Deck 13: Distribution and Pricing: Right Product Right Person Right Place Right Price

Question 1

In the context of pricing strategies, companies usually express volume goals in terms of profitability.

Answer 1

False

Question 2

Everyday-low pricing (EDLP) means pricing a handful of items temporarily below cost to drive traffic.

Answer 2

False

Question 3

Gregory works for Ocan Foods, a food supplier. His main responsibility is to make tactical decisions involving the actual movement of goods along his company's supply chain. Gregory is involved in _____.

A)logistics
B)vending
C)direct selling
D)direct response retailing

Answer 3

A

Question 4

Marketers can evaluate odd pricing strategy by examining its response in the target market.

Question 5

No firm can determine upfront how much money it needs to make for each item it sells.

Question 6

Which of the following statements is true of penetration pricing?

A)Penetration pricing makes sense only in categories that have a significant group of consumers who would be willing to pay a premium.
B)Penetration pricing involves increasing product prices to target upscale consumers.
C)A company using penetration pricing makes profit from the volume of sales.
D)A company using penetration pricing gains a very high profit on each individual sale.

Question 7

__________are distribution organizations that facilitate the movement of products from the producer to the consumer.

A)Stakeholders
B)Financial intermediaries
C)Marketers
D)Channel intermediaries

Question 8

Zetovi is a store retailer that sells a complete selection of food products, such as meat, cereals, processed foods, baked goods, and dairy products at a steep discount at a single location. It also offers a wide range of general merchandise, such as cosmetics and clothes almost at the same discount as food products. It is evident that Zetovi is a _____.

A)supermarket
B)discount store
C)convenience store
D)supercenter

Question 9

Which of the following statements is true of the members of a distribution channel?

A)All channels have at least five channel intermediaries.
B)Producers follow a single channel of distribution.
C)Some distributors act as both wholesalers and retailers.
D)Retailers buy products from the producer and sell them to businesses.

Question 10

In the context of nonstore retailers, vending machines are a key element of multilevel marketing.

Question 11

Which of the following is a form of nonstore retailing?

A)Intensive distribution
B)Direct selling
C)Exclusive distribution
D)Penetration pricing

Question 12

Plateus Inc., a warehouse club, is considered a channel intermediary because it purchases chocolates from Chocodelight chocolatiers and sells it to customers.

Question 13

iTem is a retailer that sells a wide range of merchandise to the public through its website. It is evident that iTem is engaged in _____.

A)e-tailing
B)direct response retailing
C)direct selling
D)vending

Question 14

Which of the following statements is true of loss-leader pricing?

A)It is applicable to all products sold in a department store.
B)It is legally accepted worldwide.
C)It is closely related to high/low pricing.
D)Its goal is to send consumers a message about the exclusivity of a product.

Question 15

In the context of supply chain, which of the following statements is true of modes of transportation?

A)Transportation by planes is the fastest mode but has low flexibility in handling.
B)Pipelines offer the lowest on-time dependability and the lowest frequency of shipments.
C)Marketers usually rely on a single mode of transportation.
D)Ships offer the least flexibility in handling but the highest on-time dependability.

Question 16

Single Tone, a local music and video store, consistently offers music CDs and movie DVDs at lower prices than its competitors. The pricing strategy that Single Tone uses is high/low pricing.

Question 17

A supermarket sells a complete selection of food and general merchandise at a steep discount in a single enormous location.

Question 18

Blue Legion is a store retailer that sells meat, vegetables, dairy products, baked goods, personal care items, and clothes at a discounted price to its members. It is evident that Blue legion is a _____.

A)specialty store
B)category killer
C)warehouse club
D)department store

Question 19

Sales above the breakeven point will generate a profit.

Question 20

Supply chain management is a subset of logistics that focuses more on tactics than on strategy.

Question 21

Rancone Technologies, a laptop manufacturer, released a new laptop model priced at $800 to attract customers who could afford to pay the high price. After a few months, it introduced low-priced versions of the same laptop to attract new buyers. By doing so, it maximized profitability by targeting different segments of the market. In this scenario, Rancone Technologies has used the _____ strategy.

A)penetration pricing
B)everyday-high pricing
C)loss-leader pricing
D)skimming pricing

Question 22

_____ involves placing a producer's products in as many stores as possible.

A)Selective distribution
B)Intensive distribution
C)Wholesale distribution
D)Direct distribution

Question 23

Determine the fixed cost of a pencil manufacturing company per year if its breakeven point is 300,000 packets of pencils, selling price of each packet of pencil is $3, and the cost of equipment and labor to manufacture one packet of pencil is $1.

A)$300,000
B)$400,000
C)$500,000
D)$600,000

Question 24

The fixed cost of Perfect Pizzas, a pizza restaurant, is $400,000 per year. The cost of ingredients and chef to make one pizza is $6. If the customers would pay $10 to buy one pizza, Perfect Pizzas needs to sell at least _____ pizzas to avoid losses.

A)20,000
B)25,000
C)40,000
D)100,000

Question 25

A-n-Y dominates its market section by offering a wide range of toys that includes soft toys, plastic construction toys, electronic toys, and board games to the public. It is evident that A-n-Y is a _____.

A)supermarket
B)department store
C)category killer
D)supercenter

Question 26

Bolve Technologies is a small-scale smartphone manufacturer. It advertises its phones via television commercials. Customers can buy these phones only by placing a call to the sales reps of Bolve Technologies. It is evident that Bolve Technologies is engaged in _____.

A)e-tailing
B)direct response retailing
C)direct selling
D)vending

Question 27

Allied Corp. is redesigning its path through which its products reach its consumers. The path involves producers, wholesalers, retailers, and customers. In the given scenario, it can be said that Allied Corp. is redesigning its _____.

A)channel of distribution
B)production operations
C)customer relationship channels
D)ABC system

Question 28

Merc Enterprise is an independent distributor that distributes coffee machines and water purifiers to firms on a large scale. In addition to taking legal possession of the goods it distributes, the company also provides a complete array of services that includes warehousing, shipping, product repairs, and credit to its business buyers. In this scenario, it can be said that Merc Enterprises is a(n) _____.

A)store retailer
B)broker
C)agent
D)merchant wholesaler

Question 29

Newzon Coal Supply takes possession of coal from local mining companies. However, it does not store a single ounce of coal on its premises. Instead, it simply arranges for the coal to be shipped directly from the mining companies to their customers. This type of arrangement suggests that Newzon Coal Supply is a _____.

A)drop shipper
B)full-service merchant wholesaler
C)cash and carry wholesaler
D)truck jobber

Question 30

Saturn Systems, an electronic goods manufacturer, sells its LED bulbs to Shockwave Enterprise, which in turn sells those bulbs to final consumers. In this scenario, Shockwave Enterprise is a _____.

A)wholesaler
B)producer
C)retailer
D)broker

Question 31

Rosy's Sweet Treats is a small-scale restaurant that gets its supplies from Widget Suppliers that takes legal possession of the goods it distributes. The employees of Rosy's Sweet Treats make a monthly trip to Widget Suppliers to cart their own products back to the restaurant because Rosy's Sweet Treats is too small to merit in-person sales calls from customer care reps. In this scenario, Widget Suppliers is a(n) _____.

A)agent
B)broker
C)drop shipper
D)cash and carry wholesaler

Question 32

_____ remain constant regardless of how many products are sold.

A)Variable costs
B)Overhead costs
C)Fixed costs
D)Marginal costs

Question 33

JEMS Enterprise buys wooden furniture, such as tables and chairs, from a furniture manufacturer and sells them to government schools. In this scenario, JEMS Enterprise is a _____.

A)broker
B)producer
C)wholesaler
D)retailer

Question 34

Hansel owns and runs a fruit juice manufacturing company. He decides that the company will sell packaged fruit juices through wholesalers and retailers. In this scenario, which of the following distribution strategies is Hansel planning to use?

A)Channel intermediaries
B)Direct channel
C)Voice mail marketing
D)Direct mail

Question 35

Which of the following are the elements of distribution strategy?

A)Recruitment and performance appraisals
B)Channels of distribution and physical distribution
C)Pricing strategy and credit standards
D)Normal distribution and probability distribution

Question 36

Operos, a high-end sports equipment manufacturer, sells its products to the public at its own retail outlets. Because of the high price and limited availability of its products, the company has established its stores in limited locations only in the city of Belwick. In the context of distribution strategies, Operos has adopted the strategy of _____.

A)intensive distribution
B)selective distribution
C)exclusive distribution
D)random distribution

Question 37

The fixed cost of Brendon Willows, a baseball bat manufacturing company, is $500,000 per year. The cost of wood and labor to manufacture one bat is $5. If the customers pay $25 to buy one bat, how many bats does Brendon Willows need to sell to breakeven?

