practice quiz 6

A._________ looks for exceptions or variations from planned performance. a. performance analysis b. break-even analysis c. fishbone diagram d. Praeto chart

a. performance analysis

Which of the following is a TRUE statement about markups? a. A firm can lose money even when using a high markup. b. Markup percents are computed as a percent of the cost of the product. c. It's easier for a producer to administer the prices consumers pay for products if the markup used varies from one intermediary to the next. d. The lower the markup, the lower the profit.

a. A firm can lose money even when using a high markup.

Which of the following statements best describes the iceberg principle? a. Problems in one area may be offset by good performance in other areas - and thus the problems may not be visible on the surface. b. Ten percent of the items in inventory usually account for 80 percent of the sales. c. Within a company's sales force, there are usually one or two sale reps that don't carry their weight. d. None of the above.

a. Problems in one area may be offset by good performance in other areas - and thus the problems may not be visible on the surface.

Trying to sell a firm's new product to a large market at one low price is known as: a. a penetration pricing policy. b. introductory price dealing. c. nonprice competition. d. a skimming pricing policy.

a. a penetration pricing policy

________ are the prices final customers or users are normally asked to pay for products. a. Basic list prices b. Discounts c. Cost prices d. Net prices

a. basic list prices

According to the ________, much good information is hidden in summary data. a. iceberg principle b. 80/20 rule c. paradox principle d. summary definition

a. iceberg principle

A systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function - and of the organization, methods, procedures, and people employed to implement the policies - is called a: a. marketing audit. b. MIS report. c. marketing information system . d. marketing analysis survey.

a. marketing audit

A _____ is a dollar amount added to the cost of products to get the selling price. a. markup b. rebate. c. list price d. spiff.

a. markup

A one-price policy means: a. offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. b. never using temporary sales or rebates. c. selling to different customers at different prices. d. setting a price at the "right" level from the start and never changing it.

a. offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities

According to the text, the two basic approaches to price setting are a. supply-oriented and demand-oriented price setting. b. cost-oriented and demand-oriented price setting. c. sales-oriented and profit-oriented price setting. d. cost-oriented and profit-oriented price setting.

b. cost-oriented and demand-oriented price setting.

With respect to marketing control, a. all costs should be kept in the marketing department. b. faster feedback can often be the basis for a competitive advantage c. many advances have been made, but there still is no effective way for a manager to be sure that a product is actually selling to the intended target market rather than to some other group. d. All of the above.

b. faster feedback can often be the basis for a competitive advantage

A good marketing plan sets the frame work for effective _____________ and control. a. control b. implementation c. research d. organization

b. implementation

Using temporary price cuts to speed a producer's new product into a market is known as: a. a skimming pricing policy. b. introductory price dealing. c. a flexible-price policy. d. a penetration pricing policy.

b. introductory price policy

Total fixed cost: a. is the sum of all expenses which are closely related to output. b. is the sum of those costs which do not change in total no matter how much is produced. c. may vary in the short run--but is more or less fixed in the long run. d. is the sum of all costs of manufacturing and distributing a product.

b. is the sum of those costs which do not change in total no matter how much is produced.

______ is what a customer must give up to get the benefits offered by the rest of a firm's marketing mix. a. Promotion b. Price c. Product d. Past

b. price

The text says "markup" means percent of: a. "mark-on." b. selling price--unless otherwise stated. c. fixed cost. d. delivered cost--unless otherwise stated.

b. selling price--unless otherwise stated.

_______is the feedback process that helps the marketing manager learn how ongoing plans are working and how to plan for the future. a. design b. control c. planning d. implementation

b.control

A _____ price policy tries to sell the top of the demand curve at a high price before aiming at more price-sensitive customers. a. meet competition b. skimming c. penetration d. status quo

b.skimming

Which of the following observations concerning a "reference price" is true? a. Reference price is the company's cost to produce the product. b. Reference price is set by regulators. c. Demand may increase if a firm's price is lower than a customer's reference price. d. All customers have the same reference prices for the same basic type of purchase.

c. Demand may increase if a firm's price is lower than a customer's reference price.

A marketing manager may choose a pricing objective that is: a. sales oriented. b. status-quo oriented. c. profit oriented. d. Any of the above--depending on the situation.

d. any of the above--depending on the situation

__________are the two basic approaches to handling marketing costs allocation problems. a. The average-cost approach and the break even approach. b. Time performance-analysis approach and the sales-analysis approach c. The full-cost approach and the contribution-margin approach. d. The gross margin approach and the net margin approach

c. The full-cost approach and the contribution-margin approach.

Most firms in the business world set their prices using: a. federal price guidelines. b. demand-oriented price setting. c. cost-oriented price setting. d. supply and demand analysis.

c. cost-oriented price setting.

Sales analysis is a a. well accepted trend analysis method. b. necessity for making all important marketing decisions. c. detailed breakdown of a company's sales records. d. detailed report of likely profitability.

c. detailed breakdown of a company's sales records.

