AGBU 4340 TEST 2

(O12-2) Which of the following is true of vertical marketing systems?

Producers, wholesalers, and retailers act as a unified system.

(O13-2) Springfield, a convenience store, has recently begun to redesign and restock its stores to offer a more upscale environment with products such as house wines and fresh foods. This information indicates that Springfield has most likely changed its ________.

positioning

(O14-3) Communication through a telephone call is considered a part of a(n) ________ communication channel.

personal

(O14-1) Extel Inc., a home appliance manufacturer, uses sales representatives to sell its products to wholesalers and individual customers. This is an example of ________.

personal selling

(O11-5) Price discrimination is legal when a ________.

seller can prove its costs are different when selling to different retailers

(O13-2) A ________ is a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit.

shopping center

(O10-3) Companies using target costing ________.

start with an ideal selling price and then target costs that will ensure that the price is met

(O10-3) Elmo Inc., a global conglomerate, designed the ElBrush, an electric toothbrush. Sensing market demand for the electric toothbrush, Elmo started with an ideal selling price of $13 based on customer value considerations and then targeted costs to ensure that the price was met. This exemplifies ________.

target costing

(O10-3) Under oligopolistic competition ________.

the market consists of only a few large sellers

(O14-1) A company's total marketing communications mix consists of a special blend of advertising, sales promotion, public relations, personal selling, and direct-marketing tools that the company uses to communicate customer value and build customer relationships. Which of the following terms best describes this set of communications tools?

the promotion mix

(O13-4) In an automated warehouse, orders are fed directly from the retailer's information system to the wholesaler's, and the items are picked up by mechanical devices and taken to a shipping platform where they are assembled.

true

(O10-2) Costs that change with the level of production are referred to as ________.

variable costs

(O12-2) When KFC came into conflict with its franchisees over the brand's Unthink KFC repositioning, which emphasized grilled chicken over its traditional Kentucky fried chicken, KFC experienced ________ conflict.

vertical

(O10-2) Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

$25

) (O10-2) A farm supply company plans to launch a new premium type of Vetgun with a unit cost of $270 and wants to earn a 10 percent markup on its sales. The selling price of the Vetgun is ________.

$300

(O10-2) A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to make a profit of $40,000?

$35,000=(100000+40000)/(12-8)

(O10-2) A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

25,000

. (O10-2) ________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

A) Cost-based pricing

(O12-3) Ocean Spray sells its air fresheners only through Ray's Drugs. This is an example of ________ distribution.

A) exclusive

(O12-2) ________ VMS is a vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties.

Administered

(O13-4) ________ and ________ do not take title to goods, and they perform only a few channel functions.

Brokers; agents

(O14-3) ________ involves cultivating opinion leaders and getting them to spread information about a product or a service to others in their communities.

Buzz marketing

(O10-2) If Milt Alden focuses on overall costs of manufacturing plus a standard markup for profit in setting product prices, which strategy would he employ?

Cost-plus pricing

(O12-2) ________ occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones.

Disintermediation

(O12-4) ________ are large and highly automated warehouses designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

Distribution centers

(O10-3) If demand changes greatly with a small change in price, the demand is ________.

Elastic

(O11-3) Under which type of geographic pricing strategy does each customer take responsibility for the freight charges for the product from the factory to its destination?

FOB-origin pricing

(O13-1) ________ are manufacturer-owned and operated stores that offer prices as low as 50 percent below retail on a wide range of mostly surplus, discounted, or irregular items.

Factory outlets

(O14-3) Nonpersonal communication channels include major media, ________, and events.

atmospheres

(O10-2) ________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

High-low

(O12-4) ________ logistics refers to moving products and materials from the suppliers to the factory.

Inbound

(O12-3) ________ distribution is a strategy in which producers of convenience products and common raw materials stock their products in as many outlets as possible.

Intensive

(O12-4) ________ involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Marketing logistics

(O11-2) Which of the following companies uses product bundle pricing?

Panizza, whose combo meals are priced lower than its individual components sold together

(O11-2) Which of the following is true of product line pricing?

The price steps take cost differences between products in the line into account.

(O12-4) Which of the following is an example of a Third-party Logistics (3PL) provider?

UPS Business Solutions

(O10-2) ________ uses buyers' perceptions of value as the key to pricing.

Value based pricing

(O13-4) ________ includes all activities involved in selling goods and services to those buying for resale or business use.

