TEST BANK for Marketing: Real People, Real Choices 11th Edition by Michael R. Solomon, Greg W. Marsh by welldoneassistant

Marketing: Real People, Real Choices, 11e (Solomon) Chapter 1 Welcome to the World of Marketing: Create and Deliver Value 1) A ________ is the ultimate user of a good or service. A) stakeholder B) market C) target market D) marketer E) consumer Answer: E Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 2) ________ is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. A) Demand satisfaction B) Competitive advantage building C) Marketing D) Total quality management E) Value chain management Answer: C Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 3) The ________ consists of the tools an organization uses to create a desired response among a set of predefined consumers. A) sharing economy B) market position C) value proposition D) marketplace E) marketing mix Answer: E Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

4) Which of the following is NOT one of the four Ps of marketing? A) price B) profit C) product D) promotion E) place Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 5) Which of the following is a true statement about the four Ps of the marketing mix? A) A decision about one of the Ps affects every other marketing-mix decision. B) Price is always the most important of the four Ps. C) Place is typically the least important of the four Ps. D) The four Ps have little effect on a product's market position. E) The four Ps are used to determine a product's target market. Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 6) Which of the following is part of the product element of the marketing mix? A) a quality discount B) a store coupon C) a newspaper advertisement D) the packaging E) publicity releases Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 7) The customer's overall assessment of every interaction the customer has had with a business is known as ________. A) the customer experience B) customer engagement C) e-commerce D) the marketing mix E) collaborative consumption Answer: A Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 2 Copyright © 2022 Pearson Education, Inc.

8) ________ is the assignment of a product's value, or the amount the consumer must exchange to receive the offering. A) Promotion B) Price C) Benefit D) Need E) Utility Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 9) The design and packaging of a good is included in which element of the marketing mix? A) product B) place C) price D) distribution E) promotion Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 10) Marketing communication is also referred to as ________. A) production B) selling orientation C) societal marketing D) exchange E) promotion Answer: E Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 11) For an exchange to occur, ________. A) at least two people or organizations must be willing to make a trade, and each must have something the other wants B) there must be one winner and one loser C) someone must make a financial profit D) the item that is exchanged must be a tangible product E) time utility must be created for the purchaser Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 3 Copyright © 2022 Pearson Education, Inc.

12) Which element of the marketing mix is most closely associated with a company's channel of distribution? A) production B) place C) price D) profit E) promotion Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Reflective thinking 13) ________ are intangible products that we pay for and use but never own. A) Consumer goods B) Services C) Industrial goods D) E-commerce products E) Value products Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 14) Items such as paper towels or sugar that are purchased for use by a family are considered ________. A) consumer services B) consumer goods C) value propositions D) utilities E) industrial goods Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

15) ________ marketing is the marketing of goods and services from one organization to another. A) Distributive B) Consumer C) E-commerce D) Business-to-business E) Target Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 16) ________ are organizations with charitable, educational, community, and other public service goals that buy goods and services to support their functions and to attract and serve their members. A) Consumer organizations B) Public organizations C) Private organizations D) Not-for-profit organizations E) For-profit organizations Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 17) Marketers first identify consumer needs and then provide products that satisfy those needs. This practice is referred to as ________. A) the stakeholder orientation B) the marketing concept C) total quality management D) collaborative consumption E) the marketing mix Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

18) When a gap exists between a consumer's actual state and some ideal or desired state, the consumer has a ________. A) benefit B) demand C) need D) value E) utility Answer: C Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 19) A ________ is a desire for a particular product a consumer uses to satisfy a need in a specific way that is culturally and socially influenced. A) benefit B) demand C) value D) utility E) want Answer: E Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 20) A ________ delivered by a product is the outcome that motivates a customer's buying behavior. A) benefit B) demand C) value D) need E) want Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 21) A customer's desire for a product coupled with the buying power or resources to obtain that product is called ________. A) benefit B) demand C) need D) utility E) service Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 6 Copyright © 2022 Pearson Education, Inc.

