MKTG Exam 4
If Pacific Power and Light increased its rates 10 percent and experienced only a 2 percent reduction in the demand for power, the demand would be
inelastic
Effective management of integrated marketing communications is based upon
information about customers.
Promotion helps consumers because it
informs consumers and places them in a position to specify the products that they seek.
Measuring effectiveness during a campaign is usually accomplished by using
inquiries.
The two groups of order takers in personal selling are
inside order takers and field order takers.
Retail salespeople are classified as
inside order takers.
Advertising that aims to create a more favorable view of a company as a whole in the eyes of various stakeholders is called __________ advertising.
institutional
First Union Bank airs a series of radio ads that claim, "We are the friendly bank." This campaign would best be described as __________ advertising.
institutional
The University of Iowa runs a series of ads throughout the Midwest on how friendly and helpful its faculty, staff, and students are as well as how outstanding its academic programs are. This type of promotion would best be characterized as
institutional advertising
Chris sees a television commercial for Arby's promoting its roast beef sandwiches at 5 for $5.95. Later that day he goes to the nearest Arby's for a roast beef feast, but is told that the special offer is not available at that location. Arby's seems to lack
integrated marketing communications.
If FedEx-Kinko's decided to outsource all of its marketing efforts to the MaxPro Company, which specializes in advertising, sales promotion activities, and public relations, FedEx-Kinko's would likely be striving to practice
integrated marketing communications.
The coordination of promotion and other marketing efforts for maximum informational and persuasive impact defines
integrated marketing communications.
A price developed in the consumer's mind through experience with the product is called a(n)
internal reference price.
What a price means or what it communicates to customers is called
interpretation.
Pioneer promotion is most likely to be used during the _____ stage of the product life cycle.
introduction
For most products, a(n) ____ relationship exists between the price of a particular product and the quantity demanded.
inverse
If the terms of a business exchange are 2/10 net 30, this means that the transaction
involves a cash discount if paid within ten days.
Public relations
is an element of promotion that should be handled on a continuous basis.
A major benefit of using event sponsorship is that it
is cost free.
A major disadvantage of personal selling is that it
is very expensive per contact.
A product under nonprice competition would most likely *not* succeed in the market if
it is easy to duplicate.
A product is a price leader when
it is sold at less than cost in the hope that sales of other products will increase.
What assumption does breakeven analysis make that limits its overall usefulness?
it relies on demand for a product being inelastic
Personal selling goals include finding prospects, convincing prospects to buy, and
keeping customers satisfied.
As they walk to the car, Erin Brandeis tells her sales representative, Joachin Perez, that they may need to modify the price structure they just presented to the prospect. Erin bases her statement on the way the prospect folded his arms when Joachin quoted him the prices on the new system. Joachin says he didn't notice. Erin recommends a book on ___________ communication to Joachin.
kinesic
Head nodding, winking, hand gestures, and arm motions are all forms of _________ communication.
kinesic
Julie Reese is working on developing a magazine advertisement for Curves For Women, the ladies' fitness chain. She knows what she wants the advertisement to say and the illustrations she wants to use, but she is having a tough time putting it all together. Julie is having trouble determining the
layout.
The physical arrangement of the illustration, headline, subheadline, body copy, and the signature is called the
layout.
Channel capacity is determined by the
least efficient component of the communication process.
A salesperson will be better able to determine the prospect's specific needs by
listening carefully to questions and comments and watching reactions during the sales presentation.
Tony tells his wife, Camilla, that his last sales call of the day at DuPont was a disaster. He explains that he never really figured out what the purchasing agent was looking for. Camilla, a sales trainer for another firm, hands Tony a book on
listening skills.
If a marketer of a perfume ad develops a commercial involving a man being attracted to a woman who wears a particular perfume, it is attempting to influence one's need for
love and affection.
To maintain market share and revenue in an increasingly price-sensitive market, companies have focused on quality, used labor-saving technologies, and used efficient manufacturing processes. These tactics have provided gains in productivity that have translated into ___________ for the consumer.
lower costs for the company and lower prices
A marketer that wanted to include detailed information in advertisements would most likely use
magazines.
The *best* advice for recruiting and selecting salespeople for one's organization would be
make recruitment a continuous activity aimed at seeking out the best applicants.
The stage of the personal selling process in which the salesperson attempts to make a favorable impression, gather information about the customer's needs and objectives, and build a rapport with the prospective customers is called
making the presentation.
Roberts Electronics calculates that if it produces 15 radar detectors, its costs are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this instance, $90 is the firm's ___________ cost.
marginal
If Colgate-Palmolive wants to maximize profit on its toothpaste, it should operate at the point where
marginal revenue equals marginal cost.
Michelin notices that when the number of tires it sells increases from 1,000,000 to 1,000,001, total revenue rises $35. The $35 represents the firm's
marginal revenue.
A firm establishes which of the following pricing objectives to maintain or increase its product's sales in relation to total industry sales?
market share
If Nabisco had established a pricing objective of selling one out of every three crackers consumed in the world, it would have established an objective based on
market share
Suppose that the watchband department of Timex sells completed watchbands to the finished watch department. The finished watch department is charged the price it would have to pay an outside watchband manufacturer less a discount to reflect low sales and transportation costs. This method of pricing is called _______ pricing.
market-based cost
A cost-based pricing method commonly used in retail is called
markup pricing
The message that a source originally encodes and the meaning a receiver ultimately decodes
may be different because of noise.
When encoding the message, the source should use signs that have
meanings that the target market will understand.
To increase sales of Chex cereals, Ralston Purina offered a free pound of bananas to customers who bought the large-size box. This form of sales promotion is called a
premium.
If a company calls a meeting to announce a major news event, this is known as a
press conference.
If researchers at Merck Pharmaceuticals develop a cure for prostate cancer, the best way to announce this to the public and get wide media coverage would be through a
press conference.
French Quarter Inns drops the price of a suite from $225 to $195 per night and experiences a reduction in the quantity of rooms demanded of an average of five per night. This is an indication that suites at this hotel are apparently an example of a(n) ___________ product.
prestige
If REVO sets the price for its sunglasses at $240, it is using psychological pricing to convey
prestige
A customer who is ___________ is likely to say, "People notice when you buy the most expensive brand of a product."
prestige-sensitive
Buyers who focus on purchasing products that signify prominence and status are
prestige-sensitive buyers.
An evaluation performed before an advertising campaign begins is a
pretest
General Mills used a panel of consumers to evaluate its Cheerios campaign featuring children who read the cereal box and try to persuade their parents to watch their cholesterol. These consumers judged the advertisements prior to the execution of the advertising campaign. This is an example of a(n)
pretest.
Which of the following is *not* a major factor for firms making price decisions?
previous sales
Which of the following is the most flexible variable in the marketing mix?
price
For most consumers, there is an assumed relationship between
price and quality.
Safe Auto advertises its low-cost automobile insurance as "minimum coverage for minimum budgets." Safe Auto is engaging in
price competition
When marketers emphasize price as an issue and match or beat the prices of other companies, they are using
price competition
If a company provides price differentials that harm competition by giving one or more buyers a competitive advantage, it is committing
price discrimination.
A measure of sensitivity of demand in relation to changes in price is
price elasticity of demand.
Dividing the percentage change in quantity demanded by the percentage change in price gives the
price elasticity of demand.
Which of the following pricing strategies often results in a retailer losing money on the product?
price leader
To attract customers into a store, Safeway advertises its milk at less than cost, hoping that customers will purchase other groceries as well. This pricing strategy is called
price leader pricing.
The pricing strategy that assumes that demand is relatively inelastic over certain price ranges is called
price lining
When an organization sets a number of prices for selected groups of merchandise, this is commonly referred to as
price lining
To determine the breakeven point in units, divide the fixed costs by
price minus variable costs.
If promotion does not do its job of stimulating demand, then the
price of the promoted product is likely to increase.
All of the following are psychological techniques except
price skimming
If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as
price skimming
When Sharp first introduced its line of graphing calculators, it set the price quite high; it has lowered the price as competitors have entered the market. The pricing strategy initially used by Sharp is called
price skimming
When businesses charge the highest possible price that customers who really want the new product will pay, they are using
price skimming
A danger associated with engaging in price competition is that competitors can also change prices quickly and aggressively, which can result in a(n) _____ that will be harmful to both companies.
price war
Advertisements for Suave shampoos emphasize that other shampoos may cost more but don't work any better than Suave. In this example, Suave is competing on the basis of
price.
