Deck 12: Pricing, Distributing, and Promoting Products

Question 1

Variable costs of a product are those costs that change due to the conditions of the market.

Answer 1

True
Explanation:Changing market conditions can affect the cost of a product.

Question 2

Products priced above the market play on the common assumption that a higher price means higher quality.

Answer 2

True
Explanation:Godiva chocolates and Patek Philippe watches are examples; prices are set high by promoting prestige and quality images.

Question 3

Agents and brokers buy products from manufacturers and then sell them to other businesses.

Answer 3

False
Explanation:Agents and brokers do not own, or "take title to," the goods they distribute; they merely serve as a liaison between buyers and sellers.

Question 4

The oldest and most expensive form of sales is personal selling, in which a salesperson communicates one-on-one with potential customers to identify their needs and align them with the product.

Question 5

Once an online catalog is in place, there are high costs in maintaining and accessing it.

Question 6

Sales promotions are short-term promotional activities designed to stimulate consumer buying or cooperation from distributors, sales agents, or other members of the trade.

Question 7

Because railroads do not have limited delivery routes, they can economically transport high-volume, heavy, bulky items, such as cars, steel, and coal.

Question 8

Using the odd-even psychological pricing strategy, a restaurant would price an entree at $10.00 rather than $9.95.

Question 9

Most products are well-suited to distribution by high-speed digital transmission.

Question 10

Discount houses, catalog showrooms, and factory outlets are examples of product-line retailers.

Question 11

Shopping agents (e-agents) help people shop from factory outlet stores.

Question 12

The only goal of determining prices is to maximize profit for the firm.

Question 13

When making pizzas, the cost of the cheese is a fixed cost.

Question 14

Shopping agents allow consumers to purchase products directly from their site.

Question 15

One drawback of nondirect distribution is higher prices.

Question 16

Companies using price lining offer all items in certain categories at a limited number of prices.

Question 17

Price skimming occurs when a company sets an initially low price to establish a new product in the market.

Question 18

The distribution mix is the combination of channels that a firm selects to get a product to end users.

Question 19

If prices are set too high, the company will make a large profit on each item but will sell fewer units.

Question 20

Most business products are distributed through direct channels.

Question 21

The ultimate objective of any promotion is to increase sales.

Question 22

Marketing efforts for promoting a product are no longer needed after the customer has purchased the product.

Question 23

Among the bargain retail operations, convenience stores in general provide the most substantial price reductions to the products.

Question 24

Rachel has set up a firm that buys circuit boards from overseas producers and sells them to a local computer manufacturing company. Which title best describes her role in the computer manufacturing distribution mix?

A) marketer
B) sales agent
C) broker
D) retailer
E) wholesaler

Question 25

Intermediaries can expedite the delivery of products but otherwise add no additional value to a distributional system.

Question 26

Order processing is a personal selling task used when a company seeks to promote itself and its products rather than simply to close a sale.

Question 27

Effective, knowledgeable sales personnel can often be found in the sales force of specialty stores.

Question 28

Which of the following costs refers specifically to those that change with the quantity of a product sold or produced?

A) annual costs
B) variable costs
C) fixed costs
D) marginal costs
E) market-adjusted costs

Question 29

The Men's Store offers sweatshirts at three prices: $28, $42, and $60; this illustrates price lining.

Question 30

Which of the following pricing strategies has stimulation of sales as a higher priority than maximization of profits?

A) price fixing
B) price discounting
C) price skimming
D) price pointing
E) price lining

Question 31

Which of the following terms refers to the monetary amount added to a product's cost to the seller in order to sell it at a target profit?

A) profit margin
B) breakeven cost
C) revenue
D) revenue margin
E) markup

Question 32

An online comic book store is an example of which type of intermediary?

A) marketer
B) sales agent
C) broker
D) wholesaler
E) retailer

Question 33

In addition to physical goods, point-of-sale pedestals also provide services, namely information for consumers.

Question 34

Odd-even pricing falls under the category of which of the following?

A) price fixing
B) psychological pricing
C) market pricing
D) price lining
E) price skimming

Question 35

Which of the following refers to the combination of channels that a firm selects to get a product to end users?

A) distribution mix
B) transportation strategy
C) merchandising system
D) marketing plan
E) retail system

Question 36

A farmers' market is an example of which type of distribution channel?

A) direct distribution
B) retail distribution
C) wholesale distribution
D) distribution by brokers
E) distribution by sales agents

Question 37

Phillip is an independent intermediary who deals in the local produce market of northeast Ohio. Over the years, he has formed long-term relationships and come to represent several farmers in the area in the sale of their produce to local grocery stores. Which of the following titles best describes Phillip's role in the distribution mix of northeast Ohio produce?

A) wholesaler
B) retailer
C) sales agent
D) broker
E) direct marketer

Question 38

Which of the following intermediaries matches numerous sellers and buyers as needed, often without knowing in advance who they will be?

A) producer representative
B) retailer
C) syndicated seller
D) sales agent
E) broker

Question 39

Which of the following costs refers specifically to those that are unaffected by the quantity of a product sold or produced?