22) The usefulness or benefit that consumers receive from a product is ________. A) utility B) TQM C) ROI D) e-commerce E) value Answer: A Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 23) A glitzy shopping mall, a mail-order catalog, a television shopping network, and an e-commerce website are all examples of ________. A) marketing concepts B) value chains C) monopolies D) marketplaces E) strategic business units Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 24) Consumers rent all types of goods that they aren't using, from barbecue grills to Halloween costumes, to other consumers who need them for a limited time on sites like Craigslist. This reflects ________. A) the marketing mix B) value chains C) the attention economy D) collaborative consumption E) user-generated content Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 25) All of the following are forms of utility created by marketing processes EXCEPT ________. A) form utility B) place utility C) time utility D) possession utility E) price utility Answer: E Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 7 Copyright © 2022 Pearson Education, Inc.

26) When a dress manufacturer combines silk, thread, and a zipper to create a bridesmaid's gown, ________ utility occurs. A) form B) place C) time D) possession E) price Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 27) Rent the Runway rents high-end designer dresses at one-tenth the retail cost, for four nights, shipping directly to the customer's doorstep. A prepaid envelope is provided for return shipping. This is an example of ________ utility. A) form B) place C) time D) possession E) price Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 28) ________ utility is the benefit marketing provides by allowing the consumer to own, use, and enjoy a product. A) Form B) Place C) Time D) Possession E) Price Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

29) Buyers, sellers, investors, and community residents are all considered ________ in a company. A) stakeholders B) shareholders C) consumers D) channel of distribution members E) collaborative consumers Answer: A Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 30) When Tony rented a loft apartment where he would live for the summer, he acted as a ________. A) consumer B) shareholder C) producer D) marketer E) retailer Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 31) Chris just landed her dream job but realizes that her college wardrobe is not going to work for her new professional position. In this situation, Chris has a(n) ________. A) benefit B) exchange C) value D) need E) utility Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

32) After saving a portion of several paychecks, Greg Williams now has the buying power to purchase the computer system he has wanted for the last six months. Greg's want has become a(n) ________. A) need B) necessity C) demand D) exchange E) transaction Answer: C Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 33) Ruth Terry is a realtor. In her ads, Terry offers the free use of a moving truck to every customer she helps either buy or sell a house. This free use of a moving truck is an example of ________. A) a benefit B) a demand C) business-to-business marketing D) a need E) a marketplace Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 34) Which of the following is the best example of a consumer good? A) the riding lawn mower purchased by the landscaping company B) the disposable diapers purchased by the new mother for her baby C) the paint purchased by the contractor D) the cookies purchased for the daycare center E) the art supplies purchased for the elementary school art center Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

35) Which of the following is the best example of a service? A) the medical examination Jonathon had yesterday B) the sheet music purchased by the piano teacher C) the software Monica purchased from the website D) the cleaning supplies purchased for the veterinarian's office E) the t-shirt you got for running in a 5K race Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 36) Alex paid for a(n) ________ when he took his car to the carwash to be washed and waxed. A) service B) industrial product C) consumer good D) commercial good E) business product Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 37) Which of the following is an example of a transaction that might occur in business-to-business marketing? A) Maurice buys a new razor on his way home from work. B) The amateur gardener buys a new wheelbarrow. C) The retail outlet buys athletic shoes to sell in its store. D) The professional chef bakes a birthday cake for her son. E) Robyn's mother hires a math tutor to help Robyn pass algebra. Answer: C Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

38) Asad purchases air conditioners to provide HVAC systems for office buildings. He sells ________. A) distributive goods B) consumer services C) consumer goods D) industrial goods E) intangible goods Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 39) Which of the following is an example of a not-for-profit organization that would use marketing principles? A) a fast-food restaurant B) a manufacturer of bicycles C) a software developer D) a theme amusement park E) the local city zoo Answer: E Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 40) A sign manufacturer who uses plastic, metal, and neon tubing to create a motel sign has performed the marketing benefit of creating ________ utility. A) form B) place C) possession D) time E) creation Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

41) Shane pulled her car into the gas station just as the fuel gauge dropped below empty. In this example, Shane benefited from the ________ utility offered by the gas station. A) creation B) place C) value D) marketing E) quality Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 42) Seth's mother didn't want to build a climbing wall as a permanent feature in her backyard, but it was certainly convenient to rent one from the company that catered Seth's 12th birthday party. The catering company created both ________ utility when it rented her the climbing wall. A) form and place B) place and creation C) possession and price D) time and place E) creation and possession Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 43) Kris traded Priya four hours of yardwork for a home-made dinner for four. This is an example of a(n) ________. A) differential benefit B) promotion C) exchange D) collaborative consumption E) virtual trade Answer: C Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

