MKT test 3
You have a colleague who swears by using breakeven analyses. He or she has not been on the job long enough to be able to understand the reasons why this tool isn't always reliable. Which of the following reasons should you share with him or her?
The company's accounting system does not clearly distinguish between fixed and variable costs.
As a restaurant marketer, you are responsible for setting prices on each menu item. Your new appetizer is a fruit-and-nut salad, with a total ingredient cost of $5. The industry's standard markup is 25 percent. What should you charge for this appetizer? a. $5.25 b. $6.25 c. $5.75 d. $6.50 e. $6.00
b. $6.25
Another term for margin is
gross profit
Company A and Company B both raised their prices by 30 percent. While A enjoyed a substantial increase in profits, B's profits plunged downward. Based on this information, which of the following is the most likely explanation for the companies' different outcomes?
B's customers are more price sensitive than A's customers.
Deceptive business practices, including deceptive pricing schemes, are prevented by the_______________________.
Federal Trade Commission
Which of the following is not typically a fixed cost?
Raw materiles
Company X is enjoying a spurt in sales of the stuffed animals it manufactures. To meet demand, the firm is spending more than ever before on cotton stuffing. However, its marketers note that they are spending less for stuffing per toy than in the past. Based on this information, what is the most likely explanation for the difference between overall spending and per-toy spending?
The factory is operating more efficiently.
You work in the marketing department of a household cleaning products manufacturer. When the CEO found that online purchase of consumer-packaged goods had reached only 1 percent of the $666 billion in sales in 2013, he or she charged your team with devising a plan to change that picture. Your research has shown that home delivery of cleaning supplies becomes economically feasible only when the total price hits $20 to $30. Which of the following pricing objectives should the team use for its action plan?
Volume Objectives
The following statements link various changing circumstances (causes) with effects on the breakeven point. Which of these statements is inaccurate?
When a recession cuts demand, breakeven point increases.
In the fall of 2014, Coca-Cola brought back Surge, its answer to PepsiCo's Mountain Dew. It had first offered Surge for sale in 1996 but had stopped production in 2002. Surge was marketed as a novelty, a revival of the brand for nostalgic consumers. Assuming that buyers would want this specialty, limited-production item quickly in order to show it off to friends, the company also featured next-day delivery, exclusively from Amazon. Which of the following price levels was most likely associated with the Surge revival?
a prestige item level
A shoe manufacturer determined that the cost associated with producing one pair of leather boots is $22 and it desires to achieve a 50% markup on the product. How much is the sales price of this pair of leather boots? a. $33.00 b. $11.00 c. $44.00 d. Cannot be determined.
a. $33.00 The price using the cost-based pricing method is $33 ($22 * 1.5 = $33.00).
A local restaurant makes its own root beer and sells 2 liter bottles for $3. The total fixed costs for the restaurant are $20,000 and the variable costs associated with producing one unit of root beer are $0.85. How many units of root beer does the restaurant need to sell to breakeven? a. 9, 302 units b. 6, 667 units c. 60,000 units d. Cannot be determined.
a. 9, 302 units Breakeven point = Total fixed costs/Gross margin (20,000/(3 - 0.85) = 20,000/2.15 = 9,302).
Janice works as a consultant for a tech company. In the past, the company has relied heavily on its toll-free line to sell new products, as well as its numerous distribution channels. When customers are polled via a customer satisfaction survey, 93 percent of them report that one of the primary reasons they have continued to support the company is because of its quality customer service. Janice has been asked to brainstorm strategies to increase company sales. She suggests that the company employs automatic merchandising to cut costs and boost profits. Why might automatic merchandising be a bad idea for this company? a. Automatic merchandising sales are impersonal. b. Automatic merchandising is archaic. c. It is difficult to develop effective marketing strategies for automatic merchandising. d. It is too costly to maintain automatic merchandising around the clock. e. Distribution for automatic merchandising is limited.
a. Automatic merchandising sales are impersonal.
Which of the following is true regarding business-to-business products such as medical supplies being marketed to physician offices and hospitals? a. Business-to-business products typically have short distribution channels. b. Business-to-business product firms rarely utilize market intermediaries. c. Business-to-business product firms have long distribution channels. d. Business-to-business product firms have comparatively more business purchasers than consumer product firms.
a. Business-to-business products typically have short distribution channels.
