MKT 19 Final

Corporate Wumart has a goal to achieve sales growth every year in each of its stores. In April 2009 Wumart had total net sales of $30 million in its 150 stores. In April 2010 Wumart had total sales of $45 million in its 200 stores. Of their total sales in 2010, $10 million was accounted for by the 50 new stores they opened during the year. What was Wumart's same store sales growth in April 2010?

16.7%

Wal-Mart customers are very happy because Wal-Mart brought back layaway for the holiday season to help their customers out in these tough economic times. Customers can reserve the items in October and pay a little bit each week until they finish paying them off and pick their gifts up in December. The customers also don't have to worry about hiding the gifts somewhere in their houses where inquisitive children might find them! This is an example of which retail function(s)? 1 Providing an assortment 2 Holding inventory 3 Breaking bulk 4 Providing services

2 and 4

Firehouse Subs currently holds 40% of the market share of sandwich shops in Gainesville. (Assume they also have 40% share of voice.) If they want to expand to 55% market share, they must increase their share of voice by:

22.5%

Price Strategy

A basic, long-term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle

Rebate

A cash refund given for the purchase of a product during a specific period

Market Share

A company's product sales as a percentage of total sales for that industry

Fixed Cost

A cost that does not change as output is increased or decreased

Variable Cost

A cost that varies with changes in the level of output

Zone Pricing

A modification of uniform delivered pricing that divides the United States (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone

Leader Pricing (Loss-Leader Pricing)

A price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store

After graduating from college, Jack and Jill opened an ice cream parlor in Gainesville. The ice cream parlor was a great success and has now expanded worldwide. Jack and Jill have some new advertising ideas; however, before they start investing money into marketing, they want to run a detailed analysis of their customers worldwide to determine which age groups account for the majority of their sales. Which aspect of cross-cultural analysis should Jack and Jill focus on?

Demographic

The channel strategy demonstrated when Schwinn Corp. sells its Schwinn brand bicycles through select bike dealers and its "Sand King" brand of bikes through discount stores is called

Dual distribution

Fruits N' More (FNM) has noticed that their Froot brand chewing gum has been steadily losing market share to its competitors. According to the latest market reports, only a small segment of the market is loyal to the FNM brand. Because of this, FNM's top executives have decided to continue to manufacture and distribute Froot, but no longer invest in marketing efforts. Which strategy is FNM implementing?

Harvest

Shelby is currently having problems with her bakery. She has recently mapped out an entire new strategy for both her baking process and her marketing to try to make her company more profitable. However, her employees are not abiding by her new guidelines and therefore her company is still failing. This situation is a result of:

Implementation Failure

When is Freight Absorption Pricing used?

In intensively competitive areas or as a way to break into new market areas

The price bundling of physical goods could lead to an ___________ in product consumption.

Increase

Per-unit costs will go down as a firm's production experience ____________.

Increases

Acosta, as described by guest speaker Hobie Walker, works with a wide variety of manufacturers to sell their products through various channels. What type of channel coverage does Acosta use on behalf of its manufacturer clients?

Intensive

What is an advantage of Rebates?

Is a temporary inducement that can be taken away without altering the basic price structure

Jenna wants to start a liquor store with her two friends Mia and Rachel. They are opening in Gainesville, so they have no doubt they'll be successful. Mia will be the main salesperson, Rachel will be in charge of ordering and stocking the shelves, and Jenna will develop a special rewards card to help college students save money. Who is performing which function in the distribution channel?

Jenna - facilitating, Mia - transactional, Rachel - logistical

Kurt works for a wholesaler. He takes inventory on all incoming products (meaning the wholesaler takes ownership) and is also in charge of the company catalog that they distribute to retailers. His company does not offer credit or conduct research. They recently added a sales team makes daily sales calls on retailers. The wholesaler Kurt works for can be categorized as a(n):

Jobber

_____ is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price).

Keystoning

Christie loves her new iPhone but is very frustrated that she is hardly ever able to use FaceTime because she rarely has access to Wi-Fi in her home in rural New Mexico. Christie's frustration is due to:

Lack of Bandwidth

What is a disadvantage of Status Quo Pricing?

May ignore demand or cost or both

When is Leader Pricing used?

On well-known items that consumers can easily recognize as bargains

Ani.. Anna.. and Aimee went to Mexico for Spring Break. The best friends loved shopping in the markets because.. unlike shopping at malls in America.. they could bargain with the merchants in Mexico. The girls came home with dresses that had 25-peso price tags.. but they actually haggled down the prices to 17 pesos. This type of pricing is called:

Participative Pricing

Those characteristics of a product that make it superior to competitive substitutes are called

Points of difference

Marketing two or more products in a single package for a special price

Price Bundling

a person who is able and willing to cut red tape and move a product or program forward.

Product champion

During the hot summer months, or the week before a new class starts if there is still space available, the Nick Price golf school in Orlando, Florida, offers a 25 percent reduction to get golfers during the off-season or those making a last-minute decision. This is an example of pricing strategy used as a(n):

Promotion strategy

If the new product resembles several others already on the market, there is ____________ pricing freedom.

Restricted

At the end of the summer, Howard Nursery reduced the price on all of its plants, fertilizer, and potting soil by 50 percent in order to liquidate this inventory. What type of pricing strategy is being used in this example?

Sales maximization

A price reduction for buying merchandise out of season

Seasonal Discount

Four types of price discounts are

Seasonal.. trade (functional).. cash and quantity

Fossil, an American manufacturer of clothing and accessories, has been particularly successful in developing a licensed watch line with popular designer Michael Kors. This licensing agreement added a new segment of contemporary fashion watches with retail prices ranging $65-$595. In line with the reputation of Michael Kors, these watches are sold only at a few department stores in each city that cater to the contemporary fashion market, including stores like Bloomingdales, Nordstorm, and Macy's. The degree of channel coverage for Michael Kors watches can most accurately be described as:

Selective

When Lisa received an e-mail from who she thought was Brendon, her favorite bank teller at Bank of America, asking for her PIN and account number, she replied back instantly. Later that day she went to use her debit card at her favorite store in the mall and was denied due to insufficient funds. She immediately called Brendon for an explanation. Brendon assured Lisa that he had never sent her an e-mail and explained that she was the victim of Internet fraud. What type of Internet fraud was this?

Spear phishing

Charging a price identical to or very close to the competition's price

Status Quo Pricing

What does a company's freedom in pricing a new product/devising a pricing strategy depend on?

The market conditions and other elements of the marketing mix

Predatory Pricing

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market

Keystoning is:

The practice of marking up prices by 100 percent

Keystoning

The practice of marking up prices by 100 percent, or doubling the cost

Price Lining

The practice of offering a product line with several items at specific price points

Revenue

The price charged to customers multiplied by the number of units sold

Supply

The quantity of a product that will be offered to the market by a supplier at various prices for a specified period

Demand

The quantity of a product that will be sold in the market at various prices for a specified period

firms that perform most or all of the logistics functions that manufacturers, suppliers, and distributors would normally perform themselves.

Third-party logistics providers

A price tactic that charges two separate amounts to consume a single good or service

Two-Part Pricing

The North American Free Trade Agreement was designed to encourage free trade between

US, Canada, and Mexico

Reducing the bundle of services that comes with the basic product

Unbundling

What is the first step in choosing a supply chain?

Understanding the customer

Laws that prohibit wholesalers and retailers from selling below cost

Unfair Trade Practice Acts

Setting the price at a level that seems to the customer to be a good compared to the prices of other options

Value-Based Pricing

A cost that changes with the level of output is called an ______ cost.

Variable

Casey loves cats. For this reason Casey decides to open a cat emporium called MEOW! This store will sell everything from balls of yarn to scratching posts to little computers to watch MAR 3023 lectures on. Casey realizes that such a niche market is limited, so she decides to add a small section for dogs as well. Since she doesn't know anything about dog preferences, Casey decides to let her dog-goods supplier stock that area of the store. Casey is using which type of inventory management for her dog section?

Vendor-managed inventory (VMI)

People who referred 10 friends to the Procter & Gamble website for Physique shampoo (www.physique.com) received a free, travel-sized styling spray and were entered in a sweepstakes to win a year's supply of the shampoo. The promotion generated 2 million referrals and made Physique the most successful new shampoo ever launched in the United States. To accomplish this P & G used

Viral marketing

Which of the following statements about pricing strategies throughout the product life cycle is NOT true?

With inelastic demand, price will be set low in the introduction stage.

A modification of uniform delivered pricing that divides the United States (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone

Zone Pricing

According to the text, price is best described as: a. the perceived value of a good or service b. money exchanged for a good or service c. the psychological results of purchasing d. the cost in dollars for a good or service as set by the producer e. the value of a barter good in an exchange

a

An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs. a. profit maximization b. market share pricing c. demand-oriented pricing d. sales maximization e. status quo pricing

a

_____ measures the overall effectiveness of management in generating profits with its available assets. a. Return on investment b. Economic order quantity c. Target-on-sales d. Retained earnings e. Efficiency maximization

a

In the mature and highly competitive furniture industry, you would expect furniture manufacturers to engage in:

a price war

setting a market price for a product or product class based on a subjective feel for the competitor's price or market price as the benchmark (competition oriented)

above, at, or below market pricing

a marketing system that achieves coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership.

administered vertical marketing system

Julie is trying to market a new soda product that she calls "Julie Juice". Unfortunately, even though she spent a lot of money marketing, her product is still a flop. It didn't do well because Coca-Cola and Pepsi already have huge market shares. Pepsi and Coca-Cola's large market shares and marketing budgets created _____ that doomed Julie Juice.

an entry barrier

Go to any Publix supermarket and walk down the cereal aisle. You will notice that four major brands—Kellogg's, Quaker, General Mills, and Post—occupy virtually all the shelf space. These cereals are all priced about the same. There is a good deal of product differentiation as the result of licensing agreements with movie studios (Disney, DreamWorks, etc.) and through the use of different health claims. The cereal industry is an example of what type of competitive market?

an oligopoly

The major difference between an off-price retailer and a discount store is that off-price retailers purchase merchandise from manufacturers __________ and discount stores buy from wholesalers _________.

at below wholesale prices; at full price but take a less of a markup.

When Kroger, a national supermarket chain, uses a one-time, special weekend promotion to price a six-pack of soda at $2.09 (which is below its customary price level), it is attempting to

attract customers in hopes they will buy other products as well.

A company using market share pricing has a _____ pricing objective. a. profit-oriented b. sales-oriented c. demand-oriented d. supply-oriented e. status quo

b

Bernard Hinault makes the most expensive bicycles in the world. Its target market is people who willingly pay $8,000 or more for their bicycles. If Bernard Hinault were to lower prices to target customers who want a good bike but who can't or won't spend that much for one, it would most likely use a(n) _____ pricing objective. a. inelastic or supply-oriented b. market share or sales maximization c. profit maximization or target return on investment d. status quo or satisfactory profits e. demand-oriented or supply-oriented

b

Christine owns a jewelry store. She buys jewelry from an overseas supplier and sells it in her store. However, Christine now wants to design and manufacture the jewelry herself, taking more control over the channel. She is looking to engage in:

backward integration

electronic shopping agents that comb Web sites to compare prices and product or service features.

bots

the largest, but poorest, socioeconomic group of people in the world.

bottom of the pyramid

The point at which total revenue and total cost are equal is referred to as

break-even point.

the marketing of two or more products in a single package price (demand oriented)

bundle pricing

Laurie knows little about cooking and does not want to spend the time to learn how to make a quiche. However, she has been asked to bring a quiche to an office retirement party. Not wanting to make a poor choice, she is likely to:

buy the most expensive pre-made quiche (perhaps paying too much), guessing that the price is related to quality

Money that is left over after paying for company activities is called: a. return on investment b. a contribution margin c. profit d. net worth e. a current asset

c

Which of the following statements about price is true? a. Price and revenue are synonyms. b. Price always equals some monetary figure. c. Price is not necessarily based on the satisfaction consumers receive from a product. d. High prices result in high profits. e. All of these statements about price are true.

c

Why are marketing managers finding it more difficult to set prices in today's environment? a. Inflationary and recessionary periods have made customers less price-sensitive. b. Fewer dealer and generic brands are available because the competition has been eliminated. c. The high rate of new-product introductions has led to careful reevaluation by consumers. d. Marketing managers are finding it difficult to compare prices between suppliers. e. Buyers are less informed and are less price-sensitive.

c

Yield management pricing is most consistent with services trying to deal with

capacity management.

