MAR 4

92. Variable costs change with

D. changes in the quantity being produced.

31. Using "keystoning" as a pricing strategy

C. ignores consumers' sensitivity to changes in prices.

53. For a price skimming strategy to be successful,

E. it must be difficult for competitors to enter the market.

102.What is the primary function of a stock keeping unit (SKU)?

A. An SKU represents a unique inventory item in a store.

120.Cindy went shopping for a new outfit. She bought a low-priced shirt at a discount store, and combined it with an expensive designer skirt. Which of the following terms best describes Cindy's actions?

A. Cross-shopping

93. ____________ are costs that remain constant as the volume of production increases or decreases.

A. Fixed costs

121.What type of pricing tactic is being used when several airlines agree to charge the same fare for a single route?

A. Horizontal price fixing

100.Chandra owns a pet sitting service. He recently paid a web developer to build a special version of his company website for use on smartphones. Customers will now be able to easily place orders for pet sitting on their cell phones. This is an example of

A. M-commerce.

99. When a company offers consumers the ability to make purchases via a smart phone, this is known as

A. M-commerce.

121.Thanh owns a shoe store. In this market, there are many firms competing for the same customers, but the products offered differ by quality and price. Out of the four levels of competition, which one does this market represent?

A. Monopolistic competition

122.In which of the following levels of competition does one firm control the industry and restrict competition?

A. Monopoly

123.Winston's Ice Cream Shop has been in the same location for two decades. Last week, a new ice cream shop opened up just one block down the street. Winston's decides to sell ice cream below cost in order to drive the new shop out of business. What kind of pricing is Winston's using?

A. Predatory pricing

126.Your spice company's pricing is set according to the laws of supply and demand. Therefore, when selling your spices you depend on the market to establish the price at which you will sell your spices. Which type of market are you operating in?

A. Pure competition

108.Which of the following is most likely to be characterized by pure competition in the United States?

A. Soybeans.

73. Which of the following is a TRUE statement about distribution centers?

A. They enable retailers to carry less merchandise in individual stores.

76. A(n) __________ is a 13-digit code retailers can use to track inventory.

A. UPC

Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all customers see the same value in a product. To analyze how many units will be sold at any given price point, marketers draw on

A. a demand curve.

67. A pricing strategy is

A. a long-term approach to setting prices in a companywide integrated effort.

103.Bertone's Office Supplies has decided to branch out from its existing stores. It plans to start sending out a catalog, and also to sell its products online. Bertone's is adopting:

A. a multichannel strategy.

76. Chris works for a hardware store. His boss directs him to make a list of manufacturers whose brand names were included in the store's recent newspaper ads and to put copies of the ads with the invoices from each manufacturer. Chris's boss is documenting a(n)

A. advertising allowance.

32. Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as

A. an indicator of quality.

104.Bertone's Office Supplies has large stores resembling warehouse environments, with racks stocked from floor to ceiling with different types of office supplies. Its assortment of office supplies is the largest in town, and their prices are low. Bertone's is a(n)

A. category specialist.

33. Ted is glad his company finally converted to a RFID system. Now, he no longer needs to go through all the new goods to make sure what they ordered was what they received. Ted is responsible for __________ in his company.

A. checking

47. Brian, an industrial equipment sales rep, purchases a quick snack to eat on the way to work. He buys lunch while on the road visiting customers, and grabs bread and milk on the way home. Brian probably does the majority of this shopping at

A. convenience store.

58. For a JIT system to be successful, the firm and its vendors must

A. cooperate.

119.Many stores now e-mail codes to their customers that can be used on their websites or printed and brought into the store to receive discounts. The customer is using a __________ to receive the discount.

A. coupon

50. Julia's is an upscale women's clothing store. Prices are based on customers' beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia's is using a ________________ pricing strategy.

A. customer-oriented

81. If the price for a product increases, the demand for the complementary product will

A. decrease.

48. If you walk into a __________, you will likely find a broad variety of merchandise, deep assortment, and customer service, with everything divided into what appears to be a collection of specialty shops.

A. department store

49. Kohl's, JCPenney, and Bloomingdales are examples of

A. department stores.

42. Paul's family has owned and operated a small chain of conventional supermarkets for many years. Competition from a variety of other kinds of retailers has adversely affected the business. To address the new competitive reality, Paul wants to apply what he recently learned as a marketing major and he has recommended that his family's business should

A. emphasize fresh, locally sourced perishables.

106.Which type of store is small and offers a limited merchandise assortment at very low prices?

A. extreme value retailers

41. Some retailers require their suppliers to ship merchandise ___________, thus eliminating the time and expense associated with ticketing and marking.

A. floor-ready

77. When Cynthia's Boutique receives dresses, they already have price tags and are on hangers. Cynthia's Boutique receives __________ merchandise.

A. floor-ready

86. Jordan directs her salespeople to increase their "share of wallet." Jordan is directing her salespeople to

A. focus on increasing sales to their best customers.

51. Retailers that offer a broad variety of merchandise, limited services and low prices are known as

A. full-line discount stores.

38. In a __________ pricing strategy, marketers rely on the promotion of sales, during which prices are temporarily reduced to encourage purchases.

A. high/low

40. Dan is especially price sensitive. He has been known to line up on "Black Friday" (the day after Thanksgiving) at 4 a.m. in order to be among the first to buy sale items. Dan would likely respond to a __________ pricing strategy.

A. high/low

27. In determining the price for his company's new small business accounting software, Raymond is assessing how much better the software is as compared to alternative products available in the market. Raymond is using __________ pricing.

A. improvement value

70. Kim wants to maximize sales to the customers who walk into her store. Of the following, Kim will most likely focus on

A. in-store promotions.

35. Tess is the marketing manager for a fast food restaurant chain. She uses a target return pricing strategy because her firm's primary objective is to

A. increase profits.

46. Price skimming focuses on selling products to __________ and __________ in the consumer adoption process model.

A. innovators and early adopters

35. When Creative Pen Company designed a new pen that was particularly comfortable to use, it wanted to, literally, get the pen in the hands of as many consumers as possible. Creative Pen will probably choose __________ distribution for its new product.

A. intensive

107.Which of the following strategies is designed to place products in as many outlets as possible?

A. intensive distribution

33. Distribution intensity is commonly divided into three levels:

A. intensive, exclusive, and selective.

11. Students of marketing often overlook or underestimate the importance of Place in the marketing mix simply because

A. it happens behind the scenes.

78. Which of the following retail stores would emphasize personal selling the most as part of the firm's promotional efforts?