The tuition and fees each student paid for this semester of college are both terms for
price.
Reference pricing is
pricing a product at a moderate level and positioning it next to a more expensive model or brand.
By promoting the fact that "orange juice is not just for breakfast anymore," the Florida Orange Growers Association attempted to stimulate
primary demand.
A television advertisement showing the safety features of the Volvo "Cross Country" Wagon would be best classified as which of the following?
product advertising
If an organization sets prices to recover research and development expenses and establish a premium quality image for its product, it would be using a _________ pricing objective.
product quality
Research indicates that both market share and ___________ are good indicators of profitability.
product quality
The pricing of Clinique makeup considerably higher than brands such as Cover Girl, Revlon, and Maybelline is used to communicate ______, which is the company's primary pricing objective.
product quality
The perception of price depends on a
product's actual price and consumers' expectations regarding price.
Westin Inc. has an objective of achieving a 25 percent return from its overall sales. This is an example of a ______ pricing objective.
profit
If a pull policy is to be used in promoting a product, the firm
promotes directly to consumers.
If the push policy is used in promoting a product, the firm
promotes only to the next marketing institution down the marketing channel.
Advertising, personal selling, sales promotion, and public relations are called
promotion mix ingredients.
Promotion can help keep prices lower because
promotion of prices intensifies price competition.
Communication that builds and maintains favorable relationships by informing and persuading one or more audiences to view an organization more positively and to accept its product is the role of
promotion.
Price leaders, comparison discounting, and special-event pricing are applications of
promotional pricing.
To gain maximum benefit from promotional efforts, marketers must strive to
properly plan, implement, coordinate, and control communications.
Company sales records, commercial databases, newspaper announcements, telephone directories, and public records are all sources used for
prospecting
Janetta Light tells her sales manager that she will be devoting more effort to ___________ in the coming weeks, as her list of potential customers has dwindled below the level of 30 firms recommended by the selling plan.
prospecting
Scott Bartello, a salesperson for Xerox, develops a list of potential customers and evaluates them on the basis of their ability, willingness, and authority to purchase copy machines. This process is called
prospecting
Developing a list of potential customers is called
prospecting.
Sayyid's company has launched a new product line, and he is put in charge of sales. He decides his first step will be to find potential customers in the company's sales records. Sayyid is
prospecting.
Brandon walks around behind purchasing agent Shannon Wise as she looks at the pamphlet describing Hyster's new conveyer system. Shannon stands up and walks to a table on the other side of her office. Brandon follows, but he does not understand the ___________ communication Shannon is sending.
proxemic
When a salesperson varies the physical distance between himself and a customer he is using
proxemic communication.
When a company attempts to influence a consumer's perception of price to make a product's price more attractive and reduce "sticker shock," it is using a ______ pricing strategy.
psychological
Toyota's sponsorship of a major Professional Golf Association tournament would be an example of a(n) ______ tool.
public relations
Belinda works for Burger King and her responsibilities include maintaining favorable relationships between the organization and its stakeholders. Belinda works in
public relations.
Communication through the use of brochures, annual reports, event sponsorships, and news stores is referred to as
public relations.
Kohl's, a department store featuring clothing and housewares, communicates in news story form about its organization and its efforts to support local children's hospitals. This information is transmitted through mass media at no charge and is therefore called
publicity.
The Sharper Image likes to use nonpersonal communication in news story form such as press releases for its new and improved products. This is an example of
publicity.
When Hershey Dark Chocolate Kisses were introduced, Hershey promoted directly to consumers and told them to ask for the product at their favorite stores. This is an example of a _________ policy.
pull
During the duration of an advertising campaign, Verizon Wireless ran television advertisements at a steady rate throughout the week and intensified its message with newspaper advertising in many major newspapers in the Sunday paper. Verizon Wireless used a(n)______ media schedule.
pulsing
If during an advertising campaign a certain portion of advertising runs continuously, and then during specific periods additional advertising is used to intensify the level of communication, a(n) ______ media schedule is being used.
pulsing
The three general types of media schedules are
pulsing, continuous, and flighting.
Aaron Epstein tells his fellow retail salesperson at Zales Jewelers that during the second quarter he is going to sell all the Alance watches he can and use his extra earnings to go to Cancun. He exclaims, "Can you believe the __________ program they have on for this quarter?"
push money
For customers, value is a function of the product's
quality attributes.
If Ralph Lauren offers to reduce the price of its women's blazers when retailers buy more than 100 pieces, the designer is offering a ____________ discount.
quantity
If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the
quantity demanded goes down.
A marketer is most likely to set prices according to a cash-flow objective when a
quick return on investment is desired.
Temporary price reductions through sales, rebates, and special discounts are often used to
raise cash quickly.
When a manufacturer rewards retailers based on the number of pieces moved through their scanners, this sales promotion method is known as a
scan-back allowance.
Executives in Japan decided to price Lexus luxury cars in the United States at $55,000 while pricing them at $66,000 in their own country. This is an example of
secondary-market pricing.
When a marketer makes an effort in promotion to point out the strengths and benefits of a specific brand, it is an attempt to build _________ demand.
selective
When Sears promotes the benefits and strengths of its Kenmore brand appliances, it is attempting to build
selective demand.
Premium-priced products are usually marketed through
selective or exclusive distribution.
Markup is measured either as a percentage of _____ or a percentage of _____.
selling price; cost
Sales objectives can do all of the following *except*
serve as a deterrent both to salespeople and their clients.
A salesperson should try to close the sale
several times during the sales presentation.
Which factor is least likely to affect pricing decisions?
shifting stock values
As a promotional strategy, using coupons strives to achieve all of the following except
show how a product is used
The advertising department for the Pennzoil Corporation is working on a print advertisement for a new product. At this point, the layout contains a phrase to attract attention, an additional phrase to provide an explanation, an illustration to show the product, and a paragraph to explain the advantages and benefits of the product. What other important element should be included?
signature
The identification of an advertisement's sponsor is the
signature.
Darcy presents an identification card at the supermarket checkout and has a microcomputer attached to her TV. Information from both of these is sent to a research facility. Darcy is providing
single-source data.
When individuals' behaviors are tracked from television sets to checkout counters using equipment provided by the marketer, this is known as
single-source data.
When consumers are making do with less expensive products and shopping more selectively, manufacturers and retailers must focus on the ___________ of their products.
value
Costs that vary directly with changes in the number of units produced or sold are called
variable costs
Andrea receives an e-mail from her sister-in-law that is actually a recommendation for a website with a demonstration of a new home hair-coloring system. She later discovers that her sister-in-law received a free trial kit for passing Andrea's and four other friends' e-mail addresses along to the marketer. This is known as
viral marketing.
Marginal analysis involves examining
what happens to a firm's costs and revenues when production is changed by one unit.
The amount of profit a channel member expects depends on
what the intermediary could earn if it were handling a competing product instead.
If a manufacturer decides to use a push policy to promote its products, it is most likely to focus its efforts on
wholesalers
The fact that a gas station in Texas pays less for fuel than a gas station in Maine from a producer in Louisiana suggests that refineries are using which of the following pricing methods?
zone pricing
J.C. Penney's pays $16.50 for a six-ounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately ___________ percent for this product.
57%
___________ is communication in news story form about an organization or its products that is transmitted through a mass medium at no charge.
Publicity
Sales objectives for individual salespeople can be stated in several ways. Which of the following would *least likely* be used for stating an individual salesperson's goal?
Ratio of profits relative to number of sales calls
Which of the following is the most important consideration when choosing an event to sponsor?
Reasonable association between the event and the company's product
___________ are offers of cash to customers who purchase a specific product, and ___________ are offers of cash to customers who purchase a specific quantity of a specific product.
Rebates; money refunds
Ray Singh is preparing to evaluate one of his sales representatives, Julie Hill. His evaluation of her performance for the prior year led to his conclusion that she lacked key product information. At their upcoming session, he will *most likely* do which of the following?
Recommend that she attend a training program.
Newspaper ads for Blue Haven Pools offering discounted prices during October are examples of which of the following uses of promotion?
