Marketing Midterm Practice Test

Which of the following is NOT true about the factors affecting the speed of Diffusion of Innovations?
Both observability and risk slow down the speed of diffusion.
The popular sports drink brand, Gatorade, made the decision to develop and launch a range of energy snack bars. This is an example of ______________?
Brand extension
Which of the following is NOT true about brand equity?
It refers to the brand associations of a stock brokerage firm.
According to chapters 13-14 and the six steps in setting price, which of the following steps is the first step taken place BEFORE selecting an approximate price level?
Identifying pricing objectives and constraints
Due to a draught in Kansas, Oklahoma, and Texas, crops have been suffering and there has been a decrease in wheat prices. Farmers across the US have adapted to this market change by lowering the price to match the prevailing price for wheat. This is an example of _________?
Pure competition
Which of the following competitive markets relies most heavily on advertising to differentiate their product from their competitors?
Monopolistic competition
A test on price elasticity of demand yielded a number of -.85. This number reveals that consumers are _____________ and therefore would respond _____________ to an increase in price.
Inelastic, negatively
When an elasticity number is _______________ than 1, you will make more revenue at a ______________ price. When an elasticity number is ____________ than 1, you will make more revenue at a ____________ price.
Greater; lower; less; higher
The Wall Street Journal article, “For prescription drug makers, price increases drive revenue”, discusses how the demand for prescription drugs has recently decreased. Consequently, pharmaceutical companies have seen an increase in the price of prescription drugs and an increase in revenue. Based off this information we can determine that pricing of prescription drugs is _____________.
Inelastic
You and a friend have recently opened a hot dog stand on Pearl Street. Before the launch of your business, you purchased a mobile food cart for $250. Since opening, you have sold 115 hot dogs at a price of $1.75 each. Ingredients and labor cost your business .50 cents for each hot dog sold. Approximately how many MORE hot dogs do you need to sell to break even?
85
When barriers to entry are low and there is a low variation of willingness to pay between buyer segments, a company’s decision to set a low introductory price can be described as _______________?
Penetration pricing
Which of the following represent a retailer’s decision to sell a product below the cost to produce it?
Competition oriented pricing AND “Loss Leader”
When a consumer gets utility from a purchase because the price paid is less than some mentally stored price to evaluate the favorability of a product’s price, he or she is considering which of the following types of utility?
Transaction utility
Economists would say that the BEST time for a consumer to make a purchase is when…
Acquisition utility is positive
Which of the following is NOT true about price skimming?
Buyers who are willing to pay a high initial price are prioritized
Which of the following is TRUE about advertising elasticity?
Ad elasticity is higher when introducing new products or brand extensions than when advertising existing products
In class we discussed a non-assigned article about a proposal to ban alcohol advertising in the UK. An industry spokesperson provided a counterargument claiming that their ads influence brand choice rather than increased alcohol consumption. This argument is an advocacy for which of the following?
Selective demand
Which of the following is NOT true about consideration sets?
To have your product chosen, the brand does not have to be more liked than others within the consideration set
According to our textbook, which of the following is NOT included when identifying constraints on pricing?
Sales objective and status quo
Demand is inelastic when:
The price of the good gets more expensive but demand does not change