15 to 19

A benefit of advertising is that

s:
a.
​it creates a long-term, committed relationship between a salesperson and a customer.
b.
​it provides opportunity for immediate feedback from consumers.
c.
​it has a very low cost per contact.
d.
​it facilitates consumer empowerment.

c.
​it has a very low cost per contact.
​​Which of the following strategies can be used by a firm that uses a pull strategy?​

a.
​Selling products to wholesalers
b.
​Offering heavy sampling and introductory consumer advertising
c.
​Offering aggressive discounts for retailers to buy its products
d.
​Using trade advertising

b.
​Offering heavy sampling and introductory consumer advertising
The basic goal of promotion during the introduction stage of the product life cycle is:​
a.
​to inform the target audience that the product is available.
b.
to limit personal selling at the retail level.​
c.
​to target advertising to specific potential buyers.
d.
​to reduce the costs incurred in mass advertising.
a.
​to inform the target audience that the product is available.
____ is the process by which meanings are exchanged or shared through a common set of symbols.​

a.
​Communication
b.
​Research
c.
​Analysis
d.
​Evaluation

a.
​Communication
_____ is designed to stimulate a purchase or an action

a.
​Informative promotion
b.
​Persuasive promotion
c.
​Connective promotion
d.
​Reminder promotion

b.
​Persuasive promotion
The _____ is a model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with a promotional message.​

a.
​AIDA model
b.
​SWOT matrix
c.
​BCG matrix
d.
​IMC model

a.
​AIDA model
The objective of public relations is:​

a.
​entails indirect, one-way communication.
b.
​meets the needs of a target market.
c.
​does not use advertising.
d.
​works for all products of a company.

b.
​meets the needs of a target market
An objective of a seller engaging in personal selling is:​

a.
​to persuade a buyer to accept a point of view.
b.
​to use social media sites to talk with large audiences.
c.
to increase the cost of the product that is being sold.​
d.
​to make a one-time sale rather than a long-term relationship.

a.
​to persuade a buyer to accept a point of view
As a product reaches the growth stage of its life cycle, _____.​

a.
sales promotion can be reduced​
b.
​advertising and public relations play no role in the promotional mix
c.
​mass advertising is used rather than target marketing
d.
​early trial of the product is encouraged

a.
sales promotion can be reduced​
As receivers in the communication process, marketers:​

a.
​listen to the target market in order to develop appropriate messages.
b.
​promote the purchase of goods and services.
c.
​persuade the target market to buy a company’s products.
d.
​inform and remind the target market of new and existing products.

a.
​listen to the target market in order to develop appropriate messages.
Which of the following is a reason for the increasing popularity of the integrated marketing communications (IMC) concept?​

a.
​Proliferation of thousands of media choices beyond traditional television has made promotion easier.
b.
​Marketers have increased their advertisement spending for promotional techniques that generate gradual sales responses.
c.
​More selectively segmented markets have replaced the traditional broad market groups.
d.
​Marketers have discontinued the use of online advertising due to its lack of measurability

c.
​More selectively segmented markets have replaced the traditional broad market groups.
_____ seeks to convert an existing need into a want or to stimulate interest in a new product.​

a.
​Persuasive promotion
b.
​Connective promotion
c.
​Reminder promotion
d.
​Informative promotion

d.
​Informative promotion
____ seeks to convert an existing need into a want or to stimulate interest in a new product.​

a.
​Persuasive promotion
b.
​Connective promotion
c.
​Reminder promotion
d.
​Informative promotion

d.
​Informative promotion
Which of the following statements is true of buying decisions?​

a.
​The type of buying decision does not affect the promotional mix of an organization.
b.
​Print advertising may be used for high-involvement purchase decisions.
c.
​Consumers are the not involved in complex buying decisions.
d.
​Personal selling is most effective in helping consumers in routine decisions.

b.
​Print advertising may be used for high-involvement purchase decisions.
_____ is a promotional element with a very low cost per contact.​

a.
​Personal selling
b.
​Social media
c.
​Public relations
d.
​Sales promotion

b.
​Social media
Which of the following statements is true of sales promotions?​

a.
​It complements advertising by yielding faster sales responses.
b.
​It is a long-run tool used by marketers.
c.
​It is allotted less marketing money than advertising.
d.
​It uses personal selling, advertising, and public relations

a.
​It complements advertising by yielding faster sales responses.
The objective of public relations is:​

a.
​to receive direct feedback from customers.
b.
​to create the promotional mix for an organization.
c.
​to educate the public about a company’s goals and objectives.
d.
​to facilitate consumer empowerment.

