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Marketing Channel and Pricing Strategies

Pricing Strategies

Q1. ________ involves charging a constant low price with few or no temporary price discounts.
   a. High-low pricing
   b. Penetration pricing
   c. Cost-plus pricing
   d. Everyday low pricing (EDLP)
   e. Target return pricing

Q2. General Motors prices its automobiles to achieve a 15 to 20 percent profit on its investment. This approach is called ________.
   a. target return pricing
   b. value-based pricing
   c. cost-plus pricing
   d. low-price image
   e. going-rate pricing

Q3. Which of the following statements about a break-even chart is true?
   a. It is a tool marketers use to examine the relationship between supply and demand.
   b. It is used to determine how the customer-perceived value changes with value-added pricing.
   c. It uses variable costs, the unit price, and fixed costs.
   d. It is a tool used to calculate fixed costs.
   e. It shows the level of earnings a company has during an accounting period.

Q4. The simplest pricing method is ________.
   a. going-rate and sealed-bid pricing
   b. cost-plus pricing
   c. break-even analysis
   d. target return pricing
   e. value-based pricing

Q5. It is most typical for producers who use captive-product pricing to set the price of the main product ________
and set ________ on the supplies necessary to use the product.
   a. high; low markups
   b. moderately; moderate markups
   c. low; high markups
   d. high; high markups
   e. low; low markups

Q6. Mach 3 razor blades must be used in the Mach 3 razor. Which type of pricing is most likely used?
   a. optional-product pricing
   b. captive-product pricing
   c. by-product pricing
   d. allowance pricing
   e. product line pricing

Q7. When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________.
   a. target return pricing
   b. product line pricing
   c. market-penetration pricing
   d. break-even pricing
   e. market-skimming pricing

Q8. Busch Stadium in St. Louis charges different prices for seats in different areas of the ballpark, even though their costs are
the same. What is this form of pricing called?
   a. penetration
   b. location-based
   c. skimming
   d. product-form
   e. time-based

Q9. Under which type of geographic pricing strategy does each customer pay the exact freight for the product from the factory
to its destination?
   a. freight-absorption pricing
   b. FOB-origin pricing
   c. basing-point pricing
   d. zone pricing
   e. dynamic pricing

Q10. ________ are the sum of the ________ and ________ for any given level of production.
   a. Fixed costs; variable; total costs
   b. Break-even costs; fixed; total costs
   c. Total costs; fixed; variable costs
   d. Fixed costs; total; variable costs
   e. Variable costs; fixed; total costs

Q11. When using price steps, the seller must establish perceived ________ that support the price differences among the
products in the line.
   a. images
   b. nonprice competition
   c. value differences
   d. quantity levels
   e. strategies

Q12. Value-based pricing is the reverse process of ________ pricing.
   a. variable cost
   b. value-added
   c. good-value
   d. cost-plus
   e. cost-based

Q13. Proud Pets, a producer of clothing and accessories for pets, has recently partnered with a regional chain of pet stores.
Which of the following would Proud Pets be LEAST likely to expect from its new channel member?
   a. identifying raw materials and other productive inputs
   b. promoting its products through advertising
   c. distributing relevant marketing research information
   d. negotiating on its products' prices
   e. assembling and packaging its products for final sale

Q14. A distribution channel is more than a collection of firms connected by various flows; it is a(n) ________ in which people and
companies interact to accomplish individual, company, and channel goals.
   a. multichannel system
   b. vertical marketing system
   c. complex behavioral system
   d. corporate marketing system
   e. added value chain

Q15. In choosing a transportation mode for a product, shippers must balance the considerations of speed, dependability, cost,
and ________.
   a. customer choice
   b. availability
   c. weight
   d. distance
   e. company reputation

Q16. Hybrid marketing systems are also called ________.
   a. horizontal multichannel systems
   b. administered franchises
   c. multichannel distribution systems
   d. dual distribution systems
   e. contractual marketing systems

Q17. Producers benefit from using intermediaries because they ________.
   a. refuse to store products for longer than a few days
   b. bring a fresh point of view to strategy development
   c. eliminate risk
   d. are generally backlogged with orders
   e. offer greater efficiency in making goods available to target markets

