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Which of the following observations concerning F.O.B. pricing is not true? A. Typically, it names the place. B. F.O.B. shipping point pricing may narrow the market. C. F.O.B. shipping point pricing complicates the seller's pricing. D. If a firm wants to pay the freight for the convenience of customers, it can use F.O.B. delivered. E. A firm can use F.O.B. buyer's factory if it wants to pay the freight. When a company includes "stories" and/or videos on its Web site of how it has helped individual customers solve an important problem, this is an example of a: A. branded service. B. blog. C. Facebook page. D. case study. E. microblog. All of the following are true of institutional advertising except A. focuses on the name and prestige of an organization or industry. B. seeks to inform, persuade, or remind. C. tries to keep the product's name before the public. D. develops goodwill or improves an organization's relations with various groups. E. advocates a specific cause or idea. A wholesaler-sponsored retail chain is called a: A. consumer cooperative. B. corporate chain. C. franchise chain. D. voluntary chain. E. cooperative chain. Which of the following is NOT an example of sales promotion? A. A small toy in a "kid's pack" at a Wendy's fast-food restaurant. B. A half-page ad in the telephone Yellow Pages for a security service. C. An auto bumper sticker that says "Buy American." D. Samples of a new brand of cheese given away at a supermarket. E. A display of fishing equipment by a sporting goods store in a shopping mall. Trade (functional) discounts A. are illegal unless they are offered to meet a competitor's price. B. are not offered by sellers who use administered prices. C. are a type of cash discount. D. reflect the fact that marketing activities can often be shifted and shared in the channel in different ways. E. are typically offered to consumers but not to intermediaries. Advertising spending as a percent of sales dollars is lowest for: A. malt beverages. B. cars. C. cable TV. D. computers. E. games. Apple has a magnificent glass-enclosed multilevel store in Boston with a Genius Bar staffed with techies who are very knowledgeable about its products. Customers who have purchased an Apple product (iPad, iPhone, iPod, MacPro, etc.) can make an appointment with a Genius and get personalized information and repair services on the spot. This type of retail shop is an example of a: A. branded service. B. reminder service. C. pioneering service. D. competitive service. E. comparative service. Personal selling is more appropriate than mass selling when: A. the target market is large and scattered. B. there are many potential customers and a desire to keep promotion costs low. C. flexibility is not important.









D. immediate feedback is desirable. E. All of the above are true. Which of the following would be a type of advertising used in the awareness stage of the adoption process? A. Flash ads B. Testimonials C. Teaser campaigns D. Point-of-purchase ads E. Persuasive copy Which of the following is NOT a "Something of Value" which might be offered to CONSUMERS in the "price equation"? A. Stocking allowance B. Service C. Repair facilities D. Credit E. Packaging Which of the following statements about advertising agencies is FALSE? A. The advertising agency gets a 15 percent commission on local rate but not on national rates. B. Many advertisers refuse to work with an agency that handles competing accounts. C. Some full-service agencies handle their clients' overall marketing strategy planning. D. A number of advertisers now grade the work done by their agencies and the agencies' pay depends on the grade. E. None of the above is false. When Southwest Airlines sends an e-mail to frequent-flier customers offering a special low price between selected cities if the plane ticket is purchased within the next four days, this is an example of: A. direct marketing. B. integration. C. publicity. D. indirect-response promotion. E. mass selling. Manufacturers' agents: A. don't cost the producer anything until something sells. B. aren't very useful for introducing new products. C. usually perform storing and transporting functions. D. usually handle the competing lines of several manufacturers. E. All of the above. Which of the following statements about agent wholesalers is FALSE? A. Agent wholesalers based in a foreign market can be helpful in working through government red tape because they know the local business customs. B. Export and import brokers bring together buyers and sellers from different countries. C. Manufacturers' agents can call on international customers at no cost to the producer until something sells. D. Export and import agents are basically selling agents who specialize in international trade. E. Agent wholesalers are common in international trade. The Robinson-Patman Act: A. States that selling the same product to different consumers at different prices is always illegal. B. Makes it illegal for a firm to offer quantity discounts. C. Requires that promotional allowances be made available to all of a firm's customers on "proportionately equal" terms. D. All of the above. E. None of the above. A producer using very aggressive promotion to get final consumers to ask intermediaries for a new product has: A. a pulling policy. B. a target marketing policy. C. a selective distribution policy.