A retail management approach in which a manager is assigned the responsibility for selecting all products that consumers might view as substitutes for each other, with the objective of maximizing sales and profits for that group of products is referred to as __________.

category management

The oldest retail setting, usually located in the community's downtown area, is referred to as

central business district.

a distribution system that consists of agreements and procedures among channel members for ordering and physically distributing a producer's products through the channel to the ultimate consumer.

channel partnership

An interactive, Internet-enabled system that allows individual customers to design their own products by answering a few questions and choosing from a menu of product attributes, prices, and delivery options, is referred to as a _________.

choiceboard

equation for stockturn rate

cogs/average inventory

On an e-commerce website, a process that automatically groups people with similar buying intentions, preferences, and behaviors and then predicts future purchases is referred to as _________.

collaborative filtering

When you view a selection at Amazon.com and see "Customers who bought this (item) also bought ", you are seeing the application of __________.

collaborative filtering

The actions taken during the evaluation phase of the strategic marketing process include: (1) __________ and (2) correct negative deviations and exploit positive ones.

compare results with plans to identify deviations

VideoAdvantage.net is a small company that rents DVD movies by mail using the Web. It jumped into an industry where there was no dominant leader but many competitors. It established a loyal clientele and a solid market share by providing a service that was not available through other companies that rented movies over the Internet—reliable overnight shipment. Its delivery system created its

competitive advantage.

While pricing objectives reflect corporate goals.. pricing constraints often relate to

conditions existing in the marketplace.

Bill McDermott is President and CEO of SAP Americas and Asia Pacific Japan. SAP is a company that sells extremely expensive enterprise resource planning software to large and mid-sized companies. McDermott operates at the __________ level of his organization.

corporate

A form of retail ownership that involves multiple outlets under common ownership is referred to as a(n).

corporate chain

There are three general forms of retail ownership: contractual system, independent retailer, and _________.

corporate chain

The level in an organization where top management directs overall strategy for the entire organization is referred to as the

corporate level.

Ronny's Cupcakes is a well-known bakery on the Jersey Shore that serves hundreds of customers a day. "Baking the tastiest and most scrumptious cupcakes in all of Jersey" is Ronny's Cupcakes':

corporate mission

summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price (cost oriented)

cost plus pricing

while it is important to drive down logistics costs, customer needs must be a part of the equation.

cost-effective logistics management

As stated in class.. "The purpose of price is not to recover _____ but to capture _____ in the consumer's mind."

cost; the value of the product

Recipco and Tradaq are companies that connect international companies who want to trade the products they make for products they need, rather than paying cash. Recipco and Tradaq assist international companies in making

countertrades.

Reductions in delivery times both in the marketplace and the supply chain have earned firms such as Toyota and Xerox a strong reputation. For Toyota and Xerox, logistics

creates time utility for their customers.

The online consumer who researches products online and then purchases them at a retail store is referred to as a __________ shopper.

cross-channel

Tiffany & Company knows that Japanese are superstitious about the number 4. As a result, Tiffany sells its fine glassware and china in sets of five, not four, in Japan. Tiffany has used its knowledge of __________ to avoid connecting its products with the number 4.

cultural symbols

Under which of the following conditions will companies with low market share be most likely to fail? a. competing in a slow-growth industry b. competing in an industry that makes frequently purchased items c. competing in an industry with few product changes d. competing in an industry requiring market power and economies of scale e. competing in none of these industries

d

According to the text.. services can be classified in three ways -- according to whether they are profit or nonprofit.. whether they are government sponsored.. and whether they are

delivered by people or equipment.

The quantity of a product that will be sold in the market at various prices for a specified period is called:

demand

Procter & Gamble dropped the price of Pringles Potato Chips in the Southeast due to price competition and consumer demand. As a result of the price reduction, P&G increased unit sales and earnings by 10 percent due to:

demand being elastic

The _____ is the quantity of a product that will be sold in the market at various prices for a specified period, and _____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.

demand, supply

Shoes R Us, a retail outlet, offers shoes for men, women, and children in many sizes and foot widths. It offers running, cross training, walking, golf, and other types of shoes. This an example of the __________ that Shoes R Us offers to its customers.

depth of product line

Your local Hallmark retailer carries thousands of greeting cards. You can find cards for a twin birthday, for name day, from my cat to yours, and many other unique titles. This is an example of the _________ your Hallmark retailer carries.

depth of product line

The marketing managers at Omaha Steaks used airlines' databases to mail a special offer to frequent flyers. Eight weeks after shipping the steaks to the frequent flyers who placed orders as a result of the initial offer, the company's salespeople followed up by telephoning customers to ask for new orders. This is an example of which types of nonstore retailing?

direct mail and telemarketing

Most demand curves slope:

downward and to the right

An arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product is referred to as _________.

dual distribution

The practice of changing prices for products in real time in response to supply and demand conditions is referred to as _________.

dynamic pricing

Franz Hall wants to open a business selling cotton candy from a mobile cart. He cannot decide whether to base his pricing objectives on market share, dollar sales, or unit sales. Regardless of which he chooses, his firm's pricing objective can be categorized as: a. status quo b. profit oriented c. need oriented d. cost oriented e. sales oriented

e

Revenue: a. equals quantity sold times profit margin b. equals price minus costs c. equals return on investment d. is synonymous with profit e. equals price of goods times quantity sold

e

Looking at the development of roads, water delivery networks, sewage and garbage disposal facilities, and the stability of the government are all part of a country's

economic infrastructure

When Nesco brand food hydrators sold for $59.99, Nesco sold 90 dehydrators. When the company dropped the price of its dehydrators to $44.95, it sold 145 dehydrators. Demand for the food dehydrators appears to be:

elastic

While the sales of the Apple iPhone have been great from the beginning, when Apple released its iPhone 3G, it cut the price of the iPhone for $399 to $199. Sales exploded with one million iPhones sold the first weekend. Demand for the iPhone appears to be:

elastic

When consumers are sensitive to price changes, ____ occurs.

elastic demand

Consumers' responsiveness or sensitivity to changes in price is known as:

elasticity of demand

the use of the Internet to make products and services available for purchase or use by consumers or industrial buyers.

electronic marketing channels

Why would an online consumer want to use a bot?

enhance convenience of online shopping

When the price is set at a level where demand and supply are the same, __ has been achieved.

equilibrium

When the price of a product is set at a level where demand and supply are the same, _____ has been achieved.

equilibrium

the practice of replacing promotional allowances with lower manufacturer list prices.

everyday low pricing

a method of pricing based on the learning effect, which holds that the unit cost of many products and services declines by 10 to 30 percent each time a firm's experience at producing and selling them doubles (cost oriented)

experience curve pricing

Winemaker Robert Mondavi Corp. buys satellite images from NASA to spot problems in its vineyards and pushes those images out over a(n) __________ to its independent growers. Mondavi will help growers avoid vineyard problems—and improve the grapes it buys.

extranet

A company that uses an organizational structure by marketing department, finance department, human resource department, etc., is most likely using __________ groupings.

functional

The two types of channel conflict are

horizontal and vertical.

The U.S. motorcycle manufacturer Harley-Davidson uses intermediaries to sell its U.S.-manufactured motorcycles in numerous nations outside the U.S.; Harley-Davidson uses

indirect exporting.

When price decreases and total revenue falls, demand is:

inelastic

All of the following factors directly affect the elasticity of demand EXCEPT:

inputs needed to manufacture the product

Karl Zimmerman imports furniture from Germany—some antiques but mostly new pieces made and painted in the Black Forest. To keep cost down, he has arranged to ship the furniture only when there is enough to fill a 40-foot container. The container moves through Germany by truck, river barge, and train before being loaded on a container ship. When the ship docks in a port on the eastern U.S., the container is loaded onto a train and then a truck for delivery to Zimmerman's store. Zimmerman's method of bringing goods to the U.S. is referred to as a(n) _________.

intermodal transportation

someone who buys large quantities of goods and resells to merchants rather than to the ultimate customers

jobber

Ford, an American car company, enters an agreement with a Chinese firm to share ownership of a new China-based auto manufacturing company in order to do business in China.

joint venture

when a foreign company and a local firm invest together to create a local business.

joint venture

Baldwin has decided he can't afford to maintain a large inventory of components. Instead, The Computer Company maintains a very low inventory and relies on mail-order suppliers to provide fast, on-time delivery of components as they are needed. The Computer Company is using

just-in-time inventory supply

managers who have the authority and responsibility to issue orders to people who report to them.

line positions

deliberately selling a product below its customary price.. not to increase sales.. but to attract customers' attention in hopes that they will buy other products as well.

loss-leader pricing

Which process determines whether total revenue from the sale of an additional unit of product exceeds the cost of producing and marketing that unit?

marginal analysis

Profit maximization occurs when:

marginal revenue equals marginal cost

__ is a company's product sales as a percentage of total sales for that industry.

market share

The application of modern measurement technologies to understand, quantify, and optimize marketing spending is referred to as __________.

marketing ROI (return on investment)

Intermediaries make the selling of goods more efficient by

minimizing the number of sales contacts between producer and consumer.

setting prices a few dollars or cents under a whole number (example: $11.99) (demand oriented)

odd-even pricing

setting prices a few dollars or cents under an even number.

odd-even pricing

The prices for all furniture sold at Urban's Furniture Warehouse end in $9.. such as $599.. $899.. etc. Urban's Furniture Warehouse uses

odd-even pricing.

George Zimmer, the CEO of Men's Wearhouse, is known to the public as the bearded company pitchman who sells suits and sport coats on TV declaring, "You'll like the way you look; I guarantee it!" He also says that to be successful, "You've got to have a company that starts with trust and fairness." He aims to keep his employees happy and loyal. His philosophy establishes what is termed:

organizational culture.

Marketers must take care when using __ since a lower price often signals to consumers that product quality is also low.

penetration pricing

setting a low initial price on a new product to appeal immediately to the mass market (demand oriented)

penetration pricing

Benefits that imply category membership are common to most, if not all brands and are sometimes referred to as ____.

points of parity

Along Archer Road, students can find several national stores like Target and Wal-Mart. There are also dozens of other smaller stores within the same buildings. Publix groceries are conveniently located among the major retailers. This type of retail location is best described as a:

power center

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market is called:

predatory pricing

The practice of charging a very low price for a product with the intent of driving competitors out of business is referred to as

predatory pricing.

the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service

price

The manager of a souvenir shop in Florida graphed the demand per week for fresh orange juice. The graph indicates a demand schedule that slopes downward and to the right. This graph indicates that the quantity of juice demanded increases as:

price decreases

Charging different customers different prices for the same service

price discrimination

At a price of $654,400, the SSC Ultimate Aero has been ranked as the third most expensive car in the world. The company is only planning to build 25 of the current model. If that matches the demand for the Ultimate Aero, then a state of _____has been achieved.

price equilibrium

a conspiracy among firms to set prices for a product.

price fixing

setting the price of a line of products at a number of different specific pricing points (demand oriented)

price lining

Fixed cost contribution equals:

price minus the average variable cost

the successive price cutting by competitors to increase or maintain their unit sales or market share.

price war

Which term describes factors that affect price.. including newness of the product.. whether it is part of a product line.. and cost of changing a price?

pricing constraints

Different brands within a company's product line generally have different profit margins; higher price lines have higher profit margins. For example.. Nike Variety tennis shoes have variable costs of $6 and sell for $24.. whereas Nike Wimbledon tennis shoes have variable costs of $10 and sell for $48. It is most likely true that Nike is using a _________ pricing strategy

product-line

setting prices for all items in a product line

product-line pricing

Money that is left over after paying for company activities is called:

profit

For convenience, pricing objectives can be divided into three categories. They are:

profit oriented, sales oriented, and status quo

When Insight Research Associates quotes a marketing research project, management will first estimate the cost to conduct the research and produce and deliver the final client report. The next step in determining the price is to add 30 percent to that cost estimate. This becomes the price estimate given to the potential research client. This suggests that Insight Research Associates uses a(n) _____ pricing objective.

profit-oriented

Tracy could not understand why Dominos Pizza would close its Times Square location. The Times Square restaurant has maintained one of the highest sales volumes of all the Dominos locations in the country. However, Tracy did not know that after performing a _____, the company found that the high cost of rent and wages in the area severely eroded the attractiveness of the Times Square location.

profitability analysis

Yield management systems are used to:

profitably fill unused capacity

Shopping bots:

provide a means for comparison shopping.

