Deck 11: Value Delivery : Designing the Distribution Channel and Supply Chain Marketing Channels

Question 1

Which of the following refers to a mathematical model that captures all the factors required to explain and predict sales and profits and should be able to identify the price which will fetch the highest profits?

A)maximizing profits strategy
B)target return pricing strategy
C)customer orientation strategy
D)competitive parity strategy
E)target profit pricing strategy

Answer 1

A

Question 2

Which of the following refers to a pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments?

A)maximizing profits strategy
B)target return pricing strategy
C)customer orientation strategy
D)competitive parity strategy
E)target profit pricing strategy

Answer 2

B

Question 3

Which of the following shows how many units of a product or service consumers will demand during a specific period at different prices?

A)break-even point
B)variable cost unit
C)contribution per unit
D)demand curve
E)fixed cost unit

Answer 3

D

Question 4

A firm's strategy of setting prices that are similar to those of major competitors is called:

A)maximizing profits strategy.
B)target return pricing strategy.
C)customer orientation strategy.
D)competitive parity strategy.
E)target profit pricing strategy.

Question 5

The change in the quantity of a product demanded by consumers because of a change in their earnings is called the:

A)substitution effect.
B)price effect.
C)supply effect.
D)demand effect.
E)income effect.

Question 6

A company objective based on the premise that the firm should measure itself primarily against its rivals is called:

A)sales orientation.
B)customer orientation.
C)profit orientation.
D)marketing orientation.
E)competitor orientation.

Question 7

A pricing strategy implemented by firms when they have a particular profit goal as their overriding concern is called:

A)maximizing profits strategy.
B)target return pricing strategy.
C)customer orientation strategy.
D)competitive parity strategy.
E)target profit pricing strategy.

Question 8

The pricing orientation that explicitly invokes the concept of value for the client and in which prices are set to match consumer expectations is called:

A)sales orientation.
B)customer orientation.
C)profit orientation.
D)marketing orientation.
E)competitor orientation.

Question 9

A multi-billionaire industrialist purchases a Van Gogh painting for $140 million.This is an example of a(n):

A)unsought product.
B)prestige product.
C)shopping product.
D)convenience product.
E)standard product.

Question 10

Those products whose demand curves are positively related, such that they rise or fall together, are called:

A)substitute products
B)complementary products
C)shopping products
D)convenience products
E)standard products

Question 11

A company launches a new car in the luxury segment.When it fixes the price of the car it takes into the consideration the price of all the cars in the luxury segment.It looks at rival companies for reference.It fixes the price and provides accessories on par with what is provided by the other car manufacturers in the luxury segment.This is an example of:

A)sales orientation.
B)customer orientation.
C)profit orientation.
D)marketing orientation.
E)competitor orientation.

Question 12

Those products for which changes in demand are negatively related are called:

A)substitute products
B)complementary products
C)shopping products
D)convenience products
E)standard products

Question 13

A company manufactures mobile phones that are the most expensive in their category.They are of high quality and very innovative.The company does not try to match the competition when it fixes the price.It relies strongly on its reputation as an innovative company.This is an example of:

A)sales orientation.
B)customer orientation.
C)profit orientation.
D)marketing orientation.
E)competitor orientation.

Question 14

A company objective that can be implemented by focusing on target profit pricing, maximizing profits, or target return pricing is called:

A)sales orientation.
B)customer orientation.
C)profit orientation.
D)marketing orientation.
E)competitor orientation.

Question 15

A company launches a new laundry detergent in the market.The company fixes a very low price for the detergent at rates below their competition's prices.The aim of the company is to gain market share.Here profits are of lesser concern and the main focus is on increasing sales.This is an example of:

A)sales orientation.
B)customer orientation.
C)profit orientation.
D)marketing orientation.
E)competitor orientation.

Question 16

The fall in the price of gas leads to an increased demand for cars in the market.This is an example of a:

A)substitute product.
B)complementary product.
C)shopping product.
D)convenience product.
E)standard product.