A. jewelry store

28. Today, __________ dominate supply chains.

A. large retailers

84. Supermarkets often offer great deals on milk, beef, or eggs to get customers into their stores, knowing that many customers will also purchase items that have higher markups for the store. These supermarkets are using a __________ pricing tactic.

A. leader

71. The primary reasons manufacturers offer seasonal discounts to retailers are to more easily plan production schedules and to

A. lessen inventories of finished goods.

42. Odd prices often suggest __________ to consumers.

A. low quality

56. While JIT systems have many benefits, they

A. make the logistics function more complicated.

122.When a new product is not being sold at the rate originally forecasted, the retailer may reduce the price in order to reduce the inventory of the product. This reduction is known as a

A. markdown.

Retailers use ____________ to get rid of slow moving or obsolete merchandise.

A. markdowns

57. With a __________ pricing strategy, marketers set a low initial price for the introduction of a new product or service.

A. market penetration

58. Mario is the first retailer in town to sell games for Sony's new PlayStation 3 machine. Mario wants to quickly capture as much of the market for the new games as possible. Mario will likely use a __________ pricing strategy.

A. market penetration

59. When HP first introduced their inkjet printers, consumers could only buy refill cartridges from HP. HP made significant profits from the sale of replacement cartridges. In this situation, HP logically used a __________ pricing strategy for their printers.

A. market penetration

A(n) __________ is the set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption.

A. marketing channel

20. Earl was known for driving 30 miles to save a dollar on the price for his favorite beverage. Earl perceived price as ________________, while most consumers recognize price as the ______________ made to acquire a good or service.

A. money paid; overall sacrifice

82. Today, most successful retailers concentrate on providing

A. more value to their best customers.

30. With a pull marketing strategy,

A. orders for merchandise are generated at the store level based on sales data captured at POS terminals.

68. Felicia had just taken over her family's business after spending ten years in the marketing department of a large corporation. She met with a representative from one of her firm's biggest customers, who told her, "We should think about how we can make the pie bigger rather than fighting over the size of the slices." She had expected a more cutthroat approach rather than this call for a

A. partnering relationship.

62. Price elasticity of demand is the

A. percentage change in quantity demanded divided by the percentage change in price.

32. John used to work for a large, well-known retailer. He left that company to work for a much smaller company, and in doing so, he discovered that the channel functions were handled very differently in the smaller firm. Looking back at his experience, he noticed that larger firms

A. perform many different channel functions themselves.

75. A(n) __________ is a document used by a forklift driver indicating how much of each item to get from specific storage areas.

A. pick ticket

114.A major airline sells an aggressively low priced ticket compared to a new low-fare airline, which is trying to enter the market. The airline may be accused of engaging in the unethical practice of

A. predatory pricing.

115.The Clayton Act and the Robinson-Patman Act forbid certain types of

A. price discrimination.

109.Because there are many firms with similar products in purely competitive markets,

A. price is determined by the laws of supply and demand.

90. Benefits of the traditional retail store as a channel includes the ability to

A. provide personalized and meaningful product information.

15. Naomi knows she has to order her store's Christmas holiday merchandise in April to ensure delivery before the holiday season. Naomi is concerned with the supply chain management goal of

A. providing products at the right time.

107.In _______________, many firms provide similar products that are considered substitutes for each other.

A. pure competition

42. Julia wants her firm's gourmet snacks to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that

A. rarely is the lowest-price offering the dominant brand in a market.

120.Mary decided to purchase an electronic toothbrush priced at $100 because of a special offer from the manufacturer. By sending proof of purchase and the receipt to the manufacturer, she could receive a $40 check in return, making the final price $60. This pricing tactic is known as a

A. rebate.

77. Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products by

A. reducing the price elasticity of demand.

118.The local furniture store will only purchase outdoor furniture during winter months because the manufacturer offers a better price to the furniture store. This type of pricing tactic is known as a

A. seasonal discount.

101.Johan owns an oil-change business called Oil Only. He changes oil in cars—and that is all he does. What kind of retail business is this?

A. service retailer

98. In which of the following categories would a dry cleaning business be placed?

A. service retailer

105.Carol's Studio, located in a shopping mall, offers zumba dance classes for all ages. Carol's Studio is known as a(n)

A. service retailer.

18. Retailing __________ the supply chain.

A. sits at the end of

50. When Burroughs-Wellcome introduced the first anti-AIDS drugs, they initially set the price at $10,000 for a year's supply. Burroughs-Wellcome was probably pursuing a __________ pricing strategy.

A. skimming

116.Retailers often require manufacturers to pay _________ in order to obtain shelf space for new products.

A. slotting allowances

124.A major hotel chain found that if it was to reduce the cost of the ice cream it currently served, it would be able to save over 400 employees' jobs. Therefore, it switched from a high priced brand of ice cream to a more moderate priced ice cream. This is known as the

A. substitution effect.

71. TT TOYS manufactures toys. The company recently started buying paint for its toys from a Chinese firm. This Chinese company is part of TT Toys'

A. supply chain.

101.B2B quantity discounts are legal if

A. the discounts are available to all customers.

95. Mira purchased some eyeliner from an Internet-based beauty supply house, and now she often receives online recommendations for other products from the same cosmetics line. These recommendations were probably the result of

A. the purchases she had made.

90. The difference between a coupon and a rebate is that

A. the retailer handles coupons while manufacturers handle most rebates.

67. One product strategy used by retailers to differentiate themselves from competitors is

A. the use of private label brands.

86. One problem in relying on price elasticity and demand curves when setting prices is

A. the way a product or service is marketed can have a profound impact on price elasticity.

32. One of the difficulties associated with value-based pricing is that

A. the way consumers perceive value constantly changes.

33. When Sony introduced its new PlayStation 3 game system, buyers who could not get them the first day bid up the price of the systems on eBay and other auction sites. As Sony provided more PlayStation 3 units to the market and early demand was satisfied, prices dropped because

A. the way consumers perceived their value changed.

111.Betty's Bird Seed Company charges $50 for 10 pounds of bird feed, including shipping. Betty is using __________ to determine shipping costs.

A. uniform delivered pricing

31. Generally, the larger and more sophisticated the channel member, the less likely that it will

A. use supply chain intermediaries.

91. Rebates provide manufacturers with greater control than coupons and provide the firm with

A. valuable customer information.

112.Despite the economic downturn, Alban-Turner Advertising Agency has a reputation for developing campaigns that increase sales at least 10 percent. In sales presentations, Alban-Turner emphasizes its track record in order to demonstrate that its services are worth the cost. This is an example of which pricing strategy?

