Marketing Midterm 3 - Gaffen
When Yolanda asked her firm's advertising agency to estimate how often consumers saw her firm's IMC message and what percentage of the target audience was exposed to the message, she was told the reach was 40, the frequency was 4, and the competitive parity was 10. The gross rating points for her firm's campaign were
160 (40x4)
________ refers to a potential customer's ability to recognize or recall that the brand name is a particular type of retailer or product/ service.
Brand Awareness
When her company's dry goods deliveries were late for the third time, Pilar withheld payment from her supplier until it was back on schedule. This is an example of ________ power.
Coercive power -- involves punishing a channel member for not undertaking certain tasks, such as timely delivery of products.
_______ refers to the process by which the receiver interprets the sender's message.
Decoding
At the break-even point, profits are maximized.
False
Universal product codes (UPCs) are used to describe products for inventory taxation purposes.
False - A UPC label or radio frequency identification (RFID) tag on the shipping carton that identifies the carton's contents is scanned and automatically counted as it is being received and checked.
The larger and more sophisticated the channel member, the more likely that it will use supply chain intermediaries.
False - A large manufacturer will use its own sales force that already has existing relationships in the industry instead of supply chain intermediaries.
Retailers generally have no prior knowledge of the merchandise they will be receiving from suppliers in any particular shipment.
False - An advanced shipping notice (ASN) is an electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment.
Conflicts within a supply chain tend to be more pronounced when the members are part of a corporate vertical marketing system.
False - Conflict is generally more pronounced when the channel members are independent entities. Marketing channels that are more closely aligned share common goals and are therefore less prone to conflict.
Distribution centers are always operated by distribution specialists. Group starts
False - Distribution centers may be operated by retailers, manufacturers, or distribution specialists.
Consumer packaged-goods companies, such as Procter & Gamble, Pepsi, and Kraft, typically seek an exclusive distribution strategy.
False - Exclusive distribution policies grant exclusive geographic territories to one or very few retail customers so no other retailers in the territory can sell a particular brand. Most consumer packaged-goods companies use an intensive distribution strategy designed to place products in as many outlets as possible.
An iPad mini advertisement appearing in the New York Times is an example of using a niche media channel.
False - Niche media channels are more focused and generally used to reach narrower segments. Since the New York Times is geared toward reaching large audiences, it would be considered mass media.
A pulsing advertising schedule uses periods of heavy advertising followed by periods of no advertising.
False - Pulsing combines the continuous and flighting schedules by maintaining a base level of advertising but increasing advertising intensity during certain periods. Flighting has periods of advertising followed by periods of no advertising.
Sellers using an EDLP pricing strategy often communicate their strategy through the creative use of a reference price.
False - Reference prices are used in conjunction with a high/low pricing strategy. The reference price allows buyers to compare the actual selling price of the product with the "sale" price and helps facilitate their evaluation process.
The message originates from the transmitter, who must be clearly identified to the intended audience.
False - The message originates from the sender, who must be clearly identified to the intended audience.
The primary federal agencies that regulate advertising activities in the United States are the Fed, FEMA, and the FCC.
False - The primary federal agencies that regulate advertising activities are the Federal Trade Commission (FTC), the Federal Communications Commission (FCC), and the Food and Drug Administration (FDA).
For market penetration pricing to work, the product or service must be perceived as breaking new ground in some way.
False - This is true of price skimming, not market penetration pricing. Price skimming appeals to these segments of consumers who are willing to pay the premium price to have the innovation first.
When Sony released its PlayStation 4 game console, it charged a high price, attracting the most avid game players. This was a market penetration pricing strategy.
False - This was a price skimming strategy, which starts with a high price and then gradually lowers it.
The cost of communicating directly with a potential customer is low compared with other forms of promotion.
False, reality, the cost of communicating directly with a potential customer is quite high compared with other forms of promotion.
_______ centers deliver directly to customers rather than to stores.
Fulfillment - Fulfillment centers perform the same functions as distribution centers, but because they deliver directly to customers rather than to stores, they do not have to get merchandise floor-ready.
Harold wants to increase the number of visits to his insurance firm's website, which specializes in rental insurance for college students. Harold decides to target Internet users who search for the terms "apartment," "insurance," and "student." Which of the following will be most helpful to Harold?
Google AdWords
The price elasticity of demand for a specific brand of deodorant is −.9. The market for this product is considered
INELASTIC - The market for a product is generally viewed as price insensitive, or inelastic, when its price elasticity is greater than 1.
What makes a high/low pricing strategy appealing to sellers?
It attracts two distinct market segments.
At the BMW plant in Spartanburg, South Carolina, rather than use a typical order-to-delivery process, it has suppliers deliver parts every four hours when the plant is in operation. BMW uses a ________ inventory control system.