D. a pushing policy. E. an intensive distribution policy. A group of male college students are watching a professional football game in a sports barand socializing with each other during the commercials. In the traditional communication model, the socializing during the commercials is the: A. Source B. Receiver C. Noise D. Decoding E. Encoding Which of the following is a sales-oriented pricing objective? A. Meet competition B. Market share growth C. Profit maximization D. Target return E. Non price competition Will Bishop sells a wide assortment (in small quantities) of "emergency" home repair items (fuses, electrical tape, small packets of nails) to grocery and convenience stores. He owns the products he handles, and displays them for his customers. Bishop is a: A. manufacturers' agent. B. selling agent. C. rack jobber. D. cash-and-carry wholesaler. E. truck wholesaler. A farmer's cooperative in California is sponsoring TV ads aimed at getting Americans to eat more garlic. The ads don't mention any brand names. This is an example of ______________ advertising. A. competitive B. pioneering C. indirect competitive D. reminder E. comparative Unilever is introducing a new brand of car window cleaner in market maturity. To speed its entry into the market--without encouraging price competition--Unilever should use: A. a flexible-price policy. B. a one-price policy. C. a penetration pricing policy. D. introductory price dealing. E. a skimming pricing policy. Which of the following price-related actions by a manufacturer most likely would be a violation of the Robinson-Patman Act? A. Offering a lower price to only one buyer to match a competitor's price. B. Selling to all its customers at uniform prices. C. Granting a lower price to a buyer because of a large-quantity purchase. D. Giving a special advertising allowance to a retailer that was having difficulty competing in its local market. E. None of the above is a violation. The AIDA model: A. focuses on what happens after the adoption process is complete. B. shows that the promotion effort is done once desire is aroused. C. consists of four basic promotion jobs. D. suggests that mass media can get consumers' attention only if that is what consumers desire. E. All of the above are true. A flexible-price policy is MOST LIKELY to be set by a retailer selling: A. milk. B. women's shoes. C. golf balls.










D. T-shirts. E. cars. Facebook, a social network Web site, has _________ million visitors each day in the U.S. alone. A. 20 B. 40 C. 60 D. 80 E. 100 Point-of-purchase materials is a sales promotion activity aimed at A. distributors. B. company's own sales force. C. intermediaries. D. retailers. E. final consumers. A full-service wholesaler in Santa Fe takes title to the products it stocks--a full line of home repair products for independent hardware stores. This wholesaler is a: A. selling agent. B. broker. C. specialty wholesaler. D. rack jobber. E. single-line wholesaler. Regarding advertising and the AIDA model, which of the following is the best example of advertising aimed at obtaining action? A. A TV ad at 10:00 PM for the luncheon buffet at a local restaurant. B. A car at an auto junk yard--with the operating hours painted on the side. C. An ad for a restaurant in the Yellow Pages. D. A classified ad in a newspaper with the word "SEX" in bold print and then the name and telephone number of a dry cleaner. E. None of the above. Trade shows are a sales promotion device usually aimed at promoting products or services to: A. Final consumers. B. Business/industrial customers. C. A firm's own employees. D. All of the above. E. None of the above. Behavioral targeting A. tries to place ads on websites that are designed to appeal to the firm's target market. B. decides how the messages will reach the target audience. C. allows advertisers to pay only when a customer clicks on the ad and links to the advertiser's website. D. tries to reach target customers who are actually interested in what the firm has to communicate. E. delivers ads to consumers based on previous websites the customer has visited. During the sales decline stage A. the total amount spent on promotion usually decreases as firms try to cut costs to remain profitable. B. firms do not need targeted promotion to reach customers. C. personal selling will probably dominate the promotion blends of consumer products firms. D. promotion emphasis shifts from stimulating selective demand to building primary demand. E. sales promotion is primarily targeted at intermediaries to get them interested in selling the product. Which of the following is "something of value" that might be offered to FINAL CONSUMERS as part of the "price equation"? A. Sufficient margin to allow for profit. B. Trade allowances. C. Competitive advantage. D. Branded merchandise. E. None of the above. Trying to sell a firm's new product to a large market at one low price is known as: A. a skimming pricing policy. B. introductory price dealing.










