BA370 Test 3

Samson rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Samson, the contribution per unit is

$80

When Apple's famous 1984 "Big Brother" ad aired during the Super Bowl, it reached an estimated 500 million viewers. It aired only once on commercial television, but was seen in later years in at least 10 television programs recalling great commercials. For its target audience, the frequency of this ad is measured as

1

What differentiates a distribution center and a fulfillment center?

A distribution center sends goods to company stores.

When Dream Home Solutions began building custom houses in a large subdivision with other builders, the company priced its homes slightly higher than its competitors and promoted the added quality features found in Dream Home's houses. Dream Home was using a(n) ________ pricing strategy.

Competition-based

Dollar General and Dollar Tree are examples of full-price discount retailers.

False

For market penetration pricing to work, the product or service must be perceived as breaking new ground in some way.

False

Sarita wants to quickly establish a dominant market share for her new line of organic candles. To do this, she will likely use a penetration pricing strategy.

False

Sellers using an EDLP pricing strategy often communicate their strategy through the creative use of a reference price.

False

Slotting allowances are used to get retailers to feature a manufacturer's product in their advertising and promotional efforts.

False

The larger and more sophisticated the channel member, the more likely that it will use supply chain intermediaries. Group starts

False

Universal product codes (UPCs) are used to describe products for inventory taxation purposes.

False

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

False

When a firm has a particular profit goal as its overriding concern, it will use target return pricing to meet the profit objective.

False Target return pricing is used when firms want to produce a specific return on their investment; target profit pricing is implemented when a firm has a particular profit goal as its overriding objective.

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.

Marketing communications managers usually state their media objectives in terms of ________, which represents reach multiplied by frequency.

GRP

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

It attracts two distinct market segments.

Return to question Item 10 Which of the following is true of competitive parity?

It does not allow firms to exploit the unique opportunities or problems they confront in a market

Ursula owns a pet sitting service. She recently paid a web developer to build a special version of her company website for use on smartphones. Customers will now be able to easily place orders for pet sitting on their cell phones. This is an example of

M commerce

In U.S. markets, there are many substitute products for Lucky Charms cereal, suggesting the price elasticity of demand for Fruit Loops is high.

True

Assume the demand for electricity, a necessity with few substitutes, is −0.2. If the electric company raised its rates by 10 percent, we would expect

a 2 percent decrease in quantity demanded

Because of its size and relative power, Walmart can easily impose controls on small manufacturers, such as Brown Betty Dessert Boutique, but with large, powerful suppliers such as P&G, the control is more balanced between parties. Walmart's various marketing channel relationships offer examples of different forms of a(n) ________ marketing system.

administered vertical

In the AIDA model, the think stage is the ________ stage.

awareness

Proving that a company has engaged in the deceptive ________ practice is not easy.

bait and switch

In developing marketing strategies, why is price often the most challenging of the four Ps to manage?

because it is the least understood element of the marketing mix

Katrina could not afford expensive furnishings but wanted a stylish home. After researching many options, she went to a local Target to purchase the trendy lamps, pillows, and art featured on its ads and website. As a consumer, which retailing challenge was Katrina likely responding to?

brand image consistency

A useful technique that enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales is called

break-even analysis

An advantage of Internet-based technologies is they

can be directed to a specific consumer.

When a firm is just starting out or entering a new market, it often

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

In the IMC communication process, the ________ is the medium that carries the message.

communication channel

For an advertiser, the target audience can be understood as

consumers designated by research as its focal market

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

convenience store

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?

convenience stores

For retailers, when making decisions regarding place, a key ingredient to success is

convenient locations

________ are combating competitive pressures by providing better value with private-label merchandise; adding new value-added services such as online ordering and delivery options; and providing a better shopping experience.

conventional supermarkets

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.