c.
​to educate the public about a company’s goals and objectives.
A _____ requires a manufacturer to focus its promotional efforts on end consumers.​

a.
​print marketing strategy
b.
​pull strategy
c.
​service strategy
d.
​push strategy

b.
​pull strategy
_____ refers to communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response.​

a.
​Encoding
b.
​Upselling
c.
Promotion
d.
​Production

c.
Promotion
Which of the following is a characteristic of the elements of a promotional mix?​

a.
​Managerial emphasis is the minimum for the most important element in the promotional mix.
b.
​Data influences how marketers distribute funding among the various elements of the promotional mix.
c.
​The most important promotional element receives the least funding in the promotional mix.
d.
​All elements of the promotional mix entail direct, one-way communication.

b.
​Data influences how marketers distribute funding among the various elements of the promotional mix.
The _____ is the combination of advertising, personal selling, sales promotion, social media, and public relations that is used to reach a target market and fulfill an organization’s overall goals.​

a.
​promotional mix
b.
​distribution mix
c.
​product mix
d.
​retailing mix

a.
​promotional mix
_____ is designed to stimulate a purchase or an action.​

a.
​Informative promotion
b.
​Persuasive promotion
c.
​Connective promotion
d.
​Reminder promotion

b.
​Persuasive promotion
Which of the following is a combination of sales automation and Internet technology that some marketers are using in an effort to enhance customer satisfaction and bring in more business?

a.
​Geolocation
b.
​Automated e-mail follow-up marketing
c.
​Attribution model
d.
​Preapproach model

b.
​Automated e-mail follow-up marketing
_____ is the ultimate goal of a new trend in marketing that focuses on understanding consumers as individuals instead of as part of a group.​

a.
​Total quality management (TQM)
b.
​Profit maximization
c.
​Customer relationship management (CRM)
d.
​Organizational optimization

c.
​Customer relationship management (CRM)
Personal selling is more important than advertising and sales promotion if the products being sold:​

a.
​are technically complex.
b.
​are standardized.
c.
​have many consumers.
d.
​have a low value.

a.
​are technically complex.
In the selling process, which of the following statements is true of developing and proposing solutions?​

a.
​The immediate step after presenting the sales proposal is the final purchase transaction.
b.
​It is better to depend on a formal presentation than on a salesperson’s ability to handle customer objections.
c.
​Often, customers are more likely to remember what salespeople say than how they present themselves.
d.
​The quality of both the sales proposal and the presentation can make or break the sale.

d.
​The quality of both the sales proposal and the presentation can make or break the sale.
_____ is the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement.

a.
​Trouble-shooting
b.
​Negotiation
c.
​Branding
d.
​Follow-up

b.
​Negotiation
While recruiting the sales force, sales managers prefer salespeople who:​

a.
​ensure that there is no negotiation during the process of closing a sale.
b.
​get their point across confidently without being overbearing or aggressive.
c.
​often avoidgetting involved in unlikely sales.
d.
​are transactionoriented rather than relationship oriented.

b.
​get their point across confidently without being overbearing or aggressive.
Which of the following makes it necessary for salespeople to conduct thorough and continued follow-up with the clients?​

a.
​In present times, customers are more loyal toward brands and vendors than before.
b.
​Most businesses depend on repeat sales, which depend on follow-up by the salesperson.
c.
​Buyers are more inclined to look for the best deal when they experience good postsale follow-up.
d.
​Conducting postsales follow-up gives rise to cognitive dissonance.

b.
​Most businesses depend on repeat sales, which depend on follow-up by the salesperson.
Which of the following is part of defining the sales goal of a company?​

a.
​Evaluating the sales force
b.
​Assigning quotas to salespeople
c.
​Designing the sales force structure
d.
​Training new salespeople

b.
​Assigning quotas to salespeople
_____ is using friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations to identify potential clients.​

a.
​Negotiation
b.
​Needs assessment
c.
​Networking
d.
​Campaign management

c.
​Networking
In the selling process, which of the following is true of the needs assessment of prospective clients by salespeople?​

a.
​It should be carried out once a client has been qualified as a lead.
b.
​It ignores the impact of competition on the demand of the product being sold.
c.
​It does not give a comprehensive result for instances where relationship selling is used.
d.
​It requires the salesperson to know regulation and legislation that affect the industry.

d.
​It requires the salesperson to know regulation and legislation that affect the industry.
Effective sales management begins with:​

a.
​designing a compensation plan.
b.
​specifying the sales force size.
c.
​determining sales goals.
d.
​determining the most efficient structure for the sales force.

