Question 1

Jamillah runs an automobile repair shop. She thoroughly researches her competitors to analyze their price for oil changes and other simple repairs. She then charges 1 percent less than they do, even when it means lower profits. Jamillah is most likely using a ________ pricing strategy.

Accepted Answer

Jamillah is using a competitive-based pricing strategy because she sets her prices based on what her competitors are charging, aiming to slightly undercut them to gain an advantage.

Question 2

Pharaoh sells custom baseball bats. He calculates prices by adding 10 percent over the cost of parts and labor to produce each bat. Pharaoh is most likely using a(n) ________ pricing strategy.

Accepted Answer

Pharaoh is using a cost-based pricing strategy because he determines the price of his baseball bats by adding a markup (in this case, 10 percent) to the cost of parts and labor involved in producing each bat. This approach focuses on covering the costs and ensuring a profit margin above those costs.

Question 3

Meti produces homemade candles and is preparing to open a small store to sell her creations. She has analyzed the market and her competitors and decides that she wants to sell her candles for $10.00. Based on her research, she knows she needs to make at least a 10 percent profit on each candle. Using demand-based pricing, we know that Meti's cost to produce the candles must not be greater than

Accepted Answer

To ensure a 10 percent profit on a selling price of $10.00, Meti's cost must be 90% of the selling price. $10.00 * 90% = $9.09.

Question 4

Charzone Grills is running a special sale this weekend where customers can buy a grill and either pay no interest for two years or make no payments for the first year. Charzone is most likely using which alternative pricing strategy?

Accepted Answer

Offering customers the option to pay no interest for two years or make no payments for the first year is an example of adjusting credit terms to make a purchase more attractive, which falls under the category of credit terms as a pricing strategy.

Question 5

Home and Barn is a large retailer specializing in products for the home and for farms. It typically prices its merchandise at a price that is slightly lower than its competition, but rarely offers special sales or discounts. Home and Barn is most likely using which alternative pricing strategy?

Accepted Answer

Everyday low pricing is a strategy where a retailer offers products at a low price without having frequent sales or discounts, which aligns with Home and Barn's approach of pricing merchandise slightly lower than competitors without offering special sales or discounts.

Question 6

Grumble's Clothing Depot has been open for a few years and has always priced its clothing to prices that are on the dollar like $50, $100, and $150. The new president has suggested a new pricing approach to bolster sales. Department personnel spend the weekend changing prices on all items to odd numbers like $49.99, $99.99, and $149.99. Grumble's is most likely using which pricing strategy?

Accepted Answer

Grumble's Clothing Depot is using psychological pricing by setting prices just below a round number (e.g., $49.99 instead of $50), which can make the price seem lower to consumers and potentially increase sales.

Question 7

Take a Seat Ergonomic Solutions has developed a new chair that is meant to help office workers avoid back issues. The marketing team decides to use a lower price point to attract more customers and to keep its competitors at bay. Take a Seat is most likely using which alternative pricing strategy?

Accepted Answer

Penetration pricing is a strategy where a company sets a lower price for a new product to attract customers and gain market share quickly, which is what Take a Seat is doing with its new chair.

Question 8

Sapphire Insurance offers Home, Auto, and Life insurance to customers. The price for each policy is calculated based on the specific customer's background. Sapphire offers a 5 percent discount to customers who purchase two policies and a 10 percent discount to those who purchase all three. Sapphire is most likely using which alternative pricing strategy?

Accepted Answer

Sapphire Insurance is using a bundling pricing strategy by offering discounts to customers who purchase multiple policies together, encouraging them to buy more than one type of insurance policy by providing a financial incentive.

Question 9

Flora runs a trucking company. Her fleet is responsible for picking up merchandise from a large manufacturer in Oregon and then transporting the merchandise to retailers across the country. This example best describes the concept of a

Accepted Answer

A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the final consumer. In this case, Flora's trucking company is part of the distribution channel for the manufacturer's merchandise.

Question 10

Taide works in the benefits industry. She is responsible for negotiating contracts with various benefits providers. She then locates businesses looking for benefits and connects them with the benefits providers. After making the connection, Taide helps negotiate a sale. Taide can best be described as a(n)

Accepted Answer

Taide acts as a broker because she negotiates contracts and facilitates connections between businesses and benefits providers, helping to negotiate sales.

Question 11

Nature Creations takes wood from trees and turns it into home furnishings like dining room sets. Nature Creations is most likely adding ________ utility to the products it creates.

Accepted Answer

Nature Creations is adding form utility by transforming raw wood into finished home furnishings, thereby changing the form of the raw material into a more valuable product.

Question 12

Reflections Window Supply has an online store where it sells custom-windows and window supplies to consumers and construction companies. This best represents an example of

Accepted Answer

Reflections Window Supply selling directly to consumers and construction companies through an online store is an example of direct channel distribution, where the producer sells directly to the consumer without intermediaries.

Question 13

Gallo is an independent insurance agent. He created a helpful website for potential customers that details the different policies and their respective pricing. He also has brochures that detail the policies and pricing available to customers in his office. This example best demonstrates the concept of ________ utility.

Accepted Answer

Gallo is providing valuable information to potential customers through his website and brochures, which helps them make informed decisions about insurance policies. This act of making information available and accessible to customers exemplifies the concept of information utility.

Question 14

Jitendra works in a large box store. He is always there to greet customers with a smile and ensure that they find exactly what they are looking for. He also believes it is important to answer any questions that the customer might have about the products they are considering. Jitendra is most likely adding ________ utility.

Accepted Answer

Service utility is added when services are provided to enhance the customer's shopping experience, such as greeting customers, helping them find products, and answering questions.

Question 15

Paragon Art Studio sells statues, sculptures, and paintings to consumers and businesses. It sells its products direct to consumers in retail stores and art galleries and through its own online store. It also sells to businesses through art brokers working for the company across the country. Together, these methods for getting art to its customers can best be described as Paragon's

Accepted Answer

The distribution mix refers to the various ways a company gets its products to its customers, including direct sales in retail stores and online, as well as indirect sales through brokers. This encompasses all the methods Paragon Art Studio uses to distribute its art, making "distribution mix" the correct term.

Question 16

Healthy Living purchases fruits and vegetables from farms across the country. The stock is maintained at Healthy Living warehouses around the country. Healthy Living then sells and ships the fruits and vegetables to grocery stores and restaurants around the country. Healthy Living can be best described as a ________ wholesaler.

Accepted Answer

Healthy Living acts as a full-service merchant wholesaler by purchasing products (fruits and vegetables) from producers (farms) and then selling and shipping them to retailers (grocery stores and restaurants), providing a range of services in the process.

Question 17

Quanta Office sells office supplies from large box stores. Its primary customers are small businesses who visit Quanta Office stores and pay for and pick up their office supplies. Quanta Office can be best described as a

Accepted Answer

Quanta Office operates as a cash-and-carry wholesaler because it sells office supplies to small businesses that pay for and pick up their supplies at the store, without offering delivery services.

Question 18

Petur works in the real estate industry. He represents one of the largest realty firms in the United States but does not work for them. Every sale that Petur makes earns him a commission and provides income to the realty firm. Petur is most likely a(n)

Accepted Answer

Petur is most likely an agent because he represents a realty firm and earns a commission on sales, which is typical for real estate agents who work independently but represent larger firms.

Question 19

Callahan Automotive sells different brands of automobile brake and exhaust parts to consumers from small stores across the country. Callahan can be best described as a(n)

Accepted Answer

Callahan Automotive is best described as a specialty store because it focuses on selling a specific range of products, namely automobile brake and exhaust parts, to a targeted consumer base.

Question 20

The Plus+ Store sells a wide variety of clothing, home décor, electronics, and even groceries. Plus+ can be best described as a(n)

Accepted Answer

A supercenter offers a wide variety of goods including clothing, home décor, electronics, and groceries, which matches the description of the Plus+ Store.

Quiz 12: Organizational Behavior