MKTG 221 EXAM 3 Practice Exam

price elasticy of demand

% change in quantity demanded/ % change in price

According to your text, some estimates indicate that only about _____ percent of new products actually succeed. 3 10 25 45 52

3

_____ employs irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer. A monopoly A gray market Pure competition A black market A price war

A gray market

_____ is an electronic document sent by a supplier to a retailer prior to the shipment of a merchandise order. A universal product code A radio frequency identification tag An advanced shipping notice An electronic data interchange A merchandise shipping confirmation

An advanced shipping notice

_____ is a form of deceptive price advertising where sellers advertise items for a very low price without intending to sell any of them because they plan to pressure sales of higher-priced items. Deceptive reference pricing Loss leader pricing Bait and switch Predatory pricing Price discrimination

Bait and switch

_____ involves determining the point at which the number of units sold generates just enough revenue to equal the total costs. Contribution margin analysis Break-even analysis Predatory pricing Total cost calculation Fixed cost analysis

Break-even analysis

_____ are expressed in the form of a percentage, such as "3/10, n/30," or "3%, 10 days, net 30." Cash discounts Seasonal discounts Noncumulative quantity discounts Advertising allowances Cumulative quantity discounts

Cash discounts

_____ power is when one channel member threatens to punish or punishes another channel member for not undertaking certain tasks, such as delaying payment for a late delivery. Coercive Referent Expertise Legitimate Information

Coercive

Airlines often engage in price wars in an attempt to steal customers away from other airlines. This is an example of which pricing method? Cost of ownership Cost-based pricing Value-based pricing Competitor-based pricing Predatory pricing

Competitor-based pricing

_____ pricing methods do not recognize the role that consumers or competitors' prices play in the marketplace. Value-based Improvement value Cost-based Cost of ownership Competitor-based

Cost-based

_____ is a practice in which merchandise cartons are prepackaged by the vendor for a specific store. Pick-ticketing Just-in-time inventory Radio-frequency identification Cycle time Cross-docking

Cross-docking

_____ indicates that the demand for related products can either be positively or negatively related. The income effect The substitution effect Cross-price elasticity Complementary products effect The supply curve

Cross-price elasticity

At which stage in the product life cycle do sales experience their most rapid increase? Product development Introduction Growth Maturity Decline

Growth

_____ refers to the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow. Marketing Innovation Strategic Planning Concept testing Product development

Innovation

_____ means the firm deliberately prices a product above the prices set for competing products to capture those customers who always shop for the best, or for whom price does not matter. Target return pricing Target profit pricing Status quo pricing Competitive parity Premium pricing

Premium pricing

_____ relates to how easily consumers can test and use the product. Trialability Availability Observability Compatibility Relative advantage

Trialability

Improvement value and cost of ownership are two approaches to which method of pricing? Mark-up pricing Cost-based pricing Value-based pricing Competitor-based pricing Price elasticity

Value-based pricing

_____ occurs when parties at different levels of the same marketing channel (e.g., manufacturers and retailers) agree to control the prices passed on to consumers. Horizontal price fixing Vertical price fixing Loss leader pricing Predatory pricing Price discrimination

Vertical price fixing

The international fashion retailer Zara's parent company, Inditex, owns the manufacturing plants, warehouse facilities, retail outlets, and design studios, which is an example of an independent marketing channel. a vertical marketing system. an administered vertical marketing system. a contractual vertical marketing system. a corporate vertical marketing system.

a corporate vertical marketing system.

In _____, one firm provides the product or service in a particular industry, and as such results in less price competition. a monopoly an oligopoly monopolistic competition oligopolistic competition pure competition

a monopoly

A product that is perceived to be better than most substitutes is said to have _____, which should serve to speed up the diffusion process. a relative advantage compatibility observability complexity trialability

a relative advantage

Tyler is highly knowledgeable about new developments in bicycling technology, since he reads everything he can find about the subject. Typically being the first to try out new bicycle models, he would be classified _____ in terms of the diffusion of innovation curve. as a laggard as an innovator as an early adopter in the late majority in the early majority

as an innovator

To create strong partnering relationships, supply chain members must develop mutual trust, openly communicate, have compatible goals, recognize the benefits of interdependence, and maximize market share. set out to make the most profits. be willing to invest in each other's success. minimize transportation expenditures for suppliers. maximize the profitability of the largest channel member.

be willing to invest in each other's success.