Wholesaling

(O10-2) Companies that adopt value-added pricing ________.

attach value-added features and services to differentiate their offers and support their higher prices

(O14-1) Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor is called ________ and includes broadcast, mobile, print, and online forms.

advertising

(O14-4) While using the ________ method for setting an advertising budget, a company starts with total revenues, deducts operating expenses and capital outlays, and then devotes some portion of the remaining funds to advertising.

affordable

(O12-1) Plasticine Palace supplies its products exclusively to Arts & Crafts, a chain of stationery stores across the country. The chain then makes the plasticine available to end consumers. This is an example of ________.

an indirect marketing channel

(O13-2) The lighting in Jake's Steak Restaurant is dim. The chairs are covered in leather and each table is covered with a white linen cloth. The colors are limited to earth tones with an occasional splash of red. Patrons cannot hear any kitchen noises, only a pleasant melody that seems familiar but unrecognizable. The smells are extraordinarily varied. This is a description of the restaurant's ________.

atmosphere

(O10-2) Target return pricing is a variation of which of the following cost-oriented pricing approaches?

break-even pricing

(O13-4) Which of the following wholesaler's channel functions is exemplified by buying in carload lots and then dividing these lots into small quantities?

bulk breaking

(O14-3) A manufacturer of a variety of technological devices asked its marketing department to develop inexpensive methods of building and maintaining brand awareness and excitement. The marketing department then recruited consumers who were early adopters of technological devices to spread the word about the company's new products. This is an example of ________.

buzz marketing

(O11-2) Using ________ pricing, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive.

by-product

(O11-2) Multiprint, a printer manufacturing firm, sells ink cartridges for each of its specific models. Only Multiprint cartridges are compatible with Multiprint printers, and no two models share the same specifications. What type of pricing does Multiprint use?

captive product pricing

(O11-2) Which of the following product mix pricing strategies involves pricing products that can only be used with the main product?

captive product pricing

(O13-1) Which type of store carries a deep assortment of a particular product line, has knowledgeable staff, and can be viewed as a giant specialty store? For example, Best Buy and Home Depot.

category killer

(O10-2) Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?

competition-based pricing

(O14-4) Which of the following methods is used by companies to set their advertising budgets based on the industry average?

competitive-parity method

(O11-1) A market-skimming pricing strategy should NOT be used for a new product when ________.

competitors can undercut prices easily

Stop-N-Go , 7-Eleven, and Circle K are examples of ________, which are small stores, located near a residential area, and are open long hours seven days a week and carries a limited line of high-turnover goods.

convenience stores

(O13-3) When different types of retailers sell the same products at the same prices to the same customers, thanks in part to the price transparency of the Internet, the retail forms appear to be

converging

(O13-1) Sears, Target, and Kroger are examples of ________.

corporate chains

(O10-2) What sets the ceiling for product prices?

customer perceptions of the product's value

(O11-3) The New Age Gallery has three admission prices for students, adults, and seniors, even though all three groups are entitled to the same services. This form of pricing is called ________ pricing.

customer-segment

(O13-3) Today's retailers increasingly adopt environmentally sustainable practices. Which of the following is NOT one of these practices?

cutting back on recycling programs

(O14-2) Integrated marketing communications require a company's mass-market advertisements, Web site, e-mail, and personal selling communications to all ________.

deliver a clear, consistent, and compelling message

(O12-1) Lifebelt Insurance sells insurance only through its door-to-door salespeople. What type of marketing channel does Lifebelt use?

direct

(O14-1) Which major promotion category uses catalogs, direct mail, e-mail, mobile marketing and social media?

direct and digital marketing

(O11-3) Big Mike's Health Food Store sells nutritional energy foods on Amazon.com. The price of the products sold changes very often to meet the needs of individual customers and different market situations. This strategy is an example of ________.

dynamic pricing

(O14-3) An appeal that attempts to stir up either negative or positive sentiments that can motivate purchase is called a(n) ________ appeal.

emotional

(O11-4) Which of the following would most likely lead to a company initiating a price increase?

over-demand

(O10-2) Bon Vivant offers an assortment of exclusive French wines at incredibly low prices. These prices are neither limited-time offers nor special discounts, but represent the daily prices of products sold by Bon Vivant. This reflects Bon Vivant's ________ pricing strategy. A) everyday low

everyday low

(O12-2) The ________ organization is a common type of contractual relationship.

franchise

(O13-1) Which of the following statements best represents a contractual association between a manufacturer, wholesaler, or service organization and independent businesspeople who buy the right to own and operate one or more units in the system represented by the contract?

franchise

(O13-1) At Neiman Marcus, a first-class department store, customers shop for high-end products and they are assisted in every phase of the shopping process. Neiman Marcus is a ________.

