Marketing Exam 4

_____ is a form of deceptive price advertising where sellers advertise items for a very low price without intending to sell any of them because they plan to pressure sales of higher-priced items. Deceptive reference pricing Loss leader pricing Bait and switch Predatory pricing Price discrimination

Bait and switch

Patagonia reinforces its image of selling high-quality, environmentally friendly sports equipment in its stores, catalogs, and website. Which of the following omnichannel challenges has Patagonia overcome by emphasizing function, not fashion, in the descriptions of its products in all of its channels? Integrated CRM Brand image Pricing Supply chain Cannibalization

Brand image

_____ involves determining the point at which the number of units sold generates just enough revenue to equal the total costs. Contribution margin analysis Break-even analysis Predatory pricing Total cost calculation Fixed cost analysis

Break-even analysis

Liz and Sarah watched the prices of all the ingredients in their line of specialty sauces go up and up. Now, transportation costs are going through the roof. Liz suggested they could raise prices to cover these expenses because customers would understand. Which of these is the most important factor Liz and Sarah should consider before raising prices? Consumers do not think about the cost of additional items; they are concerned mostly with the total cost for a visit to a store. Customers do not care about the company's costs; they care about value. Rental costs for their production facility might go up next. They will have to adjust their promotional literature. The costs might go back down again.

Customers do not care about the company's costs; they care about value

Which of the following is NOT one of the activities carried on in a distribution center? Receiving, checking, storing, and cross-docking Distributing paychecks and paystubs for retail employees Getting merchandise floor ready Coordinating outbound transportation Coordinating inbound transportation

Distributing paychecks and paystubs for retail and employees

Airlines that offer lower fares on seats shortly before the flight's departure date to fill empty seats are utilizing what type of pricing tactic? Status quo pricing Premium pricing Cross-pricing Complementary pricing Dynamic pricing

Dynamic Pricing

are likely to target low-income consumers who demand national brands, but cannot afford to buy large-sized packages. Department stores Category killers Warehouse club stores Specialty stores Extreme value retailers

Extreme value retailers

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

False

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

False

systems are designed to deliver smaller shipments of merchandise on a more frequent basis to retailers. Cross-docking UPC Lead time JIT CPFR

JIT

systems are designed to deliver smaller shipments of merchandise on a more frequent basis to retailers. JIT Cross-docking Lead time UPC CPFR

JIT

pricing tactics lower the price of a product below cost. Fixed Loss leader Zone Regular Cost-based

Loss Leader

is the term used to describe the situation when retailers use some combination of stores, catalogs, and the Internet to sell merchandise. Horizontal integration Vertical integration Multichannel retailing Opportunistic retailing Cross-channel leverage

Multichannel retailing

_____ is a tactic in which a firm deliberately prices a product above the prices set for competing products to capture those customers who always shop for the best, or for whom price does not matter. Target return pricing Target profit pricing Status quo pricing Competitive parity Premium pricing

Premium Pricing

As the marketing vice president of her firm, Jana is considering implementing a companywide pricing policy that all products must achieve a target profit margin of 15 percent so the firm can achieve its overall growth objectives. What type of company objective is this? Profit-orientation Sales-orientation Competitor-orientation Customer-orientation Market-orientation

Profit orientation

RFID offers participants in the supply chain a powerful tool for tracking inventories and reducing handling. The main reason why it has NOT been more widely adopted is there are concerns that the transmissions might cause health problems if use were widespread. consumers object to their use. the FCC has only recently allocated a frequency for RFID transmission. RFID is risky and expensive to use. manufacturing capacity is limited at this time.

RFID is risky and expensive to use

_____ distribution helps a seller maintain a particular image and control the flow of merchandise into an area which makes this approach attractive to many shopping goods manufacturers, such as most apparel items, home items like branded pots and pans or sheets and towels, branded hardware and tools, and consumer electronics. Variable Selective Intensive Exclusive Collective

Selective

Of the following, the best example of a category killer is Staples. Costco. Dollar General. Target. Kohl's.