C. nonprice competition. D. a penetration pricing policy. E. a flexible-pricing policy. Reminder advertising A. tries to develop primary demand for a product category rather than demand for a specific brand. B. tries to keep the product's name before the public. C. means making specific brand comparisons using actual product names. D. tries to develop selective demand for a specific brand. E. informs potential customers about the new product and helps turn them into adopters. Supermarkets: A. Usually earn net profits that are at least 15 percent of sales. B. Were late adopters of the mass-merchandising concept. C. Usually carry about 100,000 product items per store. D. Are designed to maximize efficiency. E. All of the above. If a producer wants to stabilize demand over time by encouraging repeat business, it should probably use A. uniform delivered pricing. B. phony list prices. C. a seasonal discount. D. a cash discount. E. a cumulative quantity discount. All of the following publicity tools are examples of one-way communication from a company to consumers or business customers EXCEPT: A. videos. B. MySpace. C. podcasts. D. case studies. E. commercial white papers. A discount that is offered to encourage buyers to stock earlier than present demand requires is: A. a cash discount. B. a seasonal discount. C. a quantity discount. D. "push money." E. a trade discount. Which kind of advertising should a manufacturer of paper towels (that are basically similar to competitive products) use if it wants to increase its market share? A. Reminder B. Competitive C. Institutional D. Primary demand E. Pioneering A good marketing manager for a retailer knows that: A. economic needs are more important than emotional needs in choosing a store. B. shopping atmosphere has little comparative importance. C. consumers only go to stores that offer the lowest possible prices. D. individual consumers have different economic and emotional needs. E. All of the above are true. A retail store that averages about $17 million in sales annually and specializes in groceries--with selfservice and large assortments is a: A. mass-merchandiser. B. specialty shop. C. convenience food store. D. discount house. E. supermarket. A typical retailer's newspaper ad stressing "today's" sale prices on "regular" stock is an example of ______________ advertising.







A. reminder B. direct competitive C. pioneering D. institutional E. indirect competitive Sales-oriented pricing objectives: A. may include market share targets as well as dollar or unit sales targets. B. might be achieved and still result in losses. C. are especially risky during times when a firm's costs are rising rapidly. D. All of the above are true. E. None of the above is true. If the advertising objective is to convince potential customers that "Safeway Cleaners" offers excellent dry-cleaning services, what medium would be best for reaching local prospects? A. Television B. Magazines C. Cinema D. Internet E. Newspapers A _____ price policy tries to sell the top of the demand curve at a high price before aiming at more pricesensitive customers. A. meet competition B. status quo C. penetration D. skimming E. panning If a producer wants title to pass to a buyer immediately--but still wants to pay the freight bill--the invoice should read: A. F.O.B. buyer's factory. B. F.O.B. shipping point. C. F.O.B. delivered. D. F.O.B. seller's factory--freight prepaid. E. F.O.B. mill. Which of the following wholesalers do NOT carry stocks for their customers? A. Specialty wholesalers B. Drop-shippers C. Cash-and-carry wholesalers D. Single-line wholesalers E. Catalog wholesalers Use this information for questions that refer to the Super Gaming Company and Accessories (SGCA) case. Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California is carried in only 10 percent of stores. So, Kayla has set an objective of being in 25% of all retail computer stores in California within one year. SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. So, the advertising objective is for 40% of SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80% within the next month. SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well









received, so the advertising objective for the SuperEnhancer sound card is to gain 40% market share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a game player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!" SGCA is having a sales contest to encourage retailers to quickly reduce the inventory of SuperGamer computers. Retailers with the highest sales during the next month win an expense paid trip to a special dealer meeting at a resort in Hawaii. This is A. probably illegal, since it might encourage price competition among retailers. B. an example of cooperative advertising. C. promotion aimed at employees. D. the type of promotion that continues to impact sales even after the promotion is over. E. an example of a producer using sales promotion in the channel. A marketing manager for a large company who wants to compare the financial performance of different divisions of the firm would probably pursue which of the following pricing objectives? A. Status quo B. Market share C. Target return D. Profit maximization E. Sales growth Business firms that sell to retailers and other merchants, and/or to industrial, institutional, and commercial users--but which do not sell in large amounts to final consumers--are: A. retailers. B. collaborators. C. producers. D. wholesalers. E. intermediaries. Final customers or users are normally asked to pay ______________ prices for products they buy. A. basic list B. phony list C. discounted D. wholesale list E. unchanging list A sales-oriented objective may seek all of the following except A. some level of unit sales. B. some level of dollar sales. C. target return profits. D. share of the market. E. percentage of the market. When Hewlett-Packard sends an e-mail to key business customers announcing a special low price on a new type of printer that is faster and produces better-quality color documents than any of its current printers, this is an example of: A. direct-response promotion. B. integration. C. publicity. D. indirect-response promotion. E. mass selling. During the market growth stage of the product life cycle, a producer would focus promotional efforts on creating ___________ demand for its own brand. A. Competitive B. Customer C. Selective D. Discerning E. Persuasive Pricing objectives should flow from, and fit in with, A. shareholder expectations and market practices. B. regulatory policies.









