchandise they carry because

they do not carry enough merchandise.

consumers no longer recognize brand equity.

big-box food retailers are shifting into specialty store product lines.

there is not enough merchandise to go around.

competitors can purchase and sell many of the same popular brands.

e
Retailers can gain valuable knowledge about their customers from the transaction process and from

trade industry profiles.

store brand/private label brand ratios.

multichannel flow process.

the insights of store personnel.

end-of-aisle positioning studies.

d
Retailers’ coupons, rebates, and online discounts are types of

in-store promotions.

specialty product displays.

pricing promotions.

off-price wholesaling.

mass media advertising.

c
If you were a marketer for a clothing manufacturer and you wanted to improve revenues from irregulars, production overruns, and returns, you would be attracted to using

department stores.

specialty stores.

category specialists.

off-price retailers.

supercenters.

d
If you are a marketer for a manufacturer, and the marketing mix for your product focuses on very specific market segments, you’d like to sell your product through

department stores.

category specialist stores.

extreme value retailers.

specialty stores.

convenience stores.

d
Many retail golf stores have driving ranges, some with backdrops showing famous golf courses. These driving ranges allow

wholesalers to evaluate promotional discounts.

retailers to improve the shopping experience through an improved product line assortment.

customers to increase their share of wallet spending.

retailers to avoid competition from knock-off products.

customers to try before they buy.

e
Retailing is defined as the set of business activities that

focuses on a firm’s core values.

focuses on transactions, but not relationships.

adds value to products and services sold to final consumers.

separates wholesaling from manufacturing.

only occurs in brick-and-mortar space.

c
Chandra owns a pet sitting service. He recently paid a web developer to build a special version of his company website for use on smartphones. Customers will now be able to easily place orders for pet sitting on their cell phones. This is an example of

M-commerce.

smart retailing.

cell selling.

P-commerce.

channel expansion.

a
Compared to conventional supermarkets, warehouse clubs have

a broader assortment of food items.

a lower level of service.

very comparable prices.

no products appealing to small businesses.

lower annual fees.

b
__________ are combating competitive pressures by offering fresh food and healthy fast food, tailoring assortments to local markets, opening locations closer to where consumers work and shop, and adding new services.

Warehouse clubs

Supercenters

Convenience stores

Department stores

Extreme value retailers

c
The knowledge retailers can gain from their store personnel and customer relationship management databases is valuable for developing

supply chain relationships.

extreme value retailing efforts.

loyal customers through loyalty programs.

global private label brands.

multichannel retailing.

c
__________ distribution intensity helps a seller to maintain a particular image and control the flow of merchandise into an area.

Intensive

Endogenous

Selective

Collective

Variable

c
One of the greatest constraints faced by store-based retailers—and one that the Internet channel can address—is

being price competitive.

the amount of merchandise that can be carried in a physical store.

competition from other retailers.

common zoning restrictions limiting the kinds of merchandise that can be offered for sale.

interactive customer service.

b
Benefits of the traditional retail store as a channel includes the ability to

provide personalized and meaningful product information.

offer a greater selection of products.

offer an expanded market presence for all consumers.

efficiently collect information about how consumers shop for a particular product.

quickly compare prices across multiple channels.

a
Today, __________ dominate supply chains.

large retailers

manufacturers

government agencies

wholesalers

distributors

a
Personal selling is particularly important for retailers selling

online services.

discount items.

products that are complicated or expensive.

to younger consumers and in big-box stores.

in extreme value retailing.

c
__________ is the term used to describe the situation when retailers use some combination of stores, catalogs, and the Internet to sell merchandise.

Vertical integration

Cross-channel leverage

Horizontal integration

Multichannel retailing

Opportunistic retailing

d
Which of the following represents the BEST reason a manufacturer of high-end products might consider selling products in a warehouse club?

There are no high-end shopping centers within a 100-mile radius of the warehouse club.

The warehouse club has a good reputation.

The manufacturer is trying to increase market share.

The manufacturer overestimated demand or has a great deal of returned merchandise from other retailers.

The warehouse club wants to upgrade its image.

d
Bertone’s Office Supplies has large stores resembling warehouse environments, with racks stocked from floor to ceiling with different types of office supplies. Its assortment of office supplies is the largest in town, and their prices are low. Bertone’s is a(n)

category specialist.

extreme value retailer.

off-price retailer.

full-line discount retailer.

warehouse club.

a
Knowing what customers expect is essential. Retailers need to know which manufacturers their customers prefer, while manufacturers need to know

if customers are using credit cards or cash to make purchases.

how many employees the retailers have.

where their target customers expect to find their products.

whether the products will fill a customer’s self-actualization needs.

whether customers will find the store atmospherics appropriate to the neighborhood or location.

c
Aaron has designed innovative accessories for hard-core bicycling enthusiasts. He knows where and how he will make them, and he needs to turn his attention to the getting the products to the customers. As he chooses retail partners, which of the following is LEAST important in this process?