Question 17

Which of the following refer to those products that consumers purchase for status rather than functionality?

A)unsought products
B)prestige products
C)shopping products
D)convenience products
E)standard products

Question 18

Consumers' ability to replace other products by the focal brand is called the:

A)substitution effect.
B)price effect.
C)supply effect.
D)demand effect.
E)income effect.

Question 19

If a firm believes that increased selling will help the firm more than increasing profits, the firm is using a:

A)sales orientation.
B)customer orientation.
C)profit orientation.
D)marketing orientation.
E)competitor orientation.

Question 20

A company specializing in bathroom fittings offers state-of-the-art products.The products are highly priced and the company is aware that sales will be limited.When the company offers these products, its main aim is to enhance its reputation and image.This will lead to an increase in the company's value in the minds of consumers.This is an example of:

A)sales orientation.
B)customer orientation.
C)profit orientation.
D)marketing orientation.
E)competitor orientation.

Question 21

When a market legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer, it is called a market.

A)black
B)brown
C)white
D)grey
E)green

Question 22

Those expenses that remain essentially at the same level, regardless of any changes in the volume of production, are called the:

A)break-even point.
B)variable costs.
C)contribution per unit.
D)demand curve.
E)fixed costs.

Question 23

The fall in the price of coffee in the market led to a fall in the demand for tea.This is an example of a:

A)substitute product.
B)complementary product.
C)shopping product.
D)convenience product.
E)standard product.

Question 24

Jeff is a hockey player who uses hockey sticks manufactured by a particular company.The manufacturing company decides to increase the price of hockey sticks, so Jeff switches to another company offering similar quality hockey sticks at a lower price.This is an example of the:

A)substitution effect.
B)price effect.
C)supply effect.
D)demand effect.
E)income effect.

Question 25

Which of the following refers to a pricing method by which the firm deliberately prices a product above the prices set for competing products to capture those consumers who always shop for the best or for whom price does not matter?

A)improvement value method
B)supply-based method
C)demand-based method
D)premium pricing method
E)cost of ownership method

Question 26

Which of the following occurs when only a few firms dominate a market?

A)duopoly
B)monopsony
C)oligopoly
D)monopoly
E)oligopsony

Question 27

Which of the following occurs when only one firm provides the product or service in a particular industry?

A)duopoly
B)monopsony
C)oligopoly
D)monopoly
E)oligopsony

Question 28

The price of a single piece of a product which is equal to the price less the variable cost per unit is called the:

A)break-even point.
B)variable costs.
C)contribution per unit.
D)demand curve.
E)fixed costs.

Question 29

The moment at which the number of units sold generates just enough revenue to equal the total costs is called the:

A)break-even point.
B)variable costs.
C)contribution per unit.
D)demand curve.
E)fixed costs.

Question 30

When many firms sell closely related but not homogeneous products, this is called:

A)pure competition.
B)price engagement.
C)monopolistic competition.
D)a price conflict.
E)a price war.

Question 31

An approach that attempts to reflect how the firm wants consumers to interpret its products relative to the offerings of rival companies is called the:

A)cost-based pricing method.
B)value-based pricing method.
C)competitor-based pricing method.
D)supply-based pricing method.
E)demand-based pricing method.

Question 32

Which of the following pricing methods determine the final price to charge by starting with the cost, without recognizing the role that consumers or competitors' prices play in the marketplace?

A)cost-based pricing method
B)value-based pricing method
C)competitor-based pricing method
D)supply-based pricing method
E)demand-based pricing method

Question 33

The pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers is called:

A)mystery shopping.
B)double shopping.
C)joint shopping.
D)cross-shopping.
E)mixed shopping.

Question 34

Mike wants to set up a factory to manufacture roller skates.He plans to employ a hundred people in his office.Mike's other expenses include rent, utilities, insurance, administrative salaries (for executives and higher-level managers), and depreciation of the physical plant and equipment.The raw material and labour to make the skates constitute the:

A)break-even point.
B)variable costs.
C)contribution per unit.
D)demand curve.
E)fixed costs.