Just-In-Time (JIT) - Just-in-time (JIT) and quick response (QR) both refer to inventory management systems designed to ship smaller quantities more frequently.
Which of the following is true regarding getting merchandise to customers?
Many retailers now offer free expedited service.
Which element of the marketing mix specifically deals with supply chain management?
Place - Place includes all activities required to get the right product to the right customer when that customer wants it; this is the essence of supply chain management.
________ must always be aligned with other elements of a retailer's strategy in order to accurately define the value of the product and a retailer's image.
Price
When Walmart promises to purchase larger quantities if a manufacturer will lower its wholesale price, it is exhibiting ________ power.
Reward
When a customer purchases a television at Best Buy, which of the following information flows in the supply chain are started?
The sale is transmitted to Best Buy's distribution center to adjust inventory data.
The purchase information from each individual store is typically aggregated by the retailer as a whole, which creates an order for new merchandise and sends it to the manufacturer. This is an example of information flowing from the
This represents Flow 3 (Buyer to Manufacturer): The purchase information from each store is typically aggregated by the retailer as a whole, which creates an order for new merchandise and sends it to the manufacturer. The buyer may also communicate directly with the manufacturer to get information and negotiate prices, shipping dates, promotional events, or other merchandise-related issues. demand.
A television ad showing a crowd holding candles and singing "I'd like to teach the world to sing," followed by the words "Happy Holidays from your Coca-Cola bottler," is an example of reminder advertising.
True
Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.
True
Coupons may annoy, alienate, and confuse consumers and therefore do little to increase store loyalty.
True
Each element of an integrated marketing communication (IMC) strategy must have a well-defined purpose and support, and extend the message delivered by all the other elements.
True
Encoding means converting the sender's ideas into a message, which could be verbal, visual, or both.
True
In U.S. markets, there are many substitute products for Lucky Charms cereal, suggesting the price elasticity of demand for Fruit Loops is high.
True
One significant potential benefit of the Internet channel is its ability to enable retailers to provide personalized offerings and services for each customer.
True
Public service advertising typically focuses on social marketing objectives.
True
Radio frequency identification (RFID) tags automatically transmit information about a container's contents or individual products. Group starts
True
Supercenters are large stores (185,000 square feet) that combine a supermarket with a full-line discount store.
True
The key to successful pricing is to match the product with the consumer's perception of value.
True
Van sells sports equipment and wants to get customers into his store. He knows from past experience that sales generate customer traffic, particularly when he puts children's baseball equipment on sale. Van may consider a leader pricing strategy.
True
Category specialists are also known as category killers.
True - Category specialists are stores that offer a narrow but deep assortment of merchandise. These types of stores are also called category killers.
If there is a difference between the message that is sent and the message that is received, it is probably due to noise.
True - Noise refers to any interference that stems from competing messages, a lack of clarity in the message, or a flaw in the medium.
Price is the only part of the marketing mix that does not generate costs.
True - Product, place, and promotion all generate costs; price generates revenue.
As a type of retailer, category specialists offer
a narrow but deep assortment of merchandise.
First Lady Michelle Obama recorded an ad encouraging parents to teach their children good nutrition habits to stem the increase in child obesity. This message is an example of
a public service announcement
Generally, when advertising to consumers, the objective of an advertising campaign is
a pull strategy—to get the product into stores by having consumers demand it.
In the AIDA model, the do stage is the ________ stage.
action
Because of its size and relative power, Walmart can easily impose controls on small manufacturers, such as Brown Betty Dessert Boutique, but with large, powerful suppliers such as P&G, the control is more balanced between parties. Walmart's various marketing channel relationships offer examples of different forms of a(n) ________ marketing system.
administered vertical
Melinda could recall the brand of toothpaste she used only when a marketing researcher mentioned the brand. This is known as
aided recall
Star Heating and Air Conditioning Company specializes in electric heat pumps. Francis keeps track of the price of natural gas, knowing that
an increase in the price of natural gas will increase demand for his electrical heating systems.
Personal selling is an especially important part of IMC in
business-to-business (Although consumers don't often interact with professional salespeople, personal selling represents an important channel in many IMC programs, especially in business-to-business (B2B) settings.)
Which of the following are typical outlets used by retailers?
business-to-business requests for proposals (RFPs) - Examples of retail outlets include catalogs, the Internet, stores, restaurants and hotels.
Variable costs change with
changes in the quantity being produced
The Five Cs of Pricing
company objectives, customers, costs, competition, channel members
In the IMC process, noise can occur as a result of lack of message clarity, a flaw in the medium, or
competing messages.
When firms set prices similar to those of competitors, they are following a strategy of
competitive parity - A competitive parity strategy is a type of competitor-oriented strategy in which the firm sets prices similar to those of the major competition.
