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Marketing Exam #3

Question	Answer
A drug store bundles together shampoo, conditioner, hair spray, and a hair brush and offers them all to the customer for one price. The retailer is performing the ______ channel function.	Matching
To cut the distribution costs at your rapidly growing chocolate factory, you purchase a controlling share of a trucking company. You have drawn the trucking company into a:	Corporate VMS
Consumers used to be only able to purchase Dell computers directly from the manufacturer. Now consumers can purchase them from retailers such as Office Depot as well as directly from Dell. This is an example of a(n):	Multichannel distribution system
Airlines no longer give commissions to travel agents for booking flights for customers. This is an example of:	Disintermediation
Carl is a furniture salesperson working for an independent firm whose sales force handles related products from many companies. Carl is a(n):
Mercedes Benz allows only a limited number of dealers the right to distribute its products in certain cities in the United States. What level of intensity is Mercedes using?	Selective
When a producer requires a dealer NOT to handle competitors’ products, it is engaging in:	exclusive dealing
Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers is known as:	Supply chain management
G.M. ships cars by rail from its primary plant. At certain locations along the railway, autos are unloaded from the train and moved to semi-truck car carriers, which deliver the vehicles to the dealerships. The car manufacturer uses:	Intermodal transportation
Wal-Mart has been successful in trimming distribution costs by requiring teamwork, both inside the company and among all of its venders in the channel. This is an example of:	integrated logistics management
As Vice President of Marketing for Holden-Evan. Which of the following identifies the best reason for why you should ignore advice to employ a competitive price approach in which you undercut all competitors?	By setting the price before you know the costs, you could lose money on every razor you sell.
You are considering a cost-plus pricing method for the razor. Which of the following identifies the greatest danger in using this pricing method?	the price that is set will dramatically decrease demand
Another pricing method you are considering is break-even pricing. Your VP of Finance, who is focused on profits, is against using this method to set the price. Which of the following best explains why the VP of Finance is against break-even pricing?	break-even pricing computes a price that simply offsets costs without actually generating a profit
Using break-even pricing, suppose your revenue estimate falls short of the break-even point. Which of the following modifications will not result in reaching the break-even point?	lower the break-even point and keep the price, costs, and sales steady
Rather than break-even pricing, you are considering setting your price using the target profit approach. Which of the following best explains why target profit pricing is an improvement over break-even pricing?	target profit pricing sets a price that will generate revenue above the break even point so a profit can be achieve
Another option you are considering is a value-based approach using good-value pricing. Which of the following accurately describes a good-value pricing approach?	a less expensive model that has features that are similar to the name brand product
Another value-based approach is value-added pricing. Which of the following products is using a value-added pricing approach?	a 3G smart phone with all standard features and a few very exciting extra features at a price that is higher than the industry standard
Your current estimates for the razor list $555,000 in fixed costs and $29 per unit in variable costs. New data suggests expected sales of 70,000 units. To obtain a 15 percent profit, what price range should you set?	between $43 and $44
The estimated demand for various prices for the razor are listed below. Your colleague suggests a break-even price of about $30. Which of the following best explains why a break-even price of $30 is incorrect?	to sell 135,000 units you would need to charge more than $30 per unit
A different colleague wants to charge a premium price for the razor. To make a profit of $316,000 he suggests that you price the razor at the highestpossible price, $55, and expect sales of 20,000 units. Which of the following best explains why a price o	to generate enough revenue to make a $316,000 profit you would need to raise the price to over $70 per unit
As the Vice President of Marketing of the high-end Swazzi clothing chain... Which of the following identifies the strongest reason for why price should be considered at the earliest stage of product development?	Price is part of the product design.
You are leaning toward Carnaby Street as the clothing line you will recommend to the New Product Development Committee. Which of the following best supports the Carnaby Street line as the best choice?	Classic styles are growing in popularity.