The vice president of marketing of a large grocery chain has determined to deemphasize the prices of the company's products and to concentrate marketing efforts on other factors such as the products' benefits and features. Which strategy is the vice president most likely to use? a. Competitive pricing strategy b. Penetration pricing c. Skimming d. Market-plus pricing e. Market-minus pricing
a. Competitive pricing strategy
Ellie's media company will be introducing a new series of films on nutrition and exercise for adolescent health. Prior to introducing the films into the market, her company executives want to generate a buzz about the new products. So far, two of the five films have won prestigious awards at national film festivals. Ellie's superiors want to target youth-serving organizations in the Pacific Northwestern region of the United States as potential consumers of these films. They are searching for a quick way to distribute information about the products to potential customers, yet they do not want to sacrifice the personalized experiences that customers have come to associate with the company. Ellie's superiors would also like to be able to measure the performance response of whichever marketing strategy they implement. Which of the following should Ellie suggest that her superiors use to market their new products? a. Direct mail b. Direct-response retailing c. Direct marketing d. Direct retailing
a. Direct mail
You are one member of the marketing team for a wine distributor who sells exclusively through your own chain of high-volume shops. Your team wants to explore other available marketing channels, including sales over the Internet and product placement in specialty retailers. In order to come to a consensus, you want to outline some basic questions regarding distribution channels and present them to the team for discussion. The discussion should include all of the following questions except which one? a. How will exploring new distribution channels affect relationships with current intermediaries? b. How many intermediaries are necessary for adequate market coverage? c. Will selling at other retail outlets diminish control over marketing the product? d. What restrictions exist for shipping to communities that ban the sale of alcohol?
a. How will exploring new distribution channels affect relationships with current intermediaries?
Pipelines rank third after railroads and motor carriers in ton-miles transported, but most people do not recognize pipelines as a major mode of transportation. Nevertheless, pipelines are the preferred method used for transporting crude oil, diesel fuel, kerosene, and gasoline in the United States. What are some drawbacks to transporting via pipeline? a. Pipelines are a relatively slow method of transportation. b. Pipelines move products quickly through a long network. c. Pipelines cannot be carried across the entire United States. d. Pipelines are undependable methods of transportation over time.
a. Pipelines are a relatively slow method of transportation.
Pipelines rank third after railroads and motor carriers in ton-miles transported, but most people do not recognize pipelines as a major mode of transportation. Nevertheless, pipelines are the preferred method used for transporting crude oil, diesel fuel, kerosene, and gasoline in the United States. Why are pipelines an advantageous method of transport? a. Pipelines offer low maintenance and dependable transportation for a narrow but important range of products. b. Pipelines have more locations than water carriers. c. Pipelines provide jobs for consumers because of the resurgence of exploration and drilling in North America. d. Pipelines are versatile, carrying more ton-miles than any other mode of transport over more than 2 million miles of pipeline.
a. Pipelines offer low maintenance and dependable transportation for a narrow but important range of products.
Marketers are now using _____ technology for pallets of product they ship to retail stores. The company places a tiny chip on the pallet that contains the item description, quantity, pricing, and other details that the retailer needs for inventory tracking. It simplifies the retailer's inventory records and makes it easier to check-in merchandise to the store using a hand-held scanner. a. RFID b. GPS c. SSID d. SSQL
a. RFID
Luca's company is a manufacturer of desk calendars and other office supplies. In the past, he has sold only through his own website; however, as his business has grown, he has decided to add a retail partner. Which of the following is not among the questions Luca should ask when he chooses a partner? a. Should his products be sold via direct mail that provides tips about how to run an office? b. Which retailers offer the most appropriate atmospherics for selling office supplies? c. Which retailers attract buyers for home and commercial offices? d. Should his products be sold in an office supply specialty store? b. Which retailers offer the most appropriate atmospherics for selling office supplies? c. Which retailers attract buyers for home and commercial offices? d. Should his products be sold in an office supply specialty store?
a. Should his products be sold via direct mail that provides tips about how to run an office?
As a member of the marketing team for a manufacturing company, you need to be familiar with methods that are available to your company to facilitate communication about and movement of your products and goods. Your company is facing some logistics and supply chain challenges and you have been asked to help find solutions for them. Choose the statement that does not accurately identify the best management approach to deal with each management challenge. a. The manufacturing company for which you work wants to consolidate the data from among all the firm's business units. RFID is the best approach. b. The business is growing so quickly that your company needs to reduce the human effort and error involved in tracking inventory and assets. Radio Frequency Identification (RFID) is the best approach. c. The manufacturing company for which you work wants to consolidate the data from among all the firm's business units. An Enterprise Resource Planning (ERP) system is the best approach. d. Your company wants to improve and streamline transportation and warehousing functions, but does not yet possess the specialized knowledge and expertise needed to do that. It should consider outsourcing some of these functions to a specialist firm.
a. The manufacturing company for which you work wants to consolidate the data from among all the firm's business units. RFID is the best approach.
