ba 370 final (wrong ones)

99. In _______ many firms provide similar products that are considered substitutes for each other. A. pure competition B. oligopolistic competition C. monopolistic competition D. a monopoly E. a duopoly

A. pure competition

37. An everyday low pricing strategy stresses the continuity of retail prices A. at a level above regular retail prices. B. at a level between the regular price and the deep-discount sale prices of competitors. C. based on variable production costs. D. at a price skimming level. E. at a level below the deep-discount sales prices of competitors.

B. at a level between the regular price and the deep-discount sale

108. Sophia 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 Sophia likely responding to? A. integrated CRM B. brand image consistency C. pricing consistency D. integrated supply chain E. efficient distribution

B. brand image consistency

48. Traditional demand curve economic theory is used by marketers to understand _______ in the five Cs of pricing. A. competitors B. channel members C. cost D. customers E. company objectives

D. customers

28. When Greenbelt Construction Company began building houses in a large subdivision with many other builders, the company priced its homes slightly higher than its competitors and promoted the added quality features found in Greenbelt's homes. Greenbelt was using a(n) _______ pricing strategy. A. competition-based B. value-based C. improvement-based D. premium E. reference-based

A. competition-based

78. If the price for a product increases, the demand for the complementary product will A. decrease. B. increase. C. stay the same. D. become more elastic. E. become more inelastic.

A. decrease.

39. Dan is especially price sensitive. He has been known to line up on "Black Friday" (the day after Thanksgiving) at 4 a.m. to be among the first to buy sale items. Dan would likely respond to a _______ pricing strategy. A. high/low B. premium C. price skimming D. slotting E. uniform

A. high/low

30. Tess 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 A. increase profits. B. increase sales. C. decrease competition. D. build customer satisfaction. E. broaden the product line.

A. increase profits.

98. While JIT systems have many benefits, they A. make the logistics function more complicated. B. interfere with new product development functions. C. confuse customers. D. work only in vertical marketing systems. E. decrease the accuracy of demand forecasts.

A. make the logistics function more complicated.

101. Because there are many firms with similar products in purely competitive markets, A. price is determined by the laws of supply and demand. B. consumers develop personal preferences. C. firms find it easy to build strong, distinct brands. D. advertising is heavily used. E. the many competitors will focus on variable cost pricing.

A. price is determined by the laws of supply and demand.

38. Julia wants her firm's gourmet snacks to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that A. rarely is the lowest-price offering the dominant brand in a market. B. prestige products need to be competitively priced. C. companies can gain market share by offering low-quality products at a high price. D. total value equals total cost minus variable costs leading to price escalation. E. price wars are the way to become the dominant brand.

A. rarely is the lowest-price offering the dominant brand in a market.

81. One problem in relying on price elasticity and demand curves when setting prices is A. the way a product or service is marketed can have a profound impact on price elasticity. B. the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. C. only economists can properly analyze demand curves and set prices using this tool. D. competitors can construct the same demand curves, so there is no advantage in using them. E. marketing split from economics over the ideas of demand and elasticity.

A. the way a product or service is marketed can have a profound impact on price elasticity.

80. A(n) __________ is a supply chain whose members act like a unified system. A. vertical marketing system B. independent marketing system C. concentrated marketing system D. conventional marketing system E. strategic marketing system

A. vertical marketing system

64. The saying "leaving money on the table" is associated with A. a price skimming strategy that forces consumers to choose between products. B. a market penetration strategy when there is an opportunity for price skimming. C. vertical price fixing in markets where horizontal price fixing would be more appropriate. D. a predatory pricing strategy that results in excessive seasonal discounts. E. loss leader pricing that drives consumers to competitors' products.

B. a market penetration strategy when there is an opportunity for price skimming.

111. How does a retail distribution center supporting a store channel most obviously differ from one supporting an Internet channel? A. in use of SKU identification B. in quantity of items shipped C. in speed of order fulfillment D. in quality of tracking mechanisms E. in use of CRM technology

B. in quantity of items shipped

59. A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) _______ price elasticity demand. A. elastic B. inelastic C. cross-price D. income effect E. substitution effect

B. inelastic If a 10 percent price increase results in a 2 percent reduction in demand, price elasticity of demand is equal to −2 ÷ 10 = −0.2. Price elasticity greater than −1.0 reflects inelastic demand.

58. The major objectives associated with a market penetration pricing strategy are to A. capture the high end of the market demand curve and lower introduction costs. B. quickly build sales and market share. C. minimize customer dissatisfaction and maximize reference price value. D. provide an incentive to purchase a less desirable product to obtain a more desirable product. E. match competitors' prices and communicate high quality.

B. quickly build sales and market share.

33. Bernard's firm has set corporate direction to become one of the leaders in each of its significant market segments. It was Bernard'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 Bernard's effort? A. industry-oriented B. sales-oriented C. competitor-oriented D. innovation-oriented E. customer-oriented

B. sales-oriented

60. What situation is occurring if a 1 percent decrease in price results in more than a 1 percent increase in quantity demand? A. Demand is cross-price elastic. B. Demand is price inelastic. C. Demand is price elastic. D. Demand maintains the status quo. E. Demand results in the income effect.

C. Demand is price elastic. If a 1 percent price decrease results in, say, a 1.1 percent increase in demand, price elasticity is equal to 1.1 ÷ −1 = −1.1. Price elasticity of less than −1.0 reflects elastic demand.

55. What is one of the drawbacks of using a price skimming strategy? A. It is difficult to lower prices on an introductory product. B. Price skimming allows competitors to easily enter the market. C. Firms must consider the high costs associated with producing a small volume of product. D. Price skimming does not work well with new-to-the-market, innovative products. E. Price skimming is often challenged as being illegal.

C. Firms must consider the high costs associated with producing a small volume of product.

107. Which of the following is true of competitive parity? A. It assumes the same percentage used in the past, or by competitors, is still appropriate for the firm. B. It does not take into account new plans (e.g., to introduce a new line of products in the current year). C. It does not allow firms to exploit the unique opportunities or problems they confront in a market. D. It assumes communication expenses do not stimulate sales and profit. E. If all competitors use this method to set communication budgets, their market shares will stay increase over time.

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

22. Which element of the marketing mix specifically deals with supply chain management? A. product B. price C. place D. promotion E. production

C. place

123. Traditionally, marketers have seen the role of __________ as generating short-term results, whereas the goal of __________ was to lead to long-term results. A. public relations; institutional advertising B. advertising; personal selling C. sales promotion; advertising D. advertising; public relations E. corporate blogs; public relations

C. sales promotion; advertising

72. Franchising is the most common type of contractual _______ marketing system. A. cooperative B. corporate C. vertical D. administered E. conventional

C. vertical

61. 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. a 10 percent decrease in quantity demanded. B. a 2 percent increase in quantity demanded. C. a 10 percent increase in quantity demanded. D. a 2 percent decrease in quantity demanded. E. a 5 percent decrease in quantity demanded.

D. a 2 percent decrease in quantity demanded. Price elasticity = % change in demand ÷ % change in price. In this case, −0.2 = % change in demand ÷ 10. The answer is −2, or a 2% decrease in demand.

68. Because of its size and relative power, Walmart can easily impose controls on small manufacturers, such as PenAgain, 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. A. cooperative B. corporate C. independent D. administered vertical E. conventional horizontal

D. administered vertical

94. One of the limitations associated with break-even analysis is that A. it assumes fixed costs are zero. B. it cannot adjust for high variable costs. C. it tells marketers only what price is needed to break even. D. it assumes that there is only one price. E. it assumes that demand is extremely inelastic.

D. it assumes that there is only one price.

109. It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit. A. the Better Business Bureau B. federal regulators C. the American Marketing Association D. marketers themselves E. industry standards boards

D. marketers themselves

24. Advertising slogans such as "Don't text and drive" and "Buy flood insurance before it is too late" are examples of ads designed to A. provide information. B. remind consumers. C. recruit employees. D. persuade consumers to take action. E. generate goodwill.

D. persuade consumers to take action.

25. Unlike product, promotion, or place, price is the only part of the marketing mix A. that offers the opportunity for an oligopoly. B. that is subject to gray market manipulation. C. that leads to competition. D. that generates revenue. E. that is determined by the consumer.

D. that generates revenue.

42. It is important to Joanne to get value for her money, but she does not want to spend time comparison shopping. Joanne will likely respond to _______ pricing, but not to _______ pricing. A. high/low; EDLP B. premium; high/low C. high/low; premium D. price skimming; high/low E. EDLP; high/low

E. EDLP; high/low

26. All of the following are included in the broad factors manufacturers must consider when establishing a strategy for getting their products into the hands of the ultimate customer excep tA. choosing retail partners. B. identifying types of retailers. C. developing retail strategy. D. managing an omnichannel strategy. E. lowering production costs.

E. lowering production costs.

110. The commercial airline industry is considered what type of market? A. duopoly B. monopoly C. monopolistic competition D. pure competition E. oligopolistic competition

E. oligopolistic competition

1. Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

false

4. The improvement value method and the cost of ownership method are both cost-based pricing methods.

false

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

true

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

true

20. The Robinson-Patman Act does not apply to end consumers, at which point many forms of price discrimination occur.

true The Robinson-Patman Act applies to business-to-business transactions. Price discrimination refers to selling the same product to different customers at different prices. With a few exceptions, this is legal in sales to consumers, but is illegal under certain circumstances when selling to businesses.

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

false

. Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Earl perceived price as _______ for a good or service, while most consumers recognize price as the _______ made to acquire a good or service. A. the money paid; overall sacrifice B. a variable cost; fixed cost C. a fixed cost; variable payment D. the overall sacrifice; monetary payment E. the break-even amount; total cost

A. the money paid; overall sacrificeB. a variable cost; fixed cost

35. 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. A. sales orientation B. target profit C. target return D. status quo E. maximizing profits

E. maximizing profits

117. A firm that places an emphasis on developing and maintaining positive relationships with the media is focusing on a(n) ________ strategy. A. personal selling B. mobile marketing C. advertising D. direct marketing E. public relations

E. public relations

15. Costs related to supply and costs related to demand are the two primary cost categories.

false

16. The expression "3/10, n/30" means that a business must pay 3 percent of the total invoice amount in 10 days, with the remainder due in 30 days.

false

8. When Sony released its PlayStation 4 game console, it charged a high price, attracting the most avid game players. This was a market penetration pricing strategy.

false

9. The demand curve for prestige products generally slopes downward due to higher prices.

false