Final Exam - Marketing Study Guide

________ costs are the sum of the fixed and variable costs

Total

________ provide an incentive to a channel member for performing some function in the channel that benefits the seller, such as stocking a product or performing a product service

Trade Discounts

Giovanni's Gems is a high-quality Italian leather goods store in Manhattan. Giovanni also runs an Internet site where people can buy his products and he will charge the same delivery fee to any location within the 48 contiguous states. Giovanni utilizes ________ pricing.

Uniform Delivered

With ________ pricing, customers are allowed—even encouraged—to haggle about prices

Variable

When shipping prices are dependent on geographic areas based on the distance from the shipping location, it is considered ________ pricing.

Zone

The fundamental philosophy behind ________ is to reduce investment in promotion and transfer part of the savings to lower price.

Everyday Low Pricing

The rise of Walmart as one of the world's largest corporations has brought the concept of ________ to the forefront of global consumer consciousness.

Everyday Low Pricing

________ is used by firms that rely on periodic heavy promotional pricing, primarily communicated through advertising and sales promotion, to build traffic and sales volume

High/low pricing

________ refers to products sold at prices below cost to attract shoppers to a store.

Loss Leader

James is trying to determine the best price for his new fishing poles and thus uses the sales price as a basis of calculating the markup percentage. He is using a ________ approach.

Markup on Sales Price

________ require that a certain percentage markup be applied to all products

Minimum markup laws

Amelia is the marketing manager at a cafe in Charleston, and is responsible for deciding the price of dishes included on the cafe's menu. The chef of the cafe introduced a new dish, which was initially priced at $20 by Amelia, but she increased its price slowly over a period of 6 months. In this scenario, Amelia utilized a ________ strategy.

Penetration Pricing

One rationale for establishing a price skimming objective is that ________ lends status to a product or brand by virtue of a price relatively higher than the competition.

Prestige Pricing

________ is a critical component that plays into a customer's assessment of the value afforded by a firm and its offerings.

Price

Bright House wants Madhukar to buy the full gamut of entertainment products, and the more he buys—digital television, premium channels, downloadable movies, local and long-distance phone service, cellular service, high-speed Internet—the better the deal becomes compared to the total of the individual prices of each product. Bright House is using a ________ strategy.

Price Bundling

Veggie Vitality will send retailers a check if the retailer successfully includes its vegetable-based smoothies in promotional efforts. Veggie Vitality uses ________ to incentivize retailers

Promotional Allowances

Creating a perception about price merely from the image the numbers provide the customer demonstrates ________ pricing.

Psychological

Bella is a discount furniture store. Most of the items in the store are overstock and hence tend to be more inexpensive than other furniture. Recently Bella started to display the manufacturers' suggested retail price next to the price it charges to show the savings. Bella is using a ________ strategy.

Reference Pricing

Priceline.com is a firm that serves as a clearinghouse for extra capacity from airlines, hotels, and cruise lines. It is an example of a firm that uses a(n) ________ strategy.

Reverse Auction

Besides the standard auction approach where buyers bid for a seller's offering, it is now very common for sellers to utilize ________ to bid prices to capture a buyer's business.

Reverse Auctions

_______ advertising is heavily used during the growth and early maturity stages of the product life cycle. A) Competitive B) Comparative C) Pioneering D) Covert E) Institutional

A) Competitive

A technology company wants to increase sales for their newest product, so they decide to invest in advertising and direct marketing for the product. This is an example of A) a pull strategy. B) a push strategy. C) a combination of push and pull strategy. D) digital marking. E) personal selling.

A) a pull strategy.

What is a distinct advantage of personal selling over the other marketing communication methods? A) ability to tailor the message B) highly flexible C) strategic relationship between company and customer D) less time-consuming E) highly cost effective

A) ability to tailor the message

Martina has developed a new product completely unlike anything else on the market. In which AIDA stage should she spend most of her investment in communication to potential customers? A) attention B) interest C) desire D) action E) affective

A) attention

A value network perspective is a macro-level strategic approach that is being adopted by many firms in part because of the intense competition to cut________ and maximize________ every step of the way to market. A) costs; process efficiencies B) rewards; stock inventory C) employee benefits; cost control D) time inefficiencies; profits E) labor hours; performance incentives

A) costs; process efficiencies

The simplest method of sales force organization is A) geographic orientation. B) product organization. C) customer type. D) market organization. E) workload

A) geographic orientation.