Question 35

The expenses, primarily labour and materials, that vary with production volume are called the:

A)break-even point.
B)variable costs.
C)contribution per unit.
D)demand curve.
E)fixed costs.

Question 36

A situation in the market which occurs when two or more firms compete primarily by lowering their prices is referred to by the term:

A)pure competition.
B)price engagement.
C)monopolistic competition.
D)price conflict.
E)price war.

Question 37

Mike wants to set up a factory to manufacture roller skates.He plans to employ hundred people in his office.Mike's other expenses include rent, utilities, insurance, administrative salaries (for executives and higher-level managers), and depreciation of the physical plant and equipment.Rent, utilities, insurance, administrative salaries (for executives and higher-level managers), and depreciation of the physical plant and equipment constitute the:

A)break-even point.
B)variable costs.
C)contribution per unit.
D)demand curve.
E)fixed costs.

Question 38

When different companies sell commodity products that consumers perceive as substitutable, this is called:

A)pure competition.
B)price engagement.
C)monopolistic competition.
D)a price conflict.
E)a price war.

Question 39

Megan was an assistant manager in a firm and bought a Hyundai Accent L hatchback.She was then promoted to the position of senior manager and bought a Volvo S80.This is an example of the:

A)substitution effect.
B)price effect.
C)supply effect.
D)demand effect.
E)income effect.

Question 40

Which of the following pricing methods focuses on the overall value of the product offering as perceived by consumers, who determine value by comparing the benefits they expect the product to deliver with the sacrifice they will need to make to acquire the product?

A)cost-based pricing methods
B)value-based pricing methods
C)competitor-based pricing methods
D)supply-based pricing methods
E)demand-based pricing methods

Question 41

A company advertises that winter pullovers and jackets will be sold at a 50-percent discount if they are ordered before September 30.This is an example of a(n):

A)seasonal discount.
B)advertising allowance.
C)odd price.
D)listing allowance.
E)cash discount.

Question 42

A department store offers a 30-percent discount on Christmas trees if the trees are bought before December 1.This is an example of:

A)a quantity discount.
B)geographic pricing.
C)an allowance.
D)a seasonal discount.
E)uniform delivered pricing.

Question 43

A company sells shoes at a price somewhere between the regular, nonsale price and the deep-discount sale prices that its competitors may offer.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 44

A car company introduces a new car in the market.It maintains a low introductory price, aiming at the mid-level segment.The main objective of the company is to build sales, market share, and profits quickly.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 45

A confectionery company pays a fee to a retailer to place its products near the checkout counter.By doing so, the confectionery company hopes to tempt customers to make impulse purchases.The fee paid to the retailer is an example of a(n):

A)seasonal discount.
B)advertising allowance.
C)odd price.
D)listing allowance.
E)cash discount.

Question 46

A shoe manufacturer pays a good amount to a department store to allow it to display its shoes in the store's window where they are most likely to attract the attention of customers.The money paid to the department store is an example of:

A)a quantity discount.
B)geographic pricing.
C)an allowance.
D)a seasonal discount.
E)uniform delivered pricing.

Question 47

Jared's, an exclusive delicatessen, marked down its smoked sausages from $9.99 to $6.99 in a prominently displayed poster in its smoked meats section.When consumers viewed the sale price, they were inclined to place smoked sausages in their shopping carts.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 48

A hotel chain drastically reduces the rates for its rooms during Christmas.This is done as part of a promotional offer to try to boost sales.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 49

A strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer is called:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 50

Mike wants to buy a motorcycle helmet because the one he had was stolen.It had cost him $377.99.When he goes to buy a new one, he finds that it will cost him $450.99.He finds the price of the helmet too high.He is prepared to pay only as much as his previous helmet cost him.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 51

A company prices its shoes at $74.99 instead of $75.00.This is an example of a(n):

A)seasonal discount.
B)advertising allowance.
C)odd price.
D)listing allowance.
E)cash discount.