c.
​determining sales goals.
_____ occurs when a customer and a company representative exchange information and develop learning relationships.​

a.
​Traditional selling
b.
​An intervention
c.
​Customer profiling
d.
​An interaction

d.
​An interaction
_____ involves determining a sales prospect’s recognized need, buying power, and receptivity and accessibility of a sales prospect.​

a.
​Negotiation
b.
​Lead qualification
c.
​Lead reciprocity
d.
​Customization

b.
​Lead qualification
During the preapproach stage of the selling process, a salesperson should:​

a.
​provide information about various referrals and discounts available.
b.
​handle price objections and close the sale.
c.
​create point-of-purchase displays.
d.
​learn as much as possible about a prospect’s organization and its buyers

d.
​learn as much as possible about a prospect’s organization and its buyers
Which of the following statements is true of traditional selling?​

a.
​Minimal effort is placed on asking questions to identify customer needs.
b.
​It allows ample time for detailed follow-up with customers after a sale.
c.
​High emphasis is placed on matching customers’ needs and wants to the benefits of the product.
d.
​It results in more win-win transactions for salespeople than relationship selling.

a.
​Minimal effort is placed on asking questions to identify customer needs.
​_____ is a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships.

a.
​Stimulus-response selling
b.
​Price-based selling
c.
​Adaptive selling
d.
​Relationship selling

d.
​Relationship selling
In personal selling, costs of promoting a product or service can be controlled by:​

a.
​purchasing advertising and sales promotions in large amounts.
b.
​promoting undifferentiated sales messages toward prospective consumers.
c.
​promoting a product to both qualified and nonqualified prospects.
d.
​adjusting the size of the sales force in one-person increments.

d.
​adjusting the size of the sales force in one-person increments.
_____ free sales representatives from the time-consuming task of following up on leads to determine need, buying power, and receptiveness.​

a.
​Database mining systems
b.
​Prequalification systems
c.
​Referral systems
d.
​Cold calling systems

b.
​Prequalification systems
Identify a true statement about salesforce training.

a.
​Training does not take place in the field or using online modules.
b.
​It can occur during sales meetings, annual meetings, or during the course of everyday business.
c.
​Conducting job training in the field via a live sales call provides real world experience for a trainee.
d.
​It is done by giving compensation to employees

c.
​Conducting job training in the field via a live sales call provides real world experience for a trainee.
Which of the following statements is true of advertising in social media?​

a.
​The effectiveness of social media can be easily measured.
b.
​Social media are an unpaid form of marketing.
c.
​Marketers believe that social media are not a worthwhile investment.
d.
​Social media mostly focus on deepening relationships with customers.

d.
​Social media mostly focus on deepening relationships with customers.
Twitpic, Flickr, and Photobucket are all examples of:​

a.
​media sharing sites.
b.
​virtual worlds.
c.
​corporate blogs.
d.
​microblogs.

a.
​media sharing sites.
_____ are independent and not associated with the marketing efforts of any particular company or brand.​

a.
​Social networking sites
b.
​E-mail services
c.
​E-commerce sites
d.
​Noncorporate blogs

d.
​Noncorporate blogs
According to Charlene Li and Josh Bernoff of Forrester Research, _____ are those who maintain a social networking profile and visit other sites.​

a.
​inactives
b.
​creators
c.
​joiners
d.
​critics

c.
​joiners
Much of the growth in social media sites can be attributed to:

a.
​good old-fashioned word of mouth promotion.
b.
​reduced demand for crowdsourcing.
c.
​new platforms like tablets and smartphones.
d.
​media hype

c.
​new platforms like tablets and smartphones.
According to Charlene Li and Josh Bernoff of Forrester Research, _____ are those who read blogs, listen to podcasts, watch videos, and generally consume media.​

a.
​critics
b.
​conversationalists
c.
​inactives
d.
​spectators

d.
​spectators
According to Charlene Li and Josh Bernoff of Forrester Research, which of following categories of social media users posts comments, ratings, and reviews of products and services on blogs and forums?​

a.
​Critics
b.
​Inactives
c.
​Joiners
d.
​Spectators

a.
​Critics
_____, a social media metric, refers to media mentions, influences of bloggers reached, influences of customers reached, and second-degree reach based on social graphs.

a.
​Interest
b.
​Participation
c.
​Buzz
d.
​Influence

d.
​Influence
The first action a marketing team should take when initiating a social media campaign is:​

a.
​to identify the medium for the campaign.
b.
​to establish a listening platform.
c.
​to decide which tools and platforms to use as part of its social media strategy.
d.
​to identify potential consumers.