A) annual costs
B) variable costs
C) fixed costs
D) marginal costs
E) market-adjusted costs

Question 40

Many firms have turned to distribution through supply chains as a cornerstone of business strategy.

Question 41

Which of the following pricing strategies best describes price lining?

A) setting an initial low price to establish a new product in the market
B) setting an initial high price to cover new product costs and generate a profit
C) setting individually negotiated prices for certain categories of products
D) setting a limited number of prices for certain categories of products
E) setting individually negotiated prices for all categories of products

Question 42

Which of the following strategies is involved with penetration pricing?

A) setting an initial low price to establish a new product in the market
B) setting an initial low price to cover new product costs and still generate a profit
C) setting a limited number of prices for certain categories or products
D) setting an initial high price to establish a new product in the market
E) setting an initial high price to cover new product costs and still generate a profit

Question 43

Which of the following strategies is involved with price skimming?

A) setting an initial low price to establish a new product in the market
B) setting an initial low price to cover new product costs and still generate a profit
C) setting a limited number of prices for certain categories or products
D) setting an initial high price to establish a new product in the market
E) setting an initial high price to cover new product costs and still generate a profit

Question 44

A firm that wanted to conduct a short-term activity in order to boost consumer buying would use which of the following strategies?

A) sales promotions
B) special offers
C) trade shows
D) point-of-sale displays
E) missionary selling

Question 45

Which of the following concerns finding the most effective techniques for communicating information about and selling a product?

A) market share
B) advertising
C) promotion
D) profit management
E) customer relations

Question 46

Companies that price their product low enough to attract a large number of buyers are most likely pursuing which of the following goals?

A) stable market pricing
B) high profits
C) stable market activity
D) low market volatility
E) high market share

Question 47

The sales price of a product is given as the product's cost to the seller plus which of the following quantities?

A) breakeven price
B) revenue price
C) variable price
D) fixed price
E) markup price

Question 48

From the choices below, pick the best definition of the term fixed costs.

A) costs that are needed to acquire a fixed market share
B) costs that are needed to acquire fixed profits
C) costs that are unaffected by the number of goods sold by the firm
D) costs that remain the same from year to year
E) costs that remain the same across all products

Question 49

Which distribution channel is used by companies which distribute their goods through their own system of outlets?

A) direct distribution
B) retail distribution
C) wholesale distribution
D) distribution by agents
E) distribution by brokers

Question 50

Which of the following gives the correct formula for calculating markup percentage?

A) sales price/markup
B) sales price/fixed costs
C) fixed costs/variable costs
D) markup/sales price
E) sales price/variable costs

Question 51

Which of the following is NOT a type of sales promotion?

A) warranties
B) coupons
C) point-of-sale displays
D) trade show displays
E) free samples

Question 52

Which of the following best describes department stores?

A) A department store is a large product line retailer organized into smaller, convenience-focused components.
B) A department store is a large product line retailer organized into smaller, bargain-focused components.
C) A department store is a large product line retailer organized into smaller, producer-focused components.
D) A department store is a large product line retailer organized into smaller, product-focused components.
E) A department store is a large product line retailer organized into smaller specialty stores.

Question 53

Which of the following denotes small retail stores carrying only one product line or category of related products?

A) department stores
B) bargain retailers
C) supermarkets
D) convenience stores
E) specialty stores

Question 54

Which distribution channel is used by Valley Farm Dairy to distribute its products to consumers without intermediaries?

A) direct distribution
B) retail distribution
C) wholesale distribution
D) distribution by agents
E) distribution by brokers

Question 55

In which of the following bargain retailers do the customers view display samples, place orders, and wait briefly while clerks retrieve orders from attached warehouses?

A) off-price store
B) catalog showroom
C) factory outlet
D) wholesale club
E) discount house

Question 56

Which of the following terms refers specifically to the activities needed to move products efficiently from manufacturer to consumer?

A) physical distribution
B) the distribution mix
C) product distribution
D) transportation modes
E) product placement

Question 57

Which of the following pricing strategies is used by many e-tailers in order to provide flexibility between buyers and sellers in setting a price?

A) penetration pricing
B) psychological pricing
C) breakeven pricing
D) fixed pricing
E) dynamic pricing

Question 58

Within which of the following storage facilities would one expect to see the widest variety of products stored?

A) private warehouse
B) public warehouse
C) food storage facility
D) department store distribution center
E) specialty store stockroom

Question 59

Which of the following best characterizes the difference between the roles of advertising and personal selling in the promotional mix of a firm?

A) Advertising is, at its worst, very expensive with little return, whereas personal selling is also very expensive, at its worst, but with better returns.
B) Advertising, at its best, targets a specific audience about a product, whereas personal selling, at its best, is always dependent on the clients that a seller has.
C) Advertising involves public relations with the overall population of consumers, whereas personal selling involves personalized relationships with select individuals.
D) Advertising is a relatively new method of promotion, whereas personal selling is the oldest method of promotion.
E) Advertising is nonpersonal in its communication about a product, whereas personal selling is highly individualized.