Reducing sales fluctuations
A Macy's manager designs the casual clothing department such that one of Macy's private label pairs of jeans, priced at $24.99, is positioned next to a national brand of jeans, such as Levis, priced at $39.99. What is the manager attempting to accomplish?
Reference pricing strategy
Which of the following prohibits price discrimination that lessens competition among wholesalers and retailers?
Robinson-Patman Act
The ___________ prohibits price fixing among firms in an industry.
Sherman Antitrust Act
Which of the following acts does not directly affect pricing decisions?
Simpson-Marshall Act
Threatt Production makes low-priced, convenience products that are widely available. It is most likely to focus its promotion efforts on
advertising.
When a company promotes its position on a public issue, this is specifically referred to as ______ advertising.
advocacy
When Anheuser-Busch ran an advertising campaign featuring the slogan, "Know when to say when," it was using
advocacy advertising
When respondents are shown a list of various products, brands, and company names and then asked about advertisements they have seen lately, researchers are conducting a(n)
aided recall test.
In establishing sales promotion objectives, a marketer should always
align objectives with the organization's overall objectives.
A concession in price in business markets to achieve a desired goal is called a(n)
allowance.
An advertising campaign is typically developed by an individual or a few persons within the firm, an advertising department within the organization, or
an advertising agency.
Lucy buys a new dress at T.J. Maxx that has a price tag with "Compare at $50.00. Our Price $29.99." This is an example of the use of
an external reference price.
Effective motivation of a sales force is best achieved through
an organized set of activities performed continuously.
All of the following are examples of publicity-based public relations tools except [a) press conferences. b) feature articles. c) news releases. d) annual reports. e) news stories.]
annual reports
Creating a favorable impression and developing rapport with prospective customers is a critical part of the ______ step of personal selling.
approach
Rick has reviewed a prospect's account and credit history, identified product needs, and gathered the appropriate literature. He feels he is ready for the ____ step of the personal selling process.
approach
When the CEO or chief financial officer of a company states how much the company should spend on advertising for the coming period, the company is using the
arbitrary approach.
Some critics, including consumer groups and government officials, suggest that certain products should not be promoted because they
are potentially harmful.
Below the breakeven point, a firm is operating
at a loss
If Roberts Electronics finds that the average total cost of its radar detectors and the marginal cost of its radar detectors are both $85, then
average cost is at its lowest level.
If General Mills looks at Kellogg's cereal prices as the primary method of determining its own prices, General Mills is using
competition-based pricing.
If Target were to base its advertising appropriation on the amount that WalMart spends, it would be using the ______ approach.
competition-matching
The Bentley Agency places $2,500 in radio spots and $17,500 in television spots for Darnell Insurance in June. For its efforts this month, the agency "traditionally" would receive ___________ in compensation.
$3,000
The Highland Racquet Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when the membership charge is $60 per person per year. What is the variable cost per person for Highland?
$30
Tim O'Brien gets the invoice for a load of gravel he purchased last week. The price of the gravel was $55, and the terms are 2/10, n/45. If Tim pays the invoice in five weeks, he will owe
$55
What equation shows organizations the relationship between price and profit?
(Price X Quantity Sold) - Total Costs = Profits
If a company increased its price from $100 to $120 and the quantity demanded fell by 40 percent, the price elasticity of demand for this product is
-2
A certain location of O'Charley's Restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must O'Charley's serve per year in order to break even?
5000
Markum Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at ___________ units.
1167
If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point?
2000 units
A retailer of Real Dry deodorant prices it at $2.00; it costs the retailer $1.40. What is the approximate markup as a percentage of selling price?
30%
Some grocery stores collect data on competitive prices
by using full-time comparison shoppers.
Domino's is looking into magazine advertising for its pizza. The company wants to reach as many people as possible, but due to budget constraints Domino's must reach consumers as efficiently as possible. What can Domino's use to evaluate various magazines?
A cost comparison indicator
If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?
Above some price level, the quantity demanded would begin to decrease.
Slow feedback, high absolute-dollar outlay, and difficulty in measuring effects on sales are disadvantages of which promotion mix ingredient?
Advertising
____ provide businesses with copywriters, artists, production coordinators, media experts, researchers, and other highly skilled specialists.
Advertising agencies
Which of the following is the best example of the promotional objective of combating competitive promotional efforts?
After Ford promotes the towing capacity of its F-series trucks, DaimlerChrysler soon emphasizes the towing capacity of its Dodge trucks.
Which of the following is *not* a method used to determine transfer prices?
discounted standard cost
The manager at Best Buy puts a sign up next to a Pioneer audio system that reads, "Only $199.99! $60 less than Circuit City." This is an example of what type of pricing strategy?
Comparison discounting
In recent years the proportion of promotional dollars spent on sales promotion has
increased relative to advertising.
The vehicle through which the coded message is transmitted from the source to the receiver is called a(n)
communication channel.
Which of the following lists forms of competitive advertising?
Comparative, reminder, reinforcement
___________ are designed to identify the customers called on and to present detailed information about interaction with those clients.
Call reports
___________ links the purchase of an organization's products to support of philanthropic organizations favored by the target market.
Cause-related marketing
Provisions of the Robinson-Patman Act, as well as those of the ___________, limit the use of price differentials.
Clayton Act
OES Office Systems' use of fax machines to carry its advertising messages to its business customers is which component of the communication process?
Communication channel
Which of the following statements about nonprice competition is *false*?
Companies that use nonprice competition do not need to keep track of their competitor's prices.
If PepsiCo sets its twelve-pack price at $3.99 to match the price charged by Coca-Cola, Pepsi is using which of the following pricing methods?
Competition-based
What type of advertising points out a brand's features and advantages that fit consumers but may not be available in other brands?
Competitive
When marketers at Consolidated Mustard Company tried to determine demand for their product, they found that at 50 cents, consumers wanted 2,000 jars; at $1.00, they wanted 6,000 jars; and at $1.50, they wanted 4,000 jars. What can Consolidated conclude?
Consolidated mustard is a prestige good.
Which of the following is not an advantage of using publicity-based public relations tools?
Control by media personnel of the content and timing of messages
Advertising appropriations are largest for which type of product?
Convenience goods
Frederick Griffith of Griffith's department stores tells his marketing director that he is tired of the constant price-centered advertising by the firm's agency. "We have the best customer service in town, and I feel that is what we should be hanging our hats on," he states. This statement is most appropriate for use in which of the following stages of campaign development?
Creating the platform
Radio and television signals as well as ink on the paper of a magazine or newspaper are all considered
communication channels.
A sharing of meaning defines
communication.
Generally, in small firms, ___________ create(s) and implement(s) advertising campaigns.
one or two individuals
Which of the following is not a discount provided to business customers?
Differentiated
A price-skimming strategy assumes that
the initial demand is highly inelastic.
What type of pricing strategy is used in a situation where demand for a product is price inelastic and the seller has an ethical responsibility not to overcharge the client?
Professional pricing
_____ is a broad set of communication efforts used to create and maintain favorable relationships between a company and its stakeholders.
Public relations
Which of the following is the *best* example of a well-stated sales objective?
Each salesperson should bring in $25,000 in new sales by November 15.
Rob Johnson orders 16 dozen fishing lures from Strike Right for $375. When he gets the invoice, he is furious that $25 in freight charges has been tacked onto his bill because he thought the price included freight costs. Rob should have been certain that the order terms were
F.O.B. destination
If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) ___________ price.
F.O.B. factory
Which of the following industries is most likely to employ combative promotional efforts?
Fast food
Which of the following is most likely to stimulate customer loyalty?
Frequent-user incentives
Which of the following products is most likely to have an inverted C-shaped demand curve?
Giorgio perfume
If Wrigley set its pricing objective as attaining 38 percent of the chewing gum market, what else would be needed to make this a true pricing objective?
Identification of a time period for accomplishment
Michelle works for a company that sells rotisseries for chicken and other foods. She answers phone calls from customers who see infomercials on TV and call to order the product. Michelle is considered a(n)
Inside order taker
What does the demand curve for a prestige product look like?
It forms a curve where the greatest quantity sold comes at a medium price and the quantities fall as the price increases or decreases.