b.
​to establish a listening platform.
_____ is a subset of e-commerce that involves the interaction and user contribution aspects of social online media to assist online buying and selling of products and services.​

a.
​Mass customization
b.
​Eco commerce
c.
​Social profile
d.
​Social commerce

d.
​Social commerce
Which of the following statements is true of social commerce?​

a.
​Marketers cannot customize their offerings as per the needs of specific groups of consumers.
b.
​With social media, the employees of a firm are often in control of the message, the medium, and the response.
c.
​It relies on user-generated content on Web sites to assist consumers with purchases.
d.
​It does not offer consumers the scope to make informed decisions on purchases and services.

c.
​It relies on user-generated content on Web sites to assist consumers with purchases.
Social media measurements are meaningless if:​

a.
​they consider the rate of accumulation.
b.
​they consider investment per fan and follower.
c.
​they do not focus on return on investment.
d.
​they are not tied to key performance indicators.

d.
​they are not tied to key performance indicators.
In an interactive space, earned media include

a.
​display advertising.
b.
​paid search words.
c.
​viral videos.
d.
​purchased advertisements.

c.
​viral videos.
Which of the following changes has been brought about in advertising because of the influence of social media?

a.
​The interaction between producer and consumer has become less about engaging and more about entertaining.
b.
​The focus of social media has unavoidably shifted to manufacturers.
c.
​The audience is often in control of the message, the medium, the response, or all three.
d.
​The number of ways in which marketers can have direct and meaningful conversations with customers has reduced.

c.
​The audience is often in control of the message, the medium, the response, or all three.
Which of the following processes is used in social media monitoring?

a.
​The interaction between producer and consumer has become less about engaging and more about entertaining.
b.
​The focus of social media has unavoidably shifted to manufacturers.
c.
​The audience is often in control of the message, the medium, the response, or all three.
d.
​The number of ways in which marketers can have direct and meaningful conversations with customers has reduce

c.
​The audience is often in control of the message, the medium, the response, or all three.
Which of the following processes is used in social media monitoring?

a.
​Cold calling
b.
​Sentiment analysis
c.
​Personal selling
d.
​Crowdsourcing

b.
​Sentiment analysis
Which of the following statements is true of crowdsourcing?

a.
​It describes the need for consumers to buy a product and their willingness to buy it.
b.
​It describes how the level of buzz created for a product can be used as a measurable parameter for determining the product’s effectiveness.
c.
​It describes how the input of many people can be leveraged to make decisions that used to be based on the input of only a few people.
d.
​It describes the methods in which a consumer should use a product or service.

c.
​It describes how the input of many people can be leveraged to make decisions that used to be based on the input of only a few people.
Identify a true statement about online gaming.​

a.
​Fantasy games are most appropriate for marketing than social and real-world-like games.
b.
​Massive multiplayer online games are called virtual worlds.
c.
​It restricts marketers from engaging with customers.
d.
​Many mobile games use mobile ads to generate revenue for the gamemakers.

d.
​Many mobile games use mobile ads to generate revenue for the gamemakers.
Which of the following actions is performed during the final stage of an effective social media plan?

a.
​Listening to customers and understanding their expectations
b.
​Setting objectives that can be specifically accomplished through social media
c.
​Making changes to the implemented campaign based on consumer response
d.
​Examining trends and best practices in the industry

c.
​Making changes to the implemented campaign based on consumer response
_____ are Web sites that allow consumers to post, read, rate, and comment on opinions regarding all kinds of products and services.​

a.
​Microblogs
b.
​Media sharing sites
c.
​Mommy blogs
d.
​Review sites

d.
​Review sites
Which of the following treats location-based micronetworking as a game?​

a.
​Twitter
b.
​Facebook
c.
​WordPress
d.
​FourSquare

d.
​FourSquare
Which of the following is included in the second stage of creating an effective social media plan?​

a.
​Defining strategies
b.
​Identifying the target audience
c.
​Building relationships and awareness
d.
​Listening to customer

c.
​Building relationships and awareness
Buzz, a social media metric, is based on:​

a.
​posts and impressions, by social channel, by stage in the purchase channel, by season, and by time of day.
b.
​the number of “likes,” fans, followers, and friends; growth rates; rate of virality or pass along; and change in pass along over time.
c.
​the number of comments, ratings, social bookmarks, subscriptions, page views, uploads, downloads, embeds, retweets, Facebook posts, pins, and time spent with social media platform.
d.
​media mentions, influences of bloggers reached, influences of customers reached, and second-degree reach based on social graphs.