C. industry standards. D. company-level and marketing objectives. E. market price leader actions. An ad for Toyota's lowest priced truck claimed that it "is tougher, gives better mileage, and costs less that any other truck"--and specifically named the directly competitive trucks. This is: A. institutional advertising. B. comparative advertising. C. cooperative advertising. D. direct competitive advertising. E. pioneering advertising. Which of the following retailers spent the LEAST amount on advertising as a percentage of sales? A. Amusement parks. B. Grocery stores. C. Furniture stores. D. Jewelry stores. E. Women's clothing stores. Which of the following give a producer a way to be certain that final consumers actually get the price reduction? A. Rebates B. Push money allowances C. Spiffs D. Trade-in allowance E. Noncumulative quantity discount Some developers of apps for the Apple iPhone price their apps low at launch to encourage sales and get attention so they can move into the prestigious "Top 25" list. Then, they frequently raise prices to get a higher profit margin on later sales. The initial low price is a(n): A. Noncumulative quantity discount B. Temporary sale C. Introductory price deal D. Skimming price E. Cumulative quantity discount Lauren Diaz is strongly influenced by her peer group--and she often adopts a new product only after they have pressured her to try it. She makes little use of mass media and salespeople as sources of information. In terms of the adoption curve, she is A. a laggard B. a late majority C. an early adopter D. an innovator E. an early majority The development of new types of retailers can be best explained by applying: A. the rule of franchising. B. target marketing and product life cycle concepts. C. the corporate chain hypothesis. D. the wheel of retailing theory. E. the law of retail gravitation. In recent years, changes in the social and cultural environment have had a significant effect on door-todoor selling. Which of the following is MOST likely given the changes that have occurred? A. Fuller Brush has seen a dramatic increase in profits from its door-to-door selling operations. B. Sarah Coventry Jewelry has started distributing its products through jewelry stores because of the difficulties of finding someone at home during the day. C. Avon Cosmetics has found that it needs a larger door-to-door sales force because dual career families have more income and more demand. D. None of the above is likely. What basic promotion objective should be emphasized by a producer introducing a really new product which satisfies customer needs better than any existing product? A. Persuading B. Reminding









C. Maximizing D. Informing E. Communicating Target return pricing objectives: A. usually are very high for firms facing heavy competition. B. aren't used by industry leaders because they can maximize profits. C. would never make sense for a nonprofit organization. D. may simplify the management of large producers with many divisions or departments. E. All of the above. All of the following are examples of publicity tools for interactive communication between a company and consumers or business customers EXCEPT: A. Facebook. B. LinkedIn. C. blogs. D. case studies. E. MySpace. Poor communication is likely if: A. there is no "noise" in the message channel. B. the source and the receiver do not have a common frame of reference. C. the encoder and the decoder are not the same person. D. immediate feedback is not possible. E. the source and the receiver don't have personal contact. Some marketing managers have set up relationships with Internet companies whose ads invite customers to "set your own price." Such marketing managers A. have given up on administering prices. B. are carefully administering a flexible price. C. are following a one-price policy. D. make it easier for competition to undercut them. E. are following a penetration pricing policy. Heritage Brick's marketing manager is setting her pricing policies to "increase market share to 8%." Her pricing objective seems to be: A. status-quo oriented. B. sales oriented. C. profit oriented. D. target return oriented. E. None of the above. Which of the following statements about selling agents is FALSE? A. They take over the whole marketing job for a producer. B. They may handle the entire output of one or more producers, even competing producers. C. They may provide a producer with working capital. D. They may even take over the affairs of the producer's whole business. E. None of the above is false. When an online ad is delivered to a person's computer based on previous Web sites that person has visited, this is called: A. pay-per-click targeting. B. pioneering targeting. C. pay-per-view targeting. D. copy thrust targeting. E. behavioral targeting. A typical problem for limited-line retailers is that: A. it is almost impossible for them to satisfy any particular target markets better than other types of retailers. B. their marketing strategy usually relies only on low price. C. they usually cannot carry enough items in a line for any customers to find what they want. D. many of the items they carry are slow moving. E. All of the above are problems.