Manufacturers can do all of the following to regain some control over the price their products are sold for at the retail level EXCEPT:

require resellers to maintain prices in line with competitors prices

As discussed in the text, Dell made a conscious decision to use a(n) __________ supply chain to best meet the requirements of its consumers.

responsive

identifies the specific customer base served by all stores within a given radius.

retail positioning matrix

A small businesswoman was preparing her staff for the upcoming holiday season. "We want to move as much inventory as possible. Not only can we highlight our holiday items, why not mark down some of our other seasonal items while people are in a shopping mood." From this statement, she is most concerned with __________ goals.

sales

A manager measures the response various marketing programs have met, to make sure funds are being used efficiently. He tracks the amount spent by each department and the total sales each makes on its marketing activities. This manager appears to be using what to control the store's marketing programs?

sales component analysis

As a short-term pricing objective, _____ can be effectively used on a temporary basis to sell off excessive inventory.

sales maximization

Dixie Furniture Company has recently moved to a new, larger location. At this new location, it has been unable to attract sufficient customers. Its owner did not have the cash to pay the current loan installment due on the building and inventory, so he decided to reduce all merchandise prices by at least 50 percent for a weekend sale to earn enough to make his loan payment. His pricing objective can be classified as:

sales maximization

The mathematical function that relates the expense of marketing effort to the marketing results obtained is referred to as __________.

sales response function

A company using market share pricing has a _______ pricing objective.

sales-oriented

A drug store that sells pharmaceuticals, beauty aids, camera equipment, nonperishable grocery items, and automobile motor oil is an example of a retailer using

scrambled merchandising.

Kroger supermarkets will place well-known brands on the shelves at high prices while offering their own Kroger brand at lower prices. This practice is an example of:

selling against the brand

Intermediaries that represent a single producer and are responsible for the entire marketing function of that producer are referred to as _________.

selling agents

In the marketing planning process, taking stock of where the firm or product has been recently, where it is now, and where it is headed, in terms of the organization's plans and the external factors and trends affecting it, is referred to as _________.

situation analysis

setting the highest initial price that customers who really desire the product are willing to pay (demand oriented)

skimming pricing

According to the text, all of the following are examples of pricing constraints EXCEPT: demand for the product class, product, or brand. newness of the product (stage in its life cycle). competitors' prices. social responsibility cost of producing the product.

social responsibility

a subsidiary, division, or unit of an organization that markets a set of related products to a clearly defined group of customers.

strategic business unit

The term used to identify an organization's long-term course of action designed to deliver a unique customer experience while achieving its goals is referred to as

strategy.

A __________ is essentially a sequence of linked suppliers and customers in which every customer is, in turn, a supplier to another customer until a finished product reaches the final consumer.

supply chain

In class, Hobie Walker talked about several current and expected future trends in the consumer products marketplace. Which one of the following is NOT a trend that Mr. Walker mentioned?

switch from private label back to national brands as the economy bounces back

David and Cecilia Stanford, owners of Prairie Herb vinegars, decided to offer the product in 5-ounce and 13-ounce sizes. They decided to sell the vinegar only through the mail and to price the smaller bottle at $4.45 and the larger bottle at $13.25. They were determining Prairie Herb's marketing

tactics.

If a firm wished to set its price at a level that would maximize its profit.. what condition must hold?

target ROI > 20%

estimating the price that the ultimate consumer would be willing to pay for a product (demand oriented)

target pricing

If you wanted to set up a business importing amber from Latvia to the United States, you would have to plan on paying the U.S. Customs Service roughly 20 percent of the value of the product as a(n) _________.

tariff

Price is best described as:

that which is given up in exchange to acquire a good or service

Although many factors can influence price, the primary determinants are:

the demand for the good and the cost to the seller

Elmer Fudd owns a rabbit hunting supplies business, Wabbits. He is developing a marketing plan and is in the strategy formulation stage. Elmer wants to pursue a strategy that has the most (number one) influence on market share and growth. Based on the research discussed in lecture, which of the following should he implement?

train sales force to be more effective

Assuming business risks in the ownership of inventory that can become obsolete or deteriorate would be an example of a __________ function.

transactional

State laws that put a lower limit on wholesale and retail prices are called __. In states that have these laws, selling below cost is illegal.

unfair trade practice acts

The two general methods for quoting prices related to transportation costs are FOB origin pricing and _________.

uniform delivered pricing

Prestige pricing

uses high prices to promote a high-quality product

The ratio of perceived benefits to price is referred to as

value.

For a nail salon, the costs associated with the purchase of nail polish and other products like nail polish remover, sterilized equipment, laundry service for the towels, and the beverages given to customers, are all examples of _____ costs.

variable

The two types of costs a marketer needs to consider when setting prices are:

variable and fixed

inventory management system whereby the supplier determines the product amount and assortment a retailer needs and automatically delivers the appropriate items.

vendor-managed inventory system

Mimimaternity.com is a website sponsored by Gerber where expectant mothers can go and share their thoughts, feelings and opinions with others in their same situation. They give and receive advice and share their experiences with others who understand what they are going through. This is an example of which use of the Internet?

virtual community

the description of how new retail outlets enter the market.

wheel of retailing

In order to create her marketing budget she has specified all the objectives she would like to achieve over the next year, listed all the tasks associated with those objectives, and estimated the cost of completing each task. Then, she added up the costs and created her marketing budget for the year. What is a synonym for the type of budgeting approach is Lauren using?

zero-based budgeting

The owner of specialty kitchen retail store wants to determine what price she should put on a set of mixing bowls. They cost her $7. She desires a markup of 30 percent based on selling price. Which of the following is closest to the price she should charge her customers?

$10

Old Navy has new tank tops for summer and is trying to decide how to price them. They notice that American Eagle has similar tops for $10.00. Based on some consumer research.. Old Navy knows how its tops compare to American Eagle's tops (see table below) and decides to establish a parity price. What should the price be? (All measures are on 10-point scales.) Old Navy AE Importance Fit 6 6 9 Colors 6 8 7 Style 9 5 7 Quality 7 8 4

$10.56

Link.. is a small company that makes materials for safely controlling hazardous spills of all kinds. It sells these items as a neutralizing kit that priced at $120 each. (There is no quantity discount.) The costs of the materials that go into each kit are $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1..000 for rent and insurance.. $200 for heat and electricity.. $500 for advertising in trade journals and $3..500 for the monthly salary of its owner. Link.. Inc.'s marginal revenue per unit is

$120

Stephanie is opening a deli and is trying to figure out what price she should charge for giant dill pickles. She buys dill pickles from her supplier at $12.00 per dozen. Stephanie uses a markup of 60% on everything she sells. What is her price per pickle?

$2.50

16% market share but wants to increase to 24% market share. industry's total marketing expense this year is $1,200,000. How much should the firm's total marketing expense be?

$336,000

Amanda recently bought a five-bedroom beach house in Santa Cruz.. CA.. and is hoping to rent it out. After analyzing all of her expenses.. Amanda concludes that her total fixed costs equal $2..500 per month and she has a monthly variable cost of $75 per room. What should Amanda charge per room per month in order to break even (assuming 100% occupancy)?

$575

Jenni is the store manager of Rock n' Wear and would like to determine the amount of returns she had in the month of April. She has the following information to work with: Total Sales in April: $540,000 Size of Store: 400 square feet Net Sales per Square Foot: $1200/sq. ft. What were Rock n' Wear's returns for the month of April?

$60,000

Rachel is the owner and operator of a luxurious spa resort in Cozumel.. Mexico. One of her duties is to set prices based on weekly demand for rooms at the resort. Rachel expects high demand for her rooms during the last few weeks of summer vacation. Due to this demand.. she thinks the resort will be at 90% occupancy. If her total fixed costs are $100..000; unit variable costs are $100; and the hotel has 200 rooms.. what price should Rachel charge per room just to break even?

$655.56

Cowboy Malone's Electric City pays a wholesaler $700 for a television and sells it to a customer for $1,500. The markup on the television is:

$800

What are 3 ways sellers offset rising costs due to Price Lining?

-Begin stocking lower-quality merchandise -Sellers can change the prices -Sellers can accept lower profit margins

What 3 defenses does the Robinson-Patman Act of 1936 provide for a seller charged with price discrimination?

-Cost -Market Conditions -Competition

Chulo Ibsen makes and sells hand-forged wrought iron fire screens for $125 each. He has determined that his fixed costs are $8,000, and his average variable costs per fire screen are $45. What is his break-even point in dollars?

8000

The law that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country is referred to as the

Foreign Corrupt Practices Act.

A price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store

Leader Pricing

Which of the following would imply elastic demand?

Many substitute products

At a price of $1,192,057, the Bugatti Veyron may be the most expensive street-legal car on the market today. Obviously, Bugatti is NOT using a(n) _____ pricing objective in setting the price for this car.

Market share or sales maximization

Loving Care Pets manufactures four different kinds of pet food (for dogs, cats, rabbits and gerbils), specifically created for pets under three months of age. Assuming it is marketing to a single segment of "pet owners", in terms of the market-product grid framework, Loving Care Pets is using a __________ strategy.

Market specialization

Which of the following is most likely to be a variable cost for an Internet retailer that sells spices, herbs, and seasonings to consumers?

Postage for shipping spices and herbs

Lucy really loves shopping for school supplies every year. She's not ok with buying just any old highlighter or notebook. Lucy wants to have huge selection of products to choose from so she can pick the best brand. She is disappointed when she goes to Target, because they offer only three highlighter brands. When she goes to OfficeMax, though, they have eight brands to choose from. OfficeMax's deeper selection of highlighters is an example of why it is a:

Power Retailer

Which of the following statements about price is true?

Price is not necessarily based on the satisfaction consumers receive from a product.

Which of the following statements is NOT true about price?

Price means the same thing to the consumer and the seller

Today's firms must develop specific, measurable, and attainable pricing objectives if they hope to survive in highly competitive markets.

True

Revenue:

equal price of goods times quantity sold

(also called dynamic pricing) involves setting different prices for products and services depending on individual buyers and purchase situations

flexible-price policy

If a product has high pricing power, this would indicate a situation of:

inelastic demand

Which of the following statements describes a limitation associated with break-even analysis?

it is sometimes difficult to ascertain whether a cost is fixed or variable

When marketing channel members are engaged in assorting, storing, sorting, and transporting goods, they are performing __________ functions.

logistical

Lisa was working on the situation analysis component of her company (Mazda) marketing plan. In order to conduct a SWOT analysis on Mazda, Lisa had to do some research. While conducting her research, Lisa found that economic conditions were not favorable and she began to get worried. However, she also found that these has been a recent trend toward "environmentally friendly" vehicles, which she saw as promising. Which components of the SWOT analysis are depicted in this example?

opportunities and threats

setting an annual target of a specific dollar volume on profit (profit oriented)

target profit pricing

setting a price to achieve an annual target return-on-investment (profit oriented)

target return on investment pricing

Setting a price to achieve a profit that is a specified percentage of sales volume

target return on sales pricing

The North American Free Trade Agreement was designed to encourage free trade between

the United States, Canada, and Mexico.

Managers at Winn-Dixie are trying to determine if they need to expand the number of shelf facings they give JIF peanut butter. They are interested in determining how fast the JIF peanut butter product is being sold, and therefore, how often it will need to be restocked. They determine the Beginning Inventory to be $30,000 and the Ending Inventory to be $36,000. The Cost of Goods Sold is $245,000. What is JIF's Stockturn Rate?

7.4

Kendra Wilkinson has decided to open a baby clothing store named Hank Junior. In order to attract an upscale clientele, she will open only one store in Los Angeles and one store in New York City. She hopes that having a small number of stores will positively affect the store image. What type of utility is Kendra trying to create?

place

Mike's Bikes is the newest bike shop in town. It costs $75 for him to buy a Speedster 500 bicycle from the manufacturer. As a pricing strategy.. he uses a 40% markup for everything in his store. What is Mike's selling price for the Speedster500?

$125

A shoe manufacturer in the U.S. has decided to import cheaper shoelaces from China instead of buying them from a local shoelace manufacturer in Ohio. This is an example of:

"the China price"

Kristin's Cookie Cakes wants to make a 20% return on its $75..000 investment in new cooking technology. It has fixed costs of $30..000 and unit variable costs of $2. Kristin plans on selling 5..000 cakes. How much should she charge per cookie cake?

$11.00

At Wal-Mart, Randi saw a bag of daffodil flower bulbs and a box of plant fertilizer. The items, which were sold together, retailed at $28.50 but were marked down to $19.99. The retailer sold one at the $28.50 price and five at the $19.99 price. The retailer's revenue is:

$128.45

Lili just opened a brand new clothing store in Gainesville called The Shop. She bought a new line of dresses from a wholesaler that charges 30% markup. If Lili sets the retail price on the dresses at $400.. and she charges a 50% markup.. what price does the manufacturer charge the wholesaler?

$140

AT&T is introducing one of its newest cellular phones.. the Black-Jack II.. to the Florida market. The phone costs AT&T only $45 to manufacture.. but AT&T wishes to have a mark-up of 70% on this product. Using Mark-Up Pricing.. how much money should AT&T charge consumers for its new Black-Jack II?

$150.00

The small, rarely recognized country of Agantha has the following trade statistics in the year 2011: GDP: $126 million Imports: $34.5 million Exports: $52.5 million Which of the following is correct about Agantha?

$18 million balance of trade surplus

Nina's Necessities buys packs of toilet paper from its wholesaler for $0.89 each. The store uses a markup of 58%. According to the Markup Pricing Model.. for what retail price should packs of toilet paper be sold in the store?