Q18. Steve's Physco Skates sells its products to Wal-Mart, who then sells them to the consumer. This is an example of a(n) ________.
   a. direct marketing channel
   b. indirect marketing channel
   c. corporate vertical marketing system
   d. retailer channel
   e. producer channel

Q19. Max Samuelson is a high-end fashion designer who markets his clothing lines through a limited number of highly
reputable retailers. Max uses ________.
   a. exclusive distribution
   b. full-line forcing
   c. tying agreements
   d. exclusive territorial agreements
   e. exclusive dealing

Q20. Which of the following is an example of a manufacturer-sponsored retailer franchise system?
   a. Starbucks operating within Target stores
   b. Ford and its network of independent franchised dealers
   c. fast-food restaurants such as McDonald's and Burger King
   d. motels such as Holiday Inn and Ramada Inn
   e. licensed bottlers that bottle and sell Coca-Cola to retailers

Q21. In designing its marketing channel, Chairs for Every Occasion has moved from a make-and-sell view of its business, which
focused on productive inputs and factory capacity as a starting point for marketing planning, to a sense-and-respond view, which
begins instead with the needs of target customers. With this new view, Chairs for Every Occasion is developing its ________.
   a. demand chain
   b. wholesaler chain
   c. vertical marketing system
   d. supply chain
   e. logistics

Q22. A distinguishing feature of a contractual VMS is that coordination and conflict management among the independent members
of the channel are attained through ________.
   a. contractual agreements
   b. working partnerships
   c. agents and brokers
   d. natural competitive forces
   e. limited liability incorporation

Q23. Which of the following is an example of a multichannel distribution system?
   a. J. C. Penney's catalog and retail store sales
   b. Starbuck's location inside of book stores
   c. a hotel providing guest privileges at a health spa across the street
   d. Avon's door-to-door distribution
   e. Wal-Mart locating to several countries

Q24. Today, a growing number of firms now outsource some or all of their logistics to ________.
   a. disintermediaries
   b. third-party logistics providers
   c. channel members
   d. competitors
   e. cross-functional teams

Q25. A growing number of outlet malls now feature upscale brands such as Coach, Polo Ralph Lauren, Dolce & Gabbana, and
Giorgio Armani. Which of the following are most likely to protest about this trend to the manufacturers of these brands?
   a. department stores
   b. agents
   c. factory outlets
   d. membership warehouses
   e. brokers

Q26. A retailer that uses ________ creates realistic environments that encourage customers to try products before they buy them.
   a. experiential retailing
   b. atmosphere control
   c. store differentiation and positioning
   d. hypermarketing
   e. product positioning

Q27. Most ________ retailers are significantly behind ________ retailers in global expansion.
   a. American; European and Asian
   b. Asian; African
   c. European; American
   d. African; Peruvian
   e. Asian; American

Q28. In-store demonstrations, displays, contests, and visiting celebrities are all examples of ________.
   a. public relations
   b. sales promotions
   c. advertising
   d. agent promotions
   e. direct marketing

Q29. ________ is the basis of all discount operations and is typically used by sellers of convenience goods. Retailers offering
this level of service require customers to perform their own 'locate-compare-select' process in order to save money.
   a. Full-service
   b. Specialty-service
   c. Self-service
   d. Wholesale
   e. Limited-service

Q30. ________ operate in warehouse-like facilities, sell a limited selection of items, and offer few frills. Customers pay annual
membership fees and are able to purchase goods at deep discounts.
   a. Superstores
   b. Factory outlets
   c. Discount stores
   d. Independent off-price retailers
   e. Warehouse clubs

Q31. ________ includes all the activities involved in selling products or services directly to final consumers for their personal,
nonbusiness use.
   a. Franchising
   b. Disintermediation
   c. Wholesaling
   d. Retailing
   e. Brokering

Q32. ________ retailers in the United States are growing faster than product retailers.
   a. Merchant
   b. Discount
   c. Service
   d. Off-price
   e. Specialty

Q33. The main difference between ________ organizations and other contractual systems is that these systems are normally based
on some unique product or service.
   a. independent
   b. franchise
   c. retailer cooperative
   d. warehouse-club
   e. voluntary chain

