MGT 375 Block #2

Mallory started a lemonade stand. She has the following cost structure to her business: · Her cups cost her $.05 each. · She spent $2 on materials to make signs. · The lemonade mix and ice cost her $.20 per cup. · She spent $10 on materials to build a lemonade stand. Mallory sold bottles of her lemonade to Tommy Wiseacre for $.50 each. Tommy would take the bottles and sell them to people at the neighborhood park for $1.00 each. Tommy uses a ____ markup percentage for his pricing.

50% Markup = half (50%) of Tommy's selling price.

Mallory started a lemonade stand. She has the following cost structure to her business: · Her cups cost her $.05 each. · She spent $2 on materials to make signs. · The lemonade mix and ice cost her $.20 per cup. · She spent $10 on materials to build a lemonade stand. Mallory was charging $1.00 for each cup of lemonade. Her sister Ally told her that her price of $1 per cup of lemonade was too high - and she should really be selling them for $.50 each. Mallory figured out that this cut in price would cut profit margin per cup by ____.

67% Profit dropped from $.75 to .25

Computer Supply, Inc. (CSI) is a large maker of computer accessories. The accessories are manufactured in Chicago, shipped by train to branch warehouses across the United States, and then distributed to customers by truck. CSI tries to maintain an 85 percent customer service level—that its, it tries to deliver 85 percent of its order within one day after the orders are received. Of the following, which would be the optimal customer service level for CSI? A. It depends on the firm's objectives and the needs of its target market. B. the maximum customer service level that can provided C. whatever can most minimize physical distribution costs D. any service level that will minimize the cost of lost sales E. any level that keeps inventory costs lower than transportation costs

A

Which of the following statements about how customers view physical distribution is accurate? A. Customers think of physical distribution in terms of the customer service level it provides. B. Customers are incredibly in-tune with physical distribution and play a critical role in its functioning. C. Physical distribution has nothing to do with customers, so they do not have any view on it. D. How a product was moved or stored is an essential component in a customer's decision to purchase it. E. Even when there are problems with it, customers are completely unaware of physical distribution.

A Customers don't care how a product was moved or stored or what some channel member had to do to provide it. Customers think in terms of the physical distribution customer service level—how rapidly and dependably a firm can deliver what they, the customers, want. PD is mostly invisible to customers, unless something goes wrong and gets their attention.

A vitamin company is marketing its nutritional supplements to its target market of young adults and college students. It runs several TV spots during shows this demographic watch. Its spokesperson is an unfit-looking middle-aged man whom the company discovers young adults do not find as a believable source of nutritional advice. The company also runs ads in the home and garden magazine Better Homes and Gardens and the business magazine Fortune. Which of the following best characterizes the company's magazine advertisements? A. It has picked the wrong message channel for its target market. B. It is using different sources to reach its target market. C. It has eliminated the potential noise that may occur from its TV advertising. D. It is giving its customers feedback about the product. E. It has not effectively decoded the product for its customers.

A If the company is targeting young adults and college students, a home and garden and business magazine would not be effective message channels.

Which of the following statements about advertising is accurate? A. A firm's advertising strategy should be independent of its marketing strategy. B. Every advertising campaign should have clearly defined advertising objectives. C. Advertising campaigns should be launched regardless of strategy because they are only 50 percent effective anyway. D. The type of advertising a firm wants to do should dictate what its objective are. E. A proper guide for advertising campaigns is "Promote the product."

B

Which of the following statements about social media is accurate? A. Social media is a forum for earned media opportunities only. B. Social media has paid, owned, and earned media opportunities. C. Social media is a one-to-many model of communication. D. Social media is a completely free way for companies to promote themselves. E. Social media is no different from traditional media like television, magazines, and radio.

B

A marketing manager for a big industrial company hired an outside researcher to conduct a few focus group interviews with a small group of customers to get some ideas about potential new product development. After conducting two focus groups, the researcher urges the company to immediately develop a new machine that 40 percent of the focus-group participants said they would be interested in buying. With regard to the researcher's conclusions, which of the following statements is the most accurate? A. Focus groups are representative of the target market. B. The focus group may not be a representative sample. C. The conclusions are based on quantitative research. D. The researcher accurately defined the company's problem. E. Such secondary data are helpful to solve a company's problem.

B Because the focus group includes a relatively few customers, it may not be representative. Quantitative summaries of qualitative results can be misleading. Qualitative research can provide good ideas, but other approaches—based on more representative samples and objective measures—are often needed to test the hypotheses.

Of the following options, Home Depot can best be described as a A. department store. B. single-line mass merchandiser. C. department store. D. convenience store. E. mass merchandiser.

B Stores like Home Depot that focus on a single product line and use the mass-merchandising approach would best be described as single-line mass merchandisers.