Target

Cost-based methods do not recognize the role that consumers or competitors' prices play in the marketplace.

True

Effective multichannel operations require an integrated CRM (customer relationship management) system with a centralized customer data warehouse.

True

In the four Ps of marketing, Place refers to all the activities required to get the right products to the right customer when that customer wants it.

True

Manufacturers might use selective distribution by granting exclusive geographic territories to a few retailers so no other retailers in the territory can sell a particular brand. True False

True

One of retailers' most fundamental activities is providing the right mix of merchandise and services that satisfies the needs of the target market. True False

True

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

True

A(n) __________ is a 13-digit code retailers can use to track inventory. UPC CFPR ASN EDI pick ticket

UPC

_______ is an approach for improving marketing channel efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its stores. EDI VMI ASN UPC JIT

VMI

Bertone's Office Supplies has decided to branch out from its existing stores. It plans to start sending out a catalog, and also to sell its products online. Bertone's is adopting: an extreme value strategy. exclusive distribution. selective distribution. a multichannel strategy. a service retailing philosophy.

a multichannel strategy

A forklift operator in a warehouse who needs to know how much of each item to get from specific storage areas would consult an RFID tag. an ASN document. a checking slip. a UPC label. a pick ticket.

a pick ticket

Retailers using a high/low pricing strategy often communicate this through the creative use of _____, which is the price against which buyers compare the actual selling price of the product and that facilitates their evaluation process. price lining the improvement value prices ending in odd numbers a reference price the cost of ownership

a reference point

As the dominant member of the channel of distribution, Coca-Cola holds a lot of power in the relationship with independent grocery stores, and as such, it performs the functions of restocking merchandise, setting up special displays and rotating merchandise. This is an example of an independent marketing channel. a horizontal marketing system. an administered vertical marketing system. a contractual vertical marketing system. a corporate vertical marketing system.

an administered vertical marketing system

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as a reflection of status quo pricing. a measure of scarcity. an indicator of the variety. an indicator of quality. a measure of the income effect.

an indicator of quality

In the soft drink industry only a few firms dominate, which is characterized as a monopoly. an oligopoly. pure competition. competitive parity. monopolistic competition.

an oligopoly

Salespeople can be particularly helpful when purchasing a(n) _____ product. inexpensive standard complicated easy-to-find frequently purchased

complicated

The _____ is the price less the variable cost per unit profit margin break-even point target return price contribution per unit fixed cost

contribution per unit

In a(n) __________ marketing channel, none of the participants has any control over the others. conventional contractual cooperative corporate administered

conventontial

_____ pricing methods do not recognize the role that consumers or competitors' prices play in the marketplace. Value-based Improvement value Cost-based Cost of ownership Competitor-based

cost based

Ben owns a lawn care business. From experience, Ben has found that John Deere equipment lasts almost twice as long as competitors' machines. For John Deere, Ben's perception about its products makes __________ pricing possible. cost of ownership everyday low pricing improvement value reference-based odd-even

cost of ownership

Which of the following is not required to build a successful strategic relationship? mutual trust open communications creation of a joint venture common goals credible commitments

creation of a joint venture

If a firm declared that it wanted to develop a strategic relationship, but was unwilling to commit funds or any effort to make it succeed, there would be an obvious lack of mutual trust. open communication. a contractual arrangement. common goals. credible commitments.

credible commitments

Savvy consumers often purchase automobiles from dealerships at the end of the quarter or at year-end since dealers who meet their quotas during a particular time period earn _____ in the form of rebates on all the cars they purchased from the manufacturer. seasonal discounts advertising allowances slotting allowances cumulative quantity discounts noncumulative quantity discounts

cumulative quantity discounts

Julia's is an upscale women's clothing store. Prices are based on customers' beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia's is using a ________________ pricing strategy. target return status quo target profit maximizing profits customer-oriented

customer-oriented

Purchase data collected at the point of sale are stored in RFID tags. data warehouses. ASN documents. electronic data interchanges. JIT inventory management systems.