full-service retailer

O10-2) ________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.

good value

(O13-2) Macy's department stores carry a wide range of product lines, including clothing, jewelry, kitchenware, and home furnishings. Macy's typically charges a relatively high markup, but also holds frequent sales and price promotions, in particular offering discounts to customers who use a Macy's credit card. Macy's uses ________.

high-low pricing

(O12-2) The management of two Panizza restaurants has an ongoing disagreement over the discount rate given to students from the local high school. This is an example of ________ conflict.

horizontal

(O12-2) In a(n) ________, two or more companies at one level join together to follow a new marketing opportunity.

horizontal marketing system

(O14-3) Which of the following is the first step in developing an effective integrated communications and promotion program?

identifying the target audience

(O12-1) A marketing channel that consists of one or more intermediaries is known as a(n) ________ marketing channel.

indirect

(O14-2) Delia's is a clothing retailer that targets teenage girls. The company runs coordinated promotions for its catalogs, Web site, and retail outlets. It uses the same models in its catalog, print ads, and Web site. Delia's works to make sure its public relations activities as well as its sales promotions harmonize with its advertising in all aspects. From this information, we can infer that Delia's is using ________.

integrated marketing communication

(O12-3) Whitelight sells its toothpastes in many convenience stores across the country. This is an example of ________ distribution.

intensive

(O12-3) Which of the following is NOT a criterion a company will use to evaluate the major channel alternatives?

likability

(O11-3) Sparkling Valley, a luxury resort, prices cottages facing the lake higher than cottages that do not, even though the cottages and services offered are identical in every other aspect. This form of pricing is called ________ pricing.

location-based

(O11-1) In a bid to attract more customers in a market that has several competitors, Barrymore's Bakery slashed the prices of all its products by 50 percent. Managers at the firm reasoned that lower prices would draw in even more customers, making up for the reduction in price several times over. Which of the following pricing strategies are they using?

market-penetration pricing

(O11-1) When a company sets a high price for a new product with the intention of reducing the price in the future, it is using the ________ pricing strategy.

market-skimming

O12-1) A ________ is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.

marketing channel

(O14-3) The AIDA model identifies the characteristics of an effective ________.

marketing message

(O12-2) Movie Giants offers DVD rentals through its Web site. It also offers DVD rentals via Star City stores. This is an example of a(n)________ distribution system

multichannel

(O13-1) Specialty stores carry ________ with ________ within them.

narrow product lines; deep assortments

(O13-4) Which of the following is NOT one of a wholesaler's channel functions?

off-price retailing

(O11-2) Which of the following product mix pricing strategies involves pricing additional or accessory products sold along with the main product?

optional-product pricing

(O11-5) Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most likely guilty of ________.

predatory pricing

(O11-5) When sellers set prices after talking to competitors and engaging in collusion, they are involved in ________.

price fixing

O11-2) Go Zone plans to introduce four tablet models over the next year. These models range from basic readers at $99 per unit, to more sophisticated tablets at $399 per unit. The more features a model has, the more expensive it is. What pricing strategy is Tone Zone using for its range of tablets?

product line pricing

(O13-2) Press conferences, speeches, store openings, special events, newsletters, and store magazines are examples of ________ activities used by retailers to promote themselves.

public relations

(O14-1) Which of the following promotion tools involves building up a good corporate image and handling unfavorable stories and events?

public relations

(O14-4) Using a(n) ________ strategy, the producer directs its marketing activities toward final consumers to induce them to buy the product.

pull

(O10-3) In Viña del Mar, Chile, a large number of shops specialize in selling the same quality of seafood products along the beach frequented by tourists. No individual shop dares charge more than the going price without fearing loss of business to other shops. This exemplifies ________.

pure competition

(O14-4) John Deere does very little promoting of its lawn mowers and garden tractors to final consumers. Instead, John Deere's sales force works with Lowe's, Home Depot, independent dealers, and other channel members, who in turn sell John Deere products to final consumers. According to this information, which of the following promotion mix strategies is being used by John Deere?

push strategy

(O14-3) A message showing a product's quality, economy, value, or performance is an example of a(n) ________ appeal.

rational

(O11-5) Mark's Markers, a manufacturer of white board markers, has required its dealers to charge a specified retail price for its markers. Mark's is most likely guilty of ________.

retail price maintenance

(O14-1) Which of the following promotion categories is most likely to include the use of displays, discounts, coupons, and demonstrations?

sales promotion

) (O13-2) In-store demonstrations, displays, sales, and loyalty programs are examples of ________.

sales promotion