Q34. In the battle for 'share of stomachs,' some supermarkets are cutting costs and attempting to compete more effectively with
food discounters, while others are moving upscale, providing improved store environments and higher-quality food offerings.
These two different strategies represent differences in ________.
   a. positioning
   b. place decisions
   c. retail technology
   d. wholesaling
   e. retail convergence

Q35. In order to ________, wholesalers can propose automatic reordering systems, set up management-training and advising
systems, or even sponsor a voluntary chain.
   a. identify more profitable customers
   b. determine product and service assortments
   c. settle on pricing
   d. build better relationships with customers
   e. define their target markets

Q36. ________ are flourishing due to increased use of market segmentation and market targeting.
   a. Off-price stores
   b. Chain stores
   c. Specialty stores
   d. Discount stores
   e. Superstores

Q37. Business-to-consumer companies are more likely to emphasize a ________ promotion strategy, while business-to-business
companies are more likely to emphasize a ________ promotion strategy.
   a. pull; push
   b. continuity; pulse
   c. push; pull
   d. pulse; pull
   e. pulse; continuity

Q38. One way to measure the ________ effects of advertising is to compare past sales with past advertising expenditures.
   a. interest and return
   b. sales and profit
   c. promotion and cost
   d. communication
   e. loyalty

Q39. Mariah Goldberg, a marketing manager for a manufacturer of children's toys, is looking for ways to reach potential customers
who typically avoid salespeople and advertisements. Which of the following would be the most economical promotional tool for
Mariah to use?
   a. direct marketing
   b. public relations
   c. sales promotions
   d. brand contacts
   e. personal selling

Q40. Soaring media costs, focused target marketing strategies, and the growing array of new media have increased the importance
of ________.
   a. using humor to capture audience attention and interest
   b. media planning
   c. implementing branded entertainment
   d. the competitive-parity method of setting a promotion budget
   e. the affordable method of setting a promotion budget

Q41. Suave ran ads featuring a woman with beautiful hair questioning 'Suave or Matrix? Can You Tell?' This is an example
of ________.
   a. secondary advertising
   b. comparative advertising
   c. informative advertising
   d. reminder advertising
   e. buzz marketing

Q42. You receive a report that says the 68% of your target market had been exposed to your ad campaign during a given period
of time. This is an example of ________.
   a. frequency
   b. reach
   c. impact
   d. qualitative value
   e. engagement

Q43. To succeed, an advertisement must ________.
   a. have a significant budget
   b. be placed during prime time
   c. gain attention and be engaging
   d. interrupt or disrupt
   e. be high frequency

Q44. Kathy Champe, a public relations specialist for a regional chain of pharmacies, regularly contacts members of the local and
state-wide media with information about community events and charity fundraisers sponsored by her company. This is an example
of the ________ function of public relations.
   a. press relations
   b. lobbying
   c. development
   d. product publicity
   e. public affairs

Q45. ________ is the company's most expensive promotion tool.
   a. Mass media
   b. Advertising
   c. Public relations
   d. Personal selling
   e. Publicity

Q46. When nonprofit organizations need financial or volunteer support, they often turn to public relations experts to help them
in the area of ________.
   a. development
   b. press relations
   c. public affairs
   d. lobbying
   e. product publicity

Q47. To produce better communications consistency, a unified company image, and greater sales impact, some companies
employ a(n) ________.
   a. media buyer
   b. marketing communications director
   c. advertising agency
   d. public relations specialist
   e. personal sales force

Q48. Which of the following are the three characteristics an advertising appeal should have?
   a. meaningful, believable, and distinctive
   b. humorous, memorable, and interesting
   c. trendy, compelling, and appealing
   d. unique, emotional, and entertaining
   e. engaging, informative, and stylish

Q49. Which of the following best describes a salesperson who would be categorized as a value spendthrift?
   a. believes management pursues a value-driven strategy
   b. regularly gains more business at the same price
   c. documents claims to customers about superior monetary value
   d. explains to the firm that it needs more evidence of excellent value
   e. concedes on price in order to quickly close sales deals

Q50. Pressure to increase short-term sales, less differentiated brands, declining advertising efficiency, and increasingly
deal-oriented customers are all factors contributing to the ________.
   a. growth of sales promotion
   b. decline of sales promotion
   c. decline of personal selling
   d. decline of customer relationships
   e. growth of personal selling

