MKTG Exam 3

d. promotional

"Buy three shock absorbers and get the fourth free," as advertised by an auto repair shop, is an example of _____ pricing. Answers: a. unit b. variable c. product-line d. promotional

c. 3.0.

A 5 percent increase in the price of corn flour that results in a 15 percent increase in the quantity supplied yields a price elasticity of supply for corn flour of: Answers: a. 2.0. b. 2.5. c. 3.0. d. 3.5.

a. skimming

A _____ pricing strategy helps manufacturers to distinguish their high-end products from similar products of their competitors. Answers: a. skimming b. competitive c. market share d. penetration

b. fixed

A cost that remains stable at any production level within a certain range is called a(n) _____ cost. Answers: a. variable b. fixed c. marginal d. average total

b. Breakeven volume will increase.

A firm has $50,000 in fixed costs, a selling price of $25 per unit, and variable costs of $5 a unit. If the fixed costs increase to $60,000: Answers: a. Profits will be increased. b. Breakeven volume will increase. c. Breakeven volume will decrease. d. Selling price will be decreased.

d. Breakeven volume will increase.

A firm has $50,000 in fixed costs, a selling price of $25 per unit, and variable costs of $5 a unit. If the fixed costs increase to $60,000: Answers: a. Selling price will be decreased. b. Profits will be increased. c. Breakeven volume will decrease. d. Breakeven volume will increase.

d. $20.

A firm with $50,000 in fixed costs, selling price of $25 per unit, and variable costs of $5 a unit has a contribution margin of : Answers: a. $25. b. $2000. c. $30. d. $20.

c. fixed costs increase.

A firm's breakeven volume will increase if: Answers: a. variable costs decrease. b. contribution margin increases. c. fixed costs increase. d. selling price increases.

a. market-minus

A penetration pricing strategy is called _____ pricing when it implements the premise that a lower-than-market price will attract buyers and move a brand from an unknown newcomer to brand-recognition or brand-preference stage. Answers: a. market-minus b. FOB c. market-plus d. EDLP

d. promotional

A retailer seeks to communicate information about its stores through its ______ strategy. Answers: a. merchandising b. store atmospherics c. location/distribution d. promotional

c. Promotional pricing

A retailer wants to increase the number of customers shopping in her store. Which of the following has the greatest potential for success? Answers: a. Price flexibility b. Unit pricing c. Promotional pricing d. Prestige pricing

a. set a market-entry price for distinctive goods or services with little or no initial competition.

A skimming pricing strategy is more commonly used by firms to: Answers: a. set a market-entry price for distinctive goods or services with little or no initial competition. b. set stable wholesale prices that undercut offers competitors make to retailers. c. set a relatively low price for a product when they enter new markets characterized by dozens of competing brands. d. reduce the raised prices of products to the original level.

c. wholesaler

A(n) _____ is an intermediary that takes title to the goods it handles and then distributes these goods to retailers, other distributors, or sometimes end consumers. Answers: a. agent b. drop shipper c. wholesaler d. broker

b. creating image or prestige.

Analysis has shown that ingredients account for less than 5 percent of a perfume's cost. So if a perfume costs $135 or more per ounce, it reflects the marketer's adoption of a pricing objective that focuses on: Answers: a. maximizing sales. b. creating image or prestige. c. expanding market share. d. meeting competitors' prices.

d. creating image or prestige.

Analysis has shown that ingredients account for less than 5 percent of a perfume's cost. So if a perfume costs $135 or more per ounce, it reflects the marketer's adoption of a pricing objective that focuses on: Answers: a. meeting competitors' prices. b. expanding market share. c. maximizing sales. d. creating image or prestige.

c. Differentiate them by categorizing them into price tiers ranging from $22,500 to $49,900

As the chief sales and marketing officer for Kia Motors, it's up to you to set pricing tactics in what is an established competitive pricing environment. Right now, you're looking at your firm's line-up of four different gas-powered sedans, each of which is distinctly different from the others, although they all tend to look fairly similar. Which tactic is the best approach for pricing Kia sedans? Answers: a. Suggest they are premium products by pricing them slightly higher than competitors b. Use odd pricing to make consumers think they're getting a better bargain with Kia c. Differentiate them by categorizing them into price tiers ranging from $22,500 to $49,900 d. Set a very low price point for all Optimas, the low-end model, to lure consumers away from other brands

d. Although you are selling to millions of customers, you are selling directly to individuals in the B2B environment so a short distribution channel, facilitated by online sales and delivery, works best for your needs.

As the marketing director for Adobe, a company that makes software for design and business professionals, it's your job to get your company's software into the hands of millions of customers the world over. Which type of distribution channel will work best for your objectives, and why? Answers: a. Because your objective is to sell to millions of customers, you will need to engage the services of numerous sales and marketing intermediaries who can assist you in reaching that kind of sales volume. b. Since your product is software, which is not a physical product that needs to be warehoused or delivered, you do not need to employ a logistics intermediary and therefore do not need a distribution channel. c. Because your objective is to sell to millions of customers, you will need to engage the services of one or two intermediaries who can facilitate the exchange process. d. Although you are selling to millions of customers, you are selling directly to individuals in the B2B environment so a short distribution channel, facilitated by online sales and delivery, works best for your needs.

c. at $150 because the lower the price, the less supply already on the market.

