Marketing Exam 4 (chapters 14, 15, 16 and 19)

At a price of $2,000 per unit, the demand for Rancho 60 mountain bikes from Cloyd's Inc. is 300 units, which is the number of bikes they manufacture every year. If the marketing managers at Cloyd's Inc. decide to sell each bike at a price lower than $2,000 per unit, _____. a. the demand for and the supply of the bikes will attain equilibrium b. the number of bikes produced will increase drastically c. an inelastic demand for the bikes will be created d. a shortage of bikes will be created

a shortage of bikes will be created

what is retailing?

all the activities involved in selling goods or services directly to final consumers for personal, nonbusiness use (can include retailers, wholesalers, and even manufactures)

A form of advertising that firms use when a product enters the growth phase of the product life cycle and other companies begin to enter the marketplace is called ______________. a. competitive advertising b. pioneering advertising c. advocacy advertising d. comparative advertising

competitive advertising

If the goal of the promotion plan is to improve the image of the company or the industry, _____ may be used. a. competitive advertising b. institutional advertising c. comparative advertising d. pioneering advertising

institutional advertising

The first element in the retailing mix is the _____. a. product pricing b. product offering c. retail promotion d. retail location

product offering

true or false Toys"R"Us working with Macy's to open stores-within-a-store at numerous Macy's locations is an example of a smaller specialty line opening shop inside a larger store to expand the former's retail opportunities without risking investment in a separate store.

true

true or false Sales promotion's greatest strength is in creating strong desire and purchase intent.

true

true or false Suggestion selling by sales or service associates should always help shoppers recognize true needs rather than sell them unwanted merchandise.

true

what is the retail industry like in America?

- Comprises mostly small businesses - Dominated by a small number of large companies

what are target markets?

-Process begins with market segmentation - Retailers need to be sensitive to changes in customer preferences - Target markets are defined by demographics, geographic boundaries, and psychographics

what is shopper analytics/marketing?

-an emerging trend that employs market data to best serve customers as they prepare to make a purchase -Manufacturers and retailers use shopper analytics to understand customer shopping attitudes, emotions, and behaviors - Helps fine-tune, develop, or change market offerings

different types of retailers department stores

-carry a wide range of products and specialty goods -each department acts as a separate profit center, but central management sets policies about pricing and the types of merchandise carried

different types of retailers discount stores

-compete on the basis of low prices, high turnover, and high volume

different types of retailers supercenters

-extend the full-line concept to include groceries and a variety of services (pharmacies, dry cleaning, hair salons)

different types of retailers supermarket

-large, departmentalized, self-service retailers that specialize in food and some nonfood items. -

different types of retailers specialty discount stores

-offer a nearly complete selection of merchandise within a single category and use self-service, discount prices, high volume, and high turnover to their advantage

different types of retailers full-line discount stores

-offer consumers very limited service and carry a vast assortment of well-known, nationally branded goods such as housewares, toys, automotive parts, etc.

different types of retailers drugstore

-primarily provide pharmacy-related products and services, but may also carry an extensive selection of cosmetics, health and beauty aids, seasonal merchandise, greeting cards, toys, and some non-refrigerated convenience type foods.

how is big data used?

-process whereby retailers use complex mathematical models to make better products mix decisions - Process of discovering patterns in large data sets for the purposes of extracting knowledge and understanding human behavior

different types of retailers warehouse club

-sells a limited selection of brand names appliances, household items, and groceries -sold in bulk (costco)

different types of retailers off price retailers

-sells products at prices 25% or more below traditional department store prices because they buy inventory with cash and they don't require return privileges -stores often sell manufactures' overruns, irregulars merchandise, and/or overstocks that they purchase at or below costs.

different types of retailers specialty stores

-typically carry a deeper but narrower assortment of merchandise within a single category of interest -allows for more attentive customer service

Which of the following forms of promotion is generally more prevalent during the early stages of the product life cycle? a. Relationship-based promotion b. Persuasive promotion c. Informative promotion d. All of the above are correct.

All of the above are correct.