Q51. Of the major consumer promotion tools, which is the most effective for introducing a new product or creating excitement
for an existing one?
   a. samples
   b. coupons
   c. cash refunds
   d. rebates
   e. advertising

Q52. A salesperson who researches a company's buying styles and product line is most likely in the ________ stage of the
selling process.
   a. presentation
   b. prospecting
   c. preapproach
   d. closing
   e. approach

Q53. Sales ________ encourage a sales force to make a selling effort that is above and beyond the normal expectation.
   a. quotas
   b. plans
   c. reports
   d. contests
   e. teams

Q54. Of the main consumer promotion tools, which is the most costly?
   a. advertising
   b. billboards
   c. coupons
   d. samples
   e. cash refunds

Q55. Manufacturers direct more sales promotion dollars toward ________ than to ________.
   a. consumers; retailers
   b. retailers; wholesalers
   c. retailers and wholesalers; consumers
   d. customers; wholesalers
   e. mature consumers; teenagers

Q56. Which consumer promotion tool requires consumers to send a proof of purchase to the manufacturer?
   a. coupons
   b. samples
   c. cents-off deals
   d. cash refunds
   e. promotional products

Q57. Which of the following is the term for the individuals in a company who travel to call on customers in the field?
   a. product sales force
   b. outside sales force
   c. complex sales force
   d. customer sales force
   e. inside sales force

Q58. At Finley's Fine Goods, members of the sales force and marketing department tend to have disagreements when things
go wrong with a customer. The marketers blame the salespeople for poorly executing their strategies, while the salespeople
blame the marketers for being out of touch with the customer. Which of the following steps should upper-level management
at Finley's Fine Goods take to help bring the sales and marketing functions closer together?
   a. establish a complex sales force structure
   b. create an inside sales force
   c. employ a chief revenue officer
   d. establish a customer sales force structure
   e. adopt a sales force automation system

Q59. Which sales management tool shows a salesperson which customers and prospects to see during the next 12 months and
in which months, as well as which activities to carry out?
   a. time-and-duty analysis
   b. annual call plan
   c. sales force automation system
   d. positive incentives plan
   e. sales quota plan

Q60. Which of the following best explains why many companies are adopting the team selling approach to service large, complex
   a. Salespeople prefer working in groups because of the opportunity for flex hours and job sharing.
   b. A group of salespeople assigned to one account is cost effective for corporations.
   c. Products have become too complicated for one salesperson to support.
   d. Fewer skilled salespeople are working in the high-tech industry.
   e. Customers prefer dealing with many salespeople rather than one salesperson.

Q61. A company that treats its salespeople as valuable contributors with unlimited income opportunities has developed
a(n) ________ that will have fewer turnovers and higher sales force performance.
   a. sales structure
   b. workload
   c. organizational climate
   d. sales force system
   e. compensation package

Q62. In this step of the sales process, salespeople can now take advantage of technologies such as DVDs, handheld computers,
interactive white boards, and laptop computers to show customers images that support the salesperson's verbal message.
   a. follow-up
   b. presentation and demonstration
   c. closing
   d. prospecting
   e. preapproach

Q63. Which of the following is an advantage created by the use of a sales force automation system?
   a. decreased need for an inside sales force
   b. stronger organizational climate developed by the sales team
   c. increased motivation to acquire new customers
   d. lower costs for training sales personnel
   e. more efficient scheduling of sales calls and sales presentations

Q64. When a firm sets out to analyze, plan, implement, and control sales force activities, it is undertaking ________.
   a. sales force management
   b. promotional objectives
   c. team selling efforts
   d. marketing design
   e. co-op selling and advertising

Q65. Members of a company's ________ conduct business from their offices through the telephone, the Internet, or visits from
   a. complex sales force
   b. inside sales force
   c. outside sales force
   d. customer sales force
   e. product sales force

Q66. Which sales management tool shows a salesperson which customers and prospects to see during the next 12 months and
in which months, as well as which activities to carry out?
   a. positive incentives plan
   b. sales force automation system
   c. annual call plan
   d. sales quota plan
   e. time-and-duty analysis