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.

cost of ownership

Nazira would like to know which, if any, of her firm's IMC efforts are working. She could use ________ to provide feedback from her efforts.

coupon redemption rates

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

More accurate sales forecasts are possible when retailers ________ rather than ________.

create one forecast for a distribution center; survey every current customerCorrect

A "no-haggle" pricing policy is a type of _____ pricing strategy.

customer-oriented

Integrated marketing communications include

direct marketing

Leena will be a bridesmaid next summer, and she purchased her dress online. The next time she turned on her computer, Leena was surprised to see special offers for matching accessories. This is an example of which marketing strategy?

direct marketing

Gianni made pies and sold them from her food truck to local businesses. This is an example of a(n)

direct marketing channel.

The break-even point is estimated by

dividing fixed costs by contribution per unit.

When it comes to measuring consumers' price sensitivity, product prices are viewed as either

elastic or inelastic

Return to question Item 16 Juan's family has owned and operated a small chain of conventional supermarkets for many years. Competition from a variety of other kinds of retailers has adversely affected the business. To address the new competitive reality, Juan wants to apply what he recently learned as a marketing major and he has recommended that his family's business should

emphasize fresh, locally sourced perishables.

Ambyah 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, Ambyah Fashions will most likely choose ________ distribution.

exclusive

Ellis is debating how to allocate the IMC budget for his new ski equipment store. He knows having knowledgeable salespeople in his store can simplify buyers' purchase decisions. He should also consider that, compared to other IMC alternatives, personal selling is

expensive

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

experience curve effect

As the number of communication media has increased, the task of understanding how best to reach target customers has become easier.

false

Bennett is trying to promote his new, self-published financial guidebook. By directly promoting it to readers in Wall Street Journal, he is using a push strategy. Group starts

false

Consumer goods firms such as Lancôme often use reminder advertising to convince consumers to take action—switch brands, try a new product, or even continue to buy the advertised product.

false

Quick response (QR) inventory systems allow retailers to maximize their inventory holdings.

false

The cost of communicating directly with a potential customer is low compared with other forms of promotion

false

Most manufacturing and retailing marketers worry constantly about whether or not their IMC efforts are paying off. They assess various forms of ________ to determine what is working and what is not.

feedback

National manufacturers and retailers often pay a service provider to monitor television ads around the country, to ensure that their ads are shown in their entirety during the time frames that were purchased. This service provider is monitoring for IMC noise problems associated with

flaw in the medium

A ________ advertising schedule uses heavy advertising during some periods followed by periods of no advertising.

flighting

Full-line discount, category specialist, and specialty stores are all types of ________ retailers.

general merchandise

Nathan is glad his company finally converted to an RFID system. Now, he can be sure that can be sure that

he is aware of special promotions.

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

improvement value

How does a retail distribution center supporting a store channel most obviously differ from one supporting an Internet channel?

in quantity of items shipped

Hayla is the marketing manager for a fast-food restaurant chain. She uses a target return pricing strategy because her firm's primary objective is to

increase profits

The California Raisin Advisory Board used to run ads featuring "The California Raisins," a fictitious R&B musical group composed of dancing raisins that boogied to the song "I Heard It Through the Grapevine." The ads, which were hugely popular and which gave rise to a line of raisin-themed merchandise, were designed to encourage raisin consumption. This campaign was an example of

institutional advertising

Predatory pricing

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

A strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy

is supported by consistent advertising and distribution strategies.

Which of the following retail stores would emphasize personal selling the most as part of the firm's promotional efforts?

jewelry store

Marissa is driving down Interstate 95 on her way from New England to Florida and sees a billboard saying, "South of the Border Restaurant and Motel is just 100 miles away." Marissa has never heard of South of the Border before. After seeing the sign, she will most likely need additional exposure to the product before deciding whether to stop at South of the Border. This is an example of

lagged effect

Compared to conventional supermarkets, warehouse clubs have

lower level of service

Anthony is working on an advertising campaign to promote downtown businesses. He knows the increasing number of advertising communication channels available and changes in consumers' media usage

make his job more difficult.

