Question 1

Which of the following is the efficient management of the acquisition of raw materials to the factory and the movement of products from the producer to industrial users and consumers?
A) physical transportation
B) physical distribution
C) material handling
D) channel distribution

Accepted Answer

The efficient management of the acquisition of raw materials to the factory and the movement of products from the producer to industrial users and consumers is known as physical distribution. Option A, physical transportation, refers specifically to the movement of goods from one place to another, while material handling focuses on the movement and storage of goods within a warehouse or factory. Channel distribution involves the process of getting products from the manufacturer to the end consumer through various marketing channels, and is not necessarily related to the acquisition of raw materials. Therefore, the best choice is B, physical distribution.

Question 2

A pottery manufacturer is conducting a breakeven analysis.Its line of strawberry pots has $18,000 in fixed costs.The fixed-cost contribution is $3.The pottery manufacturer must sell which of the following number of units to break event?
A) 3,000
B) 1,000
C) 10,000
D) 6,000

Accepted Answer

To determine the breakeven point, we need to set the total cost equal to the total revenue:

Total Cost = Total Revenue
Fixed Cost + Variable Cost = Price x Quantity

Let Q be the quantity of strawberry pots sold.

Fixed Cost = $18,000
Variable Cost = $3 per unit
Price = Unknown
Quantity = Q units

Fixed Cost + Variable Cost = Price x Quantity
$18,000 + $3Q = Price x Q

We need to find the quantity Q that will make the two sides equal. We can do this by solving for Q:

$18,000 + $3Q = Price x Q
$18,000 = Q x (Price - $3)
Q = $18,000 / (Price - $3)

We know that the variable cost contribution is $3 per unit, so the price must be at least $3 higher than the variable cost. Let's assume that the price is $6 per unit. Then:

Q = $18,000 / ($6 - $3) = 6,000

Therefore, the pottery manufacturer must sell 6,000 units of strawberry pots to break even.

Question 3

For a manufacturer of one-of-kind evening gowns,the lace,satin,and buttons are considered which of the following costs?
A) business
B) tangible
C) business.
D) variable.

Accepted Answer

The lace, satin, and buttons are variable costs because they change with the level of production, depending on how many gowns are made.

Question 4

In which one of the following situations is an advanatage of price skimming?
A) the low initial prices create an image of value for the customer
B) prices are initially low to encourage customers to purchase the product
C) when the price is eventually lowered,consumers might think they are getting a bargain
D) discourages competitors from entering the market

Accepted Answer

Price skimming involves setting high initial prices and gradually lowering them. When prices are eventually reduced, consumers may perceive they are getting a bargain, which can be an advantage of this strategy.

Question 5

Selling Rolex watches for $6,000 to $10,000 when a perfectly satisfactory watch can be purchased for 5 percent of that amount is an example of which of the following?
A) snob pricing strategy
B) over-value pricing strategy
C) prestige pricing strategy
D) price lining strategy

Accepted Answer

This is an example of prestige pricing strategy, in which higher prices are charged to signal status and exclusivity to consumers who are willing to pay a premium for luxury and prestige brands, such as Rolex. The price is not solely based on the product's functional value, but on its perceived higher quality or status. This strategy is commonly used in luxury fashion, jewelry, and automotive industries.

Question 6

IGA marked individual-sized snacks down to 25 cents a package for the first five individual packages purchased.This was below the store's cost.These snacks would be considered which of the following type of product?
A) a differentiated product
B) a loss leader
C) a markdown
D) a bargain leader

Accepted Answer

The individual-sized snacks at 25 cents a package for the first five packages are being sold below the store's cost. This is a strategy known as a loss leader, where a product is sold at a loss to attract customers to the store in hopes that they will also purchase other items with higher profit margins.

Question 7

When Top-Flite introduced its Strata golf balls with a new dimple design and a more solid core for better flight with metal clubs,it charged three times the price of golf balls currently on the market.This high introductory pricing is an example of which of the following strategies?
A) limited value pricing
B) market share pricing
C) penetration pricing
D) skimming

Accepted Answer

Skimming is a pricing strategy in which a business charges a high price for its new product or service in order to recoup the costs of development or to create an impression of prestige. This is exactly what Top-Flite did with its Strata golf balls by charging three times the price of other golf balls on the market.

Question 8

Which of the following are the two main new-product pricing strategies?
A) targeted return pricing and profit maximization pricing
B) value pricing and cost-plus pricing
C) price skimming and penetration pricing
D) psychological pricing and physiological pricing

Accepted Answer

The two main new-product pricing strategies are price skimming and penetration pricing. Price skimming involves setting a high price for a new product to generate maximum revenue in the short term, while penetration pricing involves setting a low price to attract a large number of customers and gain market share.

Question 9

Which of the following is the pricing strategy of marking products below normal markup or even below cost to attract customers to a store where they would not otherwise shop?
A) rebate
B) leader
C) skimming
D) economy

Accepted Answer

The pricing strategy described is known as a "leader" strategy, where a store marks down certain products to attract customers who may then purchase other products at their normal markup. This can be used to increase foot traffic and sales overall.

Question 10

Total fixed costs divided by fixed-cost contribution leads to which of the following figures?
A) profit maximization
B) breakeven point in units
C) perceived value
D) total revenues

Accepted Answer

Total fixed costs divided by the fixed-cost contribution gives us the breakeven point in units, which is the number of units we need to sell to cover our fixed costs.

Question 11

Which of the following is a strategy of charging a high introductory price for a new product that invites eventual competition?
A) kiting
B) escalation
C) skimming
D) penetration

Accepted Answer

Skimming is a pricing strategy that involves setting a high price initially for a new product or service, typically when it is unique and there are no close substitutes available. This allows the company to maximise profits in the short-term and recover the costs of development and marketing. Eventually, as competition enters the market and substitutes become available, the company may lower their prices to remain competitive. Skimming is often used for high-tech and luxury products.

Question 12

Which of the following is an example of a variable cost for Big Bob's cream store?
A) ice cream freezer
B) ice cream cones
C) rent
D) insurance

Accepted Answer

Ice cream cones are a variable cost because the amount needed depends on the amount of ice cream being sold. The other options listed are fixed costs as they do not change with the level of production or sales.

Question 13

Pricing a product at $399.99 instead of $400 to make the customer view the price as in the $300 range instead of the $400 range is an example of which of the following?
A) price lining
B) odd-even pricing
C) minimized pricing
D) red-line pricing

Accepted Answer

This is an example of odd-even pricing, where products are priced just below a round number to make them appear cheaper. In this case, the 99 cents make the customer perceive the price as being in the $300 range instead of the $400 range. Price lining refers to offering different levels of products at different price points, minimized pricing involves setting prices as low as possible to drive sales, and red-line pricing is when a company sets a minimum price below which it will not sell a product. None of these options match the scenario described in the question.

Question 14

Eli Wenzki works in the warehouse for a manufacturer of high-quality office furniture.He is involved in the transportation of metal components,fabric,lumber,etc.used to manufacture the furniture as well as the movement of the finished furniture from the manufacturing facility to the warehouse to distribution trucks.Wenzki is involved in which of the following type of distribution?
A) channel distribution
B) centralized distribution
C) physical distribution
D) component distribution

Accepted Answer

Eli Wenzki is involved in the physical distribution of the furniture components and finished products, which includes the transportation of materials and finished goods from the manufacturing facility to the warehouse and distribution trucks. Therefore, the correct choice is C, physical distribution.

Question 15

When Maurice Tsaki went online to plan his vacation to Australia,he learned that he could buy plane tickets,rent a car,and pay for a hotel in a reduced-price tourist package,which made it very convenient for him to book his trip.The website Tsaki visited used which of the following strategies to make trip planning easier and more economical?
A) price structuring
B) bundling
C) aggregated pricing
D) price grouping

Accepted Answer

The website used bundling by offering a tourist package that included plane tickets, car rental, and hotel booking. This made trip planning easier and more economical for Maurice Tsaki.

Question 16

Which of the following is a series of marketing entities through which goods and services pass on their way from producers to end users?
A) the consumption channel
B) the inventory control process
C) the distribution channel
D) the industrial channel

Accepted Answer

The distribution channel is the series of intermediaries, such as wholesalers, retailers, and agents, through which products pass on their way from producers to end users/customers.