Fresh Right, a distributor of produce grown in the South, is evaluating its physical distribution options for getting its products to grocery stores across the United States. Which of the following would help Fresh Right select its PD system? A. electronic data interchange B. the total cost approach C. the mass merchandising concept D. management contracting E. total quality management

B The total cost approach involves evaluation each possible PD system and identifying all the costs of each alternative. It allows firms to select a PD system with the lowest total cost for the right service level.

Right Ship Clothing (RSC) is a small producer of "outdoor fashions." RSC has an especially loyal following among boaters, who seek out its line of fashionable Gore-Tex products. Based on your answer to the question above, with regard to Place decisions for RSC, which of the following would be the best advice? A. RSC should be sold at locations where a broad assortment of products is available. B. RSC probably does not require widespread distribution. C. RSC should be widely distributed so that its products are available when the need strikes the consumer. D. RSC should be distributed to low-cost retailers. E. RSC should be sold in locations where other, completely unrelated products are available.

B As a specialty good, consumers are likely to search out RSC, so the higher cost of widespread distribution may not be necessary.

Nina Juarez is a district sales representative for a beverage producer. Her job is to call on supermarkets, grocery stores, and convenience stores to build special displays, inform store managers of new products, provide merchandising assistance, review customer complaints, and to occasionally suggest special orders for the stores that she visits. How is Nina's selling task best described? A. technical specialist B. missionary salesperson C. customer service rep D. order taker E. order getter

B Missionary salespeople are supporting salespeople who work for producers—calling on intermediaries and their customers. They try to develop good will and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries.

Ciao Footwear designs and manufactures a high-quality line of fashionable shoes that are popular among young professional women. These target customers know the product and actively go out of their way to find the shoes. The line is quite expensive, and it is sold through specialty shops that handle only this type of fashion shoe (including competing brands). Ciao will only work with retailers who agree to stock a large variety of sizes and colors of Ciao shoes. They also must agree to promote the Ciao line very aggressively. In return, Ciao agrees not to distribute its line to other retailers within the specialty shop's immediate trading area. For its young professional women target market, Ciao has which level of brand familiarity?

Brand insistence

A car dealership purposely lists the retail prices of its cars $15,000 higher than they actually are (or that anyone has ever paid for them), and then puts them on "sale" for the actual retail price. Which of the following statements best characterizes this action? A. The car dealership is free to set its minimum retail price. B. This is price fixing and it is illegal in the United States. C. This is a phony list price and may be illegal under the Wheeler Lea Amendment. D. This is price discrimination and may be illegal under the Robinson-Partman Act. E. This push money allowance may violate the provision of the Robinson-Partman Act that prohibits special allowances.

C

When considering customer service levels for physical distribution, which of the following considerations is most important? A. transportation costs B. inventory matters C. target market needs D. product cost E. goods storage

C

The most important difference between a merchant wholesaler and an agent wholesaler is that merchant wholesalers A. help primarily in buying and selling. B. are more common in international trade. C. take title to the products that they handle. D. generally operate at a lower cost. E. provide fewer functions to customers.

C Merchant wholesalers own the products they handle.

Hilltop, Inc. acquired a few agricultural processing plants to help grow its business. Along with the plants came large quantities of already processed vegetables that Hilltop needs to "get rid of quickly" so that it can start processing and selling its Hilltop-brand produce. Hilltop sees that there is great opportunity for its processed produce products in Western Europe. They engage Salespro, which sells other grocery-related items from other producers in the Western European market, to help them navigate the unfamiliar market conditions. Hilltop pays Salespro a commission on the product that is actually sold. Which of the following best describes Salespro? A. drop-shipper B. limited-function wholesaler C. single-line wholesaler D. manufacturers' agent E. general merchandise wholesaler

D A manufacturers' agent sells similar products for noncompeting producers—for a commission on what is actually sold. Salespro is acting as an export agent, which is a manufacturers' agent that specializes in international trade and can help firms adjust to unfamiliar market conditions in foreign countries.

Computer Supply, Inc. (CSI) is a large maker of computer accessories. The accessories are manufactured in Chicago, shipped by train to branch warehouses across the United States, and then distributed to customers by truck. CSI tries to maintain an 85 percent customer service level—that its, it tries to deliver 85 percent of its order within one day after the orders are received. Of the following, which would most likely happen if CSI tried to maximize its customer service level to 100 percent? A. Its warehouse cost would decline. B. Its transportation cost would decline. C. Its inventory cost would remain steady. D. Its total cost would rise. E. Its cost of lost sales would be unaffected.

D Because of the trade-offs that occur between costs, customer service level, and sales, providing the highest level of customer service would likely increase total costs.

Which of the following accurately describes how physical distribution decisions are made? A. They are exclusively concerned with transportation costs. B. They are based on the difference between inventory costs and transportation costs. C. They can't be made until the cost of lost sales is definitively determined. D. They are based on trade-offs among costs, customer service level, and sales. E. They are dependent on customer feedback and seek to provide the highest service level possible without regard to cost.

