Marketing 101 Unit 3 Test
Compared to creating and developing a brand from scratch, a firm sometimes buys a brand from another company at a premium price because outright purchase is
less expensive and less risky.
You are the head of supply-chain management at a large manufacturing company in the Midwestern United States. You just returned from a series of workshops on how technology is being deployed by different companies around the world to improve their supply-chain management activities. You are excited about the prospect of increasing the use of technology in your firm. Which one of the following reasons would you use to convince your firm's CEO to invest more money in technology for supply-chain management?
It will create a more effective process for matching inventory needs to manufacturing requirements.
Which of the following is a way that a restaurant can address the issues of perishability of services?
Offer happy hour specials to attract customers before dinner.
Jonathan Moore, president of Polar Manufacturing Company, has just reviewed the performance reports for the previous year and sees that there are some areas in which the company needs to improve. He specifically feels they could do a better job in managing Polar's product mix. Jonathan calls a meeting of all the managers responsible for each of the product lines that Polar currently manufactures. The group decides that they need to eliminate the complete industrial product line of ice chests, and plan to do so by letting the product decline without any changes in the marketing strategy or product. The group also decides to delete Polar's line of personal thermal underwear, however this product is to be discontinued within the week due to its unprofitability. While discussing these strategies, the group has also uncovered several customer groups for which new products could be developed. The managers decide to assemble a group of people from all functional areas of the company and give them the responsibility for all aspects of the new-product development. Refer to Scenario 11.2. The decision to delete the industrial product line of ice chests is an example of deleting a product through a(n) ____, while the decision to drop the thermal underwear line is an example of a(n) ____.
Phase-out; immediate drop
What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases?
Professional pricing
What two modes of transportation are used when containers are shipped by piggyback?
Railroads and trucks
After direct-marketing, the next slightly longer marketing channel adds a(n)
Retailer
When Amazon.com introduced its Kindle FireHD, it was available through Amazon.com, Staples office supplies store, and a few other retailers. The Kindle FireHD was most likely distributed through the _____ of distribution.
Selective level
Tiffany and John recently purchased a 25-year-old home and are currently immersed in a kitchen remodel, which includes replacing countertops, cabinets, and kitchen appliances. They are shopping for appliances and visited several retailers to compare prices and determine which brands best met their requirements. One retailer is offering the GE brand refrigerator, cook top, built-in oven, dishwasher, and warming drawer for $3,999, while another retailer has a set of LG appliances that includes a larger refrigerator, range/oven combination, dishwasher, and wine cooler for $3,450. Tiffany and John are meeting with their kitchen designer to finalize their plans for the kitchen and think that either one of these packages will fit their requirements. The appliance retailers are utilizing a ______ pricing strategy.
bundle
The fact that the first massage Gretchen gives each day is better than the last massage demonstrates the ____ of services.
heterogeneity
Saresh owns the Change-ezz, a salon specializing in the unique hair needs of minority populations. Recently, Saresh has been trying to improve the quality of service received by his customers. However, he has experienced difficulty in finding ways to standardize and control the salon's quality of service. Saresh's problem illustrates which of the following unique features of service?
heterogeniality
Kaitlynn is the owner of a local fast-food hamburger chain. She recently saw a magazine article featuring a new machine that could cook and assemble burgers without needing employees to handle the burgers. She is thinking of purchasing the new machine since it would help address problems associated with
heterogenity
At the annual managers' planning conference, Jackie Conrad asks the other managers to consider her proposal to increase the quantity of inventory to a five-week supply in order to increase the percentage of completely filled customer orders from 85 percent to 90 percent. She states that she is willing to trade off the ____ incurred for the positive effect of better customer service.