As the marketing director for a company that produces home office equipment, you've been asked to weigh in on a suggested price for the company's new all-in-one printer. Similar products retail for $200 to $600, with most of them falling in the $350 to $400 range. You'd like to position your company's product where there is less competition, so you suggest pricing yours: Answers: a. at $200 because the lower the price, the higher the sales volume and the greater the profits. b. at $150 because the higher the price, the more likely you are to have to discount the product later on. c. at $150 because the lower the price, the less supply already on the market. d. at $250 because the lower the price, the more likely you'll be to hit market equilibrium.

c. You refuse to include it since most people don't know whether they'll need your services in the coming years so their answers would not present a realistic forecast.

As the marketing director for a hospital, you've decided to develop a quick survey about your hospital's services for outgoing patients. The CEO would like you to include the following question on the survey: Do you intend to use our hospital again in the next three years? How do you react to his suggestion? Answers: a. You refuse to include it because data about buyer intentions should only be collected using electronic survey methods. b. You agree to include it, even though you feel the question would be distressing or offensive to most patients. c. You refuse to include it since most people don't know whether they'll need your services in the coming years so their answers would not present a realistic forecast. d. You agree to include it because it's an excellent way to predict long-term demand for your services.

d. Keep as many components on hand as you expect to use in the immediate future to ensure workers have just as much as they need, and closely monitor the flow of incoming materials to replace what's used before you run out of anything

As the production manager for Toyota's Georgetown, Kentucky, manufacturing plant, you're responsible for managing the inventory of all of the parts and components that go into every vehicle made there. It's a tough balancing act because you have to make sure your workers have what they need but you also have to minimize the costs associated with storing all of these unassembled components. Which of the following methods of inventory control do you think will work best for your needs? Answers: a. Keep as many components on hand as you expect to use in the next month to ensure workers have what they need plus a little extra b. Keep as many components on hand as possible to ensure that workers always have an extensive selection of materials to work with c. Keep as few components on hand as possible, and only re-order components when the current inventory has been used d. Keep as many components on hand as you expect to use in the immediate future to ensure workers have just as much as they need, and closely monitor the flow of incoming materials to replace what's used before you run out of anything

a. Yes, it would be helpful to know if buyers for menswear, furniture, bedding, and other departments are seeing the same trends.

At Brody's Department Store, you're in charge of buying women's clothing. You've noticed a lot of berry-, wine-, and rose-colored items available from several different manufacturers and you're thinking about making these colors the theme for next season's offerings. Would using a jury of executive opinion be a good way to gather some quick feedback on the sales prospects for your idea? Answers: a. Yes, it would be helpful to know if buyers for menswear, furniture, bedding, and other departments are seeing the same trends. b. Yes, it would be good to have backup in case your idea fails and you need to share the blame. c. No, other people within the store do not share your same insights, expertise, and sensibilities so their opinions are not helpful. d. No, the jury of executive opinion approach relies on the opinions of administrators, who don't know anything about fashion.

d. conducting intercept interviews with consumers as they're exiting office supply stores.

At Streamline Technology, you're responsible for marketing the company's ergonomically designed office equipment, such as chairs and desks. Since Streamline has relatively few customers, you've asked one of the marketers on your team to write up a plan for a survey of buyer intentions regarding your company's ergonomic keyboard. When you review his plan, you agree with everything he's proposed except: Answers: a. creating an online survey about the keyboard, and inviting customers to take the survey. b. requiring the sales representatives to ask three key questions about the keyboard during each sales call. c. calling customers by phone to establish current needs and demand for the keyboard. d. conducting intercept interviews with consumers as they're exiting office supply stores.

c. conducting intercept interviews with consumers as they're exiting office supply stores.

At Streamline Technology, you're responsible for marketing the company's ergonomically designed office equipment, such as chairs and desks. Since Streamline has relatively few customers, you've asked one of the marketers on your team to write up a plan for a survey of buyer intentions regarding your company's ergonomic keyboard. When you review his plan, you agree with everything he's proposed except: Answers: a. requiring the sales representatives to ask three key questions about the keyboard during each sales call. b. calling customers by phone to establish current needs and demand for the keyboard. c. conducting intercept interviews with consumers as they're exiting office supply stores. d. creating an online survey about the keyboard, and inviting customers to take the survey.

a. Anya claims that test marketing in a few select cities will provide the most realistic information on actual purchases.

At a meeting with your fellow executives at KFC, you're discussing introducing a new low-fat grilled chicken nugget option, which is significantly different from the company's usual menu items. The CEO wants to get an accurate sales forecast for the product before giving it the green light. Of the following arguments in favor of using various techniques, which one makes the most sense to you? Answers: a. Anya claims that test marketing in a few select cities will provide the most realistic information on actual purchases. b. Bruce points out that using data from other similar products to conduct a trend analysis would be the least expensive choice. c. Alex suggests surveying potential buyers since the company has access to so many consumers. d. Taylor recommends getting sales forecasts from store managers, a form of sales force composite, since they're so familiar with KFC customer preferences.

b. Enhance your customer service by offering free drinks in a clean, inviting waiting room

Car washes are a dime a dozen, or are they? You and your competitors are all charging $20 for a basic car wash, but as you think about long-range planning, you'd like to attract more business to your Rainbow's End Car Wash. What should you do? Answers: a. Offer a 20% off coupon for the next three months b. Enhance your customer service by offering free drinks in a clean, inviting waiting room c. Lower your prices, even though it will mean a significant loss in profits d. Raise your prices to suggest an image of high-end luxury

b. Increase the sandal's price.