D It usually costs more to provide higher levels of service.

Home Depot used low prices to generate high sales volume and profitability. Which of the following would most help them to measure the "high sales volume" part of this approach? A. contribution-margin approach B. customer retention rate C. markup and margin percent D. stockturn rate E. break-even analysis

D Mass-merchandising focuses on low prices and fast turnover. To monitor that turnover, retailing managers utilize a measure of stockturn rate, which is the number of times the average inventory is sold in a year.

A marketing manager for a big industrial company hired an outside researcher to conduct a few focus group interviews with a small group of customers to get some ideas about potential new product development. After conducting two focus groups, the researcher urges the company to immediately develop a new machine that 40 percent of the focus-group participants said they would be interested in buying. Based on the researcher's conclusions, which would be the best advice for the marketing manager? A. Consult with R&D to begin development of the new machine. B. Hire more researchers to verify the data interpretation. C. Reconvene the focus groups and get more problem-specific data. D. Define the problem more specifically and do a situation analysis. E. Create a customer journey map.

D Would allow for a better idea of what needs researched

Which of the following statements regarding the macro-marketing system is most accurate? A. It gives people false values and promotes materialism. B. Its use of advertising generally raises prices and wastes resources. C. It fails to consider the needs of individual consumers. D. It manipulates consumers to buy anything that is produced. E. Its attempts to satisfy consumer needs in a dynamic and on-going way.

E

Mallory started a lemonade stand. She has the following cost structure to her business: · Her cups cost her $.05 each. · She spent $2 on materials to make signs. · The lemonade mix and ice cost her $.20 per cup. · She spent $10 on materials to build a lemonade stand. Assuming Mallory sells cups of lemonade for $1.00 each and has the cost structure noted above, how many Mallory needs to sell _____ cups to break even?

FC = $10 + $2 = $12, VC = $.25 per cup, FCCPU = Price - VC (from data given). BE = FC/FCCM = $12/$.75 = 16.

Joy Jardin is opening up a knitting shop that caters mostly to women of the Baby Boom generation. She is unfamiliar with social media but would like some sort of social media presence for her shop where can she promote sales, offer coupons, and let customers know about knitting workshops and classes. To start slow, she wants to focus on one social media platform where she will reach the most customers. Which of the following platforms would be Joy's best choice?

Facebook Given the shop's demographic and the fact that Joy wants to work on one platform that will reach the most customers, Facebook would be the best choice.

A car wash business invested in a new kind of car-washing unit which is more mechanized that the usual ones, but also has higher fixed costs. The business charges $5.00 per car and the variable cost per car is estimated at $3.00. The total fixed cost per year (including depreciation, interest, taxes, fixed labor costs, and other fixed costs) is estimated at $360,000. What is the BEP in units?

Fixed contribution per unit = price - variable cost = $5.00- $3.00 = $2.00 Fixed cost = $360,000 BEP (units) = $360,000/$2.00 = 180,000

A car wash business invested in a new kind of car-washing unit which is more mechanized that the usual ones, but also has higher fixed costs. The business charges $5.00 per car and the variable cost per car is estimated at $3.00. The total fixed cost per year (including depreciation, interest, taxes, fixed labor costs, and other fixed costs) is estimated at $360,000. What is the BEP in dollars?

Fixed contribution per unit = price - variable cost = $5.00- $3.00 = $2.00 Fixed cost = $360,000 BEP (units) = $360,000/$2.00 = 180,000 BEP (dollars) = 180,000 x $5.00 = $900,000

Each day, Chef Raj takes a picture of his daily special. He doesn't have a lot of time but would like to post the picture on social media to entice customers to visit his restaurant. Which of the following social media platforms would be the best option for Chef Raj use?

Instagram Instagram works well for small businesses because it is less time-consuming to take pictures as compared to writing stories or posts. Businesses in the restaurant, clothing, fashion, travel, and entertainment fields often post images on Instagram to maintain or stoke customer interest in their goods and services.

James River Paper (JRP) produces a wide range of paper products. JRP recently introduced Absorb, a new double‑thick paper towel aimed at families with children. Primarily an industrial products manufacturer, JRP had produced paper towels for a few large grocery chains to sell as their own dealer brand. However, Absorb was its first attempt at marketing a consumer product under its own brand. So far, results are not encouraging. Only a few wholesalers have taken on the line. Most are very reluctant to handle Absorb, claiming that retail shelves are already overcrowded with paper towels. Which of the following best describes the ideal level of market exposure for Absorb paper towels?

Intensive distribution Intensive distribution is selling a product through all responsible and suitable wholesalers and retailers who will stock the product. It is often used for convenience products.

Which of the following explains a potential danger of average cost pricing?