Question 17

Which of the following is defined as the selling price per unit times the number of units sold?
A) total revenue
B) unit cost
C) total cost
D) profit

Accepted Answer

Total revenue is the income earned from selling a certain amount of goods or services. It is calculated by multiplying the selling price per unit by the number of units sold.

Question 18

Charlie Vorwek sells flower arrangements made from dried wildflowers she grows in her garden.Which of the following is a fixed cost in this business?
A) decorative ribbon
B) the undecorated wreath forms
C) a rental storage building
D) silica for drying the flowers

Accepted Answer

A rental storage building is a fixed cost because it is a recurring expense that does not vary with the amount of flower arrangements produced or sold. The other options (decorative ribbon, undecorated wreath forms, and silica for drying the flowers) are variable costs because they depend on the quantity of flower arrangements made. For example, if Charlie makes more arrangements, she will need more ribbon, wreath forms and silica.

Question 19

The Franklin Continental Hotel offers a package of room,breakfast,and parking for $125.00.What is this strategy known as?
A) bundling
B) combining
C) aggregated pricing
D) grouping

Accepted Answer

This strategy is known as bundling, where multiple products or services are combined and offered at a lower price than if purchased individually. In this case, the Franklin Continental Hotel is combining room, breakfast, and parking and offering them at a discounted price of $125.

Question 20

A fabric manufacturer is doing a breakeven analysis of oilcloth.It costs $15.00 to manufacture a metre of oilcloth.Customers will pay $25 a metre for oilcloth.The company's fixed costs are $10,000.The fabric manufacturer must sell which of the following number of metres to break even?
A) 1,000
B) 667
C) 10,000
D) 400

Accepted Answer

To find the breakeven point, use the formula: Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Here, it's $10,000 / ($25 - $15) = 1,000 metres.

Quiz 13: Creating Marketing Strategies

Which of the following is the efficient management of the acquisition of raw materials to the factory and the movement of products from the producer to industrial users and consumers?

A pottery manufacturer is conducting a breakeven analysis.Its line of strawberry pots has $18,000 in fixed costs.The fixed-cost contribution is $3.The pottery manufacturer must sell which of the following number of units to break event?

For a manufacturer of one-of-kind evening gowns,the lace,satin,and buttons are considered which of the following costs?

In which one of the following situations is an advanatage of price skimming?

Selling Rolex watches for $6,000 to $10,000 when a perfectly satisfactory watch can be purchased for 5 percent of that amount is an example of which of the following?

IGA marked individual-sized snacks down to 25 cents a package for the first five individual packages purchased.This was below the store's cost.These snacks would be considered which of the following type of product?

When Top-Flite introduced its Strata golf balls with a new dimple design and a more solid core for better flight with metal clubs,it charged three times the price of golf balls currently on the market.This high introductory pricing is an example of which of the following strategies?

Which of the following are the two main new-product pricing strategies?

Which of the following is the pricing strategy of marking products below normal markup or even below cost to attract customers to a store where they would not otherwise shop?

Total fixed costs divided by fixed-cost contribution leads to which of the following figures?

Which of the following is a strategy of charging a high introductory price for a new product that invites eventual competition?

Which of the following is an example of a variable cost for Big Bob's cream store?

Pricing a product at $399.99 instead of $400 to make the customer view the price as in the $300 range instead of the $400 range is an example of which of the following?

Which of the following is a series of marketing entities through which goods and services pass on their way from producers to end users?

Which of the following is defined as the selling price per unit times the number of units sold?

Charlie Vorwek sells flower arrangements made from dried wildflowers she grows in her garden.Which of the following is a fixed cost in this business?

The Franklin Continental Hotel offers a package of room,breakfast,and parking for $125.00.What is this strategy known as?

A fabric manufacturer is doing a breakeven analysis of oilcloth.It costs $15.00 to manufacture a metre of oilcloth.Customers will pay $25 a metre for oilcloth.The company's fixed costs are $10,000.The fabric manufacturer must sell which of the following number of metres to break even?