Q67. Manufacturers direct more sales promotion dollars toward ________ than to ________.
   a. mature consumers; teenagers
   b. customers; wholesalers
   c. consumers; retailers
   d. retailers and wholesalers; consumers
   e. retailers; wholesalers

Q68. According to research conducted by Gallup Management Consulting Group, which of the following is one of the four key
talents a successful salesperson should possess?
   a. easy-going nature
   b. technological know-how
   c. understanding of many cultures
   d. creativity
   e. disciplined work style

Q69. In order to win and keep accounts, most companies want their salesforce to practice ________ selling.
   a. competitive
   b. profit margin
   c. spendthrift
   d. value
   e. short-term

Q70. Which of the following is the term for the individuals in a company who travel to call on customers in the field?
   a. customer sales force
   b. product sales force
   c. complex sales force
   d. outside sales force
   e. inside sales force

Q71. After a company has determined its sales force structure, it is ready to determine what ________ it needs.
   a. marketing-sales liaison
   b. compensation package
   c. sales force supervision
   d. team structure
   e. sales force size

Q72. Marlene Arau is a member of the sales force at Urban Fashions, a clothing manufacturer. Marlene is preparing for a first
meeting with a wholesaler who is a potential customer, and she is preparing herself by learning as much as she can about the
wholesaler's organization. Marlene is in the ________ step of the personal selling process.
   a. qualifying
   b. preapproach
   c. approach
   d. handling objections
   e. prospecting

Q73. ________ means adjusting the marketing strategy and mix elements to each international target market.
   a. Whole channel view
   b. Communication adaptation
   c. Standardized global marketing
   d. Global market mixing
   e. Adapted global marketing

Q74. In 2005, the ________ established a free trade zone between the United States and Costa Rica, the Dominican Republic,
El Salvador, Guatemala, Honduras, and Nicaragua.
   a. NAFTA
   b. CAFTA-DR
   c. FTAA
   d. EU
   e. CAN

Q75. ________ means selling largely the same products and using the same marketing approaches worldwide.
   a. Adapted global marketing
   b. Export marketing
   c. Standardized global marketing
   d. Global market mixing
   e. Multinational strategy

Q76. As global trade is growing, global competition is ________.
   a. leveling off
   b. declining
   c. intensifying
   d. erratic
   e. contracting

Q77. ________ is a group of nations organized to work toward common goals in the regulation of international trade.
   a. A joint venture
   b. A global firm
   c. A multinational enterprise
   d. An economic community
   e. A standardized marketing mix

Q78. Azerbaijan imported wheat from Romania in exchange for crude oil and Vietnam exchanged rice for Philippine fertilizer
and coconuts. Both scenarios are examples of which of the following?
   a. exchange controls
   b. tariffs
   c. blocked currency
   d. quotas
   e. barter

Q79. The ________ concept holds that marketing programs will be more effective when tailored to the unique needs of each
targeted customer group.
   a. promotion
   b. communication
   c. marketing
   d. global
   e. international

Q80. ________ industries are safe from foreign competition.
   a. Most
   b. Major
   c. European Union
   d. Few
   e. NAFTA

Q81. Very few market opportunities are available in a(n) ________ economy.
   a. subsistence
   b. raw material exporting
   c. emerging
   d. industrializing
   e. industrial

Q82. Which of the following represents the biggest involvement a company can take in a foreign market?
   a. joint venture
   b. exporting
   c. joint ownership
   d. management contracting
   e. direct investment

Q83. In international trade, it is ideal if the buyer can pay in ________.
   a. the seller's currency
   b. the buyer's currency
   c. the euro
   d. countertrade
   e. barter

Q84. In January 1994, ________ established a free trade zone among the United States, Canada, and Mexico.
   a. WTO
   b. EU
   c. GATT
   d. CAFTA-DR
   e. NAFTA

Q85. In societal marketing, the ideal goal for companies is to turn all of their products into ________ ones.
   a. serviceable ones
   b. salutary ones
   c. pleasing ones
   d. durable ones
   e. desirable ones

Q86. A long-standing charge against intermediaries is that they mark up prices beyond the ________.
   a. going market price
   b. resale value
   c. delivery charges
   d. range most Americans can afford to pay
   e. value of their services