44) Zappos has focused on the customer's ease of navigating their website, the quality of the customer service calls, the expedited shipping, and providing free returns. Zappos is paying particular attention to the ________. A) marketing mix B) people marketing C) collaborative consumption D) not-for-profit marketing E) customer experience Answer: E Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 45) Conveniently located vending machines around your college or university campus make it easy for you to buy a soda and a snack between classes. This is an example of the ________ element of the marketing mix. A) production B) place C) price D) profit E) promotion Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 46) Susannah owns a one-bedroom apartment in Manhattan that she posts for short-term weekend and summer rentals on Airbnb when she plans to be out of town. This is an example of ________. A) not-for-profit marketing B) institutional marketing C) collaborative consumption D) people marketing E) consumer-generated marketing Answer: C Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 47) The principles of marketing apply only to goods and services. Answer: FALSE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 14 Copyright © 2022 Pearson Education, Inc.

48) The term "marketing" is synonymous with the term "advertising." Answer: FALSE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 49) Marketers define a need as the difference between a consumer's actual state and some ideal or desired state. Answer: TRUE Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 50) Although having something to eat or drink may be a need, the desire for a specific brand name is referred to as a want. Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 51) The marketing mix is commonly referred to as the four Ms. Answer: FALSE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 52) Marketing doesn't just meet the needs of customers —it meets the needs of diverse stakeholders. Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 53) For an exchange to occur, at least one party must agree on the value of the exchange and how it will be carried out. Answer: FALSE Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

54) Business-to-business marketing represents greater total sales than business-to-consumer marketing. Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 55) E-commerce is the buying and selling of goods and services electronically. Answer: TRUE Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 56) The price element of the marketing mix is the assignment of value. Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 57) The promotion element of the marketing mix includes the design of the product. Answer: FALSE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 58) Place relates to a channel of distribution in the marketing mix. Answer: TRUE Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 59) The sharing economy has been referred to as collaborative consumption. Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 60) Ria, a college sophomore, has a YouTube channel and posts short videos that typically have over 50,000 viewers each week. Ria could be described as a microcelebrity. Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 16 Copyright © 2022 Pearson Education, Inc.

61) In terms of marketing, a celebrity is considered a product. Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 62) Discuss how the principles of marketing can be applied to people. Answer: The principles of marketing apply to people in the same way that they apply to products and services. People market, or "sell," themselves all of the time, whether they are applying for a job, hoping to gain a promotion, or participating in online dating. People package and promote themselves through the clothes and accessories they choose, the cars they drive, the music they listen to, the books they read, and much more. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 63) How would an ice cream vendor create the four types of utility? Answer: The ice cream vendor would create form utility by combining ingredients to make a milkshake or a sundae. Place utility would mean the ice cream is available where the customer wants it. Time utility would mean the ice cream is available when the customer wants it. Possession utility refers to the enjoyment consumers have eating the ice cream. Difficulty: Difficult LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 64) What does the phrase "exchange relationship" mean in relation to marketing? Answer: An exchange occurs when something is obtained for something else in return. The buyer receives an object, service, or idea that satisfies a need, and the seller receives something she feels is of equivalent value. For an exchange to occur, at least two people or organizations must be willing to make a trade, and each must have something the other wants. Both parties must agree on the value of the exchange and how it will be carried out. Each party also must be free to accept or reject the other's terms for the exchange. An exchange is at the heart of every marketing act. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge

65) What is the difference between consumer goods and consumer services? Give an example of each. Answer: Consumer goods are the tangible products that individual consumers purchase for personal or family use. Consumer services are intangible products that consumers pay for and use but never own. Examples will vary, but should reflect these definitions. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 66) Identify the four Ps in the following description: Rosa Alvarez markets 23 different varieties of salsa in 8-ounce and 12-ounce bottles at supermarkets in the southwestern United States. The 8-ounce bottle sells for $5.95, and the larger size sells for $7.95. Periodically, she sets up a table in one of the marketplaces that carries her salsa brand and offers customers a sample. She recently received considerable publicity for being the "Hispanic Entrepreneur of the Year." Answer: The four P's are product, price, place, and promotion. Product: 23 different varieties of salsa in 8-ounce and 12-ounce bottles Price: $5.95 for smaller size and $7.95 for larger size Place: supermarkets in southwestern United States Promotion: sampling and publicity Difficulty: Difficult LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 67) Provide a brief explanation of what marketing is. Answer: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 68) Select one actual company located in your community. Identify at least four different types of stakeholders in this company. Answer: Each student will present different information in responding to this question. Stakeholders should include the company's customers, the company's employees, investors in the company, and residents of the community. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge

69) Can a consumer of a product be a stakeholder in the company that markets the product? Briefly explain your answer. Answer: Yes. A consumer is one type of stakeholder. A stakeholder can be a buyer, seller, or investor in a company; a community resident; or a citizen of the nation where the company's goods or services are made or sold. A consumer is the ultimate user of a good or service. Therefore, a consumer could be a stakeholder who is also the ultimate consumer using the product. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 70) Briefly describe the collaborative consumption trend. Answer: In a trend called collaborative consumption, consumers rent out their belongings—tools, cars, homes, etc.—when they are not using them. This appeals to many consumers, particularly younger consumers, who would prefer to rent products rather than purchase and own them. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 71) What is a marketplace? Provide three examples of marketplaces. Answer: A marketplace is any location or medium used to conduct an exchange. Answers providing examples will vary. These may include face-to-face retailers, a phone app, mail-order catalogs or websites. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 72) Explain the concept of business-to-business marketing and give an example of a business-to-business transaction. Answer: Business-to-business marketing is the marketing of goods and services from one organization to another. Examples will vary, but should reflect this definition. Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge

73) In which kind of market would a production orientation be most successful? A) a buyer's market in which supply exceeds demand B) a market in which there are more sellers than buyers C) a seller's market in which demand is greater than supply D) a market that sells only intangible products E) an e-commerce market Answer: C Difficulty: Difficult LO: 1.2: Explain the evolution of the marketing concept 74) Companies that have a ________ orientation tend to be more successful at making one-time sales than at building repeat businesses. A) consumer B) marketing C) selling D) societal E) relationship Answer: C Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept 75) A ________ orientation emphasizes the most efficient ways to manufacture and distribute products. A) customer B) promotion C) selling D) production E) quality Answer: D Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept 76) The Zappos company-wide goal to "WOW" consumers is an example of which marketing orientation? A) customer B) selling C) production D) total quality management E) triple-bottom line Answer: A Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept

77) Companies placing a priority on sustainability are likely to have a ________ orientation. A) triple-bottom-line B) production C) selling D) customer E) TQM Answer: A Difficulty: Difficult LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 78) What are the three components of the triple-bottom-line orientation? A) the financial bottom line, the social bottom line, and the environmental bottom line B) the financial bottom line, the social bottom line, and the political bottom line C) the financial bottom line, the cultural bottom line, and the business bottom line D) the value bottom line, the service bottom line, and the business bottom line E) the product bottom line, the service bottom line, and the relationship bottom line Answer: A Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 79) ________ maintains that marketers must satisfy customers' needs in ways that also benefit society and are profitable to the firm. A) Value propositioning B) Collaborative consumption C) The societal marketing concept D) A sales orientation E) Green marketing Answer: C Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 80) The Acme Company is concerned with meeting the unmet needs of its present customers without compromising the ability of future generations to meet their needs. This company focuses on ________. A) the selling orientation B) the production orientation C) total quality management D) sustainability E) return on investment Answer: D Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 21 Copyright © 2022 Pearson Education, Inc.

81) Which of the following refers to marketing strategies that support environmental stewardship by establishing an environmentally founded differential benefit in the minds of consumers? A) collaborative consumption B) green marketing C) triple-bottom-line orientation D) societal marketing E) corporate citizenship Answer: B Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 82) The direct financial impact of a firm's expenditure on marketing activities is called the ________. A) value chain B) value proposition C) differential benefit D) return on marketing investment (ROMI) E) utility function Answer: D Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept 83) Which of the following grew in popularity shortly after WWII ended, prevailed in the 1950s but decreased because consumers did not like to be pushed? A) mobile marketing B) corporate citizenship C) big data D) a selling orientation E) user-generated content Answer: D Difficulty: Difficult LO: 1.2: Explain the evolution of the marketing concept AACSB: Reflective thinking 84) Interacting with consumers via portable technology such as smart phones, tablets, and wearable screens is referred to as ________. A) mobile marketing B) social marketing C) societal marketing D) user-generated marketing E) branded marketing Answer: A Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept AACSB: Integration of real-world business experiences 22 Copyright © 2022 Pearson Education, Inc.

110) Cellular phone service providers typically offer customers a set number of minutes for a monthly fee plus a per-minute rate for extra phone usage. What is the pricing strategy being implemented by these cellular phone service providers? Answer: Cellular phone service providers are implementing the two-part pricing strategy, which requires two separate types of payments to purchase the product. The cellular phone customer must pay a monthly fee plus an additional fee for the minutes used. Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 111) What is the difference between peak load pricing and surge pricing? Give an example of when each might be used. Answer: Using peak load pricing, a company sets higher prices during predictable periods of higher demand. For example, movie theaters charge more for tickets to evening shows than to daytime shows because the demand is predictably greater for evening shows. Using surge pricing, a company reacts quickly to increasing demand by raising prices. For example, the car service company Uber uses surge pricing to charge more when demand is increased by events such as rain. Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 112) Discuss some pricing tactics firms use in dealing with members of their distribution channels. Answer: Four such tactics are mentioned. Trade or functional discounts are discounts off product list prices offered to members of the distribution channel who perform various marketing functions. Quantity discounts are a pricing tactic of charging reduced prices for purchases of larger quantities of a product. Cash discounts are offered to customers to entice them to pay their bills quickly. Seasonal discounts are price reductions offered only during certain times of the year. Difficulty: Difficult LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 113) What is payment pricing and why is it effective? Answer: Payment pricing refers to the practice of breaking up a total price into smaller payments due over time, helping the consumer perceive the price as more "doable." Payment pricing avoids the sticker shock of paying the whole price of an item at once. Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking

114) How do consumers benefit from price bundling? Give an example of price bundling. Answer: The advantage for the consumer is that several products are sold together at a reduced rate, so consumers pay less for the "bundle" than they would if they separately purchased each item in the bundle. Vacation packages that include air and hotel, or value meals in the fast-food industry are examples. Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge 115) Virtual currencies that use cryptography for security are also called ________. A) blockchain B) barters C) digital currencies D) freemiums E) loss leaders Answer: C Difficulty: Easy LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. 116) Which of the following allows shoppers to bid on everything from bobble heads to health-and-fitness equipment? A) shopbots B) reserve pricing tactics C) reverse auctions D) online auctions E) extranets Answer: D Difficulty: Easy LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. 117) Which of the following is a pricing strategy that charges different prices to different buyers for the same product based on the size of the order or the buyer's geographic location? A) reserve pricing B) peak load pricing C) Internet price discrimination D) freight absorption pricing E) reverse auction Answer: C Difficulty: Easy LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

118) Blockchain is ________. A) the most popular and fastest-growing cryptocurrency B) the network of computers that maintains the database of all Bitcoin and other cryptocurrency transactions C) a digital currency that uses cryptography for security D) a financial account used to store funds, make transactions, and track payments E) a smartphone app that stores credit card and other information in order to make purchases/payments Answer: B Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. 119) In a(n) ________, sellers compete for the right to provide a product to a buyer. A) reverse auction B) dynamic auction C) open auction D) reserve auction E) closed auction Answer: A Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. 120) ________ is a business strategy of offering a basic version of a product free of charge and then charging for upgraded versions of the product. A) Prestige pricing B) Freemium C) Price segmentation D) Reverse marketing E) Dynamic marketing Answer: B Difficulty: Easy LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. 121) ________ is a smartphone app that stores credit card and other information in order to make purchases/payments. A) A digital wallet B) A mobile wallet C) Blockchain D) Cryptocurrency E) Bitcoin Answer: B Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. 29 Copyright © 2022 Pearson Education, Inc.

122) ________ is a service that allows customers to get a product now and pay for it over three or four months. A) Buy-now-pay-later B) Save-now-buy-later C) Collaborative savings and consumption D) Peer-to-peer lending E) Rent-to-own Answer: A Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. 123) Pricing based on supply and demand is part of dynamic pricing. Answer: TRUE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. 124) Internet price discrimination is, by definition, an illegal practice. Answer: FALSE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Ethical understanding and reasoning 125) An advantage of cryptocurrency is that it eliminates the risk of credit card fraud for consumers. Answer: TRUE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Ethical understanding and reasoning 126) Bitcoin is the most popular and fastest-growing cryptocurrency. Answer: TRUE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Ethical understanding and reasoning

