Question 1

Maqui wants to develop a free music download site that would be supported by ads. To get a better understanding of what hurdles need to be overcome before launching the site, Maqui would need to do a breakeven analysis.

Accepted Answer

A breakeven analysis would help Maqui determine the minimum amount of downloads and ad revenue needed to cover the costs of the website and start making a profit. This is an important step before launching the site.

Question 2

A company that is breaking even is making a profit.

Accepted Answer

Breaking even means that the company is neither making a profit nor incurring a loss. In other words, the revenues are equal to the expenses.

Question 3

HP relies heavily on wholesale and retail channel partners to distribute its computers. Dell, on the other hand, elects to sell most of its computers directly to consumers without using intermediaries. This indicates that these firms have different:

Accepted Answer

HP and Dell have different channels of distribution, with HP relying heavily on intermediaries such as wholesale and retail partners, while Dell elects to sell most of its computers directly to consumers without intermediaries.

Question 4

_____ distribution is the actual movement of products along a channel of distribution.

Accepted Answer

Physical distribution is the actual movement of products along a channel of distribution from the manufacturer to the final consumer. It involves activities such as transportation, warehousing, and inventory management. Selective distribution is a strategy where a limited number of retailers or distributors are chosen to carry a product, while intensive distribution involves making the product available in as many retail outlets as possible. Exclusive distribution is a strategy where only one retailer or distributor is given the right to sell a product in a particular geographic area.

Question 5

Hans owns and operates a fruit juice manufacturing facility and is considering selling fruit juices door to door. Which distribution strategy is he planning to use?

Accepted Answer

Hans is planning to sell his fruit juices directly to consumers without the involvement of intermediaries such as wholesalers or retailers. This is known as a direct channel distribution strategy.

Question 6

Variable costs for a pizza parlor would include the cost of the insurance, rent, and property taxes.

Accepted Answer

Variable costs change with the level of production, such as ingredients and labor, while insurance, rent, and property taxes are fixed costs that do not vary with production levels.

Question 7

Odd pricing is the practice of ending numbers below even dollars and cents in order to create a perception of greater value.

Accepted Answer

The answer of Odd pricing is the practice of ending...

Question 8

The local 99 cent store, whose product prices are capped at 99 cents, is capitalizing on a price strategy known as odd pricing.

Accepted Answer

This is true. Odd pricing is a pricing strategy where prices are set at odd numbers, usually ending with a 9, to make the product appear cheaper to customers. The local 99 cent store is using this strategy by capping all their product prices at 99 cents.

Question 9

_____ act as middlemen to help producers move their product more efficiently and effectively from factories to the consumers.

Accepted Answer

Channel intermediaries, also known as middlemen, are involved in the distribution of products from producers to consumers. They help in moving products efficiently and effectively by bridging the gap between producers and consumers, handling tasks such as transportation, warehousing, and promotion. Examples of channel intermediaries include wholesalers, retailers, and agents who facilitate the movement of goods from producers to end-users.

Question 10

A firm's distribution strategy is concerned with two key elements:

Accepted Answer

A firm's distribution strategy involves two key elements, the channel of distribution (how the product reaches the end user) and physical distribution (the logistics of getting the product to the end user). Shipping, warehousing, pricing strategy, credit standards, facility location, and value stream mapping may all play a role in a firm's distribution strategy, but they are not the primary elements.

Question 11

More often expressed as a percent, profit margin is the gap between the cost and the price of an item on a per­product basis.

Accepted Answer

Profit margin is indeed the difference between the cost and the price of an item on a per-product basis, and is usually expressed as a percentage.

Question 12

Cost­based pricing is a popular method of fixed margin pricing.

Accepted Answer

Cost-based pricing involves setting prices based on the cost of producing or acquiring a product or service, with a fixed margin added on top to ensure profitability.

Question 13

The prices quoted on the menu of an upscale restaurant all end in zeros. Using this approach, the restaurant can signal to its customers that the food it serves is a real bargain.

Accepted Answer

The statement is false. Prices ending in zeros may signal that the restaurant is upscale, but it does not necessarily mean that the food is a real bargain. In fact, upscale restaurants often charge high prices for their food and services.

Question 14

_____ utility provides customer satisfaction by converting inputs into finished products.

Accepted Answer

Form utility refers to the value added to a product or service through a transformation of inputs into a finished product, which satisfies the customer's needs and wants. Therefore, the correct option is A) Form. Service, time, and ownership utilities refer to different ways of providing additional value to a product or service, but they are not related to the transformation process of inputs into finished products.

Question 15

Shadow, an art magazine, records salaries for reporters and photographers as recurring expenses no matter how many magazines are sold. They consider these expenses as fixed costs.

Accepted Answer

Recurring salaries for reporters and photographers are considered fixed costs because they do not change based on the number of magazines sold.

Question 16

The breakeven analysis formula requires knowledge of fixed costs and variable costs.

Accepted Answer

The breakeven analysis formula calculates the point at which total revenue equals total costs. In order to determine this, it is necessary to know the amount of fixed costs and the variable costs per unit.

Question 17

Which of the following statements about channel intermediaries is true?

Accepted Answer

Channel intermediaries or distributors add value to products and services in various ways, such as providing market information, logistics assistance, financing, and after-sales services. This value addition helps in reducing the overall cost of distribution and increasing the efficiency of the channel. Therefore, statement C is true. Statements A, B, and D are false.

Question 18

The goal of the distribution strategy is to:

Accepted Answer

The primary goal of distribution strategy is to ensure that the right product gets to the right person at the right place and time. This involves identifying the target market and ensuring that goods are delivered at the most convenient and accessible locations for the consumer. The distribution strategy should also aim to ensure that the products are delivered efficiently and cost-effectively from the producer to the end consumer. Therefore, the best choice is D.

Question 19

Consumer perception of quality can be driven by price.

Accepted Answer

Consumers often associate higher prices with higher quality and may believe that a product is of better quality simply because it is more expensive. However, this perception is not always accurate and can vary based on individual experiences and preferences.

Question 20

Your local video store charges $39.99 instead of $40.00 for a video game. This store is using a strategy known as penny­less pricing.

Accepted Answer

The strategy is known as "psychological pricing" or "charm pricing," not "pennyless pricing."

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

Maqui wants to develop a free music download site that would be supported by ads. To get a better understanding of what hurdles need to be overcome before launching the site, Maqui would need to do a breakeven analysis.

A company that is breaking even is making a profit.

HP relies heavily on wholesale and retail channel partners to distribute its computers. Dell, on the other hand, elects to sell most of its computers directly to consumers without using intermediaries. This indicates that these firms have different:

_____ distribution is the actual movement of products along a channel of distribution.

Hans owns and operates a fruit juice manufacturing facility and is considering selling fruit juices door to door. Which distribution strategy is he planning to use?

Variable costs for a pizza parlor would include the cost of the insurance, rent, and property taxes.

Odd pricing is the practice of ending numbers below even dollars and cents in order to create a perception of greater value.

The local 99 cent store, whose product prices are capped at 99 cents, is capitalizing on a price strategy known as odd pricing.

_____ act as middlemen to help producers move their product more efficiently and effectively from factories to the consumers.

A firm's distribution strategy is concerned with two key elements:

More often expressed as a percent, profit margin is the gap between the cost and the price of an item on a perproduct basis.

Costbased pricing is a popular method of fixed margin pricing.

The prices quoted on the menu of an upscale restaurant all end in zeros. Using this approach, the restaurant can signal to its customers that the food it serves is a real bargain.

_____ utility provides customer satisfaction by converting inputs into finished products.

Shadow, an art magazine, records salaries for reporters and photographers as recurring expenses no matter how many magazines are sold. They consider these expenses as fixed costs.

The breakeven analysis formula requires knowledge of fixed costs and variable costs.

Which of the following statements about channel intermediaries is true?

The goal of the distribution strategy is to:

Consumer perception of quality can be driven by price.

Your local video store charges $39.99 instead of $40.00 for a video game. This store is using a strategy known as pennyless pricing.

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

Maqui wants to develop a free music download site that would be supported by ads. To get a better understanding of what hurdles need to be overcome before launching the site, Maqui would need to do a breakeven analysis.

A company that is breaking even is making a profit.

HP relies heavily on wholesale and retail channel partners to distribute its computers. Dell, on the other hand, elects to sell most of its computers directly to consumers without using intermediaries. This indicates that these firms have different:

_____ distribution is the actual movement of products along a channel of distribution.

Hans owns and operates a fruit juice manufacturing facility and is considering selling fruit juices door to door. Which distribution strategy is he planning to use?

Variable costs for a pizza parlor would include the cost of the insurance, rent, and property taxes.

Odd pricing is the practice of ending numbers below even dollars and cents in order to create a perception of greater value.

The local 99 cent store, whose product prices are capped at 99 cents, is capitalizing on a price strategy known as odd pricing.

_____ act as middlemen to help producers move their product more efficiently and effectively from factories to the consumers.

A firm's distribution strategy is concerned with two key elements:

More often expressed as a percent, profit margin is the gap between the cost and the price of an item on a per­product basis.

Cost­based pricing is a popular method of fixed margin pricing.

The prices quoted on the menu of an upscale restaurant all end in zeros. Using this approach, the restaurant can signal to its customers that the food it serves is a real bargain.

_____ utility provides customer satisfaction by converting inputs into finished products.

Shadow, an art magazine, records salaries for reporters and photographers as recurring expenses no matter how many magazines are sold. They consider these expenses as fixed costs.

The breakeven analysis formula requires knowledge of fixed costs and variable costs.

Which of the following statements about channel intermediaries is true?

The goal of the distribution strategy is to:

Consumer perception of quality can be driven by price.

Your local video store charges $39.99 instead of $40.00 for a video game. This store is using a strategy known as penny­less pricing.

More often expressed as a percent, profit margin is the gap between the cost and the price of an item on a perproduct basis.

Costbased pricing is a popular method of fixed margin pricing.

Your local video store charges $39.99 instead of $40.00 for a video game. This store is using a strategy known as pennyless pricing.