EXAM #2 (CH 10-17)

(O10-2) Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

$25 ~$250,000/50,000+$20=$25~

(O10-2) A farm supply company plans to launch a new premium type of Vetgun with a unit cost of $270 and wants to earn a 10 percent markup on its sales. The selling price of the Vetgun is ________.

$300 ~$270/(1-0.1)=$300~

(O10-2) A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

25,000 ~$100,000/($12-$8)=25,000~

(O16-2) Sigma Inc. has 2,000 Type-A accounts, each requiring 35 calls per year, and 1,000 Type-B accounts, each requiring 15 calls per year. What is the sales force's workload?

85,000

(O13-3) ________ and ________ do not take title to goods, and they perform only a few channel functions.

Brokers; agents

(O10-2) What sets the ceiling for product prices?

Customer perceptions of the product's value

(O12-4) ________ are large and highly automated warehouses designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

Distribution centers

(O13-1) ________ are manufacturer-owned and operated stores that offer prices as low as 50 percent below retail on a wide range of mostly surplus, discounted, or irregular items.

Factory outlets

(O10-2) ________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.

Good-value

(O10-2) ________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

High-low

(O12-4) ________ involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Marketing logistics

(O11-2) Which of the following companies uses product bundle pricing? A) Photo Genie, which sells inexpensive cameras that run only on their own, expensive, batteries B) Tune Zone, which launched a range of mp3 player models, each priced according to its features C) Penguin's Parlor, which offers customers a 20 percent discount on their birthdays D) Green Thumb, which gives away free watering cans with the purchase of certain potted plants E) Panizza, whose combo meals are priced lower than its individual components sold together

Panizza, whose combo meals are priced lower than its individual components sold together

(O16-1) Which of the following is true with regard to personal selling? A) Personal selling entails personal presentations by a firm's sales force for the purpose of making sales and building customer relationships. B) Personal selling involves making personal requests to potential buyers to enter into short-term business relationships with firms. C) Personal selling distances the buyer from the seller and does not focus on building enduring relationships. D) An outside sales force is not involved in personal selling. E) Personal selling is a relatively new profession.

Personal selling entails personal presentations by a firm's sales force for the purpose of making sales and building customer relationships.

10) (O12-4) Which of the following is an example of a Third-party Logistics (3PL) provider? A) Walmart B) Target C) PepciCo D) UPS Business Solutions E) John Deere

UPS Business Solution

8) (O13-3) ________ includes all activities involved in selling goods and services to those buying for resale or business use.

Wholesaling

(O13-2) The lighting in Jake's Steak Restaurant is dim. The chairs are covered in leather and each table is covered with a white linen cloth. The colors are limited to earth tones with an occasional splash of red. Patrons cannot hear any kitchen noises, only a pleasant melody that seems familiar but unrecognizable. The smells are extraordinarily varied. This is a description of the restaurant's ________.

atmosphere

(O17-2) Spartan Sportsgear is a company that sells sports equipment for adventure sports. It recently launched ExtremeSpartan.com to showcase products and provide testimonials of famous adventure sports athletes who use Spartan's products. It also includes videos and blogs. Which of the following best describes ExtremeSpartan.com? A) branded community Web site B) digital catalog C) social network D) podcast E) blog

branded community web site

(O16-4) Which of the following is used to generate business leads, stimulate purchases, reward customers, and motivate salespeople? A) business plan B) SWOT analysis C) POP promotion D) benchmarking E) business promotion

business promotion

(O14-3) A manufacturer of a variety of technological devices asked its marketing department to develop inexpensive methods of building and maintaining brand awareness and excitement. The marketing department then recruited consumers who were early adopters of technological devices to spread the word about the company's new products. This is an example of ________.

buzz marketing

(O11-2) Using ________ pricing, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive.

by-product

(O11-2) Which of the following product mix pricing strategies involves pricing products that can only be used with the main product? A) by-product pricing B) product bundle pricing C) captive product pricing D) product line pricing E) optional product pricing

captive product pricing

(O15-1) When Verizon Wireless began offering the iPhone, it used its "Can you hear me now?" slogan to attack AT&T's rumored spotty service. This example best illustrates ________.

comparative advertising

(O14-4) Which of the following methods is used by companies to set their advertising budgets based on the industry average? A) percentage-of-sales method B) affordable method C) competitive-parity method D) objective-and-task method E) regression method

competitive-parity method

(O13-1) Sears, Target, and Kroger are examples of ________.

corporate chains

(O11-3) The New Age Gallery has three admission prices for students, adults, and seniors, even though all three groups are entitled to the same services. This form of pricing is called ________ pricing.

customer-segment

(O15-1) Which of the following is a major step in selecting advertising media? A) determining reach, frequency, and impact B) selecting message execution style C) developing a compelling creative concept D) deciding on format elements E) planning a message strategy

determining reach, frequency, and impact

(O12-1) Lifebelt Insurance sells insurance only through its door-to-door salespeople. What type of marketing channel does Lifebelt use?

direct

(O17-1) Amazon.com and GEICO approach customers via Web sites or mobile apps. This is an example of ________ marketing.

direct

(O17-4) Which of the following types of marketing involves sending out letters, brochures, samples, and DVDs to consumers' addresses? A) direct-response marketing B) direct-mail marketing C) direct digital marketing D) kiosk marketing E) online marketing

direct-mail marketing

(O17-2) Neal Murphy sells his company's unique products on television programs. He hosts a 30-minute show in which he demonstrates and explains the advantages of the product. At the end of the show, a toll-free number is displayed on the screen that can be used by viewers to place their orders for the product. Which of the following forms of advertising is evident here? A) direct-response television advertising B) telemarketing C) interactive marketing D) podcast marketing E) kiosk marketing

direct-response television advertising

(O10-2) Bon Vivant offers an assortment of exclusive French wines at incredibly low prices. These prices are neither limited-time offers nor special discounts, but represent the daily prices of products sold by Bon Vivant. This reflects Bon Vivant's ________ pricing strategy.

everyday low

(O12-3) Ocean Spray sells its air fresheners only through Ray's Drugs. This is an example of ________ distribution.

exclusive

(O12-2) The ________ organization is a common type of contractual relationship.

franchise

(O13-1) Which of the following statements best represents a contractual association between a manufacturer, wholesaler, or service organization and independent businesspeople who buy the right to own and operate one or more units in the system represented by the contract? A) corporate chain B) franchise C) voluntary chain D) retailer cooperative E) warehouse club

franchise

(O15-1) The number of times an average person in the target market is exposed to a message is known as the ________ of the message.

frequency

(O13-1) At Neiman Marcus, a first-class department store, customers shop for high-end products and they are assisted in every phase of the shopping process. Neiman Marcus is a ________.

full-service retailer

(O12-2) In a(n) ________, two or more companies at one level join together to follow a new marketing opportunity.

horizontal marketing system

(O14-2) Delia's is a clothing retailer that targets teenage girls. The company runs coordinated promotions for its catalogs, Web site, and retail outlets. It uses the same models in its catalog, print ads, and Web site. Delia's works to make sure its public relations activities as well as its sales promotions harmonize with its advertising in all aspects. From this information, we can infer that Delia's is using ________.

integrated marketing communication

(O12-3) Whitelight sells its toothpastes in many convenience stores across the country. This is an example of ________ distribution.

intensive

(O17-4) Music Mogul has arrangements with several stores and retail chains to place their DVDs and digital music machines in prime spots such as near billing counters and at store entrances. Consumers can buy DVDs by depositing payment or they can buy music online via the touch-screen interface on the machine. Which form of marketing is illustrated in this scenario?

kiosk marketing

(O15-2) One of the functions performed by a PR department is ________, which involves building and maintaining relations with legislators and government officials to influence legislation and regulation.

lobbying

(O11-1) In a bid to attract more customers in a market that has several competitors, Barrymore's Bakery slashed the prices of all its products by 50 percent. Managers at the firm reasoned that lower prices would draw in even more customers, making up for the reduction in price several times over. Which of the following pricing strategies are they using? A) market-skimming pricing B) market-penetration pricing C) captive-product pricing D) cash discount pricing E) by-product pricing

market-penetration pricing

(O11-1) When a company sets a high price for a new product with the intention of reducing the price in the future, it is using the ________ pricing strategy.

market-skimming

(O12-1) A ________ is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.

marketing channel

(O14-3) The AIDA model identifies the characteristics of an effective ________.

marketing message

(O17-3) Kirk's Comic Store has its own mobile app that users can download for free. The app lets users know about special events, discounts, and merchandise currently available in the store. Which of the following forms of marketing is exemplified from this scenario? A) social media marketing B) kiosk marketing C) direct-response television marketing D) mobile marketing E) direct-mail marketing

mobile marketing

(O13-1) Specialty stores carry ________ with ________ within them.

narrow product lines; deep assortments

(O13-4) Which of the following is NOT one of a wholesaler's channel functions? A) financing B) risk bearing C) transportation D) off-price retailing E) bulk breaking

off-price retailing

(O11-2) Which of the following product mix pricing strategies involves pricing additional or accessory products sold along with the main product? A) inclusive product pricing B) exclusive product pricing C) by-product pricing D) product bundle pricing E) optional-product pricing

optional-product pricing

(O14-3) Communication through a telephone call is considered a part of a(n) ________ communication channel.

personal

(O17-4) Which of the following is a type of identity theft that uses deceptive e-mails and fraudulent Web sites to fool consumers into revealing their personal data? A) bait-and-switch B) cyber spying C) viral marketing D) phishing E) spam

phishing

(O16-4) A five-foot high cardboard display of Terry the polar bear, mascot of Terry's protein shake, next to the shelf containing Terry's products in a supermarket is an example of a(n) ________.

point-of-purchase promotion

(O13-2) Springfield, a convenience store, has recently begun to redesign and restock its stores to offer a more upscale environment with products such as house wines and fresh foods. This information indicates that Springfield has most likely changed its ________.

positioning

(O16-3) Before calling on a prospect, the salesperson should learn as much as possible about the organization and its buyers. This step is known as ________.

