Marketing Last Exam
target return pricing
A pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments; designed to produce a specific return on investment, usually expressed as a percentage of sales.
target profit pricing
A pricing strategy implemented by firms when they have a particular profit goal as their overriding concern; uses price to stimulate a certain level of sales at a certain profit per unit.
Firms must provide the target audience with reasons to purchase their products or services. These reasons are conveyed through the ______.
AIDA Model
CIN then ASN or ASN then CIN
CIN then ASN
The five Cs of pricing are company objectives, customers, cost, channel members, and ________________________
Competition
Break-even analysis examines the relationships between which of the following?
Cost and Price
Inbound Transportation
Distribution delivery
Zara's store managers use hand held devices to immediately pass purchase information back to its corporate headquarters in Spain. This is a form of
EDI.Electronic data interchange (EDI) is the computer-to-computer exchange of business documents from a retailer to a vendor and bac
Which of the following federal agencies regulate advertising?
FTC; FCC; FDA
Although the online and catalog channels are very successful for Staples, why it is important for the company to continue to operate its retail locations?
Many customers like to browse products and also ask questions of the sales associates.
Gateway Cable is offering high-speed Internet, cable television, and home phone service for $125 per month. If all were purchased separately, it would total $160 per month.
Price Bundling
Receiving and Checking Merchandise
RFID tags
Hemmings Tech, a manufacturer of digital cameras, issues a refund as a portion of the retail purchase price of its newest camera.
Rebate
The Williamsburg hotel is located in a small beach town in Florida and advertises very low room prices from December to February.
Seasonal Discount
POS terminal sends data
Store to Buyer
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 2 percent decrease in quantity demanded.
Google, Yahoo, and Microsoft provide over 98 percent of all Internet searches in the United States.
an example of a oligopoly
Corporate inventory order
buyer to manufacturer
Status quo pricing ______
changes prices only to meet those of competition
The five Cs of pricing include ______.
company objectives
Outbound Transportation
complex scheduling
By opening its own retail outlets, Icebreaker has established a(n) __________ VMS.
corporate
Zara owns its factories, distribution centers, and retail stores. This is the ______ form of a ________.
corporate; vertical marketing system
The five Cs of pricing include
cost considerations
Based on the way SBC's brand manager describes its overall pricing strategy, SBC takes a ______ orientation to pricing.
customer
Smart TV purchased
customer to store
Zara collects massive amounts of data on its SKUs, orders, sales patterns, store inventories, and other variables. This information is stored in a(n)
data warehouse.
Which of the following theories is the maximizing profits strategy based on?
economic
Pure competition
exists when there are many firms, and the products are similar. examples include grains, gold, meat, spices or minerals.
Profit oriented
focuses on one or more of the following objectives: target, maximizing, return
predatory pricing
harm competitor's business
price fixing
horizontal collusion
Marketing Funnel
identifies the percentage of the potential target market at each stage in the decision process, from merely aware to highly loyal.
Each generation of cell phones has provided greater clarity, range, security, and multifunctionality. If marketers of cell phones use these features as a basis for pricing, they would be using ________ pricing.
improvement value
The omnichannel approach has enabled Staples to
increase its productivity.
Which of the following is not required to maintain the long-term success of Icebreaker's supply chain partnerships?
independence
Papa John's offer of a $6 "Brookie," as discussed in the case, could be considered an example of
leader pricing.
Pricing voice plans very low in hopes of enrolling customers in higher margin data plans is essentially a form of the pricing tactic called
leader pricing.
price discrimination
manufacturer favors one retailer
Advanced shipping notice
manufacturer to distribution center and buyer
Premium Pricing
means that the firm deliberately prices a product above the prices set for competing products so as to capture those customers who always shop for the best or for whom price does not matter.
When there are many firms competing for customers in a given market, but the products are differentiated, it is known as ______.
monopolistic competition
Based on information in the case, what level of competition does the fitness center market represent?
monopolistic competition; Monopolistic competition refers to a situation where many providers sell differentiated products at different prices, which describes the fitness center market.
In many geographic areas, utilities such as water and electricity are available from only one provider. This is an example of a level of competition called a(n) ______.
monopoly
oligopolistic competition
occurs when only a few firms dominate a market
What type of retailer is Nordstrom Rack?
off-price retailer
When a firm colludes with other firms to control prices, it is engaging in
price fixing.
Generally, a ________ represents either a short-term response to a competitive threat or a broadly accepted method of calculating a final price for the customer that is short term in nature.
pricing tactic
bait and switch
push nonsale items only
To capture market share, all the companies in the case used the same basic strategy, which was to
reduce prices.
Pizza prices at or near $5 are mentioned frequently in the case. Based on the way this price level is discussed, $5 might be considered a ________ for a basic pizza.
reference price
Sometimes firms selling a pioneering product will set a very low price in order to attract many customers before competitors enter the market. This is an example of a ______ orientation.
sales
Loss Leader Pricing
sell below store's cost
Ashley Stewart's "brick and mortar" retail stores are classified as which type of general merchandise outlet?
specialty store
yan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection. yan told the manager to always match the gasoline prices of the other store. yan is using a _______ pricing strategy.
status quo
request delivery schedule
store to distribution center
Marketing channel management is also called
supply chain management.
One of the ways that Walmart has been able to reduce the prices of its products, and add value to its customers, is by its continuing focus on streamlining all its _____ functions.
supply chain management; Walmart has focused its efforts on streamlining its supply chain management functions. This includes storage, transportation, delivery, and distribution as well as building collaborative relationships with its suppliers.
There are many options available to consumers when it comes to breakfast cereals. So, if Kellogg's significantly increases the price of Rice Krispies, consumers are more apt to buy alternate cereals instead. This illustrates which concept?
the substitution effect
Why might firms engage in a price war?
to compete by lowering prices
The _____ is fixed costs plus the sum of the variable costs.
total cost
Variable cost per unit times quantity equals ______.
total variable cost
When SBC builds its bicycles, frames, gears, and other similar components are examples of _____ costs.
variable
As the case explains, Planet Fitness can keep prices lower in part because its members make fewer visits per week to the gym, thus reducing
variable costs
As the case indicated, over time some stores had stock outs of popular merchandise while other stores were overstocked with the same item. This could lead to disagreements between the stores and Zara's corporate headquarters, which is a form of
vertical channel conflict.
Icebreaker uses contracts to better coordinate its relationship with wool suppliers. In doing this Icebreaker has established a(n)
vertical marketing system.
As the video explains, SBC primarily targets experienced, knowledgeable cyclists that seek a particular biking experience. Demand for SBC bikes within this target market is most likely
inelastic
If a firm has been accused of opening stores in new communities with artificially low prices, set for the sole purpose of driving competing stores in the area out of business, this type of behavior is called ______ pricing.
predatory
There is an old saying "If you have to ask the price of a yacht, you cannot afford it." Products like yachts are most likely to be associated with
prestige pricing
The overall sacrifice a consumer is willing to make to acquire a product or service is known as___________________________ . (Enter one word in the blank.)
price
To achieve target profit pricing, a company uses _____________to stimulate sales at a specific profit level.
price
price elasticity of demand
a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price
status quo pricing
a pricing objective that maintains existing prices or meets the competition's prices
Commonwealth Edison is the only electric delivery services company in Chicago, Illinois, USA.
an example of a monopoly
Which of the following is an example of a monopoly?
A county water board that is the sole provider of water to the county
maximizing profits
A profit strategy that relies primarily on economic theory. If a firm can accurately specify a mathematical model that captures all the factors required to explain and predict sales and profits, it should be able to identify the price at which its profits are maximized.
Which of the pricing orientations discussed in the text does Planet Fitness most closely pursue?
A sales-oriented approach sets prices rather low to generate large sales volume, which represents the essence of Planet Fitness's approach. By setting a low price, it seeks to create value for consumers who will otherwise not visit the facility frequently
If an advertiser is assessing an advertisement's impact for the product after it has been advertised (posttesting), then what activity is the advertiser most likely engaging in?
Evaluating the overall sales changes in the product and/or service that was advertised
What is an indicator of a product that is greater than -1 in elasticity?
However, if the products are inelastic, lowering prices will not appreciably increase demand; customers just don't notice or care about the lower price. (price insensitive)
What is an indicator of a product that is less than -1 in elasticity?
In this scenario small changes in price will generate fairly large changes in the quantity demanded, so if a firm is trying to increase its sales, it can do so by lowering prices. (price sensitive)
The "Got Milk" campaign launched by the milk industry used _______________advertising to appeal to consumers to drink more milk.
Institutional advertisement
Wilkerson supermarket aggressively prices its produce items in order to get more customers into the store.
Leader Pricing
Dorchester Outdoors, a hunting, boating, and outdoor sporting goods store, is offering a new fishing boat for $299 a month for 36 months. At the end of the period, the customer will have to return the boat to the store.
Leasing
Harrison's supermarket reduced the advertised price on all fresh fruits and vegetables because they were not selling quickly, and the store did not want them to spoil.
Markdown
When a company's advertising is focused on informing, persuading, or reminding consumers about the company's specific offerings, it is referred to as ______ advertising.
Product-focused
Calloway movie theatres offer three sizes of popcorn: 5-, 10-, and 20-cup buckets priced at $8.99, $9.49, and $10.99, respectively.
Quantity Discount
Competitor Oriented
a company objective based on the premise that the firm should measure itself primarily against its competition
What is an example of monopolistic competition?
The apparel industry, with many providers that seek ways to differentiate themselves and claim market share
Which of the following is an example of monopolistic competition?
The apparel industry, with many providers that seek ways to differentiate themselves and claim market share
Which of the following is an example of an oligopoly?
The oil industry, with a limited number of providers
Customer Oriented
They direct the activities of the company toward satisfying customers.
The _____ is fixed costs plus the sum of the variable costs
Total
Target return price
Variable Costs + ( Fixed costs / Expected unit sales ) times 1 + target return %
Suppose that a new fitness company decided to copy the Planet Fitness strategy as described in the case, including matching its prices. This new company would be demonstrating what type of pricing strategy?
competitive parity
If firms strategize according to the premise that they should measure themselves primarily against firms challenging them directly for customers, they have adopted a ______ orientation.
competitor
SBC's website sells add-ons such as bicycle pumps, tool bags, and water bottles that can be attached to the bike frame. These are examples of
complementary products
Price minus the variable cost per unit equals ______.
contribution per unit
Some specialty retailers attempt to compete not by setting low prices but by justifying higher prices through high levels of personalized service. This is an example of a ______ orientation to pricing.
customer orientation
Firms that are less concerned with the level of profits and more interested in the rate at which profits are generated relative to their investments tend to use ______.
target return pricing
Sales Orientation
the belief that increasing sales will help the firm more than increasing profits
Eddie was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Eddie perceived price as _______ for a good or service, while most consumers recognize price as the _______ made to acquire a good or service.
the money paid; overall sacrifice
Imagine that McDonald's decides to run a print ad campaign for one month in a specific region's newspapers. While the ad is being run in the newspapers, McDonald's monitors any changes in weekly sales for their franchises in that specific region. What is this process called?
this process is called tracking
Channel members include which of the following
Wholesalers, Manufacturers and retailers
In the United States there are many hotels offering many different types of lodging choices.
an example of monopolistic competition
Newmont Mining Corporation the world's second-largest producer of gold. The compete among many different companies offering the same product.
an example of pure competition
When the cellular providers began offering 4G service, they needed to estimate how much more (or less) consumers would be willing to pay for the product relative to other comparable products. This pricing consideration is the ___________ method.
improvement value; The improvement value method represents an estimate of how much more (or less) consumers are willing to pay for a product relative to other comparable products.
If any of the companies in the case set a very low price for one or more of its products with the intent to drive its competition out of business, they would be guilty of the illegal pricing practice known as
predatory pricing.
Why is PR becoming more and more relevant according to the text?
Consumers are skeptical of marketing claims made in other media. PR is more credible and objective than any other aspects of an IMC program because the firm does not buy the space in print media or time on radio or television.
Hartford food stores use these to induce their customers to try new products, convert first-time users to regular users, increase purchases, and protect market share.
Coupon
In the case, a Domino's spokesperson is quoted talking about limited-time-only pricing tactics. Based on this comment, Domino's probably pursues a(n) ________ strategy.
EDLP; Everyday low pricing (EDLP) is a strategy that sets a single, reasonable price instead of using periodic short-term discounts, as would be done with a high/low strategy. The spokesperson says that Domino's doesn't use those tactics. The other three options are not directly related to the use of limited-time-only tactics.
One problem that occurred for Zara was that individual store managers were ordering too much inventory on popular items. One way Zara addressed this was to implement _________, whereby Zara used mathematical processes and assumed responsibility for managing each store's inventory.
VMI; Vendor-managed inventory (VMI) 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.
competitive parity
a firm's strategy of setting prices that are similar to those of major competitors
Staples has expanded its __________ efforts to sell to companies such as Wells Fargo or IBM.
business-to-business
What are the Five Cs of pricing?
company objectives, customers, costs, competition, channel members
If a firm sets prices similar to major competitors' prices, this is an example of ______ pricing.
competitive parity
With its reinvented website, Ashley Stewart's customers find bright colors, and stylish models sporting the latest trends. The website promotes web-exclusive collections to customers that are not available in the "brick and mortar" stores. Which benefit of omnichannel retailing does this highlight?
deeper and broader selection
Walmart and Procter & Gamble effectively implemented ________, which allowed for information to flow directly from Walmart's store to Procter & Gamble's production facilities. This streamlined production as well as distribution, thus reducing costs and getting products to Walmart's customers sooner.
electronic data interchange
Suppose that a luxury brand chose to sell its products only through Nordstrom stores. This would be an example of what level of distribution intensity?
exclusive distribution; Exclusive distribution refers to selling a product through a single retailer (or, at least, a single retailer in a particular geographic area).
Utilizing its website and social media, Ashley Stewart connects with other "Neighborhood Girls Gone Global," reminding them of how someone or something local can engage communities all over the world and succeed globally. Which benefit of omnichannel retailing does this highlight?
expanded market presence
Buy choosing an omnichannel strategy, Ashley Stewart is attempting to get its target market to purchase more of their clothing and accessories from the retailer. This is an effort to
increase its share of wallet.
Using intermediaries such as distribution centers and retailers represents which type of channel design?
indirect marketing channel
Staples has been successful using a multichannel approach. One of the contributors to this success is that the consumer sees the shopping experience as being __________ across the different retail channels.
integrated; It is important for omnichannel retailers to provide an integrated shopping experience for customers. By making the process as seamless as possible, Staples has been able to capitalize on multichannel success.
The strategic relationship between Walmart and Procter & Gamble is based on __________ because both firms realize that investments in supply chain management will create savings for consumers.
interdependence
Zara has developed the practice of delivering less merchandise to its stores on a more frequent basis. This quick response system is called a(n)
just-in-time inventory system.
Verizon offered a lower data rate for its new 4G service ($50 per month) than for its existing 3G service ($60 per month). This pricing strategy is called
market penetration pricing.
Storing and Cross-Docking Merchandise
merchandise
Monopolistic competition
occurs when there are many firms competing for customers in a given market but their products are differentiated.
The case mentions that Macy's, in a move to target Millennials, is opening stores similar to Nordstrom Rack, offering brand name merchandise at discount prices. These stores are examples of
off-price retailers.; Off-price retailers offer an inconsistent assortment of brand-name merchandise at significant savings. Full-line discount stores and extreme value retailers focus primarily on price, not on brand-name merchandise, and category killers and specialty retailers are focused on merchandise assortment or service.
Nordstrom Rack sells its products in physical stores, on its website, and using its mobile app, in order to make its products available to customers when and where they want to buy them. This is part of Nordstrom's _________ strategy.
omnichannel; An omnichannel (or multichannel) retail strategy offers consumers multiple channels through which to shop. It is especially common for retailers to adopt a multichannel strategy by offering their products both in stores and online.
For Best Buy, the partnership with Macy's primarily addresses which aspect of retail strategy?
place; By having small Best Buy outlets in Macy's stores, Best Buy is increasing its number of locations, which is related to Place. The case doesn't mention any changes in product assortment or pricing for Best Buy due to the partnership. The partnership probably has some benefits in terms of Promotion as well, but there is a more direct link to distribution (place) strategy.
Ashley Stewart created beautifully merchandised stores, where each customer is greeted by "Ms. Ashley." This choice represented which part of a retail strategy?
place; In pursuit of better and better locations, retailers are experimenting with different options to reach their target markets. Ashley Stewart has realized that store environment (place) is key to success.
Walmart probably has the most ____ in its supply chain relationships because of its size, negotiating strength, and its commitment to improvement in its supply chain performance.
power; Power occurs when one firm has the means or ability to have control over the actions of another member in a channel at a different level of distribution. Walmart, in many cases, has power over its suppliers.
_______________ __________________occurs when a company has a very low price for its product(s) in order to drive its competition out of business.
predatory pricing
SBC's value proposition suggests that the quality of its products is worth "paying a little extra for"; this pricing orientation is sometimes referred to as ________ pricing.
premium
A ____________________ ____________________occurs when oligopolistic companies compete with each other by repeatedly lowering their prices.
price war
Competition, channel members, costs, customers, and company objectives are the five critical components of ______.
pricing
Forty-eight of the fifty brands sold by Nordstrom department stores are also offered at Nordstrom Rack. This is a key element of Nordstrom Rack's __________ strategy.
product; Since this deals with the merchandise offered at Nordstrom Rack, this is an element of Nordstrom Rack's product strategy. By carrying the same brands, Nordstrom Rack assures customers that they will find the same high-quality brands they love from Nordstrom, at low prices.
Macy's partnership with Best Buy primarily addresses which aspect of retail strategy?
product; The case states that Macy's looks to Best Buy to provide a greater assortment of electronics in its stores, and assortment is part of product strategy. Price is not mentioned, and Place has mostly to do with store locations. The partnership probably has some benefits in terms of Promotion as well, but there is a more direct link to product strategy.
Cary is the marketing manager for an automobile dealership. His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent. His firm is using a ________ orientation.
sales
Compared to other company objectives, a sales-oriented firm ______.
sets prices very low to generate new sales, even if profits suffer
At most pizza chains, an extra-large pizza costs less per slice than do smaller pizzas. This is an example of a
size discount.
With ________ ____________ pricing, companies change their prices only to meet those of their competitors.
status quo
Frequent direct reorder
store to manufacturer
In supply chain management, Icebreaker's long-term partnerships with the farmers who grow wool are called ______ relationships.
strategic A strategic relationship, also called a partnering relationship, is one in which the marketing channel members are committed to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial. Icebreaker and the wool farmers have established a strategic relationship.
By combining their resources and developing shared goals, Procter & Gamble and Walmart were able to increase the value to the final consumer. Their relationship is considered
strategic; Strategic relationships occur when supply chain members are committed to maintaining a relationship over the long term and investing in opportunities that are mutually beneficial.
When a firm is aiming for a particular amount of profit as its overriding concern, it usually implements ______.
target profit pricing
Strategies that can be used as part of the profit orientation strategy include which of the following?
target profit pricing and maximizing profits
The case mentions that the Best Buy stores inside Macy's stock many devices from Samsung. When choosing Best Buy as a retail partner, Macy's would have wanted to ensure that;
the Samsung brand fits with the expectations of Macy's customers. Macy's would have wanted to ensure that Samsung—and the other brands carried by Best Buy—met the expectations of Macy's customers in terms of the quality level and brand image. An exclusive distribution agreement, while it would certainly be an advantage for Best Buy, wouldn't be a realistic expectation given how widely Samsung products are distributed. The other options are related to Best Buy's supply chain, and as long as they have sufficient merchandise in stock, wouldn't be an important consideration to Macy's—especially not compared to customer expectations.
An example of a nonmonetary sacrifice made in acquiring a product or service is ______.
time
Reasons for Sales Oriented
to introduce new products that they want to establish in the market; more concern with market share than dollar sales; setting low prices to discourage new firms from entering the market; encourage current firms to leave the market and/take market share away from competitors- all to gain overall market share
Based on information in the case, Papa John's sets its prices by focusing on
value.