MAR3231 FSU HOPKINS
EXAM 4 QUESTIONS AND ANSWERS (UPDATED AND VERIFIED)
"Why do consumers pay a premium? - Correct Answer Because we want to be able to trust a product and minimize the risk of purchasing/using it"
“YETI & its competitors - Correct Answer Even though there are competitor...
MAR3231 FSU HOPKINS
EXAM 4 QUESTIONS AND ANSWERS (UPDATED AND VERIFIED)
"Why do consumers pay a premium? - Correct Answer Because we want to be able to trust a product
and minimize the risk of purchasing/using it"
“YETI & its competitors - Correct Answer Even though there are competitors in the market, Yeti is
confident in its overall brand"
"Outlet Model of Retail - Correct Answer Used to send excess inventory and flawed inventory to outlet
stores to be sold at discounted prices"
"Price Elasticity of Demand - Correct Answer The sensitivity of customers to price changes in terms of
the quantities they will buy"
"Elastic Demand - Correct Answer - Small % changes in price lead to substantial % changes in the
number of units bought
- Elasticity = Sensitivity"
"Current Outlet Model of Retail - Correct Answer - Retailers start making a separate line for outlet
stores to make more money
- Use Anchoring pricing strategy"
"Anchoring Pricing Strategy - Correct Answer Show the full price crossed out above the discounted
price → makes consumers more likely to make a purchase"
"Problem with the Current Outlet Model of Retail - Correct Answer - Products are never meant to be
sold at the "full price"
- Has led to class-action lawsuits with these retailers
,"Discount Orientation - Correct Answer - Low prices as a competitive advantage
- Consumers looking for the best deal → driven by PRICE"
"What do these companies have in common?
Michael Kors, Justice, Zulily, Coach, Burberry, Macy's & JC Penny - Correct Answer All of these
companies are getting sued because of a pricing issue
- Regards outlet pricing"
"Discount Orientation: Amazon Example - Correct Answer - Is a THREAT to many retailers, particularly
discounters
- Consumers trust that Amazon has the best deal, is the most convenient, and is the cheapest option"
"Why is Amazon a threat to discount retailers? - Correct Answer - Selection, brand power, supply clain,
and distribution
- Consumer behavior is already established
- Consumers enjoy shopping online vs. in-store
- Shipping capabilities (Amazon Prime)
- Far more advanced than competitors"
"Other Discount Orientation Examples - Correct Answer Dollar General and TJ Maxx"
"________ is the competitive advantage between Amazon and Walmart. - Correct Answer PRICE"
"Discount Orientation: Walmart Example - Correct Answer - Walmart is trying to buy a lot of
companies to get into new markets and further develop market share
- Currently having a hard time moving online"
"At-the-market Orientation - Correct Answer - Average prices
- Not the cheapest, not the premium"
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, "Price Skimming Strategy - Correct Answer Focuses on maximizing profits by charging a high price for
early adopters"
"Price Skimming can show: - Correct Answer - Insight into what consumers are willing to pay
- Can create an aura of prestige around your product
- Late adopters might be pleased to get your prestigious product at a bargain price"
"How to win with At-the-market Orientation - Correct Answer - Do not compete on price (can be
damaging)
- Compete on one of the other 4 P's
- Experience, exclusive products and brands, customer service/expertise
- One-stop-shop"
"Example of At-the-market Orientation - Correct Answer Home Depot & Lowe's"
"Upscale Orientation - Correct Answer Higher or highest prices"
"What are you paying for with Upscale Orientation? - Correct Answer - Brand name
- Recognition
- Status
- Exclusivity (ex: limited time offers, collaborations)"
"Upscale Orientation & Pricing: - Correct Answer - Website shows the cost of each component on the
website → Transparent Pricing
- Directly to consumers"
"How does Upscale Orientation & Pricing work? - Correct Answer Creates trust between the retailer
and the consumer"
"Examples of Upscale Orientation - Correct Answer - Oliver Cabell
- Gucci
- Rolex"
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