marketing quiz 2

law of one price

a market in which all customers have access to the product at the best price

According to ____________ every customer in a truly global market would receive the best product available for the best price.

A. the law of global marketing

B. the law of demand

C. the law of one price

D. the law of co-branding

E. the law of supply

C. the law of one price

A global marketer has to take into account all of the following EXCEPT

A. price floors.

B. domestic competition.

C. differences in national markets.

D. optimum prices

E. price ceilings.

B. domestic competition.

t or f - price = an independent variable

true - price is independent bc ppl can raise/lower prices as marketing strategy

what is the market skimming strategy

pricing strategy designed to reach customers willing 2 pay a premium for a particular brand/specialized product

what is a market penetration pricing strategy

a pricing strategy that calls for setting price levels low enough to quickly build market share

what is export price escalation

the increase in an imported product’s price due to expenses associated w/ transportation/currency fluctuation

what is cost based pricing

pricing based on an analysis of internal costs (materials/labor) and external costs

A strategy that is based on setting price levels that are low enough to quickly build market share is called a _____ strategy.

A. market penetration pricing

B. captive pricing

C. target costing pricing

D. cost-plus pricing

E. market skimming pricing

A. market penetration pricing

All of the following are questions for setting global prices EXCEPT

A. should prices differ with market segment?

B. which pricing objective should be selected?

C. does the price reflect the product's quality?

D. is the price competitive?

E. should express warranties be used in the pricing strategy?

global markets pricing examples

• diamonds

• crude oil

• commercial aircraft

national markets pricing examples

• costs

• competition

• regulation

three primary marketing strategies names

• skimming the cream

• matching the competition

• undercutting the competition

what is skimming the cream

w/ limited competition there’s limited competition — charge what you like (limited substitution)

what is matching the competition

guarantees that your prices will meet local standards (new marketer will slightly undercut the competition to expand market share)

price floor meaning

minimum price

price ceiling meaning

maximum price

optimum prices meaning

function of demand

what is market skimming

charge a premium price - occurring in introduction stage of a products life cycle

what is penetration pricing

low price 2 have quicker market penetration - going for market share not profitability

companion products meaning

pricing the bundled product (ex: razors and razor blades)

target costing meaning

aka design 2 cost - inexpensive consumer nondurables based on what consumers can afford

export price escalation meaning

increase in final selling price of goods traded accross boarders

t or f - if competitors don’t adjust prices in response to rising costs it’s hard to adjust your prices to maintain operating margins

true

what is dynamic pricing

seeking to maximize profits by changing the price at times of peak usage (ex: uber/lyft) demand goes up so does price

what is extension pricing

per-unit price of an item is the same no matter where in the world the buyer is located

what is adaption/polycentric pricing

managers/independent distributors can establish prices they feel more desirable of their circumstances

geocentric pricing

global pricing w/ local adjustment

transfer pricing meaning

pricing of goods/services bought and sold by operating units or divisions of a company

price fixing meaning

representatives of two or more companies secretly setting similar prices for their products

t or f - price fixing = illegal

true

cost based pricing (*)

analyze internal & external costs — per-unitproducts costs are the sum of all past/current direct/indirect manufacturing and overhead costs

market based pricing (*)

determine segments to be marketed — define prices that customers in each segment are willing to pay — allocate the target costs to the products various functions — obey the cardinal rule; if the design team cannot meet the target —> product should not be launched

which is more logical - cost based or market based pricing

cost based pricing

what is Export price escalation 

the increase in an imported products price due to expenses associated with transportation and currency fluctuations

t or f - companies use cost based pricing when selling goods outside their home markets

trueeeee

t or f - companies that use rigid cost plus pricing do not adjust to reflect market conditions outside of their home country

true

what is the Decoy effect in pricing 

decoys are products with a slightly lower price and considerably inferior quality (ex small medium large popcorn -large is slightly more expensive than medium so medium = decoy)

t or f - sometimes decoys are not middle-priced items, but they always deliver seemingly less value for the money

trueeeeeee

what is price as quality signal

consumers may associate higher price w/ higher quality

what is price as a confirmation bias

Confirmation bias is a psychological phenomenon where people tend to favour, interpret, and remember information that supports their existing beliefs

what is a place utility

the availability of a product/service in a location that is convenient to a potential customer