Look at the channel structure

Determining where target customers will expect to find this product

Considering characteristics of channel members

Encouraging new bicycling enthusiasts

Considering distribution intensity

d
__________ are subtle forms of promotion that encourage shopping in retailers’ stores.

Electronic signs

Store credit cards and gift cards

Large stocks of popular national brands

Quick response and just-in-time delivery systems

Extreme value offers and specialty share of the wallet programs

b
Which type of store is small and offers a limited merchandise assortment at very low prices?

extreme value retailers

specialty stores

outlet stores

limited assortment supermarkets

convenience stores

a
John used to work for a large, well-known retailer. He left that company to work for a much smaller company, and in doing so, he discovered that the channel functions were handled very differently in the smaller firm. Looking back at his experience, he noticed that larger firms

perform many different channel functions themselves.

have less control in the channel.

are generally less efficient.

spend more money wastefully.

use more independent salespeople.

a
When Creative Pen Company designed a new pen that was particularly comfortable to use, it wanted to, literally, get the pen in the hands of as many consumers as possible. Creative Pen will probably choose __________ distribution for its new product.

intensive

exclusive

selective

collective

variable

a
Which of the following strategies is designed to place products in as many outlets as possible?

intensive distribution

exclusive distribution

selective distribution

surplus distribution

contractual distribution

a
Traditionally, retailers treated all their customers

with suspicion.

as unique competitive opportunities.

based on their demographics.

based on share of wallet strategy.

the same way.

e
Because many consumers choose stores based on proximity to their workplaces or homes, great locations are

difficult to define.

more important than great products.

always situated near supply chain members.

a competitive advantage that few rivals can duplicate.

almost always locations next to big box discounters.

d
Unusual and exciting displays like Bass Pro Shops’ climbing wall and stocked aquarium are examples of

promotional discounts.

mass media gimmicks.

mobile marketing.

in-store promotions.

co-op advertising.

d
In the past, __________ dominated supply chains.

retailers

manufacturers

government agencies

wholesalers

distributors

b
__________ are likely to target low-income consumers who demand national brands, but cannot afford to buy large-sized packages.

Category killers

Department stores

Extreme value retailers

Specialty stores

Warehouse club stores

c
Wholesalers sell to all of the following EXCEPT

businesses.

manufacturers.

retailers.

consumers.

industrial users.

d
Benton manages a building supply company. He wants to invite twenty of his most valuable building-contractor customers to a golf outing and party. Benton will likely use the firm’s ___________ to identify these customers.

website

CRM database

specialty store sales

annual sales report

inventory management system

b
Paul’s family has owned and operated a small chain of conventional supermarkets for many years. Competition from a variety of other kinds of retailers has adversely affected the business. To address the new competitive reality, Paul wants to apply what he recently learned as a marketing major and he has recommended that his family’s business should

emphasize fresh, locally sourced perishables.

target the broadest possible customer base.

eliminate customer frills and extras.

offer fewer private label brands.

offer more national brand packaged goods and few perishables.

a
Of the following, the best example of a category killer is

Dollar General.

Staples.

Kohl’s.

Target.

Costco.

b
For retailers, promotion refers to

supply chain communication.

the relationship between price and product.

the image a store attempts to maintain through their pricing strategy.

both their in-store environment and their mass media communications.

the seasonal discounts offered to move end-of-season items.

d
Which of the following retail stores would emphasize personal selling the most as part of the firm’s promotional efforts?

jewelry store

convenience store

liquor store

second-hand clothing store

bakery

a
Full-line discount, category specialist, and specialty stores are all types of __________ retailers.

food

general merchandise

price sensitive

limited demand

special appeal

b
Carol’s Studio, located in a shopping mall, offers zumba dance classes for all ages. Carol’s Studio is known as a(n)

service retailer.

category specialist.

specialty store.

outlet studio.

small box specialist.

a
Today, retailers like Walmart, Home Depot, and Kroger dictate to their suppliers all of the following EXCEPT

which competitors they should collaborate with.

what should be made.

how products should be configured.

when products should be delivered.

what products should cost.

a
In which of the following categories would a dry cleaning business be placed?

service retailer

specialty store

category killer

superstore

discount store

a
Heartland Plantation produces organic food products like stone-ground grits and wild rice. The company has limited production capacity and wants to carefully control where its products are sold. Heartland will likely choose __________ distribution intensity.

luxury

variable

monopolistic

intensive

exclusive

e
When a company offers consumers the ability to make purchases via a smart phone, this is known as

M-commerce.

smart retailing.

cell selling.

