Question 1

A seller refuses to sell to other channel members unless that member agrees to buy solely from that particular seller.This is an example of:

Accepted Answer

Exclusive dealing is when a seller requires a buyer to purchase exclusively from them, restricting the buyer from purchasing from other sellers.

Question 2

Four companies dealing in dairy products admitted that they had exchanged information to make shoppers pay more for milk and cheese.Two of the companies had increased the price of milk.The other two had passed on sensitive information about prices to their supposed rivals.This is an example of:

Accepted Answer

This scenario is an example of price fixing, where companies collude to set prices at a certain level, rather than allowing competition to determine them.

Question 3

Suppose the only newspaper in a town refuses to carry advertisements from companies that approach the local radio station to run ads.The newspaper monitors the radio ads and stops doing business with any establishment that runs ads on the radio.This is an example of:

Accepted Answer

This scenario is an example of refusal to deal, where the newspaper refuses to do business with companies that advertise with the local radio station.

Question 4

Beck wanted to join a gym but was worried about the cost.The gym offered her a 100-percent rebate on a one-year membership if she gave the gym the names and telephone numbers of five of her friends.This is an example of:

Accepted Answer

This is an example of referral selling, where the gym offers a rebate to a current member for referring new members to the gym.

Question 5

Brian devised a scheme.He instructed a co-conspirator to submit sham price quotations from dormant companies for a bulletproof vest contract.The sham price quotations were submitted with intentionally increased prices so that one company, a Kuwaiti general trading firm, would win the contract at a lower price.The owner of the Kuwaiti general trading firm then authorized Brian to negotiate and receive all funds related to the contract.This is an example of:

Accepted Answer

This scenario is an example of bid rigging, where the outcome of a bidding process is manipulated to ensure a particular bidder wins, often through collusion or submission of fake bids.

Question 6

A university publishes a journal, which is subscribed to by individuals and bookshops.The editors have recommended $20.00 as the retail price.The university also maintains that the journal cannot be sold at a discount.The university has threatened to cease supplying anyone who sells for less than the recommended retail price.This is an example of:

Accepted Answer

This scenario describes resale price maintenance, where the supplier sets a minimum price below which the product cannot be sold.

Question 7

A situation in which incentives are offered to consumers to provide the names of other potential consumers is called:

Accepted Answer

Referral selling is a sales tactic where incentives are offered to existing customers for referring new customers. This approach helps businesses expand their customer base through word-of-mouth marketing. Other options are not directly related to this tactic.

Question 8

A hotel management institute develops a training program for students.The fee for the training program is $1,000.The institute offers to share the training program with other colleges.One of the terms of the contract is that the colleges will not offer the program to their students for less than $1,000.This is an example of:

Accepted Answer

The answer of A hotel management institute develops a training...

Question 9

Company X required people to photocopy a letter and send it to 100 other people.The letter contained a list of 10 names and addresses.An individual was required to send $1 to the first 10 names on the list.After that she had to place their names and addresses at the bottom of the list.She then had to send the new list to 100 people.This is an example of:

Accepted Answer

This is an example of pyramid selling, where participants are required to recruit others to make payments, and the scheme relies on an ever-increasing number of participants.

Question 10

What is the name of the marketing practice in which a company seeks to influence the price at which a product is sold?

Accepted Answer

Resale price maintenance is the practice where a manufacturer or supplier attempts to control the retail price of its product by setting a minimum price at which retailers can sell it.

Question 11

Four companies supplied paints to a massive housing reconstruction program.There were 200 contracts distributed over 10 years.Each company won 25 percent of the contract each year.This is an example of:

Accepted Answer

This scenario describes bid rigging, where companies collude to divide contracts among themselves, ensuring each gets an equal share, which is illegal and anti-competitive.

Question 12

Suppose a country allows millions of extra barrels of oil into the market to push prices downward.This would squeeze smaller oil producers out of the market and expand the country's own market share.It would also help limit future production, which ultimately would help support higher prices.This act could be termed as:

Accepted Answer

This act is termed as predatory pricing, where a country deliberately lowers prices to drive competitors out of the market, with the intention of raising prices later once competition is reduced.

Question 13

Schemes in which salespersons are paid to recruit other salespeople, and each new salesperson pays for the right to recruit other salespeople, with some of that money going to earlier recruiters is called:

Accepted Answer

The scheme described is a classic example of a pyramid selling or multi-level marketing scheme. The salespeople are paid to recruit other salespeople, who in turn pay for the right to recruit others, with a portion of the payments going up the chain to earlier recruiters. This type of scheme is often illegal and unethical, as it relies on a constant influx of new recruits and does not focus on selling actual products or services.

Question 14

A company sells a mattress that it claims promotes good health.It also convinces customers to become part of a club where they receive commissions if they get other people to join the club or buy mattresses.This is an example of:

Accepted Answer

The answer of A company sells a mattress that it...

Question 15

A car sales showroom displays a basic car with a very low price tag.Once the customer is interested, the salesperson persuades him to buy a more expensive model.This is an example of:

Accepted Answer

This is an example of bait-and-switch, where a low-priced item is used to attract customers, who are then encouraged to purchase a more expensive item.

Question 16

A software company released its web browser for free.As a result, other software companies were forced to release their own web browser for free in order to stay in the market.This is an example of:

Accepted Answer

This is an example of predatory pricing, where a company lowers prices to drive competitors out of the market. The move by the first software company to release its web browser for free forced others to do the same to stay in business.

Question 17

A company charges more per bottle when consumers buy bigger bottles of shampoo.It works on the premise that people who buy small packs of shampoo are price sensitive.Therefore, the company offers them discounts of up to 70 percent.If a customer buys shampoo in bottles, she ends up paying up more per millilitre.This is an example of:

Accepted Answer

This is an example of price discrimination, where the company charges different prices for the same product based on the consumer's willingness to pay.

Question 18

A driving school charges more to teach women drivers.The excuse is that it has "special driving instructors" for women, who understand women's driving styles and customize their lessons.This is an example of:

Accepted Answer

This is an example of price discrimination, where different prices are charged to different groups of people for the same service, in this case, based on gender.

Question 19

An automobile company published an advertisement which said that prices for the latest model on offer started at $10,000 with an interest rate of 10 percent.The ad showed the logo and picture of a new model.When an interested customer spoke with the authorized dealer mentioned in the ad, he was informed that the bargain price was not for the latest model, but for the older model.This is an example of:

Accepted Answer

This scenario is an example of misleading advertising because the advertisement gave the impression that the latest model was available at the stated price, but in reality, the price applied to an older model.

Question 20

Kelly ordered a computer from Modern Computers listed at $600.But she found that since that particular machine was not available, she was sold another one priced at $1,352.The PC maker then resisted her efforts to resolve the problem.This is an example of:

Accepted Answer

This scenario is an example of bait-and-switch, where a seller advertises a product at a low price to attract customers but then pressures them to purchase a more expensive item when the advertised product is unavailable.

Quiz 3: Understanding the Marketplace Consumer Behaviour