In an R-W-W framework, “R” stands for “real.” In order to qualify as “real” the product must satisfy a genuine need in the market place. Which of the following best describes the genuine need that the Carnaby Street clothing line fulfills?	all of the above
You considered abandoning the Carnaby Street line ... However, the Carnaby Street line features silks and suedes, while the competitor’s clothes are printed cottons only. Does Swazzi have a competitive advantage over the department store’s line?	No, whether silks and suedes are more desirable than cottons is a completely subjective matter that can't be predicted
A blockbuster children’s movie has been scheduled to air at the same time as the award show that will feature gowns similar to those the Swazzi plans to sell. Which of the following best justifies going ahead with plans to market Swazzi’s line of gowns?	Children and adults are likely to view the programs separately.
An associate recommends that you emphasize the low price of the Carnaby Street line in your... The Carnaby Street mini-dress will sell for $335 while a typical awards gown will sell for $1750. Show you follow your associate’s suggestion?	No, price is not a critical issue for your sophisticated, affluent target market.
You discover competition for your rock star line in the effort by a major music label to have .. Which of the following identifies the strongest advantage that the music label clothing lines would enjoy over Swazzi’s rock star line?	authenticity
You estimate a selling price of about $335 for the Carnaby Street mini-dress and $285 for the rock star ensemble. To decide between these two choices, what would be the most useful thing to calculate?	the number of ensembles you would need to sell to equal the profit for each mini-dress you sell.
The committee agrees that the true strength of the Carnaby Street line is the enduring public interest in the sixties and its effect on the market. The Carnaby Street line is chosen. Which lesson do you take away from this decision?	Some fashions never go out of style.
To test the clothing line you’ve chosen, you decide on having models walk through stores wearing prototype styles. Which of the following testing methods is likely to be an improvement on this testing method?	focus groups of affluent women in the 27-42 demographic viewing live models
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	inelastic
In the classic downward-sloping demand curve, as price increases, demand for the product or service	decreases
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	cross-shopping
_____ involves determining the point at which the number of units sold generates just enough revenue to equal the total costs.	Break-even analysis
_____ measures how changes in price affect the quantity of the product demanded.	price elasticity of demand
In the soft drink industry only a few firms dominate, which is characterized as	oligopoly
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?	Status quo pricing
_____ reflects that the greater the availability of substitute products, the higher the price elasticity of demand for any given product will be.	The substitution effect
With _____ products and services, a higher price might lead to a greater quantity sold, but only up to a certain point.	prestige
In _____, one firm provides the product or service in a particular industry, and as such results in less price competition.	monopoly
_____ indicates that the demand for related products can either be positively or negatively related.	Cross-price elasticity
Jamal was interested in getting a new flat screen television. He went to store to view the various models and discuss the features and benefits, but then bought the product online from another retailer for a lower price. Jamal was engaged in?	showrooming
The most common form of competition is _____ where many firms compete for customers in a given market with differentiated products.	monopolistic competition
_____ 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.	Premium pricing
As the marketing VP 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
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.	customer
_____ 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.	the gray market
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?	target return pricing
The _____ is the price less the variable cost per unit.	contribution per unit
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?	sales orientation
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
Jack works for a firm 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 company objective is involved?	competitor-orientation
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?	engaging in predatory pricing.