When a superior product is offered in a foreign market where cultural differences slow down the diffusion process, it would be attributed to low levels of innovation. compatibility. observability. complexity. trialability.

compatibility.

Some grocery retailers have invested in their own private brands, charging just slightly lower than national brands to signal the quality of the products is good, involving the use of variable costing. cost-based pricing. value-based pricing. competitor-based pricing. predatory pricing.

competitor-based pricing.

Jack works for a firm in the Northwestern region that is clearly the market leader, and has determined he must implement a region-wide price reduction of all product lines in order to discourage new firms from entering the lucrative market. Which of the following company objectives is involved? profit-orientation sales-orientation competitor-orientation customer-orientation market-orientation

competitor-orientation

In the new product development process, when companies provide brief written descriptions of the product and what customer needs it would satisfy, sometimes including visual images of what the product would look like it involves idea generation. concept testing. product development. market testing. product launch.

concept testing.

In _____ a manufacturer owns the merchandise in a retail store until it is sold by the retailer, at which time the retailer pays for the merchandise, thus reducing inventory levels and generating sales. collaborative selling programmed selling consignment selling electronic data interchange data warehouse management

consignment selling

The _____ is the price less the variable cost per unit. profit margin break-even point target return price contribution per unit fixed cost

contribution per unit

Firms with products in the _____ stage of the product life cycle either position themselves for a niche segment of diehard consumers or those with special needs, or they completely exit the market. product development introduction growth maturity decline

decline

In the classic downward-sloping demand curve, as price increases, demand for the product or service increases. stays the same. decreases. levels off. doubles.

decreases.

When Clarissa sells the jewelry she makes at craft fairs or on her personal website, she is utilizing a _____ marketing channel. modified indirect secondary ancillary direct

direct

The _____ is the person who coordinates deliveries to the distribution center. planner dispatcher foreman shipping manager warehouse manager

dispatcher

A _____, which may be operated by retailers, manufacturers, or distribution specialists, is a facility for the receipt, storage, and redistribution of goods to company stores or customers. logistics center wholesaler distribution center marketing channel supply chain

distribution center

Although they enjoy novelty and are considered to be opinion leaders, _____ are not the first to purchase new product innovations. laggards innovators early adopters the late majority the early majority

early adopters

when a product or service is PRICE SENSITIVE it is ________

elastic, less than -1

A(n) _____ involves the computer-to-computer transmission of sales data, purchase orders, invoices, and data about returned merchandise between a retailer and its vendors. electronic data interchange electronic data warehouse stock keeping unit universal product code radio frequency identification tag

electronic data interchange

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 considered to be monopolistic. oligopolistic. engaging in predatory pricing. engaging in competitive parity. using the substitution effect.

engaging in predatory pricing.

In terms of a pricing strategy, _____ pricing adds value by reducing consumers' search costs; consumers can spend less of their valuable time comparing prices, including sale prices, at different stores. cost-based high/low predatory everyday low competitor-based

everyday low

When using a market penetration strategy, as sales continue to grow, the costs continue to drop, allowing even further reductions in the price. This is due to markdowns. price lining. seasonal discounts. improvement value. experience curve effects.

experience curve effects.