It is often difficult for retailers to distinguish themselves from their competitors through the merchandise they carry because
competitors can purchase and sell many of the same popular brands.
Traditional demand curve economic theory is used by marketers to understand ________ in the five Cs of pricing.
customers - A demand curve shows how many units of a product or service consumers will demand during a specific period of time at different prices. Demand curves evaluate how price changes affect customers' purchase decisions, and in effect they measure customers' different value perceptions.
If you ever watched a television commercial and at the end of the message wondered what they were promoting, you may have had trouble ________ the IMC message.
decoding
If you walk into a(n) ________, you will likely find a broad variety of merchandise, deep assortment, and customer service, with everything organized into distinct departments for displaying merchandise.
department store
How can a company find its way out of a market characterized by pure competition?
differentiate the product in some way, even by packaging, so customers will see it as distinct
A ________ is a facility for the receipt, storage, and redistribution of goods to company stores.
distribution center - is a facility for the receipt, storage, and redistribution of goods to company stores, may be operated by retailers, manufacturers, or distribution specialists.
Marketing channels and supply chains comprise various buying entities that form relationships with one another. The basic motivating factor in these interactions is
each party wants something from the others.
Juan's family has owned and operated a small chain of conventional supermarkets for many years. Competition from a variety of other kinds of retailers has adversely affected the business. To address the new competitive reality, Juan wants to apply what he recently learned as a marketing major and he has recommended that his family's business should
emphasize fresh, locally sourced perishables.
Sales data, complaints, compliments, and redemption rates for coupons and rebates are types of ________ marketers use to assess the effectiveness of their IMC efforts.
feedback
Yolanda asked her firm's advertising agency to estimate how often consumers saw her firm's IMC message and what percentage of the target audience was exposed to the message. Yolanda is asking for ________ data.
frequency and reach
A(n) ________ is used in the shipment of products directly to customers.
fulfillment center
If all three grocery stores in town decide to charge the same price for a gallon of milk, what type of pricing tactic is being used?
horizontal price fixing
________ price fixing occurs when competitors collude to control prices, and ________ price fixing occurs within a marketing channel to control prices passed on to consumers.
horizontal; vertical
Emelia is trying to create an advertising message that communicates the tangible features of her company's laptop computers, telling consumers about the relative advantages of her products as compared to other offerings in the market. Emelia is trying to create a(n) ________ appeal.
informational
Price skimming focuses on selling products to ________ and ________ in the consumer adoption process model.
innovators & early adopters
The California Raisin Advisory Board used to run ads featuring "The California Raisins," a fictitious R&B musical group composed of dancing raisins that boogied to the song "I Heard It Through the Grapevine." The ads, which were hugely popular and which gave rise to a line of raisin-themed merchandise, were designed to encourage raisin consumption. This campaign was an example of
institutional advertising - which promotes an entire industry (raisin production in California) rather than any particular brand.
Some companies want to get their products into as many outlets as possible, understanding that the more exposure a product gets, the more it will sell. If this belief is consistent with the company's overall strategy, it will choose ________ distribution.
intensive - Intensive distribution refers to getting a product into as many outlets as possible.
Distribution intensity is commonly divided into three levels:
intensive, exclusive, and selective.
Predatory pricing
is illegal in the United States under both the Sherman Antitrust Act and the Federal Trade Commission Act.
Persuasive advertising is often used when competition
is most intense
For marketers using a price skimming strategy, once the initial demand is met for new and innovative products, they will likely
lower the price to capture the next most sensitive market segment.
When a new product is not being sold at the rate originally forecasted, the retailer may reduce the price in order to reduce the inventory of the product. This reduction is known as a
markdown
The execution style of an advertising message must
match the medium and the objectives
The Salvation Army runs a campaign over the Christmas holidays called the Mobile Bell Ringer. Volunteers send text messages to their friends' cell phones asking them to donate. Which type of marketing communication does this represent?
mobile marketing
What type of competition occurs when there are many firms competing for customers in a given market, but their products are differentiated?
monopolistic competition - occurs when there are many firms competing for customers in a given market, but their products are differentiated.
Pricing ________ products is especially challenging because little or nothing is known about consumers' perceptions of its value.
new-to-the-world
Julius is developing a budget for his firm's IMC program. First he sets objectives. Then he chooses media, and finally he determines the cost for each product to be promoted. Julius is using the ________ method of establishing an IMC budget.
objective-and-task method (determines the budget required to undertake specific tasks to accomplish communication objectives.)
When retailers extend their services to the Internet and become ________ retailers, they are able to satisfy a broader range of customers' needs and wants.
omnichannel
From the consumer's perspective the individual elements of an IMC strategy can be viewed on two axes: ________ and
passive and interactive; offline and online.