A. value-based pricing

74. A(n) __________ is a supply chain whose members act like a unified system.

A. vertical marketing system

114.To discourage consumers from buying in gray markets, some manufacturers have

A. warned consumers that their warranty is null and void if purchased through a gray market supplier.

72. Christina owns and operates a shop that sells home furnishings. One of her vendors has just offered her a greatly reduced price for some traditional Christmas decorations, even though it is really too early to be thinking about holiday merchandise. One of the main pricing issues Christina will have to address as she considers the offer is

A. whether the cost reduction will be low enough to cover the additional inventory costs she will have to incur.

29. Today, retailers like Walmart, Home Depot, and Kroger dictate to their suppliers all of the following EXCEPT

A. which competitors they should collaborate with.

117.When Sheila decided to sell her shoe racks on eBay, she stated the price and a shipping rate according to delivery area. Which method of pricing was Sheila using?

A. zone pricing

115.The fact that millions of consumers are using online search engines for comparison shopping has

B. made consumers more price sensitive.

36. Gary is the marketing manager for an automobile dealership. His boss tells him the firm's primary goal is to increase their local market share from 15 to 30 percent. Gary's pricing strategy will focus on

B. increasing sales.

27. In the past, __________ dominated supply chains.

B. manufacturers

19. Retailing is where marketing

B. meets the consumer.

63. A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) ________________ price elasticity demand.

B. inelastic

51. A strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy

B. is supported by consistent advertising and distribution strategies.

72. The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

B. it is easier to lose customers with a price increase than to gain customers with a price decrease.

Bernard's firm has set corporate direction to become one of the leaders in each of its significant market segments. It was Bernard's job to examine the pricing to determine how to maximize market share, even at the expense of profits in the short run. What kind of company objective would guide Bernard's effort?

B. Sales-oriented

54. Of the following, the best example of a category killer is

B. Staples.

30. Chet knows the pro shops selling his golf photography will "keystone" his products. He also knows sales will decline significantly if the retail price is greater than $200. The maximum wholesale price Chet can charge is

B. $100.

94. Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue. For Raymond, the total cost of opening the new branch and remaining open for one year will be:

B. $550,000.

98. Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Jacob, the contribution per unit is

B. $80.

100.Jason rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20. His fixed costs are $100,000 and his target profit is $20,000. For Jason, to earn his target profit, he will need to rent out ________ rooms.

B. 1,500

83. Benton manages a building supply company. He wants to invite twenty of his most valuable building- contractor customers to a golf outing and party. Benton will likely use the firm's ___________ to identify these customers.

B. CRM database

113.Supermarket A always waits until Thursday to price their canned beans in an effort to match Supermarket B's prices, which are advertised on Wednesday. This demonstrates what type of pricing strategy?

B. Competitor-based pricing

50. __________ are combating competitive pressures by increasing the amount of exclusive and private label merchandise, strengthening customer loyalty programs, and expanding their online presence.

B. Department stores

99. __________ lowers the price below the store's cost.

B. Loss leader pricing

_________________ measures consumers' sensitivity to price changes.

B. Price elasticity of demand

71. __________ are subtle forms of promotion that encourage shopping in retailers' stores.

B. Store credit cards and gift cards

34. Patricia and D'Wayne were working on pricing their line of handcrafted office furniture. D'Wayne said, "I think we've got all the main components that affect us and our products, but let's go over the list once again. We've got the stores that will carry our products, our firm's objectives, how customers will respond, and the costs." Which of the following is missing from Patricia and D'Wayne's list of the components?

B. The competition's pricing strategies.

74. 3/10, n/30 means

B. a 3 percent discount if paid in full within 10 days, or the net amount is due in 30 days.

Amazon.com was an early leader in online retailing. Part of the firm's success was due to a well-designed and efficient EDI system with book publishing companies, allowing just-in-time delivery. Even with a well-designed EDI system, Amazon.com would not have been successful without

B. a commitment to partnering with publishing companies.

44. Compared to conventional supermarkets, warehouse clubs have

B. a lower level of service.

52. If you're a manufacturer, and you want to showcase your product in a store that has a narrow but deep selection of merchandise and where sales associates can assist customers with their selections, you'd likely choose

B. a specialty store.

82. Frank's Heating and Air Conditioning Company specializes in electric heat pumps. Frank keeps track of the price of natural gas, knowing that

B. an increase in the price of natural gas will increase demand for his electrical heating systems.

A noncumulative B2B quantity discount is

B. based only on the amount purchased in a single order.

108.Sophia could not afford expensive furnishings, but wanted a stylish home. After researching many options, she went to a local Target to purchase the trendy lamps, pillows, and art featured on its ads and website. As a consumer, which retailing challenge was Sophia likely responding to?

B. brand image consistency

63. Yesterday, Lorinda overheard a surprisingly unpleasant encounter between the manager of the hardware store where she works and a sales rep who sells a well-known line of tools. The rep insisted that his tools should be more prominently displayed and that a better assortment would mean more sales. The manager had other plans and told him so, and the conversation turned into a loud argument. What Lorinda observed was an example of

B. channel conflict.

93. Price advertisements should never

B. deceive customers to the point of doing harm.

19. A _______________ is a facility for the receipt, storage, and redistribution of goods to company stores or customers.

B. distribution center

23. Typically, manufacturers and retailers exchange business documents through a(n) __________ system, the computer-to-computer exchange of business documents from a retailer to a vendor and back.

B. electronic data interchange

24. Flora is frustrated with her company's supply chain management information system. She wants to be able to receive sales data, initiate purchase orders, send and receive invoices, and receive returned merchandise documentation. Flora needs a(n)

B. electronic data interchange system.

62. Higher-income consumers visiting __________ feel like they are on a treasure hunt, searching for a bargain.

B. extreme value retailers

40. Full-line discount, category specialist, and specialty stores are all types of __________ retailers.

B. general merchandise

83. If the price for a product increases, the demand for a substitute product will

B. increase.

85. Internet comparison shopping sites like Shopping.com and Pricegrabber.com allow consumers to compare prices of substitute products much more easily than is possible without the Internet. These sites have

B. increased the cross-price elasticity for substitute products.

61. Because of the way __________ buy merchandise, customers can never be confident that the same merchandise will be in stock each time they visit the store.

