Quiz 7-12 Questions

Pumpkin Patch sells a range of children's clothing. The company has noted over the past few years that an increasing proportion of its customers have only one or two children. What external influence on pricing has Pumpkin Patch noted?

Consumer trends

4. Which of the following statements about pricing is true?

Consumers rate 'reasonable price' as the most important consideration in purchase decisions.

Kyrgyzstan is a past member of the Soviet Union. It has a predominately agricultural economy, with cotton, wool, and meat its main agricultural products and exports. 51 percent of the population lives in poverty. Kyrgyzstan is an example of a/n _______.

less developed country

After exporting, the next level of commitment a firm can make to a foreign market is a contractual agreement. Two of the most common types of such agreements are __________.

licensing and franchising

The __________ is the potential profit generated by a single customer's purchase of a firm's products over the customer's lifetime.

lifetime value of a customer

When cooking magazine Taste of Home was introduced there was already a range of cooking magazines available. Unlike the other cooking magazines that featured complicated recipes using a large number of ingredients, Taste of Home decided to feature only recipes that could be made with four ingredients or less - and the ingredients were those that most people would have on hand. Each recipe could be prepared in less than 10 minutes and cooked in less than 20 minutes. Taste of Home magazine was hoping to capitalise on its __________.

relative advantage

17. The average price Xerox charged when it introduced the first stand-alone fax machine was $12,700. This premium price was a way for Xerox to recoup some of the research and development costs that went into producing this machine. Xerox used __________.

skimming pricing

A company that chooses to offer the same products in all markets is adopting a/n __________ strategy while a company that chooses to offer different products in different markets is adopting a/n __________ strategy.

standardisation; localization

Coldplay decides to launch its new album online, offering a free download of the first single free. The album will only be sold online. This is an example of a __________.

straight extension strategy

Firms seeking a deeper commitment to a foreign market than is possible with exporting or contractual agreements, develop __________ with one or more domestic firms in the target market.

strategic alliances

Which of the following would be an example of a variable cost for an amusement park?

Concession supplies such as soft drinks

If you are a marketing manager and your home market is maturing, which of the following is the best strategy to follow?

explore opportunities abroad

To assist consumers in the __________ stage of the adoption process, marketers conduct marketing communications campaigns to ensure consumers know that the new product exists.

Awareness

5. When Kmart entered the Australian and New Zealand markets, there were already stores providing similar services and products. To get people to try the Kmart stores, the chain deliberately sold merchandise below the price charged by competitors. What type of pricing objective does this approach show?

Competitive effect

The owner of a pet-grooming salon wants to determine the customer equity of a particular customer. Which of the following would be a step the owner of this pet- grooming salon would complete to determine this information?

Compare investments made by the salon in acquiring the customer to the total amount of all financial sales made by the customer.

Which of the following is part of a foreign country's market conditions?

Competitive advantage, Domestic demand, Market potential abroad

Trading firms are practicing __________ when they work out elaborate deals in which they trade or barter their products with each other or even supply goods in return for tax breaks from the local government.

Countertrade

_______ is the financial value of customer relationships through the lifetime of the relationships.

Customer equity

There are numerous kinds of specialist shampoos such as vitamin-enriched, fruit- enhanced, colour-sensitive, therapeutic, etc. Most manufacturers, due to declining sales, have phased out shampoo that simply promises to clean hair. Shampoo that makes no other promise than to clean hair is in the __________ stage of its product life cycle.

Decline

With __________ the selling price is based on an estimate of the volume or quantity a firm can sell in different markets at different prices.

Demand-based pricing

Which of the following statements about the adopter categories is true?

Early majority consumers are typically middle class and like to buy well- established products.

What is the first step an organisation takes to estimate its potential sales?

Estimate demand for the entire product category in the market the company serves.

_________ is the tendency to prefer products or people of one's own culture to those from other countries.

Ethnocentrism

The first step in deciding whether and how to go global is to_____.

Examine basic market conditions including domestic demand, market potential abroad, and the firms ability to achieve competitive advantages

A building supply company has many high-volume as well as low-volume customers. Which of the following would be the least efficient means of communicating with low- volume customers?

Have a sales representative make a personal one-on-one appointment with each and every low-volume customer at least twice a month.

Diffusion refers to _______.

How the sue of a product spreads throughout a population.

Why do marketers consider prestige products to be an exception to the law of demand?

Increasing the price of prestige products can make them seem more desirable.

Many people rely on the prescription drug Lipitor to control their cholesterol. An increase in the price of the drug would have little effect on the quantity demanded because there are no substitutes for the drug and because people who are taking it have no choice but to continue taking it if they wish to stay healthy. The demand for Lipitor is __________.

Inelastic

Marketers often use teaser advertisements to generate _______, providing just enough information about a new product to make prospective consumers curious.

Interest

________ are the last in the population to adopt a new product.

Laggards

Franchising is a form of __________.

Licensing

Hunger Busters, a chain of sandwich shops, have determined that for every $5000 that has been invested, each sandwich shop returns on average $500 after tax. Hunger Busters have calculated their __________.

Return On Investment (ROI)

3. Which of the following is part of a foreign market's political/legal environment?

Regulatory issues

Which of the following is part of a foreign market's cultural environment?

Symbols and superstitions

The purpose of a government-imposed __________ is to give domestic competitors an advantage in the marketplace by making foreign competitors' goods more expensive than their own goods.

Tariff

In advertisements consumers are told that a particular retailer is determined to offer the lowest price and if a lower price can be found, the retailer will match it. Which external influence on pricing is most evident in this type of advertising?

The competition

Why are marketers interested in the life cycle of products?

