Marketing Exam 3

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A 5 percent increase in the price of corn flour that results in a 15 percent increase in the quantity supplied yields a price elasticity of supply for corn flour of:

3.0

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

Which of the following is an example of advertising?

A billboard with the image of a celebrity endorsing a product

At the breakeven sales volume:

Profits are zero

Retailers can project their personalities through their

atmospherics

A popular morning TV program shows its host and guests drinking beverages from mugs that have been engraved with the logo of a popular coffee chain. This is an example of:

product placement

Firms expect each of their products to:

cover the direct costs of production and help contribute to the regular fixed costs

The amounts of a product that consumers will purchase at different prices during a specified period is referred to as:

demand

Brad is a pharmaceutical representative for Merck. He attends a medical conference where he gives a presentation about a new drug that is being manufactured by his company. Brad's presentation is a part of Merck's IMC effort and it represents:

encoding of the product message

Michelle is a fitness instructor and owns her own studio. She uses Facebook and her website to market her business and often reminds readers that "the first visit is always free". Michelle's primary promotion objective is to

encourage product trial

LensCrafters focuses on fashion-oriented merchandise, backed by a complete array of customer services. Hence, LensCrafters can be regarded as a:

full-service retailer

The use of unconventional, innovative, and low-cost marketing techniques designed to get consumers' attention in unusual ways is called

guerrilla marketing

Conflicts resulting from disagreements among channel members at the same level, such as two or more wholesalers or two or more retailers, or among marketing intermediaries of the same type are called _____ conflicts

horizontal

_____ refers to the amount a retailer adds to the cost of a product to determine its selling price

markup

Compared to other broadcast media, cable advertising is more likely to attract specialized audiences and encourage niche marketing. This characteristic of cable advertising is known as

narrowcasting

When General Motors introduced the Saturn, it priced the SL sports sedan at $2,000 less than the Toyota Corolla DLX and $1,500 less than comparable Nissan and Honda automobiles. This is an example of the _____ pricing strategy

penetration

Which of the following terms best represents an interpersonal influence process that involves a seller's promotional presentation conducted on a face-to-face basis with the buyer?

personal selling

You sell a leading brand of speedboat. Many visitors to your showroom are enthusiastic young adults who would love to own your product but cannot afford it. When dealing with them, you must pay particular attention to which step in the sales process?

qualifying

Hollister stores are easy to find in shopping malls as they have a "beach hut" at the entrance to their store. This is an example of:

store atmospherics

Which of the following distribution strategies seeks to distribute a product through all available retailers in a trade area?

Intensive distribution

Which of the following is true of personal selling?

It is interpersonal and basic to any enterprise

Getz Plumbing Supply is a family-owned business located in a town of 200,000 residents and serves professional plumbers and their customers. The company provides a wide variety of fixtures and materials as well as convenient operating hours. Plumbers often refer their customers to Getz and if a customer purchases their fixtures from Getz, the plumber typically receives a commission of 10 to 15% on the total sale. What type of sales channel is Getz Plumbing Supply utilizing?

Over-the-counter selling

As the marketing director for a hospital, you've decided to develop a quick survey about your hospital's services for outgoing patients. The CEO would like you to include the following question on the survey: Do you intend to use our hospital again in the next three years? How do you react to his suggestion?

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

Which of the following terms do advertisers use to describe a promotional environment that is filled with hundreds of competing 15- and 30-second commercials?

clutter

Prior to making the approach to a potential customer, the salesperson should:

collect and analyze information about the potential customer

Casey's General Store is a popular ______-type retailer offering gasoline, snacks, extended store hours, and rapid checkout service

convenience

A cost that remains stable at any production level within a certain range is called a(n) _____ cost

fixed

People love celebrity gossip, which is what makes your Hollywood insider magazine so popular. That's why your product is sold in a wide range of outlets, from bookstores to drugstores and convenience stores to outdoor kiosks. As the marketing director for the magazine, you've set up a fairly long distribution channel because:

it is more cost effective to use intermediaries to develop and maintain contacts with such a diversified group of customers

General product categories, specific product lines, specific products within lines, and the depth and width of its assortment are factors considered by retailers while developing their:

merchandising strategy

Justin subscribes to satellite TV and enjoys the opportunity to record his favorite shows such as ESPN's Sports Center. When he watches the recorded program, he can select "skip ads" so that he only sees the program and does not have to manually skip over advertisements. According to the communication process concepts, Justin's activity would of skipping the advertisements represents

noise

The largest retailers in the United States are significant because:

of their revenue and the number of stores they have

Just Jerky makes jerky from bison, kangaroo, and alligator meat. Because of the unique aspect of the products, the company would like to maintain a premium product status and prices their jerky products higher than traditional beef jerky. The company would like to target hunters, campers, and hikers as their main customers

online retailing

_____ stores differentiate themselves through advertising, in-store displays, knowledgeable salespeople, and appropriate merchandise assortments

shopping

Drew is a sales manager with Fastenal - an industrial distributor of supplies for manufacturing, facility managers, and other industrial customers. He currently supervises 7 people and is wondering the typical or optimal number of first-line sales representatives that he should supervise. Based on the text, what do you recommend as the optimal number for him to supervise?

Which of the following is a concern regarding online or digital marketing?

Consumer privacy issues related to the use of cookies

Which of the following statements about intermediaries in a distribution channel is true?

For many producers, partnering with the right intermediaries can result in more sales and higher profits

In the grocery business, you're pretty much stuck in a competitive pricing environment. You can't afford to attract more customers by lowering all of your prices, but what could you do differently with your product and pricing tactics to entice people through your stores' doors?

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

Which of the following statements is most likely to be true about a convenience retailer?