The first step a manager should take in the promotion strategy process is to A) identify targets for promotion. B) select a promotion mix. C) develop a message. D) prepare a budget. E) establish measures of results.

A) identify targets for promotion.

Which advertising medium offers the advantage of interactive capabilities? A) online and social media B) radio C) direct mail D) newspaper E) television

A) online and social media

P&G solicits meaningful interaction from customers on its website rather than at independent sites. P&G recognizes the value of A) online brand communities. B) viral marketing. C) social marketing. D) prosocial marketing. E) digital reliance

A) online brand communities.

What is an example of measured media? A) radio B) social media C) direct marketing D) promotion E) email marketing

A) radio

Starbucks ran a new ad during the Super Bowl. The marketing department wanted to know the percentage of people watching the program who were exposed to the ad during the event. Starbucks was measuring the________ of the ad. A) reach B) frequency C) relevancy D) impact E) noise

A) reach

A group of local farmers in Charlotte sells their produce in the market every day. They band together to gain cost and operating economies of scale in the market for selling their produce. This is an example of a A) retailer cooperative. B) disintermediation. C) pull strategy. D) vertical integration. E) customer community.

A) retailer cooperative.

Abilene is the manager of a cafe and is responsible for deciding the price of dishes included on the cafe's menu. The chef of the cafe introduced a new dish, which was initially priced at $20 by Abilene, but she increased its price slowly over a period of 6 months. In this scenario, Abilene utilized a _________ strategy. A. Penetration Pricing B. Price Skimming C. Target ROI D. Competitor-based Pricing E. Value Pricing

A. Penetration Pricing

Suki is trying to explain to one of her ticket counter Associates the differences in price associated with concert tickets. She explains that the lowest price tickets are for the least desirable seats and the highest price tickets are for the most desirable seats, with the rest of the ticket prices falling somewhere in between. Suki is describing _______ pricing. A. Product line B. Captive C. Odd / even D. Reference E. Prestige

A. Product line

Martha runs a hardware store. Find that customers process the price of $9.99 a significantly lower than the price of $10 because of the reduced digit count in the price point. Accordingly, she follows this rule to set up the prices for all products. Martha uses a _______ strategy. A. Psychological pricing B. One Price strategy C. Variable pricing D. Everyday low pricing E. High / low pricing

A. Psychological pricing

________ remit monies to purchasers after the fact

Allowances

The Internet created a rise in ________ as more and more people decided to meet online to sell products to the highest bidder.

Auction Pricing

To better take into account the differential impact of fixed and variable costs, marketing managers can use ________ pricing.

Average- cost pricing (?)

________ advertising is common during the maturity stage of the product life cycle, but you should avoid this if your brand is the leader. A) Pioneering B) Comparative C) Competitive D) Institutional E) Covert

B) Comparative

________, one of the seven design elements of the customer interface in a website, is a site's ability to tailor itself to different users or allow users to personalize the site. A) Communication B) Customization C) Community D) Connections E) Commerce

B) Customization

Lan maintains a cooking blog, and she often mentions products by name if she feels they are especially nutritional and easy to obtain. This is an example of________ media. A) owned B) earned C) paid D) display E) free

B) Earned

________ measures the average number of times a person in a target market is exposed to a particular message. A) Reach B) Frequency C) Relevancy D) Impact E) Noise

B) Frequency

________ takes advantage of a salesperson's technical knowledge. A) Geographic orientation B) Product organization C) Customer type D) Market organization E) Workload method

B) Product organization

A soft drink company has been working with the same trucking company for ten years. Recently, their relationship has become strained as their contract comes up for renewal. The soft drink company wants to renew the contract with similar terms, while the trucking company wants to renegotiate rates to take into account rising gas prices. This is an example of A) disintermediation. B) channel conflict. C) stock-out. D) vertical integration. E) outsourcing.

B) channel conflict.

A wine distributor sells high-end wines to liquor, wine, and spirits wholesalers who have built relationships among select restaurants and hotels. This distributor employs a(n)________ strategy. A) selective distribution B) exclusive distribution C) push D) pull E) intensive distribution

B) exclusive distribution

In a push strategy, the focus is on A) end users. B) members of the channel who are targeted for promotion. C) members who typically rely on advertising. D) end users who drive the distribution of the new product. E) stimulating demand for an offering directly from the end user.