73. The ____________ says that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets. A. Wheel of retailing theory B. Production concept C. Mass-merchandising concept D. Sales concept E. Primary industry theory 74. Department stores: A. usually aim at customers seeking convenience products. B. have accounted for a larger share of retail sales every year since 1950. C. have no trouble holding their own against mass-merchandisers. D. are organized into separate departments. E. All of the above are true. 75. Convenience (food) stores: A. have no competitors. B. charge about the same prices as nearby supermarkets. C. try to earn better profits by high margins on a narrow assortment which turns over quickly. D. offer greater width of assortment but less depth than most supermarkets. E. none of the above. 76. A one-price policy means offering the same price: A. All four seasons of the year. B. For all types of merchandise. C. For individual consumers and organizational buyers. D. For store brands and national brands. E. To all customers. 77. In the U.S., about ________ people work directly in the advertising industry. A. 410,000 B. 460,000 C. 510,000 D. 560,000 E. 610,000 78. A producer using normal promotion efforts--personal selling, sales promotion, and advertising--to help sell a whole marketing mix to possible channel members has: A. a selective distribution policy. B. a target marketing policy. C. an intensive distribution policy. D. a pushing policy. E. a pulling policy. 79. A live-at-home college student is watching a "Mad Men" TV program, but walks to the refrigerator to get a soft drink during a commercial. In the traditional communication model, the walk to the refrigerator is the: A. Source B. Receiver C. Noise D. Decoding E. Encoding 80. Regarding retailer size and sales volume in the U. S.: A. Approximately 11% of retail stores account for 70% of all retail sales. B. Approximately 11% of retail stores account for 80% of all retail sales. C. Approximately 11% of retail stores account for 89% of all retail sales. D. Approximately 20% of retail stores account for 80% of all retail sales. E. Approximately 30% of retail stores account for 70% of all retail sales. 81. Which of the following statements would be most likely to be made by a manager with a status-quo pricing objective? A. "A price of $10.00 will penetrate the market." B. "A price of $10.00 will not start a price war with our competitors." C. "A price of $10.00 should maximize profits."







D. "A price of $10.00 will provide a 30% return on investment." E. "A price of $10.00 should result in a 9% increase in sales." A flexible-price policy means offering A. different products and quantities to different customers at different prices. B. the same product and quantities to different customers at same prices. C. different products and quantities to different customers at same prices. D. the same product and quantities to different customers at different prices. E. the same product and different quantities to different customers at same prices. Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called PlanetSavers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one and two quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge on a Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores also and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago the company introduced Yummy Fruit on a Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. The promotion for Yummy Mondaes is a good example of: A. pushing B. direct-response promotion C. pulling D. integrated marketing communications E. noise in the communication process To get the most out of its promotion spending, Yummy should probably develop its budget by: A. allocating some fixed percentage of net sales. B. matching expenditures with competitors. C. allocating money to the needs of new products first, then use any leftover money for other products. D. using the "task method." E. spending all available funds. Which of the following illustrates customer-initiated interactive communication? A. People who enter Yummy's online contest receive a "2 for 1" coupon for Yummy's new flavors. B. A customer goes to Yummy's website to see if Yummy has an ice cream shop that is nearby. C. A consumer goes to the CNN website and selects a video clip from World Cup Soccer, but at the start of the clip there is a short ad that shows kids eating Yummy Mondaes. D. A "gamer" at an online website ends a game and encounters a pop-up ad for Yummy Fruit on a Stick. E. Consumers who participate in an online marketing research survey are later called and interviewed about which of Yummy's ads they remember. Sales promotion activities: A. Usually have long-term effects. B. Are aimed at final consumers, but not business customers. C. Focus more on getting attention than on stimulating action by consumers. D. May be aimed at a firm's own employees. E. Usually take longer to achieve sales results than does advertising.

87. Ad spending for magazines in the U.S. in 2010 was about: A. $9 billion B. $13 billion C. $17 billion D. $21 billion E. $25 billion 88. Which of the following statements about retailing in different nations is NOT true? A. Mass-merchandisers are especially popular in less-developed nations. B. Some large retail chains are moving into international markets. C. Supermarkets started in the U.S. D. Supercenters started in Europe. E. New retailing formats that succeed in one country are quickly adapted to other countries. 89. Regarding direct-mail retailers, which of the following statements is TRUE? A. They emphasize low-price "commodities" that can be found in local stores. B. Their profit margins are rising. C. Their competition is decreasing. D. Some aim at very narrow target markets. E. All of the above are true. 90. A research report shows that a magazine's readers are well respected by their peers and high in opinion leadership. They tend to be younger, more mobile, and more creative than later adopters. But they have fewer contacts outside their own social group or community than innovators. A firm might advertise to the readers of this magazine if it is targeting: A. laggards. B. innovators. C. the early majority. D. early adopters. E. the late majority. 91. Mercedes, the European luxury car maker, does not mention price in its magazine advertising. Instead, the ad copy focuses on the quality and performance of the Mercedes product line. What pricing objective is Mercedes pursuing? A. Status quo B. Price flexibility C. Nonprice competition D. Introductory price deal E. Bundling 3. Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company. At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase it to 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3% reduction on the invoice amount due to advertise Bella products locally. Bella gives retailers' salespeople 2% of the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and not start a price war. Digital Imaging offers customers an 8% discount if their purchases exceed $20,000 a year. Jack's One Hour Cleaners recently opened for business. The company invested a lot of money in new equipment, and feels that it has to quickly get "at least 10% market share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20% discounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate









prices with individual customers and often have to match competitors' prices. NPE has a new product, the Gutenberg NP201, with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. In regard to freight charges for its equipment, NPE's invoice reads, "Seller pays the cost of loading equipment onto a common carrier. At the point of loading, title to such products passes to the buyer, who assumes responsibility for damage in transit, except as covered by the transportation agency." Which business offers a CUMULATIVE quantity discount? A. Digital Imaging B. Jack's One Hour Cleaners C. National Printing Equipment D. Ross Pharmaceuticals E. Bella Computers The 2% Bella Computers gives to retailers' salespeople is an example of: A. value pricing. B. push money. C. everyday low pricing. D. an advertising allowance. E. a stocking fee. National Printing Equipment ships its products: A. based on freight-absorption pricing. B. using uniform delivered pricing. C. F.O.B. shipping point. D. F.O.B. buyer's factory. E. at no cost to the customer. Regarding direct-mail retailers, which of the following statements is TRUE? A. They emphasize low-price "commodities" that can be found in local stores. B. The Internet has put most of these retailers out of business. C. They have higher operating costs than most conventional retailers. D. Some aim at very specific target markets. E. All of the above are true. Which of the following retailers spend more on advertising as a percent of sales? A. Amusement parks. B. Hotels and motels. C. Women's clothing stores. D. Grocery stores. Regarding retailing, which of the following is LEAST LIKELY to occur in the future? A. Vertical integration will increase in importance in the channels. B. Internet shopping will become less popular. C. More manufacturers will go into retailing. D. Along with larger stores, there will also be more smaller stores. E. Scrambled merchandising will continue to increase. A target return figure of zero implies: A. setting negligible sales targets. B. setting a price level that will just recover costs. C. setting a price that helps attain previous year's high profitability. D. setting a price that would match the industry standard profit margin. E. setting a price at which competition will be zero. Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods - mostly men's and women's clothing - with the upscale Walden's brand name. Walden's primarily relies on its own stores where knowledgeable salespeople offer great service. Walden products are also sold, on a limited basis, in some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for

paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Wal-Mart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances - but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides as well as commissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fifty stores grocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. 99. Which of these businesses best fits the definition of a limited-line store? A. Johnson's Health and Beauty Supplies B. Valu Grocer C. Cuzco's D. Walden's Leather 100. Department stores: A. Are no longer a major retail force in large U. S. cities. B. Have increased in number since the 1970s. C. Usually offer many product lines. D. Have increased their share of retail business since the 1970s. E. Are not threatened by mass-merchandising retailers. 101. Which of the following is NOT a franchise operation? A. Subway (food). B. H & R Block (tax work). C. Kinko's (copy center). D. 7-Eleven (convenience store). E. All of the above are franchises. 102. Regarding message planning: A. a specific message usually can be used for several target markets. B. communication may be poor if there is not a common frame of reference. C. behavioral research shows that most consumers cannot "tune out" advertising messages. D. advertising is more suitable for changing behavior than attitudes. E. All of the above. 103. A firm would likely pursue penetration pricing when A. it expects zero competition. B. economies of scale are nonexistent. C. the elite market is substantial. D. the whole demand curve is fairly elastic. E. supply is limited. 104. A producer is likely to focus its promotion effort on stimulating selective demand at what stage in the product life cycle? A. Market introduction B. Market growth C. Market maturity

D. Sales decline E. When primary demand is exhausted. 105. A manufacturer could try to defend itself against charges of price discrimination under the RobinsonPatman Act by claiming that: A. the products were not of "like grade and quality." B. any price differences were to "meet competition in good faith." C. the price differences did not injure competition. D. the price differences were justified on the basis of cost differences. E. All of the above are possible defenses against price discrimination charges. 106. The idea that retailers will start to sell a new product that offers a profit margin higher than what they achieve on their traditional product line is consistent with the A. marketing concept. B. operating philosophy of most limited-line retailers. C. wheel of retailing concept. D. scrambled merchandising concept. E. none of the above. 107. A retailer's promotion objective might be to ______________ its target market about its marketing mix. A. inform B. persuade C. remind D. All of the above. E. Only A and C above. 108. Primary demand is A. the demand for the general product idea. B. just the demand for the company's own brand. C. the main form of mass selling. D. any unpaid form of nonpersonal presentation of ideas, goods, or services. E. any paid form of nonpersonal presentation of ideas, or services by an identified sponsor. 109. The "Fashion Place" carries a carefully selected and distinctive assortment of traditional women's business clothing and accessories for upper-class executives in Boston. It emphasizes customer service with its well-trained salesclerks. The store is probably a: A. small department store. B. specialty shop. C. convenience store. D. single-line store. E. specialty store. 110. When selecting advertising media, a good advertising manager knows that: A. TV typically reaches more targeted markets than radio. B. direct-response ads are not a good alternative unless you already have your own mailing list. C. specialized media are generally too expensive. D. magazines are too production-oriented to reach special-interest groups. E. objective measures--like "cost per thousand"--can be misleading. 111. Regarding modern wholesaling, which of the following statements is TRUE? A. More careful selection of retailer customers has increased profitability. B. Wholesalers are now more "retailer-minded." C. Greater attention is being given to adding value in the channel. D. Many wholesalers are using the Internet to reach new customers and improve profits. E. All of the above are true. 112. When a purchasing agent from Ford Motor Co. is trying to find information about a new type of component that might be used in the production of a new Ford SUV, the most common message channel for him to search is: A. television. B. newspapers. C. radio. D. the Internet. E. trade magazines.

113. Which of the following is NOT a promotion method? A. mass selling B. personal selling C. sales promotion D. All of the above are promotion methods. E. None of the above are promotion methods. 114. When a supermarket manager decides the amount to charge customers for home delivery of grocery items, this is a decision about: A. Product B. Place C. Promotion D. Price 115. Which of the following is a status quo oriented pricing objective? A. Target return B. Unit sales growth C. Profit maximization D. Growth in market share E. Non price competition 116. A pharmaceutical company plans to introduce a new brand of pain reliever targeted at senior citizens. The company purchases a mailing list containing the names and addresses of elderly people who are known to take pain relievers on a regular basis to deal with chronic ailments such as arthritis. The company then sends informational brochures about the new product to the people on the list, along with a coupon they can return to get a free sample. The names of the people who respond are entered into a special database and are sent information about other products. This company is engaged in: A. Publicity response. B. Personal selling. C. Direct-response promotion. D. Decoding response. E. Noise interference. 117. Which of the following is NOT true concerning adoption curve groups? A. The early adopter group tends to have the greatest contact with salespeople. B. Early adopters are often unusual people who are not seen as opinion leaders. C. Innovators rely more on impersonal sources of information than on salespeople. D. Business firms in the innovator group are usually large and rather specialized. E. The early majority group have a lot of contact with mass media, salespeople, and opinion leaders. 118. A producer might use a "pulling policy" rather than a "pushing policy" if: A. intermediaries are reluctant to handle a new product. B. it is offering a very "high-tech" product to a small product-market. C. its sales force has been very successful getting wholesalers and retailers to handle its product. D. it has a very limited promotion budget. E. All of the above. 119. Which of the following retailers was the first to adopt the mass-merchandising concept? A. Department stores. B. Discount houses. C. Supermarkets. D. General stores. E. Supercenters. 120. Which of the following would be a type of advertising used in the evaluation and trial stage of the adoption process? A. Competitive ads B. Flash ads C. Informative "why" ads D. Pioneering ads E. Viral advertising 121. Reminder ads come under which stage of the adoption process in advertising? A. Awareness B. Interest

C. Evaluation and trial D. Confirmation E. Decision 122. All of the following are examples of publicity tools for interactive communication between a company and consumers or business customers EXCEPT: A. Facebook. B. LinkedIn. C. microblogs. D. videos. E. FourSquare. 123. _________ are countries that limit the use of cartoon characters in advertising to children. A. USA and New Zealand B. Japan and USA C. France and Japan D. New Zealand and France E. Switzerland and USA 124. Developing and selecting the "best" PROMOTION BLEND should be done by a producer's: A. sales manager. B. advertising agency. C. sales promotion manager. D. marketing manager. E. advertising manager. 125. The AIDA model's four basic promotion jobs are concerned with: A. attention, interest, desire, action. B. action, interest, desire, acceptance. C. awareness, interest, demand, action. D. attention, internalization, decision, action. E. awareness, interest, decision, acceptance. 126. Which of the following products is most likely to be sold by a drop-shipper? A. Skis B. Toothpaste C. Greeting cards D. Printing supplies E. Coal 127. Franchise operations provide a good example of: A. vertical integration. B. contractual vertical marketing systems. C. administered channels in which the retailers are the channel captains. D. direct-to-buyer channels. E. None of the above. 128. Which of the following is NOT a full-service merchant wholesaler? A. Broker B. Single-line wholesaler C. General-line wholesaler D. General merchandise wholesaler E. Specialty wholesaler 129. The largest share of total advertising expenditures in the United States goes for: A. Internet advertising. B. television and cable advertising. C. magazine advertising. D. direct-mail advertising. E. radio advertising. 130. Budgeting for marketing expenses by computing a percentage of forecasted sales: A. is especially suitable for new products. B. always results in increased expenditure levels from year to year. C. is very complicated--and thus this method is not used very often.