A banana supplier sells to both supermarket chains and independent food stores in the same region. The supermarket chains always generate more revenue than the independent food stores, because the supermarket chains order bananas more frequently and in bigger volume. To increase his or her profits from the independent food stores, the supplier wants to charge them more per bushel than he or she charges the chains. However, the supplier's director of marketing advises against it. Which of the following is the most likely reason for this advice? a. This pricing policy might violate the Robinson-Patman Act. b. This pricing policy might violate unfair trade laws. c. This pricing policy must be approved by the Federal Trade Commission. d. This pricing policy could cause a price war.
a. This pricing policy might violate the Robinson-Patman Act.
Willow runs a smoothie shop, and her primary ingredients include fruit, protein powder, milk, and vitamin additives. She offers three different sizes of smoothies, and she sells between 100 and 175 smoothies per day. How would you classify the ingredients Willow uses in her smoothie products? a. Variable costs b. Fixed costs c. Operating costs d. Premium costs
a. Variable costs
Which mode of transportation is the least expensive? a. Water carriers b. Rail carriers c. Motor carriers d. Air freight
a. Water carriers
Swan Foods utilizes a _____ , where it delivers products in large, consolidated quantities that are then separated into several smaller orders to be delivered to their customers in the local area. a. break-bulk center b. consolidating storage warehouse c. limited warehouse facility d. storage center
a. break-bulk center
Competition for smart phone customers is high and recent entrant Google Pixel is attempting to attract customers through advertisements that highlight the various features of the Pixel, which are contrasted with Apple's iPhone and Samsung's Galaxy. This is an example of the _____ advertising appeal. a. comparative b. sex c. fear d. humor
a. comparative
Your sister recently opened a swanky three-floor cheese market, Fromagerie, which is quickly gaining attention from locals, the press, and restaurateurs in the area. Located near a college town, Fromagerie specializes in rare international cheeses; and on the top floor, there is a bistro where patrons can take cooking lessons, meet new people, dine, and sample some of the world's most savory cheeses before they make a purchase decision. The bistro element of the Fromagerie is primarily an example of your sister's retail strategy in the area of: a. customer service b. promotion c. location d. merchandising e. atmospherics
a. customer service
The Broadway show, Hamilton has received many Tony awards and accolades and recently launched several additional theater companies in cities, such as Chicago and Los Angeles, where the musical will be performed. Since its opening, tickets to the show have been difficult to get and most theaters are charging $500 or more per ticket since shows are sold out at least six months in advance. The pricing for Hamilton tickets is most likely influenced by: a. demand. b. supply. c. competition. d. costs.
a. demand
The popular Swiss-made watch company Rolex, partners with a small number of jewelry stores around the world who are certified Rolex distributors. Rolex uses _____ distribution to maintain its high-quality image as well as reduce the opportunity for price discounting. a. exclusive b. intensive c. selective d. adaptive
a. exclusive
Fluffy Tails is a dog spa and grooming center. It provides bath services, flea control, and grooming for all sizes and breeds of dogs. Most owners schedule an appointment for services, but Fluffy Tails will occasionally welcome a walk-in customer. The company leases space in a strip mall and pays $400 each month plus all utilities. The lease and utility payments would be classified as: a. fixed costs. b. production costs. c. variable costs. d. premium costs.
a. fixed costs
The retail price of milk at the grocery store continues to rise since the costs associated with producing milk are increasing. However, the higher prices have not affected the amount of milk that consumers buy. This indicates that demand for milk is: a. inelastic. b. elastic. c. unitary. d. highly impacted by changes in price.
a. inelastic.
CVS recognized a need among airport travelers—a quick way to purchase forgotten items. As a result, CVS has introduced vending machines in several airport locations in the United States that sell items such as aspirin, toothbrushes, and batteries as well as other personal care, home and office items. This is an example of: a. location/distribution strategy. b. promotional strategy. c. customer service strategy. d. merchandising strategy.
a. location/distribution strategy.
Which of the following is not among the three foundations of pricing strategy? a. margin b. competition c. costs d. potential demand
a. margin
As an industry, retail accounts for how much private-sector employment in the United States? a. more than any other industry b. less than the advertising industry c. less than the direct selling industry d. more than the US government
a. more than any other industry
Casey is watching NFL on Monday night football and runs to the kitchen to grab a snack during halftime. Unfortunately, Casey is missing many advertising messages that are scheduled to appear during the halftime break. This phenomenon is known as: a. noise. b. interception. c. decoding. d. distraction.
a. noise
MediaTV typically offers introductory rates to attract new customers to switch from their current cable or satellite provider. However, the introductory rate only lasts for the first 6 months to one year and then the company raises its rates. This is an example of the _____ pricing strategy. a. penetration b. consolidation c. skimming d. competitive
a. penetration
A skimming pricing strategy allows the manufacturer of a new product to: a. quickly recover its research and development costs. b. quickly attract new investment. c. call attention to a generally homogeneous product. d. spend less on promotion.
a. quickly recover its research and development costs.