A)20,000
B)25,000
C)100,000
D)150,000

Question 38

Teri Bake delivers fresh cakes, breads, pies, and muffins to several small grocery stores in Central Radisova. In addition to delivering baked goods, Teri Bake's employees help the small store owners keep track of what they need to order, and they even remove outdated baked goods from the store shelves. Teri Bake is a _____.

A)truck jobber
B)drop shipper
C)cash and carry wholesaler
D)full-service merchant wholesaler

Question 39

Crystal Corp. is an independent distributor that distributes cosmetics, apparels, shoes, and bags to other business customers on a large scale. It does not take legal title to the goods it distributes. In this scenario, it can be said that Crystal Corp. is a(n) _____.

A)retailer
B)broker
C)merchant wholesaler
D)end user

Question 40

_____ involves hiring independent contractors to sell products to their personal network of friends and colleagues and to recruit new salespeople in return for a percentage of their commissions.

A)Multilevel marketing
B)Direct response retailing
C)Online retailing
D)Vending

Question 41

Brendon Steels, a steel manufacturer, sells its steel rods and steel slabs to Widget Corp. that, in turn, sells them to various construction companies. In this scenario, Widget Corp. is a _____.

A)retailer
B)channel intermediary
C)producer
D)broker

Question 42

Ziffcorp, an electronic goods manufacturer, recently launched a new gaming console at a very low price. The company aims to capture as much of the market as possible by offering rock-bottom prices. It aims to compensate for the loss by increasing the sales volume. In the context of pricing strategies, it is evident that Ziffcorp has adopted the strategy of _____.

A)penetration pricing
B)sustained discount pricing
C)high/low pricing
D)loss-leader pricing

Question 43

METS Pens, a pen manufacturing company, sometimes gives away some of its gel pens practically for free but reaps handsome profits as customers buy pen refills. In the context of pricing strategies, it is evident that METS Pens has adopted the strategy of _____.

A)penetration pricing
B)everyday-low pricing
C)skimming pricing
D)loss-leader pricing

Question 44

Which of the following statements is true of a specialty store?

A)It offers a small range of everyday and impulse products at easy-to-access locations.
B)It offers a wide range of food products, plus limited nonfood items.
C)It sells a wide selection of merchandise within a narrow category.
D)It sells a complete selection of food and general merchandise at a steep discount in a single enormous location.

Question 45

Allied Bakeries sells processed food and beverages manufactured by Winston Corp. to the public. In this scenario, Allied Bakeries is a _____.

A)wholesaler
B)truck jobber
C)retailer
D)drop shipper

Question 46

Sending products by__________is the least expensive option available to producers.

A)rail
B)truck
C)ship
D)plane

Question 47

Kiddiecon is a company that makes stationery products for children. The company relies on door-to-door sales strategy to sell its products. It is evident that Kiddiecon is engaged in _____.

A)e-tailing
B)direct response retailing
C)direct selling
D)vending

Question 48

Mars is an independent distributer that distributes goods, such as keyboards, monitors, and computer cabinets to various business users. The company takes legal possession of the goods it distributes. The company warehouses the products, ships them to its customers, provides promotional assistance to the manufacturers, provides product repairs, and credit to customers. It is evident that Mars Inc. is a _____.

A)full-service merchant wholesaler
B)cash and carry wholesaler
C)limited-service merchant wholesaler
D)truck jobber

Question 49

Blue Line Eateries is a large-scale grocery store. The store offers steep discounts only on packaged corn flour and whole wheat cereals, and it sells the rest of the products at their respective maximum retail prices. The company chooses a different set of products every month and offers discounts only on that set of products. In the context of pricing strategies, it is evident that Blue Line Eateries has adopted the strategy of _____.

A)penetration pricing
B)everyday-low pricing
C)high/low pricing
D)loss-leader pricing

Question 50

In _____, marketers determine prices based on what consumers are willing to pay and then subtract their desired margins to yield target costs.

A)cost-based pricing
B)demand-based pricing
C)gap-determined pricing
D)fixed-margin pricing

Question 51

The fixed cost of Allied Breads, a bread baking company, is $200,000 per year. The cost of equipment and labor to make one packet of bread is $3. If the breakeven point of the company is 100,000 packets of bread, Widget Corp. needs to sell its bread packets at a price of _____ per packet to make profits.