It may yield profits but not necessarily maximum profits. It ignores demand. It does not consider cost variations at different levels of output. It ignores competitors' costs and prices.

Fresh Right, a distributor of produce grown in the South, is evaluating its physical distribution options for getting its products to grocery stores across the United States. In terms of its marketing mix, Fresh Right's evaluation of different PD systems is a matter of

Place

The usual retail price of an item is $500.00. The manufacturer's cost to produce the item is $200.00. Retailers take a 50 percent markup and wholesalers take a 10 percent markup. What is the manufacturer's price?

Since the wholesaler is making a 10 percent markup on a selling price of $250, the wholesaler's markup is $25, and thus the wholesaler pays the manufacturer $225.

A skateboard company is trying to make inroads with beginner skateboarders ages 12 to 18. It would like to post photos and videos of people using its boards on social media. Of the following, which would be the most effective social media platform to reach the skateboard company's target market?

Snapchat For firms targeting Millennials and Gen Z, the fast-growing photo/video messaging app is Snapchat.

James River Paper (JRP) produces a wide range of paper products. JRP recently introduced Absorb, a new double‑thick paper towel aimed at families with children. Primarily an industrial products manufacturer, JRP had produced paper towels for a few large grocery chains to sell as their own dealer brand. However, Absorb was its first attempt at marketing a consumer product under its own brand. So far, results are not encouraging. Only a few wholesalers have taken on the line. Most are very reluctant to handle Absorb, claiming that retail shelves are already overcrowded with paper towels. Which of the following product classes best describes paper towels for its target market, families with children?

Staple Staples are products that are bought often, routinely, and without much thought—like paper towels.

The usual retail price of an item is $500.00. The manufacturer's cost to produce the item is $200.00. Retailers take a 50 percent markup and wholesalers take a 10 percent markup. What is the manufacturer's approximate markup percentage?

The manufacturer's cost to produce the item is $200. Since the selling price to the wholesaler is $225, the dollar markup is $225-$200 = $25. Thus, the markup percentage is $25/$225 x 100 = 11.1%.

The usual retail price of an item is $500.00. The manufacturer's cost to produce the item is $200.00. Retailers take a 50 percent markup and wholesalers take a 10 percent markup. The markup is calculated on selling price. What is the wholesale price?

The retailer pays $500 minus the $250 markup, or $250. That is the wholesaler's price.

The usual retail price of an item is $500.00. The manufacturer's cost to produce the item is $200.00. Retailers take a 50 percent markup and wholesalers take a 10 percent markup. The markup is calculated on selling price. What is the retailer's markup in dollars?

The retailer's markup is 50 percent of the $500 selling price, or: $500 x 50% = $250.

For which of the following purposes is a break-even analysis used?

To evaluate alternative prices. Break-even analysis can be a very useful tool for evaluating alternative prices—especially when the prices being considered are fairly realistic from a demand point of view. Break-even analysis evaluates whether the firm will be able to cover all of its costs with a particular price.

Which of the following best describes the "micro-macro dilemma"?

What might be good for some producers or consumers may not be good for the whole society. Because what is "good" for some produces or consumers may not be "good" for the whole society, compromises must be made in the macro-marketing system to balance the needs of society and the needs of individual producers and consumers.

A company is charged by the FTC for an "unfair or deceptive act in commerce." The FTC is likely bringing its charge pursuant to the

Wheeler Lea Amendment

Right Ship Clothing (RSC) is a small producer of "outdoor fashions." RSC has an especially loyal following among boaters, who seek out its line of fashionable Gore-Tex products. The boaters who seek out RSC are also interested in purchasing other boat-related items like fishing tackle and coolers, which RSC does not produce. This is best described as

a discrepancy of assortment. Discrepancy of assortment is the difference between the lines a typical producer makes and the assortment final consumers or users want. Wholesalers and retailers must adjust these discrepancies.

As a marketing manager for PSI, you are asked to develop a behavior change marketing strategy to combat the HIV epidemic. You have defined the problem as: "Data shows that 1 in 7 Kenyans are HIV positive." You conduct research on your computer, make phone calls, and search government data. This process is referred to as

a situation analysis A situation analysis is an informal study of what information is already available in the problem area. It can help define the problem and specify what, if any, additional information is needed.

You are now collecting data that is specific to the problem that you have identified. Which of the following is the least likely to be part of this step of the marketing research process?

a situation analysis A situation analysis uses information that is already available. In Step 3 of the marketing research process, the researcher gathers his or her own primary data to learn what people think about some topic or how they behave under some conditions. This include observations, surveys, qualitative questioning, and focus groups.

Sassy Girl Cosmetics gives retailers a price reduction (2 percent of sales) if they promote its products locally. Which of the following best describes this?

advertising allowance Advertising allowances are price reductions that are given to firms in the channel to encourage them to advertise or otherwise promote the supplier's products locally.

Home Depot allows customers to buy something online and then pick it up at one of its physical locations. This is an example of

an omnichannel selling approach Omnichannel is a multichannel selling approach in which a retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. It is designed to appeal to a single consumer who prefers to shop across channels.

Right Ship Clothing (RSC) is a small producer of "outdoor fashions." RSC has an especially loyal following among boaters, who seek out its line of fashionable Gore-Tex products. Many small retailers display RSC products along with other small items that can be used on boats like dry bags, sunscreen, and lifejackets. The retailers' actions can best be described as

assorting Assorting means putting together a variety of products to give a target market what it wants. This is usually done by those closest to the final consumer or user—retailers or wholesalers who try to supply a wide assortment of products for the convenience of their customers.

A key consideration in our macro-marketing system is to

balance societal needs with individual needs.

Average-cost pricing means setting a price

based on a reasonable markup to the average cost of a product. A manager usually finds the average cost per unit by studying past records. Dividing the total cost for the last year by all the units produced and sold in that period gives an estimate of the average cost per unit for the next year.

The sales quantity where a firm's total cost will just equal its total revenue is referred to as the

break-even point.

Hilltop, Inc. acquired a few agricultural processing plants to help grow its business. Along with the plants came large quantities of already processed vegetables that Hilltop needs to "get rid of quickly" so that it can start processing and selling its Hilltop-brand produce. Hilltop is looking for a wholesaler that will connect them with a buyer or buyers who will buy the already processed vegetables in the type and quantity of that it has. What type of wholesaler would best suit Hilltop's need?

broker Brokers bring buyers and sellers together. They usually have a temporary relationship with the buyer and seller while a particular deal is negotiated.

When a company's advertising makes a specific brand comparison using actual product names, it is using ________ advertising.

comparative

The fast-food chain wants its ads to show the size difference between its "Big Beefy" burger and another chain's "Deluxe Beef" burger. Decide what would be the best type of advertising.

comparative advertising Comparative advertising means making specific brand comparisons—using actual product names.

What type of advertising tries to develop selective demand for a specific brand?

competitive advertising

In order to set the most profitable price, firms should

consider the demand and cost curves together. Ignoring demand is a major weakness of average-cost pricing.

Fasteners Plus ("FP") sells fasteners and other small hardware to small hardware stores. FP offers its customers a price structure in which the prices of their products go down with each purchase the customer makes throughout the year. This best describes a

cumulative quantity discount Cumulative quality discounts apply to purchases over a given period and the discount usually increases as the amount purchased increases. Cumulative discounts encourage repeat buying by reducing the customer's cost for additional purchases.

A computer software manufacturer needs someone to respond to questions from consumers who call in on a toll-free line for assistance installing their software. Indicate which kind of salesperson would be most appropriate.

customer service rep Customer service reps work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. Customer service reps are the salespeople who promote a customer's next purchase by being sure that the customer is satisfied with a previous purchase.

In order for average-cost pricing to work,

demand must be constant and predictable.

Mediamax, Ltd. has just announced the introduction of a revolutionary new device called the Ultimedia. Aimed primarily at the "serious consumer" market, it is a multipurpose piece of technology that which has never been seen by the market before. Sam, a self-proclaimed "tech guru," read a review in a technology magazine. Until that time, Sam had never heard about the Ultimedia but, as he often does, he set out to research the product and the technology on the Internet. Although he didn't know anybody else who owned the product, he purchased it. Of the following, which group should the Ultimedia marketers be most concerned with selling?

early adopters Early adopters are well respected by their peers and often are opinion leaders. Marketers should be very concerned with attracting and selling to the early adopter group. Their acceptance is crucial because the early majority look to the early adopters for guidance.

Mediamax, Ltd. has just announced the introduction of a revolutionary new device called the Ultimedia. Aimed primarily at the "serious consumer" market, it is a multipurpose piece of technology that which has never been seen by the market before. Sam, a self-proclaimed "tech guru," read a review in a technology magazine. Until that time, Sam had never heard about the Ultimedia but, as he often does, he set out to research the product and the technology on the Internet. Although he didn't know anybody else who owned the product, he purchased it. Sam's sister waited until a lot of her friends purchased an Ultimedia and liked it before she committed to purchasing one. She would best be described as part of the

early majority The early majority avoids risk and waits to consider a new idea until after many early adopters have tried it—and liked it.

Sportwear, Inc., a company that makes athletic hijabs for Muslim athletes, donated its product to high school track athletes in need. The press ran a story about the donation, and it resulted in a lot of media attention. The company also maintains a Facebook page, where it highlighted the publicity about the donation and also promotes its other modest activewear. Recently, Sportwear took out a full-page advertisement in Sports Illustrated and Women's Fitness magazines that featured an athlete in one of their hijabs coming across the finish line at a USA Track & Field event. Zara, a Muslim athlete with a large social media following, also recently posted a picture of herself on Instagram in one of Sportwear's colorful hijabs along with a recommendation of Sportwear's products to her friends and followers. Which of the following best describes the media Sportwear received for its donation?

earned media Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties such as journalists or customers. The company or brand is assumed to earn the attention of journalists or customers because there is an interesting story to tell or because others would value this information.

A vitamin company is marketing its nutritional supplements to its target market of young adults and college students. It runs several TV spots during shows this demographic watch. Its spokesperson is an unfit-looking middle-aged man whom the company discovers young adults do not find as a believable source of nutritional advice. The company also runs ads in the home and garden magazine Better Homes and Gardens and the business magazine Fortune. Among other claims, the company's print advertisement claims that its supplement helps with achy joints. This causes many young adults to assume the product is not necessary for them. With regard to the advertisement, this is best described as a problem with

encoding Encoding is the source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver. Here, the source's message about its nutritional supplement used words that caused its target market to think that the product was not for them (decoding).

Mediamax, Ltd. has just announced the introduction of a revolutionary new device called the Ultimedia. Aimed primarily at the "serious consumer" market, it is a multipurpose piece of technology that which has never been seen by the market before. Sam, a self-proclaimed "tech guru," read a review in a technology magazine. Until that time, Sam had never heard about the Ultimedia but, as he often does, he set out to research the product and the technology on the Internet. Although he didn't know anybody else who owned the product, he purchased it. Sam would best be described as part of the

innovator

After a series of oil spills, the oil company wants to let customers and potential customers know about its commitment to the environment. Decide what would be the best type of advertising.

institutional advertising Institutional advertising tries to promote an organization's image, reputation, or ideas rather than a specific product.

Mediamax, Ltd. has just announced the introduction of a revolutionary new device called the Ultimedia. Aimed primarily at the "serious consumer" market, it is a multipurpose piece of technology that which has never been seen by the market before. Sam, a self-proclaimed "tech guru," read a review in a technology magazine. Sam's older brother, Bernie, was very suspicious of the new technology even after it seemed like everyone had it. He didn't see the need for it and held off buying an Ultimedia for a very long time. Eventually, some of his friends insisted that he get an Ultimedia, explaining that he was being left behind because everyone was using the Ultimedia to communicate with each other. Bernie would best be described as part of the

late majority

James River Paper (JRP) produces a wide range of paper products. JRP recently introduced Absorb, a new double‑thick paper towel aimed at families with children. Primarily an industrial products manufacturer, JRP had produced paper towels for a few large grocery chains to sell as their own dealer brand. However, Absorb was its first attempt at marketing a consumer product under its own brand. So far, results are not encouraging. Only a few wholesalers have taken on the line. Most are very reluctant to handle Absorb, claiming that retail shelves are already overcrowded with paper towels. Given this information, Absorb would best be described as a ______ brand.

manufactuer Manufacturer brands are brands that are created by producers like James River Paper.

Home Depot appeals to larger markets by offering low prices to consumers in order to get faster turnover and greater sales volume. This best exemplifies the A. mass-merchandising concept. B. scrambled merchandising theory. C. marketing research process. D. total cost approach. E. physical distribution concept.

mass-merchandising concept The mass-merchandising concept is the idea that retailers should offer low prices to get faster turnover and greater sales volume by appealing to larger numbers.

A temporary service agency is marketing a new idea in which customers pay a monthly fee and then have access to a pool of people who can provide secretarial services. The idea has been wildly popular in other areas of the country among small companies with less than 25 employees. The temporary service agency is the first to offer this service in the city. Indicate which kind of salesperson would be most appropriate.

order getter This secretarial service will be a new unsought product for the target market. The best salesperson would be someone who can interest potential clients in the idea and clearly explain the benefits of the service.

A pet supply store needs a person to work at its checkout counter. Indicate which kind of salesperson would be most appropriate.

order taker The chief task for this person would be to complete transactions customers have begun by coming to the store and making a selection.

Gary Grant works for SEP, a producer of parts that are used in the creation and repair of small engines. SEP has customers that build small engines for use in different equipment as well as those that work on the service side, servicing small engines. Gary's primary function is to seek out new customers that use small engines in their products. Recently, Gary established contact with a company that makes home generators and has arranged to give a sales presentation to them next month. With regard to SEP's customers that service small engines, these customers tend to routinely buy the same SEP items to help with their repairs. Gary checks in with them regularly to make sure they are satisfied and to see if they need anything. Gary's primary selling task at SEP is

order-getting Order getters are concerned with establishing relationships with new customers and developing new business. Order-getting means seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea.