As _____, one of the advantages that pioneers have is they create a new market or product category, establishing a commanding initial market share lead. laggards imitators first movers fashion cycles early adopters

first movers

When retailers use _____ pricing, it can create excitement and attract customers through the "get them while they last" atmosphere that occurs. high/low predatory cost-based everyday low competitor-based

high/low

When there is disagreement among members at the same level of marketing channels such as when Best Buy and Sears engage in a price war on Maytag appliances, _____ channel conflict can occur. vertical independent competitive horizontal administered

horizontal

In the new product development process, companies have a variety of ways for _____ including outsourcing, brainstorming, licensing and customer research. idea generation concept testing product development market testing product launch

idea generation

In _____ marketing channels, one or more intermediaries work with manufacturers to provide goods and services to customers. modified indirect secondary ancillary direct

indirect

In the trucking industry, demand for fuel remains relatively stable even in times when the price of fuel increases, indicating that demand for fuel in this segment is elastic. inelastic. price sensitive. expandable. flexible.

inelastic

when a product or service is PRICE INSENSITIVE it is ________

inelastic, greater than -1

The most common type of consumers in the introduction stage of the product life cycle are the laggards. innovators. early adopters. late majority. early majority.

innovators.

In some cases, _____ may never adopt a certain product or service, since they rely on traditional products until they are no longer available. laggards innovators early adopters the late majority the early majority

laggards

With a _____ marketing strategy, there is less likelihood of being overstocked or out of stock because the store orders merchandise as needed on the basis of consumer demand. pull push distributed continuous programmed

pull

Standardized products such as grains and chemical products, where consumers perceive them as commodities are characteristic of monopolies. oligopolies. pure competition. competitive parity. monopolistic competition.

pure competition.

Joe's Boathouse uses a profit-oriented company objective, but the ultimate goal is to generate a profit margin of at least 12% rather than maximizing profits. This involves premium pricing. competitive parity. status quo pricing. target return pricing. target profit pricing.

target return pricing.

In order to examine the potential success of its 1/3-pound Angus hamburger, McDonald's started offering and promoting the product in three southern cities. This move is an example of test marketing. beta testing. prototype marketing. alpha testing. trade promotion.

test marketing.

EDI reduces _____, or the time between the decision to place an order and the receipt of merchandise. cross-docking the lead time the cycle time Just-in-time inventory channel conflict

the cycle time

As noted in your text, each participant in a successful marketing channel adds time. overhead. inefficiencies. value. pricing pressure.

value.

_____ refers to the process by which the use of a product, service or process spreads throughout a market group, over time and across various categories. Innovation Fashion cycles Market segmentation The product life cycle Diffusion of innovation

Diffusion of innovation

_____ measures how changes in price affect the quantity of the product demanded. Break-even analysis Competitive parity Target return pricing Market-oriented pricing Price elasticity of demand

Price elasticity of demand

_____ is used to market products to innovators who are willing to pay the very highest prices to obtain brand-new examples of technology advances, with exciting product enhancements. Price lining Price skimming Penetration pricing Price fixing High/low pricing

Price skimming

_____ involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist. Outsourcing Brainstorming Reverse engineering Market testing Licensing

Reverse engineering

_____ represent(s)a substantial portion of the population, and few new products and services can be profitable until this large group buys them. Laggards Innovators Early adopters The late majority The early majority

The early majority

_____ reflects that the greater the availability of substitute products, the higher the price elasticity of demand for any given product will be. The income effect The substitution effect Cross-price elasticity Complementary products effect Sustainability of products

The substitution effect

The introduction of the Apple iPod is an example of _____ because its introduction to the market radically changed consumer preferences and the entire competitive landscape. a fad a pioneer an early adopter an imitator a laggard

a pioneer

Retailers using a high/low pricing strategy often communicate this through the creative use of _____, which is the price against which buyers compare the actual selling price of the product and that facilitates their evaluation process. price lining the improvement value prices ending in odd numbers a reference price the cost of ownership

a reference price

As the dominant member of the channel of distribution, Coca Cola holds a lot of power in the relationship with independent grocery stores, and as such, it performs the functions of restocking merchandise, setting up special displays and rotating merchandise. This is an example of an independent marketing channel. a horizontal marketing system. an administered vertical marketing system. a contractual vertical marketing system. a corporate vertical marketing system.

an administered vertical marketing system.