higher warehousing costs
Jonathan Moore, president of Polar Manufacturing Company, has just reviewed the performance reports for the previous year and sees that there are some areas in which the company needs to improve. He specifically feels they could do a better job in managing Polar's product mix. Jonathan calls a meeting of all the managers responsible for each of the product lines that Polar currently manufactures. The group decides that they need to eliminate the complete industrial product line of ice chests, and plan to do so by letting the product decline without any changes in the marketing strategy or product. The group also decides to delete Polar's line of personal thermal underwear, however this product is to be discontinued within the week due to its unprofitability. While discussing these strategies, the group has also uncovered several customer groups for which new products could be developed. The managers decide to assemble a group of people from all functional areas of the company and give them the responsibility for all aspects of the new-product development. Polar management is currently in which stage of new product development?
idea generation
A ____ brand usually requires a producer to become involved in distribution, promotion, and pricing decisions.
manufacturer
The major characteristic of a private brand is that
manufacturers are not identified on the product.
If Colgate-Palmolive wants to maximize profit on its toothpaste, it should operate at the point where
marginal revenue equals marginal cost.
If a firm decides to contract its physical distribution functions to third parties that have no managerial authority within the marketing channel, it is using
outsourcing
Marketers must take steps to make sure that the pricing objectives they set are consistent with the organization's ____ objectives and ____ objectives.
overall; makreting
Ethan is an operations unit manager for Morningstar Foods. So far in developing his monthly budget, he has identified the following costs: Overhead at $120,000; Packaging at $70,000; Advertising at $60,000; Salaries at $400,000; Food production at $90,000, and Distribution at $22,000. The fixed costs in this situation would be
overhead, advertising, and salaries
All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except
penetration pricing.
If Samsung uses _____ pricing for its newest version of laptops, it is probably most interested in obtaining market share; and it is assuming
penetration pricing; that other competitors could enter the market easily.
Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit. Glenwood has decided that it is going to offer a special package offer if the prevention plan is purchased within the first 30 days of each year's time for vaccinations. This type of pricing strategy would be an example of
periodic discounting.
Assuming everything else equal, the most cost-efficient way for British Petroleum to transport crude oil from remote oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be
pipelines.
Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. Given Ray-Ban's plan for positioning the new sunglass line, they should use a ____ strategy when introducing their new product.
price-skimming
Cheetos Fat-free Crunchies is a product developed through advanced technology. Cheetos engineered a technique for making reduced-fat snacks that taste cheesier and stay fresh longer. Cheetos introduced Fat-free Crunchies in limited markets in 2012 and began national distribution in 2013. About 18 months later, a series of competitors' ads was run to counter claims that Cheetos Crunchies actually contained 1.5 grams of fat, and that they contained preservatives and additives. Research showed that the taste of Cheetos Crunchies was also perceived negatively by some people. To save the product, Cheetos reduced the remaining fat to 0 grams, took out the preservatives, and improved the taste. In 2012, Cheetos was in which phase of new-product development?
test marketing
You are meeting with the new CEO of your company to discuss marketing channel strategies. You are delighted to learn that the CEO actually understands the importance of marketing channels in a firm's sales success. The CEO tells you that his primary concern is that the chosen marketing channel facilitates the firm's ability to make products available when customers want them, and in locations where they want them. He leaves it to you to decide on the appropriate marketing channel. Given his primary concern you should make sure the channel you choose is capable of creating lots of _______________.
time and place utility
If a product has an inelastic demand and the manufacturer raises its price,
total revenue will increase.
The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____ discounts.
trade
Riley prefers to buy Pantene Shampoo for Colored Hair, however, if that is not in stock, she will buy L'Oreal or Garnier Fructis. Riley's level of brand loyalty can be described as ___.
preference
_____ is an example of a trade name and _____ is a brand name owned by that company.
Ford Motor Company; Escape
Brands provide all of the following benefits for buyers except that they do not
Fosters brand loyalty
Nick Arnold's Auto Towing Service would best be described as a(n) ____ product.
Unsought
A _________ works outside established organizational divisions and has greater flexibility to apply innovative approaches to new products and markets.