B. off-price retailers

Price is the _____________ a consumer is willing to make to acquire a specific product or service.

B. overall sacrifice

78. Cross-price elasticity is the

B. percentage change in quantity demanded of product A compared to the percentage change in price of product B.

67. If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

B. price inelastic.

Ferrari and Lamborghini are manufacturers of very expensive automobiles. Their limited edition cars often sell for $300,000 or more. For most consumers, these are prestige products, and demand is likely to be

B. price inelastic.

23. Dean runs a woodworking business specializing in kitchen cabinets. He knows there are other firms with top-of-the-line machinery that make better quality cabinets, but he does well and has a constant flow of business. Dean obviously has

B. priced his products well.

45. In retailing, a just-in-time delivery system is called a _____________ system.

B. quick response

60. The major objectives associated with a market penetration pricing strategy are to

B. quickly build sales and market share.

57. Customers purchase prestige products or services for the status of owning the products, not just for the functionality. These products may not follow a typical demand curve if

B. raising the price makes more people want to own one.

52. Because manufacturers with JIT systems produce merchandise closer to the time of sale, they can

B. reduce inventories needed to satisfy retailers' demand.

95. Marketers advertising an artificially high "regular price" are unethically attempting to influence consumers'__________ perceptions.

B. reference price

64. Marlie designs and manufactures specialty furniture. She has a number of unique products but can only produce in limited quantities. Marlie will probably NOT use a market penetration strategy because

B. she could not meet a rapid rise in demand.

41. One of the problems associated with an everyday low pricing (EDLP) strategy is that

B. some consumers may associate EDLP with lower quality goods.

97. One of the greatest constraints faced by store-based retailers—and one that the Internet channel can address—is

B. the amount of merchandise that can be carried in a physical store.

26. Marketers can deliver high value through high or low prices, depending on

B. the bundle of benefits the product or service delivers.

19. Because market and operating conditions are different in each target market

B. the choice of a pricing strategy is specific to the target market.

56. According to a typical demand curve, the higher the price,

B. the lower the quantity consumers will buy.

34. A reference price is

B. the price against which buyers compare the actual selling price.

98. A reference price might be considered deceptive if

B. the reference point has been inflated or is fictitious.

12. In marketing's four Ps, Place refers to all activities required to get

B. the right products to the right customer when that customer wants it.

92. One important reason manufacturers like rebates is that

B. their redemption rates are low.

113.Gray markets can be a challenge to marketers because

B. they may tarnish the manufacturer's image.

42. Getting merchandise floor-ready entails

B. ticketing and marking.

Leona is the logistics manager for the Barnes & Noble bookstore chain. She is weighing the many benefits of the company's JIT system, but will need to consider that just-in-time inventory management systems increase

B. transportation costs.

28. Price is often the most challenging of the four Ps to manage, partly because it is often ___________________________ in developing marketing strategies.

B. treated as an afterthought

78. Clark Manufactured Housing Company charges $500 for deliveries within 50 miles and $800 for deliveries 51 to 100 miles away from their factory. The company is using a ____________ pricing tactic.

B. zone

117.While prestige products and products for the status conscious command high prices and are targeted toward customers with plenty of disposable income, marketers have noticed that

C . there is a trend toward increased purchase of these products, most probably for the status conscious who would not normally be considered part of the target markets for these products.

119.Diane owns a bakery where she sells cupcakes. Two blocks down there is another bakery, CC's Bakery, that sells cupcakes for $1 less than Diane. Diane decides to lower her price and match CC's Bakery prices. What type of pricing strategy is Diane implementing?

C. Competitor-oriented pricing

46. __________ are combating competitive pressures by offering fresh food and healthy fast food, tailoring assortments to local markets, opening locations closer to where consumers work and shop, and adding new services.

C. Convenience stores

88. Liz and Sarah watched the prices of all the ingredients in their line of specialty sauces go up and up. Now, transportation costs are going through the roof. Liz suggested they could raise prices to cover these expenses because customers would understand. Which of these is the most important factor Liz and Sarah should consider before raising prices?

C. Customers do not care about the company's costs; they care about value.

32. Which of the following is NOT one of the activities carried on in a distribution center?

C. Distributing paychecks and paystubs for retail employees

58. __________ are likely to target low-income consumers who demand national brands, but cannot afford to buy large-sized packages.

C. Extreme value retailers

79. Which of the following is the most logical example of complementary products?

C. Hot dogs and hot dog buns

46. ______________ systems are designed to deliver smaller shipments of merchandise on a more frequent basis to retailers.

C. JIT

47. At the BMW plant in Spartanburg, South Carolina, suppliers deliver parts every four hours when the plant is in operation and are responsible for removing any packaging or pallets used to deliver their products. BMW uses a ______________ inventory control system.

C. JIT

60. For which of the following is demand likely to be least sensitive to price increases?

C. Prescription drugs.

34. _______________ has dramatically reduced the time and labor associated with checking and receiving merchandise.

C. RFID

__________ distribution intensity helps a seller to maintain a particular image and control the flow of merchandise into an area.

C. Selective

103.Which of the following markets is MOST likely to be characterized by oligopolistic competition in the United States?

C. Soft drinks.

55. As a type of retailer, category specialists are fierce competitors using

C. a complete assortment in a specific category at low prices.

65. Yurgen is opening a financial consulting service for high-income retirees in his area. This target market is used to paying for quality and associates high quality with high prices. Yurgen should probably NOT use a market penetration pricing strategy because

C. a low price might signal low quality.

91. One advantage of a retail store that is NOT shared with an Internet channel is

C. accepting cash payments.

21. Retailing is defined as the set of business activities that

C. adds value to products and services sold to final consumers.

25. Today, when a customer orders merchandise from an online vendor, the vendor usually sends an immediate order confirmation message by e-mail. Usually within a day or two, a second message arrives stating that the order is in the mail. This second message is a type of

C. advanced shipping notice.

26. Roland has just received notification from a vendor that his clothing merchandise order has been processed and dispatched. Roland has just received a(n)

C. advanced shipping notice.

26. Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering

C. as perceived by the consumer.

100.Bill desperately needed tires for his car, and he found an ad with an incredibly low price. When he got there, he found out that those had been sold out, and he was pressured into buying tires that were more expensive than he wanted. Bill found out later that Marcelo had had the same experience at the store a few weeks earlier. It's quite possible that both Bill and Marcelo had become the victim of a deceptive pricing tactic known as

C. bait and switch.

53. One of the benefits of shortened lead times associated with a JIT system is

C. better forecasting because firms are not forecasting as far into the future.

125.The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the

C. break-even point.

22. Which of the following is NOT one of the typical outlets used by retailers?

C. business-to-business requests for proposals (RFPs)

28. CPFR refers to _________ inventory management systems.

C. collaborative planning, forecasting, and replenishment

46. When firms set prices similar to those of competitors, they are following a strategy of

C. competitive parity.

24. Firms using a(n) ____________ pricing method set their prices relative to what other firms are charging.

C. competitor-based

87. In general, prices should not be based on costs because

C. consumers make their purchase decisions based on perceived value.

66. Franchising involves a(n) __________ marketing system.

C. contractual

69. Which of the following is NOT required to build a successful strategic relationship?

C. creation of a joint venture

38. In a __________ distribution center, merchandise moves from vendors' trucks to retailers' delivery trucks in a matter of hours.

C. cross-docking

20. A weakness associated with cost-based pricing methods is that they

C. do not recognize the role that consumers or competitors' prices play in the marketplace.

61. The basic motivating factor in designing supply chains is that

C. each party wants something from the others.

101.Break-even analysis is useful because it allows managers to

C. estimate the quantity they will need to sell at a given price to break even.

55. A demand curve is built assuming that

C. everything but price and demand remains the same.

107.If the Amador County Pest Control Association got together and all members agreed to charge 3 percent of the value of a home for a termite inspection letter, the association members would be engaging in

C. horizontal price fixing.

28. Each generation of cell phones has provided greater clarity, range, and multi-functionality. Marketers of cell phones can use these upgrades in __________ pricing.

C. improvement value

76. Retailers in expensive resort areas often find it difficult to hire quality salespeople. In a situation like this, some retailers augment or even replace the sales and customer service functions with

C. in-store kiosks or self-checkout lanes.

84. Internet buyers are sometimes surprised to see online retailers using information about their past purchases to customize promotions targeted to them the next time they visit the retailer's website. The retailer is using the information to

C. increase the share of wallet from their best customers.

34. Some companies want to get their products into as many outlets as possible, understanding that the more exposure a product gets, the more it will sell. If this is consistent with the company's overall strategy, it will choose __________ distribution.

C. intensive

49. After installing an electronic data interchange, Kay Jewelers was able to reduce ___________, the amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise.

C. lead time

51. When the first hybrid automobiles became available on the market, manufacturers had only minimal production capacity. They used a price skimming strategy primarily to

C. limit demand.

88. As the old cliché claims, the three most important things in retailing are

C. location, location, and location.

79. The knowledge retailers can gain from their store personnel and customer relationship management databases is valuable for developing

C. loyal customers through loyalty programs.

105.In a market with _______________, there are many firms providing differentiated products.

C. monopolistic competition

110.If a firm in a purely competitive market can differentiate its product or service, it becomes part of a _______________ market.

C. monopolistic competition

91. David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following EXCEPT

C. monthly rent on the restaurant building.

43. Developing pricing strategies for __________ is one of the most challenging tasks a manager can undertake.

C. new products

93. While it is relatively easy to offer customers Internet options like a FAQ page and an e-mail address to answer questions, some companies are using an interactive approach to address customers' questions while they are visiting the websites. These firms are using ___________ to provide the customer with enhanced customer service.

C. online chats

110.A video gaming system is being sold. The package includes one game console, two gaming accessories, and one video game for $200, which is $60 less than what it would cost to purchase the items separately. This type of pricing is known as

C. price bundling.

64. If a 1 percent decrease in price results in more than a 1 percent increase in quantity demand, demand is

C. price elastic.

65. Near the end of the summer season, Sergio still has a large inventory of bathing suits. He needs to sell them rather than holding them over till next season, because colors and styles often change. He plans to offer them at 30 percent off the retail price. Sergio hopes that demand for bathing suits at the end of the season is

C. price elastic.

68. Barry customizes Harley-Davidson motorcycles. No two cycles are alike. He notices that very few customers even ask the price of his motorcycles before they decide to purchase them. Demand for his motorcycles is probably

C. price inelastic.

80. When a marketer establishes a price floor and a price ceiling for an entire line of similar products and then sets price points in between for differences in quality among the products, he or she is using a __________ pricing approach.

C. price lining

81. When Toyota introduced its Scion line of cars, the lowest priced model was listed for $15,000 while the highest priced model was listed for $21,000, with two or three other list prices in between. Toyota used a __________ pricing approach.

C. price lining

99. The contribution per unit is

C. price minus variable cost per unit.

112.When working on pricing, the marketer must carefully consider the objectives of other channel members to ensure

C. pricing is consistently handled by all participants in the channel.

72. Retailers' coupons, rebates, and online discounts are types of

C. pricing promotions.

87. For brick-and-mortar retailers, when making decisions regarding "place," a key ingredient to success is

C. private-label merchandise.

77. Personal selling is particularly important for retailers selling

C. products that are complicated or expensive.

95. At the break-even point,

C. profits are zero.

79. The advantage of zone pricing to the seller is the shipping charges typically

C. reflect more closely the cost of delivery.

94. For marketers to advertise a price as their __________, the Better Business Bureau recommends that at least 50 percent of the sales of a product occur at that price.

C. regular price

20. A distribution center is typically operated by

C. retailers, manufacturers, or distribution specialists.

41. Many years ago Honda's Accord and Ford's Taurus were the top two selling cars in the United States. As the year was coming to an end, Ford cut the price of the Taurus, hoping to outsell the Accord and allow Ford to claim that "Taurus is the best-selling car in America." Ford was using a ___________________ pricing strategy.

C. sales orientation

86. The most common form of a quantity discount for consumers is a

C. size discount.

38. Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy.

C. target return

55. The manufacturers of the early electric cars are charging relatively high prices to consumers who are willing to pay the price. They need to use a price skimming strategy because of

C. the high costs associated with producing a small volume of cars.

73. Sales of national brands of orange juice tend to increase when the economy is doing well, while sales of generic orange juice increase when the economy is not doing well. Among industry members this is called the "orange juice indicator." This is an example of how ____________ impacts demand for products.

C. the income effect

74. Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high- mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of ______________ on demand for his service.

C. the income effect

21. When a customer purchases a DVD at a Best Buy Electronics store, all of the following information flows in the supply chain are started EXCEPT

C. the purchase is added to the customer's purchasing habit records.

64. One of the most fundamental activities of retailers is to provide __________, satisfying the needs of their target market.

C. the right mix of merchandise and services

103.It is legitimate for a manufacturer to charge a retailer a lower price than its usual price if

C. the seller is trying to match a competitor's price.

16. Manufacturers use wholesalers and retailers because

C. they create value for customers through convenience and cost savings.

63. If a market penetration pricing strategy results in lower per-unit cost, competitors will be discouraged from entering the market because

C. they would likely need to quickly produce a large volume in order to compete.

30. Knowing what customers expect is essential. Retailers need to know which manufacturers their customers prefer, while manufacturers need to know

C. where their target customers expect to find their products.

22. Cost-based pricing assumes costs

C. will not vary much for different levels of production.

65. In an administered vertical marketing system,

C.there is no common ownership, and the dominant member has significant power to impose its ideas and objectives.

56. __________ offer a limited assortment of general merchandise at very low prices and are often found in lower-rent locations.

D. Extreme value retailers

33. Which of the following is NOT one of the Five Cs of pricing?

D. Collaboration.

37. __________ is when vendors ship merchandise prepackaged in the quantity required for each store to the distribution center.

D. Cross-docking

22. In addition to merchandise and payments, information flows throughout a supply chain. Which of the following is NOT a good characterization of the flow of information in a supply chain?

D. Customers will send and receive information from stores and manufacturers.

26. Aaron has designed innovative accessories for hard-core bicycling enthusiasts. He knows where and how he will make them, and he needs to turn his attention to the getting the products to the customers. As he chooses retail partners, which of the following is LEAST important in this process?

D. Encouraging new bicycling enthusiasts

57. __________ reduce costs and maintain low prices by buying opportunistically from manufacturers with excess inventory, offering limited assortments of household goods, groceries, as well as health and beauty aids.

D. Extreme value retailers

__________ pricing tactics lower the price of a product below cost.

D. Loss leader

96. __________ is the term used to describe the situation when retailers use some combination of stores, catalogs, and the Internet to sell merchandise.

D. Multichannel retailing

60. __________ offer an inconsistent assortment of brand-name merchandise at low prices.

D. Off-price retailers

109.As a multichannel retailing operation matures, as in the case of Walmart, what tends to happen to its organizational structure?

D. Operational integration of all channels

104.__________ is the practice of colluding with other firms to control prices.

D. Price fixing

36. RFID offers participants in the supply chain a powerful tool for tracking inventories and reducing handling. The main reason why it has NOT been more widely adopted is

D. RFID is risky and expensive to use.

45. Which of the following represents the BEST reason a manufacturer of high-end products might consider selling products in a warehouse club?

D. The manufacturer overestimated demand or has a great deal of returned merchandise from other retailers.

108.__________ occurs when members of the marketing channel collude to control the prices passed on to consumers.

D. Vertical price fixing

66. Assume the demand for electricity, a necessity with few substitutes, is -0.2. If the electric company raised its rates by 10 percent, we would expect

D. a 2 percent decrease in quantity demanded.

Because many consumers choose stores based on proximity to their workplaces or homes, great locations are

D. a competitive advantage that few rivals can duplicate.

68. A pricing tactic is

D. a short-term approach that often is a response to a competitive threat.

54. Especially in the fashion industry where styles and trends change rapidly, a quick response system can

D. align deliveries more closely with actual sales.

36. An everyday low pricing strategy stresses the continuity of retail prices

D. at a level somewhere between the regular price and the deep-discount sale prices competitors may offer.

97. In a __________ pricing tactic, sellers advertise low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

D. bait and switch

68. For retailers, promotion refers to

D. both their in-store environment and their mass media communications.

47. In many high-end resort markets, Westin hotels compete directly with Crown Plaza hotels. Each firm weighs the comparative advantages and disadvantages of its offerings to determine whether to price above, equal to, or below the other hotel. In these markets, the hotels are using a _______________ pricing strategy.

D. competitive parity

44. When Ursula decides how to price new products in her gift store, she measures the value of her product offerings against those of the other stores in her area. Ursula uses a __________________ pricing strategy.

D. competitor-oriented

80. Bill is a yacht broker in the southeastern United States. For years he has had difficulty selling large yachts locally because there were few places to dock these boats. Yachts and spaces to dock them are an example of

D. complementary products.

24. Wholesalers sell to all of the following EXCEPT

D. consumers.

41. If a food manufacturer had a full range of products, in a number of different container sizes, which kind of store would the company probably NOT choose as a retailing partner?

D. convenience stores

70. If a firm declared that it wanted to develop a strategic relationship, but was unwilling to commit funds or any effort to make it succeed, there would be an obvious lack of

D. credible commitments.

52. Traditional demand curve economic theory is used by marketers to understand _______________ in the five Cs of pricing.

D. customers

96. The break-even point is estimated by

D. dividing fixed costs by contribution per unit.

56. With a price skimming strategy, a marketer will NOT benefit from

D. economies of scale associated with a larger volume of production.

50. After installing a(n) __________ in its JIT system, Chocolate Tree (a retail chocolate store) was able to reduce lead time for merchandise orders.

D. electronic data interchange system

61. The __________ occurs when unit cost drops as the quantity sold increases.

D. experience curve effect

62. Production of the DeLorean car, made famous in the film Back to the Future, never got above 25,000 units during its lifetime. Automobile industry analysts estimate that production of this car needed to reach around 300,000 units to achieve the __________, a decrease in unit cost as product volume increases.

D. experience curve effect

40. Colin has just received a delivery from the company's distribution center. He opens the containers and finds the popcorn and snacks are all bar-coded, priced, and the package includes an end-of-the-aisle display rack. Colin has received a __________ shipment.

D. floor-ready

39. Merchandise that arrives in the delivery truck ready to be sold is considered

D. floor-ready.

73. Unusual and exciting displays like Bass Pro Shops' climbing wall and stocked aquarium are examples of

D. in-store promotions.

85. Retailers focusing on increasing sales to their best customers are attempting to

D. increase their share of wallet.

Manufacturers trying to implement a just-in-time delivery system need to start with

D. information about customer demand.

102.One of the limitations associated with break-even analysis is that

D. it assumes that there is only one price.

52. One reason marketers of new, innovative products often start out with a price skimming strategy rather than a market penetration strategy is that

D. it is easier to lower prices than to raise them.

69. Which of the following is NOT a common business-to-business pricing tactic?

D. loss leader pricing

47. For marketers using a price skimming strategy, once the initial demand is met for new and innovative products, they will likely

D. lower the price to capture the next most price sensitive market segment.

106.It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.

