Art Supplies: It's September and Sophia wants to buy some arts and crafts supplies for an afterschool program she is developing for her daughter's elementary school. In her Sunday newspaper was a flyer from Michaels, an arts and crafts retailer.
As she looked through the newspaper insert, she noticed that if she purchased three or more bottles of Alene's Tacky Glue, the regular price of $1.50 each was reduced to $1.15 each. She also saw that the store priced its plastic storage boxes at $1.99, $3.99, and $5.99. She thought they would be useful for storing each child's projects. On the front page of the flyer was an ad for Funky Girls Gel Pens, something she knew her daughter would love to use.
The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens. She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michael had a scrapbook starter kit, which includes scissors, book, pages, and stickers for only $15. The items could be purchased separately for $19.99. The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.
- Refer to Art Supplies. Which type of discount is being used to price the tacky glue?
a. Noncumulative quantity discount
b. Promotional allowance
c. Seasonal discount
d. Cash discount
e. Cumulative quantity discount
ANSWER: a
- The items could be purchased separately for $19.99. The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.148. Refer to Art Supplies. Which of the following merchandise is offered in the flyer with a seasonal discount?
a. Tacky glue
b. Plastic storage boxes
c. Flag-related items
d. Funky Girls Gel Pens
e. Scrapbook starter kit
ANSWER: c
- The items could be purchased separately for $19.99. The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.149. Refer to Art Supplies. What pricing practice was used to price the plastic storage boxes?
a. Seasonal pricing
b. Price shading
c. Price lining
d. Inelastic pricing
e. Cumulative pricing
ANSWER: c
- The items could be purchased separately for $19.99. The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.150. Refer to Art Supplies. Michaels was trying to get consumers into the store with the Funky Girls Gel Pens promotion in hope that they will purchase other, higher-margin items. This is an example of:
a. seasonal pricing.
b. psychological pricing.
c. price lining.
d. price bundling.
e. leader pricing.
ANSWER: e
- The items could be purchased separately for $19.99. The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.151. Refer to Art Supplies. What pricing practice was used with the scrapbook starter kit?
a. Seasonal pricing
b. Psychological pricing
c. Price lining
d. Price bundling
e. Leader pricing
ANSWER: d
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Marketing Chapter 21
- The Great Brands campaign, developed by the American Advertising Federation, promoted the economic power of advertising by:
- Which of the following can be identified as the American advertising industry's primary trade organization?
- The _____ has been running a campaign for several years to convince consumers around the world of the economic value of advertising.
- Which of the following statements can be used to refute the argument that advertising reduces the number of choices available to consumers?
- Which of the following beliefs takes a positive view of advertising's economic effects?
- Which of the following statements show how advertising can increase the cost of a product?
- Which of the following is the major reason why the American Advertising Federation created and implemented an integrated marketing communications campaign?
- Marketers who believe that advertising equals _____ sees advertising as providing consumers with useful facts of the products, increasing their price sensitivity, and increasing competition in the market.
- If a marketer for an established company believes potential entrants to the marketplace must overcome established brand loyalty and spend relatively more on advertising, then he or she must believe that advertising equals:
- The belief that advertising equals _____ reflects traditional economic thinking that views advertising as a way to change consumers' tastes, lower their sensitivity to price, and build brand loyalty among buyers of the advertised brand.
- Identify the statement that supports the advertising equals information concept?
- Many argue that industry prices decrease as a result of advertising. Which of the following concepts supports this view?
- Which of the following statements support the advertising equals market power ideology?
- ____ is a good example of a relatively homogeneous product, which through advertising has achieved perceived brand differentiation.
- From an economic perspective, advertising might lower the cost of a product by:
- Consumer advocates argue that:
- Some critics say advertising hampers consumer choice. Which of the following justifications could potentially silence them?
- For many years Rolex watches and Colt firearms spent very little money on advertising yet were successful brands. The success of these products can be interpreted as evidence that:
- Some economists argue the reason Nike has such a high market share in the athletic shoe industry is because the company spends much more on media advertising and for endorsement contracts than other shoe manufacturers. This makes it difficult for new companies to enter the industry and compete against Nike because it has created:
- Barriers to entry mainly refer to:
- Large advertisers usually sell more of a product or service, which means they may have lower production costs and can allocate more monies to advertising, so they can afford the costly but more efficient media like network television. Which of the following phenomena describes this effect?
- Procter & Gamble spends over $2 billion annually on advertising for its various consumer products and can make large media purchases at rates lower than its smaller competitors. This is an example of how a large advertiser can achieve a competitive advantage based on:
- Advertising creates makes the products or services of large advertisers are perceived as unique or as better than competitors' products. This process can be referred to as:
- Larger companies often end up charging higher prices and achieve a more dominant position in the market than smaller firms that cannot compete against them and their large advertising budgets. When this occurs, advertising:
- Some critics say advertising hampers consumer choice. Identify the most reasonable justification for this argument.