To use it to explain how product features change over the life of the product

The Disney Web site is full of games, activities, music, and stories to appeal to children of all ages. Before a parent commits to paying the annual membership fee to gain access to the site, he or she can register for one free month of use. By accepting the free month's usage, potential adopters move into the __________ stage.

Trial

Which of the following is an example of a pricing strategy based on customers' needs?

Value pricing

______ are the per-unit costs of production that will fluctuate depending on how many units or individual products a firm produces.

Variable costs

To determine customer equity, firms ______.

analyse the investments they make in acquiring customers analyse the investments they make to retain customers compare relationship enhancements with the financial returns on those investments

Logitech International is a Swiss company that from its inception sold its product worldwide with operational headquarters in California and regional headquarters in Switzerland, Taiwan, and Hong Kong. The company has manufacturing facilities in Asia and offices in major cities in North America, Europe, and Asia Pacific. Logitech International is an example of a/n __________.

born-global firm

To determine the break-even volume, a firm needs first to __________.

calculate the contribution per unit to fixed costs

Cultures that tend to subordinate their personal goals for those of a stable community are referred to as __________.

collectivist cultures

In the growth stage of the product life cycle, the marketing goal is to __________.

convince consumers that their brand is superior to competitors

In countries such as Saudi Arabia, it is not appropriate to use sexual images in advertising or store mannequins revealing gender or human shape. This illustrates the importance of __________.

cultural values

An increasing number of companies are considering their relationships with customers as financial assets. Such firms measure success by calculating the value of their __________.

customer equity

To determine __________, firms compare the investments they make in acquiring customers, retaining customers, and relationship enhancement with the financial return on those investments.

customer equity

Because exported products are made at home, firms are able to maintain control over __________.

design and production decisions

When Foster's wanted to enter the Vietnamese market it decided to open its own brewery in Vietnam. Foster's made this decision so it could ensure product quality remained high. This is an example of a/n __________.

direct investment

Marketers use penetration pricing for new products to __________.

discourage competition from entering the market

Joe is usually the first amongst his friends to purchase the latest consumer electronics once they hit the shelves. Joe would be considered a __________.

early adopter

The population of Djibouti is approximately 460,700. To serve the communication needs of this nation, there is one Internet service provider, two AM radio stations, two FM radio stations, and one television station. There are only 8,000 telephone lines in the whole country. This is a partial description of Djibouti's __________.

economic infrastructure

Small firms that wish to export their products may choose to use __________ who understand the local market and who can find buyers and negotiate terms.

export merchants

The simplest and easiest way to enter a global marketplace is by:

exporting

For a company that manufactures plastic signs, the printing press used to make the signs, its manager's salary, and its utilities are all examples of __________.

fixed costs

Country A and Country B want to ensure that each other's goods enter their markets exempt from all regulation so sign a __________.

free trade agreement

A __________ exists when an unauthorised party imports products and then sells them for a fraction of the price of authorised products.

grey market

Unlike innovators, early adopters _____.

have greater concern for social acceptance

Exploiting workers and keeping costs down by using child labour are examples of __________ that concern governments and companies.

human rights issues

According to the law of demand __________.

if prices decrease, customers will buy more

Cultures that tend to attach more importance to personal goals and will change group memberships when the demands of the group become too costly are referred to as __________.

individualist cultures

Kitchen dishcloths are often difficult to rinse clean and typically dry slowly. 3M has developed a disposable ScotchBrite Microfiber Kitchen Cloth that rinses easily and dries quickly. Because this is a brand new product to the market, it can be said to be in the __________ stage of its product life cycle.

introduction

Break-even analysis ______.

is used to determine the number of units a company must sell to cover all of its costs

Company A and Company B enter into a strategic alliance to create Company C so they can pool resources. This is an example of a/n __________.

joint venture

Which of the following would persuade a firm to enter foreign markets?

low-growth markets

Multivitamin sales are primarily to current users who are restocking. New variations of the product such as special formulas for women and men are sometimes employed to attract new users. Reminder advertising is commonly used. Multivitamins are in the __________ stage of their product life cycle.

maturity

Pepperidge Farm created a biscuit variation of traditional cheese biscuits by making its biscuits in the shape of goldfish. To attract new users and to maintain market share, Pepperidge Farm has enlarged its Goldfish biscuits and added cheese and peanut butter fillings. This strategy indicates that Goldfish cheese crackers are in the __________ stage of their product life cycle.

maturity

Demand is generally price inelastic for __________.

necessities such as basic food

When a currency cannot be exchanged outside a country's borders, it is considered:

not convertible

A firm is using a __________ strategy when it introduces a product at a very low price to encourage rapid product adoption.

penetration pricing

When demand is inelastic ______.

price and revenue change in the same direction

When consumers are unable to judge the quality of a product through examination or prior experience, they often assume that the higher-priced product is the higher- quality product. This is an example of the__________.

price-quality inference

Subway, the sandwich chain, operates in 87 countries. The basic concept is the same - healthy sandwiches made fresh - but Subway varies the sandwich ingredients on offer and the sauces for local tastes. This is an example of a __________.

product adaptation strategy

Whirlpool created a small washing machine specifically for the Indian market requiring low levels of water and power. The machine also had a specially designed agitator so that the long pieces of material used in the saris worn by Indian women could be washed without tangling. This is an example of a __________.

product invention strategy

Countries often impose import quotas on foreign goods to reduce competition for domestic industries. These quotas are examples of __________.

protectionism

In some cases a government adopts a policy of __________ in which it enforces rules on.

protectionism

3. A pricing approach that is based on the buyerʹs perceptions rather than the sellerʹs costs is known as which of the following?

value-based approach