It appeals to customers by having an accessible location, rapid checkout, extended store hours, and adequate parking

Lucas is a field sales representative for Pioneer Seeds and makes sure he has ball caps, umbrellas, and t-shirts with the Pioneer brand logo in his car. He likes to present one of these items to his customers and they appreciate having an item with the Pioneer brand symbol. Lucas believes its important to provide a small token of his appreciation to his customers. What type of sales promotion activity is Lucas using?

Specialty advertising

Uniqlo, a Japanese retailer, has started selling clothing items in vending machines in U.S. malls and airports. This is an example of:

automatic merchandising

Retailers, when classified on the basis of form of ownership, are grouped as

chain stores and independent retailers

The receiver's response, known as _____, completes the communication process

feedback

Retail experts often cite _____ as a potential determining factor in the success or failure of a retail business

location

When a company sells its goods or services at a price less than the overall costs, the company incurs a:

loss

Prestige pricing objectives emphasize:

quality and exclusivity

Which of the following functions poses a great challenge to sales managers?

recruitment and selection

_____ represent the distribution channel to most consumers because of their direct contact with the ultimate consumers

retailers

A movie theater chain sells a reusable popcorn tub for frequent patrons to purchase for $10 and get free refills for one year after purchase. The promotion of the reusable popcorn tubs is designed to

retain loyal customers

Channels designed to return goods to their producers are called _____ channels

reverse

Jill enjoys shopping at Costco especially close to lunch or dinner because she can often try a variety of different products such as dips, cheese, beverages, and crackers. Costco is using _______ as a type of consumer-oriented sales promotion

sampling

Which of the following acts as the source of the message communicated to the receiver in the communication process?

sender

Nakamichi introduced a set of true high-fidelity headphones at a price of $2,000. Most likely, Nakamichi was attempting to:

take a prestige pricing approach

One important advantage of personal selling over most advertising is:

the ability to actually demonstrate the good or service

The supply chain begins with:

the raw material inputs for the manufacturing process

KitchenAid has established an electronic storefront so that its customers can purchase mixers and accessories from its website. This establishment of electronic storefront is likely to result in a _____ conflict between KitchenAid and its retailers

vertical

As a new employee in the sales promotion department of a hotel chain, you proudly tell a coworker about all the ways you can help the chain grow. Later, you're embarrassed when you realize you misspoke. You mistakenly claimed that sales promotion is especially well suited for:

Building awareness of the hotel brand

Cabela's

Which of the following terms represents the measure of responsiveness of purchasers and suppliers to a change in price?

Elasticity

Which type of sales promotion is intended to capture the impulse purchase?

Point-of-purchase displays

Which of the following is the most important reason for manufacturers to use sales promotion?

To offer extra incentives to customers to buy products

Which of the following modes of transportation has the lowest transport cost?

Water carriers

Cameron likes to listen to Pandora and has a variety of channels and artists that he prefers. He's trying to decide whether to purchase a premium subscription because he gets tired of the periodic messages for local companies that interrupt his music choices. These "periodic messages for local companies" are called _______ and are part of a firm's promotional mix

advertising

Samsung has utilized _____ advertising to persuade smartphone buyers to choose Samsung instead of Apple's iPhone

comparative

When a pharmaceutical company advertises that its product has a greater pain-relieving effect than Tylenol, it is using _____ advertising

comparative

Some grocery stores, like Wegmans and Fred Meyer, now offer pickup and even delivery of groceries to your home. The grocery stores typically charge a small fee for this service. This reflects the _____ component of retail strategy

customer service

Prices are related to the other elements of the marketing mix and to virtually all marketing outcomes. If a firm has a strong desire to increase its market share, it is likely it will:

decrease the price of the product

Bethany is 7 years old and loves watching the Disney channel. Recently, she saw a television advertisement for My Little Pony toys and told her parents that she wanted one for her birthday. Which step in the AIDA model does Bethany's request for a My Little Pony toy reflect?

desire

In the context of the communication process, translating a message into understandable terms and transmitting it through a communications channel is known as

encoding

Canteen Company is a major supplier for vending machines in a variety of locations such as schools, offices, and public buildings. A Canteen sales representative typically sets appointments to meet with customers and discuss their needs for vending services. Once a customer account is signed, Canteen keeps the vending machine operating and stocked with the preferred products. What type of sales channel does this describe?

field selling

_____ refers to the postsale activities employed by salespeople that determine whether an individual who made a recent purchase will become a repeat customer

follow-up

A message is determined to be effective if it

gains the receiver's attention

A retail establishment that carries a wide variety of product lines, stocking all of them in some depth is referred to as a

general merchandise retailer

manufacturer for a child's tablet has received advanced recognition as one of the hottest toys for the upcoming holiday season. As a result, the manufacturer expects to sell an exceptionally large number of its tablets. One concern the company has is the ability to keep the product in stock in retail stores for demanding consumers. The company is most concerned with their:

location/distribution strategy

If you were looking for an advertising medium that worked for segmented audiences, had prestige, had a long shelf life, and money was of no object, which of the following would you select?

magazines

When personal selling efforts use telephone technology in a sales approach where the sales representative initiates the calls, it is known as _____ telemarketing

outbound

A newly opened seafood restaurant advertises various deals on meal packages and special prices on dinner packages to attract customers. This is an example of _____ pricing

promotional

A nationwide brand of women's fashion clothing is seeking an advertising channel that will offer the largest, most extensive reach. Which advertising medium would you recommend?

television

Personal selling is likely to be the primary component of a firm's promotional mix when:

the transactions frequently involve trade-ins

A retailer that uses a cost-based pricing approach would base its price on:

the wholesale cost of the item

Which of the following trade-oriented promotion techniques give especially effective opportunities to showcase goods and services?

trade shows

A couple of years ago, Google - the information services giant - made one of its first forays into manufacturing and selling a physical product: the Google Pixel smartphone. It is highly unlikely that Google used ___ to forecast sales of this new product

trend analysis

Javier is the business manager of his college. In his role, Javier makes a lot of business decisions. Javier is currently considering installing a vending machine in one of the dorms for soft drinks. The machine rents for $200 a month and the electrical use is minimal. Javier can buy soft drinks for $.25 each and plans on charging $.75 each from the vending machine. What is the contribution margin on the soft drinks?