D. marketers themselves

44. Pricing __________ products is especially challenging because little or nothing is known about consumers' perceptions of value.

D. new-to-the-world

63. If you were a marketer for a clothing manufacturer and you wanted to improve revenues from irregulars, production overruns, and returns, you would be attracted to using

D. off-price retailers.

94. Andy purchased a number of books from Amazon.com, and he learned to trust the recommendations made to him. More than once he was pleasantly surprised at the books and authors he discovered this way. In this case, Amazon.com was creating value for Andy through

D. personalized offerings.

43. Sharon knew that her established customers liked her product much better than the competitors. She was planning to expand into new markets, and she was considering pricing. She was leaning toward charging a higher price than competitors to help demonstrate that hers was a high-quality product. Sharon was considering

D. premium pricing.

58. There is an old saying, "If you have to ask the price of a yacht, you cannot afford it." Products like yachts are most likely to be associated with

D. prestige pricing.

71. The food and beverage manager at an upscale country club once offered a two-for-one happy hour price for all alcoholic beverages, only to see very little response to the special. For these consumers, demand for alcoholic beverages is

D. price inelastic.

116.In addition to knowing more about the products, services, manufacturers, and retailers, Internet users know more about prices. These consumers are becoming more

D. price sensitive.

104.Because there are only a few firms in markets with oligopolistic competition,

D. price wars may occur.

90. Variable costs, primarily labor and materials, are those costs that vary with

D. production volume.

75. Henri wants customers in his specialty tobacco store to feel at home, as if they were in their personal smoking den. He uses lighting, music, and soft chairs to create a "look and feel" that will get customers to relax and return. Henri is focusing on

D. promotion.

37. Everyday low pricing (EDLP) provides value to consumers by

D. reducing their search costs.

35. In determining the price for his company's new pocket digital camera, Matt determines what consumers consider the regular or original price for similar cameras available in the market. Matt is assessing the influence of __________ on pricing strategy.

D. reference prices

14. Stores like Home Depot and Costco act as wholesalers when they

D. sell to contractors or restaurant owners.

53. If you are a marketer for a manufacturer, and the marketing mix for your product focuses on very specific market segments, you'd like to sell your product through

D. specialty stores.

45. Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection. Ryan told the manager to always match the gasoline prices of the other store. Ryan is using a _____________________ pricing strategy.

D. status quo

18. Steven managed an auto parts store in the 1990s. At that time, stock-outs—failure to have the parts auto mechanics needed to do their work that day—increased the likelihood of the mechanics becoming customers of competing auto supply stores. To avoid this problem and keep his business customers, Steven most likely

D. stockpiled inventory, adding to the cost of providing auto parts.

65. Retailers address the conflict between consumers wanting or needing only one item and manufacturers wanting to produce and ship in quantity by providing

D. storage.

27. Unlike product, promotion, or place, price is the only part of the marketing mix

D. that generates revenue.

80. Retailers can gain valuable knowledge about their customers from the transaction process and from

D. the insights of store personnel.

75. The more substitutes that exist in a market,

D. the more sensitive consumers will be to changes in the price of a particular product.

21. The full price of a product or service includes all of the following EXCEPT

D. the price of alternative products and services.

62. Although conflict is likely to occur in any supply chain, it is generally more pronounced when

D. the supply chain members are independent entities.

27. One of the benefits of EDI is that it can reduce cycle time, which is

D. the time between the decision to place an order and the receipt of the merchandise.

75. Manufacturers use cash discounts primarily because they benefit from

D. the time value of money.

35. Radio frequency identification tags are

D. tiny computer chips that transmit information about a container's contents.

49. Marketers use a price skimming strategy for any or all of the following reasons EXCEPT

D. to gain market share quickly.

66. The saying "leaving money on the table" is associated with

D. using a market penetration strategy when there is an opportunity for price skimming.

48. A customer orientation toward pricing implicitly invokes the concept of

D. value.

13. Dawn works for a firm that buys products directly from the manufacturer and sells them to retailers, who then sell the products to consumers. Dawn works for a

D. wholesaler.

87. One of the benefits of offering a size discount to consumers is they will purchase more of a marketer's product and

D. will be less likely to switch brands.

67. In a corporate vertical marketing system,

E . participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain.

97. If the fixed costs of manufacturing a new cell phone are $10,000, the sales price is $60, and variable cost per unit is $20, the break-even point is

E. 250 units.

61. For which of the following is demand likely to be most sensitive to price increases?

E. A specific brand of soft drink.

43. Retailers often perform ticketing and marking functions in their distribution centers rather than in their retail stores because ticketing and marking is often

E. inefficient and distracting.

111.How can a company find its way out of a market characterized by pure competition?

E. Differentiate the product in some way, even by packaging, so customers will see it as distinct.

25. Gerald has a number of customers for his lawn care service who never question his bill but expect their lawns to be perfect. These customers do not want low prices, they want

E. High Value

105.__________ price fixing occurs when competitors collude to control prices, and __________ price fixing occurs within a marketing channel to control prices passed on to consumers.

E. Horizontal; vertical

20. Natalie represents a manufacturer who makes unique, high-end hats. When making a recommendation about potential retail partners, what should be Natalie's first consideration?

E. How likely is it for certain retailers to carry this product?

25. Which of the following is NOT one of the broad factors manufacturers must consider when establishing a strategy for getting their products into the hands of the ultimate customer?

E. Lowering production costs

59. __________ can purchase merchandise at one-fifth to one-fourth of the original wholesale prices because they do not ask the suppliers for advertising allowances or markdown adjustments.

E. Off-price retailers

127.The commercial airline industry is considered what type of market?

E. Oligopoly

43. Supercenters have become the fastest growing retail category by combining broad assortments of groceries and general merchandise products. __________ dominates this category with the vast majority of supercenters in the United States.

E. Walmart

25. When Greenbelt Construction Company began building houses in a large subdivision with many other builders, they priced their homes slightly higher than their competitors and promoted the added quality features in their homes. Greenbelt was using a(n) __________ pricing strategy.

E. competitor-based

64. In a(n) __________ marketing channel, none of the participants has any control over the others.

E. conventional

59. When Brian took over the position of purchasing manager for Gray Lumber Company, a regional building materials supply company, he found a JIT system in place, but in spite of that, the company had frequent problems related to inventory. Shipments were often late or incomplete, there was little communication from the company's vendors, and only superficial attempts were being made to address the problems. For companies like Gray Lumber, the critical factor in having a successful JIT system is

E. cooperation.

29. In determining the price for his company's new personal computer photography printer, Raymond is assessing the total cost of owning his printer as compared to alternative products available in the market. Raymond is using __________ pricing.