P-commerce.

channel expansion.

a
For brick-and-mortar retailers, when making decisions regarding “place,” a key ingredient to success is

product placement promotion.

convenient locations.

private-label merchandise.

off-price placement.

customer relationship management.

b
Retailing is where marketing

is replaced by personal selling.

meets the consumer.

meets corporate management.

sells itself to the corporation.

conducts all of its transactions.

b
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 deals with this?

Choosing retail partners that would likely carry their products.

Identifying appropriate retailers that would likely carry their products.

Coordinating efforts with retailers to develop their strategies to implement the 4Ps.

Determining whether or not to use a multichannel strategy.

Allocating inventory throughout the channel of distribution.

d
The level of vertical integration of firms in a supply chain directly relates to _____, which is a major consideration for manufacturers when choosing retail partners.

channel structure

customer expectations

channel member characteristics

distribution intensity

networking capabilities

a
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

channel structure.

customer expectations.

channel member characteristics.

distribution intensity.

networking capabilities.

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

smaller; less

smaller; more

larger; more

shorter; more

larger; less

c
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 chose _____ distribution intensity.

a variable

a selective

an intensive

an exclusive

a collective

c
Luxury goods firms such as Coach use a(n) _____ 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.

collective

exclusive

intensive

selective

variable

b
_____ 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.

Variable

Selective

Intensive

Exclusive

Collective

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

Convenience store

Conventional supermarket

Category specialist

Supercenter

Warehouse club

b
_____ 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.

Convenience stores

Conventional supermarkets

Category specialists

Supercenters

Warehouse clubs

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

department stores.

full-line discount stores.

specialty stores.

category specialists.

supercenters.

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

Warehouse clubs

Full-line discount stores

Specialty stores

Category specialists

Supercenters

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

Bank

Category specialist

Supermarket

Convenience store

Auto rental agency

b
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

supercenters.

extreme value retailers.

specialty stores.

category specialists.

warehouse clubs.

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

A supermarket

A drug store

An off-price retailer

A health spa

A convenience store

d
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 category specialist.

a selective brand.

a category killer.

an exclusive co-brand.

a co-op brand.

d
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.

share of wallet

consumer position

distribution intensity

retail position

share of market

a
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?

Price

Product

Promotion

Place

Product placement

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

Being able to browse for products

Being able to use all five of their senses

Having personal service

Having both cash and credit payment options

Enjoying the entertainment value of shopping in stores

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

inexpensive

standard

complicated

easy-to-find

frequently purchased

c
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.

reduces; increases

heightens; reduces

increases; increases

reduces; reduces

increases; reduces

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

ability to reduce shopper’s perception of risk

size

sales staff

inability to accept cash payments

ability to provide a social experience

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

enhanced browsing.

entertainment value.

personalized offerings.

deeper and broader selection.

personalized customer service.

e
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.

deepen and broaden its selection

personalize offerings

gain consumer insights

increase customer satisfaction and loyalty

expand its market presence

e
Which of the following multichannel challenges has Patagonia overcome by emphasizing function, not fashion, in the descriptions of its products in all of its channels?

Integrated CRM

Brand image

Pricing

Supply chain

Cannibalization

b
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.

pricing

brand image

supply chain

integrated CRM

cannibalization

c

Need essay sample on "Marketing Test 4"? We will write a custom essay sample specifically for you for only .90/page

Can’t wait to take that assignment burden offyour shoulders?

Let us know what it is and we will show you how it can be done!
×
Sorry, but copying text is forbidden on this website. If you need this or any other sample, please register
Signup & Access Essays

Already on Businessays? Login here

No, thanks. I prefer suffering on my own
Sorry, but copying text is forbidden on this website. If you need this or any other sample register now and get a free access to all papers, carefully proofread and edited by our experts.
Sign in / Sign up
No, thanks. I prefer suffering on my own
Not quite the topic you need?
We would be happy to write it
Join and witness the magic
Service Open At All Times
|
Complete Buyer Protection
|
Plagiarism-Free Writing

Emily from Businessays

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy