MBA 6140 Quiz 4
1.
T9: Suppose you introduce a highly desirable product, such as the iPhone. You
introduce the product at a price that's three times as much as its cost. For a while
sales are very brisk. When sales slow down, you reduce the price by 20%. You
continue to reduce the price whenever sales begin to decline until price approaches
cost. Which type of pricing policy would you be using?P129
i. stepped pricing
ii. price lining
iii. prestige pricing
iv. price skimming
2. T9: What is true of penetration pricing?P131
i. It may be very effective in discouraging potential poachers from entering the
market.
ii. It is a bad pricing strategy when market-share leadership affords experience or
scale economies. [Economies of scale definition: Reduction in cost per unit
resulting from increased production, realized through operational efficiencies.
Economies of scale can be accomplished because as production increases, the
cost of producing each additional unit falls.][real answer would be good if they
have experience in lowering prices by providing more efficiency]
iii. All of the above
iv. None of the above
3. T9: Nowadays, printer manufacturers tend to price their printers just above cost while realizing
very high profit margins on ink and toner cartridges. Which pricing tactic do they use?P134
i. price skimming
ii. bait and hook
iii. low-ball/high-ball
iv. None of the above
4. T9: Common dangers of frequent price promotions include that P137
i. customers stock up when the item is on sale and seldom buy at other times
ii. customers devalue the brand to the point of thinking of the sales price as the
normal price
iii. All of the above
iv. None of the above
5. T10: The "six M's" of integrated marketing communications include P152
i. mission, media, and measurement
ii. markup, management, and market share
iii. market segmentation, matching, and message
iv. misinforming, misleading, and misrepresenting
[Market, Mission, Message, Media, Money, Measurement]
6. T10: What is true of the marketing mix?P153-154
i. The various marketing mix and IMC elements should present the focal product
in a consistent, mutually reinforcing way to customers.
ii. Generally, a brand need not be presented consistently (e.g., as a teen brand
rather than a middle-aged executive brand) as long as different media are used.
Further, inconsistency often is required to reach multiple target groups.
iii. Generally, an effective IMC mix can be developed independently of other
marketing mix elements.
iv. Usually, the IMC mix should be selected before a product is priced.
[IMC goal is to use multiple modes of communications to foster awareness of a company’s products or
services, inform people about features and benefits, and move them to make a purchase.]
7. N5: "The Vanishing Mass Market" focuses mostly on which of the 4Ps?P1
i. product
ii. price
iii. promotion
iv. place, or distribution
8. N5: According to the "Vanishing Mass Market," which firms still consider themselves mass
marketers?P1
i. McDonald's
ii. Procter & Gamble (P&G)
iii. All of the above
iv. None of the above
9. N5: In the USA, what is responsible for shifts away from mass media advertising, such as
advertising on network television?P1
i. Over the past few decades, the USA has become much more diverse in terms of
both demographics and preferences.
ii. Media are fragmenting (e.g., more video channels, but smaller average
audiences)
iii. New technology
iv. All of the above
v. None of the above
10. N5: Ads on Web sites that provide access to search engines, such as Google, are common. The
more the advertiser pays, the more frequently the ads appear. This form of online advertising is
called P3
i. placement
ii. paid search
iii. sponsored repetition
iv. dollar loading
11. N5: What is true about marketing over the internet?P3
i. a - Unlike mass media, the Internet is interactive, which enables marketers to
gather reams of personal customer information directly.
ii. b - Measuring advertising effectiveness is more difficult when marketers rely on
digital media rather than mass media
iii. Both #a and #b
iv. None of the above
[First, they are interactive. This capability enables marketers to gather reams of invaluable personal
information directly from customers and adjust their sales pitch accordingly, in some cases in real time.
Second, in part because digital media are interactive they permit a fuller and more precise measuring of
advertising's impact.]
12. N5: According to "The Vanishing Mass Market," what do TV executives fear most? P3
i. zapping; i.e., using the remote control to change channels when ads come on
ii. the Federal Communications Commission (FCC)
iii. the personal video recorder (PVR)
iv. the emergence of alternate mass media
13. N5: Suppose that Pepsi pays to have the Pepsi brand displayed prominently in a movie. What is
form of promotion called? P3
i. payola
ii. spot advertising
iii. product placement
iv. subliminal promotion
14. N5: What is true of CPM?P3
i. It means cost per million
ii. When CPM is low, it may make sense to advertise to the many in hopes of
persuading a few
iii. All of the above
iv. None of the above
[Means cost per thousand]
15. N5: Prime-time TV advertising is now heavily dependent on P4
i. automobile advertising
ii. pharmaceuticals advertising
iii. telecommunications advertising
iv. film industry advertising
v. All of the above
vi. None of the above
[Autos, pharmaceuticals, telecommunications, and movies]
16. A4: According to "Mind Your Pricing Cues," how effective are "sale" signs?P3
i. They are very effective in increasing sales, unless too many items have sales
signs.
ii. They are moderately effective, but only when customers have no accurate
perception of the regular price.
iii. They have become ineffective because they are overused.
iv. Surprisingly, they work better when sale prices end in 0 rather than 9 because,
nowadays, most customers view prices that end in a 9 as a gimmick that is
intended to fool them.
17. A4: The authors of "Mind Your Pricing Cues" reported that sales increased substantially when
the price of a particular dress was raise from $34 to $39. P4
i. True
ii. False
18. A4: What is true of "signpost items"?P4
i. They are frequently purchased items.
ii. They are items with whose prices most customers are very familiar.
iii. From the prices of signpost items, customer infer whether a store's prices are
generally high, average, or low.
iv. All of the above
v. None of the above
19. A4: What is true of price matching?P7
i. Typically, only a small percentage of a store's transactions are eligible for price
matching.
ii. Many manufacturers shield stores from having to make good on price-matching
offers by varying the model numbers they sell through various retail chains.
iii. All of the above
iv. None of the above
[They are also more effective when consumers have poor knowledge of the prices of many products in a
retailer’s mix.]
20. A4: What is true of price matching?P6
i. Typically, it fails to convince customers that they get the best prices at stores
that offer price matching.
ii. Surprisingly, price matching may actually serve to raise prices in the market and,
thus, may actually conflict with the aims of antitrust laws.
iii. All of the above
iv. None of the above