127) Save-now-buy-later programs have been criticized because young consumers can quickly get into debt and damage their credit scores. Answer: FALSE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Ethical understanding and reasoning 128) In 2020, only 17 percent of Americans still used cash for small purchases. Answer: FALSE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Ethical understanding and reasoning 129) How has the Internet made it easier for companies to use dynamic pricing strategies? Use an example in your explanation. Answer: A dynamic pricing strategy involves easily adjusting prices to meet changes in the marketplace. The cost of changing prices in a brick-and-mortar retail store involves labor, advertising, and materials; the cost of changing prices online is minimal and can also be instant. For example, with the Internet the marketers of concert tickets can adjust ticket prices on the basis of supply and demand so that a ticket for a certain seat might cost more or less depending on which day the customer logs on to make the purchase. Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Application of knowledge 130) What are some of the potential consumer benefits to purchasing items online? Answer: Consumers can potentially save on the actual cost of the purchased product by shopping online. With more information about competing prices and the actual costs of producing products available through the Internet, customers have more negotiating power for big-ticket items. Savings can be realized in the customer's expenses in the gasoline not used when driving to a store. Also, there are time management advantages and stress reduction for the customer who does not have to physically travel to a store. Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Analytical thinking

131) How can digital and mobile wallets help consumers in developing nations? Answer: In developing nations, digital wallets allow consumers to participate more fully in the global financial system. Digital wallets mean individuals can accept and make payments and even receive funds from individuals in other nations. Digital wallets do not requires a bank account with a physical firm or branch, often allowing those in more rural areas to connect. Digital and mobile wallets mean consumers in developing countries can move away from cash economies to safer, more secure financial systems and participate in the world's growing economy. Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Analytical thinking 132) What is meant by the term "cashless society"? Answer: A cashless society is an economic state where financial transactions are executed through the transfer of digital information — usually in the form of a credit card, debit card, mobile wallet, or digital currency such as Bitcoin — rather than with banknotes. Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment. AACSB: Analytical thinking 133) If a competing brand's product is priced much lower than a consumer's internal reference price, which is most likely to occur? A) The consumer will feel it is overpriced. B) The consumer will buy a less expensive competing brand. C) The consumer will wonder what is wrong with the product. D) The consumer will think the product is higher than average quality. E) The consumer will purchase the item without hesitation. Answer: C Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing 134) A(n) ________ strategy is implemented when a store places two similar items next to each other, highlighting the fact that the price of one item is slightly lower than that of the other item. A) assimilation effect B) contrast effect C) price-placebo effect D) penetration pricing E) skimming price Answer: A Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing

135) Research shows that price ending in 99 rather than 00 can ________. A) cause the customer to spend less overall B) increase sales by about 50-60 percent C) create a perception that the product is a luxury good D) decrease sales by about 10-20 percent E) boost sales by about 20-30 percent Answer: E Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing 136) Which of the following is a pricing strategy that reverses the typical assumption about price-demand relationships? A) penetration pricing B) price bundling C) assimilation effect pricing D) placebo effect pricing E) prestige pricing Answer: E Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing 137) Some retailers advertise items at very low prices or even below cost just to get customers into the store. The rationale for implementing this ________ strategy is the belief that once a customer is in the store she will buy the advertised item as well as other items at regular prices. A) bait-and-switch B) price lining C) predatory pricing D) loss-leader pricing E) keystoning Answer: D Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning 138) In some states, unfair trade practices acts are designed to ________. A) regulate the markups used by various industries B) control the sale of agricultural products and raw materials C) regulate all forms of psychological pricing D) prohibit the selling of products below cost E) ban the use of price lining Answer: D Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning

139) Which of the following occurs when competitors making the same product jointly determine what price each will charge customers for the item? A) horizontal price-fixing B) vertical price-fixing C) predatory pricing D) internal reference pricing E) assimilation pricing Answer: A Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning 140) Federal legislation on price-fixing requires that sellers set their prices ________. A) based on their fixed and variable costs B) without communication with competitors C) to achieve a specified profit margin D) consistently with all customers E) consistently throughout a region Answer: B Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning 141) As a result of the ________, Rick decided the candy priced at $2.50 per pound could not be nearly as good as the candy priced at $9.50 per pound. A) assimilation effect B) contrast effect C) fair price effect D) reference effect E) clouding effect Answer: B Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 142) A local restaurant sells lunch entrees for $7.95, $9.95, and $11.95. From this information, you can infer the restaurant uses which of the following? A) price discrimination B) odd-even pricing and price lining C) dynamic pricing and price lining D) reference pricing and value pricing E) dynamic pricing and loss leader pricing Answer: B Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 34 Copyright © 2022 Pearson Education, Inc.

