MKT EXAM 2 MML
Which of the following is an example of horizontal channel conflict?
a Ford dealer complaining that another Ford dealer is advertising in its territory
Large retailers like Walmart have enormous channel control due to their size and power. Which type of channel arrangement does this represent?
an administered VMS
Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Because she does not know much about wine, she will likely use the price of the wines as
an indicator of quality
What is the first step in marketing channel design?
analyzing consumer needs
What is the first step in a value-based pricing strategy?
assess customer needs and value perceptions
On a break-even chart, the break-even volume is located
at the intersection of total revenue and total costs
Which of the following statements is true regarding costs?
average cost tends to decrease with accumulated production experience
Which of the following is a cost-based pricing approach?
break-even pricing
Cheese makers in Wisconsin sell their leftover brine to local city and county highway departments, which use it in conjunction with salt to melt icy roads. Which product mix pricing strategy does this represent?
by-product pricing
Gillette charges a fairly low price for its razors (relative to costs) and a high price for razor blades. It is using a strategy of _____ pricing.
captive-product
Which of the following statements is correct regarding the functions channel members perform?
channel members create greater efficiencies than manufacturers could achieve on their own
The franchise organization is the most common type of _____ VMS.
contractual
Producers of _____ typically use intensive distribution for their products.
convenience goods
Historically, _____ have lacked leadership and power, often resulting in damaging conflict and poor performance.
conventional distribution channels
Sherwin-Williams sells its paint and other branded products exclusively through company-owned retail stores. Sherwin-Williams has established a
corporate VMS
Which of the following correctly identifies the three major pricing strategies used by marketers?
customer value-based pricing cost-based pricing competition-based pricing
Which factor sets the ceiling on setting a product's price?
customer's value perceptions
One form of _____ is when movie theaters charge one price for adults and a different price for senior citizens.
customer-segment pricing
_____ occurs when retailers set an artificially high "regular price" and then advertise a "sale price," which is actually close to their everyday price.
deceptive pricing
Two external factors which must be considered in pricing decisions are
demand and the nature of the market
A _____ shows the number of units the market will buy in a given time period at different prices.
demand curve
A _____ has no intermediary levels.
direct marketing channel
Basic price adjustments known as _____ are used to reward customers for certain responses.
discounts and allowances
Due to changes in technology, a recent trend is for product or service producers to cut out intermediaries and go directly to final buyers. This is one form of
disintermediation
Companies that use _____ continually adjust prices to meet the characteristics and needs of individual customers and situations.
dynamic pricing
_____ is a strategy in which the seller requires that dealers not handle competitors' products.
exclusive dealing
Which of the following statements is true concerning new product pricing strategies?
for a market-skimming strategy to be successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more
Which of the following is true regarding the price-demand relationship?
if demand is elastic, sellers will consider lowering their price
The length of a channel is indicated by the number of
intermediary levels
From the producer's point of view, a greater number of levels of marketing channel means
less control and greater channel complexity
A company has set a low price on a new product it introduced. It wants to maximize its market share and attract a large number of buyers quickly. Which new product pricing strategy should the company use?
market-penetration pricing
When Apple introduced its iPhone, it priced the new product at $599, considerably higher than either its iPod or competition cellular phones. Apple Computer was pursuing a _____ new product pricing strategy.
market-skimming
Which of the following is a reason that producers use marketing channels and channel intermediaries?
marketing channel members are able to transform the assortments of products made by producers into the assortments wanted by consumers
One key function performed by channel members is _____, shaping offers to meet the buyer's needs, including activities such as manufacturing, grading assembling, and packaging.
matching
Which type of market consists of many buyers and sellers trading over a range of prices rather than a single market price?
monopolistic competition
When a single firms sets up two or more marketing channels to reach one of more customer segments, it is using a
multichannel distribution system
A car buyer can choose a base model at one price, or one with a premium sound and navigation system at a higher price. This is an example of _____ pricing.
optional-product
_____ is the practice of pricing products below cost to harm competitors.
predatory pricing
The amount of money charged for a product or service is its
price
Archer Daniels Midland Co is the world's largest processor of soybeans, corn, and wheat. In the 1990s, the Justice Department found it guilty of regularly meeting with competitors when setting prices. ADM was guilty of
price-fixing
Price is the only part of the marketing mix that
produces revenue
Which factor sets the floor on setting a product's price?
product costs
The Ford Mustang is offered in several different models. Ford will use _____ pricing to determine the price steps between the different models.
product line
Many personal care companies combine toothpaste with toothbrush at reduced price. This is an example of _____ pricing.
product-bundle
A soda pop company offers a discount to a grocer. In exchange, the grocer agrees to provide in-store advertising for the soda pop and additional sales-support. This is an example of
promotional allowances
Some sellers use 00-cent endings on regularly priced items and 99-cent endings on discount merchandise. This is an example of pricing referred to as
psychological pricing
In which type of market does no buyer or seller have much impact on setting the going market price?
pure competition
Under _____, the market consists of many buyers and sellers trading in a uniform commodity.
pure competition
In _____ pricing, the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs.
segmented
Firms producing consumer electronics, furniture, and home appliance brands typically distribute their products
selectively
What is predatory pricing?
selling below cost with the intention of punishing a competitor
What is target costing?
setting a price and then setting costs that will ensure that the price is met
Internal factors that affect pricing include
the company's overall marketing strategy, objectives, and marketing mix
How is price determined using cost-plus pricing?
the price is set by adding a standard mark-up to the cost of the product
In a broad sense, price is
the sum of all the values that customers give up to gain the benefits of having or using a product or service
The company, suppliers, distributors, and customers who "partner" with one another to improve the performance of the entire system make up the
value delivery network
New, premium movie theaters offer features such as online reserved seating, high-backed leather executive chairs with armrests and footrests, the latest in digital sound and super-wide screens, and other amenities for which they charge a higher price. This is an example of which type of pricing?
value-added pricing
Using _____, the customer shares real-time data on sales and current inventory levels with the supplier. The supplier then takes full responsibility for managing inventories and deliveries.
vendor-managed inventory
When would a competitor most likely react to a firm's price change?
when the number of firms involved is small