EXAM3

MARK3OOO Sprin g 2007

Dr. Grantham

Do not open the test, or write anything on the test, until directed to do so. Right now - fill in your name and complete student ID number on the scantron (bubble in completelv. Ieft-justifi ed).
Please write your seat # and color of your exam in the upper right corner of your scantron. Please mark all multiple-choice answers on BOTH the scantron AND the exam booklet. Lines have been provided to the Ieft of each question for you to write the letter answer down on your exam booklet. only your exam booklet will be returned to you for future reference (no scantrons will be retumed). Only answers

marked on scantron will be scdred.

I will not answer questions during the exam. I will respond to all questions after exams have been submitted, graded, and returned to you; and you have had an opportunity to review your responses.
tests and scantrons must be tumed in by the end of class. This means you must be completely done with all writing and bubbling in the scantron, and have put your exam in the appropriate envelope by the end of class time on the

All

computer clock shown on the screen. Turning your exam in after the erd of the class time will result in a late penalty. You will not be given time after the end of class to bubble in your name or any answers.

This is to be individuol work without the use of any notes or the boolc Do not look at anyone else's test or snswer sheet und do not allow anyone else to look st your test or answer sheet.

Iha

ity of Georgia Academic Honesty policy.

Signed

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ID: B
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{ARK 3000 - Grantham - Spring2007 - Exam 3

Multiple Choice Identlf! the letter of the choice that Bflcompletes

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the statement or answers the question.

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1. At present, long-distance telephone

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b. S. 'd,
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a.

services and wireless carriers are both tending to adhere to

prestige pricing policy.

psychological pricing model. competitive pricing objective.

3. Assume Target and Sony jointly share the cost of advertising a new Sony product. This is an example of adVertising. \ __ **. retall --_----ll-tr'a. : b. cooperative b. informative d. institutional 4. The Multiple Sclerosis Society has decided to organize a $500-a-plate fundraiser. This not-for-profit
organization has as its objective a. cost recovery. b. providing market incentives. c. revenuemaximization. d. profit maximization.
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a. b. c. , d-

breakeven pricing approach. Mignon d'Armitage manufactures jewelry. This firm is planning to introduce a new necklace and is trying to determine how many units it must sell in order to break even. Fixed costs are S100,000 and variable costs for each unit will be $20. At the price of $45 each, the n'umber of units that must be sold in order to break even is 4,000. 5,000. 2;500.
7,500.

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Temporary monopolies usually exist because they are have no right to be a permanent monopoly. b. created by patent protection. c. in business for just a short period of time. d. .. sure to face competition periodically The supply chain begins with a. firms seeking new markets for their products. b. the finished good rolling off the end of the production line. c. the raw material inputs for the manufacturing process of a product. d.. the product being loaded aboard the rail car for shipment.

Profit maximization is a volume pricing objective. b. achieved by most firms in the marketplace. c. determined by the point at which the marginal revenue curve intersects the marginal cost
curve.

not a pricing objective.

ID: B

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aggressive promotion is desired from retailers, the producer should choose a. dual marketing channels. b. the shortest available marketing channel. c. the longest possible marketing channel. d. multiple marketing channels. The state unfair-trade laws were originally intended to a. protect small specialty shops from the loss-leader pricing tactics used by chain stores to attract customers. b. allow selling of products at unreasonably low prices to stimulate sales. c. set retail price ceilings at cost plus a maximum markup. d. assure that the prices charged by manufacturers were strictly based on market conditions. An example of a customaryprice wouldbe a. $459 for a color TV. b. $1 to park in the lot at Hartwell Field -- the same price it's been since 1958. c. $3 for a pair of special 3-D glasses at the movies. d. $22,500 for a 2005 Toyota Camry.

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11. Assume Microsoft

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introduces a radically redesigned version of its XBox gaming system, called the ZBox. Microsoft promotes the new product through paid communications in a variety of media. These messages are examples of _ and _ a. product; informative advertising b. institutional; informative advertising c. product;persuasiveadvertising d. institutional; persuasive advertising Assume the gross rating point is 2.5 million. If the frequency is 5, what is the reach?

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a. b. c. d.

500,000 2,500,000 12,500,000 1'500,000

Everyday low pricing is a strategy devoted to continuous low prices as opposed to a. relying on short-term price-cutting tactics such as cents-offcoupons, rebates, and special

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b. c. -d.

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prices that are set daily, weekly, or monthly in reaction to competitors' actions. seasonal changes in prices based on current demand. purely cost-based prices that vary as the manufacturer's costs vary.

ffi -Skl*$ i 5. When respondents are not given copies of a magazine they've -'rF " the test is known as a. the Starch Readership Report. b. the unaidedrecall test. c. an inquiry test. d. Burke's Marketine Research Test.
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The technique that allows us to determine the number of goods or services that must be sold at a given price to generate sufficient revenue to cover total costs is called a. marginal analysis. b. breakeven analysis. c. solid state analysis. d. cost-volume-profit analysis.
read but must recall ads from

it from memory,

ID: B

16.