Demand for the hiking sandals marketed by the SoftShoe Company is highly elastic. As a pricing strategy consultant, you have been hired to help the firm reduce this elasticity. Choose the recommendation you would be least likely to make. Answers: a. Promise to undercut the price of any comparable brand. b. Increase the sandal's price. c. Introduce a unique sandal that is custom-made for hikers with significant foot problems, such as deformed toes or large bunions. d. Market the sandal as a necessity for hikers. e. Market the sandal as a prestigious luxury for hikers.

c. ultimate consumer or business purchaser.

Direct selling is a marketing channel that moves goods directly from producer to the: Answers: a. marketing intermediary. b. channel captain. c. ultimate consumer or business purchaser. d. retail storage warehouse.

b. Organizational factors, namely the volume of sales and brand recognition enjoyed by your organization, mean that Chanel can employ a dual distribution approach, selling directly and through intermediaries.

For more than a century, the Chanel brand has been synonymous with high fashion and exceptional quality. Women everywhere love your apparel, accessories, cosmetics, and fragrances. From your point of view, which factors have the greatest impact on the distribution channel strategy you've chosen? Answers: a. Market factors, especially the high demand for your company's products, enable Chanel to bypass intermediaries and sell directly to consumers. b. Organizational factors, namely the volume of sales and brand recognition enjoyed by your organization, mean that Chanel can employ a dual distribution approach, selling directly and through intermediaries. c. Competitive factors, such as Chanel's ability to match any other fashion, accessory, and cosmetics brand, allow your organization to demand exclusivity agreements with its wholesaler. d. Product factors, especially the diverse range of Chanel products, require your company to employ a long distribution channel involving multiple intermediaries.

d. browse and compare products and make purchases.

Historically, customers visited brick-and-mortar locations to: Answers: a. purchase products they had researched and compared online. b. compare prices in order to shop online. c. pick up products that had been ordered online and shipped to the store. d. browse and compare products and make purchases.

d. By adding e-commerce sites to complement their brick-and-mortar locations.

How have retailers responded to technology changing the way consumers shop? Answers: a. By replacing check out lines with self-service kiosks. b. By adding computers throughout retail locations to provide product information. c. By adding mobile apps to replace their physical locations. d. By adding e-commerce sites to complement their brick-and-mortar locations.

d. skimming

In order to recover research and development costs rapidly and earn high initial profits, SenseTV is setting a high price for its plasma TVs. The pricing strategy SenseTV is using is called _____ pricing strategy. Answers: a. penetration b. competitive c. market-minus d. skimming

b. Holding a 20% off sale on five to eight seasonal items each week

In the grocery business, you're pretty much stuck in a competitive pricing environment. You can't afford to attract more customers by lowering all of your prices, but what could you do differently with your product and pricing tactics to entice people through your stores' doors? Answers: a. Establishing different tiers of prices for different quality levels of meat b. Holding a 20% off sale on five to eight seasonal items each week c. Lowering the prices on all of your best-selling items d. Featuring more gourmet items at premium prices

d. variable cost.

Jamara has started a home party business that hosts parties and those attending paint signs. Jamara must pay $500 a year to be a representative for Paint A Sign. In addition, Jamara buys all the materials for the parties, including the metal base, the paints, brushes, stencils, and transfers. Currently, these items all add up to $10 on average. Jamara charges each participant $25 for each sign they make. For Jamara's Paint A Sign business, the $10 cost of materials is a: Answers: a. loss. b. fixed cost. c. total cost. d. variable cost.

a. Jamara will pay the Paint A Sign company $500 regardless of the number of parties she hosts.

Jamara has started a home party business that hosts parties and those attending paint signs. Jamara must pay $500 a year to be a representative for Paint A Sign. In addition, Jamara buys all the materials for the parties, including the metal base, the paints, brushes, stencils, and transfers. Currently, these items all add up to $10 on average. Jamara charges each participant $25 for each sign they make. For Jamara's Paint A Sign business, the $500 is a fixed cost per year. Which of the following is true? Answers: a. Jamara will pay the Paint A Sign company $500 regardless of the number of parties she hosts. b. Jamara will lose money if she has less than 100 participants a year. c. Jamara's annual fixed costs will be higher than her variable costs regardless of the number of participants. d. Jamara will have to pay Paint A Sign $500 for every party she hosts.

d. Profit of $20

Javier is the business manager at his college. In his role, Javier makes a lot of business decisions. Javier has installed a vending machine in a dorm for soft drinks. The machine rents for $200 a month and the electrical use is minimal. Javier buys soft drinks for $.25 each and charges $.75 each from the vending machine. Currently, the machine has a sales volume of 400 cans a month. Javier thinks raising the price to $.80 will not have any effect on sales. What impact would raising the price to $.80 have on overall profit or loss? Answers: a. Profit of $100 b. Profit of $200 c. Profit of $320 d. Profit of $20

d. 100

Maddie noticed that many students on campus had sweatshirts with Greek organization letters or club names on them. Recognizing that there was a huge market for this attire, Maddie rented a store front and a silk screening machine to get into the sweatshirt business. Maddie's rent is $1,000 a month, including utilities. The silk screen machine leases for $300 a month. Maddie can buy sweatshirts for $10 each and determined the cost of materials for the silk screening at $2 per unit. Considering just the figures provided above, how many sweatshirts does she need to sell each month to breakeven if she prices the screened sweatshirts at $25? Answers: a. 200 b. 150 c. 425 d. 100

d. variable cost.