$2.12

At the moment.. there is a new brand of toothbrush.. Toothberry.. competing for market share. The market leader.. iBrush.. is priced at $2.50 and Toothberry is using the critical strategic pricing ratio to try to calculate what its "parity" price should be. The data below show the results of a survey of the toothbrush target market. What should Toothberry charge? Brand Ratings iBrush Toothberry Importance Bristle Softness 7 8 7 Reach 8 7 8 Comfort 6 8 6 Attractiveness 7 9 5

$2.79

Sam Manilla owns a plant that produces canned chicken. Sam is unsure of how much to charge the distributor of his canned chicken product. The retail markup is 40% and the distributor markup is 20%. Using chain markup pricing.. if the retail price is $6 for each can of chicken.. how much should Sam Manilla charge the distributor per can?

$2.88

Mary owns a small kiosk where she sells hip bandanas. She sells the bandanas for $12 each. Mary uses a markup of 30%.. and she buys the bandanas from a distributor. The distributor uses a 65% markup and buys the bandanas directly from the bandana company. What price does the bandana company charge the distributor for each bandana?

$2.94

Maddy Baker is the owner of Maude's Cookie Shop.. a new bakery that makes giant.. pizza-sized gingerbread cookies. The variable cost per gingerbread cookie is $13.20. In addition.. Maddy has monthly fixed costs of $4500 and hopes to make a profit of $2750 per month. Using target profit pricing.. what price should Maddy charge per cookie assuming she sells 750 cookies a month (please round to the nearest dollar)?

$23.00

Cookie Monster currently has cookie sales of $10,000,000 each year. Assuming that their gross margin is $2,000,000, and that total industry sales are $40,000,000, how much would Cookie Monster be able to spend in additional marketing effort in order to expand its market share by three points and still break even?

$240,000

Consider the following trade statistics for Country A in 2009. Imports: $86.0 billion Exports: $114.5 billion GDP: $330 billion Country A had a _____ for 2009.

$28.5 billion balance of trade surplus

Kacy, a Gator fanatic, has always had a dream to open a store that sells Gator jewelry. She has calculated that the rent will cost her about $1,500 per month and staff salaries will be about $2,000 per month. The variable cost per piece will come out to $10.00. She estimates that she will sell 350 pieces a month. If she sells all of her pieces each month and she wishes to earn a profit of $3,000 per month, what price should she charge for each piece of jewelry?

$28.57

Rod N' Reel Fishing Pole Company has an idea for a new line of fishing poles that are sleeker and more durable. Before they start production.. they plan to use target return on investment pricing to see whether they should invest in the new product. They are willing to invest $120..000 and desire a return on investment of 20%. Their total fixed costs are $200..000 and unit variable cost is $17.50. They expect to make 20..000 units. What is their Target ROI price?

$28.70

Pear AppleCore Importance Design 8 8 8 Weight 9 7 9 Storage Space 7 7 5 Processor Speed 7 8 7 Pear, Inc. is a new technology company that is about to release its first product -- the thinnest, lightest tablet device yet. AppleCore, the market leader, has set its price at $400. If Pear, Inc. decides to price its tablet using Value-based pricing, what is its parity price (rounded)?

$420

Abby is the manager of a pet supply store and is ordering Crazy Cat kitten litter from her usual wholesaler.. who uses a 40% markup. After Abby adds her 50% markup.. the retail price of a 1-lbag of Crazy Cat kitten litter is $18. What price does the manufacturer charge the wholesaler for a 1-lbag of litter?

$5.40

Go Gators! is a small company that makes Seminole Stomping kits priced at $120. The costs of the materials that go into each kit are $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $4,500 for the monthly salary of its owner. Go Gators! unit variable cost for its kits is

$50.

Barney's Bean Bags manufactures bean bag chairs that are used in local libraries and children's centers. Barney's just built a new manufacturing facility at a cost of $500..000. Barney's Bean Bags has annual fixed costs of $27..000. Unit variable cost for a bean bag chair is $20.00. If Barney's wishes to achieve a target ROI of 10% on its first year production of 1..000 chairs.. what should the price of a bean bag chair be?

$97.00

What 4 things must be accomplished to set a price on a product?

-Establish pricing goals -Establish demand, costs, and profits -Choose a price strategy -Fine-tune the base price with pricing tactics

Erica has decided to franchise her cake shop called The Best Chocolate Cake in the World. Her franchisees come from all over the country, and Erica is expanding her chain of shops into cities like New York, Chicago, and L.A. The franchisees are excellent bakers themselves and are fully capable of starting their own bake shops, but they choose to franchise because they receive all of these benefits: 1 higher chance of success 2 advertising power 3 centralized planning 4 autonomy 5 more "buy local" appeal

1 2 and 3

Pierre's Ice Cream Company produces ultra-rich ice cream, which it sells in the Cleveland, Ohio, area. Last year, it managed to exceed its target return on investment (ROI) for the current fiscal year. The following results were found on its financial statements:

10 percent

Your Memory Lane creates custom art prints that use graphs and icons in a street scene to commemorate special occasions. Suppose that Your Memory Lane has priced its product at $350 per print. Further, it has determined that the company's fixed cost is $12,500, with average variable costs per print of $250. What is the fixed cost contribution per print?

100

Regency, Inc. makes disposable cap and gown sets for graduations. Each cap and gown set sells for $15. The average variable cost for manufacturing ten cap and gown sets is $100. Total fixed costs for the year equal $65,000. Calculate the break-even point in units.

13000

The first aspect he considers is the age distribution in each country.Secondly, he considers both per capita income and inflation in each country. Lastly, he considers whether or not the consumers in each country would even accept his product into their lives. In terms of cross-cultural analysis, what characteristic(s) is Newt considering? 1 technological 2 demographic 3 economic 4 natural 5 legal/regulatory 6 social/cultural

2 3 and 6

Kohl's has expanded and opened up numerous new stores across the country in the past year. The executives at Kohl's know that their overall sales growth, due to expansion, has increased tremendously, but they are curious to know their Same-Store Sales Growth. Calculate it for them, using the information below. May 2010 May 2011 Total # of Stores 300 375 Total Net Sales $40 MM $60 MM # New Stores 64 79 Net Sales of New Stores $10 MM $12 MM

20%

Chuck's Chinese Cuisine has opened up 5 new restaurants since 2011. According to the chart below, what is the difference between Chuck's overall sales growth and Chuck's same-store sales growth? June 2011 June 2012 Total # of restaurants 20 25 Total net sales $10mil $15mil # of new restaurants 4 5 Net sales new rest. $2mil $3mil

30%

Pepsi is trying to increase its market share in the soft drink industry. Their current market share and current Share of Voice are both 20%, but they would like it to increase their market share to 27%. Based on the Competitive Parity Model, what will Pepsi's total Share of Voice need to be to reach the desired market share this year, and assuming they are successful, what will their total Share of Voice need to be next year to maintain the desired market share?

30.5%; 27%

Personal Touch produces and markets beaded purses. When graphed, the demand schedule for its purses is a straight line. If one purse costs $20, 5,000 beaded purses are sold. At $25, 4,500 purses are sold. How many beaded purses will be sold if the price per purse is increased to $30?

4000

Learning 2 Read (L2R) is attempting to determine the amount of marketing effort they need to budget for their growth objective. A recent trade journal published research that found L2R currently holds a 25% market share as well as 25% "share of voice". If L2R wants to increase their market share to 40% next year, what total share of voice do they need to have?

47.5%

An educational toy store can buy a world globe for $30. If the store owner sells the globe for $45 what is the markup based on cost?

50 Percent

Zephyrhills has the objective of expanding its share of the Florida bottled water market from 40% to 50%. In order to achieve this growth, what is the total share of voice that Zephyrhills must have? (Assume Zephyrhills' current SOV is 40%.)

55%

Publix is trying to determine how much shelf space should be devoted to each brand of pretzels that they carry. For fiscal 2010, Snyder's Pretzels has a cost of goods sold = $364,000, its beginning inventory = $62,500 and its ending inventory = $51,250. Rold Gold Pretzels has a cost of goods sold = $407,000, its beginning inventory = $38,725 and its ending inventory = $32,500. What is Snyder's stockturn rate and which of the two brands should have the most shelf space, assuming they are equally profitable on a per unit basis?

6.40, Rold Gold

In the early 1900s, Henry Ford revolutionized the automobile industry by developing production lines and mass-producing the Ford Model T automobile. By reducing production costs, Henry Ford made the Model T affordable for virtually all American families. What generic business strategy did Henry Ford use to gain a competitive advantage in the automobile market?

A cost leadership strategy.

Noncumulative Quantity Discount

A deduction from list price that applies to a single order rather than to the total volume of orders placed during a certain period

Functional Discount (Trade Discount)

A discount to wholesalers and retailers for performing channel functions

Inelastic Demand

A situation in which an increase or a decrease in price will not significantly affect demand for the product

Elastic Demand

A situation in which consumer demand is sensitive to changes in price

Promotional Allowance (Trade Allowance)

A payment to a dealer for promoting the manufacturer's products

Seasonal Discount

A price reduction for buying merchandise out of season

Which of the following statements best describes how a supply chain differs from a marketing channel?

A supply chain includes suppliers that provide raw material inputs to a manufacturer; a marketing channel does not.

Yield Management Systems (YMS)

A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity.

Scott is in the process of opening a Panera Bread Company on Anna Maria Island. In determining the location for his restaurant, Scott is deciding where he should build the cafe (e.g., along a street, at an intersection) in order to best accommodate potential customers traveling around the island and, thus, draw them to Panera rather than other restaurants on the island. In this scenario, Scott is considering which micro factor of site location?

Accessibility

Price Fixing

An agreement between two or more firms on the price they will charge for a product

Consumer Penalty

An extra fee paid by the consumer for violating the terms of the purchase agreement

A high-priced product that may never sell but makes everything else look cheap by comparison

Anchor

Your uncle Albert D. Gator is the proud owner of "Swamp Survival Fashions," a chain of hunting gear and clothing stores. One of the functions your uncle performs is evaluating many different products and deciding which ones to sell in his store. This is an example of which channel function?

Assorting

A price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise

Bait Pricing

The general price at which the company expects to sell the good or service

Base Price

When consumers are thinking of buying a good or service with Two-Part Pricing, they may mentally process the ____________ more thoroughly than the extra fee or surcharge.

Base Price

A price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shippped

Basing-Point Pricing

Ray, who has been a star athlete for the past fifteen years, is retiring from sports due to an injury and is about to enter the job market. Ray has been warned by many of his peers about the difficulty of finding a job in today's business world. Therefore, he decides to polish up his resume, begin searching for jobs, and start networking with professionals that are in his desired industry. Ray's actions show that he is following which of Covey's Seven Habits of Highly Effective People?

Be proactive

Alberta is searching for a Tim Tebow Denver Broncos jersey for her husband Albert's Christmas present. She searches every sports store in Gainesville, but they are all sold out for the holidays. As a result, Alberta decides to purchase the jersey from NFLShop.com. This represents _____ e-commerce, and NFLShop.com is a _____ website.

Business-to-consumer, transactional

_____ determine what sales volume must be reached before the company's total revenue equals total costs and no profits are earned.

Break-even analyses

Sam's Club is a large warehouse store that carries a variety of products. Many of their products are sold in larger quantities than would be found in supermarkets and at a lower unit cost. What value adding retail function does Sam's Club not incorporate into its retail strategy to the same degree supermarkets do?

Breaking Bulk

A box of dishwasher detergent shrink-wrapped with a bottle of Jet Dry for 10 cents more than the regular price of the dishwasher detergent is an example of __________ pricing.

Bundle

How can the problem of "underpricing" be solved?

By linking information about price, cost, and demand within the same decision support system

A price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill

Cash Discount

Currently, the market growth rate is 5%. Each brand's sales are listed below: Brand Sales Bounty $25,000,000 Scott $19,000,000 Brawny $17,000,000 Viva $12,000,000 Sparkle $8,000,000 All Others $45,000,000 According to the BCG Matrix, what cell does Bounty fall into and what is Bounty's relative market share?

Cash cow; 1.32

Wublix is a popular grocery store in Canada. They are tired of potato chips arriving at their stores broken into a million pieces. To fix this issue, they have informed their potato chip suppliers that from now on they will only carry brands that package their chips in hard containers like Pringles, or that pay a premium for more "gentle" shipping. Several potato chip companies, scared of losing Wublix's business, comply with Wublix's demands. In this instance, Wublix is a(n) _____.

Channel Captain

A reduction in price may be necessary to stay even with the ____________

Competition

If the firm introduces a totally new product with no close substitutes, there is _______________ pricing freedom.

Considerable

Elasticity of Demand

Consumers' responsiveness or sensitivity to changes in price

In retailing, __________ involve independently owned stores that band together to act like a corporate chain.