a.
​posts and impressions, by social channel, by stage in the purchase channel, by season, and by time of day.
If the goal of the promotion plan is to improve the image of the company or the industry, _____ may be used.

a.
​competitive advertising
b.
​institutional advertising
c.
​pioneering advertising
d.
​comparative advertising

b.
​institutional advertising
Which of the following statements is true of cooperative advertising?

a.
​It resolves the impracticality of listing all the dealers of the brand in national advertising.
b.
​It does not allow retailers to devote effort to the manufacturer’s lines.
c.
​It doubles the revenue generation for the retailer.
d.
​It cannot be used for advertising through radio.

a.
​It resolves the impracticality of listing all the dealers of the brand in national advertising.
Which of the following is an example of unmeasured media ad spending?

a.
​Newspapers
b.
​Cable TV
c.
​Catalogs
d.
​Magazines

c.
​Catalogs
Which of the following is an advantage of using cost per contact to determine the media mix for a product?

a.
​It enables an advertiser to compare the relative expenses of specific media vehicles.
b.
​It allows advertisers to increase an ad’s effectiveness by reaching potential customers.
c.
​It requires advertisers to pay only for the customers who view their ad.
d.
​It allows marketers to minimize the cost of advertising by reaching a large number of people.

a.
​It enables an advertiser to compare the relative expenses of specific media vehicles.
_____ is the number of times an individual is exposed to a given message during a specific period.

a.
​Contact
b.
​Reach
c.
​Life span
d.
​Frequency

d.
​Frequency
_____ is the ability of an advertising medium to reach a precisely defined market.

a.
​Projection efficiency
b.
​Target sensitivity
c.
​Target efficiency
d.
​Audience selectivity

d.
​Audience selectivity
Understanding the advertising response function helps marketers:

a.
​know the real effect of an advertising campaign.
b.
​gain publicity for a brand.
c.
​use their advertising budgets wisely to suit the target market.
d.
​increase the sales and market share of a brand.

c.
​use their advertising budgets wisely to suit the target market.
_____ is a public relations strategy that involves getting a product, service, or company name to appear in a movie, television show, radio program, magazine, newspaper, video game, video or audio clip, book, or commercial for another product; on the Internet; or at special events.​

a.
​Product placement
b.
​Corporate communication
c.
​Audience selectivity
d.
​Advergaming

a.
​Product placement
_____ is the element in the promotional mix that evaluates people’s attitudes, identifies issues that may elicit their concern, and executes programs to gain their understanding and acceptance.​

a.
​Sales promotion
b.
​Public relations
c.
​Personal selling
d.
​Advertising

b.
​Public relations
Identify a true statement about an advertising campaign.

a.
​It extends for a defined period of time.
b.
​It follows the Boston Consulting Group’s matrix.
c.
​It contains a wide variety of themes and slogans.
d.
​It cannot focus on more than one advertising appeal.

a.
​It extends for a defined period of time.
A disadvantage of newspaper advertising is that:

a.
​it does not lend itself well to cooperative advertising.
b.
​it has low geographic selectivity and flexibility.
c.
​it does not allow manufacturers and retailers to split the costs of advertising.
d.
​it may not be the best vehicle for marketers trying to reach a very narrow market.

d.
​it may not be the best vehicle for marketers trying to reach a very narrow market.
Firms use competitive or brand advertising when a product enters the _____ of the product life cycle and other companies begin to enter the marketplace.

a.
​growth stage
b.
​introductory stage
c.
​decline stage
d.
​formative stage

a.
​growth stage
_____ is a form of advertising designed to influence demand for a specific brand.

a.
​Advocacy advertising
b.
​Institutional advertising
c.
​Competitive advertising
d.
​Pioneering advertising

c.
​Competitive advertising
_____ is the channel used to convey a message to a target market.

a.
​Reach
b.
​A medium
c.
​An advertising appeal
d.
​Audience selectivity

b.
​A medium
In the context of the effects of advertisements, humorous advertisements:

a.
​cannot be used to reinforce and remind loyal customers about the benefits of a product.
b.
​are effective in changing consumers’ deeply rooted values and attitudes.
c.
​are effective at shaping attitudes when consumers already have a positive image of an advertised brand.
d.
​cannot be used by companies that introduce new products.

c.
​are effective at shaping attitudes when consumers already have a positive image of an advertised brand.
Advertising campaigns follow the _____.