B) members of the channel who are targeted for promotion.

A distribution company purchases meat from farmers. It then controls the terms of the sale of the meat to grocery stores around the country, including the price and delivery dates. It also takes on the risks associated with handling the product. This company is acting as a(n) A) product promoter. B) merchant intermediary. C) agent intermediary. D) broker. E) commission dealer.

B) merchant intermediary

HP sells an inexpensive printer for an entry level user, but the printer cartilages that need continual replacement are fairly expensive. This demonstrates the concept of A. Product line pricing B. Captive pricing C. Price bundling D. Reference pricing E. Prestige pricing

B. Captive pricing

The internal process at Southwest Airlines are highly efficient, giving it a competitive advantage over other airlines. Southwest has a very efficient maintenance process and also has a very simple process of booking passengers. Because of these efficiencies, the company is able to offer customers an appealing mileage-driven pricing structure while also increasing the airline's profit margin. According to Michael Porter, Southwest's competitive advantage is based on... A. Price Perception B. Cost Leadership C. Value Ratio D. Service E. Quality

B. Cost Leadership

Maurice has just completed a new line of designer handbags. He wants the price to communicate to the customer that the handbags are high quality and exclusive, so he sets the price high. He knows that after this season, the price may need to decrease as the market evolves. Maurice is using a _______ strategy. A. Penetration Pricing B. Price Skimming C. Target ROI D. Competitor-based Pricing E. Value Pricing

B. Price Skimming

Massage monthly offers A reduced rate for massages with a monthly membership that includes one massage or facial per month. During the service, the provider recommends products they are using, and that they sell in the store. The provider also asked if the customer would like to upgrade to an aromatherapy massage at an extra cost. This is an example of A. product line pricing B. Two-part pricing C. Price bundling D. Reference pricing E. Prestige pricing

B. Two-part pricing

When a seller advertises an item at an unbelievably low price to lure customers into a store, and then refuses to sell the advertised item and instead pushes a similar item with a much higher price and higher margin, the seller is participating in the illegal practice of ________

Bait and Switch

________, one of the seven dimensions used by researchers to define a website interface, is a site's ability to enable transactions while keeping data secure. A) Connections B) Community C) Commerce D) Communication E) Content

C) Commerce

Sierra is the marketing manager for a sporting goods store, and she's preparing the company's promotional strategy for the upcoming holiday season. She has identified the targets for the promotion. What should she do next? A) Select the promotion mix. B) Prepare promotion budget. C) Establish goals for promotion. D) Develop the message. E) Establish measures of results.

C) Establish goals for promotion.

Which advertising medium offers the advantage of high audience selectivity? A) online and social media B) radio C) direct mail D) newspaper E) television

C) direct mail

The main difference between B2C and B2B markets is A) good interpersonal and communication skills are more important for B2C than for B2B. B) B2B requires more supervision and performance evaluation than B2C. C) goods and services sold by B2B salespeople are often more expensive and technically complex than those in B2C. D) B2B requires more knowledge of the products being sold than B2C. E) B2C requires the ability to discover customer needs and solve their problems more than B2B.

C) goods and services sold by B2B salespeople are often more expensive and technically complex than those in B2C.

Neil wants to apply marketing concepts and strategies inside his organization, so he ensures that his employees are knowledgeable about company products and can effectively articulate what the company and its offerings stand for. What concept is Neil using? A) buzz marketing B) internal buy-in C) internal marketing D) employee advocacy E) employee loyalty

C) internal marketing

Gillette sends out a free razor to induce switching from an older model. This is an example of using________ as the sales promotion approach. A) coupons B) premiums C) product sampling D) comparative parity method E) product placements

C) product sampling

Zora is using a combination of digital and social media marketing, advertising, sales promotion, public relations, and personal selling in order to achieve an acceptable ROI. Zora is using the A) marketing mix. B) promotion strategy. C) promotion mix. D) promotion campaign. E) strategic messaging.

C) promotion mix.

A bicycle manufacturer pays a shelf fee to a sporting goods store to ensure its products' position on the store's shelves. This is an example of a(n) A) selective distribution. B) exclusive distribution. C) push strategy. D) pull strategy. E) intensive distribution.

C) push strategy.