Contractual systems

Frank needs to buy a new car. Before visiting a showroom, however, he logs onto www.autobytel.com. Here, he can compare the attributes of various makes and models, find information about the prices of various option packages and learn the manufacturer's suggested retail prices for different cars. After deciding on the car he wants to buy, Frank visits the local showroom and negotiates with the salesperson for the model and options package he wants. Because Frank is so well informed about prices, he is able to make a deal several hundred dollars below the salesperson's initial offer. Frank's car buying experience illustrates which reason why consumers shop online?

Control

A firm can charge different prices to different customers if the prices represent manufacturing or quantity discount savings

Cost

Rather than billing clients by the hour.. some lawyers and their clients agree on a fixed fee based on expected costs plus a profit for the law firm. Which pricing method are they using?

Cost-plus pricing

What does Zero Percent Financing accomplish?

Creates huge increase in sales

an online consumer who researches products online and then purchases them at a retail store

Cross-channel shopper

A deduction from list price that applies to the buyer's total purchases made during a specific period...encourages customer loyalty

Cumulative Quantity Discount

Gina and Daniela, two recent UF Marketing graduates, are hired by Elderly Gators Retirement Investments Firm as part of a team commissioned to do a detailed analysis of the consumers worldwide who use their products and services. By doing so, the company hopes to better understand and reach a worldwide retirement age audience. The type of study Gina and Daniela are being tasked with focuses on which component of "cross-cultural" analysis? (Choose the best answer)

Demographic

Longaberger baskets are sold at parties hosted by individual consumers. The hostess invites friends and neighbors to see the baskets the company has sent to display and takes orders. In return, the hostess is able to purchase the baskets at a discount. Longaberger uses which type of retailing?

Direct selling

Hostess, makers of the iconic snack Twinkies, has noticed that it has lost much of its market share to competitors. Its top executives have decided that the brand is no longer worth their efforts and are preparing for the sale of their iconic brand. What strategy based on market share are Hostess' executives implementing?

Divesting

Michael owns a company that manufactures cigarettes, among other items. Fueled by fears of legal problems due to tobacco lawsuits and anti-smoking campaigns, investors worried that Michael's cigarette sales would drag the rest of this business down. Because of this, Michael sold the tobacco division of his company to another firm. This strategy is called:

Divesting

When do companies use Price Skimming?

For new products when the product is perceived by the target market as having unique advantages

The greater the number of different users for a product, the more ______ demand tends to be.

Elastic

What does a successful skimming strategy do?

Enables management to recover product develop costs quickly

The retail price of DVD players has decreased from $900 to less than $100 over the past few years. This is due in large part to

Experience curve pricing

A price tactic that requires the buyer to absorb the freight costs from the shipping point

FOB (Free on Board) Origin Pricing

A method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle for transporting to the buyer and specifies the name of the location where the loading is to occur is referred to as

FOB origin pricing.

Adam is starting a website called knowyourstuff.com, which is a site dedicated to the consumer. Here, anyone with an account can write reviews for products, read other people's reviews, and be connected to a huge source of information on several consumer goods. The website also has a feature that allows you to enter the location, size, and age of a house you are thinking about purchasing, and then tells you the "fair market price" for the house. This site is an example of:

Facilitating Sales

Stephanie is in the market for a new digital camera because the lens on her old camera got smashed after a night of partying. Before going to an electronics store, she researches different cameras on an independent ratings website called www.cameraratings.com to compare the available models on their zoom, quality, and price. The primary objective of this kind of website is:

Facilitating Sales

Taylor's technology company is aimed at producing the maximum amount of computers per day and maintaining a high quality reputation. During the holiday season, many employees work overtime in order to meet the high demand for computers. As a result of these long, strenuous hours, many of the computers are not meeting Taylor's high quality standards. This problem is mainly due to which of the 7 Habits?

Failure to Sharpen the Saw

_______ costs do not change as output is increased or decreased.

Fixed

Bertha wants to open a bookstore in Gainesville, Florida. She is working on her marketing plan. She has just finished her SWOT analysis. What should she do next?

Formulate objectives

A price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer

Freight Absorption Pricing

A discount to wholesalers and retailers for performing channel functions

Functional Discount

Marketers of Chanel's worldwide clothing line have found that skinny jeans are popular in all their markets, with only slight cultural variations. They produce essentially the same product; however, they change the color, cut, and wash of the jeans for some locations. This type of marketing approach represents:

Glocalization

A skimming strategy means starting with a _____ price and either maintaining it or slowly ___________ it over time.

High; lowering

What is the key consumption behavior of bundled products based on?

How closely consumers can link the costs and benefits of the exchange

Which of the following characteristic(s) of a website is(are) aimed at enabling user-to-user communication? I. Content II. Communication III. Connection IV. Community

IV only

Billy is an economist studying the effect of E-Commerce on the retailing industry. His major concern is that retailers will be hurt because consumers can now easily buy directly from manufacturers. He also believes price competition will _____ because of a(n) _____ in search cost with the availability of search engines like Google.

Increase, decrease

A channel that includes intermediaries that are between the producer and consumer and perform numerous channel functions is referred to as a(n)

Indirect channel.

Janet is obsessed with eating sunflower seeds, especially Ranch flavored ones. Her favorite brand, Spitz Sunflower Seeds, manufactures the seeds in Canada. After the seeds are covered in the delectable ranch flavoring and packaged, Spitz then distributes the seeds to gas stations and convenience stores across the U.S. and Canada. Customers can buy bags of Spitz seeds at thousands of stores. What degree of channel coverage and what type of channel are described in this situation?

Intensive; Indirect

decide to keep the advertising the same in other countries. They soon realize that no one is responding to the ads the way people are in the U.S. and no one is buying the perfume in the other countries. What marketing approach is responsible for Whitney's fragrance flop?

International Marketing

Tara's university charges $6000 a year in tuition; it was recently ranked #20 in quality of education by U.S. News and World Report. Emily goes to a different school that charges $30..000 a year in tuition and was ranked #15 by the same magazine. Based on these results.. we can infer that Tara:

Is getting more value than Emily

H.H. Gregg wants to start carrying Apple MacBooks, so they place an order with Situation Shipping, Apple's independent intermediary. Situation Shipping indicates that they have plenty of MacBooks in stock. However, when H.H. Gregg requests a financing plan to assist them in paying for the order, Situation Shipping replies that they don't offer financing. In this scenario, Situation Shipping is what type of intermediary?

Jobber

Marco recently started his own computer business and knows he does not have the resources needed to market and sell to customers directly. Therefore, he has decided to work with an independent wholesaler. The wholesaler performs some key logistical and transactional functions. The wholesaler takes ownership and physical possession of the products, but does not offer any financing to its customers. The wholesaler Marco has decided to do business with is a(n):

Jobber

Patty has just inherited a large sum of money and has decided to open her own photo gallery. She has a great plan mapped out, but she has spent six months analyzing every possible detail and has yet to set an opening date. What aspect of improving implementation should Patty focus on in order to be successful?

Just Do It

an inventory supply system that operates with very low inventories and requires fast on-time delivery.

Just in time

Starbucks is looking to expand into India, but first must conduct market research to make sure they will be successful there. The marketing director is currently working on the pricing strategy, and must take several factors into consideration. He has heard that India has a higher import duty on coffee beans, so he is looking into that issue further, as it would affect his cost of goods. What international environmental sector is he examining?

Legal/Regulatory Sector

HDK Electronics has developed a new music listening device called the MP5. Instead of manufacturing and shipping the new device to China, they enter into a contract with a Chinese electronics company wherein HDK agrees to allow the Chinese firm to use its technology and brand name in exchange for royalty payments. The Chinese firm will finance all the production, distribution, and marketing in China. What global marketing strategy is HDK Electronics using?

Licensing

_______ is a companys product sales as a percentage of total sales for that industry.

Market share

When guest speaker Megan Kates was in sales for Cartier, she believed the most important aspect of her job, especially in Latin America, was fulfilling which responsibility?

Managing Client Relationships

work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory.

Manufacturer's agents

_____ cost is the change in total costs associated with a one-unit change in output.

Marginal

_____ is the extra revenue associated with selling an additional unit of output.

Marginal Revenue

discounting a product when the product does not sell at the original price and an adjustment is necessary.

Markdown

Price variations are justified if designed to meet fluid product or ___________________

Market Conditions

Sarah is the marketing manager for Boston Red Socks, a company that sells Red Sox fan gear. Every year she evaluates the company's marketing efforts to make sure they are up to par. She looks at the marketing mix, the marketing budget and the company's overall marketing strategy. What Control (Evaluation) activity is Sarah in charge of performing?

Marketing Audit

the application of modern measurement technologies to understand, quantify, and optimize marketing spending.

Marketing ROI

the visual computer display on a single computer screen of the essential information related to achieving a marketing objective.

Marketing dashboard

due to either a poor plan, poor implementation, or both.

Marketing failures

the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in the traditional marketplace and online.

Multichannel marketing

Return on Investment (ROI)

Net profit after taxes divided by total assets

A deduction from list price that applies to a single order rather than to the total volume of orders placed during a certain period...encourages orders in large quantities

Noncumulative Quantity Discount

Captain Morgan is known for making and distributing rum. The decision makers in the company have recently increased their advertising budget. They arrived at this larger budget by basing their ad spending on their new goal of increasing Captain Morgan's presence in the college market. They know they need to introduce some new flavored rums and do a lot of event marketing. By estimating the costs of these initiatives, Captain Morgan was able to arrive at their budget, which is now slightly higher than Bacardi's. What type of advertising budget strategy is this an example of?

Objective & Task

When determining their Marketing plan and budget for the upcoming year, Pepsi decides they want to introduce three new products to their existing soft drink line. In order to do so, Pepsi determines that they will need $15 million for research and development, $20 million for market testing, $20 million for an ad campaign, and $10 million for an expanded manufacturing facility. What type of budgeting approach is Pepsi using?

Objective & Task

A price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality

Odd-Even Pricing

Brittany logged onto what she thought was Amazon.com to browse for a new pair of running shoes. Sure enough, she found a pair in her favorite color and they had them in her size. She ordered the shoes and typed in all her appropriate information. The next day she logged in to check her bank account and realized someone had stolen her credit card number and purchased $500 worth of ring tones. What type of transaction fraud has Brittany fallen victim to?

Pharming

David likes New Balance running shoes. However, when he stopped by the Foot Locker to buy a new pair of running shoes, he noticed that Nike had a new pair of running shoes that cost $350. To David, the higher price of the Nike shoe indicated that it would be a better pair of running shoes. This is an example of:

Prestige pricing

An agreement between two or more firms on the price they will charge for a product

Price Fixing

Used by people with lengthy experience, training, and often certification by a licensing board

Professional Services Pricing

the practice of shielding one or more sectors of a country's economy from foreign competition through the use of tariffs or quotas.

Protectionism

A price reduction offered to buyers buying in multiple units or above a specified dollar amount

Quantity Discount

Firms on average used eight metrics to measure their innovation. Among firms that use more than three different innovation metrics, they use output and input metrics. Which of the following is an input metric? A. customer satisfaction with new products or services B. return on investment (ROI) in new products or services C. number of new products or services launched D. revenue growth due to new products or services E. R&D spending as a percentage of sales

R&D spending as a percentage of sales

Other things equal.. if a firm finds the demand for its product is inelastic.. it can increase its total revenues by

Raising its price

A cash refund given for the purchase of a product during a specific period

Rebates

Rachel is an avid shopper. While her friends only go shopping when absolutely necessary, Rachel considers it her biggest hobby. Each week she enjoys the challenge of finding the perfect outfit for the upcoming weekend. In Rachel's eyes, shopping is her most rewarding experience. Rachel engages in:

Recreational Shopping

Forever 21 is trying to increase its customer base by changing its retail store strategy. The stores will have a big fashion show once every quarter, showing off all the new styles, offering complimentary food and drinks, and basically hosting a big party, all while customers can still shop for clothes. What retail concept is Forever 21 using?

Retailtainment

_______ is equal to net profit after taxes divided by total assets.

Return on investment

Profit

Revenue minus expenses

Prohibits any firm from selling two or more different buyers, within a reasonably short time, commodities of like grade and quality at different prices where the result would be to substantially lessen competition

Robinson-Patman Act of 1936

Miranda is in charge of selling MTV's daytime television advertisement slots. Overall, ad sales have been declining for the past few months. Miranda wants to find out which time slots in particular are performing the worst. To do this, she considers each show individually: MADE, True Life, Teen Mom, etc. Miranda is engaging in:

Sales Component Analysis

Value-based Pricing

Setting the price at a level that seems to the customer to be a good price compared to the prices of other options

Joel has been working non-stop for eight months on a marketing program to introduce a new flavor of Mountain Dew. After the program launches, he decides to take some time for self-renewal and re-creation. Joel now runs 2 miles each day, participates in community service efforts, and is an active member in a church. According to Steven Covey, which of the seven habits of highly effective people is Joel exhibiting?