When a product has gained a certain level of brand awareness, firms use ________ advertising to motivate consumers to take action.
persuasive
If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors, the company could be charged with
predatory pricing - When a firm sets a very low price for one or more of its products with the intent to drive its competition out of business, it is using predatory pricing, which is difficult to prove.
French luxury goods manufacturer and retailer Hermès is known for making expensive leather goods. But paying $300,168 for a handbag at auction, which is over the standard retail price of $280,000, is extraordinary, and not for the casual shopper. The handbag is considered a
prestige product.
Consumers generally believe that ________ is one of the most important factors in their purchase decisions.
price
Cosmetic manufacturers that sell shampoo and conditioner together as one package at a lower price rather than selling each item separately are using
price bundling
If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is
price inelastic (bc less than 1%)
When Toyota introduced its Scion line of cars, the lowest-price model was listed for $15,000 while the highest-priced model was listed for $21,000, with two other list prices in between. Each price point represented distinct differences in the features and quality of the cars. Toyota used a ________ pricing approach.
price lining - When marketers establish a price floor and a price ceiling for an entire line of similar products and then set a few other price points in between to represent distinct differences in quality, the practice is called price lining.
In omnichannel retailing, what visible element must often be adjusted because of competition faced in different channels?
pricing
Personal selling is particularly important for retailers selling
products that are complicated or expensive.
The three general objectives of advertising are to select, target, and
promote
Reminder advertising is primarily used to
prompt repurchase of a product
In the United States, the regulation of advertising involves a complex mix of laws and informal restrictions designed to
protect consumers from deceptive practices.
A ________ advertising schedule uses a base level of advertising during some periods followed by periods of increased advertising.
pulsing
Whitney just bought a gift and jewelry store on Main Street. She knows from the previous owner that almost 60 percent of her sales take place during the Christmas holiday season, with the other 40 percent of sales evenly distributed over the rest of the year. Whitney will probably use a ________ advertising schedule.
pulsing
In ________ many firms provide similar products that are considered substitutes for each other.
pure competition - With pure competition, a large number of sellers offer standardized products or commodities that consumers perceive as substitutable, such as grains, gold, meat, spices, or minerals.
Achmed's Pita Bread Chips offers free POP (point-of-purchase) displays to retailers ordering its product. Achmed's is using a ________ strategy.
push - A push strategy promotes a product to members of the supply chain by focusing on wholesalers, retailers, or salespeople. Consumer advertising, in contrast, is usually part of a pull strategy, in which the goal is to have consumers demand the product of retailers.
Juliannna wants her firm's gourmet snacks to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that
rarely is the lowest-price offering the dominant brand in a market. - Julianna is seeking market share, not profits, but she should bear in mind that market leaders are rarely the lowest-priced products in the market.
When Costco sells to consumers directly, it acts as a ________; when it sells to other businesses, such as a restaurant owner, it acts as a ________.
retailer; wholesaler
When Pete's Pizza wants tomatoes delivered in smaller batches more frequently, it offers its distributors an incentive in the form of special bonuses to change their schedules. Pete's demonstrates which kind of power?
reward
Starbucks provides tastes of new products to customers. This is called
sampling
The local sports store may purchase outswim-related products only during the winter months because the manufacturer offers a better price to the sports store. This type of pricing tactic is known as a
seasonal discount
Price reductions offered on products and services to stimulate demand during off-peak seasons are referred to as
seasonal discounts
If a manufacturer isn't happy with either intensive or exclusive distribution, a logical choice, which incorporates some features from both, would be ________ distribution.
selective
Dylan designs and manufactures custom Murphy bed units. He has a number of unique products but can only produce in limited quantities. Dylan will probably not use a penetration pricing strategy because
she could not meet a rapid rise in demand.
The most common form of a quantity discount for consumers is a
size discount - The goal of this tactic is to encourage consumers to purchase larger quantities each time they buy.
Of the following retailers, the best example of a category killer is
staples
A ________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen
target return
If you send an email and include a link, you can track how many people took the desired action of clicking on the link. This is known as
the click-through rate.
According to a typical demand curve, the higher the price,
the lower the quantity consumers will buy.
In marketing's four Ps, place refers to all activities required to get ___
the right product to the right customer when that customer wants it.
Manufacturers use cash discounts primarily because it allows them to benefit from
the time value of money. - Cash discounts encourage early payment by offering a price reduction if payment is received ahead of time. This is related to the time value of money, in that funds can be invested and earn interest if received early.
The key factor distinguishing retailers from other members of the supply chain is that
they sell to customers for their personal use.
Neville is trying to create an advertising message that tells consumers how his company's cable and Internet services differ from other alternatives in the market. Neville is trying to create a(n)
unique selling proposition.
Generally, the larger and more sophisticated the channel member, the less likely that it will
use supply chain intermediaries.