Venture team
If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point?
2,000 units
As Jessica enters Audio Jetz car electronics department, she is asked by the salesperson if she has seen the new plug-in cell phones with coffee-warming app. She answers that she didn't know that this type of app for cars was available. Based on this information, she is now in what stage of the product adoption process for this item?
Awareness
Business products that are purchased routinely, do not become part of finished goods, and are expense items rather than capital goods are called
Accessory equipment
Which of the following statements is true about breakeven analysis?
At the breakeven point, the firm's sales revenue equals the sum of its fixed and variable costs.
Which of the following statements is true about customers' interpretation and response to price?
At times, customers interpret a higher price as higher product quality.
If Silk Soymilk were to begin offering Silk Soymilk Chocolate Ice Cream Bars, this would be an example of
Brand extension
The owner of Big Bike Motorcycles is opening a new retail location. Which of the following is most likely to be a fixed cost for Big Bike Motorcycles?
Building Rent
An accountant buys a supply of pencils to be used in calculating the taxes of other business firms. Based on this information, pencils in this case would be considered what type of product?
Business
Pricing the basic product in a product line low while pricing related items at a higher level is called
Captive pricing
Although they become part of a larger product, ____ can often be easily identified and distinguished on the larger product.
Component parts
____________ are relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort.
Convenience products
Energizer batteries would be classified as which type of product?
Convienence
If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500 because it knows that at that price it will reach that goal, the firm would be using a ____ pricing method.
Demand based
Which of the following products is most likely to have an inverted C-shaped demand curve?
Eternity perfume
When an individual considers whether a product will meet certain criteria that are critical for meeting his or her needs, in what stage of the product adoption process is this individual?
Evaluation
Which one of the following terms is the best description of what happens in the third stage of the product adoption process?
Evaluation
Which of the following is not a stage in the buyer's product adoption process?
Exploration
If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) ____ price.
F.O.B. factory
Supplier ABC requires all its channel members to purchase all of its products in order to be able to purchase any of its products. This is an example of ____________________.
Full-line forcing
Changes that affect a product's versatility, effectiveness, convenience, or safety are called ____ modifications.
Functional
A package of aluminum foil at Kroger supermarket has only a white package with black letters stating "aluminum foil." This product is an example of a ____ brand.
Generic
Grand Resorts Hawaii has just celebrated its first profit since opening two years ago. Grand Resorts Hawaii is most likely in the ____ stage of the product life cycle.
Growth
Luke is a transportation coordinator for Volkswagen of North America. In order to move a large order of vehicles from a plant in Germany to Chicago, he is planning to use both waterways and railroads. The combining and coordinating of these two modes of transportation in order to take advantage of benefits offered by each of the different types of carriers is called
Intermodal transportation.
What assumption does breakeven analysis make that limits its overall usefulness?
It relies on demand for a product being inelastic.
Many brand names have become so common that they are now generic terms for a particular product category. Which of the following is the best example of this?
Kleenex
You are the marketing manager for a multi-state auto dealership in the Southeast United States. It is that time of year when your fleet of autos goes through a major model year change. You are putting the final touches on your pricing strategy to facilitate this change in your inventory of autos. Which of the following pricing strategies will you use to facilitate this model year change?
Periodic discounting
The pricing strategy that assumes that demand is relatively inelastic over certain price ranges is called
Price lining
ClearChem is a producer of chemicals used in car detailing and painting. Because of the volatility of their chemical products when exposed to dirt and heat, ClearChem operates its own facilities for storing and shipping its products. ClearChem's facilities are most likely known as
Private warehouses.
______________ refers to how a product is conceived, planned and produced.
Product design
Ideally, test marketing should follow which stage in the new-product development process?
Product development
Which of the following is least likely to be a factor affecting the selection of marketing channels?