When the members of a marketing channel operate to satisfy their own objectives and maximize their own profits, often at the expense of the other members, the channel operates as a vertical marketing system. an independent marketing channel. a corporate vertical marketing system. a contractual vertical marketing system. an administered vertical marketing system.

an independent marketing channel.

In the soft drink industry only a few firms dominate, which is characterized as a monopoly. an oligopoly. pure competition. competitive parity. monopolistic competition.

an oligopoly.

Using the _____ pricing method, consumers may be willing to pay more for a particular product because, over its entire lifetime, it will eventually be less expensive to own than a cheaper alternative. cost of ownership improvement value value-based competitor-based cost-based

cost of ownership

The pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers is referred to as showrooming. cross-shopping. mixed competition. overlap shopping. double-dipping.

cross-shopping.

Savvy consumers often purchase automobiles from dealerships at the end of the quarter or at year-end since dealers who meet their quotas during a particular time period earn _____ in the form of rebates on all the cars they purchased from the manufacturer. seasonal discounts advertising allowances slotting allowances cumulative quantity discounts noncumulative quantity discounts

cumulative quantity discounts

A(n) _____ orientation explicitly invokes the concept of value such as when a firm uses a "no-haggle" price structure to make the purchase process simpler and easier. profit sales competitor customer market

customer

A _____ pricing strategy is attractive because it attracts two distinct market segments: those who are not price sensitive and more price-sensitive customers. cost-based high/low predatory everyday low competitor-based

high/low

A _____ pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases. predatory high/low cost-based everyday low competitor-based

high/low

Supermarket chains often implement _____, a pricing tactic of selling leading brands of products below their own cost in order to build store traffic. price lining value-in-use leader pricing predatory pricing cost-based pricing

leader pricing

In managing its product portfolio, 3M demands that a specific percentage of its yearly sales come from new products introduced within the previous few years in order to better with stand external shocks and respond to fashion cycles. change customer preferences. improve business relationships. hedge against market saturation. manage risk through diversification.

manage risk through diversification.

The objective of _____ is to build sales, market share, and profits quickly by providing an incentive to purchase the product immediately. price lining price skimming market penetration pricing price fixing experience curve effects

market penetration pricing

In the United States, most consumer packaged goods found in grocery and discount stores are already in the _____ stage, which is characterized by the adoption of the product by the late majority and intense competition for market share among firms. introduction growth maturity first decline

maturity

The most common form of competition is _____ where many firms compete for customers in a given market with differentiated products. oligopolistic competition market saturation pure competition competitive parity monopolistic competition

monopolistic competition

As the number of transactions in the supply chain falls and transactions are eliminated, the channel and supply chain becomes _____, which impacts customers by making it _____ to purchase merchandise. less efficient; more expensive more efficient; less expensive more efficient; more difficult less efficient; convenient more complex; more difficult

more efficient; less expensive

JIT inventory systems are associated with all of the following EXCEPT frequent deliveries of less merchandise. reduced lead time. more inventory to warehouse. increased product availability. lower inventory investment.

more inventory to warehouse.

People who get Botox treatments consider it to be a private matter, therefore, they do not discuss it with others. This lowers the level of _____, slowing down the diffusion process. trialability complexity observability compatibility relative advantage

observability

In addition to offering the potential to build sales, market share, and profits, _____ discourages competitors from entering the market because the profit margin is relatively low. price lining price skimming predatory pricing penetration pricing experience curve effects

penetration pricing

Purchase data collected at the point of sale is stored in a data warehouse and can be accessed on three dimensions: age, gender, and total sales. point in time, merchandise aggregation, and level of the company. SKU, UPC, and RFID. total number of items, total dollar amount spent, type of payment. sales associate, store number, and time of transaction.

point in time, merchandise aggregation, and level of the company.

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 the illegal practice of deceptive reference pricing. loss leader pricing. bait and switch. predatory pricing. price discrimination.

predatory pricing.

Everyone in town knows that Designer's Edge coffee costs twice as much as the average cup of coffee, but it still attracts a large following of loyal customers looking for the best. Designer's Edge uses premium pricing. competitive parity. status quo pricing. target return pricing. target profit pricing.

premium pricing.