Patty is in charge of overseeing the flow of activities among several entities for a chain of large retail stores. Her main objective is to coordinate these value-adding activities in a way that maximizes value and profit. She is in charge of A) physical distribution B) assortment creation. C) supply chain management. D) partner relationship management. E) transaction reduction.

C) supply chain management.

Paula complains that she has seen the same commercial dozens of times and is tired of seeing it, so she changes the channel when it comes on. This reaction to over exposure to an advertising campaign is called advertising A) response function. B) tracking. C) wearout. D) burnout. E) illusion.

C) wearout.

Joachim purchased an alarm system for his car during a promotion. You considered the price during the promotion to be very attractive. Ever, the Firm said an artificially High preference price for the alarm system just before the promotion to make the advertised sale price more attractive. Joachim just explained A. Price fixing B. Price discrimination C. Deceptive pricing D. Bait and switch E. Predatory pricing

C. Deceptive pricing

When Delphi purchased her new cell phone, offered an opportunity to purchase a car charger and a cover together at a reduced price. The cell phone provider was using a ________ strategy. A. Product line pricing B. Captive pricing C. Price bundling D. Reference pricing E. Prestige pricing

C. Price bundling

Krista goes to a store to buy a new liquid soap dispenser. When she purchases a new dispenser from the store she gets two liquid soap refill packets for free, as part of a promotional offer, but she will need to purchase refills later. In this scenario, the pricing strategy used for the soap dispenser is ________ pricing.

Captive

________ could lead the marketing manager to decide to price at some market average price, or perhaps above or below it in the context of penetration or skimming objectives.

Competitor- based pricing

________, one of the seven dimensions used by researchers to define a website interface, refers to the overall layout, design, and aesthetic appeal of a site. A) Community B) Content C) Commerce D) Context E) Customization

D) Context

What is the final element the marketing manager should implement in promotional strategy? A) Identify targets for promotion. B) Prepare promotion budget. C) Develop the message. D) Establish measures of results. E) Select the promotion mix.

D) Establish measures of results.

Laurens is the marketing manager for sporting goods store, and he's preparing the company's promotional strategy for a new line of camping gear. He has developed the message for the promotion. What should he do next? A) Select the promotion mix. B) Prepare promotion budget. C) Revise goals for promotion. D) Select media for use in promotion. E) Establish measures of results.

D) Select media for use in promotion.

An intermediary works with large consumer product manufacturers as well as small local retailers. The company buys large quantities of products from the manufacturers and sells them in smaller quantities to retailers to better match quantities needed for space constraints and inventory turnover requirements. The intermediary is performing the distribution function of A) disintermediation. B) assortment creation. C) reverse logistics. D) breaking bulk. E) accumulating bulk.

D) breaking bulk.

In an administered vertical marketing system, the sheer size and power of one of the intermediaries places it in a position of control. The lead player in such situations may be referred to as the A) virtual organization. B) retailer cooperative. C) wholesaler cooperative. D) channel captain. E) network organization.

D) channel captain.

Apple ran a series of humorous television ads in which two guys stood side by side while slinging barbs back and forth about features of the Mac versus the PC. This is an example of________ advertising. A) pioneering B) competitive C) institutional D) comparative E) covert

D) comparative

An artisan creates handmade soaps and sells them at her local farmers market. What channel of distribution does she use? A) exclusive distribution B) physical distribution C) virtual network D) direct channel E) indirect channel

D) direct channel

When actress Jennifer Aniston appears in an advertisement using and promoting a particular brand of body lotion, it is an example of the________ approach to advertising execution. A) demonstration B) research-based C) lifestyle D) endorser E) slice-of-life

D) endorser

A home décor store took out an ad in the local paper focusing on how the company was started and how it benefits the community. This is an example of________ advertising. A) product B) pioneering C) competitive D) institutional E) comparative

D) institutional

From an AIDA model perspective,________ advertising seeks to gain awareness and initial interest and is used mostly in the early growth stages of a product. A) institutional B) competitive C) covert D) pioneering E) comparative

D) pioneering

Who or what are potentially the best brand and message ambassadors? A) television advertisements B) satisfied customers C) viral advertisements D) the company's employees E) third-party reviewers

D) the company's employees

When a seller advertises an item at an unbelievably low price to lure customers into a store, and then tells customers that it doesn't have the advertised item and instead pushes a similar item with a higher price and margin, the seller is participating in the illegal practice of A. Price fixing B. Price discrimination C. Psychological pricing D. Bait and switch E. Predatory pricing

