MAR 250


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is a method of setting price by estimating the price consumers would be willing to pay for the item and then working backward to assure necessary margins for the retailers and wholesalers. Target Pricing
In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery, but unlike Duracell, Energizer priced its batteries at a low initial price to attract the mass market. Energizer used: Penetration Pricing
One problem in the interstate trucking industry is the number of trucks that return after making a delivery with an empty truck. There is a website where independent interstate truckers can look for loads that they can carry with them on their return trip. Because the trucks would be returning empty (and inefficiently), truckers, who use this website to get business that they would not have had without it, give a reduced shipping rate. This reduced rate is an example of: Yield Management Pricing
Creative Quilts Studio sells hundreds of colors and types of thread and fabric. To price its inventory, the owners of the studio add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing method called? Standard Mark Up Pricing
is a method of pricing where price often falls following the reduction of costs associated with the firm's producing and selling an increased volume of the product. Experience Curve Pricing
A custom tailor wishes to use target profit pricing to establish a price for a custom designed business suit. Assume variable cost is $200 per suit, fixed cost is $44,000, and a target profit of $50,000 on a volume of 50 suits is desired? What should be charged for a typical custom suit? $2080
Consumers buy candy bars, snacks, and soda pop from vending machines. Traditionally, the price of each of these products is about 75 cents. If a marketer charges a significantly higher price for such products dispensed by vending machines, sales are likely to decline. In order to avoid such declines in sales, marketers tend to be very consistent in the price charged for vending machine products. This is an example of marketers employing a __________ strategy. Customary Pricing
When you buy a Saturn Automobile from a dealership, you are offered the car at a single price. You can buy it or not, but there is no variation in price under the seller's: One Price Policy
Yield management pricing is a form of: Dynamic Pricing
Your local instant photocopying service charges 10 cents a copy for copies up to a quantity of 25, 9 cents a copy for 26 to 100, and 8 cents a copy for 101 or more. What kind of adjustment to list or quoted prices is the photocopying service using? Quantity Discounts
A manufacturer estimates that consumers will accept a price of $275 for a snowboard. If the manufacturer expects to offer trade discounts of 35/15/ 5 to retailers, wholesalers, and agents, respectively, what price will the manufacturer receive for the snowboard? $144.34
What would be the ultimate selling price of a sweater be if the cost to the manufacturer is $11.75 and the manufacturer, wholesaler, and retailer (no other members of the channel) took markups on selling price of 10 percent, 25 percent, and 40 percent respectively? $29.01
What would be the ultimate selling price of vase if the cost to the manufacturer is $20.00 and the manufacturer, wholesaler, and retailer (no other members of the channel) took markups on selling price of 25 percent, 10 percent, and 50 percent? $60.60
A company in Virginia that manufactures and sells peanut brittle to retailers charges higher shipping costs for orders sent to customers living west of the Mississippi River. This Virginia company is using: Multiple Zone Pricing
In one of its least favorite actions, was caught fiddling with its price tags. Avid videodisc shoppers found that the online store was offering different customers different prices for the same DVD, and complained vociferously. Amazon was caught red-handed. It was, company officials admitted, trying to see how much it could charge for an item before shoppers balked. No matter what the reasoning behind it, was using: Price Discrimination
You probably own several pairs of shoes. Further, it is highly likely you purchased those shoes at retail stores located in a shopping mall. It is quite unlikely you bought the shoes directly from the manufacturer. In fact, most goods are brought to you via a(n) __________, which consists of several organizations involved in the process of marketing products or services and making them available for our use as consumers. Marketing Channel sells grinders, boring mills, and engine lathes. The website has listed goods from over 700 machinery manufacturers, 2,500 distributors of new equipment, and 650 dealers of used inventory for sale at the website. relies on a well-established channel of manufacturers, distributors, and machinery dealers to provide the merchandise that is sold through this: Electronic Marketing Channel
Mail order selling, catalog sales, and telemarketing, are all examples of: Direct Marketing Channels
Which of the following statements describes the key difference between merchant wholesalers and agents and brokers? Merchant wholesalers take title to merchandise and agents and brokers do not.
Hallmark Cards has its own sales force that is responsible for the entire marketing function. Hallmark uses __________ as its sales force. Selling Agents
Breath mints, bottled water, and nail clippers would most likely use which density of distribution? Intensive Distribution
Which type of distribution density is used by Rolls Royce when the car manufacturer maintains only one dealership in any large metropolitan area? Exclusive Distribution
Keiretsu is the term for: A vertical integration of as well as a social and economic bond between producers and intermediaries in Japan.
Vertical integration can lead to legal prosecution if: There is potential to lessen competition or create a monopoly.