With _____ products and services, a higher price might lead to a greater quantity sold, but only up to a certain point. status quo prestige predatory price elastic substitute

prestige

When Suddenlink Communications offers its customers a discount when they order their television, Internet, and phone service all with Suddenlink on just one bill, it is an example of leader pricing. quantity discounting. price bundling. a markdown. a rebate.

price bundling.

For _____ to work, the product or service must be perceived as breaking new ground in some way, offering consumers new benefits currently unavailable in alternative products. price lining loss leader pricing penetration pricing price fixing price skimming

price skimming

The _____ stage of the new product development process can involve the development of a prototype for alpha or beta testing. market testing concept testing product launch idea generation product development

product development

The _____ stage of the new product development process requires tremendous financial resources and extensive coordination of the marketing mix to roll out the product. market testing concept testing product launch idea generation product development

product launch

As the marketing vice president of her firm, Jana is considering implementing a companywide pricing policy that all products must achieve a target profit margin of 15% so the firm can achieve its overall growth objectives. What type of company objective is this? profit-orientation sales-orientation competitor-orientation customer-orientation market-orientation

profit-orientation

Firms that use a(n) _____ supply chain allocate merchandise to stores based on previous sales forecasts. pull push distributed continuous programmed

push

Manufacturers like _____ because it allows them to offer price cuts to consumers directly, rolling them out and shutting them off quickly. markdowns quantity discounts seasonal discounts coupons rebates

rebates

Jana's firm is entering new market and she plans to set prices to take sales away from the established market leader even though it will mean profits might suffer. This corresponds to which of the following company objectives? profit-orientation sales-orientation competitor-orientation customer-orientation market-orientation

sales-orientation

Jamal was interested in getting a new flat screen television. He went to his local electronics store to view the various models and discuss the features and benefits with the sales associate, but then bought the product online from another retailer for a lower price. Jamal was engaged in showrooming. cross-shopping. competitive parity. reference shopping. target profit pricing.

showrooming.

Criticized by small manufacturers of grocery products, _____ are fees paid to retailers simply to get new products into stores or to gain more or better shelf space for their products. seasonal allowances cash discounts advertising allowances slotting allowances quantity discounts

slotting allowances

Best Buy will match competitor prices for customers who bring in proof that a particular product is being sold at a lower price by a competitor, thus using premium pricing. competitive parity. status quo pricing. target return pricing. target profit pricing.

status quo pricing.

Supply chain management refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their manufacturers, warehouses, transportation intermediaries, stores, and suppliers. customers. competitors. buying centers. top-level executives.

suppliers.

The last group of buyers to enter a new product market are _____, and when they do, the product has achieved its full market potential. laggards innovators early adopters the late majority the early majority

the late majority

All of the following are examples of the value provided by a supply chain in the production of kitchen stoves EXCEPT the transportation company gets the stove to the retailer. the retailer educates the customer about product features, and delivers and installs the stove. the product design team develops initial drawings for a new product offering. the stove maker turns the components into the stove. the components manufacturer helps the stove manufacturer by supplying parts and materials.

the product design team develops initial drawings for a new product offering.

Radio frequency identification tags are demand scheduling data tags. information tags used on floor-ready merchandise. shipping tags used to record weight limits of different types of trucks. tiny computer chips that transmit information about the contents of containers. electronic discount information tags used to provide reduced prices to select customers.

tiny computer chips that transmit information about the contents of containers.

Frito Lay is an example of a company that partners with retailers by implementing a _____ system, involving taking on the responsibility of managing inventory levels at the retailers where its products are sold. stock keeping unit universal product code electronic data warehouse vendor-managed inventory radio frequency identification tag

vendor-managed inventory

When a manufacturer based in New York City charges more to ship to customers in Los Angeles and less to ship to customers in Memphis, it is using zone pricing. variable pricing. uniform delivered pricing. flexible delivered pricing. inflated pricing.

zone pricing.