If a firm's promotional budget were extremely limited, for which of the following reasons would it be more likely to rely on personal selling as its main promotional tool?
It is easier to measure a salesperson's effects on sales than advertising's effects on sales.
Why is the headline of a print advertisement such a critical component of the copy?
It is often the only part of the advertisement that is read.
Which of the following best characterizes the function of recruiting and selecting a sales force?
It should be a continuous, systematic attempt to match applicants' characteristics to the firm's needs.
Jennifer Clarkson, a sales representative for a publisher of college textbooks, had the southern half of the state as a sales territory. Last year, the director of marketing for the publishing company told Jennifer's sales manager to increase her territory to the entire state. Now Jennifer's customers are less satisfied with the company. They are most likely to blame ___________ for their reduced level of customer satisfaction.
Jennifer
Which is the best example of noise that originates with the receiver in the communication process?
Kevin simply tunes out pop-up ads on the Internet so that they don't even enter his awareness.
___________ is a broad set of communication activities used to create and maintain favorable relations between the organization and its stakeholders.
Public relations
Which of the following is the most commonly used type of publicity-based public relations tool?
News release
Danielle Robinson, account representative for EXpert Advertising, tells D'Orazio Tile Products that she is proposing to use 5 full-page, four-color ads in home-decorating magazines to achieve an increase in consumer and builder inquiries of 15 percent. This approach is an example of which of the following methods of determining advertising expenditure levels?
Objective-and-task
To determine how much money to spend on advertising, marketers for a new brand of caffeinated energy drink decided that they wanted the advertising to create awareness of the new flavor in 80 percent of the energy drink market within one month of introduction. The marketers then determined how much it would cost to reach this goal. This is an example of which one of the following approaches to determining advertising budgets?
Objective-and-task
What is the primary justification marketers use for conducting recognition and recall tests?
People are more likely to buy a product they have seen advertised than one they have not seen advertised.
High-priced products usually depend heavily on which promotion mix ingredient?
Personal selling
Kinesic communication is an element in which type of promotional method?
Personal selling
Which promotion mix ingredient costs considerably more than advertising to reach just one person but can provide more immediate feedback?
Personal selling
During the introduction stage of the product life cycle, which type of promotion would a firm focus on?
Pioneer
Which of the following types of promotion informs potential customers about a product and what it is?
Pioneer
When Blue-ray disc players were first introduced to the market, what would the logical choice for promotion have been?
Pioneer promotion
To announce its development of a solid fuel titanium rocket for the U.S. missile defense system, Unijet management feels it needs to get wide media coverage. Under these circumstances, which of the following would be its best alternative?
Press conference
Which of the following is not a public relations tool? [a) Feature article b) Company magazine c) News release d) Annual report e) Product sample]
Product sample
Some of the posttest methods for measuring advertising effectiveness are based on how well consumers remember advertising and include (1) recognition tests and (2) recall tests. What is the basic difference between these two approaches?
The actual ads are shown in the former but not in the latter.
When an organization uses an advertising agency, who usually develops the advertising campaign?
The firm and the agency working jointly
Which of the following is *not* a reason why the proportion of promotional dollars spent on sales promotion has increased in recent years?
The greater emphasis on improving long-term performance has resulted in an increased use of sales promotion methods.
Which of the following statements applies to media planning?
The message content affects the types of media used for an advertising campaign.
Which of the following is a requirement for setting pricing objectives?
The objectives should be explicitly stated.
What is an advertising platform most commonly based upon?
The opinions of employees within the firm or the advertising agency
At what point does a firm maximize profit?
The point at which marginal cost equals marginal revenue
Companies tend to view promotion from many vantage points. Which of the following alternatives is most accurate?
The role of promotion is to stimulate product demand.
Which of the following is not true when making the sales presentation?
The salesperson should focus on anticipating questions and answering them before they're asked.
Which of the following target market characteristics are most important to consider before determining the promotion mix ingredients?
The size, geographic distribution, and demographic characteristics
Which of the following statements about markup pricing is correct?
The use of similar markups reduces price competition.
What do all of the following have in common: tuition, fee, premium, retainer, dues?
They are different terms for the concept of price.
___________ consumers are concerned about both the price and the quality aspects of a product.
Value-conscious
Which of the following statements about price elasticity is *false*?
When price is raised on a product that has an inelastic demand, then total revenue will decrease.
Why should a benchmark statement be included in advertising objectives?
Without a reference point, it is difficult to determine to what degree objectives have been accomplished.
Which of the following are personal informal exchanges of communication that customers share with one another about products, brands, and companies?
Word-of-mouth communication
Advertising agencies typically receive
a 15 percent commission paid by the media from which it makes purchases.
A temporary price reduction to resellers for purchasing specified quantities of a product is
a buying allowance
One advantage of nonprice competition is that
a firm can build customer loyalty.
A dealer loader is
a gift to a retailer who purchases a specified quantity of merchandise.
In conducting an assessment of her accounting firm, Pauline Santana discovers the following annual results: average charge per customer = $250; rent = $12,000; total billings = $150,000; employee compensation and benefits = $60,000; and other costs = $110,000. Given these results, Mary's profits would equal
a loss of $32,000.
A missionary salesperson is usually employed by
a manufacturer
If a firm currently produces 2,500 products per month and decides to produce 2,501, it will incur
a marginal cost.
When Levi's agrees to pay JC Penney's money for providing television advertising and Sunday newspaper sales fliers emphasizing Levi's jeans, Levi's is offering
a merchandise allowance.
To gain market share, when Hyundai first entered the U.S. car market it did so with a comparatively low price strategy. One of the negative side effects of making this pricing decision is
a negative impact on consumers' perceptions of quality.
If Kroger Food Stores advertises 2-liter bottles of Pepsi for 89 cents to generate store traffic that will purchase other items at regular prices, the grocer is using
a price leader.
Odd-even pricing is
a psychological pricing strategy.
Cost efficiency, repetition, and adding product value are all potential benefits of
advertising.
One of the biggest problems associated with ___________ as an element of promotion is the high absolute dollar outlay often required.
advertising
The use of a pull policy may require heavy expenditures for
advertising and sales promotion.
The total amount of money a marketer allocates for advertising for a specific time period is the
advertising appropriation.
Suppose State Farm Insurance stated, "We want our advertising to increase our customer base for home and automobile insurance 10 percent by the end of the fiscal year." This would be considered a(n)
advertising objective.
Before launching a new advertising campaign, marketers for Healthy Choice frozen dinners must determine the selling points that they want to include in the advertisements. The identification and organization of these selling points is called the
advertising platform.
The basic issues or selling points that an advertiser wants to include in an advertising campaign is (are) the
advertising platform.
A paid form of nonpersonal communication about an organization and/or its products that is transmitted to a target audience through a mass medium is
advertising.
Sometimes retailers are offered temporary price reductions for purchasing specified quantities of a product. These offers are used to provide an incentive to handle a new product, to achieve a temporary price reduction, or to stimulate the purchase of an item in large quantities. What is this sales promotion?
buying allowance
When Gabriella logs on to Dell's website, she sees a notebook model priced well below $1,000. As she continues through the site to view the other options, she realizes the first one she saw was the cheapest model available, but she of course wants more features. Dell is utilizing
bait pricing
When a company prices one item in a line low with the intention of selling a higher-priced item in the same line, it is using
bait pricing
The type of prices most likely to appear in advertising is
bargain.
The oldest form of exchange—trading of products—is known as
barter
An advertising platform is the
basic issue or selling point that an advertiser wishes to include in an advertising campaign.
Rachel is considering advertising her new restaurant on the radio to attract more customers. She knows that in order to attract listeners' attention on the radio it will be important for her to
be both informal and conversational in tone.
The effectiveness of an advertising campaign can be measured
before, during, and after the campaign through the use of pretests, inquiries, and posttests.
Brands that are promoted through comparative advertising are most likely to be
brands that are attempting to compete with market leaders.
Suppose managers at Caterpillar have determined the costs associated with producing hay balers are equal to the price that they charge for the hay balers. This indicates that Caterpillar is producing at the ___________ point.
breakeven
When Mia and Shane are planning their honeymoon, their travel agent tells them that if they buy a special package, their trip to Paris will include meals, tickets to the theater, and a rental car in addition to airfare and a hotel. This is an example of the use of
bundle pricing
If Green Giant wants to provide its resellers with a secondary incentive to stimulate repurchases after an initial consumer coupon campaign for its latest product, it can offer resellers a sum of money for each unit purchased. This type of sales promotion is a
buy-back allowance
An attempt to create a trend or acceptance of a product through word-of-mouth communication is called
buzz marketing.