______ are reductions from list price that are given by a seller to a buyer who either gives up some marketing function or provides the function himself. a. PMs b. Phony prices c. Discounts d. Markups

c. discounts

The best pricing tool marketers have for looking at costs and revenue at the same time is a. break-even analysis. b. target return approach. c. marginal analysis. d. average-cost pricing method.

c. marginal analysis.

At break-even point (BEP), a. the firm's total revenue will equal its variable costs. b. the firm's total sales will equal its total production. c. the firm's total cost will equal its total revenue. d. the firm's total profits will equal its total cost.

c. the firm's total cost will equal its total revenue.

If a producer wants title to pass to a buyer immediately--but still wants to pay the freight bill — the invoice should read: a. F.O.B. buyer's factory. b. F.O.B. shipping point. c. F.O.B. delivered. d. F.O.B. seller's factory--freight prepaid.

d. F.O.B. seller's factory--freight prepaid.

The main advantage that marginal analysis has over most other popular pricing methods is that it: a. Considers both fixed and variable costs. b. Takes into account the break-even point. c. Allows managers to evaluate pricing alternatives. d. Takes into account both costs and demand.

d. Takes into account both costs and demand.

Average-cost pricing: a. May be very profitable if actual sales are higher than expected. b. may lose money for the firm if actual sales are less than expected. c. does not take demand into account in setting prices. d. All of the above.

d. all of the above

Customers are likely to be more price sensitive when: a. the total expenditure is great. b. they have to pay the bill themselves. c. the end benefit isn't very significant. d. All of the above.

d. all of the above

The basic objectives of implementation are to do things a. better. b. faster. c. at lower cost. d. All of these are true.

d. all of these are true

The best way to break down or analyze sales data is a. by order size. b. product category c. price. d. any of these are correct depending on the situation.

d. any of these are correct depending on the situation.

Setting prices by adding a "reasonable" markup to a firm's average cost is called: a. break-even pricing. b. add-on pricing. . c. target-return pricing. d. average-cost pricing.

d. average-cost pricing.

_____ means offering a specific price for each possible job rather than setting a price that applies for all customers. a. Price lining b. Odd-even pricing c. Product bundle pricing d. Bid pricing

d. bid pricing

Pricing objectives should flow from, and fit in with, a. shareholder expectations and market practices. b. regulatory policies. c. industry standards. d. company-level and marketing objectives.

d. company-level and marketing objectives

Price fixing means: a. changing a price that was set at the wrong level by the financial manager. b. pricing a product that will be sold in a foreign market at a level below the cost of production. c. selling products of like grade and quality to different buyers at different prices. d. competitors getting together to raise, lower, or stabilize prices.

d. competitors getting together to raise, lower, or stabilize prices.

Prices are "administered" when: a. they fall below "suggested list price." b. prices can change every time a customer asks for a price. c. government regulators set prices. d. firms consciously set their own prices.

d. firms consciously set their own prices

The sequence of markups firms use at different levels in a channel is referred to as a(n) a. market sequence. b. standard markup. c. markup margin. d. markup chain.

d. markup chain

High markups on a product could lead to low profits when a. competitors have higher markups. b. there are no substitutes. c. demand is inelastic. d. sales dip due to high prices

d. sales dip due to high prices

A flexible-price policy means offering a. different products and quantities to different customers at different prices. b. the same product and quantities to different customers at same prices. c. different products and quantities to different customers at same prices. d. the same product and quantities to different customers at different prices.

d. the same product and quantities to different customers at different prices.

The sum of those changing expenses which are closely related to output is called: a. total fixed cost. b. total cost. c. total overhead cost. d. total variable cost.

d. total variable cost

_____ means setting a fair price level for a marketing mix that really gives the target market superior customer value. a. Uniform pricing b. Target pricing c. Consumer surplus d. Value pricing

d. value pricing

Strategy planning for Price is concerned with: a. to whom and when discounts and allowances will be given. b. how transportation costs will be handled. c. how flexible prices will be. d. at what level prices will be set over the product life cycle. e. All of the above.

e. all of the above

Which of the following statements about rebates is True? a. Rebates are refunds paid to consumers after a purchase. b. Rebates ensure that the final consumer gets a producer's price reduction. c. Many consumers purchase a product because a rebate is offered but then never request the refund. d. Many consumers think that some sellers make it an unnecessary hassle to claim a rebate. e. All of the above.

e. all of the above

Which of the following statements is true? a. Leader pricing means setting some very low prices to get customers into retail stores. b. Bait pricing is setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store. c. Price lining is setting a few price levels for a product line and then marking all items at these prices. d. Prestige pricing is setting a rather high price to suggest high quality or high status. e. All of the above.

e. all of the above

Unfair trade practice acts: a. require different types of retailers to charge different retail prices. b. make price fixing illegal. c. eliminate price competition on manufacturers' brands. d. prohibit intermediaries from taking excessive markups. e. put a lower limit on prices, especially at the wholesale and retail levels.

e. put a lower limit on prices, especially at the wholesale and retail levels.