Which statement best defines price fixing? a. A policy whereby a firm charges a relatively low price for a product when it is first rolled out b. A policy whereby a firm charges a high introductory price, often coupled with heavy promotion c. Charging a price identical to or very close to the competition's price d. An agreement between two or more firms on the price they will charge for a product

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

Which of the following describes a difference between an attribute and a benefit of a product? a. An attribute is simply a feature of a product, whereas a benefit is what consumers receive by using a product. b. An attribute is the goal to sell a product, whereas a benefit is an apparent part of a product. c. An attribute includes pleasure or improved health, whereas a benefit includes an easy-open package or a special formulation. d. An attribute cannot be experienced by consumers, whereas a benefit is tangible and can be experienced.

An attribute is simply a feature of a product, whereas a benefit is what consumers receive by using a product.

Which of the following is a similarity between trade sales promotion and consumer sales promotion? a. Both focus on providing incentives to consumers or wholesalers to make an immediate purchase. b. Both are directed toward members of the marketing channel, such as wholesalers and retailers. c. Both target at members of the marketing channel. d. Both aim to increase sales by using point-of-purchase display.

Both focus on providing incentives to consumers or wholesalers to make an immediate purchase.

When a purchase decision involves uncertainty, which of the following statements best describes the price-quality relationship? a. Consumer demand for higher priced goods remains unchanged even if product quality declines. b. Consumers believe that higher-priced goods are manufactured with materials or ingredients of better quality. c. Consumers lack information about the quality of lower-priced goods due to poor advertising. d. Consumers perceive lower-priced goods to be more long-lasting than higher-priced goods.

Consumers believe that higher-priced goods are manufactured with materials or ingredients of better quality.

Which of the following is NOT true of publicity? a. Both profit and not-for-profit organizations seek publicity. b. Publicity is the effort to capture media attention. c. Corporations usually prefer not to generate publicity through press releases. d. Corporate donations and sponsorships create favorable publicity for companies.

Corporations usually prefer not to generate publicity through press releases.

Which of the following is the final stage in the product life cycle? a. Growth stage b. Decline stage c. Maturity stage d. Introductory stage

Decline stage

Which is true about the process of communication? a. Customer plays the role of sender in the communication process. b. Advertisement and sales presentations are examples of decoding the message. c. Encoding the message refers to receiver's interpretation of message. d. Most marketing communications are a two-way process.

Encoding the message refers to receiver's interpretation of message.

true or false Marketers are senders of messages and do not act as receivers.

False

Which type of retailer generally has a medium-to-broad product assortment, while the others typically have a broad product assortment? a. Department stores b. Warehouse clubs c. Full-line discount stores d. Supermarkets

Full-line discount stores

Which of the following statements is true of service failures? a. These can be eliminated by successful market segmentation. b. Retailers cannot recover from service failures. c. These can be solved by canceling return policies. d. If handled effectively, these can result in higher customer loyalty.

If handled effectively, these can result in higher customer loyalty.

Which form of promotion is most suitable to promote complex and technical products such as automobiles, computers, and investment services? a. Reminder promotion b. Informative promotion c. Connective promotion d. Persuasive promotion

Informative promotion

Which of the following is true about the use of social media in promotion? a. It is designed to stimulate a purchase or an action. b. It aims to form relationships with customers and potential customers. c. It seeks to convert an existing need into a want or to stimulate interest in a new product. d. It becomes the main promotion goal when the product enters the growth stage of its life cycle.

It aims to form relationships with customers and potential customers.

Which of the following is true of public relations? a. It has the advantage of being able to reach the masses. b. It is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. c. It is generally a short-run tool used to stimulate immediate increases in demand. d. It helps an organization communicate with its customers, suppliers, stockholders, government officials, employees, and the community in which it operates.

It helps an organization communicate with its customers, suppliers, stockholders, government officials, employees, and the community in which it operates.

Which factor is considered the most critical in determining where customers choose to shop? a. Store/website design b. Merchandise selection c. Display d. Service

Merchandise selection

Which of the following is true of the current retail industry? a. Most retail businesses employ less than 50 people. b. The industry is dominated by many large companies. c. About one in every ten American jobs is in the retail industry. d. Most current retail employees are dissatisfied with their jobs.

Most retail businesses employ less than 50 people.

