mar test 4

Which of the following is NOT one of the activities carried on in a distribution center? Coordinating inbound transportation Receiving, checking, storing, and cross-docking Distributing paychecks and paystubs for retail employees Getting merchandise floor ready Coordinating outbound transportation

Distributing paychecks and paystubs for retail employees

Which of the following is NOT one of the activities carried on in a distribution center? Coordinating outbound transportation Distributing paychecks and paystubs for retail employees Receiving, checking, storing, and cross-docking Coordinating inbound transportation Getting merchandise floor ready

Distributing paychecks and paystubs for retail employees Distribution centers do all of these things except distribution of paychecks.

Which type of store is small and offers a limited merchandise assortment at very low prices? convenience stores extreme value retailers limited assortment supermarkets outlet stores specialty stores

Extreme value retailers are small, full-line discount stores that offer a limited merchandise assortment at a very low price.

__________ are likely to target low-income consumers who demand national brands, but cannot afford to buy large-sized packages. Category killers Department stores Specialty stores Extreme value retailers Warehouse club stores

Extreme value retailers are small, full-line discount stores that offer a limited merchandise assortment at very low prices.

Because market and operating conditions are all very similar, marketers' pricing strategies should be uniform.

False Market and operating conditions are very different from one target market to another, requiring different pricing strategies.

______________ systems are designed to deliver smaller shipments of merchandise on a more frequent basis to retailers. Cross-docking Lead time JIT UPC CPFR

JIT "Just-in-time" (JIT) and "quick response" both refer to inventory management systems designed to ship smaller quantities more frequently.

Which of the following is a TRUE statement about distribution centers? They are appropriate for all retailers, from the largest to the smallest. They always involve a pull marketing strategy. Distribution center space is typically more expensive than retail space. They are the quickest way to get all products to retailers. They enable retailers to carry less merchandise in individual stores.

They enable retailers to carry less merchandise in individual stores. Distribution centers enable the retailer to carry less merchandise in individual stores, which results in lower inventory investments systemwide. If the stores get frequent deliveries from the distribution center, they need to carry relatively less extra merchandise as backup stock. Retail store space is typically much more expensive than space at a distribution center, and distribution centers are better equipped than stores to prepare merchandise for sale.

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as an indicator of the variety. an indicator of quality. a measure of the income effect. a measure of scarcity. a reflection of status quo pricing.

an indicator of quality. Price is often used as an indicator of quality, as in the saying, "You get what you pay for."

Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering as perceived by the consumer. in order to minimize bundling charges. as recognized by competitors. relative to production costs. when the product is produced.

as perceived by the consumer. Value-based pricing methods consider the consumers' perceived value.

CPFR refers to _________ inventory management systems. corporate partnering, facilitation, and replenishment centralized planning, factoring, and receiving collection, partnering, franchising, and receiving collective preferential forecasting and returns collaborative planning, forecasting, and replenishment

collaborative planning, forecasting, and replenishment

Wholesalers sell to all of the following EXCEPT consumers. manufacturers. businesses. retailers. industrial users.

consumers Wholesalers connect channel members together, including businesses and manufacturers, but they do not sell to consumers.

Brian, an industrial equipment sales rep, purchases a quick snack to eat on the way to work. He buys lunch while on the road visiting customers, and grabs bread and milk on the way home. Brian probably does the majority of this shopping at a conventional supermarket. category specialist. warehouse club. convenience store. drugstore.

convenience store Brian probably makes these purchases in convenience stores in the midst of his busy life.

In a(n) __________ marketing channel, none of the participants has any control over the others. corporate cooperative contractual conventional administered

conventional independent

Compared to other pricing methods, __________ pricing is relatively simple. cost-based reference-based improvement value value-based cost of ownership

cost-based Cost-based pricing is relatively simple because it requires only that the firm understand its cost structure and set profit or ROI objectives.

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 target return strategies. multiple regression analyses. a demand curve. the law of averages. a sales orientation.

demand curve Demand curves evaluate how price changes affect consumers' purchase decisions, and in effect they measure consumers' different value perceptions.

If you walk into a __________, you will likely find a broad variety of merchandise, deep assortment, and customer service, with everything divided into what appears to be a collection of specialty shops. department store category specialist discount store specialty store off-price retailer

department store Department stores carry many categories of merchandise, organized into departments that seem like small specialty shops.

The break-even point is estimated by dividing fixed contribution per unit by variable costs. dividing fixed costs by contribution per unit. dividing variable costs by fixed costs. multiplying revenue per unit times the quantity sold. multiplying fixed costs by contribution per unit.

dividing fixed costs by contribution per unit.

Anbinh Fashions is launching a new line of one-of-a-kind designer jewelry. Each piece is handcrafted, and production volumes will be very low. To emphasize the unique nature of this jewelry, Anbinh Fashions will probably choose _________ distribution. monopolistic luxury intensive selective exclusive

exclusive Anbinh Fashions should use exclusive distribution. This will reinforce the unique nature of the jewelry, and will also match the low production volumes.

Production of the DeLorean car, made famous in the film Back to the Future, never got above 25,000 units during its lifetime. Automobile industry analysts estimate that production of this car needed to reach around 300,000 units to achieve the __________, a decrease in unit cost as product volume increases. cumulative bundling benefit slotting allowance benefit experience curve effect improvement value effect price fixing return

experience curve effect The experience curve refers to a drop in unit cost as the quantity sold increases.

If Brandon buys hats for his store for $5 each and sells them for $15 each, he is using a keystoning pricing strategy.

false A keystoning strategy involves selling a product for twice the price paid for it. In this case, a keystoning strategy would call for Brandon to sell the hats for $10 each.

Brands that have developed loyal customers have a higher price elasticity of demand.

false Brands with loyal customers have lower price elasticity of demand; in other words, demand will decrease more slowly as price goes up.

At the break-even point, profits are maximized.

false Breakeven analysis determines the point at which revenues and expenses are equal; in other words, the quantity of a product that must be sold in order to have a $0 profit.

Some retailers require their suppliers to ship merchandise ___________, thus eliminating the time and expense associated with ticketing and marking. synthesized flattened floor-ready aggregated lead time synchronized

floor-ready "Floor-ready" refers to merchandise that has already been ticketed and marked with price and identification labels.

Full-line discount, category specialist, and specialty stores are all types of __________ retailers. special appeal price sensitive limited demand general merchandise food

general merchandise carry wide range of products

nternet 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 shift from a general merchandise retailer to a private-label retailer. reward customer loyalty. comply with Homeland Security requirements. create traffic in their brick-and-mortar stores. increase the share of wallet from their best customers.

increase the share of wallet from their best customers Online retailers are using browsing and purchase behavior to customize promotions and recommendations, with the hope that customers will increase their spending with the retailerin other words, increase their share of wallet.

Retailers often perform ticketing and marking functions in their distribution centers rather than in their retail stores because ticketing and marking is often too complex for sales personnel to manage. done in conjunction with supply chain promotional allowances. inefficient and distracting. the responsibility of the logistics department and not the marketing department. the responsibility of the dispatcher.

inefficient and distracting Before going out onto a sales floor, merchandise must be ticketed and markedin other words, price and identification labels must be created and attached. This time-consuming job better suited to a distribution center than to a retail store with little behind-the-scenes space for such activities.

Price skimming focuses on selling products to __________ and __________ in the consumer adoption process model. early majority and late majority late majority and laggards early adopters and early majority innovators and early adopters laggards and innovators

innovators and early adopters There are two primary new product pricing strategies: skimming, which focuses on selling at a high price to the innovators and early adopters on the diffusion of innovation curve; and market penetration, which focuses on selling at a low price in order to gain market share as quickly as possible.

One reason marketers of new, innovative products often start out with a price skimming strategy rather than a market penetration strategy is that few consumers understand a penetration strategy. it is easier to lower prices than to raise them. price skimming is legal while price penetration is not. few marketers understand pricing. a price skimming strategy lowers the value for consumers.

it is easier to lower prices than to raise them There are two primary new product pricing strategies: skimming, which focuses on selling at a high price to the innovators and early adopters on the diffusion of innovation curve; and market penetration, which focuses on selling at a low price in order to gain market share as quickly as possible. Skimming is often preferred since it is easy to gradually lower prices over time, but difficult to increase them after introduction.

Supermarkets often offer great deals on milk, beef, or eggs to get customers into their stores, knowing that many customers will also purchase items that have higher markups for the store. These supermarkets are using a __________ pricing tactic. bundling cumulative quantity discount leader seasonal allowance price lining

leader Leader pricing is a retail pricing tactic that offers a small number of in-demand items at low prices in order to bring customers into the store, in the hopes that they will buy other items too.

Supermarkets often offer great deals on milk, beef, or eggs to get customers into their stores, knowing that many customers will also purchase items that have higher markups for the store. These supermarkets are using a __________ pricing tactic. price lining cumulative quantity discount leader bundling seasonal allowance

leader Leader pricing is a retail pricing tactic that offers a small number of in-demand items at low prices in order to bring customers into the store, in the hopes that they will buy other items too.

__________ pricing tactics lower the price of a product below cost. Cost-based Loss leader Zone Regular Fixed

loss leader While leader pricingsetting prices of a few items lower than usual to bring customers into a storeis a common practice, if the prices go below cost, it becomes loss leader pricing, an unethical tactic.

With more frequent shipments associated with quick response (QR) systems, a retailer is more likely to have what customers want. more likely to add extra floor-ready merchandise. less likely to use radio frequency identification tags. more likely to engage in predatory pricing behavior. likely to have lower shipping costs.

more likely to have what customers want. A quick response system allows smaller, more frequent deliveries of goods that are matched to recent sales. In this way, as trends change, the retailer will not have a store full of older products, but can instead adapt quickly to changing consumer preferences.

Bertone's Office Supplies has decided to branch out from its existing stores. It plans to start sending out a catalog, and also to sell its products online. Bertone's is adopting: selective distribution. exclusive distribution. a multichannel strategy. a service retailing philosophy. an extreme value strategy.

multichannel strategy is when a company uses multiple sales channels, such as stores, catalogs, and the Internet.

Developing pricing strategies for __________ is one of the most challenging tasks a manager can undertake. cost-based pricing seasonal rebate items new products quantity discounts zone pricing products

new products New product pricing is very challenging because there is generally little data about consumer responses to different prices. In contrast, when an updated version of an existing product is introduced, all the knowledge about pricing for the existing product can be used when pricing the new product.

If you were a marketer for a clothing manufacturer and you wanted to improve revenues from irregulars, production overruns, and returns, you would be attracted to using category specialists. supercenters. department stores. specialty stores. off-price retailers.

off-price retailers To be able to sell at prices 20-60 percent lower than the MSRP, off-price retailers buy opportunistically from manufacturers with excess inventory at the end of the season.

In a corporate vertical marketing system, participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain. transaction selling is the norm, with the invisible hand guiding the overall functioning. there is no common ownership, and the dominant member has significant power to impose its ideas and objectives. conflict tends to be a major problem. independent firms join together formally to decide how the marketing channel will operate.

participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain. A corporate vertical marketing system is one in which all members of the marketing channel are part of the same corporation, which helps to coordinate efforts and minimize conflict.

Cross-price elasticity is the change in quantity of a product demanded divided by the change in its elasticity. percentage change in quantity demanded of product A compared to the percentage change in price of product B. change in quantity of a product demanded divided by the change in its price. percentage change in quantity of a product demanded divided by the percentage change in its price. change in price of product A divided by change in quantity demanded for product B.

percentage change in quantity demanded of product A compared to the percentage change in price of product B. Cross-price elasticity looks at the impact of a change in one product's price on demand for another product. The two products might be substitutes or complementary products.

John 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 perform many different channel functions themselves. spend more money wastefully. have less control in the channel. use more independent salespeople. are generally less efficient.

perform many different channel functions themselves. Larger, more sophisticated channel members (such as large manufacturers) are likely to perform many channel functions for themselves instead of using intermediaries. They are large enough to be able to achieve economies of scale, increasing efficiency and reducing costs.

If a 1 percent decrease in price results in more than a 1 percent increase in quantity demand, demand is derived demand inelastic. cross-price elastic. price inelastic. price elastic. status quo elasticity.

price elastic If a 1 percent price decrease results in, say, a 1.1 percent increase in demand, price elasticity is equal to 1.1/-1 = -1.1. Price elasticity of less than -1.0 reflects elastic demand.

Because there are many firms with similar products in purely competitive markets, advertising is heavily used. price is determined by the laws of supply and demand. firms find it easy to build strong, distinct brands. consumers develop personal preferences. the many competitors will focus on variable cost pricing.

price is determined by the laws of supply and demand. Since products in purely competitive markets are not differentiated, price tends to fluctuate based on supply and demand.

When Toyota introduced its Scion line of cars, the lowest priced model was listed for $15,000 while the highest priced model was listed for $21,000, with two or three other list prices in between. Toyota used a __________ pricing approach. noncumulative quantity discount market penetration zone loss leader price lining

price lining Price lining offers products across a range of prices.

Personal selling is particularly important for retailers selling to younger consumers and in big-box stores. in extreme value retailing. products that are complicated or expensive. online services. discount items.

products that are complicated or expensive. Sales personnel are especially helpful for complex and/or expensive products, since the greater risk will lead customers to seek help.

If firms price their products too low, it may result in lower costs. result in inelastic demand. increase contribution per unit. create a premium pricing effect. signal poor quality.

signal poor quality. A price that is too low may communicate that the product is of poor quality.

Retailing __________ the supply chain. sits at the end of maximizes the length of is in the center of focuses on production in creates rigidity in

sits at the end facing the consumer

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy. competitive parity status quo sales orientation target return target profit

target return A target return strategy focuses on a particular return on investment target.

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy. status quo target return competitive parity target profit sales orientation

target return A target return strategy focuses on a particular return on investment target.

The more substitutes that exist in a market, the easier it will be to utilize a target profit pricing strategy. the greater the income elasticity for each product. the lower the price elasticity for each product. the more sensitive consumers will be to changes in the price of a particular product. the more likely the market will be characterized as an oligopoly.

the more sensitive consumers will be to changes in the price of a particular product. Substitutes, by offering reasonable alternatives, typically make consumers more sensitive to price changes.

The difference between a coupon and a rebate is that the manufacturer handles coupons while retailers handle rebates. there is no difference. the retailer handles coupons while manufacturers handle most rebates. coupons are for cents or dollars off while rebates are for percentages off the listed price. coupons are always for greater amounts off than rebates.

the retailer handles coupons while manufacturers handle most rebates. Consumers redeem coupons at the retail store; most rebates are handled by the manufacturer and consumers must mail in a request.

3/10, n/30 means a 3 percent discount if paid in full within 10 days, or the net amount is due in 30 days.

true

In the four Ps of marketing, Place refers to all the activities required to get the right products to the right customer when that customer wants it.

true

One of retailers' most fundamental activities is providing the right mix of merchandise and services that satisfies the needs of the target market.

true To be successful, retailers must find the right balance of merchandise assortment and services offered.

Marketing channel relationships evolve when the parties have complementary goals.

true Supply chains require cooperation to operate efficiently. If the partners have conflicting goals, there may be channel conflict.

When a retail store rarely sells deeply discounted or sale products, it is known as "everyday low pricing."

true With an EDLP strategy, companies stress the continuity of their retail prices at a level somewhere between the regular, non-sale prices and deep discount sale prices their competitors may offer.

If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

true customers in a given market but their products are differentiated.

One of the benefits of offering a size discount to consumers is they will purchase more of a marketer's product and experience the experience curve effect. will be less likely to switch brands. will be able to take advantage of zone pricing benefits. will not fall prey to predatory pricing. earn a cash discount.

will be less likely to switch brands Size discounts refer to pricing that rewards the consumer for buying larger packages of a product by offering a lower unit price. For example, a gallon of milk is usually cheaper by the ounce than a quart of milk. By enticing the customer to buy more of the product, they may use it for longer and will be less likely to buy a competitor's product.

Clark Manufactured Housing Company 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. horizontal cumulative uniformed delivered zone noncumulative

zone With zone pricing, shipping costs vary based on the destination.