data warehouses

Price advertisements should never include "puffery." deceive customers to the point of doing harm. include the MSRP. use advertising allowances to increase sales promotion. use price skimming after using price penetration.

decieve customers to the point of doing harm

If you walk into a __________, you will likely find a broad variety of merchandise, deep assortment, and customer service, with everything divided into what appears to be a collection of specialty shops. off-price retailer discount store specialty store department store category specialist

department store

After installing a(n) __________ in its JIT system, Chocolate Tree (a retail chocolate store) was able to reduce lead time for merchandise orders. quick change directory distribution center collaborative planning schedule electronic data interchange system supply chain

electronic data interchange system

Production of the DeLorean car, made famous in the film Back to the Future, never got above 25,000 units during its lifetime. Automobile industry analysts estimate that production of this car needed to reach around 300,000 units to achieve the __________, a decrease in unit cost as product volume increases. cumulative bundling benefit price fixing return experience curve effect slotting allowance benefit improvement value effect

experience curve effect

Which type of store is small and offers a limited merchandise assortment at very low prices? outlet stores convenience stores limited assortment supermarkets extreme value retailers specialty stores

extreme value retailers

Off-price retailers specialize in having a consistent line of merchandise available at discount prices. True False

false

The most common type of contractual vertical marketing system is franchising. a joint venture. just-in-time inventory. exporting. vendor-managed inventory.

franchising

Retailers that offer a broad variety of merchandise, limited services and low prices are known as department stores. category specialists. convenience stores. home improvement stores. full-line discount stores.

full-line discount stores

Walmart, Target, and Kmart offer a broad variety of merchandise, limited service, and low prices, which would classify them as department stores. full-line discount stores. specialty stores. category specialists. supercenters.

full-line discount stores

Full-line discount, category specialist, and specialty stores are all types of __________ retailers. price sensitive special appeal food general merchandise limited demand

general merchandise

A(n) _____ strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases. predatory pricing high/low pricing cost-based pricing EDLP competitor-based pricing

high/low pricing

_______ channel conflict occurs when there is disagreement or discord among members at the same level in a marketing channel, such as two competing retailers or two competing manufacturers. Horizontal Independent Conventional Coercive Vertical

horizontal

If the Amador County Pest Control Association got together and all members agreed to charge 3 percent of the value of a home for a termite inspection letter, the association members would be engaging in predatory pricing. bait and switch pricing. monopolistic competition. loss leader pricing. horizontal price fixing.

horizontal price fixing

Internet buyers are sometimes surprised to see online retailers using information about their past purchases to customize promotions targeted to them the next time they visit the retailer's website. The retailer is using the information to increase the share of wallet from their best customers. reward customer loyalty. create traffic in their brick-and-mortar stores. shift from a general merchandise retailer to a private-label retailer. comply with Homeland Security requirements.

increase the share of wallet from their best customers

In _____ marketing channels, one or more intermediaries work with manufacturers to provide goods and services to customers. modified indirect secondary ancillary direct

indirect

Retailers often perform ticketing and marking functions in their distribution centers rather than in their retail stores because ticketing and marking is often too complex for sales personnel to manage. the responsibility of the logistics department and not the marketing department. the responsibility of the dispatcher. done in conjunction with supply chain promotional allowances. inefficient and distracting.

inefficient and distracting

In the trucking industry, demand for fuel remains relatively stable even in times when the price of fuel increases, indicating that demand for fuel in this segment is elastic. inelastic. price sensitive. expandable. flexible.

inelastic

The objective of _____ is to build sales, market share, and profits quickly by providing an incentive to purchase the product immediately. price lining price skimming market penetration pricing price fixing experience curve effects

market penetration pricing

JIT inventory systems are associated with all of the following except frequent deliveries of less merchandise. reduced lead time. more inventory to warehouse. increased product availability. lower inventory investment.

more inventory to a warehouse

With more frequent shipments associated with quick response (QR) systems, a retailer is more likely to have what customers want. likely to have lower shipping costs. more likely to add extra floor-ready merchandise. less likely to use radio frequency identification tags. more likely to engage in predatory pricing behavior.

more likely to have what customers want.