Some manufacturers have tried to use the brand loyalty of their consumers to force retailers to carry the manufacturers' products and none of their competitors. These manufacturers were trying to force retailers to participate in: Exclusive Dealing
In Europe, stores called __________ are based on the concept of one-stop shopping for consumers. Such retail stores, which use scrambled merchandising, typically encompass over 200,000 square feet of floor space and offer quality, variety, and low price for food and groceries and general merchandise. Hypermarkets
Vending machines are an example of: Nonstore Retailing
The retail pricing, store location, merchandise and the communication mix chosen by a store are known collectively as the: Retailing Mix
Emphasizing consistently low prices and eliminating most markdowns or sales is called a(n) __________ strategy. Everyday Low Pricing
Wal-Mart's Sam's Club, and Costco's Warehouse Club are all examples of: Off Price Retailers
Procter & Gamble created an advertisement for its High Endurance men's antiperspirant. In terms of the communication process, the __________ for the information in the High Endurance men's antiperspirant advertisement is Procter & Gamble, its manufacturer. Source
In a brainstorming session for a new drug to lower cholesterol, the members of the marketing department agreed the benefits of the new drug could best be promoted by comparing the drug to those currently on the market. In terms of the communication process, the transformation of this idea into an ad campaign is an example of: Encoding
Melissa saw an ad promoting Vermont as a tourist destination and great place to live. The ad contained a postage-paid reply card which could be used to request more information. In terms of the communication process, the mailing in of the postcard with a request for further information is an example of: Feedback
When Sears places a multiple-page booklet in the local newspaper about its President's Day sale, it is an example of the use of which element of the promotional mix? Advertising
Which of these promotional elements has the inherent weakness of extremely high expenses per exposure? Personal Selling
When companies use tools such as press conferences and image management, they are using: Public Relations
Allegra is an antihistamine that is only available through prescription, but to create brand awareness, it is offering people who request information about the product a cushion to use at their favorite sporting event plus a coupon for $10 off their next purchase of the medication. This free cushion and coupon are examples of: Sales Promotion
Lenox China Co. would like to get its annual Christmas ornament series into the Federated Department Stores. Federated has a buying office in New York City that makes decisions on its giftware buys. Which promotional element would be most appropriate for Lenox to use to reach the Federated buyers? Personal Selling
At which stage in the product life cycle would your promotional objective be to persuade the consumer to buy the product rather than substitutes? Growth
A push strategy is when: A manufacturer directs the promotional mix to channel members to gain their cooperation in ordering and stocking the product.
An advertisement for Lipitor, a cholesterol medicine is shown on TV during the Super Bowl. The advertisement is an element of the promotional mix which is directed towards the ultimate consumer, not towards doctors. This is an example of a(n) __________ promotional strategy. Pull
Imagine you have overheard the owner of a medium-sized manufacturing company saying, "We had a good year, and I think next year will be even better. I'm going to raise this year's promotion budget to 4.5 percent of last year's gross sales. That will let me do more advertising than the 3.5 percent I budgeted last year." From this information, you know the small manufacturer used __________ budgeting. Percentage of Sales
The best approach to promotion budgeting is __________ budgeting method whereby the company determines its promotion objectives, outlines the tasks to accomplish these objectives, and determines the promotion cost of performing these tasks. Objective and Task
Pauline received a postcard from a local antique mall. The card invited her to attend an invitation-only open house at the mall and receive a 10 percent discount on her first purchase that day. The antique mall was using the postcard for: Traffic Generation
An ad for Allegra allergy medicine highlights the competitive advantage of Allegra over its primary competitors Benagryl, Tylenol, and Chlor-Trimeton. This is ad is an example of __________ advertising. Comparative
If you ordered a commercial to run on a local stations that could reach 500,000 households for a cost of $1,000, what would your cost per thousand (CPM) be? $2
__________ occurs when people outside the target market for the product see a firm's advertisement. Wasted Coverage
Young and Rubicam, Inc. developed the "Softer Side of Sears" campaign for Sears to target middle-income women. This agency provided marketing research, media selection, copy development, artwork, and production services for Sears. Young and Rubicam is an example of a(n): Full Service Advertising Agency
Which of the following is NOT an example of an advertising posttest? Theater Tests
As a subscriber to Fitness magazine, Kelly was asked by a researcher, which ads she remembered seeing in the most recent issue of the magazine. Then she was asked questions about the content and appearance of the ads she remembered. The researcher was using __________ to test the effectiveness of ads in the magazine. Unaided Recall
When Allyn went to get his newspaper, he found the paper in a plastic bag along with a box containing one dose of Alka-Seltzer Heartburn Relief medication. Which type of sales promotion is Alka-Seltzer using? A Sample
__________ is a sales promotion designed to encourage and reward repeat purchases by acknowledging each purchase made by a consumer and offering a premium as purchases accumulate. Loyalty Programs
TransWave International is a small company that has developed a system that uses the Web and patented electronic sensors as an early-warning device for pipeline leaks. Pipeline safety is becoming a big issue in the U.S. as more natural gas lines are being laid near populous centers. The timing is right for this company to be extremely successful, but it must make it self known to oil companies. One method it used was an article about the company in Business 2.0 magazine. This article described the company, what its product could do, and why the product was needed. The article was an example of: Publicity
All activities involved in selling goods or services directly to final consumers for their personal use Retailing
Businesses whose sales come primarily from retailing retailer
EX Specialty Stores Home Depot
EX Department Stores Macys
EX Supermarkets ShopRite
EX Convenience Stores Duane Reade
EX Discount Stores Dollar Store
EX Off Price Retailer Costco
EX Superstore Wal Mart
Independant Retailer, Corporate Chain, Contractual System Forms of Retail Ownership
Self Service, Limited Service, Full Service Levels of Retail Service
Depth of Line & Breadth of Line Types of Retail Merchandise
Retailers are classified by Form of Ownership Level of Service, and Type of Merchandise
Demand oriented, psychological, cost oriented, profit oriented, and competition oriented various pricing approaches
skimming pricing, penetration pricing, prestige pricing, price lining, yield management pricing demand oriented pricing approaches
odd/even pricing, target pricing, bundle pricing, reference prices, captive product prices, loss leader pricing psychological pricing approaches
standard mark up pricing, cost plus pricing, experience curve pricing cost oriented pricing approaches
target profit pricing, target return on sales pricing, target ROI pricing profit oriented pricing approaches
customary pricing, above/at/below market pricing competition oriented pricing approaches
quantity, seasonal, trade/functional, cash types of discounts
trade in, promotional types of allowances
fob origin, uniform delivered, zone, freight absorption, basing point types of geographic price adjustments
price fixing, price discrimination, deceptive pricing, geographical pricing, oredatory pricing legal and regulatory pricing aspects