Question 1

Household appliance retailers earn an average 33.5% gross margin.These retailers might be willing to accept a lower margin on promotional products if:

Accepted Answer

A)  The turnover rate is extraordinarily high. 
B)  The lower margins are only temporary. 
C)  The channel members are convinced that the promotional products will help build customer patronage. 
D)  The promotional products are of high quality. 
E)  The promotional products are heavily advertised on national media. 
A)  The turnover rate is extraordinarily high. 
B)  The lower margins are only temporary. 
C)  The channel members are convinced that the promotional products will help build customer patronage. 
D)  The promotional products are of high quality. 
E)  The promotional products are heavily advertised on national media. C

Question 2

Before automatically passing price increases through the channel,the manufacturer should:

Accepted Answer

A)  Analyze customer reactions. 
B)  Offer rebates for the same amount as the price increase. 
C)  Do whatever it can do to mitigate the negative effects of the increase on channel members. 
D)  Offer increased trade discounts. 
E)  Provide special promotional material. 
A)  Analyze customer reactions. 
B)  Offer rebates for the same amount as the price increase. 
C)  Do whatever it can do to mitigate the negative effects of the increase on channel members. 
D)  Offer increased trade discounts. 
E)  Provide special promotional material. C

Question 3

The sale of well-known brand products by unauthorized dealers,usually at very low prices,is referred to as:

Accepted Answer

A)  Off-price selling. 
B)  The black market. 
C)  The gray market. 
D)  Counterfeiting. 
E)  Specialty discount retailing. 
A)  Off-price selling. 
B)  The black market. 
C)  The gray market. 
D)  Counterfeiting. 
E)  Specialty discount retailing. C

Question 4

Distributors and dealers who offer extremely low prices but little if any service to customers are engaging in a practice called:

Accepted Answer

A)  Segmented marketing. 
B)  Specialty retail discounting. 
C)  Vertical marketing. 
D)  Franchise discounting. 
E)  Free riding. 
A)  Segmented marketing. 
B)  Specialty retail discounting. 
C)  Vertical marketing. 
D)  Franchise discounting. 
E)  Free riding.

Question 5

Gross margins of wholesalers range approximately from:

Accepted Answer

A)  7% to 34%. 
B)  2% to 5%. 
C)  6% to 10%. 
D)  30% to 50%. 
E)  15% to 40%. 
A)  7% to 34%. 
B)  2% to 5%. 
C)  6% to 10%. 
D)  30% to 50%. 
E)  15% to 40%.

Question 6

If an item that had cost the retailer $7 sold at retail for $12.50,the gross margin percentage on selling price is:

Accepted Answer

A)  78.6%. 
B)  56%. 
C)  44%. 
D)  21.4%. 
E)  100%. 
A)  78.6%. 
B)  56%. 
C)  44%. 
D)  21.4%. 
E)  100%.

Question 7

___________ are products that usually have the lowest price in the product line and yield low margins.

Accepted Answer

A)  Price jumpers 
B)  Price points 
C)  Lures 
D)  Door openers 
E)  Cost leaders 
A)  Price jumpers 
B)  Price points 
C)  Lures 
D)  Door openers 
E)  Cost leaders

Question 8

When channel members load up on discounted products featured in the manufacturer's promotion but pass on the lower price for just a portion of the amount purchased to their customers,they are most likely to be engaged in:

Accepted Answer

A)  the gray market. 
B)  Price fixing. 
C)  Forward buying. 
D)  Price pointing. 
E)  Free riding. 
A)  the gray market. 
B)  Price fixing. 
C)  Forward buying. 
D)  Price pointing. 
E)  Free riding.

Question 9

Gross margins for retailers of __________ are on the average lower than for retailers of ___________.

Accepted Answer

A)  Vending machines; liquor 
B)  Furniture; fuel oil 
C)  Gasoline service stations; furniture 
D)  Household appliances; liquor 
E)  Groceries: fuel oil 
A)  Vending machines; liquor 
B)  Furniture; fuel oil 
C)  Gasoline service stations; furniture 
D)  Household appliances; liquor 
E)  Groceries: fuel oil

Question 10

Which of the following is a possible channel member reaction to a manufacturer-initiated price cut?

Accepted Answer

A)  They will expect price cuts to reduce sales volume. 
B)  They may resent the reduction in their margins that may result from the price cut. 
C)  They will discontinue carrying the product. 
D)  They may have to cut the prices of other products they carry. 
E)  They may be concerned about complaints from customers. 
A)  They will expect price cuts to reduce sales volume. 
B)  They may resent the reduction in their margins that may result from the price cut. 
C)  They will discontinue carrying the product. 
D)  They may have to cut the prices of other products they carry. 
E)  They may be concerned about complaints from customers.