E. cost of ownership

30. Ben owns a lawn care business. From experience, Ben has found that John Deere equipment lasts almost twice as long as competitors' machines. For John Deere, Ben's perception about its products makes __________ pricing possible.

E. cost of ownership

21. Compared to other pricing methods, __________ pricing is relatively simple.

E. cost-based

23. Yvonne estimates the average cost of her floral arrangements is $14 regardless of whether she is doing 5 or 20 arrangements that day. She adds a standard markup to the $14 estimate to determine her price. Yvonne is using a(n) __________ pricing method.

E. cost-based

89. Retailers use __________ because they believe the use will induce customers to try new products, convert first-time users to regular users, increase purchases, and protect market share.

E. coupons

118.The fact that more consumers are buying prestige items like Rolex watches and Mercedes-Benz cars and are, at the same time, shopping more at low-priced discount stores is called

E. cross-shopping.

49. A "no haggle" pricing policy is a type of _______________ pricing strategy.

E. customer-oriented

74. Many retail golf stores have driving ranges, some with backdrops showing famous golf courses. These driving ranges allow

E. customers to try before they buy.

84. Managers of Wendy's fast food restaurants keep track of prices at competitors such as McDonald's, Burger King, and Arby's, knowing that a decrease in the prices at these other fast food restaurants will

E. decrease demand for their products.

39. It is important to Joanne to get value for her money, but she does not want to spend time comparison shopping. Joanne will likely respond to __________ pricing but not __________ pricing.

E. everyday low; high/low

36. Anbinh Fashions is launching a new line of one-of-a-kind designer jewelry. Each piece is handcrafted, and production volumes will be very low. To emphasize the unique nature of this jewelry, Anbinh Fashions will probably choose _________ distribution.

E. exclusive

37. Heartland Plantation produces organic food products like stone-ground grits and wild rice. The company has limited production capacity and wants to carefully control where its products are sold. Heartland will likely choose __________ distribution intensity.

E. exclusive

44. Each time a politician or celebrity writes a book, bookstores can expect at least some customers to want the book, but whether or not it will become a bestseller is less certain. The bookstore's primary inventory management challenge is

E. having enough books to satisfy customer demands versus the cost of having the inventory.

31. One of the difficulties associated with value-based pricing is that

E. it necessitates a great deal of consumer research to be implemented successfully.

69. Retailers use __________ to get customers into their stores.

E. mass media advertising

39. A _________________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

E. maximizing profits

17. By reducing the number of transactions needed to move a product from the manufacturer to the consumer, wholesalers and retailers make a supply chain

E. more efficient.

55. With more frequent shipments associated with quick response (QR) systems, a retailer is

E. more likely to have what customers want.

77. Jill knows her wholesaler will give an additional 20 percent off if she orders more than 100 new swimsuits at a time for her store. The wholesaler is using a __________ pricing tactic.

E. noncumulative quantity discount

48. For a price skimming strategy to work, the product or service must

E. offer consumers some new benefit currently unavailable..

102.If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors, the company could be charged with

E. predatory pricing.

54. A demand curve shows the relationship between ___________________ in a period of time.

E. price and demand

82. Cosmetic retailers often have one price for each item but another price for three or four similar items with the same brand, all attractively packaged together. These retailers are using

E. price bundling.

83. Mona is selling her artwork at a local festival. Her art is selling well, but t-shirts she had made up with her artwork are not selling. She decides to offer a package price for her art with a t-shirt included. Mona is using

E. price bundling.

70. Marketers of products and services associated with the wedding industry know that customers often do not care what the price is. They just want the wedding to be perfect. For these customers, demand is likely to be

E. price inelastic.

109.A mobile carrier decides to introduce a new cellular phone at a high price. This is known as

E. price skimming.

70. Generally, a __________ represents either a short-term response to a competitive threat or a broadly accepted method of calculating a final price for the customer that is short-term in nature.

E. pricing tactic

29. Historically, prices were

E. rarely changed except in response to radical shifts in market conditions.

76. Brad always buys and uses Nike brand golf balls. If he finds a Titleist or Callaway ball in the rough, he gives it away. Brand loyal golfers like Brad allow Nike to charge a higher price and not lose many sales. By building a strong brand, Nike has effectively

E. reduced the price elasticity of demand for its products.

29. In vendor-managed inventory systems,

E. retailers send sales information to the manufacturer.

Consumers judge the benefits the product delivers against the ____________ necessary to obtain it.

E. sacrifice

40. Health clubs often use a low, introductory offer price to get people to join their club. These low prices represent a ______________ pricing strategy.

E. sales orientation

39. If a manufacturer wasn't happy with either intensive or exclusive distribution, a logical choice, which incorporates some features from both, would be __________ distribution.

E. selective

24. If firms price their products too low, it may

E. signal poor quality.

54. When Apple Computer Company introduced the iPhone—a combination phone, MP3 player, and Internet access device—in 2007, it was priced at $499, considerably higher than either the iPod or competing cell phones. Apple was probably pursuing a __________ pricing strategy.

E. skimming

45. Charging a relatively high price for new and innovative products to those consumers most willing and able to pay the high price is called price

E. skimming.

88. Some consumers make it a point to go shopping the day after Christmas in order to

E. take advantage of seasonal discounts.

106.Because there are many firms in monopolistic competition markets,

E. the many competitors will focus on product differentiation.

Traditionally, retailers treated all their customers

E. the same way.

23. The key factor distinguishing retailers from other members of the supply chain is that

E. they sell to customers for their personal use.

51. Shorter lead times allow retailers

E. to reduce the needed level of inventories.

89. Labor, materials, and energy are typically __________ costs.

E. variable

31. Which of the following is NOT an advantage of using a distribution center?

E.Customers know they are dealing with a more sophisticated and financially well-off operation if the firm uses a distribution center.

66. It is often difficult for retailers to distinguish themselves from their competitors through the merchandise they carry because

competitors can purchase and sell many of the same popular brands.

92. Janelle is shopping for a unique outfit for a special benefit dinner dance. She wants it to sparkle and shine, but still feel light, silky, and comfortable. For the highest satisfaction, Janelle likely should

shop in traditional retail stores.