Sharpen the saw

The Belk Department Store at the Oaks Mall is reviewing the success of all its departments. Belk's management team is seeking to determine which department is the most successful so they can expand it. They have decided that the way they will make this decision is to compute each department's net sales per square foot. The two departments that they are comparing are Shoes and Home. The Shoe department occupies 2,000 square feet and is responsible for $1,200,000 in sales. It has returns equal to $60,000. The Home department is 4,000 square feet and produces $2,500,000 in sales. Its returns equal $400,000. Which of these departments is more successful, and what is its net sales per square foot?

Shoes is more successful at $570 / sq. ft.

Oliver loves his Beta fish named Alpha. He notices that a new store called Fish R Us has opened in his town. Even though the Fish R Us store is small and has high prices, Oliver shops there because the employees are very knowledgeable about fish and are always willing to help him find the best products for Alpha. Fish R Us focuses only on fish-related merchandise, but it has a great selection within those categories. Fish R Us can best be described as a:

Specialty Store

ASOS.com is an online-only fashion retailer that started in the UK. They plan to build physical stores in the future. They enjoy huge profits compared to other retailers because they have a reputation for strong social media presence and for product variety. In a S.W.O.T. analysis, ASOS' strong social media presence and product variety are _____.

Strengths

__ is the quantity of a product that will be offered to the market at various prices for a specified period.

Supply

______ is the quantity of a product that will be offered to the market at various prices for a specified period.

Supply

Attorneys' fees.. park entrance fees.. train fares and organization dues are all

Synonyms for price

government taxes on goods or services entering a country that primarily serve to raise prices on imports.

Tariffs

Price

That which is given up in an exchange to acquire a good or service

Markup Pricing

The cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for

Base Price

The general price level at which the company expects to sell the good or service

Why are marketing managers finding it more difficult to set prices in todays environment?

The high rate of new-product introductions has let to careful re-evaluation by consumers

Bob the Builder has decided to create a marketing plan for his company. In doing this, Bob realizes that the construction industry as a whole has been steadily declining for the past few years and that Bob's company is quite small relative to many competitors. According to S.W.O.T. analysis, these factors would be considered a(n) _____ and a(n) _____, respectively.

Threat; Weakness

What does Flexible Pricing enable sellers to do?

To adjust for competition

What do Seasonal Discounts enable manufacturers to do?

To maintain a steady production schedule year-round

What is the goal of Unfair Trade Practice Acts?

To protect small local firms from giants

When a firm moves from a lower priced product to a higher priced product with more or better attributres

Trade Up

Suppose a door to door salesman comes to your house to sell you a knife set. He gives you his pitch about why this knife set is the best and how you can buy it for only $19.99. Anytime you ask a question he emphasizes how low this price is for these great knives. After you agree to purchase this knife set you never hear from or do business with this salesman again. This is an example of:

Transaction Marketing

Sears has many different types of products that they move through their supply chain. Combining two products such as lightweight pillows and heavy washing machines in 18-wheelers allows them to achieve synergies and save money in which of the following logistic functions?

Transportation

A price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge

Uniform Delivered Pricing

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

Unitary elasticity

When is Zone Pricing used?

When a marketing manager wants to equalize costs among buyers within a large geographic region

When are lower prices allowed in regards to Unfair Trade Practice Acts?

When a specific wholesaler or retailer can provide "conclusive proof" that operating costs are lower than the minimum required figure

When is Uniform Delivered Pricing used?

When the marketing manager wants total costs to be equal for all purchasers of identical products

When is Two-Part Pricing preferred by customers?

When they are uncertain about the number and types of activities they might use at places

Which of the following statement about yield management systems is true?

YMS are mathematically complex systems to make use of underutilized capacity and reduce the cost of perishability.

an institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.

World Trade Organization (WTO)

Utz, a regional snack food producer in the Northeast, is looking to increase its market share by 2% in the potato chip industry. Currently the potato chip industry has $460 million in annual sales with $32.2 million of that coming from the sales of Utz. Utz has a gross margin of $10.5 million. The potato chip industry typically spends $30 million in combined marketing effort. Is it worth spending the required extra money in marketing effort for Utz to achieve this increase in market share?

Yes, it will be a net gain of $2,100,000

The Fenton Company produces memorial bricks, which veterans' organizations, Chambers of Commerce, and other service organizations sell as fund raisers. The company has a target return on investment of 13 percent. This means that the Fenton Company has a(n) _____ pricing objective. a. profit-oriented b. market share maximization c. status quo d. sales maximization e. supply-demand equalization

a

_____ pay for every activity of the company. a. Revenues b. Investments c. Retained earnings d. Profits e. Prices

a

Vince Violins is a small manufacturer of high quality violins. They have just finished their new luxury "Finn" line and would like to distribute it to high-end retailers around the country. Because Vince is a small manufacturer, they employ the help of Music Mart to negotiate the sales between Vince and high-end retailers. After the sale is made by Music Mart, Vince ships the violins directly to the retailers. In this example, Music Mart is a/an _____ and, the channel process used by Vince Violins is called _____.

agent / drop shipping

At Wal-Mart, Randi saw a bag of daffodil flower bulbs and a box of plant fertilizer. The items, which were sold together, retailed at $28.50, but were marked down to $19.99. The $19.99 is the: a. revenue b. price c. profit d. liquidity value e. amortized value

b

The practice in which a translated word or phrase is retranslated into the original language by a different interpreter to catch errors is referred to as

back translation.

InStyle magazine has a magazine, www.instyle.com, that contains many different links to fun things that help to increase positive feelings and loyalty among their readers. The site has information about different beauty products, information about the latest trends, and a link that allows people to perform virtual makeovers. InStyle's website is used for:

brand building

Which of the following is NOT one of the six major pricing objectives discussed in the text? Break-even Survival Unit volume Profit Market share

break even

An approach to managing the assortment of merchandise in which a manager is assigned the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales or profits, is referred to as __________.

category management

Designing a car is expensive and time-consuming even with the use of computers, because until recently there was no way for all the varied departments that are involved in new car development to work together. Daimler-Chrysler created a unique central Web-based system that cuts the design and production process by at least two years. This unique system is an example of a(n)

competency.

Procter & Gamble is trying to extend its Mr. Clean brand by opening franchised Mr. Clean car washes around the U.S. Under the Mr. Clean umbrella, an individual car wash owner would be considered: Part of a

contractual system

Suppose you are designing a transactional website and you would like it to be as user-friendly as possible. In particular, you do not want repeat customers to have to enter their address, e-mail, telephone number, and credit card data every time they make an online purchase. Rather, you would like your website to recognize each customer by name every time he or she visits the website and to retrieve all the information about that customer automatically whenever he or she wishes to make a purchase. To achieve this goal, you would most likely use __________.

cookies

setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors (competition oriented)

customary pricing

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

demand

Hard Candy is a cosmetics company that markets the Palm Palette—all the make-up a "girl-on-the-go" needs without a cumbersome make-up bag. It comes in three shades—glam, funky, and girlies. Hard Candy targets women who are twenty something. Which one of Porter's generic business strategies does Hard Candy use?

differentiation focus

If Caterpillar Tractor Co., a manufacturer of heavy earthmoving equipment, starts manufacturing toy tractors and selling them through Toys R Us and other retailers, this would be an example of _________.

diversification

The marketing strategy of developing new products and selling them in new markets is referred to as

diversification

Pharmaceutical companies sell some of their products to hospitals and clinics directly. They also market other products to large retail chains like Walgreens that distribute them to their stores across the nation. In addition, they sell products to drug wholesalers that sell to the remaining independent drugstores in the U.S. What best describes the distribution method used by pharmaceutical companies in this example?

dual distribution

OceanAir logistics will ship your product to Japan for less than what it would cost you to do so. It does this by accumulating small shipments into larger lots and then hiring a carrier to move them. OceanAir logistics is an example of a

freight forwarder

Williams-Sonoma is a specialty store that caters to customers who want to cook at home. It offers free cooking classes, has frequent demonstrations by cookbook authors, and has employees who are knowledgeable about food preparation. The sales staff helps customers make their selections. Williams-Sonoma offers its customers _________.

full-service

The difference between the retailer's cost and the selling price is the:

gross margin

When Apple, Inc. developed and introduced the iPhone, it was unique as it essentially combined a cellular phone with an iPod, an Internet browser, and e-mail capabilities. As such, in the short run, it seemed that demand for the product would be inelastic, with no real existing competition. The recommend pricing strategy in such a situation would be:

high initial price, falling slightly when entering the growth stage

The evaluation phase of the strategic marketing process involves comparing goals and results to identify deviations using marketing metrics and dashboards, _____, and formulating new plans and actions.

identifying causes of deviations

Many supermarkets have in-store restaurants where a customer can buy prepared meals to take home. Supermarkets and restaurants that provide these same kinds of meals are engaged in __________ competition.

intertype

Fresh-cut flowers that only used to be available from florists can now be purchased at neighborhood supermarkets. This is an example of _________.

intertype competition

Many consumers, especially when faced with an uncertain purchase decision, think that a high price:

is a signal of quality

The Nest is a retail store owned and operated by an interior designer. The markup on all items in the store is 100 percent over cost (or double the cost). In this case, we would say the designer uses:

keystoning

deliberately selling a product below its customary price to attract customers' attention in hopes that they will buy other products as well (competition oriented)

loss-leader pricing

The detailed day-to-day operational decisions essential to the overall success of a firm's marketing effort are referred to as __________.

marketing tactics

The detailed day-to-day operational decisions essential to the overall success of marketing strategies are referred to as _________.

marketing tactics

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for, the seller is using _____ pricing.

markup

The point at which marginal cost and marginal revenue are equal always results in:

maximization of profits

Consider the following quote from the Lucent Technologies website: "To use our unique capabilities to ensure that our customers thrive, our business grows, and we enrich the personal communications experience for people around the world." This quote represents Lucent's:

mission statement

Expand a business overseas. Goes to each foreign market and decides which aspects of its marketing approach can be kept and which ones need to be adjusted. This is called a:

mixed approach

Eddie Bauer has leveraged its store, Web site, and catalog channels with impressive results. At Eddie Bauer, every effort is made to make the apparel shopping and purchase process for its customers the same as its retail stores, its catalog, and its Web site. An Eddie Bauer marketing manager says, "We don't distinguish between channels because it's all Eddie Bauer to our customers." Eddie Bauer is likely following a(n) __________ strategy.

multichannel marketing

The blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online, is referred to as __________.

multichannel marketing

(called fixed pricing) involves setting one price for all buyers of a product or service

one-price policy

At tendollars.com they offers thousands of gifts.. all priced at ten dollars. This is an example of two pricing methods working in tandem. Most likely.. the firm uses a __________ and a _________ strategy.

one-price policy; below market pricing

a Web site's aesthetic appeal and functional look and feel, reflected in site layout and visual design.

online customer experience, context

Figure 14-2A above shows a demand curve that slopes downward and to the right.. then turns back to the left. Which pricing approach does Figure 14-2A depict?

prestige pricing

setting a high price so that quality (or status-concious) consumers will be attracted to the product (demand oriented)

prestige pricing

An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.

profit maximization

When Apple, Inc. originally introduced its iPhone, it was priced at what many believed to be about as high as the market would allow. Within weeks, Apple lowered the price of the iPhone. It appears that Apple entered the market with a _____ approach to pricing the iPhone.

profit maximization

James has divided his customers into 3 groups. The top group are valuable and loyal and he will make special accommodations for them. The middle group are good customers but not loyal. The lowest group cost James money and he wants them to stop shopping there. In figuring this out, James has engaged in what?

profitability analysis

Sherrie is seven years old and wants to open a lemonade stand in her neighborhood. She is having a tough time deciding whether to base her pricing objectives on market share, dollar sales, or unit sales. Regardless of which she chooses, her pricing objective can be categorized as:

sales oriented

adding a fixed percentage to the cost of all items in a specific product class (cost oriented)

standard markup pricing

If a company's pricing objective is to meet the competition or to maintain existing prices, it is using _____ pricing.

status quo

When Delta Airlines raises or lowers its prices on its Atlanta to Chicago route, other airlines tend to make the same changes in their pricing. This is an example of __ pricing.

status quo

When Delta Airlines raises or lowers its prices on its Atlanta to Chicago route, other airlines tend to make the same changes in their pricing. This is an example of _____ pricing.

status quo

Which of the following statements describes an advantage of status quo pricing?

status quo pricing requires little planning

Collaborative relationships are becoming a common way to meet the demands of global competition. Global __________ are agreements between two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation.

strategic alliances

Allstate has more than 1,500 price levels determined by complex algorithms that analyze 16 credit report variables, including late payments and card balances. Allstate is using a _____ to set prices.

yield management system

Tim's Teak Tables makes tables for furniture stores across the U.S. Tim is trying to decide how much he needs to charge his distributors who sell his tables to retailers. Tim estimates that the retail price for one of his teak tables should be $300, assuming a retail markup of 50%. The distributor markup is 15%. What should Tim charge his distributors?

$127.50

Suppose Snickers holds 20% market share for candy bars, as well as 20% share of voice. Mr. Mars, the brand manager for Snickers, wants to increase his market share by 4 share points. Snickers' total gross margin is $1 million. If the total industry market effort is $3 million, what is the short-term gain or loss by Snickers if it is successful in expanding its market share by the desired amount?

$20,000 gain

Ryan Seacrest is looking to increase the market share of his male hair care line, SeaLocks. He would like to increase the current 26% market share to 32% market share. He uses share point analysis to determine if it is worth increasing marketing expenditures to improve market share. Research shows that the total male hair care industry marketing effort is $900,000. Ryan also finds that SeaLocks sales revenues are $2,860,000 and the cost of goods sold is $1,560,000. Given this information, what is Ryan's short-term gain (or loss) in profit if he is successful in his effort to expand SeaLocks' market share?

$219,000

What are 2 disadvantages of Single-Price Tactic?

-Continually rising costs -Eliminates the possibility of maximizing the profitability of leading products

What are 3 advantages of Penetration Pricing?

-Discourages or blocks competition from entering a market -Boost sales and provides large profit increases -Can justify product expansion

When is Penetration Pricing effective? (3)

-In a price-sensitive market -If a firm has a low fixed cost structure -If an experience curve will cause costs to drop significantly

What are 5 situations when Price Skimming is useful?

-Inelastic demand -Unique advantages/superior -Legal protection of product -Technological breakthrough -Testing of market prices

What are 4 disadvantages of Flexible Pricing?

-Lack of consistent profit margins -Potential ill-will of high-paying purchasers -Tendency for salespeople to automatically lower the price to make a sale -Possibility of a price war among sellers

Why do managers price their products too low? (2)

-Managers attempt to buy market share through aggressive pricing -Managers want to make decisions that can be justified

What are 3 Pricing Strategies?

-Price Skimming -Penetration Pricing -Status Quo Pricing

What are 2 advantages of Price Lining?

-Reduces confusion -Enables a seller to reach several market segments

What are 3 disadvantages of Penetration Pricing?

-Requires gear up for mass production -Selling large volumes at low prices -Strategy to gain market share may fail

What must the Justice Department do to prove Predatory Pricing? (2)

-Show that the predator explicitly tried to ruin a competitor -Show that the predatory price was below the predator's average variable cost

The relationship of annual marketing effort to annual sales revenue is assumed to be __________ of the sales response function.

a S-shaped curve, which shows that an additional marketing effort in the midrange of the curve results in far greater increases of sales revenue than at either end of the curve

Teddy realizes that it's his turn to buy the necessities in his apartment, such as toilet paper, paper towels, dish soap, etc. He runs out to the store to buy all of this stuff. First, he tackles the paper goods, quickly realizing that there are various different brands and types of toilet paper, paper towels, and so on. He finally chooses a 4-pack of toilet paper and a 2-pack of paper towel rolls, as he has nowhere in his apartment to store any larger packages. He grabs the dish soap and heads home. Fortunately, the store had everything he needed. In this example, what retail functions is the store serving for Teddy? 1 Providing assortments 2 Breaking bulk 3 Holding inventory 4 Transporting 5 Financing

1 2 and 3

Starbucks' marketing department is in the process of preparing its annual marketing plan and decides to conduct a SWOT analysis for their premium line of coffee. Which of the following are considered strengths in the SWOT matrix for Starbucks? 1 The company has strong ethical values and an ethical mission statement 2 The demand for coffee is growing exponentially 3 The company is very profitable 4 The company has a reputation for fine products and services 5 Starbucks' baristas provide personalized customer service

1 3 4 and 5

According to guest lecturer Sara Sharpe from Chompmenus.com, which of the following statements are TRUE about Chompmenus? 1 Students, Gainesville residents and restaurants are all customers of Chompmenus 2 Chompmenus generates revenue only through selling advertising space to restaurants 3 Chompmenus offers exclusive deals and customer loyalty programs as incentives for ordering online 4 Chompmenus does not use any local guerrilla marketing tactics to advertise their services 5 Chompmenus offers easy online ordering and a free menu guide

1 3 and 5

Monthly output at Leisure-Time, Inc. changed from 12 to 13 prefabricated gazebos, and the total costs changed from $9,000 to $10,500. What is the marginal cost for this company?

1500

Furr Friends sells kits for making personalized grave markers for pets. The company sells each kit for $25. The average variable cost for each kit is $10, and the total annual fixed costs for plant operation are $45,000. What is the break-even point in units?

3000

Your Memory Lane produces custom-made art prints that include graphics and icons to celebrate life's special moments. For example, on his wedding anniversary, David had an art print produced that celebrated highlights of his ten years with his wife, Kathy. Suppose that Your Memory Lane sells the custom artwork for $500. It estimates its average variable costs to be $200 per unit produced. It figures its fixed costs to be $900,000 per year. How many prints does it have to sell to break even?

3000 prints

An educational toy store can buy a world globe for $30. If the store owner sells the globe for $45, what is the markup based on the selling price?

33 percent

Khimaira Farms sells handcrafted cookie cutters. When graphed, the demand schedule for Khimaira Farms brand cookie cutters forms a straight line. If at $3 per cutter, 500 cookie cutters are demanded, and at $4 per cutter, 450 cookie cutters are ordered, how many will be ordered at a price of $6 per cutter?

350

La Perla lingerie company has annual sales of $15,000,000, while industry sales are $50,000,000. The company's gross margin is $6,000,000, and the industry's total marketing effort is $8,000,000. La Perla wishes to expand its market share by 4 share points. Is it cost effective for La Perla to try to increase its market share by 4 points, and what is the short-run loss or gain of that decision?

6/15=.4 2m*.4=800k revenue .04*1.5=.06 .06*8m=480k cost 800k-480k=320k gain

The local Abercrombie and Fitch was trying to figure out their stockturn rate for 2011. A&F's beginning inventory was $1,800 and ending inventory was $2,100. The cost of goods sold was $120,000. What was A&F's stockturn rate?

61.54 turns per year

In its annual marketing plan, Pear, Inc. plans to launch its Pear me-Phone 5 in July and its me-Pad in September. However, they also state in their plan that if competitor Zoid launches the Space Tab in September, Pear will hold the me-Pad launch until December and include upgraded features. The latter aspect of Pear's plan is known as:

A Contingency Plan

Cumulative Quantity Discount

A deduction from list price that applies to the buyer's total purchases made during a specific period

Break-even Analysis

A method of determining what sales volume must be reached before total revenue equals total costs

Cash Discount

A price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill

Quantity Discount

A price reduction offered to buyers buying in multiple units or above a specified dollar amount

Flexible Pricing (Variable Pricing)

A price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities

Freight Absorption Pricing

A price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer

Uniform Delivered Pricing

A price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge

Basing-Point Pricing

A price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shipped

Two-Part Pricing

A price tactic that charges two separate amounts to consume a single good or service

Single-Price Tactic

A price tactic that offers all goods and services at the same price (or perhaps two or three prices)

FOB Origin Pricing

A price tactic that requires the buyer to absorb the freight costs from the shipping point ("free on board")

Bait Pricing

A price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise

Odd-Even Pricing (Psychological Pricing)

A price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality

Status Quo Pricing

A pricing objective that maintains existing prices or meets the competition's prices

Price Skimming

A pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion

Penetration Pricing

A pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market

Extranet

A private electronic network that links a company with its suppliers and customers

Dynamic Pricing

A strategy whereby prices are adjusted over time to maximize a company's revenues

What happens when demand is elastic?

As price goes up, revenue goes down

Which type of Internet sales currently accounts for the most sales revenue?

Business to Business transactions

Which of the following statements about the Internet is true?

Business-to-business auctions on the Internet are likely to be more important than consumer auctions in the future.

L'Oreal wants to release a new shampoo scent to increase its market share in the hair care industry. Below are sales revenue data for each brand. Total industry sales for the past three years have been $131 million in 2010, $137 million in 2011, and $143 million this year. Brand 2012 Sales L'Oreal $38,000,000 Pantene $21,000,000 TRESemme $18,000,000 Herbal Essences $13,000,000 Nivea $8,000,000 All Others $45,000,000 In the BCG Matrix, L'Oreal is a _____, with a relative market share of _____.

Cash cow; 1.81

price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount.

False

profit is the price charged to customers multiplied by the number of units sold.

False

Mitch owns a pet boarding kennel. The monthly payment on the land he purchased for his kennel, the mortgage on his small office building, and his business license are all examples of _____ costs.

Fixed

A price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities

Flexible Pricing

Nicole is a designer and manufacturer of high end shoes. Nicole usually follows a typical channel model, selling her shoes to various retailers, who in turn sell to consumers. Nicole has learned that she has the potential to make more money by opening up her own retail store where she can sell her designer shoes. What channel type would Nicole be employing if she opened her own retail store?

Forward Vertically Integrated

Hershey's Milk Chocolate bars have been around since 1894. Through the decades, the company has invested a lot of marketing and advertising to make Hershey's Milk Chocolate bars the best known brand of chocolate in America. However, for the past few years, the company decided not to invest any more money on advertising for the chocolate bar since it is so well-established. What strategy is the Hershey's company engaging in with respect to the Milk Chocolate bar?

Harvesting

There are multiple stores in town selling textbooks: OBT, Florida Bookstore, Titletown Textbooks, etc. All of these stores are competing for your textbook purchases. However, you go into one of these stores, skim through a textbook and then decide to buy the same book from Amazon.com at a cheaper price. What type of channel conflict exists among the various "brick-and-mortar" book stores and Amazon?

Horizontal

Polo Ralph Lauren sells its products in countries around the world. When it enters a new market, it does not modify its advertising or marketing to the culture of the country. Polo believes the product sells itself, and therefore operates its stores in exactly the same fashion as in the United States. Polo's global marketing approach is best defined as:

International Marketing

A basic, long-term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle

Price Strategy

Katie had been eyeing a dress for graduation in her favorite boutique's window for the past month. She couldn't wait to go buy it after she received her paycheck this week. On Friday afternoon she went into the store to purchase the dress. When she looked at the price tag she nearly fainted. She had imagined the price of the dress to be about half of what it actually was. Katie was experiencing a classic case of sticker shock.. due to the difference between the actual price of the dress and her:

Internal Reference Price

John owns a medium-sized grocery store. He finds that he does not have enough selling space to carry all the products he would like to. He would like to reduce his storage space in order to increase the amount of selling space available. What process can he implement to accomplish this?

Just-in-time inventory

Unfair Trade Practice Acts

Laws that prohibit wholesalers and retailers from selling below cost

The Sawgrass Oasis is a popular upscale shopping destination in South Florida. It contains a movie theater, an upscale department store, specialty stores, and restaurants, all in an appealing outdoor setting. The Sawgrass Oasis can best be described as a:

Lifestyle Center

Winter Park Village is a popular upscale shopping center close to Orlando. The village has a customer-friendly design in an outdoor setting surrounding a small park with a fountain. There are a variety of shops such as Ann Taylor and Utla, restaurants such as the Cheesecake Factory, and a Regal Cinema. Winter Park Village can best be described as a:

Lifestyle Center

Who typically uses the variation of skimming called Anchoring?

Luxury retailers

Olivia likes the convenience of ordering food to be delivered using the Seamless App on her smartphone. With her address and payment information saved on the app, Olivia can have her Bento order placed within seconds. Olivia's use of the Seamless app is an example of which concept?

M-Commerce

Jordyn sells a variety of household products for a small group of producers. She sells to discount stores and convenience stores in the Central Florida region. One of the products she sells is 3M Command Adhesives. When a store agrees to order a shipment of Command Adhesives, Jordyn places the order with 3M on behalf of the customer. The nearest 3M warehouse will then package the order and ship it to the customer. Jordyn's position can most accurately be described as a:

Manufacturers Representative

Price Bundling

Marketing two or more products in a single package for a special price

The most popular method used by wholesalers and retailers in establishing a sales price is ______ pricing.

Markup

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of market

Predatory Pricing

The practice of offering a product line with several items at specific price points

Price Lining

A pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion

Price Skimming

General Electric is looking to extend their business and sell refrigerators in India. After conducting some research on habits and behaviors in India, they discover that consumers place their refrigerators in different parts of the home (unlike the U.S. where consumers place their refrigerators in their kitchens). With this in mind, GE decides to market a variety of colors of refrigerators to satisfy the needs and wants of the consumers in India. Which type of global marketing approach is this?