Question 11

In attempting to gain price control in the channel,the manufacturer should use:

Accepted Answer

A)  "Friendly persuasion." 
B)  Coercive power. 
C)  Fair trade laws. 
D)  Incentives. 
E)  Threats to change to another channel member. 
A)  "Friendly persuasion." 
B)  Coercive power. 
C)  Fair trade laws. 
D)  Incentives. 
E)  Threats to change to another channel member.

Question 12

For some product categories,customers simply have come to expect finding products priced at customary levels.The "expected" prices for such products are referred to as:

Accepted Answer

A)  Price lines. 
B)  Price points. 
C)  Standard prices. 
D)  Promotional prices. 
E)  Psychological prices. 
A)  Price lines. 
B)  Price points. 
C)  Standard prices. 
D)  Promotional prices. 
E)  Psychological prices.

Question 13

If a product has a list price of $25 and offers a wholesale trade discount of 59% and a retail trade discount of 40%,the cost to the wholesaler is:

Accepted Answer

A)  $14.75. 
B)  $4.75. 
C)  $10.25. 
D)  $10.00. 
E)  $3.75. 
A)  $14.75. 
B)  $4.75. 
C)  $10.25. 
D)  $10.00. 
E)  $3.75.

Question 14

A customer buying a branded product from a low-priced distributor likely is:

Accepted Answer

A)  Getting a counterfeit product. 
B)  Buying in the gray market. 
C)  From an authorized dealer with high-volume and operating economies. 
D)  Purchasing from a free rider. 
E)  There is no way to tell from the information given. 
A)  Getting a counterfeit product. 
B)  Buying in the gray market. 
C)  From an authorized dealer with high-volume and operating economies. 
D)  Purchasing from a free rider. 
E)  There is no way to tell from the information given.

Question 15

A producer may offer a margin different from that offered by competitive brands if:

Accepted Answer

A)  If the customers associate superior benefits with the product. 
B)  The product is imported. 
C)  Manufacturing cost differences jeopardize the manufacturer's profits. 
D)  All of the above. 
E)  Producers should not deviate from the margin offered by competitive brands. 
A)  If the customers associate superior benefits with the product. 
B)  The product is imported. 
C)  Manufacturing cost differences jeopardize the manufacturer's profits. 
D)  All of the above. 
E)  Producers should not deviate from the margin offered by competitive brands.

Question 16

Differing perceptions of price incentives between the consumers and channel members' viewpoints stem from:

Accepted Answer

A)  Small advertising allowances. 
B)  Differing marketing philosophies. 
C)  Differing price elasticities. 
D)  Differing cross elasticities. 
E)  Differing promotional displays. 
A)  Small advertising allowances. 
B)  Differing marketing philosophies. 
C)  Differing price elasticities. 
D)  Differing cross elasticities. 
E)  Differing promotional displays.

Question 17

A product cost a wholesaler $6.80.The wholesaler sold the product to a retailer for $10.00.The percentage gross profit on the wholesaler's cost is:

Accepted Answer

A)  32%. 
B)  49.3%. 
C)  52.4%. 
D)  16.8%. 
E)  47%. 
A)  32%. 
B)  49.3%. 
C)  52.4%. 
D)  16.8%. 
E)  47%.

Question 18

Generally,when manufacturers make major changes in their pricing structure,channel members usually are __________ when manufacturers make major changes in their terms of sale.

Accepted Answer

A)  less uneasy than 
B)  more uneasy than 
C)  as uneasy as 
D)  unconcerned because changes in terms of sale rarely cause negative reaction from channel members, even 
E)  as threatening as 
A)  less uneasy than 
B)  more uneasy than 
C)  as uneasy as 
D)  unconcerned because changes in terms of sale rarely cause negative reaction from channel members, even 
E)  as threatening as

Question 19

Which of the following is not a potential reaction by channel managers to a manufacturer's cut in price?

Accepted Answer

A)  The price cut may decrease sales volume and profits. 
B)  The price cut may affect the product's quality image, so channel managers may become reluctant to deal with the product. 
C)  Channel managers may be concerned about the image of their own firms. 
D)  They may be concerned about a loss of inventory value. 
E)  Channel managers may be concerned about future pricing policies. 
A)  The price cut may decrease sales volume and profits. 
B)  The price cut may affect the product's quality image, so channel managers may become reluctant to deal with the product. 
C)  Channel managers may be concerned about the image of their own firms. 
D)  They may be concerned about a loss of inventory value. 
E)  Channel managers may be concerned about future pricing policies.

Question 20

When a channel member makes disparaging remarks about a product in order to sell a competitor's product,the channel member is engaging in:

Accepted Answer

A)  The gray market. 
B)  Footballing. 
C)  Free riding. 
D)  Undercutting. 
E)  Unethical behavior. 
A)  The gray market. 
B)  Footballing. 
C)  Free riding. 
D)  Undercutting. 
E)  Unethical behavior.

