quiz

Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue. For Raymond, the total cost of opening the new branch and remaining open for one year will be: $550,000. $650,000. $500,000. $605,000. $450,000.

$550,000.

Brands that have developed loyal customers have a higher price elasticity of demand. True False

False

For which of the following is demand likely to be least sensitive to price increases? Spring break vacations. Prescription drugs. Restaurant meals. A specific brand of cereal. Theater tickets.

Prescription drugs

Which of the following is a TRUE statement about distribution centers? -They are the quickest way to get all products to retailers. -They are appropriate for all retailers, from the largest to the smallest. -They always involve a pull marketing strategy. -They enable retailers to carry less merchandise in individual stores. -Distribution center space is typically more expensive than retail space.

They enable retailers to carry less merchandise in individual stores.

Marketing channel relationships evolve when the parties have complementary goals. True False

True

Amazon.com was an early leader in online retailing. Part of the firm's success was due to a well-designed and efficient EDI system with book publishing companies, allowing just-in-time delivery. Even with a well-designed EDI system, Amazon.com would not have been successful without -a commitment to partnering with publishing companies. -acceptance from local education unions. -cooperative advertising with brick and mortar retailers. -support from government regulators. -a customer rebate program.

a commitment to partnering with publishing companies.

Retailing is defined as the set of business activities that adds value to products and services sold to final consumers. focuses on a firm's core values. separates wholesaling from manufacturing. focuses on transactions, but not relationships. only occurs in brick-and-mortar space.

adds value to products and services sold to final consumers.

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as a measure of scarcity. a measure of the income effect. an indicator of quality. a reflection of status quo pricing. an indicator of the variety.

an indicator of quality.

Brian, an industrial equipment sales rep, purchases a quick snack to eat on the way to work. He buys lunch while on the road visiting customers, and grabs bread and milk on the way home. Brian probably does the majority of this shopping at a conventional supermarket. convenience store. warehouse club. category specialist. drugstore.

convenience store

Compared to other pricing methods, __________ pricing is relatively simple. value-based cost-based reference-based cost of ownership improvement value

cost based

If the price for a product increases, the demand for the complementary product will become more inelastic. increase. become more elastic. decrease. stay the same.

decrease

After installing a(n) __________ in its JIT system, Chocolate Tree (a retail chocolate store) was able to reduce lead time for merchandise orders. supply chain collaborative planning schedule quick change directory distribution center electronic data interchange system After installing a(n) __________ in its JIT system, Chocolate Tree (a retail chocolate store) was able to reduce lead time for merchandise orders. supply chain collaborative planning schedule quick change directory distribution center electronic data interchange system

electronic data interchange system

Anbinh Fashions is launching a new line of one-of-a-kind designer jewelry. Each piece is handcrafted, and production volumes will be very low. To emphasize the unique nature of this jewelry, Anbinh Fashions will probably choose _________ distribution. luxury intensive selective monopolistic exclusive

exclusive

Proving that a company has engaged in the deceptive bait and switch practice is easy. True False

false

Some retailers require their suppliers to ship merchandise ___________, thus eliminating the time and expense associated with ticketing and marking. aggregated lead time synchronized flattened synthesized floor-ready

floor ready

If the Amador County Pest Control Association got together and all members agreed to charge 3 percent of the value of a home for a termite inspection letter, the association members would be engaging in loss leader pricing. predatory pricing. bait and switch pricing. horizontal price fixing. monopolistic competition.

horizontal price fixing

Students of marketing often overlook or underestimate the importance of Place in the marketing mix simply because it occurs after making pricing decisions. it happens behind the scenes. the product itself is so much more important. no one is directly in charge of place decisions. it conflicts with promotion.

it happens behind the scenes

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that - firms gain more customers with price decreases than they lose with price increases. - most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes. -most consumers would rather skip buying a product than pay a higher price. -most consumers cannot remember what price they paid the last time they bought a particular product. -it is easier to lose customers with a price increase than to gain customers with a price decrease.

it is easier to lose customers with a price increase than to gain customers with a price decrease.

__________ pricing tactics lower the price of a product below cost. Cost-based Zone Loss leader Fixed Regular

loss leader

With more frequent shipments associated with quick response (QR) systems, a retailer is less likely to use radio frequency identification tags. likely to have lower shipping costs. more likely to have what customers want. more likely to engage in predatory pricing behavior. more likely to add extra floor-ready merchandise.

more likely to have what customers want.