Product packaging
A suggested approach to deleting products, in which each product is evaluated periodically to determine its impact on the overall effectiveness of the firm's product mix, is called a(n)
Systematic review
Select the true statement concerning test marketing.
Test marketing is a limited introduction of the product in areas chosen to represent the intended market.
Which of the following issues is least important in using co-branding effectively
The brands involved should be owned by different companies.
You are a senior sales and marketing analyst for a major retailing firm in Wyoming. The marketing manager just stopped by your office with a very frustrated look on her face. She tells you that she is confused why every time the company raises the sales price of its products, total revenue for the company declines. Based on this information, which of the following explanations do you give her for why this situation occurs?
The demand for the company's products is elastic, so total revenue declines when prices are raised.
PepsiCo has a new flavor of soft drink that it wants to test to determine reactions of probable buyers. Which of the following test-market characteristics would be least useful to PepsiCo when testing the new soft drink?
Tourism is a major industry in the area.
Laura Spangler, of North Central Novelties, reduces the price of games sold to Robertson's Entertainment by 10 percent to allow for expenses associated with Robertson's promoting the games to consumers. This is an example of a ____ discount.
Trade
If a firm currently produces 2,500 products per month and decides to produce 2,501, it will incur
a marginal cost
Cassie and Julian both are buying new iPhones this week. Cassie goes to the Apple store because she wants to actually see the phone before she makes a final decision. Julian knows that he does not need to see the phone, because he just wants to update from his older version. Cassie is purchasing her phone through_____, while Julian is purchasing his through ___.
a retailer; a direct-marketing channel.
Compared to goods marketers, services providers are more likely to promote performance documentation, availability, guarantees, and
price.
Alexandria has gone to the store to shop for a new backpack. She looks for the same brand she has always bought in the past but notices that the backpack is now available in a variety of new colors. The backpack has undergone a(n) _____ modification.
aesthetic
The three major ways to modify a product include
aesthetic, quality, and functional changes.
Morgan is interested in upgrading to a new sofa for her apartment. Morgan looks online to see what new models her favorite sofa brand has available and can get information on the style and color; however, she can't actually sit on the sofa to determine its comfort level. Morgan is able to evaluate the ____ modifications to the sofa, but not the ____ modifications.
aesthetic; functional
Steelcase, Inc. markets furniture directly to businesses. This is an example of a(n) ____ channel.
producer-to-business buyer
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. BASF has decided to offer discounts to its businesses customers in the form of the following: For each order of $100,000 or more during the next 90 days, the buyer will receive a rebate of 5 percent. This type of pricing would be an example of ____ discounts.
allowance
Intuitiv Manufacturing's large plastics molding machine suddenly broke down during its day shift. When considering the purchase of available alternatives, Intiutiv decided to rent one for the next two years instead of buying one. In this situation, the large plastics molding machine it rented would be classified as
an installation
According to the text, a product is defined as
anything the customer receives in an exchange.
Traditionally, the main advantage of a private brand over a manufacturer brand was the ____; now this advantage is _____.
better price; gradually diminishing
If a brand is extended too many times, one major risk is that it can lead to _____.
brand dilution
Which of the following is most likely the primary factor Liz Claiborne, Inc. used when selecting the marketing channel for its Juicy Couture brand?
product attributes
Gambrell Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as
cash flow
Showing a product's price along with its previous price, the price of a competing brand, or the price at another retail outlet is called
comparison discounting.
ACE Electronics introduces a new voice-activated personal computer that no longer requires a keyboard. ACE charges the high price of $11,000 per unit, thus generating large profits because it has a 20 percent market share. ACE's major problem in the future will most likely be
competition
The ability of a product to provide the same level of quality over time is called
consistency
Overall channel goals and individual channel member goals cannot be achieved together without
cooperation.
The Limited, which produces and retails clothing products in a coordinated channel, is an example of a(n)
corporate vertical marketing system.