A)at least $7
B)at least $6
C)less than $4
D)more than $5

Question 52

Ziffcorp, a laptop manufacturing company, is working on a strategy to deliver its laptops to the students of a university before their new term begins. It is evident that Ziffcorp is working on its _____.

A)advertisement strategy
B)distribution strategy
C)pricing strategy
D)product strategy

Question 53

Lynk Corp. drives perishable goods, such as eggs, bread, and muffins to small grocery stores. In addition to taking legal title of the goods it distributes, Lynk Corp. also checks the stock and suggests reorder quantities to the grocery stores. It is evident that Lynk Corp. is a(n) _____.

A)agent
B)broker
C)drop shipper
D)truck jobber

Question 54

Eula, a company that manufactures soda, offers its latest products at very low prices. Eula's strategy is based on the assumption that more customers will be willing to buy its products if they are offered at lower prices. Eula has adopted this strategy to attract a larger customer base and increase its sales volume even though it will only gain a small profit on each individual sale. In this scenario, Eula has implemented the _____ strategy.

A)high/low pricing
B)skimming pricing
C)penetration pricing
D)loss-leader pricing

Question 55

Which of the following is a disadvantage of online retailing?

A)Online retailing is more expensive than on-ground retail.
B)Online-only brands do not offer effective customer service.
C)Consumers cannot exchange products once they are bought.
D)Product delivery takes at least a couple of days.

Question 56

Techilex delivers timber directly to furniture manufacturers. The company takes legal possession of the timber it distributes. The company doesn't physically process timber but it facilitates timber's safe delivery to the clients. In this scenario, Techilex is a(n) _____.

A)agent
B)broker
C)drop shipper
D)Truck Jobber

Question 57

_____ includes all organizations, processes, and activities involved in the flow of goods from the raw materials to the final consumer.

A)Multilevel marketing
B)Direct response retailing
C)Supply chain
D)Wheel of retailing

Question 58

Fit & Flare is a fitness equipment manufacturer. It sells its equipment directly to the public through its own stores at a huge discount. From the given scenario, it can be concluded that Fit & Flare is a(n) _____.

A)outlet store
B)discount store
C)convenience store
D)independent wholesaler

Question 59

Merchant wholesalers can develop their own marketing strategies, including pricing strategies, because they:

A)facilitate transactions in exchange for commissions.
B)take legal title to the goods they distribute.
C)are the producers of the goods they distribute.
D)are the least common form of independent wholesalers.

Question 60

Transcone is an independent distributer that distributes home décor related products to various retailers. The company takes legal possession of the goods it distributes. It warehouses the products and ships them to the retailers, but it does not provide credit or marketing assistance. It is evident that Transcone is a _____.

A)full-service merchant wholesaler
B)agent
C)broker
D)limited-service merchant wholesaler

Question 61

AS Mart is a supermarket. It sells all its products at highly discounted rates. The company aims to achieve long-term profitability through high sales volume. In the context of pricing strategies, it is evident that AS Mart has adopted the strategy of _____.

A)everyday-low pricing
B)penetration pricing
C)high/low pricing
D)loss-leader pricing

Question 62

Which of the following statements is true of distributors in a channel of distribution?

A)They increase the number of transactions for goods to flow from producers to consumers.
B)They are always owned by producers.
C)They add value in a number of different ways to products.
D)They make distribution channels more complex.

Question 63

Odd pricing refers to the practice of:

A)charging different prices at odd intervals rather than maintaining stable and predictable pricing.
B)ending prices in numbers below even dollars and cents.
C)charging prices that differ significantly from competitors' prices.
D)setting prices based on a statistical analysis of the amount consumers are willing to pay.

Question 64

Dash-N-Dee is an independent distributer that distributes cosmetics to various retailers. The company takes legal possession of the goods it distributes. The company warehouses the products but does not ship them to the retailers. It is evident that Dash-N-Dee is a _____.

A)full-service merchant wholesaler
B)limited-service merchant wholesaler
C)broker
D)agent

Question 65

Timber Guitars, a guitar manufacturing company, launched 1000 high-quality, limited-edition guitars worldwide at a premium price of $10,000 per guitar. The company offered the lower-priced version of the same guitar after the first 1000 limited-edition guitars were sold out. In the context of pricing strategies, it can be concluded that Timber Guitars has adopted the strategy of _____.

A)penetration pricing
B)high/low pricing
C)skimming pricing
D)loss-leader pricing

Question 66

Which of the following statements is true of ownership utility?