A content analysis of an organization's messages, readability studies, and readership surveys are all tools used to conduct a(n)
communications audit.
Soft drink companies advertise that their products beat the competition in national "taste tests," and they refer to the rival brands by name. This type of advertising is best described as
comparative
When products in an industry are relatively homogeneous and price is a key purchase consideration,
competition-based pricing becomes more important.
Maintaining or increasing market share
can be achieved even if industry sales are flat or decreasing.
A market share objective
can be used effectively whether total industry sales are rising or falling.
Promotion tends to
capitalize on existing needs.
Lexmark sells some of its color printers for about $100, but the refill cartridges cost over $30 each. Lexmark's pricing strategy would be best labeled as
captive pricing
Pricing the basic product in a product line low while pricing related items at a higher level is called
captive pricing.
Which of the following pricing objectives sets prices to recover cash as quickly as possible?
cash flow
Gambrell Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as
cash flow.
Companies that focus on particular product categories and rely on everyday low pricing to acquire a large market share through aggressive and competitive pricing strategies are often referred to as
category killers
When Yoplait Yogurt gives a portion of its profits to Breast Cancer Research, it is using
cause-related marketing.
Although a radio announcer can read several hundred words a minute, a one-minute advertising message should not exceed 150 words because most announcers cannot articulate words into understandable messages at faster rates. This illustrates the ___________ consideration in effective communication.
channel capacity
Claire Nevsky is in charge of advertising for her company and has produced a 30-second television spot to promote one of the company's new products. One of her assistants just out of college believes that the commercial has too much visual and audio information packed into such a small amount of time. The assistant is specifically concerned about limits in the receiver's
channel capacity.
Each communication channel has a limit on the volume of information it can handle effectively. This limit is called
channel capacity.
For many consumers, the pages near the back of magazines with dozens of very small black and white advertisements exceed their
channel capacity.
The _____ stage of the personal selling process is when the salesperson asks the prospect to buy the product.
closing
Stacey's client group has been gradually shrinking and she is looking for new prospective clients. She has decided to spend a couple of days approaching potential customers without any prior consent. Stacey's method of approach is known as
cold canvass
Salespeople receive a set salary plus a commission based on sales with a
combination compensation plan
Advertising campaign objectives that are aimed at making customers' attitudes more favorable are stated in ________ terms.
communication
If an advertising campaign is aimed at increasing brand awareness and consumers' knowledge of a product's features, the advertising objective should be stated in terms of
communication
The Barrister's Deli decides to run advertisements for its lunch specials on a local FM radio station. Marketing research later reveals that the restaurant's target market listens primarily to satellite radio stations. This promotion program suffered from an error in the selection of
communication channel.
ACE Electronics introduces a new voice-activated personal computer that no longer requires a keyboard. ACE charges the high price of $11,000 per unit, thus generating large profits because it has a 20 percent market share. ACE's major problem in the future will most likely be
competition.
Coors advertises that its beer is the only one that is kept cold from the brewery to the store. This type of advertising is called
competitive
Troy Products Company advertises a specific product heavily, and Carbone Products Company wants to offset the effects of that advertising. In this case, Carbone would most likely employ ___________ advertising.
competitive
An advertising platform should consist of issues that are important to consumers. Selling features should be important to consumers and should be features that
competitive products lack.
Mike Stevens wonders whether the creative idea of using the character "Tom T. Turtle" as an image for marketing a new line of running shoes will be successful. He should suggest to his account representative that a(n) __________ be used to pretest the campaign.
consumer jury
Matt was in a group considered to be actual or potential purchasers of a new mountain bike produced by Specialized. He and the other consumers were shown three different advertisements and asked to judge several dimensions of each one. Matt participated in a(n)
consumer jury.
Heinz uses various techniques such as coupons, free samples, and consumer contests to encourage consumers to try its products. All of these marketing activities are considered
consumer sales promotion methods.
The difference between consumer sales promotion methods and trade sales promotion methods is
consumer sales promotions focus on getting consumers to buy their products, whereas trade sales promotions focus on getting wholesalers and retailers to buy.
An arrangement in which a manufacturer pays a certain amount of a retailer's media costs for advertising that manufacturer's products is
cooperative advertising.
All of the following are key areas of sales force management *except*
coordinating sales promotion efforts.
The verbal portion of an advertisement, including headlines, body, and signature, is called the
copy.
A tool that allows an advertiser to compare the costs of several media vehicles within a specific medium relative to the number of persons reached by each vehicle is called a(n)
cost comparison indicator.
For custom-made equipment or commercial construction projects, which pricing method is most likely used?
cost-plus
Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?
cost-plus
The federal government often uses _____ pricing when it grants defense contracts.
cost-plus
When a seller's costs are usually determined during or after a product is made and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using _____ pricing.
cost-plus
When determining markup as a percentage of cost, divide the markup amount by
cost.
Marketers generally view _____ as the minimum price a product can be sold for.
costs
One way for a company to measure the effectiveness of its publicity-based public relations efforts is to
count the number of exposures in the media
As Quaker Oats tries to decide how to introduce its new line of breakfast bars, it considers all the advantages and disadvantages of the various consumer sales promotion methods. After careful consideration, Quaker Oats decides to use _____, which are the most widely used form of consumer sales promotion.
coupons
Fraudulent usage, inability to attract potentially brand-loyal customers, and use by current customers but not new customers are believed to be disadvantages of which of the following?
coupons
Often when a company introduces a new product or line extension, its promotion will focus on _____ in order to initiate the product-adoption process.
creating awareness
Customer density and distribution are important factors in
creating sales territories.
The step in developing an advertising campaign that directly precedes campaign execution is
creating the advertising message.
A deduction from list price for purchasing large quantities aggregated over a stated period of time is a
cumulative quantity discount.
The most common sales force evaluation practices are for sales managers to compare a salesperson's performance with other salespeople operating under similar selling conditions, or to compare
current performance with past performance.
Order-getting activities are divided into two categories:
current-customer sales and new-business sales.
Goods that are priced primarily based on the way they have always been priced are examples of
customary pricing.
Carlos generally makes cold calls on businesses to look for new prospects. He has many satisfied customers, but like many salespeople, he does not frequently utilize one of the best ways to find new prospects, which is through
customer referrals
The most effective method of determining platform issues is to use a survey of
customers
When better market conditions prevail or when company growth occurs, a company may suffer if it
cut back the size of its sales force.
Although Maybelline would like to use ______ as a consumer sales promotion method, this method has extremely high labor costs that are more affordable for higher-end make-up companies such as Clinique and Estée Lauder.
demonstrations
A company may determine how many sales calls per year it needs to serve customers effectively and divide that by the average number of sales calls made by one salesperson in order to
determine sales force size.
When establishing prices, a marketer's first step is to
develop pricing objectives.
After the advertising budget is determined, the next step in creating an advertising campaign is
developing the media plan.
The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ___________ pricing.
differential
A television advertisement for Miracle-Gro lawn fertilizer indicates that the product is available at Kmart and Wal-Mart. This form of sales promotion is called a(n)
dealer listing.
A __________ is a gift to a retailer who purchases a specified quantity of merchandise.
dealer loader
A commercial for a weight-loss program that explains that the customer pays only one dollar for every pound he or she wants to lose but specifies in fine print that the cost of meals is extra exemplifies ____________ advertising.
deceptive
Both the Federal Trade Commission Act and the Wheeler-Lea Act prohibit
deceptive pricing.
The use of heavy advertising in the promotion mix is least likely to occur in which product life cycle stage?
decline
After the target audience for an advertising campaign has been identified and analyzed, marketers should then proceed by
defining the advertising objectives.
A graph of the quantity of products marketers expect to sell at various prices if other factors remain constant is a
demand curve.
Primary demand is defined as
demand for a product category
The three primary bases for developing prices are
demand, competition, and cost.