Gary Grant works for SEP, a producer of parts that are used in the creation and repair of small engines. SEP has customers that build small engines for use in different equipment as well as those that work on the service side, servicing small engines. Gary's primary function is to seek out new customers that use small engines in their products. Recently, Gary established contact with a company that makes home generators and has arranged to give a sales presentation to them next month. With regard to SEP's customers that service small engines, these customers tend to routinely buy the same SEP items to help with their repairs. Gary checks in with them regularly to make sure they are satisfied and to see if they need anything. With regard to SEP's repair customers, Gary's selling task is best described as

order-taking Order takers sell to regular or established customers. Order-taking is the routine completion of sales made regularly to target customers. It usually requires ongoing follow-up to make certain that the customer is totally satisfied.

Sportwear, Inc., a company that makes athletic hijabs for Muslim athletes, donated its product to high school track athletes in need. The press ran a story about the donation, and it resulted in a lot of media attention. The company also maintains a Facebook page, where it highlighted the publicity about the donation and also promotes its other modest activewear. Recently, Sportwear took out a full-page advertisement in Sports Illustrated and Women's Fitness magazines that featured an athlete in one of their hijabs coming across the finish line at a USA Track & Field event. Zara, a Muslim athlete with a large social media following, also recently posted a picture of herself on Instagram in one of Sportwear's colorful hijabs along with a recommendation of Sportwear's products to her friends and followers. The company's Facebook page is an example of

owned media Owned media refers to promotional message generated by a brand communicated through a message channel the company directly controls, like Sportwear's Facebook page.

Sportwear, Inc., a company that makes athletic hijabs for Muslim athletes, donated its product to high school track athletes in need. The press ran a story about the donation, and it resulted in a lot of media attention. The company also maintains a Facebook page, where it highlighted the publicity about the donation and also promotes its other modest activewear. Recently, Sportwear took out a full-page advertisement in Sports Illustrated and Women's Fitness magazines that featured an athlete in one of their hijabs coming across the finish line at a USA Track & Field event. Zara, a Muslim athlete with a large social media following, also recently posted a picture of herself on Instagram in one of Sportwear's colorful hijabs along with a recommendation of Sportwear's products to her friends and followers. The magazine advertisements are examples of

paid media Paid media are messages generated by a company and communicated through a message channel the brand pays to access.

What type of advertising tries to develop primary demand for a product category rather than demand for a specific brand?

pioneer advertising Pioneering advertising is usually done in the early stages of the product life cycle; it informs potential customers about the new product and helps turn them into adopters.

In which of the following actions did a company that is charged under the Robinson-Patman Act likely engage?

price discrimination The Robinson-Patman Act makes illegal any price discrimination—selling the same product to different buyers at different prices—if it injures the competition.

A group of competing concrete companies joined together and decided that none of them would sell their concrete below a certain, mutually beneficial price. This is best described as

price fixing Price fixing is when competitors get together to raise, lower, or stabilize prices. It is considered conspiracy under the Sherman Act and the Federal Trade Commission Act.

In order to help move its new laptop, a consumer electronics firm offers its retailers money to give to their salesclerks to encourage them to aggressively sell its new product. In return, Compustore offers the members of its sales team $10 for each of the laptops that they sell. This is best described as a(n)

push money allownace Push money allowances are given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks to encourage them to aggressively sell certain items.

What type of advertising would be most useful when a product has achieved brand preference or insistence and the firm wants to reinforce previous promotion?

reminder advertising

Nike runs an ad that consists solely of a Nike swoosh superimposed over a picture of someone out for an early morning jog. Decide what would be the best type of advertising.

reminder advertising Reminder advertising tries to keep a product's name before the public. It is useful when the product has achieved brand preference or insistence.

Jason's Lumber sells and delivers seasoned firewood to customers in the northern parts of Maine, New Hampshire, and Vermont. It offers a 10 percent discount to any customer who orders and takes delivery of their firewood between May 1 and August 15. This is best described as a

seasonal discount Seasonal discounts are discounts that are offered to encourage buyers to buy earlier than present demand requires. The demand for firewood is likely to be less in the summer months, so Jason's offers a discount to encourage early buying.

Ciao Footwear designs and manufactures a high-quality line of fashionable shoes that are popular among young professional women. These target customers know the product and actively go out of their way to find the shoes. The line is quite expensive, and it is sold through specialty shops that handle only this type of fashion shoe (including competing brands). Ciao will only work with retailers who agree to stock a large variety of sizes and colors of Ciao shoes. They also must agree to promote the Ciao line very aggressively. In return, Ciao agrees not to distribute its line to other retailers within the specialty shop's immediate trading area. Which of the following best describes the ideal level of market exposure for Ciao shoes?

selective distribution Selective distribution is selling through only those intermediaries who will give the product special attention. It is used when widespread coverage is needed, but so is special attention from intermediaries.