Standardized products such as grains and chemical products, where consumers perceive them as commodities are characteristic of	pure competition
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?	price bundling
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.	everyday low
_____ 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 skimming
Supermarket chains often implement _____, a pricing tactic of selling leading brands of products below their own cost in order to build store traffic.	leader pricing
The objective of _____ is to build sales, market share, and profits quickly by providing an incentive to purchase the product immediately.	market penetration pricing
Manufacturers like _____ because it allows them to offer price cuts to consumers directly, rolling them out and shutting them off quickly.	rebates
Savvy consumers often purchase automobiles 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.	cumulative quantity discounts
A _____ pricing strategy is attractive because it attracts two distinct market segments: those who are not price sensitive and more price-sensitive customers.	high/low
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.	a reference price
_____ pricing methods do not recognize the role that consumers or competitors’ prices play in the marketplace.	cost-based
When retailers use _____ pricing, it can create excitement and attract customers through the “get them while they last” atmosphere that occurs.	high/low
A _____ pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.	high/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?	experience curve effects
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	predatory 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.	Vertical price fixing
Airlines often engage in price wars in an attempt to steal customers away from other airlines. This is an example of which pricing method?T	Competitor-based pricing
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
Improvement value and cost of ownership are two approaches to which method of pricing?	Value-based pricing
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
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?	competitor-based pricing
_____ are expressed in the form of a percentage, such as “3/10, n/30,” or “3%, 10 days, net 30.”	Cash discounts
_____ 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.	Bait and switch
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.	penetration pricing
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 skimming
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.	slotting allowance
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	an independent marketing channel
To create strong partnering relationships, supply chain members must develop mutual trust, openly communicate, have compatible goals, recognize the benefits of interdependence, and?	be willing to invest in each other’s success
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.	more efficient; less expensive
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.	distribution center
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 administered vertical marketing system.
_____ is an electronic document sent by a supplier to a retailer prior to the shipment of a merchandise order	An advanced shipping notice
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.	vendor-managed inventory
EDI reduces _____, or the time between the decision to place an order and the receipt of merchandise.	the cycle time
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.	horizontal
The _____ is the person who coordinates deliveries to the distribution center.	dispatcher
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.	consignment selling
When Clarissa sells the jewelry she makes at craft fairs or on her personal website, she is utilizing a _____ marketing channel.	direct
_____ is a practice in which merchandise cartons are prepackaged by the vendor for a specific store.	Cross-docking
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?	a corporate vertical marketing system.
_____ 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
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
Purchase data collected at the point of sale is stored in a data warehouse and can be accessed on three dimensions:	point in time, merchandise aggregation, and level of the company
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
All of the following are examples of the value provided by a supply chain in the production of kitchen stoves EXCEPT?	the product design team develops initial drawings for a new product offering
JIT inventory systems are associated with all of the following EXCEPT?	more inventory to warehouse.
As noted in your text, each participant in a successful marketing channel adds	value
In _____ marketing channels, one or more intermediaries work with manufacturers to provide goods and services to customers.	indirect
Radio frequency identification tags are?	tiny computer chips that transmit information about the contents of containers.
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
Firms that use a(n) _____ supply chain allocate merchandise to stores based on previous sales forecasts.	push
The _____ stage of the new product development process requires tremendous financial resources and extensive coordination of the marketing mix to roll out the product.	product launch
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?	concept testing
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 pioneer
Tyler is knowledgeable about new developments in bicycling, 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 an innovator
According to your text, some estimates indicate that only about _____ percent of new products actually succeed.	3
_____ refers to the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow.	innovation
The last group of buyers to enter a new product market are _____, and when they do, the product has achieved its full market potential.	the late majority
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.	decline
In some cases, _____ may never adopt a certain product or service, since they rely on traditional products until they are no longer available.	laggards
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?	compatibility
_____ relates to how easily consumers can test and use the product.	Trialability
_____ 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.	Diffusion of innovation
_____ involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist.	Reverse engineering
Although they enjoy novelty and are considered to be opinion leaders, _____ are not the first to purchase new product innovations.	early adopters
_____ represent(s)a substantial portion of the population, and few new products and services can be profitable until this large group buys them.	The early majority
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.	maturity
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
At which stage in the product life cycle do sales experience their most rapid increase?	Growth
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.	observability
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
In the new product development process, companies have a variety of ways for _____ including outsourcing, brainstorming, licensing and customer research.	idea generation
The most common type of consumers in the introduction stage of the product life cycle are the	innovators.
The _____ stage of the new product development process can involve the development of a prototype for alpha or beta testing.	product development
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?	manage risk through diversification.
As _____, one of the advantages that pioneers have is they create a new market or product category, establishing a commanding initial market share lead.	first movers

Created by: klm151

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