Q87. ________ persuades people to buy goods they had no thought of buying.
   a. High-pressure selling
   b. Redlining
   c. Deceptive placement
   d. Sustainable marketing
   e. Reverse redlining

Q88. In which of the following scenarios would high-pressure selling tactics typically be most advantageous for marketers?
   a. selling situations with dissatisfied customers
   b. selling situations with long-time customers
   c. selling situations with a company's most highly valued customers
   d. one-time selling situations
   e. selling situations with new customers with a high likelihood of becoming repeat customers

Q89. ________ is an organized movement of citizens and government agencies to improve the rights and power of buyers in
relation to sellers.
   a. The Bill of Rights
   b. Environmentalism
   c. Consumerism
   d. The Human Relations Movement
   e. Grassroots politics

Q90. The overselling of private goods results in ________, such as cars causing traffic jams, air pollution, injuries, and deaths.
   a. materialism
   b. social costs
   c. misdirected funding
   d. opportunity costs
   e. cultural pollution

Q91. The concept of ________ holds that a company's marketing should support the best long-run performance of the marketing
   a. consumer-oriented marketing
   b. the free enterprise system
   c. consumerism
   d. global marketing
   e. sustainable marketing

Q92. Jacob Engineering Group views and organizes its marketing activities from the viewpoint of its buyers. Management works
hard to sense, serve, and satisfy the needs of its well-defined group of buyers. What does Jacob Engineering Group practice?
   a. sense-of-mission marketing
   b. consumer-oriented marketing
   c. societal marketing
   d. customer-value marketing
   e. innovative marketing

Q93. The ________ specifically focuses on future company needs rather than both future company and future customer needs.
   a. sustainable marketing concept
   b. strategic planning concept
   c. consumer business concept
   d. societal marketing concept
   e. marketing concept

Q94. A company that produces and heavily markets cigarettes, with many promotions aimed at young (although legal age)
nonsmokers, most likely follows which of the following as a guiding principle?
   a. the philosophy that companies should have a social conscience
   b. the philosophy of consumer-oriented marketing
   c. the philosophy of sustainable marketing
   d. the philosophy that companies can do in good conscience whatever the market and legal systems allow
   e. the philosophy of consumerism

Q95. As international trade barriers come down and global markets expand, environmental issues are having ________ impact
on international trade.
   a. more impact on cultural differences and less
   b. a neutral
   c. a slowly declining
   d. a greater
   e. a smaller

Q96. When Hancock & Dunberry developed and introduced new simplified wills for the elderly and less educated markets,
 less expensive home visits, and a free statewide legal referral service, the law firm began practicing ________ marketing.
   a. societal
   b. sense-of-mission
   c. customer-value
   d. consumer-oriented
   e. innovative

Q97. The ________ in the United States came about because of concern for acid rain, toxic wastes, litter, and the damage
caused by strip mining and forest depletion.
   a. first wave of modern environmentalism
   b. first wave of enlightened marketing
   c. second wave of consumerism
   d. current wave of environmentalism
   e. second wave of modern environmentalism

Q98. Critics claim that companies in the ________ industries introduce planned streams of new products that make older
models obsolete, a form of planned obsolescence that harms consumers.
   a. food and beverage
   b. car and truck
   c. consumer electronics and computer
   d. financial and entertainment
   e. housing and construction

Q99. Advertising 'puffery' is a term for ________.
   a. innocent exaggeration for effect
   b. emotional appeals to consumers
   c. subliminal appeals to consumers
   d. value-added promotions
   e. a straightforward promotional message

Q100. Baker Enterprises produces several new products that have low appeal but may benefit consumers in the long run.
What is the most accurate classification of these products?
   a. unpleasing
   b. salutary
   c. deficient
   d. pleasing
   e. desirable


d. Everyday low pricing (EDLP)

e. going-rate pricing

b. It is used to determine how the customer-perceived value changes with value-added pricing

b. cost-plus pricing

c. low; high markups

a. optional-product pricing

a. target return pricing

b. location-based

b. FOB-origin pricing

c. Total costs; fixed; variable costs

d. quantity levels

e. cost-based

a. identifying raw materials and other productive inputs

c. complex behavioral system

b. availability

c. multichannel distribution systems

e. offer greater efficiency in making goods available to target markets

b. indirect marketing channel

a. exclusive distribution

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