Which of the following is part of a pull strategy? a. Selling products to wholesalers b. Using trade advertising c. Offering heavy sampling and introductory consumer advertising d. Offering aggressive discounts to retailers

Offering heavy sampling and introductory consumer advertising

Which of the following best describes a continuous media schedule? a. A media schedule that runs advertisementsintensively during times of the year when the product is most likely to be used b. One that runs advertising heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times c. A media schedule that runs regular scheduling throughout the year coupled with a flighted schedule during the best sales periods d. One that runs advertising steadily throughout the advertising period and is often used for products in the later stages of the product life cycle

One that runs advertising steadily throughout the advertising period and is often used for products in the later stages of the product life cycle

Which form of advertising promotes the benefits of a specific good or service? a. Product advertising b. Competitive advertising c. Comparative advertising d. Institutional advertising

Product advertising

_____ is a public relations strategy that involves getting a product, service, or company name to appear in a movie, television show, radio program, magazine, newspaper, video game, video or audio clip, book, or commercial for another product; on the Internet; or at special events. a. Audience selectivity b. Corporate communication c. Cooperative advertising d. Product placement

Product placement

Which term refers to the combination of promotional tools—including advertising, public relations, personal selling, sales promotion, and social media—that are used to reach the target market and fulfill the organization's overall goals? a. Promotional mix b. Informative promotion c. Coding and decoding d. Communication

Promotional mix

Which of the following is NOT true of promotional strategies? a. Most modern campaigns utilize a variety of newer tactics. b. Targeted customer segments have become more difficult to reach. c. Promotional strategies have remained stagnant over a period of years. d. In today's competitive world, marketers should think more creatively to survive.

Promotional strategies have remained stagnant over a period of years.

Which of the following refers to net profit after taxes divided by total assets? a. Return on investment (ROI) b. Price c. Revenue d. Profit

Return on investment (ROI)

Which of the following cannot be considered a competitive advantage of a firm? a. Same level of service as offered by a competitor b. Low prices c. High product quality d. Rapid delivery

Same level of service as offered by a competitor

Which of the following refers to a pricing objective that maintains existing prices or meets the competition's prices? a. Sales maximization b. Status quo pricing c. Pricing based on perceived satisfaction d. Satisfactory pricing

Status quo pricing

Which of the following best defines markup pricing? a. The cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for b. The practice of marking up prices by 100 percent, or doubling the cost c. A method of determining what sales volume must be reached before total revenue equals total costs d. The ability to change prices very quickly, often in real time

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

Which of the following defines revenue? a. The price charged to customers multiplied by the number of units sold b. Net profit after taxes divided by total assets c. Something that is given up in an exchange to acquire a good or service d. Profit minus expenses

The price charged to customers multiplied by the number of units sold

Which of the following is true of freestanding retail store units? a. Retailers feel outlets generally stand out better in huge shopping centers and malls. b. Retailers decide to relocate their businesses in pedestrian malls. c. These account for more than half of all retail store construction in the United States. d. These are a bad idea for an aggressive expansion plan in an area without shopping centers.

These account for more than half of all retail store construction in the United States.

Which of the following represents the thinking behind off-price retailers? a. They turn customers into suppliers by buying back pre-owned items from customers and reselling to different customers. b. They sell items from a full-line discount stock to customers who are drawn in primarily by the food on sale. c. They offer a nearly complete selection of merchandise within a single category and use self-service, discount prices, high volume, and high turnover to their advantage. d. They sell overruns, irregular merchandise, and/or overstocks purchased from manufacturers at or below cost.

They sell overruns, irregular merchandise, and/or overstocks purchased from manufacturers at or below cost.

Which of the following sells bulk quantities of merchandise to customers at volume discount prices in exchange for a periodic membership fee? a. Warehouse club b. Full-line discount store c. Factory outlet d. Specialty discount store

Warehouse club

With reference to message transmission, in which case is the reception of the message normally high? a. When the message is cluttered by noise b. When the message is communicated through mass media c. When a sales pitch is given by a sales representative to a potential client d. When the message is communicated through newspapers or television

When a sales pitch is given by a sales representative to a potential client

A medium of communication—such as a voice, radio, or newspaper—for transmitting a message is called _____________. a. a sender b. encoding c. decoding d. a channel

a channel

Inelastic demand is a situation in which: a. a pricing objective maintains existing prices or meets the competition's prices. b. an increase or a decrease in price does not significantly affect the demand for a product. c. prices are adjusted over time to maximize a company's revenues. d. demand is created for new products by aggressive brand awareness campaigns.

an increase or a decrease in price does not significantly affect the demand for a product.