Multinational Marketing

Central Bark is a dog resort where pets are pampered. Which of the following is the BEST example of one of its fixed costs?

Payment on the building used by central bank

A pricing policy whereby a firm charges a relatively low price for a product when it is first rolled out as a way to reach the mass market

Penetration Pricing

The Wm. Wrigley Jr. Co. recently introduced a new flavor of Orbit brand sugar free chewing gum—mint mojito. The introductory price was low so that it would create loyal customers for the flavor quickly. In this example Wrigley is using

Penetration pricing

Kendall had been eyeing a scarf at Target for some time. When she decided to purchase the scarf in the store last week it was sold out. She rushed home, accessed the web using her secure wireless connection, and signed on to the Target website to order the scarf online. She entered her information and awaited the scarf's arrival. When she did not receive her scarf, Kendall checked her credit card statement and noticed that someone had ordered $300 worth of gourmet jams from Canada. This situation is an example of which of the following internet security issues?

Pharming

Esten doesn't like to shop online because she is paranoid that her transactions will not be secure. However, one day Esten decided to make a Michaels.com account so she could indulge her knitting obsession. Two weeks after ordering 17 spools of "Crazy Woman Mountain Colors Yarn", Esten received an e-mail that she thought was from Michael's. It asked her to kindly update her credit card and address for maintenance purposes. She did as requested, and was the victim of a $2,000 scam. The e-mail Esten received was not sent by Michael's; it was sent by an imposter. This known as:

Phishing

Dizzles' service is among the best in the business, and their prices are generally low. Their huge stores provide a relatively narrow but also very deep selection of goods. Dizzles is most likely a:

Power retailer

A payment to a dealer for promoting the manufacturer's products

Promotional Allowance

Michael Phelps, having just finished a training session for the 2012 Olympics, is hungry. He goes to Publix to buy some frozen pizzas, toilet paper, and toothpaste, and while he's there, he figures he might as well get some lunch, too. He goes to the deli and orders 4 large Boar's Head traditional subs as well as 2 dozen Publix chicken tenders for lunch. Phelps' lunch (the subs and the chicken) is an example of which retailer function? (Choose the best answer.)

Providing services

GreenWay, a U.S. organic food company, has decided to expand into the international market. After doing significant market research, the company realized that they would have to create a different product specifically tailored for each country, due to varying cultural tastes. This approach is called ____.

Pure Non-Standardization

Hostess is planning on extending their marketing of Twinkies and other treats to other parts of the world. They decide to use the same marketing plan that is being used in the United States. Everyone loves a delicious Twinkie, so consumers should respond the same to a Twinkies ad no matter where they live in the world. Hostess is using which standardization model described in class?

Pure Standardization

David has just watched his Principles of Marketing online lecture about Steven Covey's Seven Habits of Highly Effective People. His Marketing Final Exam is in one week, and David needs a strong performance to get an A in the course. Typically, after watching a lecture he rereads his notes twice so he can remember them. However, a phone call from his girlfriend has David getting dressed to go out to Midtown. Which of Covey's habits has David already forgotten?

Put First Things First

______ pay for every activity of the company

Revenues

Google headquarters has begun looking a little drab lately, so they have decided to remodel their offices. They are looking to hire a top-notch design firm. To find the firm willing to take on the project for the lowest cost, Google uses a _____, a common practice in B2B e-commerce.

Reverse auction

the process of reclaiming recyclable and reusable materials, returns and reworks from the point-of-consumption or use for repair, remanufacturing, redistribution, or disposal.

Reverse logistics

Kim, Khloe and Kourtney need to improve implementation at their small boutique called DASH. They want to switch to a commission based pay plan for their employees to help increase sales. On top of commission, the top seller for the month will receive a free trip to a place of their choice! What are the three sisters doing to improve implementation at DASH?

Reward Performance

Every month, the marketing department at Hawaii Chair, Inc., evaluates the performance of their product. This particular month, they decided they would try a new type of analysis to see if they could get more useful results. To do so, they retrieved sales data from the 60 regions their product is sold in. They wanted to see which regions were underperforming, according to the plan. Which type of analysis is the marketing department conducting?

Sales component analysis

Emily notices that whenever she calls HP for customer service, she is always assisted by someone working at a call center in India. This can be attributed to the lower cost of communication lines today and cheaper labor costs abroad. This is an example of:

Shrinking Globe

What is an advantage of Status Quo Pricing?

Simplicity

A price tactic that offers all goods and services at the same price

Single-Price Tactic

In terms of the Seven Habits, Habit 7 refers to sharpening the saw, where individuals take the time for self-renewal and re-creation. Individuals work to improve their four general areas of physical, mental, emotional, and _____ well-being.

Spiritual

Alberto is an up and coming marketing student living on student loans and scholarships at the University of Florida. He is a tremendously hard worker and is motivated by achievement. He looks up to successful role models in his life and hopes one day to be like them. Alberto would be classified as which of the following?

Striver

_______ use complex mathematical software to profitably fill unused capacity.

Yield management systems

To get consumers into automobile showrooms, manufacturers offer with ______________, which enables purchasers to borrow money to pay for new cars with no interest charge

Zero Percent Financing

George and Gina are in charge of the Marketing plan for "Monsieur Leroy Jenkins", the new Unisex fragrance line, and must create a plan to market the new fragrance line in the Unites States, Europe, and Asia. In their plan they view the world as one giant market but with many different market segments. This approach to worldwide marketing is best known as:

Transnational Marketing

True/False: store brands should be priced lower than manufacturer's brands.

True

A __________ is an inventory-management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.

Vendor-managed inventory system

The dimensions of quality that are important to consumers include:

Versatility, serviceability, performance, and ease of use

McDougal's is a fast food franchise that specializes in cheap, quick meals. Many franchisees are unhappy with the brand of potatoes the franchisor insists upon using. The shipments of potatoes frequently arrive late and are often small, so the fries are coming out rather short. The franchisor does not want to switch potato brands because they do not see this as a major problem and the potatoes are cheapest when purchased through the current potato company. This situation best describes which type of channel conflict?

Vertical Conflict

Pinguinos.com is a new website founded and created for/by extreme penguin lovers. This website features silly penguin videos, penguin games, and personal experience blogs. Which of the following uses of the Internet does Pinguinos.com represent?

Virtual Communities

Stefano loves his Harley-Davidson motorcycle. Unfortunately for Stefano, none of his friends share the same love for Harley-Davidson or motorcycles in general. One day Stefano finds the "Harley Owners Group" website. Stefano eagerly joins and meets many new online friends with whom he can talk about Harley-Davidson motorcycles. The Harley Owners Group website most accurately fits the description of which use of the Internet?

Virtual Communities

Hal Macini owner of Evergreen Landscaping is more interested in earning customer goodwill than striving for maximum profit. He determines his prices by maintaining the company's profitability at a level that gives him a good living but will never make him a rich man. Macini is basing his pricing policy on: a. maintaining stable sales levels b. earning satisfactory profits c. creating retained earnings d. creating the most sales possible e. decreasing consumer demand

b

At the end of the summer, Howard Nursery reduced the price on all of its plants, fertilizer, and potting soil by 50 percent in order to liquidate this inventory. What type of pricing strategy is being used in this example? a. supply oriented b. sales maximization c. target return on investment d. satisfactory profit e. profit maximization

b

The pricing policy used by Middleton Industries, manufacturer of Renaissance charms for bracelets and necklaces, is to set prices so its retail prices are as high as the market will tolerate. Additionally, Middleton strives to keep its costs at an industry low by using silver and gold overlays over charms made of cheap base metal. This is an example of a _____ policy a. market share pricing b. profit maximization c. demand-oriented d. sales maximization e. status quo pricing

b

Costa Coffee Company processes and distributes its coffee to retailers worldwide. This year the company wants to significantly reduce the cost of operations. Costa decides to acquire three of the coffee plantations that supply its high quality beans. What type of channel process is Costa engaging in?

backward vertical integration

The practice of exchanging products and services for other products and services rather than for money is referred to as __________.

barter

Freightfinder.com is an Internet company that is called a "go-between." If a trucker needs to find a load for a particular trade lane, he or she can visit this site, list the price and available truck space, and find a company that needs a shipment moved. Since the purpose of this Web site is to put buyers and sellers together so that a sale can be made, this Web site can be categorized as a __________.

broker

The typical break-even model assumes a given fixed cost and a:

constant average variable cost

Chad has calculated the sales volume at which his lemonade stand's costs equal revenue. Over dinner, he announced to his family that he only needed to sell 50 glasses of lemonade at $5 per glass to cover all his costs (lumber and nails for the stand, lemons, sugar, etc.). Which important factor has Chad excluded from his analysis?

consumer demand

Text, pictures, sound, and video refer to which website design element?

content

As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold, a firm should:

continue manufacturing

For convenience, pricing objectives can be divided into three categories. They are: a. refundable, competitive, and attainable b. perceived, actual, and unique-situational c. differentiated, niche, and undifferentiated d. profit oriented, sales oriented, and status quo e. monopolistic, fixed, and variable

d

Grove City Furniture Company has recently moved to a new, larger location. At this new location, it has been unable to attract sufficient customers. Frankie Alonza, its owner, does not have the cash to pay the current loan installment due on the building and inventory. Alonza has decided to reduce all merchandise prices by at least 50 percent for a weekend sale so he can earn enough to make his loan payment. His pricing objective can be classified as: a. market share maximization b. satisfactory profits c. asset maximization d. sales maximization e. target ROI

d

a technique that helps a firm search for growth opportunities from among current and new markets as well as current and new products.

diversification analysis

To handle products in the decline stage of the product life cycle.. companies often use either a __________ or a __________ strategy.

divesting; harvesting

The stapler industry has five competing brands, which are listed below. The market growth rate for staplers is 5.6%. The BCG Growth-Share Matrix would label Stapler Express as a _____, with what relative market share?

dog .37

Which of the following statements about price is true? a. Price can relate to anything with perceived value, not just money. b. Price is that which is given up in an exchange to acquire a product. c. Customers are interested in obtaining a perceived reasonable price. d. The price paid is based on the satisfaction consumers expect to receive from a product. e. All of these statements about price are true.

e

Thompson Pool and Patio is known for quality pool installations, excellent customer service, and reasonable prices. If you want to have a Thompson pool, you will have to wait about six months due to demand for their product. While Thompson could probably price its product higher, given the demand, they don't. Instead, the company sets its price so that it will earn a reasonable level of profits. Thompson seems to base its pricing policy on:

earning satisfactory profits

When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,600, demand doubled from four units sold per month to eight units per month. However, total revenue dropped. This is an example of:

inelastic demand

Critics claim that bank ATMs take advantage of the _____ of customers who suffer a poverty of time and have a strong need for convenience.

inelastic demand schedule

The Limited employs a quick response system to order fast-moving fashion items. The Limited's point-of-sale scanner records each sale. When stock falls below a minimum level, the system automatically sends an electronic order to the manufacturer, which processes the order immediately. This system has effectively reduced

lead time.

Before opening a store, the owner has to decide what to stock the store with and how many of each type to keep in stock. Also, figure out the best, least expensive place from which to order the products and make sure the shipments will arrive at the correct location at the right time. This is describing:

logistics

When the Apple iPhone 3G was introduced, the Apple iTunes Web site also began selling small program "apps" written by third parties that could be run on the iPhone. One interesting app was the "I Am Rich" application. For a price of $1,000, you could buy this app that did nothing but display a red gem on the iPhone's screen. The description of the app stated that this red icon would remind you (and others you show it to) "that you were rich enough to afford this." Six of the applications were sold before Apple, Inc. removed the app from iTunes. At the $1,000 price, the author of the app was using _____ pricing as part of his marketing approach.

prestige

Marketing managers who attempt to raise the quality image of their product by selling it at high prices are following a(n) _____ strategy.

prestige pricing

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

prestige pricing.

At Wal-Mart, Randi saw a bag of daffodil flower bulbs and a box of plant fertilizer. The items, which were sold together, retailed at $28.50 but were marked down to $19.99. The $19.99 is the:

price

Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii. When a tourist shop began selling Pure Hawaiian Air, it charged $5 per bottle and could not keep up with the demand. It has since raised the price to $7. Now the shop is still selling all the bottles of Pure Hawaiian Air it carries, but the owner is not forced to reorder on a daily basis. The $7 price is probably a(n):

price equilibrium

involves successive price cutting by competitors to increase or maintain their unit sales or market share

price war

People who have the authority and responsibility to advise others in the organization but cannot issue direct orders to them are referred to as holding __________.

staff positions

The Italian shoe industry has become a world leader because of intense domestic competition among firms such as Bruno Magli and Rossimoda. According to Michael Porter's theory about national competitive advantage, Italy's success in the shoe industry is due in part to its

strategy, structure, and rivalry.

charging of different prices to maximize revenue for a set amount of capacity at any given time (demand oriented)

yield management pricing