Hilltop, Inc. acquired a few agricultural processing plants to help grow its business. Along with the plants came large quantities of already processed vegetables that Hilltop needs to "get rid of quickly" so that it can start processing and selling its Hilltop-brand produce. Hilltop plans to sell a lot of its product from the new plants to Grocery Guru, a wholesaler that carries fresh and processed produce for sale to grocery stores. Grocery Guru would best be described as a

single-line wholesaler A single-line merchandise wholesaler carries a narrower line of merchandise than general wholesalers. Grocery Guru only sells fresh and processed produce to grocery stores, so it can best be described as a single-line wholesaler.

A vitamin company is marketing its nutritional supplements to its target market of young adults and college students. It runs several TV spots during shows this demographic watch. Its spokesperson is an unfit-looking middle-aged man whom the company discovers young adults do not find as a believable source of nutritional advice. The company also runs ads in the home and garden magazine Better Homes and Gardens and the business magazine Fortune. In terms of the reaction by young adults to the company's spokesperson, this is best described as a problem of

source Customers evaluate the source of the message in terms of trustworthiness and credibility. Here, the salesperson does not appear to be a trusted source of nutritional information to the intended receiver, so the message is not being delivered.

A vitamin company is marketing its nutritional supplements to its target market of young adults and college students. It runs several TV spots during shows this demographic watch. Its spokesperson is an unfit-looking middle-aged man whom the company discovers young adults do not find as a believable source of nutritional advice. The company also runs ads in the home and garden magazine Better Homes and Gardens and the business magazine Fortune. The company recently discovered that customers who search for nutritional supplements online and end up on the company's website are often leaving after only looking at its homepage. In the customer-initiated communication process, this reflects a problem with the

source's message Companies must be prepared for customers who initiate communication. The company should work on its homepage and its message. Websites must have truly useful information or the customers will quickly click to something that can help them make a better purchase decision. Promotion needs to keep potential customers on the company's website so that they can learn about more of their offerings.

Right Ship Clothing (RSC) is a small producer of "outdoor fashions." RSC has an especially loyal following among boaters, who seek out its line of fashionable Gore-Tex products. With regard to the boaters mentioned in the scenario, RSC is most likely what type of product class?

specialty product

Ciao Footwear designs and manufactures a high-quality line of fashionable shoes that are popular among young professional women. These target customers know the product and actively go out of their way to find the shoes. The line is quite expensive, and it is sold through specialty shops that handle only this type of fashion shoe (including competing brands). Ciao will only work with retailers who agree to stock a large variety of sizes and colors of Ciao shoes. They also must agree to promote the Ciao line very aggressively. In return, Ciao agrees not to distribute its line to other retailers within the specialty shop's immediate trading area. Which of the following product classes best describes Ciao shoes for its young professional women target market?

specialty products

A manufacturer of specialized GPS applications that are used in new cars needs someone to call on automobile companies to explain to their engineers how the product works, how it can best be integrated into dashboard computer systems, and the advantages of their GPS applications over others. Indicate which kind of salesperson would be most appropriate.

technical specialist Technical specialists are supporting salespeople who provide technical assistance to order-oriented salespeople. They are often science or engineering graduates with the know-how to understand customer's applications and explain the advantage of the company's product.

Gary Grant works for SEP, a producer of parts that are used in the creation and repair of small engines. SEP has customers that build small engines for use in different equipment as well as those that work on the service side, servicing small engines. Gary's primary function is to seek out new customers that use small engines in their products. For his presentation to the generator manufacturer, Gary explained how SEP's products can help benefit the company but then turned his attention to the customer and asked them detailed questions about their needs. This is best described as

the consultative selling approach. The consultative selling approach involve developing a good understanding of the individual customer's needs before trying to close the sale. With this approach, the sales rep makes some general benefit statement to get the customer's attention and interest and then asks question and listens carefully to understand the customer's needs.

The idea that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level is referred to as

the physical distribution concept The physical distribution concept is based on the idea that lower costs and better service help increase customer value.

Macro-marketing is best understood as how

the whole marketing system operates. Macro-marketing describes how the whole marketing system operates, and is different from micro-marketing, which is how individual firms and channels operate.

Sportwear, Inc., a company that makes athletic hijabs for Muslim athletes, donated its product to high school track athletes in need. The press ran a story about the donation, and it resulted in a lot of media attention. The company also maintains a Facebook page, where it highlighted the publicity about the donation and also promotes its other modest activewear. Recently, Sportwear took out a full-page advertisement in Sports Illustrated and Women's Fitness magazines that featured an athlete in one of their hijabs coming across the finish line at a USA Track & Field event. Zara, a Muslim athlete with a large social media following, also recently posted a picture of herself on Instagram in one of Sportwear's colorful hijabs along with a recommendation of Sportwear's products to her friends and followers. Which of the following best describes Zara's Instagram post?

user-generated content User-generated content refers to any type of communication created by customers for other customers. It is a type of earned media.