__________ is the term used to describe the situation when retailers use some combination of stores, catalogs, and the Internet to sell merchandise. Horizontal integration Cross-channel leverage Vertical integration Multichannel retailing Opportunistic retailing

multichannel retailing

Developing pricing strategies for __________ is one of the most challenging tasks a manager can undertake. zone pricing products cost-based pricing seasonal rebate items new products quantity discounts

new products

In a corporate vertical marketing system, -participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain. -conflict tends to be a major problem. -there is no common ownership, and the dominant member has significant power to impose its ideas and objectives. -transaction selling is the norm, with the invisible hand guiding the overall functioning. -independent firms join together formally to decide how the marketing channel will operate.

participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain.

Cross-price elasticity is the -change in quantity of a product demanded divided by the change in its elasticity. -change in quantity of a product demanded divided by the change in its price. - percentage change in quantity of a product demanded divided by the percentage change in its price. -percentage change in quantity demanded of product A compared to the percentage change in price of product B. -change in price of product A divided by change in quantity demanded for product B.

percentage change in quantity demanded of product A compared to the percentage change in price of product B.

Marketers of products and services associated with the wedding industry know that customers often do not care what the price is. They just want the wedding to be perfect. For these customers, demand is likely to be derived demand elastic. price elastic. price inelastic. status quo elastic. cross-price elastic

price inelastic

When Toyota introduced its Scion line of cars, the lowest priced model was listed for $15,000 while the highest priced model was listed for $21,000, with two or three other list prices in between. Toyota used a __________ pricing approach. price lining zone noncumulative quantity discount market penetration loss leader

price lining

Retailers' coupons, rebates, and online discounts are types of off-price wholesaling. in-store promotions. mass media advertising. pricing promotions. specialty product displays.

pricing promotions

In determining the price for his company's new pocket digital camera, Matt determines what consumers consider the regular or original price for similar cameras available in the market. Matt is assessing the influence of __________ on pricing strategy. everyday low pricing cost of ownership reference prices improvement value odd-even prices

reference prices

Johan owns an oil-change business called Oil Only. He changes oil in cars—and that is all he does. What kind of retail business is this? category specialist specialty store service retailer extreme value retailer off-price retailer

service retailer

Retailing __________ the supply chain. focuses on production in creates rigidity in is in the center of sits at the end of maximizes the length of

sits at the end of

B2B quantity discounts are legal if new customers can "buy up" to reach the minimum quantity. they are not short term. they do not exceed 25 percent of the regular price. the discounts are available to all customers. cumulative discounts do not run for more than a calendar year.

the discounts are available to all customers.

The manufacturers of the early electric cars are charging relatively high prices to consumers who are willing to pay the price. They need to use a price skimming strategy because of -the relatively high emissions produced by electric cars. -the potential benefits of price bundling. -the slotting allowances needed to gain greater distribution. -the high costs associated with producing a small volume of cars. -a vertical price fixing arrangement among vendors supplying the needed components.

the high costs associated with producing a small volume of cars.

According to a typical demand curve, the higher the price, the lower the cross-price elasticity. the lower the quantity consumers will buy. the greater the production costs. the greater the income effect. the lower the output of producers.

the lower the quantity consumers will buy

Because there are many firms in monopolistic competition markets, -the many competitors will focus on product differentiation. -producers do not have to consider the reactions of rival firms. -government often encourages consolidation to reduce the number of competitors. -everyone is a price taker. -price controls may be implemented.

the many competitors will focus on product differentiation.

Traditionally, retailers treated all their customers the same way. based on share of wallet strategy. with suspicion. t based on their demographics. as unique competitive opportunities.

the same way

In the four Ps of marketing, Place refers to all the activities required to get the right products to the right customer when that customer wants it. True False

true

It is primarily the retailer's responsibility to make sure customers' expectations are fulfilled. True False

true

Manufacturers might use selective distribution by granting exclusive geographic territories to a few retailers so no other retailers in the territory can sell a particular brand. True False

true

Odd prices suggest low quality. True False

true

Dawn works for a firm that buys products directly from the manufacturer and sells them to retailers, who then sell the products to consumers. Dawn works for a retail distribution center. store representative. manufacturer's representative. retail jobber. wholesaler.

wholesaler