A distribution channel moves goods from producers to customers. Suppose a channel has four producers, each serving the same four customers, and no middlemen. If a distributor is introduced, the number of contacts among producers, customers, and the distributor) in the channel will:
Answer(s): D
The number of contacts without a distributor is 16 four producers four customers). The number with a distributor is 8 four producers +four customers). Thus, the effort required of producers and consumers is reduced by the distributor, thereby increasing marketing efficiency.
Which of the following is not a component of physical distribution?
Answer(s): B
Physical distribution market logistics) involves planning, implementing, and controlling the movement of materials and final goods to meet customer needs while earning a profit.Physical distribution systems coordinate suppliers, purchasing agents, marketers, channels, and customers. They include warehousing, transportation, and retail outlets.
Buyer-based pricing involves:
Answer(s): C
Buyer-based pricing involves basing prices on the product's perceived value rather than on the seller's cost. Nonprice variables in the marketing mix augment the perceived value. For example, a cup of coffee may have a higher price at an expensive restaurant than at a fast food outlet.
Market-skimming pricing strategies could be appropriate when:
Market-skimming pricing is used when a new product is introduced at the highest price possible given the benefits of the product. For market skimming to work, the product must appear to be worth its price, the costs of producing a small volume cannot be so high that they eliminate the advantage of charging more, and competitors cannot enter the market and undercut the price.
Which one of the graphs depicts the demand curve for prestige goods?
Over some intermediate range of prices, the reaction to a price increase for prestige goods is an increase, not a decrease, in the quantity demanded. Within this range, the demand curve is upward sloping. The reason is that consumers interpret the higher price to indicate a better or more desirable product. Above some price level, the relation between price and quantity} demanded will again became negatively sloped.
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