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a. b. c. d. b. c. d.

The type of advertising often closely related to the public relations function of an enterprise is

productadvertising. informativeadvertising. institutionaladvertising. newspaper advertising. one type of volume pricing objective is a. return on investment.
market-share. cost recovery. cost-plus pricing.

18.

a. b. c. d. a. b. c. d.

Snickers,

Milky Way, and Mars candy bars are typically marketed using selectivediskibution. exclusivedistribution. intensivedistribution. specializeddistribution.
trade discounts. transportation discounts. quantity discounts. cash discounts.

19.

Discounts off the list price given to channel members for performing marketing functions are called

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20. A theater that lowers prices in the afternoons

demand rises is practicing a. yield management. b. modified breakeven analysis. c. exploitation ofthe local theater-goers.

to offset low demand and raises prices in the evening when

d.

marginal pricing.

21. A product is priced to sell for $12 with

average variable costs of $8. The company expects to earn a profit of S400,000 with its total fixed costs of $120,000. The minimum number of units that must be sold rn order to reach this target return is 80,000. 400,000. 130,000. 120,000.

a. b. c. d.
a. -b. c. d. a. b. c. d.

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22. "cutting through the clutter" refers

to the ability of an advertisement to gain the attention and interest of the audience. inform the audience of the concepts the advertiser wishes to communicate. lead to a purchase or other desired action. apply persuasive pressure to the audience.

23.

In which of the following types of market structures would a producer have the least amount of flexibility in
setting prices?

pure competition

monopolisticcompetition monopoly oligopoly

ID: B

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24.

Which advertising medium dominates local markets? a. cable tElevision b. network television
,

c. d.

newspapers

radio

25. Which of the following elements of the promotional mix is the most expensive (cost per contact)? a. sales promofion b. advertising c. direct marketing d. personal selling The promotional tool that is generally free, though under the least control by the firm of any component the promotional mix, is a. publicity. \

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b. c. d.

advertising. sales promotion. public relations.

a. b. c. 3.

Paid, nonpersonal communication through various media by an identified sponsor designed to inform or persuade its audience is known as

public relations. publicity. sales promotion. advertising. A company has fixed costs of $35,000 and has average variable costs of $7 per item. This company sells 10,000 units and just breaks even. The unit selling price for the product is

a. b. c.

$10.00. $7.35.
S17.00.

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$to.so. A major factor influencing the elasticity of demand for a product is the a. drop in demand for the product's substitutes or complements. b. decrease in price ofthe product. c. availability of substitutes. d. increase in supply of the product. Lack of flexibility compared to other media is the biggest disadvantage of

a.'

a. b. c.

newspapers. magazines.

d. a. b. c. d.

radio. television. inelastic.

elastic. unstable.

If the price of basic food products were to increase significantly, demand in the short-run would tend to be

plastic.

ID: B

32. A direct channel of distribution

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a. b. c.
d.

is haditional for consumer goods. carries goods directly from a producer to the business purchaser or ultimate user. always moves goods from producers to users efficiently.

33.

involves relatively few intermediaries. Which type of appeal typically loses its effectiveness the soonest? a. Ads based on sex b. Ads containing humor c. Adsbased on fearappeals d. Ads containing objective facts

34. A l0 percent

a. 0.1. b. 1.5. c. 1.0.

d. '0.s.
35. If your

increase in the price of eggs that results in a 5 percent decrease in the quantity of eggs demanded yields a price elasticity of demand for eggs of

a. b. c. d.'

sole objective were to find the least expensive mode of shipping cargo, you would most likely select water carriers. motor carriers. pipelines. railroad.

36.

The most popular method of pricing is a. cost-plus pricing. b. breakeven pricing.

c. d.

incremental-costpricing. full-cost pricing.

37.

38.

a. b. c. id. a. b. c. d.

The new pricing strategy that has emerged in recent years that emphasizes the benefits a product provides in comparison to the price and quality levels of competing offerings is called

benefits maximization, prestige pricing.

head-on pricing. value pricing.

Some retailers believe that consumers' perceptions of prices such as $5.97 and $6.93 is that these prices are

regularretailprices. discountprices. wholesale prices. competitive prices. 39. The firm's communications that inform and build relationships with customers, employees, stockholders, suppliers, government agencies, and society, is called ?. publicity. b. stakeholderrelations. c. publiccommunications. d. public relations.

ID: B

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' b. c. d.

A major problem facing company decision-makers when setting transfer prices is a. what price to actually charge the receiving profit center.
when to complete the transfer. how to assign the controllable costs to the profit centers. how to determine the product-service attributes of the transfer.

41.

Match the three ohiectives of pdvertising and ptages in the product life cyele. (6 points)

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42.

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According to the textbook reading, what are two of the most important factors influencing profitability, based on the PIMS studies? (8 points)

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ID: B 43.
The first step in the sales process is prospecting and quali$ing. Discuss the remaining 6 steps in the sales process. (6 points)

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