Maddie noticed that many students on campus had t-shirts and sweatshirts with Greek organization letters or club names on them. Recognizing that there was a huge market for this attire, Maddie rented a store front and a silk screening machine to get into the t-shirt business. Maddie's rent is $1,000 a month, including utilities. The silk screen machine leases for $300 a month. Maddie can buy blank t-shirts for $6 each and sweatshirts for $10 each. Maddie calculated the cost of materials for the silk screening at $2 per unit. For pricing decisions, Maddie should consider the $2 cost of silk screening material as a: Answers: a. deductible expense. b. marginal expense. c. fixed cost. d. variable cost.

c. variable cost.

Maddie noticed that many students on campus had t-shirts and sweatshirts with Greek organization letters or club names on them. Recognizing that there was a huge market for this attire, Maddie rented a store front and a silk screening machine to get into the t-shirt business. Maddie's rent is $1,000 a month, including utilities. The silk screen machine leases for $300 a month. Maddie can buy blank t-shirts for $6 each and sweatshirts for $10 each. Maddie calculated the cost of materials for the silk screening at $2 per unit. For pricing decisions, Maddie should consider the $2 cost of silk screening material as a: Answers: a. fixed cost. b. marginal expense. c. variable cost. d. deductible expense.

a. Supply

Several factors influence the best price. In particular three core issues influence the correct price. Which of the following is NOT one of the three foundations of pricing? Answers: a. Supply b. Competition c. Potential demand d. Costs

b. $7 a unit

Maddie noticed that many students on campus had t-shirts and sweatshirts with Greek organization letters or club names on them. Recognizing that there was a huge market for this attire, Maddie rented a store front and a silk screening machine to get into the t-shirt business. Maddie's rent is $1,000 a month, including utilities. The silk screen machine leases for $300 a month. Maddie can buy blank t-shirts for $6 each and sweatshirts for $10 each. Maddie calculated the cost of materials for the silk screening at $2 per unit. If Maddie sells a screened t-shirt for $15 each, what is the contribution margin for t-shirts? Answers: a. $9 a unit b. $7 a unit c. $15 a unit d. $13 a unit

d. test marketing

Many food producers and restaurants believe that the best way to predict sales of a new product is to make it available to a subset of the people who are most likely to buy it. That's why General Mills would most likely use ___ to forecast sales of a new whole grain cereal. Answers: a. a jury of executive opinion b. the Delphi Technique c. trend analysis d. test marketing

d. 50%.

Mayra works at a jewelry store on the weekends. Roman, the store manager, asked her to help him with putting price tags on some new jewelry for display. Mayra was surprised that there was not much thought to the pricing process - all they did was look on the invoice for the price they paid, double that amount, and put that figure on the price tag. Therefore, an item that they paid $125 was priced at $250. The jewelry store's margin percentage on that item when sold would be: Answers: a. 100%. b. 25%. c. 200%. d. 50%.

a. cost-based pricing.

MycroFiber is a producer of microfiber material for the auto detailing industry. Jamal, the owner of MycroFiber is highly skilled in the technical and manufacturing areas, but does not understand pricing. Jamal knows he wants to cover the cost of production when selling his material and needs revenue to cover his overhead costs and to make a profit. To be sure he meets these goals, Jamal decides to calculate the cost of production and add a percentage to that. Jamal is using: Answers: a. cost-based pricing. b. total view pricing. c. value pricing. d. overhead pricing.

d. cost-based pricing.

MycroFiber is a producer of microfiber material for the auto detailing industry. Jamal, the owner of MycroFiber is highly skilled in the technical and manufacturing areas, but does not understand pricing. Jamal knows he wants to cover the cost of production when selling his material and needs revenue to cover his overhead costs and to make a profit. To be sure he meets these goals, Jamal decides to calculate the cost of production and add a percentage to that. Jamal is using: Answers: a. value pricing. b. total view pricing. c. overhead pricing. d. cost-based pricing.

d. markup percentage

MycroFiber is a producer of microfiber material for the auto detailing industry. Jamal, the owner of MycroFiber is highly skilled in the technical and manufacturing areas, but does not understand pricing. Jamal knows he wants to cover the cost of production when selling his material and needs revenue to cover his overhead costs and to make a profit. To be sure he meets these goals, Jamal decides to take a cost-based pricing approach by calculating the cost of production and adding a(n) ________. Answers: a. operating profit b. discount rate c. cost adjustment d. markup percentage

c. 60%.

MycroFiber is a producer of microfiber material for the auto detailing industry. Jamal, the owner of MycroFiber is highly skilled in the technical and manufacturing areas, but does not understand pricing. Jamal knows he wants to cover the cost of production when selling his material and needs revenue to cover his overhead costs and to make a profit. To be sure he meets these goals, Jamal decides to take a cost-based pricing approach. If MycroFiber's cost of production is $4 a square yard, Jamal and Jamal prices his material at $10 a square yard, what is MycroFiber's margin percentage? Answers: a. 40%. b. 150%. c. 60%. d. 250%.

b. take a prestige pricing approach.

Nakamichi introduced a set of true high-fidelity headphones at a price of $2,000. Most likely, Nakamichi was attempting to: Answers: a. take a sales volume approach. b. take a prestige pricing approach. c. take a pricing parity approach. d. take a market share maximization approach.

d. an automated warehouse

On your first day as the new operations manager for a major toy manufacturer, you take a look at how raw materials are handled. The manufacturing plant keeps close to 500,000 types of tiny parts on hand, ready for assembly. To ensure that workers are able to easily locate, inventory, and retrieve these parts, as well as finished goods, you've decided the company needs ______ to keep production at its peak. Answers: a. a storage warehouse b. a distribution warehouse c. a cold-storage warehouse d. an automated warehouse

b. merchandising

One consideration of a retailer's ______ strategy is that it must consider the preferences and needs of its previously defined target market. Answers: a. pricing b. merchandising c. location/distribution d. customer service

b. Penetration

Oscar Mayer has recently developed a new snack product that's targeted to kids and young adults as a healthy, protein-based after-school or pre-dinner snack. They expect the product to complement their Lunchables product line and appeal to teen-age or college-age consumers who think of Lunchables as just for younger kids. In order to promote product trial and subsequent adoption, the company plans to use a relatively low entry price compared to the competition. What type of pricing strategy does Oscar Mayer plan to utilize? Answers: a. Everyday low pricing b. Penetration c. Competitive pricing d. Skimming

d. Warehousing and storage, production, finished product storage

Which of the following components in the supply chain of a manufacturing company are most concerned with safety? Answers: a. Inbound and outbound logistics, production b. Production, inbound logistics, finished product storage c. Warehousing and storage, production d. Warehousing and storage, production, finished product storage

d. a marketing intermediary, specifically a fresh food and produce distributor

Out of the icy waters of southern Alaska, you cultivate and catch salmon and other fish known to the Pacific. You want consumers in western Canada and the Pacific Northwest to experience your company's products when they're fresh and delicious. With this objective in mind, you feel that _____ would work best for your fish. Answers: a. dual distribution, involving direct online sales and intermediary sales through a distributor b. a direct channel, specifically open-air markets across the region c. a direct channel, specifically a company-run e-commerce website d. a marketing intermediary, specifically a fresh food and produce distributor

c. $3.00

Parker Industries is a small company with a big name! Parker Industries is actually a one-person company that imports strands of LED lights from China and sells them through its website. Parker's only overhead is a storage unit for inventory that costs $125 a month and a $25 monthly fee for web site hosting. Currently, Parker imports the lights for $.99 each (including inbound shipping) and sells them for $4.49. Parker also pays shipping expenses of $.50 per light strand. What is Parker's contribution margin? Answers: a. $3.99 b. $4.49 c. $3.00 d. $3.50

a. Variable cost would decrease

Parker Industries is a small company with a big name! Parker Industries is actually a one-person company that imports strands of LED lights from China and sells them through its website. Parker's only overhead is a storage unit for inventory that costs $125 a month and a $25 monthly fee for website hosting. Currently, Parker imports the lights for $.99 each (including inbound shipping) and sells them for $4.49. Parker also pays shipping expenses of $.50 per light strand. If Parker found a vendor that would provide the same product for $.89 each including shipping, what would happen? Answers: a. Variable cost would decrease b. Fixed cost would decrease c. Breakeven volume would increase d. Contribution margin would decrease

c. $150

Parker Industries is a small company with a big name! Parker Industries is actually a one-person company that imports strands of LED lights from China and sells them through its website. Parker's only overhead is a storage unit for inventory that costs $125 a month and a $25 monthly fee for website hosting. Currently, Parker imports the lights for $.99 each (including inbound shipping) and sells them for $4.49. Parker also pays shipping expenses of $.50 per light strand. What is Parker's monthly fixed costs? Answers: a. $.99 b. $125 c. $150 d. $1.49

d. uses a direct selling strategy.

Peach, a cosmetic company, sells its products only through some independent representatives. To buy a Peach product, customers will have to contact a representative and place an order for the products they need. This information indicates that Peach: Answers: a. uses truck jobbers to sell its products. b. employs category managers to sell its products. c. relies on channel captains to sell its products. d. uses a direct selling strategy.

d. quality and exclusivity.

Prestige pricing objectives emphasize: Answers: a. sales maximization. b. cost minimization. c. revenue maximization. d. quality and exclusivity.

a. store atmospherics.

Products in Charming Charlie jewelry and accessory stores are organized by color, making the perfect accessory easy to find. This is an example of Charming Charlie's: Answers: a. store atmospherics. b. promotional strategy. c. customer service strategy. d. merchandising strategy.

c. store atmospherics.

REI stores feature climbing walls, mountain bike test tracks, and Gore-Tex rain rooms for trying out Gore-Tex rainwear. These features are part of REI's: Answers: a. merchandising strategy. b. customer service strategy. c. store atmospherics. d. promotional strategy.

a. atmospherics

Retailers can project their personalities through their ______. Answers: a. atmospherics b. customer service strategy c. pricing strategy d. merchandising strategy

b. chain stores and independent retailers.

Retailers, when classified on the basis of form of ownership, are grouped as: Answers: a. wholesalers and service providers. b. chain stores and independent retailers. c. convenience, shopping, and specialty retailers. d. limited-line and general merchandise retailers.

d. Because you are selling in the B2B environment with relatively few business purchasers, a short distribution channel works best for your needs.

Several years ago, in order to help your spouse, who is a fine artist, you invented an inventory tracking software for artists. Now you want to market this software to other artists, even though you recognize that the demand for such a product will always be limited and that finding customers will be difficult. Which type of distribution channel will work best for your objectives, and why? Answers: a. Due to the wide geographic range of your potential customers, you will need to set up a long distribution channel with many intermediaries who can facilitate the exchange process. b. When your product is software, you cannot use any intermediaries, thus you will have an extremely short distribution channel. c. Because of the challenges involved in identifying potential customers, you will be forced to engage the services of several sales and marketing intermediaries who can assist you. d. Because you are selling in the B2B environment with relatively few business purchasers, a short distribution channel works best for your needs.

a. unfair-trade

State laws requiring sellers to maintain minimum prices for comparable merchandise are called _____ laws. Answers: a. unfair-trade b. tax-exemption c. price-discrimination d. loss-leader

c. wholesaler.

Sysco Foods provides thousands of food service products to restaurants, hotels, hospitals, and schools. Sysco purchases their products from manufacturers such as Hormel and then markets them to their business customers. Sysco Foods is known as a(n): Answers: a. producer. b. retailer. c. wholesaler. d. logistics specialist.

c. Pricing entrees exactly the same as the other two Italian restaurants in town

That guy! Your brother-in-law is finally fulfilling his dream - opening Giordini's Italiano Ristorante - and he's put you in charge of marketing. He says he wants to use something called penetration pricing to launch his business. Of all the penetration pricing ideas you come up with, which one are you least likely to use? Answers: a. Creating a local radio commercial advertising free desserts for first-time visitors b. Inserting two-for-one dinner coupons in a local mailer c. Pricing entrees exactly the same as the other two Italian restaurants in town d. Offering a 50% discount off the first pizza when you set up an online account

c. $40,000

The Acme Flashlight Company breaks even at 20,000 flashlights at $6 each, with the average variable cost per flashlight of $4. The amount of its fixed costs is: Answers: a. $80,000 b. $20,000 c. $40,000 d. $60,000

a. of their revenue and the number of stores they have.

The largest retailers in the United States are significant because: Answers: a. of their revenue and the number of stores they have. b. they are global companies with locations in foreign countries. c. of the resources spent on e-commerce and online retailing. d. they have all been in business for over 30 years.

d. A storage warehouse where goods can be stored for any length of time until needed by customers

The place where you've been holding your company's novelty screen-printed t-shirts while waiting to be shipped out to fill incoming orders is going out of business. As the production manager, it's up to you to find a new facility to use instead. Of the following, which seems like the best fit for your needs? Answers: a. An automated warehouse where technology is used to monitor and redistribute a wide variety of goods b. A break-bulk center where large shipments are broken down into smaller shipments for delivery to customers c. A distribution warehouse where goods are assembled and redistributed d. A storage warehouse where goods can be stored for any length of time until needed by customers

c. The products are perishable.

Which of the following factors is most likely to be associated with a short marketing channel? Answers: a. Manufacturer lacks adequate resources to perform channel functions. b. Manufacturer serves a geographically dispersed potential trade area. c. The products are perishable. d. The products require little or no technical knowledge and servicing.

d. upstream management.

Tim works for an ice-cream manufacturer. Tim's department handles the supplies of dairy, nuts, and sweeteners that go into the daily production. In addition, they make sure that the suppliers give them good quality products at an optimal price as the freshness of these products ensures the quality of the company's ice cream. Tim is most likely involved with: Answers: a. reverse management. b. horizontal integration. c. forward integration. d. upstream management.

a. upstream management.

Tim works for an ice-cream manufacturer. Tim's department handles the supplies of dairy, nuts, and sweeteners that go into the daily production. In addition, they make sure that the suppliers give them good quality products at an optimal price as the freshness of these products ensures the quality of the company's ice cream. Tim is most likely involved with: Answers: a. upstream management. b. forward integration. c. horizontal integration. d. reverse management.

c. breakeven point in units.

Total fixed costs divided by the product's contribution margin gives us : Answers: a. average total cost. b. total variable costs. c. breakeven point in units. d. total profit.

b. 1,000,000

Vandelay Industries manufactures a range of latex products. Vandelay recently purchased new equipment to manufacture latex gloves for the medical community. The new machinery costs $70,000 and can produce 40,000 pairs of gloves each day. The raw latex material for each pair of gloves costs $.03 and Vandelay sells the gloves at a wholesale price of $.10 a pair. Considering only the cost of the new equipment, how many pairs of gloves does Vandelay need to sell to pay for the new machinery? Answers: a. 7,000 b. 1,000,000 c. 700,000 d. 70,000

b. $.07.

Vandelay Industries manufactures a range of latex products. Vandelay recently purchased new equipment to manufacture latex gloves for the medical community. The new machinery costs $70,000 and can produce 40,000 pairs of gloves each day. The raw latex material for each pair of gloves costs $.03 and Vandelay sells the gloves at a wholesale price of $.10 a pair. Vandelay's contribution margin for a pair of gloves is: Answers: a. $.40. b. $.07. c. $.13. d. $.10.

d. automatic merchandising.

Vending machines are an example of: Answers: a. telemarketing. b. Internet retailing. c. direct selling. d. automatic merchandising.

d. Intensive distribution, where the product is available for sale in as many retail outlets as possible, including grocery stores, convenience stores, drugstores, mini-marts, and vending machines

Water is an essential element for human survival. That's one reason why the makers of Smartwater want to make their product available to as many people as possible. Which level of distribution intensity makes the most sense for Smartwater? Answers: a. Digital distribution, where the product is only available through online retailers, such as Amazon.com b. Selective distribution, where the product is available in only a limited number of retailers to help protect the company's brand image, such as select grocery stores and convenience stores c. Exclusive distribution, where the product is available at only a very limited number of retailers to promote the image of exclusivity and prestige, such as one grocery store like Kroger d. Intensive distribution, where the product is available for sale in as many retail outlets as possible, including grocery stores, convenience stores, drugstores, mini-marts, and vending machines

a. Water

Which mode of transportation is very slow in speed, is low cost and offers very high levels of flexibility in handling? Answers: a. Water b. Truck c. Air d. Pipeline

c. Materials handling system

Which of the following best represents a set of activities that move products within factories, warehouses, and transportation terminals? Answers: a. Vendor-managed inventory system b. Order processing system c. Materials handling system d. Package tracking system

a. It does not provide flexibility for making price changes on individual items.

Which of the following is a disadvantage associated with product-line pricing? Answers: a. It does not provide flexibility for making price changes on individual items. b. It results in consumers having difficulty in making purchase decisions. c. It does not allow shoppers to choose desired price ranges. d. It is ineffective in differentiating between products.

c. Sales agent

Which of the following is a marketing intermediary who may or may not take possession of the goods but never takes title? Answers: a. Retailer b. Industrial distributor c. Sales agent d. Wholesaler

c. 6,000 muffin tins sold for $8 each this year

Which of the following is the best example of demand? Answers: a. 4,000 pairs of Nike running shoes sold on Amazon.com this year b. Six months' worth of an accountant's time billed at $100 per hour c. 6,000 muffin tins sold for $8 each this year d. 5,000 people willing to buy muffin tins for $8 each

c. Water carriers

Which of the following modes of transportation has the lowest transport cost? Answers: a. Air freight b. Railroads c. Water carriers d. Trucks

c. Air freight

Which of the following modes of transportation is the costliest? Answers: a. Water freight b. Pipelines c. Air freight d. Railroads

a. Pipelines

Which of the following modes of transportation is typically associated with high frequency of shipment? Answers: a. Pipelines b. Water freight c. Railroads d. Air freight

b. It is based on the belief that the organization's members who are closest to the marketplace will have the best insights into expected short-term sales.

Which of the following statements is true about the forecasting technique known as the "sales force composite"? Answers: a. Because salespeople are concerned about how estimates will influence perceived performance, they typically inflate their estimates. b. It is based on the belief that the organization's members who are closest to the marketplace will have the best insights into expected short-term sales. c. It is a time-consuming method because it involves so many members at all levels of an organization. d. It is only valuable when applied to a very small geographic region.

b. Results may be somewhat misleading in that buyer intentions do not necessarily translate into actual purchases.

Which of the following statements is true about the forecasting technique known as the "survey of buyer intentions"? Answers: a. It should only be used by organizations with huge quantities of customers so that results are based on a significant amount of data. b. Results may be somewhat misleading in that buyer intentions do not necessarily translate into actual purchases. c. It is the preferred technique for making long-term forecasts. d. It is time-consuming because data can only be collected through personal interviews conducted face-to-face or over the phone.

b. Discovering that you enjoy the taste of the competitor's coffee

You begin every work day by stopping by the local premium coffee shop for a latte. They recognize you when you come in and just hand you your regular order. Recently, a number of events happened at the same time: you got a promotion with a higher salary; your regular coffee shop increased its prices; and a competitor moved into the same shopping center, offering lower prices. ​ Required: During your vacation, you have the luxury of time to reflect on your workday pattern of coffee consumption. Looked at from a marketing perspective, which action could you choose to show that your demand is more elastic? Answers: a. Demonstrating that you are a loyal customer of your current coffee shop b. Discovering that you enjoy the taste of the competitor's coffee c. Spending some of your higher income after the promotion d. Asking for a good-customer discount from your regular place e. Returning to the comfort of your established routine

b. People are sensitive to price changes on big-ticket items such as housing, so you should be prepared for a drop in demand if you raise the rent.

You own an apartment complex, and you want to increase the monthly rent on all units by $50 a month. When you ask the building's on-site manager, Janette, whether she thinks it's okay to raise the rent, she says that demand for rental housing is elastic. What is she saying you should do? Answers: a. People are more tolerant of price changes on big-ticket items such as housing, so it's okay to raise the rent. You won't see a change in demand. b. People are sensitive to price changes on big-ticket items such as housing, so you should be prepared for a drop in demand if you raise the rent. c. People won't be able to find a close substitute to your apartments, so they'll have to absorb the price increase when you implement it. d. Housing is perceived as a necessity, so a change in price will have relatively little effect on demand. Raising the rent will have no repercussions.

d. The opinions you've received have to be combined and averaged to get a clear answer.

You're a senior product manager for an educational product publisher, and your team has come up with an intriguing new twist on a digital economics textbook. To get a better sense of how well this product might sell, you've invited several other senior product managers from other fields, such as business, statistics, and marketing, to provide feedback on your idea. Jonah thinks it's an amazing idea he should copy. Yvonne is sure it will be far too expensive. Marianna says it wouldn't appeal to her customers. What have you learned from this experience? Answers: a. The jury of executive opinion approach could never work because no group could ever completely agree. b. You should ask the company's sales representatives for feedback because the jury of executive opinion technique should always be used in conjunction with the sales force composite technique. c. You should only seek opinions from members of your own team who understand the product. d. The opinions you've received have to be combined and averaged to get a clear answer.

b. ERP, an integrated software that consolidates sequencing and scheduling data from all units

You're the production manager for a company that manufactures clothing, and you oversee activities in a wide range of departments from cutting and stitching to warehousing and shipping. Maintaining a steady flow of goods through production is essential, so if you could employ any supply chain management system to make your job easier, which of the following would you choose? Answers: a. RFID, a tool that requires placing a tiny tracking chip on all materials b. ERP, an integrated software that consolidates sequencing and scheduling data from all units c. Value chain management, a means of managing the complete sequence of suppliers and activities that contribute to the creation and delivery of goods d. Logistical cost control, a method of evaluating how to add value for your customers through logistical changes

b. Because you are selling in the B2B environment with relatively few business purchasers, a short distribution channel works best for your needs.