D. may lead to a drop in marketing expenses at a time when the firm wants to maintain or expand sales. E. tends to result in large changes in marketing expenses from year to year. 131. A corporate chain is defined as A. a firm that owns and manages more than one store. B. retailer-sponsored groups formed by independent retailers that run their own buying organizations and conduct joint promotion efforts. C. wholesaler-sponsored groups that work with "independent" retailers. D. franchisors who develop good marketing strategies, and who carry out the strategy in their own units. E. a firm that owns a single-store but operates through multiple franchisors. 132. Southwest Airlines' "Ding" widget pops up on your computer desktop to let you know of lower fares to cities you want to visit. This is an example of a(n) _________ promotion objective. A. Persuading B. Reminding C. Informing D. Pioneering 133. When an advertiser pays a fixed amount (e.g. 70 cents) each time a Web surfer clicks on the advertiser's ad and links to the advertiser's Web site, this process is called a(n): A. copy thrust. B. pay-per-view. C. pioneering ad. D. pay-per-click. E. advertising allowance. 134. The early majority group A. tends to have the greatest contact with salespeople. B. tends to cling to the status quo and think it's the safe way. C. prefers to do things the way they have been done in the past and are very suspicious of new ideas. D. tends to avoid risk and waits to consider a new idea after many early adopters have tried itand liked it. E. can help the promotion effort by spreading word-of-mouth information and advice among other consumers. 135. A reduction from list price given to intermediaries to get shelf space for a product is a: A. shelf allocation. B. brokerage allowance. C. trade allowance. D. stocking allowance. E. push money allowance. 136. Research to evaluate advertising effectiveness: A. should focus primarily on the judgment of advertising experts. B. should focus primarily on measuring increases in sales. C. includes experiments conducted using split runs on cable TV systems. D. is a problem because nothing can be done until after the ad has actually run. E. All of the above are true. 137. The court decisions in the Borden case clearly show that: A. products of "like grade and quality" must be offered to all buyers at the same price--even if sold under different labels. B. manufacturers who supply retailers with dealer brands cannot force the retailer to charge consumers the manufacturer's suggested list price. C. price fixing is always illegal. D. a manufacturer can charge different prices for different brands of physically identical products as long as the price differentials do not exceed the recognized consumer appeal of the higher-priced brands. E. manufacturers cannot charge different prices for dealer brands and manufacturer brands. 138. A "penetration pricing policy": A. is the same as a "meeting competition" price-level policy. B. is wise when demand is fairly inelastic--offering an "elite" market. C. involves temporary price cuts to speed new products into market.

D. involves a series of step-by-step price reductions along an inelastic demand curve. E. may be wise if a firm expects strong competition very soon after its product introduction. 139. Quantity discounts are offered by sellers to: A. reduce shipping or selling costs. B. encourage customers to purchase larger quantities. C. shift some of the storing function to buyers. D. encourage buyers to make additional purchases. E. All of the above. 140. A producer of disposable diapers is planning to introduce a new brand of diapers that is specially designed for large babies who are hard to fit with regular diapers. The company mails coupons for the new brand to all the consumers in its database of disposable diaper users. The coupons offer consumers a $2 discount off the regular price of a pack of diapers. The company sends an accompanying letter advising consumers to bring the coupons to their favorite store and use them. If the brand is not in stock, the letter encourages consumers to ask the store manager to stock the new brand. This promotion effort by the company is an example of: A. Pushing in the channel. B. Pulling by customers. C. Integrated marketing communications. D. Buyer-initiated communication. E. None of the above. 141. LAGGARDS or NON-ADOPTERS: A. are usually the smallest businesses with the least specialization. B. tend to be older and less well educated. C. rely mainly on other laggards for information. D. are suspicious of new ideas. E. All of the above. 142. In the 30-minute TV infomercial for a new type of "home gym equipment," a toll-free 800 number is prominently displayed across the bottom of the screen. This is an example of ______________ promotion. A. latent-response B. delayed-response C. indirect-response D. laggard-response E. direct-response 143. Until recently, Triad Equipment, Inc. took trade-ins when it sold new equipment to manufacturers. Now, Triad has a new owner who wants to sell the inventory of used equipment quickly to the best available buyer. He should look for: A. a manufacturers' sales branch. B. a broker. C. a selling agent. D. a manufacturers' agent. E. sales finance company. 144. A penetration pricing policy: A. Tries to sell the whole market at one low price. B. Tries to sell the top of the market at a high price. C. Is used when demand for the product involved is inelastic. D. Usually involves a slow reduction in price over time. E. Is used when the firm does not expect strong competition soon after its product is introduced. 145. When a previous visitor to returns to the site, the online retailer will instantly have information about that visitor because of the ___________ it placed on the visitor's computer during the first visit. A. institution B. reminder C. cooperative D. cookie E. allowance