$.50

You're the chief sales and marketing officer for Kia Motors. You've decided to price the standard, gas-powered Optima at $22,500. The company is also offering a plug-in hybrid model, which costs an extra $3,500 to manufacture, including the cost of R&D. What price do you assign to the plug-in hybrid, and why?

Eco-friendly products are perceived as more valuable and prestigious, so you're pricing the plug-in hybrid at $35,200

Which of the following components in the supply chain of a manufacturing company are most concerned with speed and timeliness?

Inbound logistics, outbound logistics, production

Demand for the hiking sandals marketed by the SoftShoe Company is highly elastic. As a pricing strategy consultant, you have been hired to help the firm reduce this elasticity. Choose the recommendation you would be least likely to make

Increase the sandal's price

Which of the following statements is true about the forecasting technique known as the "test market"?

It provides realistic information on actual purchases rather than on customers' intention to buy

Maddie noticed that many students on campus had t-shirts and sweatshirts with Greek organization letters or club names on them. Recognizing that there was a huge market for this attire, Maddie rented a store front and a silk screening machine to get into the t-shirt business. Maddie's rent is $1,000 a month, including utilities. The silk screen machine leases for $300 a month. Maddie can buy blank t-shirts for $6 each and sweatshirts for $10 each. Maddie calculated the cost of materials for the silk screening at $2 per unit. If Maddie sells a screened t-shirt for $15 and a sweatshirt for $25 each, which would she prefer the customer purchase?

Sweatshirt because the contribution margin is higher

Maddie noticed that many students on campus had t-shirts and sweatshirts with Greek organization letters or club names on them. Recognizing that there was a huge market for this attire, Maddie rented a store front and a silk screening machine to get into the t-shirt business. Maddie's rent is $1,000 a month, including utilities. The silk screen machine leases for $300 a month. Maddie can buy blank t-shirts for $4 each and sweatshirts for $10 each. Maddie calculated the cost of materials for the silk screening at $2 per unit. If Maddie sells a screened t-shirt for $20 and a sweatshirt for $25 each, which would she prefer the customer purchase?

T-shirt because the contribution margin is higher

Having worked in a large law firm for quite a few years, you've decided to start your own legal practice helping people write up their wills and plan for their estates. The success of your new business will depend largely on the connections you've made or can make in your hometown of Minneapolis and the nearby city of St. Paul. Which type of distribution channel will work best for your objectives, and why?

Your desire to build personal relationships with people in a concentrated geographic location means you will need to set up a short distribution channel without intermediaries

When a men's clothing store sells suits at four price levels ($295, $455, $525, and $650), the store's retail policy is _____ pricing

product-line

The advertising medium that offers real-time, measurable feedback and highly selective targeting for any advertising budget is

digital media

Which of the following distribution strategies seeks to distribute a product through a single wholesaler or retailer in a specific geographic region?

Exclusive distribution

Marcus works as an account executive with an advertising agency and assists clients in developing a consistent, coherent campaign, which is synergistic and ensures one unifying message is delivered to target audiences. This approach is known as:

integrated marketing communications

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

1,000,000

You're the marketing manager for Streamline Technology, a company that makes ergonomically designed home office equipment. Six months ago, your firm introduced a new paper shredder that was faster, easier, and more comfortable to use. You priced the paper shredder at $350, which is double and even triple some other models, to reflect its many superior product features. However, sales have been poor. What is the most likely explanation for this situation?

Consumers do not perceive real value in the extra features of your product and therefore are not willing to pay a premium price for it

Which of the following statements is true about the forecasting technique known as the "jury of executive opinion"?

Contributors may lack the background knowledge and experience to make meaningful predictions

Maddie noticed that many students on campus had t-shirts with Greek organization letters or club names on them. Recognizing that there was a huge market for this attire, Maddie rented a store front and a silk screening machine to get into the t-shirt business. Maddie's rent is $1,000 a month, including utilities. The silk screen machine leases for $300 a month. Maddie can buy blank t-shirts for $6 each and determined the cost of materials for the silk screening at $2.50 per unit. Considering just the figures provided above, how many t-shirts does she need to sell each month to breakeven if she prices the screened t-shirts at $15?

200

You're finding your new job as the marketing manager for highly specialized medical equipment to be very challenging. Relatively few medical practices and hospitals across the country need your product, and it's tough to determine who the decision makers are. Which type of distribution channel will work best for your objectives, and why?

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

Breakeven sales volume is calculated as:

Breakeven point (in units) = Total Fixed Costs/Contribution Margin

You work for an investment bank that is marketing a new credit card. As part of your company's marketing strategy, you come up with an animated penguin who is associated with your services, and your company comes up with the slogan, "Shopping with kings." Your ad campaign is viewed by millions around the country through television commercials, online ads, direct mail, and celebrity sponsors. Which of the following would be considered feedback?

Customers apply for your bank's credit card

Jamal needed a new cell phone but didn't have a lot of money. He went to TechBargains.com and typed "cheap cell phones" into the search bar. As he was scrolling through his options, he noticed very few brands under $50 and far more brands selling for $100 or more. Which of the following statements best describes what Jamal has observed?

Generally speaking, the higher the price point, the more supply is available

You're the marketing director of Southern Pride Candle Company, and you've been studying sales data for the last five years. Despite several newcomers entering the market, sales have been increasing steadily during this period. Specifically, sales increased by 8.9%, 9.1%, 8.7%, and 9.3% over each previous year's sales, respectively. What does your trend analysis tell you about sales for the coming year?

It's reasonable to assume that your sales will increase approximately 9% over the previous year's sales

For more than a century, the Chanel brand has been synonymous with high fashion and exceptional quality. Women everywhere love your apparel, accessories, cosmetics, and fragrances. From your point of view, which factors have the greatest impact on the distribution channel strategy you've chosen?

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

Which of the following is true of pipelines as a transportation alternative?

They can accommodate shipments of only a small number of products

As a Procter & Gamble sales representative, you sell Pampers diapers, among many other brands, to grocery store chains of all sizes. One of the smaller chains located in three states, which earns close to $200 million annually, would like a discount. Under the Robinson -Patman Act, what kind of discount could you offer this customer?

You can offer a discount to this and any other retailer based strictly on the volume of their orders

A buyer at CVS Pharmacy has a fairly good sense of which seasonal products she wants to stock for the coming summer, but she'd like to quickly get a confirmation of her plans. She would most likely use ___ to get an immediate, inexpensive reading on these seasonal product

a jury of executive opinion

Which of the following is an example of a specialty store?

a men's shoe store

Celeste is working with a Ford Motor Company, one of her clients to negotiate the use of Ford trucks in an upcoming country music video. This type of paid, nonpersonal communication is known as

advertising

Deena operates a coffee shop located near the university campus. Her major competitor is Kaprice's Coffee on the corner across the street from Deena's Café. Recently, Deena decided to raise the price of all the products she sells. Since they are close competitors with Deena's Café, Kaprice's can most likely experience:

an increase in sales

The basic objective of all customer services focuses on:

attracting and retaining target customers, thus increasing sales and profits

Fastenal was one of the first business-to-business suppliers to offer vending machines or kiosks in manufacturing facilities to enable their customers' employees to "purchase" supplies such as gloves and safety equipment including goggles, ear protection, and masks. This innovation enabled the customers to track their purchases and hold employees accountable for using supplies. This is an example of:

automatic merchandising

Southwest Airlines and Carnival Cruises collaborated to market "fly and cruise" specials from major cities to Carnival's ports in New Orleans, Galveston and Miami. The collaboration enabled both firms to share the cost of the campaign. This strategy is known as:

cross promotion

Touchstone Crystal by Swarovski sells their jewelry through consultants and at-home parties. This is an example of:

direct selling

Alpha Trendz, a clothing and apparel manufacturer, carefully studies information available on the Internet. It also checks computerized databases and trade show exhibits before launching its latest line of designer clothes. The company is in the _____ stage of the sales process

prospecting

_____ is a personal selling function that involves identifying potential customers

prospecting

What are the typical first and last steps in the personal selling process?

prospecting; follow up

Scott has an 8-year-old Labrador Retriever who's starting to suffer from arthritis. On a recent trip to his veterinarian, the doctor recommended that Scott start using a prescription anti-inflammatory and pain medication for his dog. The veterinarian thinks a new drug, Previcox is extremely effective but relatively expensive at $1 per dose which is given daily. The drug sales representative has provided the veterinarian with a promotion opportunity where new customers can receive a VISA gift card of $12 when a new prescription is filled. The drug company is offering the veterinarian and their customers a(n):

rebate

Which of the following is a marketing intermediary who may or may not take possession of the goods but never takes title

sales agent

The communication process begins with a(n) ______ who acts as the source in the communication system as they seek to convey a(n)

sender message

_______ occurs when a customer examines and compares products at a store, then buys the product for a lower price through an online retailer

showrooming

A _____ pricing strategy helps manufacturers to distinguish their high-end products from similar products of their competitors

skimming

A department store is a series of _____ stores under one roof

specialty

Which of the following is a customer-oriented sales promotion technique?

specialty advertising

Items such as raw materials and labor costs, which change with the level of production, are known as:

variable costs

Which elements of retail strategy would be most important for a company that has just decided to construct a brick-and-mortar storefront?

Location and store atmospherics

Javier is the business manager at his college. In his role, Javier makes a lot of business decisions. Javier has installed a vending machine in a dorm for soft drinks. The machine rents for $200 a month and the electrical use is minimal. Javier buys soft drinks for $.25 each and charges $.75 each from the vending machine. Currently, the machine has a sales volume of 400 cans a month. Javier thinks lowering the price to $.60 each will increase sales by 100 cans a month. What effect will this have on profit or loss?

Loss of $25

Lashaun is learning about personal selling and the situations when personal selling is recommended as part of a company's promotional mix elements. Which of the following is TRUE regarding personal selling?

Personal selling works best when customers are clustered geographically

Which of the following modes of transportation provides the most efficient way for moving bulky commodities over long distances?

Railroads

You're the marketing director for a software development start-up. Your company is only a week away from launching the most forward-thinking new software it has ever developed, and everyone is excited about the product's sales potential. Suddenly, the CEO says you've got to use the Delphi technique to make one more sales forecast before the launch. What do you say to change her mind?

You remind her that the Delphi technique is time-consuming and can't be completed in one week

Golden State Warriors player Stephen Curry is frequently featured wearing Under Armour shoes and clothing and is effective in stimulating sales of Under Armour products due to his popularity and the success of the Warriors basketball team. Under Armour is using a _____ advertising appeal by partnering with Stephen Curry

celebrity

Bella Italia is a family-owned Italian restaurant that recently opened in a strip center. The restaurant has partnered with two popular radio stations to air spots during the morning and evening drive times. The radio stations created a short spot emphasizing the restaurant's name and location to familiarize listeners with the name of the new restaurant. The objective of this advertisement is to

create awareness

Controlling part of the supply chain that involves finished product storage, outbound logistics, marketing and sales, and customer service constitutes

downstream management

The Lands' End catalog provides a toll-free number for customers to call and place orders. The staff is pleasant and knowledgeable and will place orders and answer questions. This is an example of a(n)

inbound telemarketing effort

Vandelay Industries manufactures a range of latex products. Vandelay recently purchased new equipment to manufacture latex gloves for the medical community. The new machinery leases for $70,000 annually and can produce 10,000 pairs of gloves each day. The raw latex material for each pair of gloves costs $.03 and Vandelay sells the gloves at a wholesale price of $.10 a pair. Currently, sales are 2,500,000 annually. What is the profit on the gloves if the machinery lease is the only fixed cost considered?

$105,000

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

Profit of $20

Each mode of transportation has its own unique characteristics, and logistics managers select the best options for their specific transportation needs. For this particular job, you decide that your products should be transported via a combination of the three major modes of transportation that control the largest share of the freight business. How will you be transporting your products?

Rail carriers; motor carriers; pipelines

The Acme Flashlight Company breaks even at 20,000 flashlights at $6 each, with the average variable cost per flashlight of $4. The amount of its fixed costs is:

$40,000

$750

Maddie noticed that many students on campus had t-shirts and sweatshirts with Greek organization letters or club names on them. Recognizing that there was a huge market for this attire, Maddie rented a store front and a silk screening machine to get into the t-shirt business. Maddie's rent is $1,000 a month, including utilities. The silk screen machine leases for $300 a month. Maddie can buy blank t-shirts for $6 each and sweatshirts for $10 each. Maddie calculated the cost of materials for the silk screening at $2 per unit. Considering only the figures presented above, what is the variable cost for a t-shirt Maddie silk screens?

$8 a unit

Devon is a wholesaler for water purification systems. Valerie was one of his first customers, and she's continued to purchase a fair number of systems from him over the years. Recently, Valerie asked Devon if he could cut her a break on her next order, especially since she's been such a steady, loyal customer for so long. How should Devon respond?

Devon could offer her a discount based on a certain number of units ordered, as long as he offers the same discount to all of his customers

As the chief sales and marketing officer for Kia Motors, it's up to you to set pricing tactics in what is an established competitive pricing environment. Right now, you're looking at your firm's line-up of four different gas-powered sedans, each of which is distinctly different from the others, although they all tend to look fairly similar. Which tactic is the best approach for pricing Kia sedans?

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

You're the CEO of a national chain of carpet, flooring, and tile stores. Your company sources hundreds of finished products from a wide array of suppliers, sells them through your stores, and then contracts with independent installers to deliver and install the products in homes and businesses all across the country. Lately you've been wondering if you could improve your company's financial performance by examining all aspects of this system. Which of the following do you think would be the most useful tool for this purpose?

Logistical cost control, a method of evaluating how to add value for your customers through logistical changes

Technology is being utilized by retail operations to reduce the amount of time to track inventory and record shipments. Companies such as Target and Walmart now require suppliers to attach a tiny chip with identification information to pallets and cases of products. This technology is called:

RFID

You'd like to own your own business, and you love to work with your hands, preferably outdoors. That's why a lawn and garden maintenance business is the perfect match for your abilities and interests, and you're ready to start! Which type of distribution channel will work best for launching your new service business, and why?

You'd like to establish and maintain personal relationships with your clients, so you should set up a short distribution channel without intermediaries

Pricing is a highly visible component of a firm's marketing mix and an easy tool for obtaining a differential advantage over competitors. However, when competitors continually undercut each other to gain that advantage, it can lead to a price war that damages all companies involved. When firms have identical or very similar products and price information is readily available - for example, Coca-Cola and Pepsi - a common pricing approach to avoid price wars is:

competitive-parity pricing

At Streamline Technology, you're responsible for marketing the company's ergonomically designed office equipment, such as chairs and desks. Since Streamline has relatively few customers, you've asked one of the marketers on your team to write up a plan for a survey of buyer intentions regarding your company's ergonomic keyboard. When you review his plan, you agree with everything he's proposed except:

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

Selling price of the product minus the variable cost of the product yields:

contribution margin

Jesse would never have thought that his own trademarked children's toys would be flooding a parallel market and competing against him. Now he needs to contact his attorney to see what remedy he has in order to mitigate his damages. What kind of marketing channel conflict is Jesse experiencing?

gray market conflict

Sysco Foods provides thousands of food service products to restaurants, hotels, hospitals, and schools. Sysco purchases their products from manufacturers such as Hormel and then markets them to their business customers. Sysco Foods is known as a(n):

wholesaler

Jamara has started a home party business that hosts parties and those attending paint signs. Jamara must pay $500 a year to be a representative for Paint A Sign. In addition, Jamara buys all the materials for the parties, including the metal base, the paints, brushes, stencils, and transfers. These items all add up to $10 on average. Jamara charges each participant $25 for each sign they make. For Jamara's Paint A Sign business, the gross margin or contribution margin for Jamara's business is:

$15

A firm with $50,000 in fixed costs, selling price of $25 per unit, and variable costs of $5 a unit has a contribution margin of:

$20

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

Walter White is a pharmaceutical distributor. Walter takes a cost-based approach to pricing his products by tripling his price for each of his products. For example, products that Walter imports from Mexico for $2, he sells for $6. What is Walter's sales margin?

You're the marketing director for a new wrinkle-reducing skincare product manufacturer. Your moderately priced skincare products are quite different from others on the market, and you'd like to make personal contact with your target market - women over 40 - so you can demonstrate the use and benefits of your product. Which distribution channel makes the most sense for your objectives?

A direct channel involving in-home, informercial, and online sales demonstrations and order-taking

Oh, no! The place where you've been holding your company's novelty screen-printed t-shirts while waiting to be shipped out to fill incoming orders is going out of business. As the production manager, it's up to you to find a new facility to use instead. Of the following, which seems like the best fit for your needs?

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

What does the AIDA acronym represent?

Attention, interest, desire, action

Several years ago, in order to help your spouse, who is a fine artist, you invented an inventory tracking software for artists. Now you want to market this software to other artists, even though you recognize that the demand for such a product will always be limited and that finding customers will be difficult. Which type of distribution channel will work best for your objectives, and why?

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

A firm has $50,000 in fixed costs, a selling price of $25 per unit, and variable costs of $5 a unit. If the fixed costs are reduced to $40,000:

Breakeven volume will decrease

The company you work for as a marketing director makes smartphones. About a year ago, the company's design team rolled out a new model that was comparable in every way to other brands retailing for $300 to $400, except that the phone could be manufactured for far less money. You decided to use a penetration strategy and set a retail price of $199, but sales have fallen well below your forecast. What is the most likely explanation for the shortfall?

Consumers in the market for a smartphone in the $300 to $400 range do not perceive your smartphone as having the same kind of quality and durability as other similar brands

Your company manufactures umbrellas, among other accessories. Six months ago, you projected sales of 5,000 units of your $16 umbrellas over the course of a year, so you produced 5,000 umbrellas. But so far you've sold less than half. What does this mean, and what is the best way to address the situation?

Demand of this product at this price is less than anticipated, so you should drop the price

Jeff is the owner of Bayou Adventure in southeast Louisiana and sells a variety of fishing equipment for salt and fresh water fishing. Recently, Mike met with Jeff to discuss a new lightweight rod and reel that his company had developed. Jeff and Mike took a kayak and went out on the Lacomb Bayou to test the rod and reel. What stage of the sales process does this represent?

Demonstration

According to the AIDA concept, which of the following is the first function of a promotional message?

Gaining the potential consumer's attention

As head of sales for your firm, one of your key supervision-related responsibilities is determining an optimal span of control. You consider all of the following factors except:

How much each salesperson is paid

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

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

Which of the following best represents a set of activities that move products within factories, warehouses, and transportation terminals?

Materials handling system

Which of the following is a characteristic of a corporate culture that encourages ethical behavior?

Open communication exists between employees and managers

_____ refers to a personal selling approach in which customers comes to the seller's place of business to buy products largely on their own initiative

Over-the-counter selling

Which of the following is the most effective method to promote products when the customers of a firm are geographically concentrated?

Personal selling

Dish Network has recently advertised a bundled package of 50 channels plus Internet for $59.99 per month but in the fine print, the advertisement notes that this offer is applicable for new subscribers only. What type of pricing policy is Dish Network using with this promotion?

Promotional pricing

Brandon recently completed law school, passed the bar exam and began working for a prestigious law firm in Dallas, TX. The firm has a strict dress code and Brandon is required to wear business suits, dress shirts, ties, and dress shoes. He is investing in a new wardrobe and visited Men's Discount Warehouse to purchase new clothes. He shared his situation with Tim, his sales representative, and Tim told him that if he bought 2 suits, he would receive 2 dress shirts, 3 ties, and 2 pairs of socks for free. Which of the following statements is TRUE regarding this example?

Promotions such as this are legal when differences in price reflect cost differentials

The Noble GM car dealership has been in your family for three generations. Your biggest competitor is the massive Royal Honda/Toyota/Kia/Mazda dealership across town. For each of the past eight weeks, you've noticed that the team at Royal has been advertising a couple of brand-new vehicles for about half of their retail sticker prices, a tactic that's attracting all of your potential customers to Royal. What can you do about it?

Report Royal to the state since their loss-leader pricing tactic may be violating the state's unfair trade laws

Which of the following statements is TRUE regarding sales promotion?

Retailers and manufacturers use sales promotions to encourage consumers to buy their product

Which of the following statements is accurate about sales promotion?

Sales promotion can increase sales by providing extra purchasing incentives

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

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

Wal-Mart, K-Mart, and Target are all large discount store chains, and they carry many of the same types of products. Yet Target is perceived as being better quality and more prestigious. Why?

Target sells slightly higher-priced brands and products

Champagne lovers are familiar with the highly respected, expensive Veuve Clicquot brand, but as the product's marketing manager, you'd like your champagne to be better known among wine drinkers. Which level of distribution intensity makes the most sense for Veuve Clicquot at this time?

Selective distribution, where the product is available at better restaurants, grocery stores, and liquor stores

You're involved in an intense debate with your co-worker at the pharmaceutical manufacturing firm where you both work. As the head of sales, he maintains that his salespeople are the best source of sales forecasting data. As the head of marketing, you feel that trend analysis is the best choice for forecasting sales. What is the best solution to this dilemma?

Since both techniques have limitations, you should use both approaches and compare

Which of the following is an example of a quantitative forecasting technique?

Starbuck's promotes a new breakfast burrito at Midwestern stores for the next two months

Your invention is a hit! Your investment in TV informercials has really paid off, and you've already ordered another 10,000 units to be manufactured. What do you anticipate will happen next?