Developing pricing strategies for __________ is one of the most challenging tasks a manager can undertake. cost-based pricing seasonal rebate items new products zone pricing products quantity discounts

new products

Because of the way __________ buy merchandise, customers can never be confident that the same merchandise will be in stock each time they visit the store. off-price retailers category specialist stores department stores services retailers discount stores

off-price retailers

_______ offer an inconsistent assortment of brand name merchandise at a significant discount from the manufacturer's suggested retail price. Extreme value retailers Category specialists Off-price retailers Department stores Warehouse clubs

off-price retailers

Price is the _____________ a consumer is willing to make to acquire a specific product or service. overall sacrifice amount of money variable cost fixed cost target return

overall sacrifice

In a corporate vertical marketing system, there is no common ownership, and the dominant member has significant power to impose its ideas and objectives. participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain. transaction selling is the norm, with the invisible hand guiding the overall functioning. conflict tends to be a major problem. independent firms join together formally to decide how the marketing channel will operate.

participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain.

A beauty products manufacturer packages its face wash and facial moisturizer together for a price lower than what it would cost to buy the products separately. This tactic is referred to as price lining. price bundling. leader pricing. predatory pricing. markdown pricing.

price bundling

Variable costs are affected by profit margins. production levels. marketing outlays. contribution per unit. the break-even point.

production levels

Personal selling is particularly important for retailers selling in extreme value retailing. discount items. products that are complicated or expensive. to younger consumers and in big-box stores. online services.

products that are complicated or expensive

In break-even analysis, when the break-even point is reached _______ is (are) zero. profits demand supply the contribution per unit costs

profits

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 rarely is the lowest-price offering the dominant brand in a market. prestige products need to be competitively priced. companies can gain market share by offering low-quality products at a high price. total value equals total cost minus variable costs leading to price escalation. price wars are the way to become the dominant brand.

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

In determining the price for his company's new pocket digital camera, Matt determines what consumers consider the regular or original price for similar cameras available in the market. Matt is assessing the influence of __________ on pricing strategy. everyday low pricing cost of ownership odd-even prices improvement value reference prices

reference prices

The set of business activities that adds value to products and services sold to consumers for their personal or family use is referred to as retailing. marketing. wholesaling. distribution. supply chain management.

retailing

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? industry-oriented sales-oriented competitor-oriented innovation-oriented customer-oriented

sales oriented

Johan owns an oil-change business called Oil Only. He changes oil in cars—and that is all he does. What kind of retail business is this? off-price retailer category specialist service retailer extreme value retailer specialty store

service retailer

Jackie is running errands on Saturday morning. First, she drives through CVS pharmacy to pick up a prescription, stops at the tailor to pick up a dress she had hemmed, and then heads to her manicure appointment. What kind of retailers is Jackie visiting? category killers category killers and services retailers services retailers convenience stores off-price retailers and specialty stores

services retailers

Retailers may modify product, price, and/or promotion to attempt to increase their _____, which is the percentage of the customer's purchases made from that particular retailer. share of wallet consumer position distribution intensity retail position share of market

share of wallet

Retailing __________ the supply chain. creates rigidity in sits at the end of maximizes the length of is in the center of focuses on production in

sits at the end of

The most common implementation of a quantity discount at the consumer level is the _______ discount. size MSRP slotting zone premium

size

Retailers often require manufacturers to pay _________ in order to obtain shelf space for new products. slotting allowances shelf rental fees zone pricing quantity discounts cash discounts

slotting allowances

_____ tailor their retail strategy toward very specific market segments by offering deep but narrow assortments and sales associate expertise. Warehouse clubs Full-line discount stores Specialty stores Category specialists Supercenters

specialty stores

Best Buy will match competitor prices for customers who bring in proof that a particular product is being sold at a lower price by a competitor, thus using premium pricing. competitive parity. status quo pricing. target return pricing. target profit pricing.