Question 52

A pricing strategy of setting the initial price low for the introduction of a new product or service, with the objective of building sales, market share, and profits quickly is called:

A)market development pricing.
B)market extension pricing.
C)market establishment pricing.
D)market testing pricing.
E)market penetration pricing.

Question 53

A strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay to obtain is called:

A)price fixing.
B)price skimming.
C)price discrimination.
D)bait and switch.
E)resale price maintenance.

Question 54

A dairy farm sells milk to a confectionery company.The dairy offers the company a discount of 10 percent on the total amount of the invoice if the company settles the amount within a period of 7 days instead of the usual 30 days.This is an example of a(n):

A)seasonal discount.
B)advertising allowance.
C)odd price.
D)listing allowance.
E)cash discount.

Question 55

A company has marked its refrigerators at $729.94 as the original price.The sales price has been marked at $650.99.Because the customer compares the sales price with the original price, he identifies an increased value.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 56

A store that sells kids clothes drastically reduces prices during promotional sales in an effort to boost sales.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 57

The method in which a manager must estimate how much more (or less) consumers are willing to pay for a product relative to other comparable products is called the:

A)improvement value method.
B)supply-based method.
C)demand-based method.
D)premium pricing method.
E)cost of ownership method.

Question 58

A method for setting prices that determines the total cost of owning the product over its useful life is called the:

A)improvement value method.
B)supply-based method.
C)demand-based method.
D)premium pricing method.
E)cost of ownership method.

Question 59

A laptop manufacturer introduces a new model in the market.The company is aiming to market the model to students and has therefore given it a low price.The main objective of the company is to build sales, market share, and profits quickly.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 60

James goes to the market to buy a duffle bag.When James last bought a duffle bag, it cost him $74.99, a price he was comfortable with.Now he finds that it costs $99.99 and finds the price too high.This is an example of:

A)everyday low pricing.
B)external reference price.
C)high/low pricing.
D)market penetration pricing.
E)internal reference price.

Question 61

A grocery store prices milk at cost, thus lowering the price of milk.This helps to attract customers who might buy other items in the store that are being sold at regular price.This is an example of:

A)price fixing.
B)price bundling.
C)price discrimination.
D)leader pricing.
E)price lining.

Question 62

A computer store advertises to sell a particular model of laptops at a discounted price.When a customer approaches the store, he is informed that the discounted model is out of stock.The salesperson then tries to sell him a different model that is priced higher than the model for which he had come.This is an example of:

A)predatory pricing.
B)vertical price fixing.
C)horizontal price fixing.
D)price discrimination.
E)bait and switch.

Question 63

A furniture manufacturing company in Canada delivers goods to its customers in Europe.The shipping company that delivers the goods to customers has divided the continent into five different zones and charges according to the rate prevalent in each of the zones.This is an example of:

A)geographic pricing.
B)price bundling.
C)price lining.
D)leader pricing.
E)uniform delivered pricing.

Question 64

A department store offers a discount if a shirt is purchased with a pair of trousers.The combined purchase would cost less than what it would cost the customer to purchase the two individually.This is an example of:

A)price fixing.
B)price bundling.
C)price discrimination.
D)leader pricing.
E)price lining.

Question 65

A shoe store gets a 50-percent discount from the manufacturer when it places a $5000 order.The discount percentage increases when the amount of the purchase order increases.This is an example of a(n):

A)seasonal discount.
B)cumulative quantity discount.
C)odd price.
D)non-cumulative quantity discount.
E)cash discount.

Question 66

A car manufacturer offers cars in the luxury segment.It establishes a price floor and a price ceiling for the entire line of cars and then sets a few other price points in between to represent distinct differences in quality.It helps the manufacturer to satisfy a wide range of tastes and budgets.This is an example of:

A)geographic pricing.
B)price bundling.
C)price lining.
D)leader pricing.
E)uniform delivered pricing.

Question 67

Which of the following provides instant savings when presented?

A)rebate
B)size discount
C)markdown
D)coupon
E)quality discount

Question 68

A retailer dealing in air conditioners has to sell a certain number of air conditioners in a year.If the retailer does so, the manufacturer offers him a discount on every air conditioner bought by the retailer during that year.The discount is in the form of a rebate cheque.This is an example of a(n):

A)seasonal discount.
B)cumulative quantity discount.
C)odd price.
D)noncumulative quantity discount.
E)cash discount.

Question 69

A company manufacturing shampoo charges a low price to customers who buy sachets on the premise that since they belong to lower income groups they are more price sensitive.It charges higher prices to customers who buy shampoo bottles.This is an example of:

A)predatory pricing.
B)vertical price fixing.
C)horizontal price fixing.
D)price discrimination.
E)bait and switch.

Question 70

A prominent fast-food chain sets a very low price for its burgers with the intent of driving its competition out of business.This is an example of:

A)predatory pricing.
B)vertical price fixing.
C)horizontal price fixing.
D)price discrimination.
E)bait and switch.

Question 71

A company selling air conditioners finds that sales begin to decrease at the end of summer.The company then reduces the price of air conditioners to get rid of the slow-moving merchandise.This is an example of a:

A)rebate.
B)size discount.
C)markdown.
D)coupon.
E)quality discount.

Question 72

A store that sells hockey equipment offers a discount if a customer also buys a pair of skates.The combined purchase costs less than what it would cost the customer to buy the equipment individually.This is an example of:

A)geographic pricing.
B)price bundling.
C)price lining.
D)leader pricing.
E)uniform delivered pricing.

Question 73

A clothing line company provides a large price reduction to its wholesalers if they feature the company's goods in their promotional campaigns.This is an example of a(n):

A)seasonal discount.
B)advertising allowance.
C)odd price.
D)listing allowance.
E)cash discount.

Question 74

A supermarket offers a 1-litre milk carton, a 2-litre milk carton, and a 3-litre milk jug at $3.50, $6.00, and $9.00, respectively.Thus, the larger the quantity bought, the lower the cost.This is an example of a:

A)rebate.
B)size discount.
C)markdown.
D)coupon.
E)quality discount.

Question 75

A store advertises a pair of shoes at $79.99 with a cash back offer of $20.The refund is made by the manufacturer.This is an example of a:

A)rebate.
B)size discount.
C)markdown.
D)coupon.
E)quality discount.

Question 76

A furniture manufacturing company in Canada delivers goods to its customers in Europe.The shipping company that delivers the goods to customers charges the same irrespective of the country in which the customer is located.This is an example of:

A)geographic pricing.
B)price bundling.
C)price lining.
D)leader pricing.
E)uniform delivered pricing.

Question 77

Books Inc.is an online seller of books.It ships its books to different parts of the world and has divided the continents into different zones.When it delivers its shipments, it charges the rate of the particular zone in which the customer is located.This is an example of:

A)a quantity discount.
B)geographic pricing.
C)an allowance.
D)a seasonal discount.
E)uniform delivered pricing.

Question 78

Books Inc.is an online seller of books.It ships its books to different parts of the world.The company, when it ships the books, charges the same rate irrespective of the location of the customer.This is an example of:

A)a quantity discount.
B)geographic pricing.
C)an allowance.
D)a seasonal discount.
E)uniform delivered pricing.

Question 79

A shoe manufacturer has an in-house manufacturing brand.It manufactures shoes for customers in the middle-range segment and the upper-range segment.It also has shoes in between these segments, at different prices, to represent distinct differences in quality.This is an example of:

A)price fixing.
B)price bundling.
C)price discrimination.
D)leader pricing.
E)price lining.

Question 80

A grocery store prices its eggs at cost, thus lowering the price of eggs.This helps attract customers who will most likely buy other items in the store that are being sold at regular price.This is an example of:

A)geographic pricing.
B)price bundling.
C)price lining.
D)leader pricing.
E)uniform delivered pricing.