preapproach

(O11-5) Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most likely guilty of ________.

predatory pricing

(O15-2) Kathy Champe, a public relations specialist for a regional chain of pharmacies, regularly contacts members of the local and statewide media with information about special events and charity fundraisers sponsored by her company. This is an example of the ________ function of public relations.

press relations

(O11-5) When sellers set prices after talking to competitors and engaging in collusion, they are involved in ________.

price fixing

(O16-2) Johnson Business Solutions maintains one sales force for its copy machines and a separate sales force for its computer systems. Johnson Business Solutions utilizes a(n) ________.

product sales force structure

(O16-3) In the ________ stage of the selling process, a company first identifies qualified potential customers.

prospecting

(O15-2) The owner of Second Avenue wants to establish a community clothing drive to collect clothes for a local children's shelter. The owner is planning to set up collection barrels outside Second Avenue. In this case, which of the following public relations tools is being used by the owner? A) press relations B) product publicity C) lobbying D) development E) public affairs

public affairs

(O14-1) Which of the following promotion tools involves building up a good corporate image and handling unfavorable stories and events? A) sales promotion B) personal selling C) direct marketing D) public relations E) advertising

public relations

(O15-2) Which of the following promotion tools involves building up a positive corporate image and handling unfavorable stories and events? A) sales promotion B) personal selling C) direct marketing D) public relations E) advertising

public relations

(O14-4) Using a(n) ________ strategy, the producer directs its marketing activities toward final consumers to induce them to buy the product.

pull

(O15-1) In the context of media timing, ________ means scheduling ads unevenly over a given time period.

pulsing

(O10-3) In Viña del Mar, Chile, a large number of shops specialize in selling the same quality of seafood products along the beach frequented by tourists. No individual shop dares charge more than the going price without fearing loss of business to other shops. This exemplifies ________.

pure competition

(O14-4) John Deere does very little promoting of its lawn mowers and garden tractors to final consumers. Instead, John Deere's sales force works with Lowe's, Home Depot, independent dealers, and other channel members, who in turn sell John Deere products to final consumers. According to this information, which of the following promotion mix strategies is being used by John Deere? A) public relations strategy B) direct marketing strategy C) push strategy D) blitz strategy E) pull strategy

push strategy

(O15-1) You receive a report that 68 percent of your target market has been exposed to your ad campaign during a given period of time. Which of the following aspects of media selection is represented by this information? A) frequency B) reach C) impact D) engagement E) qualitative value

reach

(O14-1) Which of the following promotion categories is most likely to include the use of displays, discounts, coupons, and demonstrations? A) sales promotion B) direct marketing C) horizontal diversification D) public relations E) advertising

sales promotion

(O16-1) A(n) ________ is an individual who represents a company to customers by prospecting, communicating, selling, servicing, information gathering, and/or relationship building.

salesperson

(O11-5) Price discrimination is legal when a ________.

seller can prove its costs are different when selling to different retailers

(O13-2) A ________ is a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit.

shopping center

(O17-2) Randy keeps getting unwanted and annoying e-mails from several marketing firms unknown to him. The number of these e-mails is alarmingly high in his inbox. Which of the following best describes these e-mails? A) malware B) adware C) Trojan D) firewall E) spam

spam

(O10-3) Companies using target costing ________.

start with an ideal selling price and then target costs that will ensure that the price is met

(O15-1) Which of the following is most likely an objective of informative advertising? A) build brand preference B) change customer perceptions of brand value C) encourage customers to switch brands D) suggest new uses for a product E) keep the brand in customer minds during off-seasons

suggest new uses for a product

(O17-4) Sales executives at Keiron Air Conditioners use phone directories to call customers and convince them to buy their air conditioners. Which form of direct marketing is used here?

telemarketing

(O16-2) In the ________, each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that region.

territorial sales force structure

(O14-1) A company's total marketing communications mix consists of a special blend of advertising, sales promotion, public relations, personal selling, and direct-marketing tools that the company uses to communicate customer value and build customer relationships. Which of the following terms best describes this set of communications tools? A) the product mix B) product line filling C) the promotion mix D) the price mix E) horizontal diversification

the promotion mix

(O16-4) Happy Pet is a large pet food company that has convinced the retailers and the wholesalers of the New England area to resell its products. Happy Pet promises to reimburse the advertising costs to its retailers and wholesalers for advertising its products. This is an example of a ________.

trade promotion

(O10-2) Costs that change with the level of production are referred to as ________.

variable costs

(O12-2) When KFC came into conflict with its franchisees over the brand's Unthink KFC repositioning, which emphasized grilled chicken over its traditional Kentucky fried chicken, KFC experienced ________ conflict.

vertical

(O17-2) Uptown-Clean Crew is a company that provides house-cleaning services in major urban and suburban areas. Marketers at Uptown-Clean Crew developed a short, humorous video promoting the company's services and posted it online. Soon the video was a rage as customers who saw the video found it hilarious and they passed it on to their friends and colleagues calling it the "Uptown comedy." Which form of marketing is illustrated from this scenario?

viral marketing