Household appliance retailers earn an average 33.5% gross margin.These retailers might be willing to accept a lower margin on promotional products if:

Before automatically passing price increases through the channel,the manufacturer should:

The sale of well-known brand products by unauthorized dealers,usually at very low prices,is referred to as:

Distributors and dealers who offer extremely low prices but little if any service to customers are engaging in a practice called:

Gross margins of wholesalers range approximately from:

If an item that had cost the retailer $7 sold at retail for $12.50,the gross margin percentage on selling price is:

___________ are products that usually have the lowest price in the product line and yield low margins.

When channel members load up on discounted products featured in the manufacturer's promotion but pass on the lower price for just a portion of the amount purchased to their customers,they are most likely to be engaged in:

Gross margins for retailers of are on the average lower than for retailers of _.

Which of the following is a possible channel member reaction to a manufacturer-initiated price cut?

In attempting to gain price control in the channel,the manufacturer should use:

For some product categories,customers simply have come to expect finding products priced at customary levels.The "expected" prices for such products are referred to as:

If a product has a list price of $25 and offers a wholesale trade discount of 59% and a retail trade discount of 40%,the cost to the wholesaler is:

A customer buying a branded product from a low-priced distributor likely is:

A producer may offer a margin different from that offered by competitive brands if:

Differing perceptions of price incentives between the consumers and channel members' viewpoints stem from:

A product cost a wholesaler $6.80.The wholesaler sold the product to a retailer for $10.00.The percentage gross profit on the wholesaler's cost is:

Generally,when manufacturers make major changes in their pricing structure,channel members usually are __________ when manufacturers make major changes in their terms of sale.

Which of the following is not a potential reaction by channel managers to a manufacturer's cut in price?

When a channel member makes disparaging remarks about a product in order to sell a competitor's product,the channel member is engaging in:

Marketing Channel Concepts

The Channel Participants

The Environment of Marketing Channels

Behavioral Processes in Marketing Channels

Strategy in Marketing Channels

Designing Marketing Channels

Selecting the Channel Members

Target Markets and Channel Design Strategy

Motivating the Channel Members

Product Issues in Channel Management

Promotion through the Marketing Channel

Logistics and Channel Management

Evaluating Channel Member Performance

Electronic Marketing Channels

Franchise Marketing Channels

Marketing Channels for Services

International Channel Perspectives

Filters

Exam 11: Pricing Issues in Channel Management

Household appliance retailers earn an average 33.5% gross margin.These retailers might be willing to accept a lower margin on promotional products if:

Before automatically passing price increases through the channel,the manufacturer should:

The sale of well-known brand products by unauthorized dealers,usually at very low prices,is referred to as:

Distributors and dealers who offer extremely low prices but little if any service to customers are engaging in a practice called:

Gross margins of wholesalers range approximately from:

If an item that had cost the retailer $7 sold at retail for $12.50,the gross margin percentage on selling price is:

___________ are products that usually have the lowest price in the product line and yield low margins.

When channel members load up on discounted products featured in the manufacturer's promotion but pass on the lower price for just a portion of the amount purchased to their customers,they are most likely to be engaged in:

Gross margins for retailers of __________ are on the average lower than for retailers of ___________.

Which of the following is a possible channel member reaction to a manufacturer-initiated price cut?

In attempting to gain price control in the channel,the manufacturer should use:

For some product categories,customers simply have come to expect finding products priced at customary levels.The "expected" prices for such products are referred to as:

If a product has a list price of $25 and offers a wholesale trade discount of 59% and a retail trade discount of 40%,the cost to the wholesaler is:

A customer buying a branded product from a low-priced distributor likely is:

A producer may offer a margin different from that offered by competitive brands if:

Differing perceptions of price incentives between the consumers and channel members' viewpoints stem from:

A product cost a wholesaler $6.80.The wholesaler sold the product to a retailer for $10.00.The percentage gross profit on the wholesaler's cost is:

Generally,when manufacturers make major changes in their pricing structure,channel members usually are __________ when manufacturers make major changes in their terms of sale.

Which of the following is not a potential reaction by channel managers to a manufacturer's cut in price?

When a channel member makes disparaging remarks about a product in order to sell a competitor's product,the channel member is engaging in:

Marketing Channel Concepts

The Channel Participants

The Environment of Marketing Channels

Behavioral Processes in Marketing Channels

Strategy in Marketing Channels

Designing Marketing Channels

Selecting the Channel Members

Target Markets and Channel Design Strategy

Motivating the Channel Members

Product Issues in Channel Management

Promotion through the Marketing Channel

Logistics and Channel Management

Evaluating Channel Member Performance

Electronic Marketing Channels

Franchise Marketing Channels

Marketing Channels for Services

International Channel Perspectives

Filters

Gross margins for retailers of are on the average lower than for retailers of _.