Amtrak prices its tickets so that it is less expensive to travel on weekends than during the week when there is heavy business travel. This illustrates ___________ pricing.
demand-based
If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500 because it knows that at that price it will reach that goal, the firm would be using a ___________ pricing method.
demand-based
If a product is priced based on how many or how few people want it at a particular time and place, ______ pricing is being used.
demand-based
During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of
demand-based pricing
Sherry Sullivan, Kevin Miller's sales manager, points out to him that his last shopper in the housewares department didn't seem involved as he explained the new food processor to her. She suggests that he use a ___________ as part of his presentation next time.
demonstration
Sony management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does not
discourage competitors from entering the market.
For most firms in the United States, demand curves are
downward sloping.
Communication can be viewed as a circular process because
during feedback, the receiver can be viewed as the source of the message while the original source becomes the receiver.
Cheyenne calls to see if her customer's new hardwood floors were installed correctly
during the follow-up step.
If Carnival Cruise Lines increased the price of its seven-day cruise package by 10 percent and, as a result, experienced a 20 percent decline in customer bookings, Carnival's demand would be
elastic.
As Emily Jeffries prepares the script for a radio commercial for her boutique, she is engaging in the _______ stage of the communication process.
encoding
Promotional efforts designed to reduce the risk to consumers for using a product for the first time seek to
encourage product trial.
If children and teenagers are insisting on wearing expensive name-brand apparel, a criticism of promotion can be made that promotion
encourages materialism.
Retro64 distributes free downloadable versions of its computer games for a short time. These efforts have a primary promotional objective of
encouraging product trial.
A firm can identify changes in public opinion that affect it by conducting
environmental monitoring.
After compiling a list of potential customers, a salesperson must
evaluate whether each prospect is able, willing, and authorized to buy the product.
The last stage in the development of any advertising campaign is
evaluating the effectiveness of advertising.
An advantage of the arbitrary approach for determining the advertising appropriation is that it is
expedient.
When a customer is considering the purchase of a product in a less-familiar product category, that individual is likely to rely more heavily on
external reference prices.
In many instances the most appropriate way for a firm to cope with an event that leads to negative public relations is to
facilitate news coverage of the event.
When Hamburger Helper introduced its Oven Varieties, it gave special offers to supermarkets to purchase the new product and supplemented these offers with consumer advertising. Hamburger Helper's primary objective is to
facilitate reseller support.
Cooperative advertising efforts between manufacturers and retailers demonstrate the promotional objective of
facilitating reseller support.
In one corner of its magazine advertisement for office copiers, Epson places a small box asking for the names and addresses of individuals or companies seeking more information. Epson has included this box to facilitate ___________ for this communication.
feedback
The receiver's response to a message is ___________ for the source.
feedback
Doug Browton travels around to various established customers to see what new office supplies they need. His customers have come to depend on him to check their supplies. Doug is a(n)
field order taker
A sales representative for Coca-Cola travels to various restaurants to determine how much syrup the customer needs for the coming period. This sales representative would be classified as a(n)
field order taker.
Advertising that encourages customers to send in reply cards for additional information aids salespeople in achieving which goal of personal selling?
finding prospects
Costs that do not vary with changes in the number of units produced and sold are called ____ costs.
fixed
Subway decided to run its new commercials several times a day for three weeks and then not at all for two weeks. It will then run the commercials again for three more weeks. Subway is using a _____ schedule for its advertising.
flighting
A schedule in which advertisements run for set periods of time, alternating with periods in which no ads run is known as
flighting.
The final stage of the selling process is
follow up
The purpose of the ___________ stage in personal selling is to determine customers' problems and questions about using the product.
follow up
Which of the following is an example of a trade sales promotion method?
free merchandise
The maker of Huggies diapers is developing a media plan that involves trying to expose its target audience to its new advertisement about ten times. This is advertising
frequency.
Jamba Juice offers its customers a stamp card that allows them to receive a free smoothie after they have filled an entire card. This is an example of a
frequent-user incentive.
A marketer sometimes uses temporary price reductions to
gain market share.
Reductions for transportation and other costs related to the physical distance between buyer and seller are known as
geographic pricing.
The decision of Macy's to use even prices such as $60 for a Ralph Lauren Polo shirt is an application of odd-even pricing, and even prices are often used to
give a product an upscale or exclusive image.
In order for customers to receive greater customization and service, they must be willing to
give information about themselves and their tastes.
As their meeting concludes, Jamal rises and thanks Gina for taking the time to come by and explain her firm's new line of industrial fasteners. A(n) ___________, which is a form of tactile communication, concludes the session.
handshake
A common form of tactile communication in U.S. business activities is
handshaking
The two main reasons for criticism of promotional activities are that promotion
has some flaws, and it pervades our daily lives.
If a manager tries to form territories with equal sales potential, the territories will usually be unequal in geographic size; this will cause the salespeople with larger territories to
have to work longer and harder to generate a certain sales volume.
An ad's ___________ is designed to attract readers' attention and develop interest so that they will read the entire advertisement.
headline
As Will Marcum reads the copy for South Beach Hotel's upcoming magazine ad in Southern Living, he worries that no one will spend the time to read all the details of the facilities his resort has to offer. Wanting to have the greatest impact, Will focuses his creative efforts on the
headline.
Pricing strategies and methods
help direct and structure the selection of a final price.
A penetration pricing strategy is particularly appropriate when demand is
highly elastic.
Competitors' prices, along with the marketing variables they emphasize, are determining factors in
how important price will be to customers.
The basic promotional objective underlying a magazine advertisement with a direct-response information form that requests the reader to complete and mail the form to receive additional information is to
identify prospects.
A direct-response information form found in a magazine advertisement that allows customers to send for more information has a primary objective of
identifying prospects.
Bowflex uses infommercials to demonstrate its fitness products and encourage customers to call and receive a free video with more information about its products. This promotional effort is directed at
identifying prospects.
The first stage in the development of any advertising campaign is
identifying the advertising target audience.
Artwork, a major part of most advertisements, consists of the
illustration and they layout.
What design element is used to attract attention, communicate an idea quickly, or communicate ideas that are difficult to put into words?
illustrations
After developing the budget for advertising GEO automobiles, marketing managers at General Motors then determined what proportion of that budget would be spent on magazine, television, and radio advertisements based on the cost effectiveness of each. This subsequent allocation of the budget is known as a(n) _________ plan.
media
The limitations in using publicity-based public relations tools stem primarily from the fact that
media personnel control the content of the communication.
A list of the exact magazines, newspapers, and television stations in which an advertisement will appear, along with the dates and times, is a(n)
media plan.
Recognition and recall tests are posttest methods based on
memory.
While anticipating objections and countering them before they are asked is a good idea, one negative consequence of doing so is that the salesperson may
mention objections the customer had not thought of.
As Oscar Meyer puts together its advertising campaign for the summer, it will need to keep in mind that its desire to use outdoor advertising will have strong effects on its selection of the advertising
message.
A primary goal of routing and scheduling decisions in personal selling is to
minimize nonselling time.
Assisting the producer's customers in selling to those customers is the major purpose of which type of salesperson?
missionary salesperson
Daphne King of Cleborn Pharmaceuticals tells a sales management class at the state university that her job is to call on doctors and explain the benefits of new prescription drugs that her firm develops. Daphne would call herself a(n)
missionary salesperson
Jin Xiao, a trained engineer, is a salesperson for a chemical manufacturer. He provides current customers with advice about a product's characteristics and applications. He is a(n)
missionary salesperson
Dorothy won a hot-air balloon ride and dinner for two for being the top revenue-producing mortgage loan officer at her company for the month of October. This contest exemplifies a company's efforts at
motivating salespeople
Products such as light bulbs, canned soft drinks, and ice cream sandwiches are usually priced using
multiple-unit pricing.
When using the percentage-of-sales approach for determining the advertising appropriation, marketers
multiply the firm's past sales plus a factor for expected changes in sales times a standard percentage.
Recruiting and selection of salespeople should include enough steps to yield the information needed to make accurate selection decisions. However, the stages of the process should be sequenced so that the more expensive steps are
near the end.
Marketers at organizations engaged in nonprice competition
need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands.
Maria recently put her house on the market at an asking price of $260,000. She realizes, however, that in order to sell the house, she may have to use
negotiated pricing.