Dish Network cut back advertising expenditures to minimum levels and reduced the number of channel members for its industrial satellite product. These actions indicate that its product is in the ____ stage of its life cycle.
decline
Mercedes recognized it needed to revitalize its brand and attract different market segments. These are indications that Mercedes' products were primarily in the ____ stage of the product life cycle.
decline
Weyerhaeuser is evaluating its complete product mix. It wishes to decrease some of its marketing expenditures and streamline its product offerings. Weyerhaeuser will most likely look at products in the ____ stage of the product life cycle as possibilities for elimination.
decline
When determining how a product is conceived, planned, produced, and even its physical appearance and its specific characteristics, one is really talking about the product's
design, styling, and features.
When establishing prices, a marketer's first step is to
develop pricing objectives.
Many companies use more than one marketing channel to distribute their products to the same target market, a tactic called
dual distribution.
A run-out policy of product deletion
exploits any strengths left in the product.
Lysol Basin, Tub, and Tile Cleaner and Lysol Disinfectant Spray exemplify
family branding
Aggressive pricing is typical during the ____ stage of the product life cycle.
growth
When a product experiences an increase in the number of competitors, it is usually in the _____ stage of the product life cycle; however, when that competition becomes intense, it is in the ____ stage.
growth; maturity
Packaging that is designed to flow through the distribution channel easily is called ____ packaging.
handling-improved
When Jiffy-Pop packaged its popcorn in an aluminum skillet, complete with attachable handle, it designed the package to become the cooking utensil. After cooking, the handle was removed and the package became the popcorn bowl. Jiffy-Pop's popcorn in this case is an example of _____ packaging.
innovative
Jeff was interested in taking classes to become a certified yoga instructor. In order to earn the certification, he found out he would need to take 200 hours of training. He would have to be present in the training classes with a trainer for all 200 hours. The fact that he would have to attend the classes with a trainer reflects the _____ quality of services.
inseparability
Personal trainers cannot complete their work without their clients present because of the ____ feature of services.
inseparability
What degree of brand loyalty is the strongest and most desired by marketers?
insistance
The three levels of brand loyalty from strongest to weakest are
insistence, preference, recognition.
Max is a product manager at Whirlpool. He learned that one of his competitors, Kenmore, was engaging in a product test of a new dishwasher. He decided to lower prices on his Whirlpool dishwashers in Kenmore's test market area in order to _____ the test program.
jam
If Jason Carter, product manager at SeaRay Boats, became aware that Bass Boats, Inc., was in the process of test marketing a new line of shallow-water fishing boats in the southeast region, he might want to engage in ____ to reduce the validity of the other firm's results.
jamming
Brunswick's bowling balls, bowling bags, and shoes are individual product ____ for this sporting goods manufacturer.
lines
Rick is a new product manager for a large bio-chemical firm. He is currently working on a proposal for a new chemical solvent and knows that introducing the new product can be risky because it might fail. He also knows that ___ is risky as well.
not introducing new products.
The fact the services cannot be inventoried and then sold at a later date is called
perishability.
Since Victoria's Secret has decided to use nonprice competition, it distinguishes its brand through all but which of the following?
rabates
If a business decides to reduce its prices once in a while on an unsystematic basis, it is using
random discounting.
A specialty product
requires purchase planning, and the buyer will not accept substitutes.
The degree to which the price of a product enhances a customer's satisfaction with the purchase experience and with the product after the purchase is part of their
response.
When service companies change high-contact services into low-contact services, the
service becomes less personalized
Fragile products that require special handling are more likely to be distributed through
shorter channels.
A sale that advertised prices "up to 65 percent off" the original price uses
tensile pricing.
When Cadillac buys headlights from Delco (both of which are divisions of General Motors), ____ pricing occurs.
transfer
In a simple economy of five producers and five consumers, there would be ____ transactions possible without an intermediary and ____ transactions possible with one intermediary.
twenty-five; ten