Question 60

Which of the following describes two of the primary objectives of promotion?

A) positioning and communicating information
B) positioning and developing new uses for products
C) developing new uses for products and communicating information
D) adding value to a product and eliminating competition
E) controlling sales volume and eliminating competition

Question 61

Which of the following best describes the purpose of point-of-sale displays?

A) to inform customers about the benefits of the products
B) to entice customers to buy additional products
C) to make it easier for customers to find products
D) to promote the reputation of the company offering certain products
E) to target specific messages about the product to customers

Question 62

A well-established Internet provider is facing stiff competition from several new companies. Which of the following techniques would it use in order to demonstrate to consumers that its product is superior to that of its competitors?

A) order processing
B) sales promotions
C) direct marketing
D) creative selling
E) missionary selling

Question 63

Which of the following will a large firm utilize when it needs temporary storage space for a large amount of products in immediate demand?

A) public warehouses
B) distribution centers
C) relay warehouses
D) private warehouses
E) storage warehouses

Question 64

Which of the following are examples of premiums?

A) contests that reward winners with free samples of the product
B) free items given out at trade shows
C) coupons for reduced prices on certain products
D) reduced-price items available upon purchase of a product
E) reduced-price items available during a sales promotion

Question 65

In which of the following retail outlets is there a most direct communication line between producer and consumer?

A) e-retailing
B) specialty store retailing
C) catalog showroom retailing
D) mail-order retailing
E) brokered retailing

Question 66

In which type of store would you most likely find shoes, furniture, a women's section, and a men's section?

A) a supermarket
B) a discount house
C) a department store
D) a convenience store
E) a specialty store

Question 67

A highly successful bakery specializes in making cherry tarts. Which of the following costs at the bakery is NOT variable?

A) cost of cherries
B) cost of flour
C) cost of wax paper liners
D) cost of the oven
E) cost of heating the oven

Question 68

Which of the following gives examples of bargain retailers?

A) bakery outlet, athletic shoe store
B) local bakery, discount shoe chain
C) bakery thrift shop, athletic shoe store
D) bakery thrift shop, shoe factory outlet
E) local bakery, shoe factory outlet

Question 69

Which of the following bargain retailers generate large sales volume by offering a wide variety of new products at substantial price reductions?

A) discount houses
B) catalog showrooms
C) second-hand stores
D) factory outlets
E) direct-response bargain marketing

Question 70

Which of the following is the fastest and most expensive transportation mode?

A) railroads
B) airplanes
C) pipelines
D) water carriers
E) trucks

Question 71

Which component of the distribution mix do agents and brokers represent in receiving commissions?

A) producers
B) consumers
C) retailers
D) industrial users
E) other intermediaries

Question 72

J.C. Penney owns and maintains its own warehouses. What is this type of warehouse called?

A) public warehouse
B) relay warehouse
C) distribution center
D) private warehouse
E) storage warehouse

Question 73

Which of the following is crucial for high-priced consumer products such as homes and cars?

A) creative selling
B) interactive marketing
C) missionary selling
D) order processing
E) trade shows

Question 74

Which of the following describes the function of search engines that act as collections of business Web sites representing diverse products?

A) Internet service providers
B) electronic storefronts
C) cybermalls
D) e-catalogs
E) interactive retailing

Question 75

What are the three major classifications of retail outlets in the United States?

A) large-sized outlets, medium-sized specialty shops, small-sized convenience stores
B) product-based retailers, discount-based retailers, convenience-based retailers
C) quality-based retailers, quantity-based retailers, specialty-based retailers
D) producer-owned retailers, franchised retailers, independently owned retailers
E) brick-and-mortar retailers, e-retailers, hybrid retailers

Question 76

Home Shopping Club and QVC are examples of which of the following retail sales outlet?

A) direct selling
B) video marketing
C) electronic shopping
D) virtual selling
E) telemarketing

Question 77

Which of the following is the slowest and the cheapest mode of transportation?

A) railroads
B) planes
C) pipelines
D) water carriers
E) trucks

Question 78

Which of the following describes best what distinguishes publicity among all other forms of promotion?

A) Publicity is less directed than other forms of promotion.
B) Publicity is less effective than other forms of promotion.
C) Publicity is more impersonal than other forms of promotion.
D) Publicity is cheaper than other forms of promotion.
E) Publicity is more direct than other forms of promotion

Question 79

Convenience stores utilize which kind of distribution?

A) direct distribution
B) retail distribution
C) wholesale distribution
D) distribution by agents
E) distribution by brokers

Question 80

Which of the following is involved in the final stage in the buyer decision process?

A) After the buyer has purchased the product, the marketer asks for feedback on the quality of the product.
B) After the buyer has purchased the product, the marketer promotes more advanced versions of the product.
C) After the buyer has purchased the product, the marketer provides customer assistance for use of the product.
D) After the buyer has purchased the product, the marketer reminds the buyer that he or she made a wise purchase.
E) After the buyer has purchased the product, the marketer promotes related products by the same company.