Zack Freedman is an experienced salesperson who has worked for the same company for 20 years. When he is informed that he must attend a training seminar the following Tuesday, he believes it will most likely be about
new-product information
Price skimming and penetration pricing are both strategies used for
new-product pricing.
A single page of typewritten copy that has 300 words or less and describes a company event or product is called a
news release.
The public relations department at Lowe's Home Improvement submits one page of typewritten copy to national newspapers and news web sites to announce its one-day, nationwide clean-up-local-parks event.
news release.
During a one-minute television ad for Nike, the National Weather Service interrupts to announce a flash flood warning for surrounding counties. Such an occurrence is an example of ___________ in the communication process.
noise
Anything that reduces the accuracy and clarity of communication is called
noise.
Sonya is watching the six o'clock news as she prepares dinner. As commercial breaks come on, Sonya's dinner preparation would be considered
noise.
Justin Caprese phones Ben Kirkland of Southside Furniture to inform him that if he will increase his recent order of 15 mattress sets to 20, he will receive a 14 percent price reduction. This offer is due to a recent overstock condition at the factory and will not be available in the future. The discount offered here is
noncumulative.
Which of the following is most likely to have an inelastic demand curve?
nonelective surgery
Sellers that emphasize distinctive product features to encourage brand preferences among customers are practicing
nonprice competition.
A major reason why a substantial amount of publicity material is rejected by media personnel is that the material is
not newsworthy.
Sony Corporation has a particular approach for determining its advertising appropriation. A problem with this technique, however, is that the people in the marketing department have difficulty estimating the level of effort needed to achieve certain goals. This problem is characteristic of the __________ approach.
objective-and-task
The owner of a professional baseball team asks the account representative of an advertising agency to develop an advertising campaign to bring more teenagers to the ballpark. At this point, the account representative logically begins to discuss establishing __________ for the campaign.
objectives
Yolanda's job is to find new customers for her company's telecommunication services. She encourages existing customers to add more services and finds customers who are completely new to the company. Yolanda would best be classified as a(n)
order getter.
Creative selling, which requires that salespeople recognize a potential buyer's needs and then provide the prospect with the necessary information, is performed by
order getters.
A person who primarily seeks repeat sales is called a(n)
order taker.
Marketers must take steps to make sure that the pricing objectives they set are consistent with the organization's ___________ objectives and ___________ objectives.
overall; marketing
A consumer jury is a
panel of potential buyers of the advertised product brought together to pretest an advertising message.
Selective demand is demand for a
particular brand
The management at Allied Electronics is having difficulty in raising the introductory price on system components to cover the increased costs of producing the sensing devices for home security systems. Apparently, Allied used a(n) ___________ strategy in pricing these components.
penetration
Which of the following would be used in setting the price of a new product if considerable competition is expected?
penetration pricing
All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except
penetration pricing.
If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use
penetration pricing.
While sales contests can motivate employees at all levels to participate, a disadvantage of this method of sales promotion is that
people often discontinue their positive behavior after the contest is over.
The target audience for an advertising campaign is the
people toward whom the advertisements are directed.
Colin McKinney, director of marketing for Greenwald Industrial Products, complains to his advertising director that the continuing slump in orders has apparently been perpetuated by the firm's failure to have the necessary advertising expenditures. Based on this information, Greenwald is most likely using the __________ approach to determine its advertising expenditures.
percent-of-sales
Marketers have no flexibility in setting prices under conditions of
perfect competition.
A problem associated with _____ is that consumers can predict when prices will be lowered and delay purchases until that time.
periodic discounting
The "White Sale" that many department stores have every year a few weeks after Christmas is an example of
periodic discounting.
Generally, promotion mixes for companies with extremely limited promotional budgets tend to concentrate on
personal selling.
Organizations that sell products to industrial markets or a few wholesalers tend to focus their promotion efforts on
personal selling.
Paid personal communication that attempts to inform and persuade customers to purchase products in an exchange situation is called
personal selling.
Paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation is
personal selling.
Reba Vincent is employed as a consultant for Mary Kay Cosmetics. This illustrates
personal selling.
Sara Dickson is concerned about the effectiveness of Magnum, Inc.'s promotional messages, and is seeking an approach with immediate feedback. Sara is most likely to achieve this through
personal selling.
Advertising that focuses on stimulating demand for a product category is called _____ advertising.
pioneer
The two major types of product advertising are
pioneer and competitive
Signs, counter pieces, racks, and self-service cartons are all forms of
point-of-purchase displays.
Before contacting prospects, a salesperson for an industrial cleaning equipment company analyzes information about the prospects' product needs, feelings about brands, and personal characteristics. This process is called
preapproach
Garrett Almar tells a fellow buyer at Robins Wholesale Parts that the last salesperson who called on him before lunch was a real loser: "He has done a poor job of ___________. He didn't even know what brands we carry or what types of retailers we service!"
preapproach
Tim has just finished compiling a list of potential customers and evaluating their ability, willingness, and authority to buy. He knows his next step in the personal selling process is to
preapproach
At one time, Wheaties offered two free golf balls with the purchase of a twin pack of Wheaties cereal featuring Tiger Woods. This is an example of a
premium
The types of prices that appear least often in ads are ___________ prices.
premium
___________ are items offered free or at minimal cost as a bonus for purchasing a product.
premium
A product that has more features than those of its competition, or that is perceived to be of higher quality, warrants using which type of pricing strategy?
premium pricing
Breyer's produces a variety of ice cream flavors and lines of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using _____ to price its ice cream.
premium pricing
A manager at JC Penney discovers that Sears has reduced the price of its children's Levi's from $31.99 to $24.99, according to an advertisement in the Sunday newspaper. She immediately phones her store and instructs the salesperson on duty to put a sign up next to their children's Levi's that reads, "SALE: $24.99." This is an example of what pricing strategy?
random discounting
If a business decides to reduce its prices once in a while on an unsystematic basis, it is using
random discounting
The primary goal of a media planner is to
reach the largest number of people in the target market within the budget constraints.
The percentage of consumers in the target audience actually exposed to a particular advertisement in a stated period of time is the definition of
reach.
During the decoding process, the
receiver attempts to convert signs or symbols into concepts and ideas.
The individual or group that decodes a coded message is called a
receiver.
Sierra is driving to work on I-95 and notices a billboard for new salads at Wendy's. She reads the message and sees the pictures of the new salads. In this case, Sierra is the _____ and Wendy's is the _____ of this communication.
receiver; source
If a consumer is shown a particular advertisement and asked if she has seen it before, a(n) _____ is being performed.
recognition test
A spokesperson for Mott's apple juice encourages television audiences to use its juice in the winter by serving it hot with a cinnamon stick. In this instance, Mott's is using promotion to
reduce sales fluctuations.
An advertisement from a ski lodge extolling the benefits of a summer getaway in the mountains uses promotion to
reduce sales fluctuations.
Factors such as climate, seasons, and holidays tend to lead to the promotional objective of
reducing sales fluctuations.
Dial Soap's advertising slogan "Aren't you glad you use Dial? Don't you wish everybody did?" exemplifies the use of ___________ advertising.
reinforcement
Which of the following involves building mutually beneficial long-term associations with a customer—usually a business customer—through regular communications over prolonged periods of time.
relationship selling
Advertising that lets consumers know that an established brand still offers certain uses, characteristics, and advantages is _____ advertising.
reminder
An ad for a multivitamin that claims, "We still bring you everything you need to get through your day in one vitamin," would most likely be considered ______ advertising.
reminder
Which of the following is most likely to be a fixed cost?
rent
The degree to which the price of a product enhances a customer's satisfaction with the purchase experience and with the product after the purchase is part of their
response
Blockbuster offers its customers a Blockbuster Rewards Card that allows them to rent every sixth movie free and provides various discounts throughout the year. The primary promotional objective of programs such as this is
retaining existing customers.
The cost of _____ is usually substantially lower than the cost of _____.
retaining existing customers; acquiring new customers
Most pricing objectives based on ___________ are achieved by trial and error because not all cost and revenue data are available when prices are set.
return on investment
Which of the following products is most likely to involve personal selling?
riding lawn mowers
The salesperson must attract and hold the prospect's attention, stimulate interest, and spark a desire for the product during the
sales presentation.
