SEVI Chap 12 practice questions

Marlon, the owner of a furniture retail store in Carrollton, Texas, purchases a truckload of furniture items from a furniture manufacturer in Lexington, North Carolina. The purchase order indicates "FOB origin" pricing. What does this pricing term mean?

"Free on board at the point of origin," which means that the price does not include freight charges.

Karolina, the owner of a consumer electronics retail store in Little Rock, Arkansas, purchases 25 televisions from an electronics wholesaler in Chicago, Illinois. The purchase order indicates "FOB destination" pricing. What does this pricing term mean?

"Free on board destination," the price includes freight charges, and thus the seller pays freight charges.

Noticing that her car is "running on empty," Alessia stops at a local gas station to fill up. After doing so, Alessia goes into the store to purchase a soft drink. What kind of product is the soft drink?

A convenience product

Food Lion is an American grocery store chain headquartered in Salisbury, North Carolina. In 2016, Food Lion launched its new "Cha-Ching" brand of grocery products. According to the company, Cha-Ching brand items are "budget-approved with satisfaction guaranteed. Enjoy unbeatable values on everything from bread and sugar to canned goods and household essentials. Now that's quality you can feel great about!" Food Lion's Cha-Ching brand is which of the following?

A private brand

Originally introduced as Washburn's Gold Medal Whole Wheat Flakes in 1924, Wheaties is a brand of breakfast cereal made by General Mills, Inc. The company owns the brand name "Wheaties." Which of the following is this brand name?

A producer brand

Ishara, a general partner in a law practice, purchases a photocopier for the firm to use for business purposes. What kind of product is the photocopier?

Accessory equipment

As a loading dock supervisor, Oban has dealt with the "transfer pricing" term occasionally. Which of the following is correct regarding transfer pricing?

An organization must ensure that it is fair to all units involved in the purchases.

In studying for his Introduction to Business final examination, Njere is reviewing his class notes regarding pricing objectives for a business. Which of the following is correct regarding pricing objectives?

Before setting prices for a firm's products, marketers must establish pricing objectives that are aligned with organizational and marketing objectives.

In operating his flower shop, Julian has decided to use cost-based pricing as his pricing strategy. Which of the following is not a recognized element of cost-based pricing?

Brand loyalty

During her last class lecture for Introduction to Business, Ramia's professor emphasized that before setting prices for a firm's products, marketers must establish pricing objectives that are aligned with organizational and marketing objectives. Which of the following is not a recognized pricing objective?

Commercial impracticability

Juanita is opening a chocolate shop. She has determined what it costs to produce each type of chocolate product she will sell, how much overhead she must include in each product price, and other costs associated with producing each chocolate product. After doing these computations, she visits chocolate shops in other cities and several neighborhood grocery stores to review their chocolate prices. She returns to her shop and prices her chocolates similar to the competitors' prices. What type of pricing strategy is she using?

Competition-based pricing

Alba has just purchased a food truck, and she is trying to determine the prices to charge for the various sandwiches and drinks she will be selling to her customers. Which of the following is the simplest method of pricing for Alba to adopt?

Cost-based

Publishers confirm that the printed dictionary market is disappearing. Sales of printed dictionaries have decreased sharply in recent years, as have industry profits. This is obviously due to ease of looking up word definitions on the internet. At what stage of its product life cycle is the printed dictionary?

Decline

Javiera owns and manages a successful business equipment manufacturing company in Las Cruces, New Mexico. To build upon her entrepreneurial success, Javiera plans to significantly expand the number and types of business equipment offered to customers. The major ways to improve a product mix include all but which of the following?

Decrease the firm's advertising budget

Emergency Supply Depot (ESD) sells generators, freeze-dried food, bottled water, lanterns, propane stoves, and other items that may be needed in the event of an emergency. During the summer, ESD's prices are high due to outdoor enthusiasts purchasing items for camping, hiking, rafting, and other outdoor activities. The prices usually drop in the spring and fall, but rise sharply in the winter when heavy rain, hail, ice storms, and snow are highly likely. ESD monitors the weather and news reports year-round and raises prices even in the spring and fall if heavy storms, high winds, fires, or natural disasters of any kind are predicted. What pricing scheme does ESD use?

Demand-based pricing

Nina makes party packages that she sells online. The packages are custom made and include themed cake toppers, streamers, banners, pendants, candles, and themed serving dishes with themed labels. She includes the cost of delivery in the pricing strategy so the cost of each package varies by the cost to ship it to the buyer. What type of pricing strategy is Nina using?

Geographic pricing

Laclan has operated a banjo shop in Sevierville, Tennessee for the past three years. Laclan sells only the banjos that he, his brother, and his son produce. Although sales were modest in the first two years, sales of his family-made banjos have increased so dramatically in the past year that it is difficult for him to keep inventory on the store's shelves. Many customers have paid deposits on the banjos, and Laclan is concerned that they may have to wait over one year before they receive their orders. At what stage of the product life cycle are Laclan's family-crafted banjos?

Growth

As the founders of Microsoft Corporation, Bill Gates and Paul Allen knew that the success of any company depends on the development of new and exciting products for customers. Which of the following is correct regarding the development of new products?

Innovations are entirely new products.

Having just opened her antique shop, Nanami is aware that she will most likely have to be price-competitive for her business to survive. Which of the following is incorrect regarding price competition?

It allows a marketer to set prices based on the breakeven point.

Ford Motor Company sells a wide range of trucks, including the F-150 series, the Ford Ranger series, and the Ford Super Duty series. This wide range of trucks represents which of the following for Ford Motor Company?

Its product line

The Home Depot, Inc. is the largest home improvement retailer in the United States. It sells a wide assortment of products, ranging from washing machines and dryers to shovels and rakes. The assortment of products that The Home Depot, Inc. offers to consumers and businesses is known as which of the following?

Its product mix

Sinclair Fabrication bought four machine lathes, which is a machine that is primarily used for shaping metal or wood, for which it paid $200,000 each. Of which type of business product are these machine lathes?

Major equipment

In need of laundry detergent, Longwei stops at a local Target store to make his purchase. Although he really only needed one container, the detergent is advertised at $15.25 each, or three for $45. Longwei purchases three containers, realizing that he will always need detergent. To which of the following pricing strategies has Longwei been subjected?

Multiple-unit pricing

Shun needs to purchase a preowned car. He visits a local car dealership and sees a car he likes priced at $34,999.99. Shun feels that it is very strange to price the car at 1 cent less than $35,000; after all, what difference does a penny make when spending tens of thousands of dollars? What pricing strategy is the seller using in this situation?

Odd-number pricing

Canon has developed a new SLR digital camera for professional photographers. Because it is lighter than similar models made by other companies, has more features, has access to the cloud, internet, advanced on-screen editing, and video capabilities with a sound system that is superior to any other video-capable cameras on the market, the company is certain the demand for the product will be high. Based on this assumption, the company is setting the highest possible price for the new camera. What pricing strategy is Canon using?

Price skimming

When the digital video disc (DVD) format was first introduced in 1996, DVD players cost approximately $1,000. Today, a DVD player can be purchased for less than $40. What type of pricing strategy did the sellers of DVD players use in the 1990s?

Price skimming

Vanya just purchased a new Ford Bronco sport utility vehicle for $49,975. Vanya is pleased with her purchase (she is a huge "off-road" enthusiast), but she is not very happy about the monthly payments she will be making for the Bronco. Which of the following is incorrect regarding the allocation function of pricing?

Pricing allocates goods and services in an optimal way that ensures equitable outcomes for all involved in the sales transaction.

_____ is the process of developing and promoting differences between one's product and all similar products.

Product differentiation

As the owner of a candle shop, Filipa has learned that she must not only be competitive in terms of her product pricing, but also that she must also be non-price competitive. Which of the following is incorrect regarding non-price competition?

Product packaging is not a feature of non-price competition.

Kyle is the marketing director of Brown Bear Products and Priya is the director of accounting. While discussing the pricing strategy for a new product the company will soon release, Priya outlines her concepts for profit maximization and market-sharing goals for the product. She has read about other pricing strategies and asks Kyle to explain what is involved in product survival pricing and return-on-investment pricing. Of the pricing strategies they have discussed, which one is not an obtainable goal?

Profit maximization

In operating his restaurant, Jian is satisfied with both the profit his restaurant earns and its market share. Jian has adopted a pricing strategy that simply matches the competition. Which of the following pricing strategies does Jian utilize?

Status-quo pricing

Suppose that a sports ticket-brokering company is considering using demand-based pricing as its pricing strategy. Which of the following is correct regarding demand-based pricing?

This method results in a higher price when product demand is strong.

When Vans created new designs and colors for its slip-on sneakers, the product had undergone a(n) ______ modification.

aesthetic

Batteries and candy bars are usually packaged in quantities most suitable for a consumer's needs and located near the checkout register. These items would most likely be classified as ______ products.

convenience

Nadia is attempting to determine costs for her business. She knows the rent she pays and how much her utilities cost each month. These costs represent Nadia's _____.

fixed costs

The redesign of a drill to improve its safety is an example of a(n) _____ modification.

functional

A large manufacturing company ships products using trucks and ships. The company uses ______ to specify whether buyer or seller will pay delivery costs.

geographic pricing

During the ______ phase of new product development, a company may send surveys to customers to determine their preferences for proposed products.

idea generation

Exercise bands for resistance training entered the market in about 2010. They are now sold in stores from Dick's Sporting Goods to Target and through several online venues. The product appears to have reached its peak in sales. Exercise bands are likely in the _____ of the product life cycle.

maturity stage

GreenWise is a brand of goods only available at Publix. GreenWise is a ______ brand.

private

Mondelez International manufactures Oreos, Philadelphia Cream Cheese, Honey Maid, Trident, and many other products. All of the products Mondelez International produces represents the company's _______.

product mix

Odd-even pricing, multiple-unit pricing, and reference pricing are all examples of _____ pricing strategies.

psychological

Stefan is going in for a job interview and realizes he needs to whiten his teeth. He goes to the store and picks out a brand of whitening strips he remembers from an advertisement on television. His level of brand loyalty could be described as _____.

recognition

During the growth stage of the product life cycle, marketers ____

stabilize and strengthen the product's position by encouraging brand loyalty

A _____ is a symbol or word that is registered with the U.S. Patent and Trademark Office and thus is legally protected from use by anyone but the owner.

trademark