A)It boosts customer satisfaction by providing helpful information.
B)It satisfies customer needs by providing the right products in the right place.
C)It adds value by making products available at a convenient time for consumers.
D)It adds value by making it easier for customers to possess the goods that they purchase.

Question 67

Which of the following statements best defines a channel of distribution?

A)It is the network of regulatory agencies that regulate production strategies.
B)It is the network of organizations and processes that links producers to consumers.
C)It is a theory that suggests retail firms and retail categories become more upscale as they go through their life cycles.
D)It is the path through which products are produced and packaged in an assembly line.

Question 68

Saffexo is a low-cost toiletries producer in the town of Lucitona. It sells its products through almost all the retail stores in the town of Lucitona. In the context of distribution strategies, Saffexo has adopted the strategy of _____.

A)intensive distribution
B)selective distribution
C)exclusive distribution
D)random distribution

Question 69

Which of the following statements is true of online retailing?

A)All the people visiting a typical website convert into paying customers.
B)Online retailers cannot provide efficient customer service like their on-ground counterparts.
C)There is a lack of security on the Web.
D)Online retailing will attract less customers than on-ground retailing.

Question 70

Nicoloss is a store that sells clothes, cosmetics, travel bags, and furniture to final consumers. Customer reviews indicate that the store offers a high level of service. In this scenario, Nicoloss is an example of a(n) _____.

A)outlet store
B)discount store
C)department store
D)specialty store

Question 71

Neptune Corp. buys a wide range of products from automobile parts manufacturers, motorcycle riding gear manufacturers, and commercial paint manufacturers. It then sells these products to a wide range of different customers. It is evident that Neptune Corp. is a(n) _____.

A)independent store retailer
B)independent wholesaling business
C)broker
D)producer

Question 72

Delvry Inc. is a solid fuel supplier. It supplies coal to different thermal power plants. The company takes legal possession of the coal, and they hire outside transporters to aid the delivery process. In this scenario, Delvry Inc. is a(n) _____.

A)agent
B)drop shipper
C)broker
D)full-service merchant wholesaler

Question 73

Donton Inc. dominates its market section by offering a wide range of office supplies that includes printers, furniture, and cleaning supplies to final consumers. It is evident that Donton Inc. is a _____.

A)category killer
B)department store
C)supermarket
D)supercenter

Question 74

Nexi 10 is a store retailer that offers a wide range of food products, such as meat, vegetables, dairy products, and baked goods at a single location. In addition to food products, it also offers a variety of household products and personal care items. In this scenario, it is evident that Nexi 10 is a _____.

A)supermarket
B)discount store
C)convenience store
D)supercenter

Question 75

Plezion Corp. is an independent distributor that connects furniture sellers to its buyers. The company distributes furniture made of plastic, wood, and carbon fiber on a large scale. The company does not take legal ownership of the goods it distributes. In this scenario, it can be said that Plezion Corp. is a(n) _____.

A)retailer
B)agent
C)merchant wholesaler
D)end user

Question 76

The fixed cost of Widget Corp., a keyboard manufacturing company, is $600,000 per year. The cost of equipment and labor to make one keyboard is $10. If the customers would pay $25 to buy one keyboard, Widget Corp. needs to sell _____ keyboards to make profits.

A)at least 50,000
B)at least 45,000
C)more than 40,000
D)less than 35,000

Question 77

Joanne works in the marketing department of a toy manufacturing company. Her company offers discounts for soft toys but sells electronic toys at a price higher than that of its competitors. In this scenario, Joanne's company has adopted the _____ strategy.

A)everyday-low pricing
B)high/low pricing
C)penetration pricing
D)skimming pricing

Question 78

Which of the following statements is true of cost-based pricing?

A)It determines the price by adding a fixed margin to the per-unit cost of a product.
B)It determines the price based on the amount consumers are willing to pay for a product.
C)It is seldom used in the real world.
D)It is more market-focused than demand-based pricing.

Question 79

Spade Archer buys surgical knives, scissors, forceps, needle holders, and retractors from a surgical equipment manufacturer and sells them to local hospitals. In this scenario, Spade Archer is a _____.

A)broker
B)producer
C)retailer
D)wholesaler

Question 80

_____ means establishing only one retail outlet in a given area.

A)Intensive distribution
B)Wholesale distribution
C)Exclusive distribution
D)Direct distribution