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Question 1.Which example BEST illustrates the Law of Supply and Demand?

  • As the price of corn syrup increases, cereal manufacturers raise their prices.
  • As the price of gas increases, drivers find ways to use their vehicles less.
  • As the price of clothing increases, shoppers increasingly use coupon promotions.
  • As the interest rate on bank deposits falls, consumers use credit cards more.

Question 2.Which of the following examples best illustrates “inelastic demand’?

  • A business traveler encounters rain on the way to his meeting; finding umbrellas priced at $25 but plastic ponchos for $10, he chooses the latter.
  • A young man hopes to buy a DVD of a favorite movie but finds the movie available only on video cassettes, which he buys, in spite of its lower quality.
  • A vacationer becomes thirsty while touring Wally World. Finding Wally Water at $2 a bottle for sale, the same price as soft drinks, she purchases a Diet Sprite.
  • A business traveler discovers he has forgotten to bring deodorant and he pays the high price for a travel-size deodorant product in the hotel’s gift shop.

Question 3.Which of the following statements BEST represents a channel conflict arising from pricing strategies?

  • A retailer deeply discounts certain fashion accessories, which the manufacturer resents because of the message that the deep discount sends to consumers regarding its products’ perceived quality.
  • A travel operator creates a “name your own price” model in which the consumer doesn’t know exactly what’s included until after contracting to buy the package.
  • Consumers, feeling the pinch of the recession, begin asking for customized pricing on items previously considered non-negotiable, such as pharmacy products.
  • A gas station begins using segmented pricing in order to allow those on fixed income to live within their means without sacrificing auto use.

Question 4.In what quadrant of the POES model of message channels does a “company blog” belong?

  • Owned
  • Earned
  • Shared
  • Paid

Question 5.Why are complementary businesses a factor that can make or break a retail business?

  • The demographics around the retail area must represent a good fit to the retailers’
  • merchandise assortment.
  • The way merchandise is displayed must be coordinated with the layout of the facility.
  • Too much traffic generated by nearby businesses can make customers’ access difficult.
  • Complementary businesses dictate what type of retail activity is going on nearby.

Question 6.Which statement BEST describes how branding relates to positioning?

  • Branding brings positioning to life through style elements such as images, colors, words, and music.
  • Branding puts a unique stamp on an offering that connects companies and customers.
  • Positioning creates a meaningful identity in the minds of consumers.
  • Positioning sets the stage for branding by building a platform for competitive differentiation.

Question 7.Which of the following examples BEST illustrates a permanent pricing strategy that uses reductions from base price?

  • Placing sale signs near one third of the merchandise on display.
  • Offering a discount for customers who pay cash.
  • Posting prices ending in 9.
  • Changing prices as supplies of goods fluctuate.

Question 8.How do retailers’ use of house branded (private label) products benefit manufacturers?

  • Consumers believe private labels are a better value.
  • Manufacturers’ costs are reduced because channel partner relationships are fewer.
  • Manufacturers worry that private labels compete with their brands, cannibalizing sales.
  • Retailers sell house brand products with a greater profit margin.

Question 9.What advantage does use of RFID tags bring to the logistics function of companies that adopt this technology?

  • The technology helps vertical market systems integrate their resources.
  • The devices create flows of information without accompanying transaction records.
  • The technology enables businesses to outsource shipping, transport, warehousing, and inventory control.
  • The devices reduce or eliminate manual labor in capturing data related to individual items.

Question 10.When an intermediary in the distribution channel takes ownership of items, what is the impact on others in the supply chain?

  • Other supply chain partners must undertake value-adding activities to convert inputs to outputs.
  • The channel partner selling the items must generate transaction records, such as invoices and packing slips.
  • The channel partner taking ownership must generate demand through retailer supports, such as product display materials.
  • Other channel partners competing for that sale must create incentives to stimulate retail demand.