a.
​SWOT matrix
b.
​AIDA model
c.
​IMC model
d.
​BCG matrix

b.
​AIDA model
Which of the following statements is true of pioneering advertising?

a.
​It offers consumers in-depth information about the benefits of the product class.
b.
​It is used mainly to compare brands on one or more specific attributes.
c.
​It is heavily used during the growth stage of the product life cycle.
d.
​It focuses on influencing demand for a specific brand over other brands.

a.
​It offers consumers in-depth information about the benefits of the product class.
An alternative to a commercial spot is _____, a thirty-minute or longer advertisement, which is relatively inexpensive to produce and air.

a.
​a premium
b.
​a sweepstake
c.
​the infomercial
d.
​the frequent buyer program

c.
​the infomercial
If an advertiser wants to enhance the sales of a specific good or service, _____ should be used.

a.
​corporate advertising
b.
​advocacy advertising
c.
​institutional advertising
d.
​product advertising

d.
​product advertising
A _____ is a media scheduling strategy in which ads are run heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times.

a.
​continuous media schedule
b.
​circular media schedule
c.
​seasonal media schedule
d.
​flighted media schedule

d.
​flighted media schedule
New brands with a small market share tend to spend proportionately more for advertising and sales promotion than those with a large market share because:

a.
​spending more will prevent advertising response function.
b.
​product sales and market share improve drastically and keep increasing with more spending.
c.
​returns multiply beyond a certain level of spending.
d.
​a certain minimum level of exposure is needed to measurably affect purchase habits.

d.
​a certain minimum level of exposure is needed to measurably affect purchase habits.
Pioneering advertising is heavily used during the _____ of the product life cycle.

a.
​conception stage
b.
​growth stage
c.
​formative stage
d.
​introductory stage

d.
​introductory stage
Reach is related to a medium’s ratings, generally referred to in the industry as:

a.
​gross review points.
b.
​cost per rating points.
c.
​gross ratings points.
d.
​target ratings points.

c.
​gross ratings points.
Which of the following statements is true of executional styles?

a.
​A message can be easily communicated through humor in print or magazine advertising.
b.
​Executional styles often dictate what type of media is to be employed to convey the message.
c.
​Scientific executional styles lend themselves well to billboard advertising.
d.
​Injecting humor into an advertisement is the least effective executional style.

b.
​Executional styles often dictate what type of media is to be employed to convey the message.
Which of the following is an impact of the Internet on consumers’ shopping behavior?​

a.
​Consumer reviews on the Internet about various products tend to be equal in quality.
b.
​The Internet auction business is likely to disappear in the future.
c.
​Extranets are programs that search the Internet for the best price for a particular product.
d.
​Business-to-business auctions are likely to be the dominant form of Internet auction in the future.

d.
​Business-to-business auctions are likely to be the dominant form of Internet auction in the future.
_____ is a pricing policy whereby a firm charges a relatively low price for a product when it is first rolled out as a way to reach the mass market.​

a.
​Status quo pricing
b.
​Price discrimination
c.
​Price skimming
d.
​Penetration pricing

d.
​Penetration pricing
_____ is the selling to two or more different buyers, within a reasonably short time, of commodities (not services) of like grade and quality at different prices where the result would be to substantially lessen competition.​

a.
​Bait pricing
b.
​Price discrimination
c.
​Penetration pricing
d.
​Price fixing

b.
​Price discrimination
A price skimming strategy is most often used for a new product when:​

a.
​competition in the market is abundant.
b.
​its supply is greater than its demand.
c.
​customers are unwilling to spend a large amount of money on the product.
d.
​the product is perceived by the target market as having unique advantages.

d.
​the product is perceived by the target market as having unique advantages.
Which of the following happens if demand is elastic?

a.
​There is no substitute for a product in such case.
b.
​As price goes up, consumer demand changes.
c.
​The competition between organizations reduces.
d.
​Purchasing power of the consumer decreases.

b.
​As price goes up, consumer demand changes.
Return on investment (ROI) for a firm:

a.
​will be lower than the previous year if the firm performs better in the market.
b.
​measures management’s overall effectiveness in generating profits with the available assets.
c.
​is its total assets multiplied by the net profits after taxes.
d.
​is the margin of profit earned by the firm inclusive of the taxes payable by the firm.

b.
​measures management’s overall effectiveness in generating profits with the available assets.
Which of the following statements is true of unfair trade practice acts?