Supply will increase due to copycat products appearing on the market

You're a senior product manager for an educational product publisher, and your team has come up with an intriguing new twist on a digital economics textbook. To get a better sense of how well this product might sell, you've invited several other senior product managers from other fields, such as business, statistics, and marketing, to provide feedback on your idea. Jonah thinks it's an amazing idea he should copy. Yvonne is sure it will be far too expensive. Marianna says it wouldn't appeal to her customers. What have you learned from this experience?

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

Mitch and Jill were visiting the Eiffel Tower when there was a downpour. They were willing to pay 25 euros for a poorly made umbrella that would usually sell for 10 euros or less. This illustrates the fact that:

The relationship between price and potential demand can be driven by many factors

Variable cost would decrease

You're the marketing arm of your family's business, Happy Valley Farms, where you raise organic beef, pork, and lamb. Up until last year, you used a very short distribution channel - you were marketing and selling directly to your local customers. But now you've doubled the size of your farm and intend to sell to customers throughout the state, and you're not sure this approach still works for you. Which type of distribution channel will work best for your current and future needs, and why?

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

Go Daddy is a company specializing in domain names, website hosting, and other online services for business. They've worked with Danica Patrick, a popular female Indy car racer as a spokesperson for the brand. Go Daddy is using a _____ advertising appeal

celebrity

Bailee recently joined a direct sales company as an independent contractor and earns 20% on product sales. She's excited about the opportunity to earn additional income by using social media to market her products to friends. Recently, she was a top 10 producer and sold $1000 in product which translates to an extra $200 in income for Bailee. The type of compensation Bailee receives from the company is called:

commission

Carlos is the VP Sales for a consumer electronics company and has recently been reviewing the performance feedback and employee satisfaction reviews. He noted that several sales representatives mentioned that they dissatisfied with the amount of commission they receive. Carlos wants to retain the best sales representatives rather than risk losing them to a competitor so he's trying to determine whether or not he should raise the percentage of commission representatives might receive on their sales. What management function best describes Carlos' activity?

compensation

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

cost-based pricing

Kassidy is a high school junior and is now receiving letters of introduction and brochures from a variety of colleges and universities. She doesn't yet know what she wants to study and is excited to receive the direct mail pieces so she can learn about schools she might not know. The colleges and universities are attempting to _______ as their primary promotional objective

create awareness

Katie was watching TV late one night and was surprised to see a promotional program for the Sleep Number bed. She had heard of the mattress before and watched a few minutes of the program to learn more. The program mentioned a 60-night full refund and encouraged viewers to contact a toll-free number or place an order via the company's website. What type of promotional activity is the Sleep Number mattress company using?

direct marketing

Eddie Bauer has physical retail stores as well as an e-commerce and catalog mailed to consumers on a regular basis. Eddie Bauer utilizes:

direct response retailing

David is recently divorced and his ex-wife took most of their kitchen equipment when she relocated. He's decided to host a Pampered Chef party and invite friends who enjoy cooking. He knows that they will enjoy sampling various dips and dishes and will likely buy an item or two. He can purchase Pampered Chef items at a discount and may even earn free items as a benefit of hosting the party. Pampered Chef is classified as a(n):

direct sales retailer

John works for an ice-cream manufacturer. His department focuses on keeping the finished products fresh as well as ensuring that they reach the retailers on time as the products are highly perishable. In addition, his department decides on which flavors of ice cream should be sent to which retailers in various trade areas. John is most likely involved with:

downstream management

Smartwatches seem mainstream to you since you've been marketing them for three years now, but you're aware that some consumers still need a lot of help and information before making a decision whether to buy a smartwatch and, if so, which model to buy. With this in mind, you can see that ____ makes the most sense for promoting your company's smartwatches

dual distribution, involving direct online sales and intermediary sales through retailers, including electronics and department stores

The Coffee Hound is a specialty coffee cafe that roasts its own beans and specializes on pour-over coffee drinks. The Coffee Hound hopes to increase its sales of whole and ground beans and offers free samples of flavored coffees daily. The primary objective of offering free samples is to

encourage product trial

fixed cost

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

fixed cost

A customer-focused firm wants its sales representatives to:

form long-lasting relationships with buyers by providing high levels of customer service

When the same branded product is carried in competing retail pharmacies, discount houses, department stores, and convenience stores, the marketing channel conflict that can result is referred to as:

horizontal conflict

The first step in the sales process is to:

identify the prospective customers

Which of the following is a principal method used in sales training?

in house classes

Cleveland Solvents has field sales staff, a customer service department, and two individuals who manage the "tech hotline." These individuals not only answer technical questions from customers, they also identify customer needs and recommend products that can fill those needs. They have the ability to initiate and close sales on the spot. These individuals are essentially participating in:

inside selling

Phyllis graduated with a degree in chemistry and started her career as a laboratory scientist with Dow Chemical. While at Dow, she met a sales representative from PPG Industries who suggested she might enjoy an opportunity to work directly with customers and assist them by answering product questions, making recommendations about new products and serving as an assistant to the field sales team. Phyllis applied for the position and is now working at PPG. She enjoys the opportunity to use her technical skills to assist customers and doesn't mind being on the phone or answering e-mails from customers. What type of sales channel is Phyllis working in?

inside selling

More and more consumers are falling in love with your company's ice cream bars, and this coming summer should be your best season yet! These tasty treats will be sold in grocery stores, convenience stores, and even several major theme parks across the country. As the marketing manager for the product, you've set up a fairly long distribution channel mainly because

it's too expensive to own your own fleet of refrigerated warehouses and delivery trucks

You've been hired as a consultant to assist a global pharmaceutical company with their advertising medium choices. They have a new product targeting owners of dogs who are interested in preventing fleas and ticks. They want to target a very narrow audience of individuals who own a dog and also use high quality images to capture the emotional connection of the owners to their pets. They also want the advertising message to have a relatively long life. What would you recommend?