You and a coworker, Liam, are discussing the merits of different media options for placement of your firm's advertising. The options include TV, radio, direct mail, magazines, and outdoor. "I'm concerned about people's limited attention spans," says Liam. "However, its low cost is a big advantage because of our tight budget." "The short lead time for placing ads will be especially helpful, since we often change prices on short notice," you comment. "And it's great for targeting our local market." Which of the following media options are you and Liam discussing? a. radio b. magazines c. direct mail d. outdoor
a. radio
A local family-owned grocery store offers a rewards program where customers can earn points for purchases that are then redeemed as cash discounts on future purchases. Brady was happy to receive $12.50 off his purchase and prefers to shop at this grocery store rather than chain stores since they seem to appreciate his business. The rewards program is a promotion activity whose primary objective is to: a. retain loyal customers. b. create awareness. c. stimulate demand. d. encourage product trial.
a. retain loyal customers.
Typically, as prices increase: a. supply goes up. b. demand goes up. c. supply stays the same. d. demand stays the same.
a. supply goes up.
Consumer shopping habits are changing, as illustrated by: a. the closing of brick-and-mortar retail locations. b. the decline of online shopping. c. retailers' addition of in-store services such as coffee bars. d. Walmart's online sales are less than 3% of its total revenue.
a. the closing of brick-and-mortar retail locations.
The price floor represents: a. the price point where costs or expenses related to producing a product or service are covered. b. the point at which no more customers are willing to purchase a product or service. c. the price point where demand is maximized. d. the price point where equilibrium is achieved.
a. the price point where costs or expenses related to producing a product or service are covered.
Due to the rise in the consumption of baked cracker products, a regional grocery store chain developed a private label brand of crackers that are similar to the popular Cheez-Its cracker owned by Kellogg. Since the introduction of the proprietary private label cracker product in the grocery store chain stores, sales of Cheez-Its have declined which is negatively impacting Kellogg's sales and profitability. This is an example of: a. vertical conflict. b. horizontal conflict. c. producer-retailer disagreement. d. distributor parity.
a. vertical conflict
Public relations refers to a firm's communications and relationships with its various publics, including customers, suppliers, the government, employees, and stakeholders. The publicity that a company garners involves unpaid placement of significant news about the company in a published medium or through favorable presentations on the radio, Internet, or television. Why are consumers more likely to believe information that stems from the marketing aspect of public relations than they are to believe claims in advertising? a. Because published information typically reflects bad news about companies, products, executives, and ideas. b. Because many consumers consider news more credible when it comes from a media organization than when it comes directly from a marketer. c. Because this information tends to be nonelectronic. d. Because many consumers appreciate when news comes directly from marketers instead of being filtered through a media organization.
b. Because many consumers consider news more credible when it comes from a media organization than when it comes directly from a marketer.
You work for a food-processing plant that manufactures corn tortillas. You have been asked to review the activities of upstream management to determine if costs can be cut in that area. Which activities listed below will be your concern? a. Investigating the possibility of diversifying into producing not only corn tortillas but flour tortillas as well. b. Contacting the farming cooperative to negotiate the price of corn for your upcoming contract. c. Checking the feasibility of raising the price at which corn tortillas are sold to your business customers. d. Decreasing the cost resulting from returns due to improper handling and packaging of corn tortillas.
b. Contacting the farming cooperative to negotiate the price of corn for your upcoming contract.
You work for a small tech company that has recently introduced a new mobile application called "Streamline" into the market. The mobile application is aimed at helping individuals keep track of all their social media accounts in one place and streamlining the flow of information from one program to the next. For instance, if you update your Facebook page, your Twitter and Instagram accounts will also update. After identifying the target market and conducting market research, the marketing team decides that its first set of ad campaigns should be Web-based in order to draw appropriate audiences. When Alexa signs into her Facebook page, a banner pops up in the center of her browser advertising Streamline, the new mobile application. After clicking on the ad, Alexa learns that she can control all of her 11 social media accounts from one place. Which of the marketing communications steps is next? a. Encoding b. Feedback c. Decoding d. Channeling
b. Feedback
Marketers are concerned with distribution intensity, which is how many intermediaries will distribute the goods in a particular market. Select the description of the general categories of market coverage that is incorrect. a. In exclusive distribution, a single wholesaler or retailer is granted the right to sell a product in a given area. b. In controlled distribution, the manufacturer is forced by law to sell its own products. c. In selective distribution, the manufacturer will often provide training and assistance to the limited number of dealers it chooses to distribute its product. d. In intensive distribution, items with wide appeal are distributed through as many channels as are available in a trade area.
b. In controlled distribution, the manufacturer is forced by law to sell its own products.
Paul Lindsay is a logistics manager for a farm equipment manufacturer; he needs to move several tractor-trailers of farm equipment from the Midwest manufacturing plant to the East Coast distribution centers. This heavy equipment must travel a long distance—across country—and then over land to the various wholesalers that distribute them. What intermodal operation will allow Paul to combine long-hauling capacity with overland flexibility? a. Birdyback b. Piggyback c. Fishyback d. Run-through
b. Piggyback
A new boss just took over the marketing department where you work for a women's swimwear manufacturer. You hope to impress him or her with your knowledge of an important topic in your industry: How prices affect consumer perceptions of quality. You should make all of the following points except: a. Perceptions of quality may be affected by both high and low prices. b. Supply and demand play no role in purchasing patterns when perceptions of quality are driven by price. c. Perceptions of quality may be affected by the eco-friendliness of a product. d. It is common for consumers to define both upper and lower limits within which their quality perceptions vary.
b. Supply and demand play no role in purchasing patterns when perceptions of quality are driven by price.
You work for a local politician who has allegedly been linked to a local scandal. As the head of the politician's communications team, you are strategizing ways to address this issue, especially since it is an election year, and he or she wants to run for national office. You think that the best approach in addressing this problem is employing media marketing, but you still have to figure out which medium is best. You want to use a medium that is credible, flexible, and reaches wide audiences. You are not particularly concerned about cost because you believe that the expense is worth it. Which of the following media can best help you accomplish your goal? a. Billboards b. Television c. Radio d. Newspaper e. Magazines
b. Television
You work for a multinational food corporation that specializes in breakfast foods. For the last ten years, your breakfast bars have dominated the market and been found on the tables of 65 percent of the families in the United States. In the last three quarters, however, your product has not been performing as well; you think the younger generation of parents perceives your bars, incorrectly, as high in sugar and fat and is unaware of their healthy ingredients. Your company develops a series of buy-one-get-one-free promotions and arranges for retailers to hand out samples at their stores. Despite all the resources you invest in this promotional campaign, the product's performance does not improve over time. Why is the approach to marketing described in the scenario ineffective? a. The goals for the promotional campaign were too broad. b. The company's promotional objective was inappropriate given its marketing needs. c. The company chose the wrong target market. d. The prices for the product were too high for young families.
b. The company's promotional objective was inappropriate given its marketing needs.
You are the marketing manager of a small start-up retail company. You are aware that your company's pricing strategies are an important way to communicate your firm's image to consumers. You also realize that as a start-up your company must make every effort to attract customers. After thoroughly analyzing your competitors' offerings, you decide to set the prices of your company's merchandise at odd, unusual numbers slightly below a round number. For example, instead of pricing an item at $10.00 you price it at $9.95. What is the most likely reason to employ this odd pricing strategy? a. This allows the retailer to emphasize important characteristics that differentiate product lines at different price points. b. This makes the price seem like $9.00 plus change rather than a full $10.00. c. This allows the retailer to inconspicuously change the prices at any time. d. Odd-numbered pricing adds to the perceived prestige of the company on the part of consumers.
b. This makes the price seem like $9.00 plus change rather than a full $10.00.
Your family owns a commercial bakery that has always partnered with large food distributors that sell and deliver to supermarkets around the United States. You and your sister have recently taken over from the older generation and may consider other distribution options. Your sister is especially interested in shortening the distribution channel. Having more channel strategy experience than her, you explain that moving in this direction could involve all of the following actions except: a. hiring a sales force experienced in selling baked goods b. choosing a logistics company experienced in cross-country shipping c. planning a direct selling program to demonstrate the special characteristics of your packaging d. buying delivery trucks with cooling systems to retard spoilage
b. choosing a logistics company experienced in cross-country shipping
Sue runs a high-end jewelry boutique. In the past, she provided complementary gift wrapping, but there has been so much demand for this service that she has decided to start charging for it and limiting it to only one wrapped item per customer. Which of the following elements of retailing strategy is Sue about to change? a. merchandising b. customer service c. pricing d. store atmospherics e. customer amenities
b. customer service
The retail industry in the United States: a. is small, accounting for only a fifth of the United States GDP. b. is the largest private-sector employer in the United States. c. is shrinking, due to off-shoring. d. is weak, with most consumers cutting spending.
b. is the largest private-sector employer in the United States.
Mr. Cohen wants to open a hair salon and has to decide on the geographic location of the shop. He is targeting girls and young women aged 13 and older who get their hair done frequently. What sets his shop apart from other beauty salons is that all his beauticians have been trained to employ the most modern techniques and were all in the top 5 percent of their classes in their respective cosmetology schools. He wants to locate the salon within a group of similarly distinctive, upscale retailers, service providers, and department stores with high visibility in the same region. Mr. Cohen's location will be in which of the following types of shopping center? a. showroom b. planned c. regional d. designed e. multiple
b. planned
While shopping for a new laptop, Lorenzo compares a few models at his local electronics store. After identifying the model he likes the best, Lorenzo goes home and orders a new laptop online for a lower price from another store. This process is known as: a. warehousing. b. showrooming. c. webrooming. d. window shopping.
b. showrooming.
Marisol's online jewelry store originally sold only earrings and necklaces for women. After adding men's rings and cuff links, profits doubled. Given that success, Marisol may soon expand her product line to include unisex watches. Which of the following is a dimension of merchandising strategy that Marisol should consider? a. what type of repair service to offer b. the profitability of unisex watches c. when to open a brick-and-mortar outlet d. how to advertise the store
b. the profitability of unisex watches
In 2014, the Golden Gate Bridge toll fee rose from $6 to $7. Beginning in 2015, the toll fee will go up by a quarter for each of the next four years. Administrators explained that fees were not keeping up with inflation because "toll revenues have remained flat." What situation are administrators counting on? Choose the correct answer. a. Crossing the bridge will change to an inelastic demand. b. Crossing the bridge will change to an elastic demand. c. Crossing the bridge will remain an inelastic demand. d. Crossing the bridge will remain an elastic demand.
c. Crossing the bridge will remain an inelastic demand.
Firms often set goals related to desired share of a market. These goals are a type of _______ objectives. a. profitability b. marginal analysis c. competition d. sales
d. sales
Sal is currently in the market for a new car. He considers various factors before making his purchase; for example, he considers gas mileage, power-train warranty, safety records, status, price, and convenience. He then makes a final list of six possible vehicles to purchase. However, after thinking about all these things, he dismisses them and decides instead to purchase the highest price vehicle. Based on this information, what is the most likely reason for Sal's decision? a. The list of important features to consider was too long and therefore there were too many comparisons to make easily. b. The highest price vehicle was more effectively promoted than the alternatives. c. He assumed that the highest price car must also be the most prestigious and he would like to project a high-status image. d. He neglected to set prices limits before making his decision. prestigious and he would like to project a high-status image. d. He neglected to set prices limits before making his decision.
c. He assumed that the highest price car must also be the most prestigious and he would like to project a high-status image.
Which of the following statements about cross-promotion is inaccurate? a. It may utilize a mix of promotional tools. b. The partners share promotional costs. c. Its effectiveness is limited to complementary products. d. Its importance in the marketing world is likely to increase over time.
c. Its effectiveness is limited to complementary products.
Ads based on fear, humor, or sex can be effective, but also face distinctive challenges. All of the following accurately describe these challenges except: a. Humor in an ad may distract consumers' attention from the brand. b. Sex-based ads are tricky when used in culturally diverse markets. c. Selective perception may be a problem for humorous ads. d. People may tune out fear-based ads that seem implausible.
c. Selective perception may be a problem for humorous ads.
After working in retail for about a decade, Lynette decided to open her own shop. For years, she had been interested in learning about handbags and collected vintage purses. Naturally, Lynette was going to open a handbag shop. Because she knows just how expensive designer bags could be, she also decided to find ways to cut the costs associated with running a store so she could increase customer bargains. Lynette's store is open five days a week from 12 noon to 6 p.m. Which of the following types of retailers accurately reflect Lynette's store? a. Mass merchandiser b. Department store c. Specialty store d. Convenience retailer e. Chain store
c. Specialty store
All of the following are categories used to classify retailers except: a. services provided b. shopping effort c. form of financing d. product lines e. form of ownership
c. form of financing
To forecast sales for your firm's new product, you want to use a forecasting technique that is based solely on input from sources internal to the firm. Which of the following groups of techniques meets your criterion? a. Delphi technique, jury of executive opinion, and test markets b. test markets, survey of buyer intentions, and sales force composite c. jury of executive opinion, sales force composite, and trend analysis d. survey of buyer intentions, sales force composite, and trend analysis
c. jury of executive opinion, sales force composite, and trend analysis
Zappos sells around 50,000 varieties of shoes from its website, zappos.com. This is an example of: a. direct selling. b. direct-response retailing. c. online retailing. d. automatic merchandising.
c. online retailing
You own a mattress store called "Dream Better." Since people routinely compare your products to those offered by Sleepy's and other major competitors before making a purchase, you invest heavily in skilled salespeople and attractive displays. "Dream Better" is best classified as a: a. self-service retailer b. showroom store c. shopping store d. convenience retailer e. sales store
c. shopping store
You have noticed that the most profitable diners at your restaurant are repeat customers, so you've developed a program to reward their loyalty. On every fifth visit, they will receive a free dessert and specialty coffee. Which of the following statements about this reward program is accurate? a. It is likely to stimulate primary demand. b. Its promotional objective is to create awareness of your restaurant. c. Advertising could not be used to further the same promotional objective. d. Advertising could be used to further the same promotional objective.
d. Advertising could be used to further the same promotional objective.
You planned to use trend analysis to forecast sales of the new yogurt being introduced by your dairy products firm. However, the marketing director just informed you that trend analysis is inappropriate for this purpose. Assuming he or she is correct, what is his or her most likely reason? a. Because the product is new, historical data is too expensive to obtain. b. Trend analysis cannot be applied to the dairy products market. c. Trend analysis is an outdated forecasting technique. d. Because the product is new, historical data is not available.
d. Because the product is new, historical data is not available.
"Do you have ten or more pounds of excess weight to shed? If so, you should be drinking Blast Berry before every meal! Blast Berry is a weight-loss supplement, and the first of its kind to be approved by the Food and Drug Administration. In a random controlled study, 75 percent of the research participants who used Blast Berry along with exercise dropped an average of 23 pounds within two months of following the program. Blast Berry costs $19.99 for a month's supply and works for those who stick to the plan. Drink one serving before each of the three major meals of the day, and see the weight come off!" Which of the following basic tasks of effective messaging does this message fail to accomplish? a. Gaining the receiver's attention b. Achieving understanding by both the receiver and sender c. Stimulating the receiver's needs and suggesting an appropriate way to satisfy those needs d. Communicating competitive advantage and positioning
d. Communicating competitive advantage and positioning
You are contemplating adding direct selling activities to your existing bricks-and-mortar retail business to increase sales. You are concerned, however, that the negative aspects of direct selling outweigh the positive. Which of the following is a negative aspect of direct selling that you must mitigate in some way to be successful? a. Direct selling is a less expensive form of retailing. b. Products are presented at convenient times for customers. c. Products are presented at convenient locations for customers. d. It may be more expensive and time-consuming than using an intermediary. e. Customers get personal attention.
d. It may be more expensive and time-consuming than using an intermediary.
The elasticity of demand for a product would be highest in the presence of which two conditions? a. Few substitutes, high price b. Many substitutes, low price c. No substitutes, low price d. Many substitutes, high price
d. Many substitutes, high price
Danielle is opening an exclusive beauty salon in a luxury shopping mall. Which of the following psychological pricing policies should she use? a. Elastic pricing b. Exclusivity pricing c. Luxury service pricing d. Prestige pricing
d. Prestige pricing
A retailer is facing difficult times: Sales are down and there has been a decrease in the number of customers visiting the store. The retailer decides to lower the prices on a few items, hoping this strategy will draw more customers who will not only purchase the discounted items but will also linger in the store and buy additional items. Which type of pricing policy is the retailer using? a. Product line pricing b. Price flexibility c. Psychological pricing d. Promotional pricing
d. Promotional pricing
Which of the following is not a component of store atmospherics? a. Architectural design b. Store layout c. Lighting d. Reputation
d. Reputation
You work for an organization that wants to use a celebrity spokesperson to advertise its new smoking cessation programs. The company enlists the support of a local music celebrity who is well known and well liked. The celebrity has previously endorsed a local restaurant, is supporting the campaign of a local politician, and is known to partner with a local music program that works with blind children. This celebrity also is known to support awareness for lung cancer initiatives because his or her brother was a pack-a-day smoker for three decades and died of Stage IV lung cancer. Which of the following might be a drawback of working with this particular celebrity on promoting your organization's cause? a. The celebrity's body of professional work is not impressive. b. The celebrity is not a credible source of information. c. This celebrity spokesperson is expensive and probably behaves badly. d. There is marketplace confusion surrounding this celebrity.
d. There is marketplace confusion surrounding this celebrity.
The Ash brothers operate an online retailer that specializes in herbal teas from remote villages across the globe. A direct-response retailer, the Ash brothers' company allows customers to purchase their teas by phone, mail, or via the company's website, and then they ship the order directly to the client. The Ash brothers serve as an intermediary between product manufacturers and customers. Which of the following is an advantage that the Ash brothers have in running this online direct-response retailer? a. Most of their purchase orders come directly through the company's website. b. They completely bypass retailers and wholesalers. c. They sell the teas to customers at prices that are marked down. d. They are able to reach a wide base of customers and special niche markets because of the Internet. e. They generate a large number of inquiries from customers making purchase decisions.
d. They are able to reach a wide base of customers and special niche markets because of the Internet.
Which of the following is true of wholesalers? a. They distribute only to retailers. b. They perform the same functions as brokers. c. They are also known as manufacturer's representatives. d. They distribute to retailers, other distributors, or consumers.
d. They distribute to retailers, other distributors, or consumers.
Intensive distribution seeks to distribute a product through _______ available channels in a trade area. a. a limited number of b. only one of all c. a variable number of d. all
d. all
The first ever "pizza ATM" serves pizza 24 hours a day on a college campus in Cincinnati, Ohio. Through ______, students can order from several different varieties and receive their pizza in about three minutes. a. online retailing b. direct selling c. direct-response retailing d. automatic merchandising
d. automatic merchandising
Direct selling enables manufacturers to _____ wholesalers. a. absorb b. underprice c. oversee d. bypass
d. bypass
Around Thanksgiving, many supermarkets cut their prices on turkey to match the discounts offered by competitors and maintain market share. This is an example of _______ pricing strategy. a. penetration b. EDLP c. market-minus d. competitive
d. competitive
A retailer that appeals to customers by having an accessible location, rapid checkout, extended store hours, and adequate parking is known as a: a. specialty retailer. b. community retailer. c. chain store. d. convenience retailer.
d. convenience retailer.
A producer of nets and cleaning equipment for tennis courts sells to tennis clubs and resorts all over the country. The firm is constantly in touch with its customers, keeping the buyers abreast of new products and offering to repair or improve existing nets and equipment. Based on this information, the producer is using a(n) ______ type of distribution channel. a. indirect b. national c. service-based d. direct
d. direct
Many snack food brands, like Lay's Potato Chips, are sold in vending machines, at supermarkets, and online. This means that these items utilize _______ distribution. a. multi-platform b. technology-based c. strategic d. dual
d. dual
Chain stores and independent retailers differ structurally based on: a. shopping effort. b. services provided. c. product lines. d. form of ownership.
d. form of ownership.
A product's price represents: a. cost-benefit ratio. b. revenue potential. c. exchange conditions. d. funds required to purchase it.
d. funds required to purchase it.
The Robinson-Patman Act was inspired by price competition triggered by the rise of: a. convenience stores. b. multinational corporations. c. monopolies. d. grocery store chains.
d. grocery store chains
When a product's elasticity of demand is less than 1, that product's demand is said to be: a. elastic. b. marginally elastic. c. marginal. d. inelastic.
d. inelastic
The director of marketing at your company has asked you to evaluate the cost-cutting potential of using marketing intermediaries. You point out to his or her that intermediaries will save money in some, but not all, of your marketing activities. In which of the following activities would marketing intermediaries be ineffective in saving money? a. delivering product b. selling to multiple customers c. maintaining inventory d. manufacturing product e. warehousing product
d. manufacturing product
An online shoe store runs banner ads enticing customers to "Buy two pairs of adult sandals and get a kid's pair for free!" The offer, which is only made during the summer, is an example of _____ pricing. a. psychological b. product-line c. unit d. promotional
d. promotional
Unlike wholesalers and manufacturers, retailers represent the distribution channel to most consumers. Which of the following is not a reason for this consumer perception? a. Consumers have little contact with wholesalers and manufacturers. b. Retailers determine shopping hours and locations. c. Consumers rely on retailers to obtain a wide array of merchandise. d. Retailers determine merchandise selections. e. Retailers have little contact with wholesalers and manufacturers.
e. Retailers have little contact with wholesalers and manufacturers.
When the price of Product A is raised by 1 percent, its sales drop by 0.06 percent. When the price of Product B is raised by 1 percent, its sales drop by 1.5 percent. This means that demand for Product A is _______, while demand for Product B is ________. a. elastic, inelastic b. elastic, partially elastic c. unelastic, inelastic d. partially elastic, inelastic e. inelastic, elastic
e. inelastic, elastic
Martin has opened a new, trendy restaurant in the downtown section of a large city. There are, however, many competing restaurants in the neighborhood, and Martin knows that many of them have large customer followings. In order to obtain a relatively fast rate of market acceptance, Martin decides to offer two-for-one coupons to all patrons during the restaurant's opening weeks. After that limited time, Martin plans to withdraw the two-for-one offers and begin charging regular market prices. Fill in the blank with the word from the drop-down list that best completes the sentence. Martin is using a ______________ pricing strategy.
penetration
Selena is embarrassed. After explaining to her boss how the company's CVP (cost-volume-profit) relationship affects its pricing strategy, she realizes that she left out a key variable. Reviewing her notes, she sees that she included price, sales volume, and profit margin. What did Selena leave out?
price sensitivity of consumers
Competition_________ affects a firm's pricing strategy more than cost.
sometimes
Some companies choose to sell a product below its production price. This strategy is_______________.
unsustainable
The relationship between price and demand ___________ overtime.
varies