E3 Mkt

_______ products are products whose demands are positively related and as such, they rise or fall together.

Complementary

When Walmart communicates to consumers that, for any given group of often-purchased items, its prices will tend to be lower than that of any other competitor, Walmart is exhibiting what type of pricing strategy?

EDLP

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

Extreme-value retailers

__________ 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.

Extreme-value retailers

What is one of the drawbacks of using a price skimming strategy?

Firms must consider the high costs associated with producing a small volume of product.

What makes a high/low pricing strategy appealing to sellers?

It attracts two distinct market segments.

__________ can purchase merchandise at substantial discounts from the original wholesale prices because they do not ask the suppliers for advertising allowances or markdown adjustments.

Off-price retailers

What is the difference between a coupon and a rebate?

The retailer handles coupons while manufacturers handle most rebates.

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 demand curve.

The saying "leaving money on the table" is associated with

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

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 specialty store.

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

a specific brand of soft drink

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

align deliveries more closely with actual sales.

Ted is glad his company finally converted to an RFID system. Now, he no longer needs to go through all the new goods to make sure what they ordered was what they received. Ted is responsible for __________ in his company.

checking

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

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

Considering what you know about their target markets and merchandise, which of the following retailers is least likely to have an online presence?

convenience stores

Retailers use _____ because they believe their use will induce customers to try new products, convert first-time users to regular users, increase purchases, and protect market share.

coupons

All of the following are required to build a successful strategic relationship except

creation of a joint venture.

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

credible commitments.

The Service Gaps Model is designed to highlight those areas where

customers believe they are getting less or poorer service than they should.

All of the following are advantages of using a distribution center except

customers know they are dealing with a more sophisticated and financially well-off operation if the firm uses a distribution center.

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

customers to try before they buy.

Marketers can take advantage of the variable nature of services by

customizing services to meet customers' needs exactly.

To meet or exceed customers' expectations, marketers must

determine what those expectations are.

Marketing channels and supply chains comprise various buying entities that form relationships with one another. The basic motivating factor in these interactions is

each party wants something from the others.

The price elasticity of demand for a teeth-whitening kit is −1. The market for this product is considered

elastic

The price elasticity of demand for a teeth-whitening kit is −1. The market for this product is considered

elastic.

The Broadmoor Hotel in Colorado Springs, Colorado, maintains its five-star rating by focusing on five service characteristics: reliability, responsiveness, assurance, empathy, and tangibles. Employees are instructed to always address a guest by name, if possible. To accomplish this, employees are trained to listen and observe carefully to determine a guest's name. Which service characteristic is this an example of?

empathy

Empowerment of employees helps address the delivery gap because

employees directly involved with the customer can respond effectively at the moment the problem occurs.

Using technology and __________ are two ways a delivery gap can be reduced in size.

empowering employees

The __________ occurs when unit cost drops as the quantity sold increases.

experience curve effect

Empowerment is when __________ are authorized to make decisions to help their customers and, as a result, service quality generally improves.

frontline employees

A customer who is shopping for fashionable but relatively low-cost merchandise in a pleasant environment is shopping at a(n)

full-line discount store.

One approach marketers are using to reduce service __________ is to replace people with machines whenever appropriate.

heterogeneity

The old restaurant saying "You are only as good as the last meal served" reflects the fact that services are

heterogeneous.

Traditionally, retailers treated all their customers ________, but today, successful retailers

identically; provide more value to their best customers.

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

innovators; early adopters

One reason marketers of new, innovative products often start out with a price skimming strategy rather than a market penetration strategy is that

it is easier to lower prices than to raise them.

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

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

Firms can close the __________ gap by matching customer expectations with actual service through use of marketing metrics.

knowledge

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

knowledge of customer demand.

For marketers using a price skimming strategy, once the initial demand is met for new and innovative products, they will likely

lower the price to capture the next most sensitive market segment.

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

markdown.

In a vertical marketing system, if the system is _______, the less likely conflict will occur.

more formal

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

new products

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

off-price retailers

For a price skimming strategy to work, the product or service must

offer consumers some new benefit currently unavailable in alternative products.

As an omnichannel retailing operation matures, as in the case of Walmart, what tends to happen to its organizational structure?

operational integration of all channels

Cross-price elasticity is the

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

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

prescription drugs

There is an old saying "If you have to ask the price of a yacht, you cannot afford it." Products like yachts are most likely to be associated with

prestige pricing.

French luxury goods manufacturer and retailer Hermès is known for making expensive leather goods. But paying $300,168 for a handbag at auction, which is over the standard retail price of $280,000, is extraordinary, and not for the casual shopper. The handbag is considered a

prestige product.

In omnichannel retailing, what visible element must often be adjusted because of competition faced in different channels?

pricing

Because services like cruises and car rentals are perishable, many marketers use

pricing strategies to match supply with demand.

Personal selling is particularly important for retailers selling

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.

quick response (QR)

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

quickly build sales and market share.

Julia 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

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

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

reduce inventories needed to satisfy retailers' demand.

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products by

reducing the price elasticity of demand.

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.

referent

When the delivery of a service fails to meet customers' expectations, a __________ gap exists.

service

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

specialty stores.

By setting appropriate service standards and measuring service performance, firms can attempt to close a __________ gap.

standards

Retailers address the conflict between consumers wanting or needing only one item and manufacturers wanting to produce and ship in quantity by providing

storage

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

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

When a manufacturer chooses one or more retailing partners, the overriding consideration must be

the greatest possible customer convenience and satisfaction.

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

the insights of store personnel.

According to a typical demand curve, the higher the price,

the lower the quantity consumers will buy.

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

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

Value-based pricing can be difficult to implement because

the way consumers perceive value changes often.

One important reason manufacturers like rebates is that

their redemption rates are low.

Services marketing managers have learned that more employees will support a quality-oriented process if

they are involved in setting the goals.

Franchising is the most common type of contractual _______ marketing system.

vertical

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

vertical marketing system