magazines

Michelle is a sales manager with Enterprise at a busy residential branch. She often invites her team to a Friday after work social hour at a local restaurant and takes time to celebrate recent successes such as the top sales representative for sales, customer satisfaction scores, or other accolades. Michelle believes these activities are important to maintaining a positive work culture and showing recognition for the hard work of her colleagues. What management function does this represent?

motivation

The blend of variables including advertising, personal selling, sales promotion, and direct marketing that are designed to satisfy the needs of a company's customers and achieve organizational objectives through various communications is referred to as the

promotional mix

Which of the following best represents the complete sequence of suppliers and activities that contribute to creating and delivery of merchandise?

supply chain

In response to natural disasters such as hurricanes and tornadoes, Procter & Gamble sends its Tide laundry team to provide portable laundry services to those affected by the storm as well as distribute free products. After one incident, CNN highlighted the work of Procter & Gamble's employees and how they were changing lives through this service. Which element of the promotional mix describes the feature on CNN?

public relations

A local newspaper is planning to come up with a special series on the growth of entrepreneurship within the community. Each week an article featuring a different business owner and his or her success story will be published. For the featured business owners, this type of promotion would constitute

publicity

The element of the promotional mix where marketers seek unpaid placement of news about the company or a product in mass media or social media is called

publicity

You work for a clothing manufacturer whose executives recently decided they were going to sever their ties with four of their manufacturing partners in Guatemala due to dismal labor conditions. Your superiors believe this is a public relations-worthy topic, and they want your consumers and stakeholders to know about their decision. Which of the following steps can they take to ensure their various publics are aware of their decision to sever ties with the Guatemalan manufacturers?

publish a press release

Executives at Pfizer are trying to forecast sales of the company's popular cholesterol-lowering drug, Lipitor. Trend analysis has given them a fairly good sense of projected sales, but they'd like to get some additional feedback from the marketplace. A good technique to use for this purpose would be

sales force composite

Charlie participates in a summer baseball league and his team raises money for uniforms and travel by selling a book that costs $10 and includes a variety of discounts at restaurants and retail outlets in the local area. Charlie often tells his friends that the value of each book is over $250 and only costs $10. Which element of the promotional mix is being utilized with the book?

sales promotion

Which of the following is one of the fundamental steps in the marketing strategy process on which a retailer bases its key decisions?

selecting a target market

Sales of Kathleen's baked goods have begun to increase dramatically. She is selling online, but many customers in her core region are asking about local outlets where they can make immediate purchases. Kathleen has no desire to open and operate a retail outlet herself, but she also does not want her product sold beside a generic cookie in a supermarket. What type of distribution will Kathleen investigate for her premium baked goods?

selective distribution

If categorizing by services provided, Banana Republic stores would be classified as:

shopping store

Coca-Cola just announced a new carbonated drink that will feature twice the caffeine as their regular sodas. Coca-Cola expects this new drink to be just as popular as their Coca-Cola and Diet Coke beverages. Which of the following type of store would not be a good location in which to sell this new drink?

specialty retailers

The Tostitos BCS National Championship game features the top two college football teams competing for the national title. The Tostitos brand name is included in the event's name because Frito-Lay, the manufacturer, paid for:

sponsorship

When a major distributor of beauty supplies went out of business, you were able to acquire large amounts of combs, brushes, hairpins, and other accessories that you sell in your small chain of four stores. You will be restocking your stores with this merchandise for the next nine months. What kind of warehouse facility will you use for your inventory?

storage warehouse

Products in Charming Charlie jewelry and accessory stores are organized by color, making the perfect accessory easy to find. This is an example of Charming Charlie's:

store atmospherics

When considering their location/distribution strategy, retailers must consider all of the following except:

the location's exterior appearance

The per reader cost of direct mail is high, so the effectiveness depends largely on:

the quality of the mailing list

Brandi is an account executive with Wirtz Beverage, a wine and spirits distributor with an extensive catalog of brands. She typically meets with restaurants, bars, and hotels to market her products and assists customers in developing their beverage menu to generate sales revenue and meet customer's needs. Recently, she had the opportunity to offer customers a great deal - if they ordered 5 cases of wine (assorted brands), they could receive the 6th case at 50% off retail. Wirtz Beverage offered this promotion in order to reduce warehouse inventory and shift inventory from their warehouses to the customer's business location. This is an example of a(n):

trade allowance

Direct selling is a marketing channel that moves goods directly from producer to the:

ultimate consumer or business purchaser

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

upstream management

A pricing strategy that emphasizes benefits of a product in comparison to the price and quality levels of competing offerings is called _____ pricing

value

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

variable cost

Vandelay Industries manufactures a range of latex products. To set the price of its products, George, the CEO of Vandelay, calculates the total cost associated with the manufacturing of each product, then multiples that by 1.5 to get the sales price. Therefore, a product that cost $10 for Vandelay to manufacture would sell for $15. Vandelay's margin on the sale is:

Organically grown orchard fruits, such as apples, plums, and pears, are the core of your business. You want to make it easy for consumers in your part of the country to obtain your company's products when they're fresh and delicious. With this objective in mind, which distribution channel would work best for your produce?

A marketing intermediary, specifically a produce distributor

As the marketing director for a chain of mid-priced hotels, you've been directly involved in the development of a new hotel in the organization. This new Boston location will be quite different, with more amenities, better furnishings, and bigger rooms. Your boss, the CEO, has asked you to review several different pricing options and pick the one that sends a clear message to consumers. Which one do you choose?

A penetration strategy to attract attention, followed by a competitive strategy with comparable hotels

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