a.
​State enforcement of unfair trade practice laws has been lax partly because low prices benefit local consumers.
b.
​They establish penalties for companies that engage in predatory pricing.
c.
​They prohibit any firm from selling to two or more different buyers.
d.
​Unfair trade practice lawsprevent oligopoly leaders from joining together and fixing prices at the highest rates that a market will allow.

a.
​State enforcement of unfair trade practice laws has been lax partly because low prices benefit local consumers.
Which of the following is true of simple break-even analysis?

a.
​It ignores the demand for a product.
b.
​It ignores the selling price of a product.
c.
​It does not give weightage to the cost of labor that is incurred during production.
d.
​It is applicable only when the demand for a product is elastic.

a.
​It ignores the demand for a product.
Identify a true statement about status quo pricing.​

a.
​It requires serious planning and is difficult to implement.
b.
​It leads to optimal pricing of a product.
c.
​It can lead to a pricing disaster.
d.
​It gives great importance to the demand and costs of a product.

c.
​It can lead to a pricing disaster.
Which of the following statements is true about yield management systems (YMS)?​

a.
​They are complex pricing systems used to establish price equilibrium.
b.
​They are can be used only in service industries.
c.
​They are used to eliminate the problem of simultaneous production and consumption from services.
d.
​They are used to make profitable use of the unused capacity of perishable goods.

d.
​They are used to make profitable use of the unused capacity of perishable goods.
_____ does not change as output is increased or decreased.

a.
​Dependentcost
b.
​Fixed cost
c.
​Opportunity cost
d.
​Marginal cost

b.
​Fixed cost
Adequate distribution for a new product can often be attained by:​

a.
​offering a larger-than-usual profit margin to distributors.
b.
​allowing customers to involve in showrooming.
c.
​increasing the prices of the products.
d.
​having different model or serial numbers for products.

a.
​offering a larger-than-usual profit margin to distributors.
In _____,the seller pays all or part of the actual freight charges and does not pass them on to the buyer.​

a.
​uniform delivered pricing
b.
​freight absorption pricing
c.
​free on board origin pricing
d.
​basing-point pricing

b.
​freight absorption pricing
Which of the following statements is true about shopping bots?​

a.
​They create opportunities for prestige pricing.
b.
​The niche-oriented shopping bot searches a wide range of product categories such as Google Shopping or Nextag.
c.
​They search the Web for the best price for a product.
d.
​The broad-based type of shopping bot searches for prices for only one type of product such as consumer electronics (CNET) or travel-related services (Kayak).

c.
​They search the Web for the best price for a product.
_____ is a method of determining what sales volume must be reached before total revenue equals total costs.​

a.
​Markup pricing
b.
​Fixed-cost pricing
c.
​Break-even analysis
d.
​Opportunity analysis

c.
​Break-even analysis
Which of the following is true of price-quality relationships?​

a.
​Consumers lack information about the quality of lowerpriced goods due to poor advertising.
b.
​Consumer demands for higherpriced goods remain unchanged even if their quality declines.
c.
​Consumers perceive lowerpriced goods to be more long lasting than higherpriced goods.
d.
​Consumers believe that higher priced goods are manufactured with better quality of ingredients.

d.
​Consumers believe that higher priced goods are manufactured with better quality of ingredients.
Consumers are more likely to perceive the value of a product to be less than its cost if:​

a.
​in consumers’ minds, the product’s price is set too high.
b.
​the product’s manufacturer gains very little profit from the product.
c.
​the product has an inelastic demand.
d.
​the product’s demand and supply attain the state of price equilibrium.

a.
​in consumers’ minds, the product’s price is set too high.
To consumers, value is based upon:​

a.
​their perceived satisfaction.
b.
​the absolute monetary value of price.
c.
​their ability to get discount on a product.
d.
​the steadiness of price over a period of time.

a.
​their perceived satisfaction.
_____ is the quantity of a product that will be offered to the market by a supplier at various prices for a specified period.​

a.
​Product share
b.
​Market share
c.
​Demand
d.
​Supply

d.
​Supply
_____ is a price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities.​

a.
​Price skimming
b.
​Flexible pricing
c.
​Price lining
d.
​One-part pricing

b.
​Flexible pricing
Dynamic pricing is used to:

a.
​adjust prices over time to maximize a company’s revenues.
b.
​attain price equilibrium.
c.
​implement bait pricing to get more loyal customers.
d.
​perform price discrimination among customers.

