Question 1

Which of the following statements is true of penetration pricing?

Accepted Answer

Penetration pricing involves setting a low price to attract a large number of customers and gain market share, with the profit coming from the high volume of sales rather than high margins on each sale.

Question 2

In the context of physical distribution, which of the following is a key management decision regarding materials handling?

Accepted Answer

Balancing efficiency with effectiveness is a key management decision in materials handling as it ensures that resources are utilized optimally while meeting customer requirements.

Question 3

Which of the following statements is true of loss-leader pricing?

Accepted Answer

Loss-leader pricing is a strategy where a product is sold at a low price to attract customers, who may then purchase other higher-margin items. This is related to high/low pricing, where prices fluctuate to attract customers.

Question 4

Which of the following modes of transportation provides the highest on-time dependability?

Accepted Answer

Pipelines provide the highest on-time dependability because they are not affected by weather conditions or traffic, unlike other modes of transportation.

Question 5

AS Mart is a supermarket. It sells all its products at highly discounted rates. The company aims to achieve long-term profitability through high sales volume. In the context of pricing strategies, it is evident that AS Mart has adopted the strategy of _____.

Accepted Answer

AS Mart aims to achieve long-term profitability through high sales volume by selling all its products at highly discounted rates. This is consistent with the everyday-low pricing strategy, which involves setting prices at a consistently low level to attract and retain customers.

Question 6

Ziffcorp, an electronic goods manufacturer, recently launched a new gaming console at a very low price. The company aims to capture as much of the market as possible by offering rock-bottom prices. It aims to compensate for the loss by increasing the sales volume. In the context of pricing strategies, it is evident that Ziffcorp has adopted the strategy of _____.

Accepted Answer

Penetration pricing involves setting a low price to enter a competitive market and attract customers, aiming to gain market share quickly.

Question 7

In the context of physical distribution, which of the following is a key management decision regarding customer service?

Accepted Answer

Customer service is all about making sure that customers are happy with the products and services they receive. One of the key ways to do this is to reduce waiting times and facilitate interactions. This can be done by making sure that there are enough staff on hand to help customers, by providing self-service options, and by making sure that the checkout process is efficient.

Question 8

In the context of the various pricing strategies, which of the following statements is true of high/low pricing?

Accepted Answer

High/low pricing can train consumers to buy only when products are on sale, as they become accustomed to waiting for discounts.

Question 9

Blue Line Eateries is a large-scale grocery store. The store offers steep discounts only on packaged corn flour and whole wheat cereals, and it sells the rest of the products at their respective maximum retail prices. The company chooses a different set of products every month and offers discounts only on that set of products. In the context of pricing strategies, it is evident that Blue Line Eateries has adopted the strategy of _____.

Accepted Answer

Blue Line Eateries offers steep discounts on a limited set of products each month, while selling the rest of the products at their maximum retail prices. This is consistent with the high/low pricing strategy, where retailers offer deep discounts on a few items to attract customers and generate sales.

Question 10

Which of the following pricing strategies is also known as sustained discount pricing?

Accepted Answer

Everyday-low pricing is a strategy where a company consistently offers products at a low price without running frequent sales or discounts, hence it is known as sustained discount pricing.

Question 11

In the context of supply chain, which of the following statements is true of modes of transportation?

Accepted Answer

Air transportation is the fastest mode of transportation but typically has low flexibility in handling due to limitations on cargo size and weight.

Question 12

Which of the following is a key benefit of penetration pricing?

Accepted Answer

Penetration pricing involves setting a low price to attract customers and gain market share, which can discourage competitors from entering the market due to the low-profit margins.

Question 13

Penetration pricing is a strategy where:

Accepted Answer

Penetration pricing involves setting a low price for a new product to attract customers and gain market share, often resulting in small profits per sale initially.

Question 14

Joanne works in the marketing department of a toy manufacturing company. Her company offers discounts for soft toys but sells electronic toys at a price higher than that of its competitors. In this scenario, Joanne's company has adopted the _____ strategy.

Accepted Answer

The company offers discounts on soft toys (low pricing) and sells electronic toys at a higher price (high pricing), which is characteristic of a high/low pricing strategy.

Question 15

Eula, a company that manufactures soda, offers its latest products at very low prices. Eula's strategy is based on the assumption that more customers will be willing to buy its products if they are offered at lower prices. Eula has adopted this strategy to attract a larger customer base and increase its sales volume even though it will only gain a small profit on each individual sale. In this scenario, Eula has implemented the _____ strategy.

Accepted Answer

Penetration pricing is a strategy where a company offers products at low prices to attract customers and increase market share, even if it means lower profits per sale.

Question 16

In the context of pricing strategies, the _____ tries to increase traffic in retail stores by special sales on a limited number of products, and greater everyday prices on others.

Accepted Answer

The high/low pricing strategy involves offering special sales on a limited number of products to increase store traffic, while maintaining higher everyday prices on other items.

Question 17

In the context of physical distribution, which of the following is a key management decision regarding transportation?

Accepted Answer

Transportation management in physical distribution focuses on moving products efficiently through the supply chain.

Question 18

Sending products by _____ is the least expensive option available to producers.

Accepted Answer

Shipping by sea is generally the least expensive option for transporting goods, especially over long distances, due to the large volume of goods that can be transported at once.

Question 19

In the context of modes of transportation, _____ have the most limited availability.

Accepted Answer

Pipelines have the most limited availability as they are fixed infrastructure used primarily for transporting liquids and gases, unlike planes, trucks, and railroads which are more versatile and widely used for various types of cargo and passengers.

Question 20

Which of the following modes of transportation provides the lowest flexibility in handling?

Accepted Answer

Pipelines provide the lowest flexibility in handling because they are fixed infrastructure used primarily for transporting liquids and gases, and cannot easily adapt to different routes or types of cargo.

Quiz 13: Distribution and Pricing: Right Product, Right Person, Right Place, Right Price