Question 1

Although the product is at the heart of the marketing program, it is important to remember that product offerings in and of themselves have little value to customers. An offering's real value comes from:

Accepted Answer

An offering's real value to customers comes from its ability to deliver benefits that solve their problems, as this directly addresses the customer's needs and desires.

Question 2

Firms such as IKEA and The Home Depot are known for their use of __________ because they set reasonably low prices but still offer high-quality products and adequate customer services.

Accepted Answer

IKEA and The Home Depot use value-based pricing, which involves setting prices based on the overall value of the product's offering as perceived by the customer, balancing quality and price to offer good value.

Question 3

A price reduction offered to channel intermediaries for purchasing specified quantities of a product at a single time is called a:

Accepted Answer

A buying allowance is a price reduction or discount given to retailers and wholesalers when they purchase a specified quantity of a product. This incentive is often used to encourage bulk purchases or to promote certain products within the distribution channel.

Question 4

__________ is defined as a customer's subjective evaluation of benefits relative to costs to determine the worth of a firm's product offering relative to other product offerings.

Accepted Answer

Value is the correct answer because it refers to the customer's assessment of the product's benefits compared to its costs, which helps in determining its worth compared to other products in the market. This concept involves a subjective evaluation by the customer, considering both the tangible and intangible aspects of the product offering.

Question 5

Because the company was angered by the actions of its resellers, Acme Manufacturing decided to slow down deliveries and postpone product availability to these resellers. What type of power is Acme wielding in the channel?

Accepted Answer

Coercive power is being used by Acme Manufacturing because they are using the threat of negative consequences (slowing down deliveries and postponing product availability) to influence the behavior of their resellers. This type of power relies on the fear of negative results rather than on mutual respect or admiration.

Question 6

Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firm's cost structure, they should never be the driving force behind pricing strategy. Why?

Accepted Answer

The answer of Although break-even analysis and cost-plus pricing are...

Question 7

The inherent goal of product differentiation is to make the demand curve for a product more inelastic. This happens because increased differentiation:

Accepted Answer

Increased differentiation reduces the number of perceived substitutes, making consumers less sensitive to price changes, thus making the demand curve more inelastic.

Question 8

A car repair shop provides which of the following types of products?

Accepted Answer

Car repair services are typically considered unsought products because consumers do not actively seek them out until there is a need, such as a car breakdown or maintenance issue.

Question 9

Unlike tangible goods, virtually all services are susceptible to inconsistency and variations in quality. Why is this so?

Accepted Answer

Services rely heavily on human interaction and performance, which can vary due to numerous factors such as mood, skill level, and personal circumstances, leading to inconsistency.

Question 10

What is the most appropriate type of distribution to use when customers need the opportunity to comparison shop, or when after-sale services are important?

Accepted Answer

Selective distribution is most appropriate when customers need the opportunity to comparison shop or when after-sale services are important. It allows manufacturers to choose a few retailers that meet certain criteria to carry their products, ensuring a level of service and product knowledge that benefits consumers.

Question 11

Which member of the marketing channel has the primary responsibility of fulfilling the channel's main functions?

Accepted Answer

The primary responsibility of fulfilling the channel's main functions is shared among all members, as each plays a crucial role in the distribution process.

Question 12

The phrase "Unused service capacity is lost forever" refers to which major challenge associated with the marketing of services?

Accepted Answer

The phrase "Unused service capacity is lost forever" directly refers to the challenge of perishability in services marketing. Unlike physical goods, services cannot be stored for future use; if a service is not used at the time it is available (e.g., an empty hotel room for a night), the opportunity to sell that service is lost forever.

Question 13

Retailers use __________ extensively. This occurs when the retailer compares sale prices to regular prices, such as when Best Buy promotes a DVD player as "Regularly $99, Now $49."

Accepted Answer

Reference pricing is used by retailers to show customers the savings they can achieve by purchasing items at a sale price compared to the regular price. This strategy helps consumers perceive the value of the deal they are getting, as illustrated by the example of a DVD player being advertised with a significant discount from its regular price.

Question 14

The Ritz-Carlton Hotel is widely known for its exceptional quality and impeccable customer service. Not surprisingly, the Ritz-Carlton sets prices at the top end of all competing hotels. Which pricing strategy is the Fairmont using?

Accepted Answer

The Ritz-Carlton uses prestige pricing, setting high prices to reflect the high quality and exclusivity of their service, appealing to customers seeking luxury and exceptional service.

Question 15

In launching its new line of power tools, Black and Decker spent a considerable amount of time and resources to educate, motivate, and compensate members of its supply chain. By investing heavily in these types of promotions, Black and Decker hopes its __________ strategy will lead to a more effective product launch.

Accepted Answer

Black and Decker's strategy of educating, motivating, and compensating members of its supply chain is a push strategy. This approach involves pushing the product through the marketing channel to final consumers by promoting the product to wholesalers, retailers, or other intermediaries.

Question 16

Ensuring the availability of products in the right place in the right quantities at the right time in a cost efficient manner is the main focus of:

Accepted Answer

The answer of Ensuring the availability of products in the...

Question 17

Price elasticity is defined as:

Accepted Answer

Price elasticity measures how much the quantity demanded of a good responds to a change in the price of that good, reflecting customers' sensitivity to price changes.

Question 18

Most firms today compete in mature markets characterized by commoditization. In these cases, the __________ typically becomes incapable of differentiating the product offering from those of the competition.

Accepted Answer

The core product, which represents the fundamental benefit or service being offered, becomes difficult to differentiate in mature markets where many products offer similar basic functions or services. Commoditization means that products become more alike and interchangeable in the eyes of the consumer, making the core product's unique features less distinguishable.

Question 19

In terms of marketing channel functions, which of the following statements describes the concept of discrepancy of quantity?

Accepted Answer

Discrepancy of quantity refers to the difference between the large quantities in which manufacturers produce goods and the small quantities that consumers typically want to buy. This discrepancy necessitates intermediaries in the distribution channel to break down these large quantities into smaller ones that are more suitable for consumer purchase.

Question 20

Despite conventional thinking, __________ accounts for the bulk of promotional spending in many firms. This is especially true for firms selling consumer products in grocery stores and mass-merchandise retailers.

Accepted Answer

Sales promotion accounts for the majority of promotional spending for many firms, particularly those selling consumer products in grocery stores and mass-merchandise retailers, due to its direct impact on sales volume.

Quiz 6: The Marketing Program