Why do new brands with a small market share tend to spend proportionately more for advertising and sales promotion than those with a large market share? a. Beyond a certain level of spending for advertising and sales promotion, diminishing returns set in. b. A certain minimum level of exposure is needed to measurably affect purchase habits. c. Neither is correct. d. Both are correct.

both are correct

Unlike supermarkets, convenience stores: a. offer no service to customers. b. enable customers to shop without visiting a physical store location. c. carry a much more limited line of high-turnover convenience goods. d. charge lower prices.

carry a much more limited line of high-turnover convenience goods.

Decathlon Corp., a sports shoe manufacturer, launches a new line of sports shoes. To promote the product, Fournotts Corp. invites its customers to try on the shoes for a period of one week and get a feel of its features. This is an example of _____. a. corporate communication b. sponsorship c. product placement d. experiential marketing

experiential marketing

true or false A well-known rule of thumb in the advertising industry is that the goal in advertising is to sell the attributes of the product, not its benefits.

false

true or false If an advertiser wants to enhance the sales of a specific good or service, institutional advertising should be used.

false

true or false In a franchise, a franchisor pays a franchisee for the right to use its name, product, and methods of operation.

false

true or false In cooperative advertising , the manufacturer and the supplier bear the entire cost of advertising the brand.

false

true or false Price promotion alone always creates a low price image.

false

true or false Prices always steadily decline for a product in the decline stage of the product life cycle.

false

true or false Print advertising does not involve using the Internet.

false

true or false Push strategy stimulates consumer demand to obtain product distribution.

false

true or false Sales promotion consists of all marketing activities—including personal selling, advertising, and public relations—that stimulate consumer purchasing and dealer effectiveness.

false

true or false Serious or emotional advertisements are largely used to change consumers' deeply rooted values and attitudes.

false

true or false Break-even analysis is the method of determining the cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for.

false

true or false Consumer sales promotion is directed toward members of the marketing channel, such as wholesalers and retailers.

false

As output is increased or decreased, the ______ costs remains unchanged. a. fixed b. marginal c. opportunity d. dependent

fixed

Firms use competitive or brand advertising when a product enters the _____ of the product life cycle and other companies begin to enter the marketplace. a. growth phase b. decline phase c. introductory phase d. formative phase

growth phase

Shopper marketing has significant implications for retailers' supply chains, which must react more quickly to customer demand changes as instore initiatives become ______. a. less unique and short-term and products become more customized b. more unique and long-term and products become more customized c. more unique and short-term and products become more standardized d. more unique and short-term and products become more customized

more unique and short-term and products become more customized

Consumers determine value of the product on the basis of: a. discounts availed. b. the opportunity cost to buy the product. c. perceived satisfaction. d. what other people buy.

perceived satisfaction.

Ketchup King, a food manufacturing company, markets its tomato ketchup globally. As its consumers are well aware of the uses of ketchup, the company does not have to generate product awareness. The company, however, wishes to focus on convincing consumers to buy Ketchup King's ketchup instead of other brands' ketchup. In this scenario, Ketchup King must employ _____. a. reminder promotion b. persuasive promotion c. connective promotion d. informative promotion

persuasive promotion

true or false The Internet, Extranets (private electronic networks), and wireless setups are enabling buyers to quickly and easily compare products and prices, putting them in a better bargaining position.

true

what is the retailing mix?

product: •The first element in the retailing mix is the product offering, also called the product assortment or merchandise mix. • Many online retailers purposely focus on single product line niches that could never attract enough foot traffic to support a traditional brick-and-mortar store. promotion: •Promotion Strategy includes − Advertising − Public relations and publicity − Sales promotion • Risk − Brand cannibalization: Reduction of sales for one brand as the result of the introduction of a new product place: • Factors to be considered while choosing a location -Economic growth potential - Amount of competition - Geography • Stores in isolated locations must become destination stores in order to be successful price: • Ultimate goal is to sell products to consumers • Based on the cost of merchandise • Pricing is efficient and timely buying • "Value-based pricing"—focuses on the value of the product to the customer • Price is a key element in a retail store's positioning strategy presentation: • Influential factors in creating a store's atmosphere - Employee type and density - Merchandise type and density - Fixture type and density - Sound, odors, and visual factors - Layout of the store personnel: • Salespeople are trained in the following selling techniques: - Trading up —Persuading customers to buy a higherpriced item than they originally intended to buy - Suggestion selling—Seeking to broaden customers' original purchases with related items • Sales personnel provide their customers with the amount of service prescribed by the retail strategy of the store

For convenience, pricing objectives can be divided into three categories: a. refundable, competitive, and attainable. b. differentiated, niche, and undifferentiated. c. profit oriented, sales oriented, and status quo. d. perceived, actual, and situational.

profit oriented, sales oriented, and status quo.