143) A hamburger stand near the local mall sells hamburgers for $3.99, drinks for $1.99, and fries for $1.49, while a gourmet restaurant nearby sells entrees for $20, $30, and $45. Both of these restaurants are using ________. A) demand-based pricing B) cost-based pricing C) psychological pricing D) prestige pricing E) penetration pricing Answer: C Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 144) After looking at the ads in her Sunday paper, Ruby decided to visit a local nursery and buy potting soil for her plants at $1.99 a bag. The regular price is $4.99 a bag. While Ruby was there she also purchased three bushes, six flowering plants, and a bird bath. You can infer from this information that the nursery used the bags of potting soil as a ________. A) loss leader B) freemium C) bait-and-switch D) price line E) reference price Answer: A Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 145) When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is most likely using ________. A) price fixing B) price lining C) penetration pricing D) skimming pricing E) loss leader pricing Answer: B Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking

146) Bayer AG agreed to pay $46 million as part of a law settlement for conspiring with Archer-Daniels-Midland (ADM) to keep prices of citric acid at a certain level. These two international companies were guilty of ________. A) price lining B) skimming pricing C) predatory pricing D) price-fixing E) placebo pricing Answer: D Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 147) Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most at risk of being accused of ________. A) skimming prices B) price-fixing C) predatory pricing D) deceptive pricing E) loss leader pricing Answer: C Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 148) Mark believes he should pay more than $49.95 for a motel room; this price is his internal reference price. Answer: TRUE Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 149) To encourage customers to buy the $799 dining room suite, the furniture store set a much cheaper and shoddily made set next to the more expensive furniture, thereby using the contrast effect. Answer: TRUE Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 150) Restaurants have found that when prices are given with dollar signs or the word dollar, customers spend more. Answer: FALSE Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing 36 Copyright © 2022 Pearson Education, Inc.

151) Explain the pricing strategy being implemented when a retail store places the store's brand items next to the national brand items when the national brand items have a slightly higher price than the store's item. Why would a retailer do this? Answer: The store is relying on the assimilation effect. A retailer may do this in an attempt to show the consumer that the products are very similar, and then consumers will feel as if they are saving money by purchasing the generic versus the national brand item. Sales of the generic items will likely increase because of their positive association with the brand items and their somewhat lower prices. Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Application of knowledge 152) Why is price lining a good practice for retailers? Answer: Price lining is a way to maximize profits. Price lining uses a limited number of prices, or price points, that generally fall at the top of the range that different types of customers find acceptable. Ideally, companies would charge each customer a different price–the highest price she was willing to pay. Since this isn't possible, price lining is a more workable alternative. Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Application of knowledge 153) A local appliance store is advertising the sale of a 27-inch color TV for only $199. The ad states that this price will apply only to TVs that are in stock and no rain checks will be given. Fifteen minutes after the store opens on the day of the sale of the TV, a customer is told by a sales clerk that all of the TVs selling for $199 have been sold. However, the sales clerk is very happy to show the customer a similar TV for only $399. What pricing strategy is the store implementing and why? Answer: The store is using the bait-and-switch tactic. One item is used as the bait to get customers into the store. Then, for whatever the reason, the customer cannot buy the advertised sale item, so a salesperson shows the customer another item, the switch, usually selling for a higher price. The store was successful in getting the customer into the store. Now, the store is striving to get the customer to spend more money. Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Application of knowledge 154) Define price gouging and give an example. Answer: Price gouging is an illegal act in which a seller seeks to take advantage of an emergency or extreme need to charge exorbitant prices for items. An example is charging high prices for shovels, snow blowers, salt and other related items during a blizzard. Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Application of knowledge

155) What are the two types of price fixing? Briefly define each. Answer: Horizontal price fixing occurs when competitors making the same products jointly determine what price they will charge. Vertical price fixing occurs when manufacturers and wholesalers force retailers to charge a certain price for their products. Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning