ch 14-17

Which of the following is included in the broad factors that manufacturers must consider when establishing a strategy for getting their products into the hands of the ultimate customer? a. choosing retail partners b. creating JIT manufacturing system c. increasing transportation costs d. lowering production costs e. retail advertising programs

a. choosing retail partners

If a manufacturer wanted to sell a full range of products in a number of different container sizes, which kind of store would the company be least likely to choose as a retailing partner? a. convenience store b. conventional supermarket c. full line discount stores d. warehouse club e. supercenter

a. convenience stores

Which of the following is required to build a successful strategic relationship? a. credible commitments b. creation of a joint venture c. autonomous respect d. closed communications e. individual goals

a. credible commitments

How can a company find its way out of a market characterized by pure competition? a. differentiate the product in some way, even by packaging, so customers will see it as distinct b. increases the amount of available product to flood the market c. decrease the amount of available product until the market reacts d. increases prices and attract different, quality oriented customers e. consistently offer the lowest price until other competitors leave the market

a. differentiate the product in some way, even by packaging, so customers will see it as distinct

The break-even point is estimated by a. divided fixed costs by contribution per unit b. multiplying fixed costs by contribution per unit c. divided fixed contribution per unit by variable costs d. dividing variable costs by fixed costs e. multiplying revenue per unit times the quantity sold

a. dividing fixed costs by contribution per unit.

Ike manages a Shoney's restaurant. He is considering staying open later in the evening. For Ike, the variable costs associated with staying open longer hours will include a. hours worked by cooks b. rents on the restaurant building c. advertising costs d. routine maintenance e. property taxes

a. hours worked by cooks.

Dynamic pricing is also referred to as ________ pricing. a. individualized b. market c. profit d. monopoly e. premium

a. individualized

Predatory pricing a. is illegal in the United States under both the Sherman Antitrust Act and the Federal Trade Commission Act b. is legal in the united states when a company wants to set a very low price to drive its competition out of business c. occurs when a firms sets a very high price for one or more of its products d. occurs when there are many firms competing for customers in a given market, but their products are differentiated e. is legal in the untied states

a. is illegal in the United States under both the Sherman Antitrust Act and the Federal Trade Commission Act

Students of marketing often overlook or underestimate the importance of place in the marketing mix simply because a. it happens behind the scenes b. it conflicts with promotion c. it occurs after making pricing decisions d. no one is directly in charge of place decisions e. the product itself is so much more important

a. it happens behind the scenes

In which of the following tactics does a consumer pay a fee to purchase the right to use a product for a specific amount of time? a. lease b. bait and switch c. rebate d. lay away e. bundling

a. lease

Cosmetic manufacturers that sell shampoo and conditioner together as one package at a lower price rather than selling each item separately are using a. price bundling b. cumulative quantity discounts c. slotting allowances d. price lining e. loss leaders

a. price bundling

Because there are many firms in monopolistic competition markets, a. the many competitors will focus on product differentiation b. price controls may be implemented c. everyone is a price taker d. producers do not have to consider the reactions of rival firms e. government often encourages consolidation to reduce the number of competitors

a. the many competitors will focus on product differentiation

One of the most fundamental activities of retailers is to provide ________, satisfying the needs of their target market a. the right mix of merchandise and services b. corrective price controls c. category killing profitability d. persuasive advertising e. wholesaling opportunities

a. the right mix of merchandise and services

The level of difficulty a manufacturer experiences in getting retailers to purchase its products is determined by the degree to which the channel is a. vertically integrated b. exclusive c. horizontally integrated d. recognized e. known nationally

a. vertically integrated

Janette has a large family and likes to stock up on large packs of basics like toilet paper, paper towels, and large bottles of condiments like ketchup. Janette would most likely prefer to shop for these items at a(n) a. warehouse club b. convenience store c. category killer d. off price retailer e. specialty store

a. warehouse club

Cost-based pricing assumes that costs a. will not vary much for different levels of production b. are calculated based on historical consumer perceptions fo what things should cost c. will vary with the level of prices d. will continue to decrease as production increases e. are used to estimate value

a. will not vary much for different levels of production

If the fixed costs of manufacturing a new cell phone are $10,000, the sales price is $60, and variable cost per unit is $20, the break-even point is a. 20 units b. 250 units c. 100 units d. 4,000 units e. 1,000 units

b. 250 units

Which of the following are typical outlets used by retailers? a. distribution centers b. business-to-business requests for proposals (RFPs) c. catalogs d. wholesalers e. manufacturers

b. business-to-business requests for proposals (RFPs)

Variable costs change with a. competitive parity b. changes in the quantity being produced c. changes in cross price elasticity d. changes in fixed costs e. changes in target return pricing

b. changes in the quantity being produced

Having no intermediaries between the buyer and seller is a defining characteristic of a(n) ________ marketing channel a. indirect b. direct c. vertical d. horizontal e. simple

b. direct

________ enable the retailer to lower inventory investments systemwide a. additional local factories b. distribution centers c. warehouses d. local storage units e. additional retail outlets

b. distribution centers

A(n) ________ pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases a. EDLP b. high/low c. premium d. slotting e. uniform

b. high/low

If all three grocery stores in town decide to charge the same price for a gallon of milk, what type of pricing tactic is being used? a. vertical price fixing b. horizontal price fixing c. vertical price discrimination d. loss leader pricing e. horizontal price discrimination

b. horizontal price fixing

Gina wants to maximize sales to the customers who walk into her store. Of the following, Gina will most likely focus on a. mass media advertising b. in store promotions c. billboard and other outdoor advertising d. supply chain relationships e. off price wholesaling

b. in-store promotions

In a(n) ________ marketing channel, one or more intermediaries work with manufacturers to provide goods and services to customers a. horizontal b. indirect c. vertical d. simple e. direct

b. indirect

The price elasticity of demand for a specific brand of deodorant is −.9. The market for this product is considered a. elastic b. inelastic c. saturated d. dynamic e. a prestige market

b. inelastic

The price elasticity of demand for a specific brand of deodorant is −.9. The market for this product is considered a. a prestige market b. inelastic c. saturated d. elastic e. dynamic

b. inelastic.

Today, ________ dominate supply chains a. wholesalers b. large retailers c. government agencies d. distributors e. manufacturers

b. large retailers

A(n) ________ marketing system is a supply chain whose members act like a unified system a. independent b. vertical c. concentrated d. strategic e. conventional

b. vertical

The ________ does not apply to end consumers, at which point many forms of price discrimination occur a. federal trade commission act b. sherman antitrust act c. robinson patman act d. clayton act e. MSRP

c. Robinson-Patman Act

________ centers deliver directly to customers rather than to stores a. retail b. distribution c. merchandise d. fulfillment e. direct store

d. fulfillment

The knowledge retailers can gain from their store personnel and customer relationship management databases is valuable for developing a. omnichannel retailing b. supply chain relationships c. global private label brands d. increased customer loyalty e. extreme value retailing efforts

d. increased customer loyalty

________ between supply chain members that is based on mutual benefits is key to developing and sustaining the relationship a. vertical conflict reduction b. vendor managed inventory c. independence d. interdependence e. cross checking

d. interdependence

One of the limitations associated with break-even analysis is that a. it assumes that demand is extremely inelastic b. it cannot adjust for high variable costs c. it tells marketers only what price is needed to break even d. it assumes that there is only one price e. it assumes fixed costs are zero

d. it assumes that there is only one price

________ pricing tactics lower the price of a product below the store's cost a. cost based b. fixed c. zone d. loss leader e. regualr

d. loss-leader

Cross-price elasticity is the a. change in quantity of a product demanded divided by the change in its price b. changes in quantity of a product demanded divided by the change in its elasticity c. change in price fo product a divided by change in quantity demanded for product b d. percentage change in quantity demanded of Product A compared to the percentage change in price of Product B e. percentage change in quantity of a product demanded divided by the percentage change in its price

d. percentage change in quantity demanded of Product A compared to the percentage change in price of Product B

A pricing tactic is a. an approach that can be used only in a business to business setting b. an approach that can be used only with consumers c. a long term and broad based approach to pricing d. an integrative pricing approach based on the five Cs e. a short-term approach that is often in response to a competitive threat

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

If you're a manufacturer, and you want to showcase your product in a store that has a narrow but deep selection of merchandise and where expert sales associates can assist customers with their selections, you'd most likely choose a. an extreme value retailer b. a category specialist c. a department store d. a warehouse club e. a speciality store

e. a specialty store

Retailers need to provide a consistent ________ across all channels a. availability of merchandise b. selling technique c. shopping experience d. assortment of merchandise e. brand image

e. brand image

Firms using a(n) ________ pricing method set their prices relative to what other firms are charging a. improvement value b. cost based c. reference based d. value based e. competition based

e. competition-based

Dana owns a bakery where she sells cupcakes. Two blocks down there is another bakery, Sweet's Bakery, that sells cupcakes for $1 less than Dana. Dana decides to lower her price and match Sweet's Bakery prices. What type of pricing strategy is Dana implementing? a. internal pricing b. customer oriented pricing c. sales oriented pricing d. profit oriented pricing e. competitor oriented pricing

e. competitor-oriented pricing

When choosing a retail partner, manufacturers consider a. channel structure b. distribution intensity c. who they can buy components from d. horizontal channels e. convenience for the customer

e. convenience for the customer

When choosing a retail partner, manufacturers consider a. channel structure b. distribution intensity c. who they can buy components from d. horizontal channels e. convenience for the customer

e. convenience for the customer

The vertical marketing system that exhibits the most formalization and control is the ________ vertical marketing system. a. administered b. franchise c. contractual d. partnership e. corporate

e. corporate

In determining the price for his company's new photo printer, Antonio is assessing the total cost of owning his printer as compared to alternative products available in the market. Antonio is using ________ pricing a. EDLP b. reference price c. improvement value d. premium e. cost of ownership

e. cost of ownership

The pricing method that considers what consumers may be willing to pay for a particular product based on the value received over the product's entire lifetime is the ________ pricing method a. cost based b. improvement value c. market based d. reference based e. cost of ownership

e. cost of ownership

While it is relatively easy to offer customers Internet options like a FAQ page and an email address to answer questions, some companies are using an interactive approach to address customers' questions while they are visiting the websites. These firms are using ________ to provide the customer with enhanced customer service a. web videos b. vendor managed inventory c. online games d. EDU e. online chats

e. online chats

Anders purchased a number of books from Amazon.com, and he learned to trust the recommendations made to him. More than once he was pleasantly surprised at the books and authors that he discovered this way. In this case, Amazon.com was creating value for Anders through a. expanded market presence b. interactive offerings c. repeat business d. rapid delivery e. personalized offerings

e. personalized offerings

Which element of the marketing mix specifically deals with supply chain management? a. production b. promotion c. price d. product e. place

e. place

Raoul was known for driving 20 miles just to save a dollar on the price of his favorite beverage. Raoul perceived price as ________ for a good or service, while most consumers recognize price as the ________ made to acquire a good or service a. a variable cost; fixed cost b. the break even amount; total cost c. a fixed cost; variable payment d. the overall sacrifice; monetary payment e. the money paid; overall sacrifice

e. the money paid; overall sacrifice

Value-based pricing can be difficult to implement because a. this method requires all costs be identified and calculated on a per unit basis b. it is difficult to determine how competitors will price their products c. everyday low pricing has neutralized the impact of price on consumers purchase decisions d. value depends on variable costs and not fixed costs e. the way consumers perceive value changes often

e. the way consumers perceive value changes often

The improvement value method and the cost of ownership method are two approaches for setting prices that are ________ methods a. production based b. competitor based c. market based d. cost based e. value based

e. value-based

Consider a bakery like Entenmann's: The majority of the ________ costs are the cost of the ingredients, primarily flour. a. incidental b. inelastic c. fixed d. prestige e. variable

e. variable

The key factor distinguishing retailers from other members of the supply chain is that a. they sell to customers for their personal use b. they utilize marketing to reach consumers c. they use advertising to generate demand d. they rarely engage in personal selling e. they sell to consumers, businesses, and government

they sell to customers for their personal use

Karson Manufactured Homes charges $500 for deliveries within 50 miles and $800 for deliveries 51 to 100 miles away from their factory. The company is using a ________ pricing tactic a. zone b. cumulative c. noncumulative d. horizontal e. uniformed delivered

zone

Because there are only a few firms in markets with oligopolistic competition, a. price wars may occur b. government often encourages consolidation to reduce the number of competitors c. producers do not have to consider the reactions of rival firms d. the many competitors will focus on product differentiation e. everyone is a price taker

a. price wars may occur

What differentiates a distribution center and a fulfillment center? a. a fulfillment center sends goods to company stores b. a distribution center packs single orders to multiple addresses c. a fulfillment center redistributes the goods that it stores d. a distribution center sends goods to company stores e. a fulfillment center ships goods in bulk to one address

c. a distribution center sends goods to company stores

A(n) ________ is used in the shipment of products directly to customers a. distribution center b. administration center c. fulfillment center d. data warehouse e. vendor warehouse

c. fulfillment center

A company that buys products from manufacturersand resells them to retailers is a a. specialist b. cooperative c. wholesaler d. supercenter e. warehouse

c. wholesaler

The most common form of a quantity discount for consumers is a a. coupon b. markdown c. cash discounts d. rebate e. size discount

e. size discount

Best Buy is shipping computers to its distribution center. It uses ________ as notification mechanisms a. advanced shipping notices b. just in time inventory c. quick response inventory systems d. universal product codes e. radio frequency identification tags

a. advanced shipping notices

Karson Manufactured Homes charges $500 for deliveries within 50 miles and $800 for deliveries 51 to 100 miles away from their factory. The company is using a ________ pricing tactic a. zone b. cumulative c. noncumulative d. uniformed delivered e. horizontal

a. zone

In a vertical marketing system, if the system is ________, conflict is less likely to occur a. less independent b. more formal c. more conventional d. less formal e. more independent

b. more formal

A demand curve shows the relationship between ________ during a specific period of time. a. profit and price b. price and demand c. price and costs d. income and demand e. price and elasticity

b. price and demand

In one year, the Sunrise Hotel incurred $100,000 in fixed costs. Because the hotel booked 10,000 room nights, its total variable cost is $100,000 (10,000 room nights × $10 per room). Thus, its total cost is a. $10,000 b. $100,000 c. $200,000 d. $20,000 e. $120,000

c. $200,000

When Lenovo sells computers to Brownston College, it engages in a ________ transaction, but when it sells to students individually, it is a ________ operation a. retail; B2B b. fulfillment; distribution c. B2B; B2C d. B2C; B2B e. B2C; fulfillment

c. B2B; B2C

It is important to Elias to get value for his money, but he does not want to spend time comparison shopping. Elias will likely respond to ________ pricing, but not to ________ pricing a. price skimming; high/low b. high/low; EDLP c. EDLP; high/low d. premium; high/low e. high/low; premium

c. EDLP; high/low

Which of the following markets is most likely to be characterized by oligopolistic competition in the United States? a. soybeans b. electrical service to the home c. smartphone service providers d. pens and pencils e. mens clothing

c. smartphone service providers

Star Heating and Air Conditioning Company specializes in electric heat pumps. Francis keeps track of the price of natural gas, knowing that a. the demand for natural gas is price elastic b. natural gas creates more environmental greenhouse effects than coal c. gas heating systems and electrical heating systems are complementary goods d. an increase in the price of natural gas will increase demand for his electrical heating systems e. when the price of natural gas goes up, the quantity demanded also rises

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

A noncumulative B2B quantity discount is a. considered illegal under the Robinson Patman act b. offered only to one time purchasers c. used to encourage consumers to purchase larger quantities each time they buy d. based only on the amount purchased in a single order e. used primarily to attract new retail customers

d. based only on the amount purchased in a single order

When Walmart threatens to punish or punishes the other channel member for not undertaking certain tasks, such as if it were to delay payment for a late delivery, this is an example of a. expertise power b. referent power c. information power d. coercive power e. reward power

d. coercive power

Fees paid to retailers simply to get new products into stores or to gain more or better shelf space for their products are called ________ allowances a. space b. location c. shelf d. slotting e. placement

d. slotting

Developing pricing strategies for ________ is one of the most challenging tasks a manager can undertake a. cost based pricing b. seasonal rebate items c. zone pricing products d. quantity discounts e. new products

e. new products

Mario is the first retailer in town to sell games for Sony's latest version of its PlayStation gaming console. Mario wants to quickly capture as much of the market for the new games as possible. Mario will likely use a ________ pricing strategy a. price fixing b. skimming c. reference d. bundling e. penetration

e. penetration

For marketers to advertise a price as their ________ price, the Better Business Bureau recommends that at least 50 percent of the sales of a product occur at that price a. regular b. fixed c. zone d. cost based e. leader

a. regular

The percentage of a customer's purchases made from a particular retailer is referred to as a. share of wallet b. share of market c. customer loyalty d. customer relationship management e. customer value ratio

a. share of wallet

Dylan designs and manufactures custom Murphy bed units. He has a number of unique products but can only produce in limited quantities. Dylan will probably not use a penetration pricing strategy because a. she could not meet a rapid rise in demand b. she would have to determine zone pricing discounts c. the experience curve effect would drop unit costs too rapidly d. a low price would indicate low quality e. there are few barriers to competitive entry in the market

a. she could not meet a rapid rise in demand

Walmart needs P&G to satisfy its customers, and P&G recognizes that if it can keep Walmart happy, it will have more than enough business for years to come. Walmart and P&G recognize that it is in their common interest to be a. strategic partners b. in a corporate vertical marketing system c. supply chain intermediaries d. in an administered vertical marketing system e. separate identities

a. strategic partners

Ozzie is the marketing manager for an automobile dealership. His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent. His firm is using a ________ orientation a. product development b. sales c. competitive d. customer satisfaction e. profit

b. sales

Because many consumers choose stores based on proximity to their workplaces or homes, great locations are a. almost always locations next to big box discounts b. more important than great products c. difficult to define d. a competitive advantage that few rivals can duplicate e. always situated near supply chain members

d. a competitive advantage that few rivals can duplicate

A customer orientation toward pricing implicitly invokes the concept of a. profit b. positioning c. the income effect d. value e. knowing the dimensions of the target market

d. value

Otto used to work for a large, well-known retailer. He left that company to work for a much smaller company, and in doing so, he discovered that the channel functions were handled very differently in the smaller firm. Looking back at his experience, he noticed that larger firms a. use more independent salespeople b. perform many different channel functions themselves c. are generally less efficient d. have less control in the channel e. spend more money wastefully

b. perform many different channel functions themselves

Which of the following are activities carried on in a distribution center? a. sending promotional materials to customers b. receiving, checking, and storing merchandise c. arranging expedited shipping direct to customers d. setting up in store displays e. distributing paychecks and paystubs for retail employees

b. receiving, checking, and storing merchandise

Walmart may have ________ power if a supplier desperately wants to be associated with Walmart, because being known as an important Walmart supplier enables that supplier to attract other retailers' business a. licensing arrangement b. referent c. information d. coercive e. legitimate

b. referent

A(n) ________ distribution intensity helps a seller maintain a particular image and control the flow of merchandise into an area a. widespread b. selective c. intensive d. variable e. collective

b. selective

Byron gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection. Byron told the manager to always match the gasoline prices of the other store. Byron is using a ________ pricing strategy a. target return b. status quo c. target profit d. sales e. maximizing profits

b. status-quo

One of the greatest constraints faced by store-based retailers—and one that the Internet channel can address—is a. common zoning restrictions limiting the kinds of merchandise that can be offered for sale b. the amount of merchandise that can be carried in a physical store c. competition from other retailers d. interactive customer service e. price competition

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

According to a typical demand curve, the higher the price, a. the greater the income effect b. the lower the quantity consumers will buy c. the lower the output of producers d. the greater the production costs e. the lower the cross price elasticity

b. the lower the quantity consumers will buy

Because many consumers choose stores based on proximity to their workplaces or homes, great locations are a. almost always location next to big box discounters b. difficult to define c. a competitive advantage that few rivals can duplicate d. more important than great products e. always situated near supply chain members

c. a competitive advantage that few rivals can duplicate

The purchase information from each individual store is typically aggregated by the retailer as a whole, which creates an order for new merchandise and sends it to the manufacturer. This is an example of information flowing from the a. store to the distribution center b. customer to the buyer c. buyer to the manufacturer d. store to the buyer e. store to the manufacturer

c. buyer to the manufacturer

Caruso's Office Supplies has large stores resembling warehouse environments, with racks stocked from floor to ceiling with different types of office supplies. Its assortment of office supplies is the largest in town, and its prices are low. Caruso's is a(n) a. full line discount retailer b. off price retailer c. category specialist d. extreme value retailer e. warehouse club

c. category specialist

Nathan is glad his company finally converted to an RFID system. Now, he can be sure that can be sure that a. fulfillment centers are stocking appropriate inventories b. the mobile task management system is operating properly c. he is aware of special promotions d. strategic partner are informed of special sales e. customer information is entered into the database

c. he is aware of special promotions

Which of the following retail stores would emphasize personal selling the most as part of the firm's promotional efforts? a. secondhand clothing store b. bakery c. jewelry store d. convenience store e. liquor store

c. jewelry store

________ is the cash expenditure plus taxes that consumers have to pay for a good or service a. competitive value b. a trade c. price d. consumer perception e. a warranty

c. price

Samar customizes Harley-Davidson motorcycles. No two cycles are alike. He notices that very few customers even ask the price of his motorcycles before they decide to purchase them. Demand for his motorcycles is probably a. cross price elastic b. price elastic c. price inelastic d. price sensitive e. income elastic

c. price inelastic

In omnichannel retailing, what visible element must often be adjusted because of competition faced in different channels? a. supply chain b. return policies c. pricing d. place e. distribution

c. pricing

LeeAnna knows she has to order her store's Christmas holiday merchandise in April to ensure delivery before the holiday season. LeeAnna is concerned with the supply chain management goal of a. providing the right quantities b. providing products at the right location c. providing products at the right time d. satisfying the service levels supply chain participants expect e. minimizing systemwide costs

c. providing products at the right time

When the price for Blu-ray players dropped, the demand for DVD players went down, so DVD players and Blu-ray players are a. outsourced products b. interchangeable products c. substitute products d. complementary products e. superior products

c. substitute products.

When a customer purchases a television at Best Buy, which of the following information flows in the supply chain are started? a. the point of sale terminal records the sale and sends it to the manufacturer b. the purchase is added to the customers purchasing habit records c. the sale is transmitted to Best Buy's distribution center to adjust inventory data d. best buy's buyer aggregates sales at all stores and sues the information to alert the advertising company e. the sales associate records the UPC in the sales ledger

c. the sale is transmitted to Best Buy's distribution center to adjust inventory data

Firms using a(n) ________ pricing method set their prices relative to what other firms are charging a. value based b. improvement based c. reference based d. competition based e. cost based

d. competition-based

In order to anticipate demand, advertising and promotions must be coordinated with the a. human resource departments b. store managers c. fulfillment centers d. departments that control inventory e. customers

d. departments that control inventory

Gianni made pies and sold them from her food truck to local businesses. This is an example of a(n) a. distribution center b. indirect marketing channel c. wholesale operation d. direct marketing channel e. simplified transaction

d. direct marketing channel

Pricing ________ products is especially challenging because little or nothing is known about consumers' perceptions of its value a. bundled b. seasonal c. service related d. new to the world e. cost based

d. new-to-the-world

________ can purchase merchandise at substantial discounts from the original wholesale prices because they do not ask the suppliers for advertising allowances or markdown adjustments a. department stores b. drugstores c. specialty stores d. off-price retailers e. category specialists

d. off-price retailers

Cross-price elasticity is the a. change in quantity of a product demanded divided by the change in its elasticity b. change in quantity of a product demanded divided by the change in its price c. change in price fo product a divided by change in quantity demanded for product b d. percentage change in quantity demanded of Product A compared to the percentage change in price of Product B e. percentage change in quantity of a product demanded divided by the percentage change in its price

d. percentage change in quantity demanded of Product A compared to the percentage change in price of Product B

Samar customizes Harley-Davidson motorcycles. No two cycles are alike. He notices that very few customers even ask the price of his motorcycles before they decide to purchase them. Demand for his motorcycles is probably a. income elastic b. price sensitive c. price elastic d. price inelastic e. cross price elastic

d. price inelastic

Which of the following is most likely to be characterized by pure competition in the United States? a. computer operating systems b. cereal c. fast food restaurants d. soybeans e. soft drinks

d. soybeans

________ are included in the full price of a product or service a. the prices of alternative products and services b. market perceptions c. extended warranties d. travel costs e. delivery costs

d. travel costs

Cost-based pricing assumes that costs a. will vary with the level of prices b. are calculated based on historical consumer perceptions of what things should cost c. are used to estimate value d. will not vary much for different levels of production e. will continue to decrease as production increases

d. will not vary much for different levels of production

Compared with other methods used to set prices, ________ pricing is relatively simple a. value based b. improvement value c. cost of ownership d. reference based e. cost based

e. cost-based

When Walmart relies on its experience and knowledge to decide how to market a product without giving the supplier much of a say in the matter, this is an example of a. referent power b. information power c. coercive power d. reward power e. expertise power

e. expertise power

In determining the price of his company's new financial planning software, Ricardo is assessing how much better his company's software is as compared to alternative products available in the market. Ricardo is using ________ pricing a. cost based b. cost of ownership c. market based d. reference based e. improvement value

e. improvement value

Ilya had just taken over his family's business after spending ten years in the marketing department of a large corporation. He met with a representative from one of his firm's biggest customers, who told him, "We should think about how we can make the pie bigger rather than fighting over the size of the slices." He had expected a more cutthroat approach rather than this call for a a. common marketing system b. linked supply chain c. corporate vertical marketing system d. shared mission statement e. partnering relationship

e. partnering relationship

The most common form of a quantity discount for consumers is a a. coupon b. rebate c. cash discount d. markdown e. size discount

e. size discount

Of the following retailers, the best example of a category killer is a. costco b. target c. dollar general d. kohls e. staples

e. staples

Yesterday, Marya overheard a surprisingly unpleasant encounter between the manager of the hardware store where she works and a sales rep who sells a well-known line of tools. The sales rep insisted that his tools should be more prominently displayed and that a better assortment would mean more sales. The manager had other plans and told him so, and the conversation turned into a loud argument. What Marya observed was an example of a. channel conflict b. passive aggressive behavior c. sales tactics d a failure of EDI processes e. retail strategy tension

a. channel conflict

Coca-Cola wants its product available everywhere—grocery stores, convenience stores, restaurants, and vending machines. The more exposure the products get, the more they sell. The company is employing a (an) ________ strategy a. intensive distribution b. exclusive distribution c. contractual distribution d. selective distribution e. surplus distribution

a. intensive distribution

Otto used to work for a large, well-known retailer. He left that company to work for a much smaller company, and in doing so, he discovered that the channel functions were handled very differently in the smaller firm. Looking back at his experience, he noticed that larger firms a. perform many different channel functions themselves b. use more independent salespeople c. have less control in the channel d. are generally less efficient e. spend more money wastefully

a. perform many different channel functions themselves

Personal selling is particularly important for retailers selling a. products that are complicated or expensive b. discount items c. low cost services d. trend or fashion items e. online services

a. products that are complicated or expensive

H&M has adopted the inventory management system that delivers less merchandise on a more frequent basis than in traditional inventory systems. The firm gets the merchandise just in time for it to be used in the manufacture of another product or for sale when the customer wants it. This is an example of a ________ inventory system a. quick response (QR) b. lead time c. cross docking d. UPC e. EDI

a. quick response (QR)

Walmart may have ________ power if a supplier desperately wants to be associated with Walmart, because being known as an important Walmart supplier enables that supplier to attract other retailers' business a. referent b. information c. licensing arrangement d. legitimate e. coercive

a. referent

Retailing is defined as the set of business activities that a. separates wholesaling form manufacturing b. adds value to products and services sold to consumers for their personal or family use c. occurs only in brick and mortar space d. focuses on transactions, but not relationships e. focuses on a firms core values

b. adds value to products and services sold to consumers for their personal or family use

When a firm is just starting out or entering a new market, it often a. can choose to whom it sells, but not from whom it buys b. cannot choose from whom it buys or to whom it sells is able to choose from whom it buys and to whom it sells d. can choose from whom it buys, but not to whom it sells e. can choose to whom it sells, but not how it distributes the products

b. cannot choose from whom it buys or to whom it sells

When Creative Pen Company designed a new pen that was particularly comfortable to use, it wanted to literally get the pen in the hands of as many consumers as possible. Creative Pen will probably choose ________ distribution for its new product a. selective b. intensive c. exclusive d. variable e. collective

b. intensive

Coca-Cola wants its product available everywhere—grocery stores, convenience stores, restaurants, and vending machines. The more exposure the products get, the more they sell. The company is employing a (an) ________ strategy a. contractual distribution b. intensive distribution c. selective distribution d. exclusive distribution e. surplus distribution

b. intensive distribution

The six Ps include product, price, promotion, place, presentation, and a. presence b. personnel c. profit d. purchase e. private label

b. personnel

Traditionally, retailers treated all their customers ________, but today, successful retailers a. based on demographics; provide more value to mobile commerce customers b. the same; provide more value to their best customers c. based on demographics; treat customers based on share of wallet d. identically; base customer attention on demographics e. based on share of wallet; treat all customers identically

b. the same; provide more value to their best customers

In addition to merchandise and payments, information flows throughout a supply chain. Which of the following statements are a good characterization of the flow of information in a supply chain? a. customers will send and receive information from stores and manufacturers b. distribution centers will send and receive information directly from customers c. a manufacturer will send and receive information from buyers, stores, and distribution centers d. stores will send and receive information only from manufacturers e. manufacturers will send and receive information only from fulfillment centers

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

Tesla Motors, manufacturer of luxury electric automobiles, represents a(n) ________ because it manufactures its own cars in Fremont, California, and it operates its own retail stores in high-foot-traffic locations such as malls and shopping streets a. independent marketing channel b. conventional marketing channel c. corporate vertical market system d. horizontal channel e. indirect marketing channel

c. corporate vertical market system

Yvonne represents a manufacturer who makes unique, high-end handbags. When making a recommendation about potential retail partners, what should be Natalie's first consideration? a. what prices will customer be willing to pay? b. what assortments of product will customers want? c. what is the appropriate advertising strategy? d. how likely is it for certain retailers to carry this product? e. when will customers want this product?

d. how likely is it for certain retailers to carry this product?

Internet buyers are sometimes surprised to see online retailers using information about their past purchases to customize promotions targeted to them the next time they visit the retailer's website. The retailer is using the information to a. reward customer loyalty b. create traffic in their brick and mortar stores c. comply with homeland security requirements d. increase the share of wallet from their best customers e. shift from a general merchandise retailer to a private label retailer

d. increase the share of wallet from their best customers

In the four Ps of marketing, ________ refers to all the activities required to get the right product to the right customer when that customer wants it a. product b. packaging c. partnership d. place e. promotion

d. place

Personal selling is particularly important for retailers selling a. discount items b. trend or fashion items c. online services d. products that are complicated or expensive e. low costs services

d. products that are complicated or expensive

When a customer purchases a television at Best Buy, which of the following information flows in the supply chain are started? a. the sales associate records the UPC in the sales ledger b. the point of sale terminal records the sale and sends it to the manufacturer c. the purchase is added to the customers purchasing habit records d. the sale is transmitted to Best Buy's distribution center to adjust inventory data e. best buy's buyer aggregates sales at all stores and uses the information to alert the advertising company

d. the sale is transmitted to Best Buy's distribution center to adjust inventory data

If a firm declared that it wanted to develop a strategic relationship, but was unwilling to commit funds or any effort to make it succeed, there would be an obvious lack of a. a contractual arrangment b. common goals c. open communication d. mutual trust e. credible commitments

e. credible commitments

________ reduce costs and maintain low prices by buying opportunistically from manufacturers with excess inventory, offering limited assortments of household goods and groceries, as well as health and beauty aids a. specialty stores b. convenience stores c. factory outlets d. category killers e. extreme value retailers

e. extreme-value retailers

Yury is opening a financial consulting service for high-income retirees in his area. This target market is used to paying for quality and associates high quality with high prices. In this instance, Yury should probably not use a penetration pricing strategy because a. a low price might signal low quality b. he might be missing out on customers who would only pay less for his products c. he would have to determine zone pricing discounts d. the experience curve effect would drop unit costs too rapidly e. there are moderate barriers to competitive entry in the market

a. a low price might signal low quality

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that a. it is easier to lose customers with a price increase than to gain customers with a price decrease b. most consumers would rather skip buying a product than pay a higher price c. most consumers cannot remember what price they paid the last time they bought a particular product d. firms gain more customers with price decreases than they lose with price increases e. most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes

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

Juliannna wants her firm's gourmet snacks to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that a. rarely is the lowest-price offering the dominant brand in a market b. price wars are the way to become the dominant brand c. companies can gain market share by offering low quality products at a high price d. prestige products need to be competitively priced e. total value equals total cost minus variable costs leading to price escalation

a. rarely is the lowest-price offering the dominant brand in a market

Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all customers see the same value in a product. To analyze how many units will be sold at any given price point, marketers draw on a. a sales orientation b. a demand curve c. multiple regression analyses d. target return strategies e. the law of averages

b. a demand curve.

Yury is opening a financial consulting service for high-income retirees in his area. This target market is used to paying for quality and associates high quality with high prices. In this instance, Yury should probably not use a penetration pricing strategy because a. there are moderate barriers to competitive entry in the market b. a low price might signal low quality c. he might be missing out on customers who would only pay less for his products d. the experience curve effect would drop unit costs too rapidly e. he would have to determine zone pricing discounts

b. a low price might signal low quality

One of the difficulties associated with value-based pricing is that a. costs used in this method are difficult to compute b. it necessitates a great deal of consumers research to be implemented successfully c. value depends on variable costs and not fixed costs d. everyday low pricing has neutralized the impact a price on consumers purchase decisions e. only the creator of a new product can fully understand its value to consumers

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

One of the difficulties associated with value-based pricing is that a. everyday low pricing has neutralized the impact of price on consumers purchase decisions b. it necessitates a great deal of consumer research to be implemented successfully c. costs used in this method are difficult to compute d. only the creator of a new product can fully understand its value to consumers e. value depends on variable costs and not fixed costs

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

Because there are many firms in monopolistic competition markets, a. everyone is a price taker b. the many competitors will focus on product differentiation c. government often encourages consolidation to reduce the number of competitors d. products do not have to consider the reactions of rival firms e. price controls may be implemented

b. the many competitors will focus on product differentiation.

If a penetration pricing strategy results in lower per-unit cost, competitors might be discouraged from entering the market because a. profits would increase too rapidly b. they would likely need to produce a large volume quickly in order to compete c. a high/low cost based pricing strategy will not work d. they would be able to advertise only to the same target market as the firm that introduced the original product e. selective consumer demand will increase gross profit margins

b. they would likely need to produce a large volume quickly in order to compete

If a penetration pricing strategy results in lower per-unit cost, competitors might be discouraged from entering the market because a. selective consumer demand will increase gross profit margins b. they would likely need to produce a large volume quickly in order to compete c. a high/low cost based pricing strategy will not work d. profits would increase too rapidly e. they would be able to advertise only to the same target market as the firm that introduced the original product

b. they would likely need to produce a large volume quickly in order to compete

Especially in the fashion industry where styles and trends change rapidly, a quick response system can a. allow manufacturers to introduce unpopular styles and still be successful b. increase cross docking promotional effectiveness c. align deliveries more closely with actual sales d. reduce logistical overlay e. allow retailers to better forecast long term demand

c. align deliveries more closely with actual sales

Yesterday, Marya overheard a surprisingly unpleasant encounter between the manager of the hardware store where she works and a sales rep who sells a well-known line of tools. The sales rep insisted that his tools should be more prominently displayed and that a better assortment would mean more sales. The manager had other plans and told him so, and the conversation turned into a loud argument. What Marya observed was an example of a. retail strategy tension b. sales tactics c. channel conflict d. passive aggressive behavior e. a failure of EDI processes

c. channel conflict.

In many high-end resort markets, Westin hotels compete directly with Crown Plaza hotels. When it comes to pricing, Westin tends to charge its guests similar rates to what the Crown Plaza hotels charge. Westin is using a ________ pricing strategy a. target return b. target profit c. competitive parity d. maximizing profits e. sales oriented

c. competitive parity

Kaelin owns a lawn maintenance business. From experience, Kaelin has found that Kubota equipment lasts almost twice as long as competitors' machines. For Kubota, Kaelin's perception about its products makes ________ pricing a logical choice a. reference based b. improvement value c. cost of ownership d. cost based e. market based

c. cost of ownership

More accurate sales forecasts are possible when retailers ________ rather than ________. a. survey every current customer; create one forecast for a distribution center b. forecast for each store; create one forecast for a distribution center c. create one forecast for a distribution center; survey every current customer d. survey all current customers; forecast for every store e. create one forecast for a distribution center; survey every current customer

c. create one forecast for a distribution center; survey every current customer

What makes a high/low pricing strategy appealing to sellers? a. it allows the seller to market as an "everyday low price leader" b. it allows sellers to capture the most profit from a new product or service c. it attracts two distinct market segments d. it doesn't require the seller to continually offer sales or deep discounts e. it reduces the need for slotting and advertising allowances

c. it attracts two distinct market segments

Frannie's Housewares has set very low prices for its products in an attempt to drive its competitor, George's Housewares, out of business. This is known as a. monopolistic pricing b. price fixing c. predatory pricing d. bait and switch e. price discrimination

c. predatory pricing

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is a. cross price elastic b. price elastic c. price inelastic d. derived demand inelastic e. status quo elastic

c. price inelastic.

Because manufacturers with JIT systems produce merchandise closer to the time of sale, they can a. effectively eliminate the need for a dispatcher b. organize cooperative agreements among competing manufacturers to reduce oversupply c. replace independent supply chains with corporate supply chain d. reduce inventories needed to satisfy retailers' demand e. use exclusive geographic territories to centralize production

d. reduce inventories needed to satisfy retailers' demand

The local sports store may purchase outswim-related products only during the winter months because the manufacturer offers a better price to the sports store. This type of pricing tactic is known as a a. slotting allowance b. flexible price c. customary discount d. seasonal discount e. cash discount

d. seasonal discount

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

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

Ike manages a Shoney's restaurant. He is considering staying open later in the evening. For Ike, the variable costs associated with staying open longer hours will include a. property taxes b. rent on the restaurant building c. advertising costs d. routine maintenance e. hours worked by cooks

e. hours worked by cooks

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that a. most consumers cannot remember what pice they paid the last time they bought a particular product b. firms gain more customers with price decreases than they lose with price increases c. most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes d. most consumers would rather skip buying a product than pay a higher price e. it is easier to lose customers with a price increase than to gain customers with a price decrease

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

Price lining is a. the most common implementation of a quantity discount at the consumer level b. a price reduction offered on products and services to stimulate demand during off peak seasons c. the reduction retailers take on the initial selling price of the product or service d. a discount on the price of specific items when they're purchased e. setting a price floor and a price ceiling for a line of products and then setting price points in between to represent differences in quality

e. setting a price floor and a price ceiling for a line of products and then setting price points in between to represent differences in quality