_____ involves a formal invitation to potential suppliers to submit written, sealed bids.

_____ involves a formal invitation to potential suppliers to submit written, sealed bids.

a. Closed bidding

b. Open bidding

c. On-line bidding

d. E-commerce

e. Comparative bidding

Answer: A

Which of the following are questions that must be addressed when determining responses to a competitor's threat?

Which of the following are questions that must be addressed when determining responses to a competitor's threat?

a. If you respond, is the competitor willing and able to lower their price again?

b. Is our position in other markets at risk if the competitor gains market share?

c. Is there a response that would cost you more than the preventable sales loss?

d. All of the above.

e. Only (a) and (b).

Answer: E

Which of the following are reasons why followers into a market often find lower costs than the pioneer firm?

Which of the following are reasons why followers into a market often find lower costs than the pioneer firm?

a. The use of more current production technologies.

b. Experience of suppliers leads to cost reductions.

c. Learning from the pioneer's mistakes.

d. All of the above.

e. Only (b) and (c).

Answer: D

Which of the following are useful to business marketers trying to gauge competitive responses to pricing?

Which of the following are useful to business marketers trying to gauge competitive responses to pricing?

a. Examining the cost structure and strategy of direct competitors.

b. Examination of annual reports and other public records.

c. Identifying which markets competitors deem as important.

d. All of the above.

e. Only (a) and (c).

Answer: D

Examples of typical add-on benefits include:

Examples of typical add-on benefits include:

a. joint working relationships.

b. commitment.

c. supplier flexibility.

d. All of the above.

e. Only (a) and (b).

Answer: D

_____ are those attributes that are not typically required but that can ultimately lead to a supplier being selected by a customer over other qualified suppliers.

_____ are those attributes that are not typically required but that can ultimately lead to a supplier being selected by a customer over other qualified suppliers.

a. Core benefits

b. Add-on benefits

c. Supplier personality traits

d. Customer values

e. Elasticities of demand

Answer: B

____ represents a business customer's overall assessment of the utility of a relationship with a supplier based on the benefits received and sacrifices made.

____ represents a business customer's overall assessment of the utility of a relationship with a supplier based on the benefits received and sacrifices made.

a. Core benefits

b. Add-on benefits

c. Customer value

d. Relationship commitment

e. Total cost analysis

Answer: C

____ features a design-to-cost philosophy that begins by examining market conditions.

____ features a design-to-cost philosophy that begins by examining market conditions.

a. Target costing

b. ABC costing

c. Value-based segmentation

d. Total cost costing

e. Penetration pricing

Answer: A

A skimming strategy is appropriate when:

A skimming strategy is appropriate when:

a. there is high price elasticity of demand.

b. strong threat of imminent competition.

c. the firm has a distinctly new product in a monopoly period.

d. All of the above.

e. Only (b) and (c).

Answer: C

____ refers to the rate of percentage change in quantity demanded attributable to change in price.

____ refers to the rate of percentage change in quantity demanded attributable to change in price.

a. Cost/benefit analysis

b. Customer demand

c. Price elasticity of demand

d. Perceived value

e. Competitive edge

Answer: C

____ costs include financing, storage, and inspection costs.

____ costs include financing, storage, and inspection costs.

a. Acquisition

b. Possession

c. Usage

d. None of the above

Answer: B

If competitors are likely to continue to pursue price cutting, the best strategy for the defender is to:

If competitors are likely to continue to pursue price cutting, the best strategy for the defender is to:

a. allow the competitor to win where it is least damaging to profitability.

b. create barriers that make it more difficult for competitors to reach less price-sensitive customer segments.

c. center reactive price cuts on a particular geographic region.

d. all of the above.

e. (a) and (b) only.

Answer: E

General plant overhead is an example of _____ costs.

General plant overhead is an example of _____ costs.

a. direct traceable

b. indirect traceable

c. general

d. attributable

Answer: B

Which of the following statements regarding competitive threats is incorrect?

Which of the following statements regarding competitive threats is incorrect?

a. Matching a price cut will be an ineffective strategy if the competitor simply reestablished the differential by a further price reduction.

b. A single response is rarely enough to stop price moves by competitors that are struggling to establish a market position.

c. If a price response is required, the strategist should focus the firm's competitive retaliation on those actions that are most cost-effective for the firm.

d. All of the above.

Answer: D

_____ are those that support a number of activities that cannot be objectively assigned to a product on the basis of a direct physical relationship.

_____ are those that support a number of activities that cannot be objectively assigned to a product on the basis of a direct physical relationship.

a. Indirect traceable costs

b. Attributable costs

c. General costs

d. none of the above.

Answer: C

The buyer's price sensitivity increases to the degree that:

The buyer's price sensitivity increases to the degree that:

a. buyers can switch from one supplier to another without incurring additional costs.

b. organizational buyers can easily shop around and assess the relative performance and price of alternatives.

c. the product represents one for which it is difficult to make price comparisons.

d. all of the above.

e. (a) and (b) only.

Answer: E

Since higher costs are incurred in providing higher levels of performance on one or more of the attributes, the strategists should assess the:

Since higher costs are incurred in providing higher levels of performance on one or more of the attributes, the strategists should assess the:

a. relative importance of the attributes to different market segments.

b. strength of the firm's offering on each of the importance attributes vis-a-vis competitors.

c. costs associated with the experience effect.

d. (a) and (b) only.

e. (b) and (c) only.

Answer: D

Examples of pricing objectives include:

Examples of pricing objectives include:

a. channel relationships.

b. achieving a market-share goal.

c. achieving a target return on investment.

d. all of the above.

e. (b) and (c) only.

Answer: D

Pertinent considerations for pricing industrial products or services include:

Pertinent considerations for pricing industrial products or services include:

a. competition.

b. demand determinants.

c. cost determinants.

d. all of the above.

e. (b) and (c) only.

Answer: D

The successful implementation of value-based strategies requires close coordination between the _____and _____ units in the firm.

The successful implementation of value-based strategies requires close coordination between the _____and _____ units in the firm.

a. product

b. sales

c. service

d. all of the above.

e. (b) and (c) only

Answer: D