Principles of Marketing
Chapter 10 Pricing: Understanding and capturing customer value
1) ________ is the amount of money charged for a product or service.
A) Experience curve
B) Demand curve
C) Price
D) Wage
E) Salary
2) Price is the only element in the marketing mix that produces ________.
A) revenue
B) variable costs
C) expenses
D) out fixed costs
E) stability
3) Consumer perceptions of the product's value set the ________ for prices.
A) demand curve
B) floor
C) ceiling
D) variable cost
E) image
4) Which of the following is a customer-oriented approach to pricing?
A) value-based pricing
B) sealed-bid pricing
C) break-even pricing
D) target profit pricing
E) C and D
5) ________ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key
to pricing.
A) Value-based pricing
B) Value-added pricing
C) Variable cost
D) Price elasticity
E) Product image
6) Value-based pricing is the reverse process of ________.
A) variable cost pricing
B) cost-plus pricing
C) cost-based pricing
D) good-value pricing
E) value-added pricing
7) Underpriced products sell very well, but they produce less revenue than they would have if
price were raised to the ________ level.
A) perceived
B) value-based
C) variable
D) demand curve
E) price-floor
8) If a seller charges ________ than the buyer's perceived value, the company's sales will
________.
A) more; benefit
B) more; suffer
C) less; increase
D) less; suffer
E) none of the above
9) ________ involves attaching features and services to differentiate a company's offers and to
support charging higher prices..
A) Break-even pricing
B) Target pricing
C) Value-added pricing
D) Cost-plus pricing
E) Pricing-down
10) ________ pricing involves setting prices based on the costs for producing, distributing, and
selling the product plus a fair rate of return for the company's efforts and risks.
A) Value-based
B) Fixed cost
C) Cost-based
D) Variable
E) Skimming
11) Costs that do not vary with production or sales level are referred to as ________.
A) fixed costs
B) variable costs
C) target costs
D) total costs
E) unit costs
12) The simplest pricing method is ________.
A) value-based pricing
B) going-rate and sealed-bid pricing
C) cost-plus pricing
D) break-even analysis
E) target profit pricing
13 The relationship between the price charged and the resulting demand level can be shown as
the ________.
A) demand curve
B) variable cost
C) target cost
D) break-even pricing
E) experience curve
14) Consumers usually perceive higher-priced products as ________.
A) out of reach for most people
B) having high quality
C) having high profit margins
D) having cost-based prices
E) being in the introductory stage of the product life cycle
Chapter 11 Pricing Strategies
1) A company sets not a single price, but rather a ________ that covers different items in its line
that change over time as products move through their life cycles.
A) pricing by-product
B) pricing structure
C) pricing loop
D) pricing cycle
E) pricing bundle
2) Companies facing the challenge of setting prices for the first time can choose between two
broad strategies: market-penetration pricing and ________.
A) market-level pricing
B) market-competitive pricing
C) market-skimming pricing
D) market-price lining
E) market-price filling
3) A firm is using ________ when it charges a high, premium price for a new product with the
intention of reducing the price in the future.
A) price skimming
B) trial pricing
C) value pricing
D) market-penetration pricing
E) prestige pricing
4) ________ pricing is the approach of setting a low initial price in order to attract a large
number of buyers quickly and win a large market share.
A) Market-skimming
B) Market-penetration
C) Below-market
D) Value-based
E) Leader
5) Companies usually develop ________ rather than single products.
A) product families
B) product lines
C) product groupings
D) product brands
E) product images
6) A marketer must be familiar with the five major product mix pricing situations. Which of the
following is NOT one of them?
A) product line pricing
B) optional-product pricing
C) captive-product pricing
D) unbundled product pricing
E) by-product pricing
7) When using price steps, the seller must establish perceived ________ that support the price
differences.
A) nonprice competitions
B) quality differences
C) quantity levels
D) images
E) strategies
8) When amusement parks and movie theaters charge admission plus fees for food and other
attractions, they are following a(n) ________ pricing strategy.
A) by-product
B) optional product
C) captive product
D) skimming
E) penetration
9) Companies involved in deciding which items to include in the base price and which to offer as
options are engaged in ________ pricing.
A) product bundle
B) optional product
C) captive product
D) by-product
E) skimming
10) What is a major advantage of product bundle pricing?
A) It can promote the sales of products consumers might not otherwise buy.
B) It offers consumers more value for the money.
C) It combines the benefits of the other pricing strategies.
D) It provides a more complete product experience for consumers.
E) All of the above.
11) Which of the following is an example of a cash discount?
A) 2/10, net 30
B) $5.00 with a two-pack
C) a free case when you buy 12
D) when you pay cash and take the product with you
E) none of the above
Chapter 12 Marketing Channels: Delivering Customer Value
1) Which of the following is NOT a typical supply chain member?
A) resellers
B) customers
C) intermediaries
D) government agencies
E) raw materials supplier
2) When suppliers, distributors, and customers partner with each other to improve the
performance of the entire system, they are participating in a ________.
A) value delivery network
B) channel of distribution
C) supply chain
D) demand chain
E) all of the above
3) Most producers today sell their goods to ________.
A) final users
B) final users and marketing members
C) intermediaries
D) the government at various levels
E) competitors
4) Intermediaries play an important role in matching ________.
A) dealer with customer
B) supply and demand
C) product to region
D) manufacturer to product
E) information and promotion
Chapter 13 Retailing and Wholesaling
1) ________ includes all the activities involved in selling products or services directly to final
consumers for their personal, nonbusiness use.
A) Franchising
B) Retailing
C) Brokering
D) Wholesaling
E) Disintermediation
2) In recent years, ________ has/have been growing fast. This includes selling to final
consumers through direct mail, catalogs, telephone, and the Internet.
A) specialty stores
B) shopping centers
C) superstores
D) nonstore retailing
E) e-commerce
3) Which of the following retailers likely require the most emphasis on salespeople to assist
customers?
A) self-service retailers
B) full-service retailers
C) off-price retailers
D) limited-service retailers
E) megaretailers
4) _______, the world's second largest retailer after Wal-Mart, has embarked on an aggressive
mission to extend its role as a leading international retailer.
A) McDonald's
B) Target
C) Carrefour
D) Ikea
E) Costco
5) ________ includes all activities involved in selling goods and services to those buying for
resale or business use.
A) Wholesaling
B) Retailing
C) Franchising
D) Discounting
E) Disintermediation
6) ________ buy mostly from producers and sell to retailers and industrial consumers.
A) Independents
B) Factory outlets
C) Wholesalers
D) Discount stores
E) Megaretailers
7) McDonald's, Subway, and Pizza Hut are all examples of a ________.
A) voluntary chain
B) retailer cooperative
C) franchise
D) full-service retailer
E) power center
Chapter 14 Communicating Customer Value: Integrated Marketing
Communication Strategy
1) A company's total marketing communications mix consists of a special blend of advertising,
sales promotion, public relations, personal selling, and direct-marketing tools that the company
uses to communicate customer value and build customer relationships. This is also called
________.
A) direct marketing
B) integrated marketing
C) the promotion mix
D) competitive marketing
E) target marketing
2) The use of short-term incentives to encourage the purchase or sale of a product or service is
called ________.
A) direct marketing
B) sales promotions
C) personal selling
D) public relations
E) publicity
3) Which of the following is NOT a major category in a company's promotion mix?
A) sales promotion
B) strategic positioning
C) direct marketing
D) public relations
E) advertising
4) Which major promotion category makes use of catalogs, telephone marketing, kiosks, and the
Internet?
A) sales promotion
B) direct marketing
C) publicity
D) public relations
E) advertising
5) Which major promotion category makes use of displays, discounts, coupons, and
demonstrations?
A) sales promotion
B) direct marketing
C) publicity
D) public relations
E) advertising
6) More companies are adopting the concept of ________, which carefully integrates and
coordinates the company's many communication channels to deliver a clear, consistent, and
compelling message about the organization and its brands.
A) integrated marketing communications
B) integrated personal selling
C) integrated competitive methods
D) nonpersonal communication channels
E) buzz marketing
7) Integrated marketing communications produces better communications ________ and greater
________ impact.
A) consistency; sales
B) sales; consistency
C) marketing; sales
D) variety; production
E) branding; quality
8) Which of the following is NOT one of the four major communication functions?
A) feedback
B) encoding
C) noise
D) response
E) decoding
9) The communication channel a company uses to move its advertising messages from sender to
receiver is called the ________.
A) message
B) media
C) encoder
D) communicator
E) feedback loop
10) The receiver assigns meaning to the symbols encoded by a company in its advertisements
through a process known as ________.
A) disencoding
B) feedback
C) acknowledgement
D) decoding
E) response
12) Marketing communicators must do all of the following EXCEPT ________.
A) identify the target audience
B) deliver products to the customer
C) determine the communication objectives
D) collect feedback
E) choose the media through which to send a message
Chapter 15 Advertising and Public Relations
1) Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an
identified sponsor is called ________.
A) sales promotion
B) direct marketing
C) advertising
D) personal selling
E) public relations
2) All of the following are important decisions during the process of developing an advertising
program EXCEPT ________.
A) setting advertising objectives
B) setting the advertising budget
C) developing advertising strategy
D) selecting a target market
E) evaluating advertising campaigns
3) Advertising ________ define the task that advertising must accomplish with a specific target
audience during a specific period of time.
A) objectives
B) budgets
C) strategies
D) campaigns
E) evaluations
4) Familiar products such as Coca-Cola are more likely to use ________.
A) informative advertising
B) comparative advertising
C) persuasive advertising
D) reminder advertising
E) institutional advertising
5) After determining its advertising objectives, the company's next step in developing an
advertising program is to ________.
A) set its advertising budget
B) determine the media vehicle
C) use cash refund offers
D) plan its advertising campaign
E) develop its message strategy
6) To be successful, an advertisement must ________.
A) guarantee the highest quality product
B) offer the highest quality service
C) reach consumers frequently
D) promise the lowest market price
E) gain the attention of consumers
7) The Internet, video on demand, and DVRs (digital video recorders) present which of the
following problems for marketers?
A) Consumers are watching less television.
B) Consumers cannot focus on specific messages due to advertising clutter.
C) Audiences are less interested in media consumption.
D) Consumers have more choices about what to watch or not watch.
E) Television advertising is becoming more expensive.
8) The authors of the book The Fall of Advertising and the Rise of PR state that all of the
following firms found success with very little advertising EXCEPT ________.
A) Starbucks Coffee
B) Body Shop
C) Wal-Mart
D) Amazon
E) Nike
Chapter 16 Personal Selling and Sales Promotion
1) Which of the following elements of the promotion mix involves making personal connections
with customers for the purpose of making sales?
A) personal selling
B) advertising
C) e-commerce
D) publicity
E) public relations
2) A ________ is an individual acting on behalf of a company who performs one or more of the
following activities: prospecting, communicating, servicing, and information gathering.
A) press agent
B) sales assistant
C) marketing director
D) salesperson
E) publicist
3) When a company sets out to analyze, plan, implement, and control sales force activities, the
company is undertaking ________.
A) sales design
B) sales force management
C) group sales efforts
D) co-op selling and advertising
E) promotional objectives
4) All of the following are problems associated with the poor selection of salespeople EXCEPT
________.
A) lower sales
B) costly turnover
C) less productivity
D) less office support
E) disrupted customer relationships
5) A ________ has the advertiser's name on it and is given as a gift to consumers.
A) sample
B) price pack
C) cents-off deal
D) promotional product
E) corporate identity material
Chapter 17 Direct and Online Marketing: Building Direct Customer Relationships
1) Amazon.com was the first company to use ________, which is technology that sorts through
customer purchasing patterns to create personalized site content.
A) mass marketing
B) personalized marketing
C) records management
D) customer filtering
E) collaborative filtering
2) Modern direct marketers rely heavily on database technologies and the Internet, while early
direct marketers primarily used direct mailers, telemarketing, and ________.
A) door-to-door salespeople
B) catalogs
C) POP promotions
D) e-mail
E) inside salespeople
3) Amazon.com, eBay, and GEICO employ ________ as the only method of doing business with
customers.
A) mass marketing
B) sales promotion
C) direct marketing
D) public relations
E) personal selling
4) Direct marketing is continuing to become more ________ oriented.
A) television
B) Web
C) mail
D) telephone
E) radio
3) All of the following are forms of direct marketing EXCEPT ________.
A) personal selling
B) public relations
C) telephone marketing
D) direct-mail marketing
E) kiosk marketing
4) Which kind of marketing involves sending an offer, announcement, reminder, or other item to
a person at a particular address?
A) kiosk marketing
B) digital direct marketing
C) catalog marketing
D) direct-mail marketing
E) telephone marketing
5) Which of the following enables consumers to download files from the Internet to a handheld
device?
A) telemarketing
B) interactive TV
C) podcasting
D) infomercials
E) direct-mail