a.
​adjust prices over time to maximize a company’s revenues.
Identify a true statement about yield management systems.​

a.
​They determine whether it is financially more feasible to buy a new product or repair a broken one.
b.
​They use a software that employs techniques such as discounting early purchases and limiting early sales at these discounted prices.
c.
​They predict necessary service levels required to achieve revenue goals.
d.
​They determine the availability of product substitutes in industries that are experiencing rapid change.

b.
​They use a software that employs techniques such as discounting early purchases and limiting early sales at these discounted prices.
_____ is a price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise.​

a.
​Leader pricing
b.
​Bait pricing
c.
​Price lining
d.
​Price bundling

b.
​Bait pricing
A _____ is a price reduction offered to buyers buying in multiple units or above a specified dollar amount.​

a.
​trade discount
b.
​quantity discount
c.
​cash discount
d.
​seasonal discount

b.
​quantity discount
_____ is a price tactic that charges freight costs from a given point, regardless of the city from which the goods are shipped.​

a.
​Uniform delivered pricing
b.
​Free on board origin pricing
c.
​Basing-point pricing
d.
​Zone pricing

c.
​Basing-point pricing
A _____ is a price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill.​

a.
​cash discount
b.
​quantity discount
c.
​functional discount
d.
​seasonal discount

a.
​cash discount
Shopping bots theoretically give pricing power to:​

a.
​agents.
b.
​retailers.
c.
​wholesalers.
d.
​consumers.

d.
​consumers.
For convenience, pricing objectives can be divided into three categories, which are:​

a.
​differentiated, niche, and undifferentiated.
b.
​perceived, actual, and situational.
c.
​refundable, competitive, and attainable.
d.
​profit oriented, sales oriented, and status quo.

d.
​profit oriented, sales oriented, and status quo.
Which of the following is a limitation of break-even analysis?​

a.
​It does not give weightage to the cost of labor that is incurred during production.
b.
​It is applicable only when the demand for a product is elastic.
c.
​It is hard to determine which costs are fixed and which costs are variable.
d.
​It does not give an estimate of how much profit can be earned once the break-even point is obtained.

c.
​It is hard to determine which costs are fixed and which costs are variable.
_____ is sometimes called a “market-plus” approach to pricing because it denotes a high price relative to the prices of competing products.​

a.
​Price skimming
b.
​Penetration pricing
c.
​Bait-and-switch pricing
d.
​Status quo pricing

a.
​Price skimming
Profit-oriented pricing objectives include:​

a.
​target return on investment.
b.
​target market share.
c.
​meeting competitors’ prices.
d.
​status quo pricing.

a.
​target return on investment.
Which of the following is true of products in the introductory stage of their life cycle?​

a.
​They experience an elastic demand in the core of the market.
b.
​Their prices will rise dramatically as they move into the specialty goods category.
c.
​Their prices are usually set high.
d.
​They experience price increases that are cost initiated.

c.
​Their prices are usually set high.
Which of the following statements is true of price lines?​

a.
​Buyers cannot be offered a wide variety of merchandise at each established price.
b.
​Firms have to carry a larger total inventory than it could without price lines.
c.
​Price lines are advantageous when costs rise continually.
d.
​Price lines enable a seller to reach several market segments.

d.
​Price lines enable a seller to reach several market segments.
When there are many substitutes available for a particular product, consumers:​

a.
​perceive individual products to have poor durability.
b.
​are sensitive to changes in supply of substitute products belonging to new brands.
c.
​judge the quality of the substitute product based on supply of each substitute.
d.
​can easily switch from one product to another.

d.
​can easily switch from one product to another.
A cost that changes with the level of output is called a(n) _____.​

a.
​independent cost
b.
​variable cost
c.
​indirect cost
d.
​liquid cost

b.
​variable cost
Firms that indulge in price fixing

a.
​undercut the price quoted by a seller to a buyer.
b.
​do not sell to two or more different buyers.
c.
​decide how much to charge for a product.
d.
​charge different prices to different customers.

c.
​decide how much to charge for a product.
Demand for a product will be inelastic if:

a.
​the product can be repaired and replaced or prolonged in its use.
b.
​its price is so low that it is an inconsequential part of an individual’s budget.
c.
​the product has a number of different uses.
d.
​many substitute products are available in the market.

b.
​its price is so low that it is an inconsequential part of an individual’s budget.
Inelastic demand is a situation in which:​

a.
​prices are adjusted over time to maximize a company’s revenues.
b.
​demand is created for new products by aggressive brand awareness campaigns.
c.
​consumers’ demand is sensitive to price changes.
d.
​an increase or a decrease in price does not significantly affect the demand for a product.

d.
​an increase or a decrease in price does not significantly affect the demand for a product.