A plan for the optimal use of promotional elements—such as advertising, public relations, personal selling, sales promotion, and social media—is known as a ___________. a. marketing mix b. competitive advantage c. promotional strategy d. promotional mix

promotional strategy

different types of retailers restaurants

provide both tangible products and valuable service

_____ is the element in the promotional mix of a marketing plan that evaluates the public's attitudes, identifies issues that may elicit their concern, and executes programs to gain their understanding and acceptance. a. Personal selling b. Cooperative advertising c. Sales promotion d. Public relations

public relations

Strategic retailing goals typically focus on: a. reducing costs of goods sold. b. reducing return on assets or equity. c. increasing costs of goods sold. d. not using a retailing mix.

reducing costs of goods sold.

different types of retailers convenience store

resembles a miniature supermarket but carries a much more limited line of high-turn-over convenience goods - typically located near residences

Gross margin is how much the retailer makes as a percentage of ______. a. the cost of all goods after the profit is subtracted b. sales after the discount on the goods sold is added c. sales after the cost of the goods sold is subtracted d. profit after the discount on the goods sold is subtracted

sales after the cost of the goods sold is subtracted

Advent Automobiles Inc. has launched a new sport utility vehicle (SUV). It's advertising firm develops a marketing message and places advertisements in leading newspapers and on social media sites to inform consumers about the new SUV and its various features. In the context of the communication process, Advent Automobiles is the _____. a. receiver b. encoder c. sender d. decoder

sender

what is the communication process?

sender: the originator of the message in the communication process -marketers attempt to inform, persuade, and remind the target market to take actions compatible with the need to promote the purchase of goods and services encoding: is the conversion of the sender's ideas and thoughts into a message, usually in the form of words and signs message channel: transmission of a message decoding: the interpretation of the language and symbols sent by the source through a channel receivers: decodes the message -marketers listen to the target market in order to develop the appropriate messages, adapt existing messages, and spot new communication opportunities

Social networking sites such as Facebook, Instagram, and Twitter enable users to immediately purchase items recommended by their social connections, a phenomenon known as ______. a. sharing economy b. social shopping c. microtargeting d. e-tailing

social shopping

Unlike trade sales promotion methods, consumer sales promotion methods are: a. concerned with offering free merchandise and store demonstrations. b. focused on persuading consumers to make slow purchases. c. targeted at the ultimate consumer market. d. directed toward members of the marketing channel.

targeted at the ultimate consumer market.

A price skimming strategy is most often used for a new product when: a. the supply of the product is greater than its demand. b. customers are unwilling to spend a large amount of money on the product. c. competition in the market is abundant. d. the product is perceived by the target market as having unique advantages.

the product is perceived by the target market as having unique advantages.

true or false A firm can charge different prices to different customers if the prices represent manufacturing or quantity discount savings.

true

true or false Advertising can affect the way consumers rank a brand's attributes.

true

true or false Around the world, most retailers are independent, with each owner operating a singular store within a local community.

true

true or false Because of the impact of Internet and social media, consumers are now able to become senders as opposed to only brands being senders.

true

true or false Dynamic pricing has better equipped brick-and-mortar stores to compete with their online alternatives.

true

true or false Microtargeting is an effective tool for online retailing.

true

true or false Newspapers and magazines have a high noise level.

true

true or false Retailers can better acquire and use assets when they customize store layouts and merchandise mixes to the tastes of local consumer bases.

true

is marketing communication one-way or two-way?

two-way

Costs that change with the level of output are called _____ costs. a. indirect b. independent c. fixed d. variable

variable

Dillard's, Target, and Walmart use big data analytics to determine ______. a. which products to stock and at what prices and how to advertise to draw target customers, but the data cannot be used to manage markdowns. b. how to manage markdowns and how to advertise to draw target customers, but the data cannot be used to evaluate which products to stock and at what prices. c. which products to stock and at what prices and how to manage markdowns, but the data cannot be used to plan how to advertise to draw target customers. d. which products to stock and at what prices, how to manage markdowns, and how to advertise to draw target customers.

which products to stock and at what prices, how to manage markdowns, and how to advertise to draw target customers.