A consumer contest is an example of
sales promotion
Frequently, Burger King restaurants offer 32-ounce glasses depicting currently popular movie characters free with the purchase of a large drink. This example illustrates Burger King's use of which one of the following elements of the promotion mix?
sales promotion
Hunt's decided to put a much larger share of its promotion budget into ___________ because of the heavy reliance it will be placing on coupons in the second quarter.
sales promotion
Marketers of highly seasonal products tend to have more irregular use of
sales promotion
Procter & Gamble periodically sends out coupons and free samples of products like Downy fabric softener. This illustrates P&G's use of which of the following elements of the promotion mix?
sales promotion
When McDonald's uses the Monopoly game in which customers receive game pieces with each visit and try to assemble a set of properties to win prizes, McDonald's is utilizing
sales promotion
Sweepstakes, free samples, coupons, and rebates are examples of
sales promotion techniques.
An activity and/or material that offers added value or incentive to resellers, salespeople, or consumers is
sales promotion.
The greatest amount of responsibility for providing customer satisfaction falls on the shoulders of
salespeople.
Realizing that her firm's sales promotion budget was small and cut by 30 percent for the coming year, Stacey Baronas rules out ___________ as playing a role in her sales promotion plan.
samples
Home Depot is interested in knowing how its efforts to act in a socially responsible manner through its Habitat for Humanity and disaster relief efforts have affected stakeholders' views of the company. Home Depot should conduct a(n)
social audit.
A person, group, or organization that has a meaning it intends and attempts to share with a receiver or an audience is a
source.
In the Gillette advertisement that claims, "Gillette, the best a man can get," Gillette is the communication
source.
A sale at The Bon Marche the day after Thanksgiving to kick off the Christmas season would be considered
special-event pricing.
When developing an advertising campaign, benchmarks need to be included in the
statement of advertising objectives.
Maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability are all associated with a _____ pricing objective.
status quo
What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?
status quo
Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?
status quo
Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?
status quo
When marginal cost is equal to marginal revenue, the firm should
stop producing additional units to maximize profits.
Chelsea Collins walks her client, Kaptain Korn president Steve Gonski, through her agency's proposed television campaign for the product's introduction. In doing so, she moves from square to square on the
storyboard.
When a copywriter and an artist combine the copy with the visual material for a television commercial, it usually is done through use of a
storyboard.
Jose Suarez has been hired as sales manager at a new firm and is trying to come up with a sales force compensation method. He would like to have selling expenses relate directly to sales resources, an aggressive sales force, and minimization of nonselling tasks. What compensation method(s) would best fulfill his requirements?
straight commission
Which of the sales force compensation methods is easy to administer, yields more predictable selling expenses, and provides sales managers with a large degree of control over salespeople?
straight salary
A sales career can offer all of the following except a
structured, inflexible workday.
Which of the following is least likely to be directly involved in actually making sales?
support sales personnel
Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is
survival
When a company adjusts price levels so that it can increase sales volume to levels that match the organization's expenses, it is said to employ a _________ objective.
survival
On a break between classes, Kelley Macon selects two magazines and mails the Publishers Clearing House entry form. She doubts that she will win $10 million, but she never passes up a chance to participate in a
sweepstakes.
In which of the following does the salesperson join with people from the firm's financial, engineering, and other functional areas to engage in the personal selling process?
team selling
Which of the following is particularly appropriate for pricey high-tech business products, such as jet aircraft and medical equipment?
team selling
A support salesperson who usually advises customers on product characteristics and application, system design, and installation procedures is a(n)
technical salesperson
Ryan Amerson leads his company's clients through the installation procedure of their new industrial equipment. He also helps answer their questions about product characteristics and system design both before and after their purchases. Ryan is a
technical salesperson
The type of salesperson that usually requires training in physical science or engineering is the
technical salesperson
Brian and Tiffany are discussing the media plan for the opening of their new bar/laundromat called Soap and Suds. He tells her that while he agrees that __________ has tremendous impact, he does not feel that the upfront costs for such a campaign are in the modest budget that presently exists.
television
In designing sales territories, a sales manager considers several major factors. The territories must be constructed so that sales potential can be measured; the shape of the territories should facilitate salespeople's activities to provide the best possible coverage of customers; and
territories should be designed to minimize selling costs.
The step of the personal selling process in which a salesperson contacts a potential customer is called
the approach
The point at which the costs of producing a product equal the revenue earned from selling the product is
the breakeven point.
When a source converts meaning into a series of signs or symbols representing ideas or concept, the source is undergoing
the coding process.
The process of putting one's thoughts (meaning) into signs (symbols) is called
the coding process.`
The cost per thousand (CPM) indicator shows
the cost to expose 1,000 people to a one-page magazine advertisement.
Reinforcement advertising is primarily targeted at
the current users of a particular product.
Price is a key element in the marketing mix because it relates directly to
the generation of total revenue.
The main problem with using the objective-and-task approach to setting an advertising budget is that
the marketer may experience difficulty when trying to estimate accurately the level of effort needed to achieve goals.
At the breakeven point,
the money a company brings in from selling products equals the amount spent producing the products.
A salesperson finds and analyzes information about each prospect's specific product needs, current use of and feeling about brands, and personal characteristics during
the preapproach
Sales force objectives are generally established for
the total sales force and for each salesperson.
Price is
the value that is exchanged for products in a marketing transaction.
During the personal selling process, a salesperson, if possible, should handle objections when
they arise.
Generally, customers are most likely to rely on the price-quality association when
they cannot judge the quality of the product for themselves.
Marketers improve their ability to establish prices appropriately when
they know prices charged for competing brands.
Bundle pricing may be perceived to be of value by customers because
they prefer buying a combination of bundled products in a single transaction, which saves time, effort, and perhaps money.
Monopolies usually keep their prices at a level that generate a reasonable, but not excessive, return primarily because
they want to avoid government regulations on their pricing.
What is the overall role of promotion?
to stimulate product demand
In the long run, the J. F. Smucker Company must view ___________ as the absolute lowest price for its Jif brand peanut butter.
total costs
If a product has an inelastic demand and the manufacturer raises its price,
total revenue will increase.
Laura Spangler, of North Central Novelties, reduces the price of games sold to Robertson's Entertainment by 10 percent to allow for expenses associated with Robertson's promoting the games to consumers. This is an example of a ___________ discount.
trade
The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____________ discounts.
trade
What type of discount is given to a business purchaser for performing activities such as transporting, storing, and selling?
trade
Any marketing tactic used to stimulate wholesalers and retailers to carry a producer's products and market those products more aggressively is a
trade sales promotion method.
Maria Martinez works for a cosmetics manufacturer and is responsible for ensuring that retailers have adequate quantities of products when they need them. However, she is directing much of her effort toward helping the retailers promote the products. She would be characterized as belonging to which group of salespeople?
trade salespeople
Jana works for Hormel Foods and she frequently sets up special displays and distributes samples of Hormel products to customers in supermarkets. Jana would best be classified as a(n)
trade salesperson
"Mrs. Brucker, you would agree that this is the most attractive car interior in this price range, wouldn't you?" Cliff Davis, a salesperson at Midtown Ford, was using a(n) ___________ when he made this statement.
trail close
When a salesperson asks the customer to buy the product several times throughout the sales presentation in an effort to uncover hidden objections, it is called
trail closing.
When Cadillac buys headlights from Delco (both of which are divisions of General Motors), ___________ pricing occurs.
transfer
Suppose that the frozen foods division of Swanson purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called
transfer pricing
During his presentation to Mrs. French about a high-end gourmet oven, Brian asks, "Would you prefer black or stainless steel?" This is an example of a
trial close.
When deciding on sales promotion methods to employ, marketers take several factors into consideration. Which factor below is unlikely to affect decisions regarding sales promotion methods?
type of package
Carla is stopped by a researcher at a shopping mall and asked what was last television commercial she remembers seeing was. This is an example of a(n)
unaided recall test.
A company trying to position itself as value oriented should not
use premium pricing for its products.
Suppose Tommy Hilfiger is introducing a new line of men's ties. The designer believes that the target market for these ties comprises men who are very status-conscious. In keeping with this assessment, department stores selling the ties should
use price symbolically.
Competition-based pricing is
used when costs and revenues are secondary to competitors' prices.