While JIT systems have many benefits, they

make the logistics function more complicated.

In the past, ________ controlled supply chains.

manufacturers

Rory was nervous about making the ________. He knew it was likely to be the largest expense in the advertising budget.

media buy

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

monopolistic

In a vertical marketing system, if the system is ________, conflict is less likely to occur.

more formal

A(n) ________ discount is based on the amount purchased in a single order

noncumulative quantity

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

off price retailers

________ offer an inconsistent assortment of brand-name merchandise at low prices.

off price retailers

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.

online chats

What problem has developed as a result of increased package delivery?

package porch thieves

Cross-price elasticity is the

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

Which element of the marketing mix specifically deals with supply chain management?

place

The ________ terminal records the purchase information and electronically sends it to the buyer at corporate office.

point of sale

Advertising agencies often provide the IMC function of comparing their customer's target audience with the viewer, listener, or reader profile of the communication channel being considered. The agency is most likely trying to avoid noise problems associated with

poor choice of medium

Because there are many firms with similar products in purely competitive markets,

price is determined by the laws of supply and demand.

The contribution per unit is

price minus variable cost per unit.

Because there are only a few firms in markets with oligopolistic competition,

price wars may occur

Roberto wants customers in his specialty tobacco store to feel at home, as if they were in their personal smoking den. He uses lighting, music, and soft chairs to create a "look and feel" that will get customers to relax and return. Roberto is focusing on which aspect of the marketing mix?

promotion

Whenever the major beverage companies develop a new product, they advertise it heavily using television and print media. These efforts are designed to

pull the product into retail stores through consumer demand.

________ is an inventory management system that delivers less merchandise on a more frequent basis than in traditional inventory systems.

quick response

Each year in December, Anheuser-Busch runs television ads featuring the Clydesdale horses pulling a stagecoach with an Anheuser-Busch logo. The message is low-key, wishing everyone well during the holiday season. This is an example of ________ advertising.

reminder

Traditionally, marketers have seen the role of ________ as generating short-term results, whereas the goal of ________ was to lead to long-term results.

sales promotion; advertising

Abdul's firm has set corporate direction to become one of the leaders in each of its significant market segments. It was Abdul's job to examine the firm's pricing strategy to determine how to maximize market share, even at the expense of profits in the short run. What kind of company objective would guide Abdul's effort?

sales-oriented

Stores like Home Depot and Costco act as wholesalers when they

sell to contractors or restaurant owners.

Which of the following is most likely to be characterized by pure competition in the United States?

soybeans

Steve managed an auto parts store in the 1990s. At that time, stockouts—failure to have the parts auto mechanics needed to do their work that day—increased the likelihood of the mechanics becoming customers of competing auto supply stores. To avoid this problem and keep his business customers, Steve most likely

stockpiled inventory, adding to the cost of providing auto parts.

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

storage

A ________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

target return

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

the insights of store personnel.

A reference price might be considered deceptive if

the reference price has been inflated or is fictitious.

Return to question Item 13 Who usually makes the final decision regarding the use of distribution center versus direct store delivery?

the retailer

Which of the following is considered a major consideration in determining an advertising budget?

the role of advertising in overall promotional objectives

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

the same; provide more value to their best customers.

One product strategy used by retailers to differentiate themselves from competitors is

the use of private-label brands.

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.

________ are included in the full price of a product or service.

travel costs

It is primarily the retailer's responsibility to make sure customers' expectations are fulfilled.

true

Marketing channel management and supply chain management are virtually the same

true

A customer orientation toward pricing implicitly invokes the concept of

value

Walmart's customers have come to expect to find P&G products in stores, and P&G depends on Walmart to purchase a good portion of its output to sell to its own customers. This scenario represents the first phase of a

vertical marketing system.

Return to question Item 6 The level of difficulty a manufacturer experiences in getting retailers to purchase its products is determined by the degree to which the channel is

vertically integrated