MKT 475 Week 8 Quiz – Strayer

MKT/475 Week 8 Quiz – Strayer

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Chapter 11

Pricing Strategy

True/False Questions

1. Price strategy is always related to competition whether firms use a higher, lower, or equal price.

323

2. Both revenues and costs need to be taken into account in selecting pricing strategies.

323

3. Lowering prices generally eliminates potential price wars.

324

4. The second step in selecting a pricing strategy is analyzing the pricing situation.

324

5. The core issue in pricing is finding out what value requirements (benefits-costs) the buyer places on the product or brand.

327
6. The underlying logic of economic value modeling (EVM) is that using the price/benefit ratio is a more realistic view of value than “dollar worth of benefits minus price.”

328

7. Customer value mapping estimates are based on the differentiated benefits that a customer receives from a product.

328

8. Competitive bidding is an example of demand-oriented approach of pricing.

340
9. Reverse auction pricing involves sellers bidding for organizational buyers’ purchases.

340
10. The competitor is the frame of reference for demand-oriented pricing methods.

340

Multiple Choice Questions

11. Which of the following distribution approaches is most likely to call for more competitive pricing?
A. Exclusive
B. Selective
C. Intensive
D. Narrow

321
322

12. Price cuts in economic downturns are primarily aimed at:
A. increasing short-term profits.
B. defending a firm’s position vigorously.
C. compensating for low quality products.
D. capturing market share.

323

13. Which of the following is the first step in selecting a pricing strategy?
A. Setting pricing objectives
B. Analyzing the pricing situation
C. Selecting pricing strategy
D. Determining specific prices and policies

323

14. Which of the following is the final step in selecting a pricing strategy?
A. Setting pricing objectives
B. Determining specific prices and policies
C. Selecting pricing strategy
D. Analyzing the pricing situation

323

15. _____ is the percentage change in the quantity sold of a brand when the price changes, divided by the percentage change in price.
A. Price distribution
B. Price band
C. Price point
D. Price elasticity

327

16. _____ estimates value as the perceived quality buyers obtain per unit of price.
A. Customer value mapping
B. Customer equity
C. User lifetime value
D. Customer value proposition

327
328

17. Value using _____ consists of the financial savings and gains provided to customers due to purchase of the firm’s brand instead of competitors’ brands.
A. customer value mapping
B. economic value modeling
C. user lifetime value
D. customer value proposition

328

18. Which of the following is the first step in cost analysis for pricing decisions?
A. Estimating how cost varies with the volume of sales
B. Analyzing the cost competitive advantage of the product
C. Determining the components of the cost of the product
D. Estimating how much control management has over costs

330

19. _____ indicates whether costs and prices for various products decline by a given amount each time the number of units produced doubles.
A. Economic value modeling
B. Activity-based costing
C. Customer value mapping
D. Learning-curve analysis

331

20. A high-active pricing strategy:
A. values superiority.
B. emphasizes nonprice competitive factors.
C. offers discounts.
D. avoids price comparisons.

336

21. Which of the following is true of high-passive strategy pricing?
A. It is used when competition for the market target is very high.
B. It emphasizes nonprice competitive factors.
C. It is primarily used by discount retailers.
D. It is used by producers whose brands are not familiar to the market.

337

22. A low-active pricing strategy:
A. emphasizes nonprice competitive factors.
B. is mainly used to gain margins in small market targets.
C. is most effective for discount retailers.
D. is an attractive strategy when competition for market target is high.

337

23. A low-passive pricing strategy:
A. emphasizes superior value of the product.
B. emphasizes nonprice competitive factors.
C. offers discounts.
D. avoids price comparisons.

337

24. When two or more competitors collude to explicitly or implicitly set prices, this practice is referred to as _____.
A. horizontal price fixing
B. price discrimination
C. deceptive pricing
D. predatory pricing

337

25. _____ is the practice of charging different prices to different buyers for goods of similar grade and quality.
A. Price fixing
B. Price discrimination
C. Deceptive pricing
D. Predatory pricing

338

26. Charging a very low price for a product with the intent of driving competitors out of business is referred to as _____.
A. cannibalization
B. price fixing
C. predatory pricing
D. deceptive pricing

338
27. Which of the following types of price determination methods uses the price of producing and marketing the product as the basis for determining price?
A. Cost-oriented
B. Supply-oriented
C. Competition-oriented
D. Demand-oriented

339

28. _____ pricing methods consider estimated market response to alternative prices.
A. Cost-oriented
B. Supply-oriented
C. Competition-oriented
D. Demand-oriented

339

29. Which of the following types of pricing is considered a cost-oriented approach of pricing?
A. Break-even pricing
B. Reverse auction pricing
C. Demand-oriented pricing
D. Internet auction pricing

339

30. When using markup pricing, which of the following formulas determines the selling price?
A. Price = Average unit cost divided by Markup percentage
B. Price = Average unit cost divided by 1 minus Markup percentage
C. Price = Unit cost minus Markup price
D. Price = Total fixed costs divided by Unit price minus Unit variable cost

340

Essay Questions

31. Explain the role of price in the distribution strategy.

32. Explain the various roles of price in the marketing program.

33. What are the steps in selecting a pricing strategy?

34. Give an account of predatory pricing. What are its ethical implications?

35. Give an account of the impact of emerging markets on pricing.

Chapter 12

Promotion, Advertising, and Sales Promotion Strategies

True/False Questions

1. An advantage of personal selling over advertising is its flexibility in responding to the buyer’s objections and questions at the time the decision to purchase is being made.

355

2. The percent-of-sales method of budgeting for promotion is arbitrary and does not recognize that promotion efforts and results are related.

357
3. Promotion expenditures for the competitive parity method are guided by comparing which component(s) is/are appropriate for attaining each objective.

357
4. The final step in developing an advertising strategy involves evaluating its effectiveness.

359
5. Determining the sales and profit impact of advertising is more difficult to measure than the exposure and awareness it creates.

360
6. The fragmentation of many consumer markets is driving significant amounts of advertising spending from traditional mass media to more focused narrowcast media.

363

7. Recall tests measure consumers’ awareness of specific ads and campaigns by asking questions to determine if a sample of people remembers an ad.

366

8. Longitudinal studies use empirical data to build a mathematical relationship between sales and advertising effort.

366

9. Sales promotions are primarily used to bring awareness of a particular product.

366

10. Coupons are extensively used as a promotional activity to target value chain members.

369

Multiple Choice Questions

11. _____ consists of planning, implementing, and controlling an organization’s communications to its customers and other target audiences. 
A. Promotion strategy
B. Distribution program
C. Benchmarking
D. Planned obsolescence

350
12. Which of the following is a disadvantage of advertising?
A. It has high cost per exposure.
B. It has fixed messages for the duration of an exposure.
C. It does not allow much creativity in message design.
D. It provides low control of message content.

351

13. Which of the following is true about advertising?
A. It has high cost per exposure.
B. It provides low control over exposure.
C. It does not allow direct interactions with buyer.
D. It does not allow for creative message designs.

351

14. _____ consists of verbal communication between a salesperson and one or more prospective purchasers with the objective of making or influencing a sale. 
A. Public relation
B. Sales promotion
C. Advertising
D. Personal selling

351

15. _____ consists of activities such as, trade shows, contests, samples, point-of-purchase displays, product placement in films and other occasions, trade incentives, and coupons.
A. Sales promotion
B. Advertising
C. Personal selling
D. Interactive marketing

351
16. _____ refers to communications placed in the commercial media at no charge to the company receiving the publicity.
A. Advertising
B. Public relations
C. Personal selling
D. Interactive marketing

353

17. Which of the following is a disadvantage of the percent of sales method of setting promotional budgets?
A. It heavily relies on the experience and judgment of the marketing team.
B. It can result in too much spending on promotion when sales are high and not enough when sales are low.
C. Its budgeting method is directly guided by how much competitors spend.
D. It does not base its budgeting on past expenditure patterns.

357
18. Which of the following promotion strategies is most appropriate when buyers’ information needs are high?
A. Advertising-driven
B. Sales promotion-driven
C. Personal selling-driven
D. Generic

358

19. An advertising-driven promotion strategy is used when:
A. the numbers of buyers are small.
B. the size and importance of purchase is large.
C. product complexity is high.
D. no post purchase contact is required.

358

20. Which of the following advertising objectives is used more often because of the ease of measurement?
A. Exposure objectives
B. Attitude change objectives
C. Sales objectives
D. Profit objectives

360

21. Distributing promotional video clips across the Internet is referred to as _____.
A. personal selling
B. viral marketing
C. sales promotion
D. direct distribution

363

22. _____ identifies relationships between advertising expenditures and sales using statistical techniques such as regression analysis. 
A. Test marketing
B. Recall test
C. Longitudinal study
D. Evaluating historical data

366
23. _____ measure(s) consumers’ awareness of specific ads and campaigns by asking questions to determine if a sample of people remembers an ad. 
A. Recall tests 
B. Effort/result models 
C. Longitudinal studies
D. Test marketing

366
24. _____ track(s) advertising expenditures and sales results before, during, and after an advertising campaign. 
A. Effort/result models
B. Longitudinal studies
C. Recall tests
D. Test marketing

366
25. _____ use empirical data to build a mathematical relationship between sales and advertising effort. 
A. Controlled tests
B. Recall tests
C. Effort/results models
D. Longitudinal studies

366
26. Which of the following is a promotional pricing form of sales promotion activity?
A. Selling aids
B. Trade shows
C. Prizes
D. Coupons

369

27. Which of the following sales promotion activity is targeted at industrial buyers?
A. Coupons
B. Bonuses
C. Rebates
D. Advertising support

369

28. Which of the following informational activities is targeted at both channel members and the salesforce?
A. Demonstrations
B. Trade shows
C. Displays
D. Selling aids

369

29. Which of the following is a disadvantage of sales promotions?
A. The sales response of the sales promotion activities cannot be measured to determine their effectiveness.
B. The incentive and price promotion techniques trigger the purchase of other products.
C. It allows value-added resellers to build inventories on products that receive manufacturers’ trade discounts.
D. It has the flexibility to contribute to various marketing objectives.

370

30. Which of the following is the first step in developing a sales promotion strategy?
A. Setting specific promotion objectives
B. Defining the communications task(s) to be accomplished
C. Evaluating the relative cost-effectiveness of various methods
D. Coordinating the content and the timing with other activities

371

Essay Questions

31. Identify the advantages and disadvantages of advertising.

32. List the activities involved in designing an organization’s promotion strategy.

33. Define and explain the benefits of the objective and task method of promotion budget.

34. Explain the challenges impacting the creative process in advertising and changing the design of creative strategies and media.

35. Give an account of the different promotional activities targeted at a firm’s salesforce.