You're finding your new job as the marketing manager for highly specialized medical equipment to be very challenging. Relatively few medical practices and hospitals across the country need your product, and it's tough to determine who the decision makers are. Which type of distribution channel will work best for your objectives, and why? Answers: a. Because of the challenges involved in identifying potential customers, you will need to engage the services of several sales and marketing intermediaries who can assist you. b. Because you are selling in the B2B environment with relatively few business purchasers, a short distribution channel works best for your needs. c. Due to the wide geographic range of your potential customers, you will need to set up a long distribution channel with many intermediaries who can facilitate the exchange process. d. Since you are selling physical products that need to be warehoused and delivered, you will need a long distribution channel with multiple logistics intermediaries.

a. Because you are selling in the B2B environment with relatively few business purchasers, a short distribution channel works best for your needs.

You're finding your new job as the marketing manager for highly specialized medical equipment to be very challenging. Relatively few medical practices and hospitals across the country need your product, and it's tough to determine who the decision makers are. Which type of distribution channel will work best for your objectives, and why? Answers: a. Because you are selling in the B2B environment with relatively few business purchasers, a short distribution channel works best for your needs. b. Since you are selling physical products that need to be warehoused and delivered, you will need a long distribution channel with multiple logistics intermediaries. c. Due to the wide geographic range of your potential customers, you will need to set up a long distribution channel with many intermediaries who can facilitate the exchange process. d. Because of the challenges involved in identifying potential customers, you will need to engage the services of several sales and marketing intermediaries who can assist you.

a. RFID, a tool that requires placing a tiny tracking chip on all materials

You're responsible for keeping track of inventory for a huge, national chain of bookstores, which is challenging since thousands of products are constantly being delivered, stocked, sold, and transferred through your stores. So, if you could employ any supply chain management system to make your job easier, which of the following would you choose? Answers: a. RFID, a tool that requires placing a tiny tracking chip on all materials b. ERP, an integrated software that consolidates data from all of your stores c. Logistical cost control, a method of evaluating how to add value for your customers through logistical changes d. Value chain management, a means of managing the complete sequence of suppliers and activities that contribute to the delivery of goods

d. Your business's need to warehouse and transport perishable products throughout the state mean that you will need to involve a couple of intermediaries in your new, still relatively short distribution channel.

You're the marketing arm of your family's business, Happy Valley Farms, where you raise organic beef, pork, and lamb. Up until last year, you used a very short distribution channel - you were marketing and selling directly to your local customers. But now you've doubled the size of your farm and intend to sell to customers throughout the state, and you're not sure this approach still works for you. Which type of distribution channel will work best for your current and future needs, and why? Answers: a. If you involve intermediaries, you will lose all the profits you might gain from expanding your business, so you should continue to avoid any intermediaries. b. Doubling the size of your business changes everything, and you'll now need a long distribution channel involving logistics and sales and marketing intermediaries who can assist you. c. Given that your business has succeeded on personal relationships, you should continue to use a short distribution channel without any intermediaries. d. Your business's need to warehouse and transport perishable products throughout the state mean that you will need to involve a couple of intermediaries in your new, still relatively short distribution channel.

a. there are so few customers for your product that you can manage your own sales efforts within the company.

You're the marketing director for a company that manufactures customized mining equipment used to extract fairly rare precious metals like iridium, palladium, and rhodium from the earth. You have chosen to create a fairly short distribution channel because: Answers: a. there are so few customers for your product that you can manage your own sales efforts within the company. b. a long channel would diminish your profit margins without offering any benefits. c. it is challenging to deliver the kind of highly specialized equipment you manufacture to remote locations. d. your customers are located all over the world.

a. Salespeople's estimates aggregated at the district level, then at the regional level, and then at the national level

You're the marketing director of a company that manufactures women's shoes. Six months ago your company introduced a new style of walking shoes, and now you'd like to get a better sense of how popular they are so you can forecast sales for the next six months. What kind of data will you include when you use the sales force composite technique to help develop a forecast? Answers: a. Salespeople's estimates aggregated at the district level, then at the regional level, and then at the national level b. Salespeople's estimates aggregated at the district level c. Salespeople's estimates aggregated at the district level, then at the regional level, then at the national level, and then at the executive level d. Salespeople's estimates aggregated at the district level and then at the regional level

b. Logistical cost control, a method of evaluating how to reduce costs and add value for your customers through logistical changes

You're the production manager for Logan Home Builders, and you've just come from a disturbing meeting with the executive team. The company's president informed everyone that expenses are skyrocketing and profits are shrinking because there's a limit to how much the company can charge for new homes. You'd like to help solve the problem. Which supply chain management system might you employ to help Logan restore profitability? Answers: a. Supply chain management, a means of managing the complete sequence of suppliers and activities that contribute to the creation and delivery of goods b. Logistical cost control, a method of evaluating how to reduce costs and add value for your customers through logistical changes c. RFID, a tool that requires placing a tiny tracking chip on all materials d. ERP, an integrated software that consolidates sequencing and scheduling data from all units

b. ​Vertical

Your first exposure to channel conflict came when you decided to offer your handmade soap through your own website in addition to the skin care boutiques that carry it. The retailers lost no time complaining to your sales representatives. You were involved in ________conflict. Answers: a. ​Horizontal b. ​Vertical c. ​Legal d. ​Gray market e. ​Positioning

d. Chain stores

_____ are groups of retail outlets that operate under central ownership and management and handle the same product lines. Answers: a. Specialty stores b. Department stores c. Variety stores d. Chain stores