D. Bait and switch

Kikio owns a driving range in a suburb of Chicago. He has taken notice of the three competitors who are located very close to his business. Kikio decides to look at the other driving ranges' pricing and then determine his best pricing strategy based on all of the information. In this scenario, Mikio is utilizing A. Penetration Pricing B. Price Skimming C. Target ROI D. Competitor-Based Pricing E. Value Pricing

D. Competitor-Based Pricing

__________ refers to products sold at prices below cost to attract Shoppers to a store A. Free on Board (FOB) B. Bait and Switch C. Price Bundling D. Loss Leader E. Prestige

D. Loss Leader

Companies that collude to set prices at a mutually beneficial high level are engaged in A. Price discrimination B. Deceptive pricing C. Predatory pricing D. Price fixing E. Bait and switch

D. Price fixing

A manufacturer employing a(n)________ strategy focuses much of its promotional investment on the end-user consumer. A) selective distribution B) exclusive distribution C) push D) pull E) limited distribution

D. Pull

Jimmy is trying to determine the best price for his new fishing poles and thus uses the sales prices as a basis of calculating the markup percentage. He is using a(n) ________ approach A. markup on cost B. value price C. average-cost pricing D. markup on sales price E. cost-plus

D. markup on sales price

________ means the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries, which is common in the electronic channel. A) Creating assortments B) Reducing transactions C) Channel integration D) Outsourcing E) Disintermediation

E) Disintermediation

________ is a distinct advantage that personal selling offers over other marketing communications methods. A) Low transactional costs B) Strategic flexibility C) Geographic flexibility D) Personal knowledge management E) Personal relationship with a customer

E) Personal relationship with a customer

A food distributor buys fruit from local farmers, sorts it by quality, and then packages it to sell to larger grocers. This company is performing the distribution function of A) physical distribution. B) product processing. C) determining variety. D) breaking bulk. E) accumulating bulk

E) accumulating bulk

Which customer sales promotion refers to an instant price reduction at the point of sale, available in print media, online, or in-store, that encourages customers to "buy now?" A) loyalty program B) rebate C) contest or sweepstake D) premium E) coupon

E) coupon

An art supply manufacturer sells its goods to a wholesaler, who then sells those goods to a retailer. What channel of distribution does this company use? A) channel community B) network organization C) virtual organization D) direct channel E) indirect channel

E) indirect channel

The goal of________ advertising is to promote an industry, company, family of brands, or some other issues broader than a specific product. A) product B) pioneering C) competitive D) comparative E) institutional

E) institutional

Vache is a marketing manager for a large soft drink company. As the marketing manager, he A) must also manage the sales department. B) is responsible for products hitting their sales quotas. C) must remove himself from the sales process. D) should outsource the sales department to a third party. E) must understand the basics of promotion.

E) must understand the basics of promotion.

An example of a push strategy is A) organizing couponing campaigns. B) utilizing newspaper advertising. C) using television advertising. D) employing direct marketing. E) paying a shelf fee.

E) paying a shelf fee.

In deciding on the right balance between control and flexibility in a channel, marketing managers must consider A) utilizing software applications. B) the type of channel power to be used. C) the right pull strategy. D) employing enterprise resource planning systems. E) the type of products involved.

E) the type of products involved.

A strategy to intentionally sell below cost to push a competitor out of a market then raise prices to new highs, is called A. Price fixing B. Price discrimination C. Deceptive pricing D. bait and switch E. Predatory pricing

E. Predatory pricing

________ could result in overall higher prices for consumers since various competitors are all pricing the same to maximize their profits.

Price-Fixing

Marriott has branded its entire family of accommodations based on different value propositions, supported by clearly delineated pricing strategies. Its offerings include Ritz-Carlton and JW Marriott for the most discriminating patron, Marriott and Renaissance at the next level of full service, and an array of differentially positioned brands such Courtyard and Residence Inn. This is an example where ________ can occur at a level much broader in scope than individual products

Pricing Lining

________ are typically expressed as greatly extended invoice due dates.

Seasonal Discounts

Pricing objectives very frequently are designed to maximize profit, which necessitates a ________ pricing strategy

Target Return on Investment (ROI)