what is time utility

the availability of a product/service when desired by a consumer

what is a form utility

the availability of a product processes and prepared in ready to use condition

what is a information utility

the availability of answers to questions and general communication about useful product features/benefits

t or f - utilities can be a basic source of CA and represent important elements of a firms overall proposition

true

what is a distributor

a channel/wholesaler that produces from manufacturers and delivers to retail channel members

what is an agent

an intermediary who negotiates transactions between two or more parties - doesn’t take the title for goods/services being purchased/sold

what is a distribution

physical flow of goods/services through channels

what is a channel

make up of coordinated groups/individuals/firms that perform functions adding utility to products/services

what is an omnichannel

reaching consumers thru multiple channels (fast & seamless)

which is a supply chain - upstream or downstream

supply chain: upstream (focus on inputs & outputs)

• raw material suppliers —> component makers —> manufacturer

which is a distribution center - upstream or downstream

• distribution center: downstream (focus on delivery to buyer)

  • manufacturer —> wholesaler —> retailer —> end customer

    • focus = physical movement/warehousing/transportation

what is a marketing channel

• marketing channel (ownership & value transfer)

producer —> intermediaries (agents/brokers/wholesalers/retailers) —> end customer

• focus = ownership transfer/promotion/pricing/value

The availability of the product processed, prepared, in proper condition, and ready to use is called

A. form utility.

B. place utility.

C. promotional utility.

D. time utility.

E. information utility.

A. form utility.

Before selecting a channel arrangement, a company should gain a clear focus of its marketing effort by asking all of the following questions EXCEPT

A. how sensitive are customers to a product or service's price?

B. what are the information requirements?

C. what are the preferences for service?

D. what internet provider should the company use?

E. who are the target customers?

D. what internet provider should the company use?

what is global retailing

engaging/owning retail operations in multiple national markets

what are department stores

a category of retail operations characterized by multiple sections or areas under 1 roof

what are specialty retailers

retail operations characterized by a more narrow focus than a department store - offering narrow merchandise mix aimed at a particular target

what are discount retailers

category of retail operations emphasizing low merchandise prices

what are hard discounts

retailer that sells tightly focused selection of goods at very low prices / relying heavily on private brands

what are hypermarkets

large-scale facilities that combine elements of discount store, supermarket and warehouse approaches

what is a category killer

a store that specializes in a particular product category offering a vast selection at low prices

what is organic growth

a company uses its own resources to open a store on a greenfield site to acquire one/more existing retail facilities or sites from another company

what is acquisition

a market-entry strategy that entails investing in assets outside the home country

______ offer less variety than department stores.

A. Specialty retailers

B. Convenience stores

C. Supermarkets

D. Discount retailers

E. Outlet stores

A. Specialty retailers

Factors that prompt management to seek growth opportunities in the global market include all of the following EXCEPT

A. saturation in the home-country market.

B. strict regulation on store development.

C. high operating costs.

D. good financial results in the home market.

E. recession or other economic factors.

D. good financial results in the home market.

B2B - customer or industrial channels

industrial channels - deliver products to manufacturers/organizations that uses them as inputs in the production process

B2C - customer or industrial channels

consumer channels are designed to put products in the hands of people for their own use

what is the global retail matrix

a framework used to classify global retailers based on their focus to own-label products vs. manufacturer brands

t or f - Global retail expansion can be achieved via organic growth, franchising, acquisition, joint venture, and licensing.

trueeee

t or f - you can classify retailers by using a matrix

true - allows you to distinguish companies offering few/many categories with a manufacturer brand focus

What are the two key 2x2 matrices used in global retailing, and what do they represent?

• Global Retailing Categories Matrix (2x2): Categorizes retail formats based on degree of standardization vs. adaptation across markets (e.g., standardized global formats vs. locally adapted formats).

• Global Retailing Market Entry Strategy Matrix (2x2): Classifies entry strategies based on control level (low to high) and resource commitment (low to high), helping retailers choose between options like exporting, franchising, joint ventures, or wholly owned subsidiaries.

what is integrated marketing communications

an approach to the promotion element of the marketing mix - values coordination/integration of a companies marketing communication strategy

t or f. - Adherents of an IMC approach explicitly recognize that the various elements of a company’s communication strategy must be carefully coordinated.

trueeee

what is advertising (*)

any sponsored/paid message that is communicated thru a non-personal channel

t or f - advertising is one of the 4 variables in the promotion mix (*)

TRUE

what is global advertising

ads that have been developed expressly for their worldwide suitability

what is pattern advertising

communication strategy that calls for a global concept that can be adapted for individual country markets

what is appeal (*)

the creative approach in advertising to attract the attention of the target audience

two types/examples of appeals (*)

• rational appeal

• emotional appeal

Difficulties that can affect an organization's communication with global customers include all of the following EXCEPT

A. the message may not compel the recipient to take action.

B. the effectiveness of the message may be impaired by noise.

C. the message may not be understood by the recipient.

D. the global advertiser can achieve economies of scale.

E. the message may not reach the intended recipient.

D . the global advertiser can achieve economies of scale.

Ads in a European campaign for Boeing shared basic design elements, but the copy and visual elements were localized. This is an example of

A. regional advertising.

B. localized advertising.

C. adaptation.

D. standardization.

E. pattern advertising.

E. pattern advertising.

China bans Facebook, Google, Instagram, WhatsApp, X, and YouTube as well as The New York Times - This example shows that…

A. copywriters develop headlines, subheads, and body copy.

B. companies prefer to use two media categories.

C. media placement does not vary from country to country.

D. country-specific regulations must be considered for global advertising.

E. many advertisers use media buying organizations.

D. country-specific regulations must be considered for global advertising.

A study comparing ads in the United States with those in Arab countries found all of the following differences EXCEPT

A. U.S. ads contain more price information.

B. people are depicted more often in Arabic ads.

C. U.S. ads have more information content.

D. context is more important in Arabic ads.

E. women wear long dresses in Arabic ads.

B. people are depicted more often in Arabic ads.

Who are the main participants involved in the advertising process?

• Clients: The businesses or organizations that want to promote their products or services.

• Agencies: Creative and strategic partners that develop and execute advertising campaigns.

• Media: Channels or platforms (TV, radio, digital, print) that deliver the advertising messages to the target audience.

• Specialized Firms: Support companies offering expert services like market research, production, or public relations.

What is the difference between centralized and decentralized marketing functions in clients?

• Centralized Marketing: Marketing decisions and activities are controlled by a single, central department within the organization, ensuring consistency and unified strategy.

• Decentralized Marketing: Marketing responsibilities are distributed across various divisions, regions, or product lines, allowing flexibility and responsiveness to local markets.

What are examples of the world’s largest advertising agencies and their typical organizational structure?

• Examples: WPP, Omnicom Group, Publicis Groupe, Interpublic Group, Dentsu.

• Approximate Structure:

  • Holding Company: Parent organization overseeing multiple agency networks.

  • Agency Networks: Specialized agencies under the holding company (creative, media, digital, PR).

  • Departments within Agencies: Creative, Account Management, Media Planning/Buying, Strategy, Production, and Support Services.

What are key elements in creating global ads regarding standardization vs. adaptation, appeals, and creative execution styles?

• Standardization: Using a uniform advertising strategy and message across all markets to maintain brand consistency and reduce costs.

• Adaptation: Modifying ads to fit local cultures, languages, and consumer preferences for better relevance and impact.

• Appeals:

  • Rational Appeals: Focus on product features, benefits, and logical reasons to buy.

  • Emotional Appeals: Target feelings, values, and emotional connections to influence consumers.

• Creative Execution Styles:

  • Demonstration: Showing the product in use to highlight benefits.

  • Slice of Life: Portraying everyday situations where the product solves a problem.

  • Testimonial: Using endorsements from satisfied customers or celebrities.

  • Fantasy: Creating imaginative scenarios to evoke desire.

  • Humor: Using comedy to engage and entertain the audience.

What characterizes the big shift to digital channels in advertising?

• Movement from traditional media (TV, print, radio) to digital platforms (social media, search engines, websites, streaming).

• Enables targeted, interactive, and measurable advertising campaigns.

• Greater use of data analytics to understand consumer behavior and personalize ads.

• Rise of mobile advertising as smartphones become primary devices.

• Increased importance of content marketing, influencer partnerships, and real-time engagement.

• Digital channels offer cost efficiency and the ability to quickly adapt campaigns based on performance.