Which of the following statements about price elasticity is false?
a. Steak is an example of a product that has an elastic demand for most people, because
when price goes up quantity demanded goes down.
b. Elasticity of demand is the relative responsiveness of a change in quantity demanded
to change in price.
c. If marketers can determine price elasticity, then setting prices at optimum levels is
much easier.
d. When price is raised on a product that has an inelastic demand, then total revenue
will decrease.
e. Electricity is an example of a product that has elastic demand.
Price is a key element in the marketing mix because it relates directly to:
a. the size of the sales force.
b. the speed of an exchange.
c. quality controls.
d. the generation of total revenue.
e. brand image.
Monitoring the competitive environment guides marketers in developing competitive
advantages.
a. True
b. False
Scenario 14.1
Use the following to answer the questions.
Landry Restaurants Inc. owns a number of different franchised restaurants, including
the Rain Forest Cafe and their recent addition, the T-Rex Cafe. Both the Rain Forest and
T-Rex restaurants differentiate themselves from their competitors by offering a unique
dining experience. At the Rain Forest Cafe, you can dine under a ceiling of lush tropical
forest plants, while you are viewing the enormous aquarium with exotic fish.
Periodically, the rain forest explodes with the sound of waterfalls and birds. Giant
stuffed monkeys, parrots, and other jungle creatures are planted within the landscape.
The Rain Forest Cafe also contains a gift shop, where customers can purchase t- shirts,
hats, and other items emblazoned with the Rain Forest logo. The newer T-Rex Cafe has
a similar approach to the uniqueness of the dining experience. The T-Rex Cafe offers
guests a hands-on prehistoric experience, including educational, interactive computer
screens. Customers can also pan for precious gems and fossils in
Discovery Creek or feast on food from the Kitchen of Fire. The T-Rex Cafe also has a
gift shop, where customers can purchase items with the T-Rex logo or build their very
own stuffed dinosaur, through “Build-a-Dino” by the “Build-a-Bear” franchise.
Refer to Scenario 14.1. The lush tropical plants and aquarium represent the of the Rain
Forest Cafe.
a. atmospherics
b. retail positioning
c. scrambled merchandising
d. location
e. category management
Differential pricing is effective mainly when focusing on only one market segment.
a. True
b. False
Domestic marketing involves marketing strategies aimed at markets within the home
country.
a. True
b. False
Ethical standards for acceptable conduct for a company should:
a. be clearly dictated by top management and enforced by all management staff.
b. consider only the point of view of the customers and the employees.
c. reflect the desires of the company’s employees for a quality working environment.
d. be based on company, industry, government, customer, and society view
e. be derived only from federal, state, and local laws and regulatory agencies.
If Baskin-Robbins calculates that it could sell up to 25 percent of all ice cream cones
sold in the United States, this percentage would represent the ice cream marketer’s .
a. target growth rate
b. sales forecast
c. sales objective
d. company sales potential
e. market potential
Michael’s, PetSmart, and Staples are all examples of:
a. discount stores.
b. off-price retailers.
c. category killers.
d. traditional specialty retailers.
e. superstores.
Home Depot is interested in knowing how its efforts to act in a socially responsible
manner through its Habitat for Humanity and disaster relief efforts have affected
stakeholders’ views of the company. Home Depot should conduct a(n) .
a. social audit
b. publicity audit
c. environmental audit
d. communications audit
e. environmental impact study
The major characteristic of a private brand is that .
a. only manufacturers initiate and own the brand
b. manufacturers are not identified on the product
c. they generate lower gross margins
d. these brands are exclusive and never distributed nationally
e. retailers purchase these products of a specified quality at the highest cost