status quo pricing

__________ are subtle forms of promotion that encourage shopping in retailers' stores. Electronic signs Store credit cards and gift cards Large stocks of popular national brands Quick response and just-in-time delivery systems Extreme value offers and specialty share of the wallet programs

store credit cards and gift cards

Offering a one-stop shopping convenience to customers, _______ combine a supermarket with a full-line discount store. specialty stores big box retailers category specialists supercenters warehouse clubs

supercenters

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy. status quo competitive parity target return sales orientation target profit

target return

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

that generates revenue

Which of the following explains why the demand for Blu-ray discs increases when the demand for Blu-ray players increases? The income effect The substitution effect Cross-price elasticity The complementary products effect The substitute products effect

the complementary products effect

In thinking about the channel structure, the level of difficulty a manufacturer experiences in getting retailers to purchase its products is determined by all of the following except the degree to which the channel is horizontally integrated. the degree to which the channel is vertically integrated. the degree to which the manufacturer has a strong brand. the degree to which the manufacturer is desirable in the market. the relative power of the manufacturer and retailer.

the degree to which the channel is horizontally integrated.

According to a typical demand curve, the higher the price, the lower the output of producers. the lower the quantity consumers will buy. the greater the income effect. the lower the cross-price elasticity. the greater the production costs.

the lower quantity consumers will buy

All of the following are examples of the value provided by a supply chain in the production of kitchen stoves except the transportation company gets the stove to the retailer. the retailer educates the customer about product features, and delivers and installs the stove. the product design team develops initial drawings for a new product offering. the stove maker turns the components into the stove. the components manufacturer helps the stove manufacturer by supplying parts and materials.

the product design team develops initia drawings for a new product offering

Radio frequency identification tags are demand scheduling data tags. information tags used on floor-ready merchandise. shipping tags used to record weight limits of different types of trucks. tiny computer chips that transmit information about the contents of containers. electronic discount information tags used to provide reduced prices to select customers.

tiny computer

A marketing channel and a supply chain are virtually the same. True False

true

Marketing channel management creates value by getting products to customers efficiently. True False

true

Improvement value and cost of ownership are two approaches to which method of pricing? Mark-up pricing Cost-based pricing Value-based pricing Competitor-based pricing Price elasticity

value-based pricing

____ occurs when parties at different levels of the same marketing channel (e.g., manufacturers and retailers) agree to control the prices passed on to consumers. Horizontal price fixing Vertical price fixing Loss leader pricing Predatory pricing Price discrimination

vertical pricefixing

_____ are large retailers (100,000 to 150,000 square feet) that offer a limited and irregular assortment of food and general merchandise, little service, and low prices to the general public and small businesses. Convenience stores Conventional supermarkets Category specialists Supercenters Warehouse clubs

warehouse clubs

Christina owns and operates a shop that sells home furnishings. One of her vendors has just offered her a greatly reduced price for some traditional Christmas decorations, even though it is really too early to be thinking about holiday merchandise. One of the main pricing issues Christina will have to address as she considers the offer is whether the cost reduction will be low enough to cover the additional inventory costs she will have to incur. whether this offer is legal. whether the company is going out of business. whether she can get an even lower price by waiting. whether she should open a Christmas shop instead of her home furnishing store

whether the cost reduction will be low enough to cover the additional inventory costs she will have to incur.

Dawn works for a firm that buys products directly from the manufacturer and sells them to retailers, who then sell the products to consumers. Dawn works for a store representative. retail distribution center. wholesaler. manufacturer's representative. retail jobber.

wholesaler

When a manufacturer based in New York City charges more to ship to customers in Los Angeles and less to ship to customers in Memphis, it is using zone pricing. variable pricing. uniform delivered pricing. flexible delivered pricing. inflated pricing.

zone pricing