Chapter 1—An Overview of Marketing



Chapter 1—An Overview of Marketing

MULTIPLE CHOICE

1. The term marketing refers to:

|a. |new product concepts and improvements |

|b. |selling |

|c. |advertising and promotion activities |

|d. |a philosophy that stresses customer satisfaction |

|e. |planning sales campaigns |

ANS: D PTS: 1 REF: 3 OBJ: 01-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

2. A business is concerned with many day-to-day activities. Some of the most important of these activities are the planning and development of a product, its pricing policy, and the distribution strategy. These activities are all a part of:

|a. |a control system |

|b. |marketing |

|c. |accounting |

|d. |production |

|e. |human resources |

ANS: B

This description contains three of the four main activities included in the marketing function. Many students may mistakenly believe that marketing is only concerned with promotion.

PTS: 1 REF: 3 OBJ: 01-1 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Distribution

3. _____ is a philosophy, an attitude, a perspective, or a management orientation that stresses customer satisfaction.

|a. |Planning strategy |

|b. |Customer management |

|c. |Marketing |

|d. |A control system |

|e. |Reciprocity |

ANS: C PTS: 1 REF: 3 OBJ: 01-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product

4. The American Marketing Association's definition of marketing:

|a. |is limited to promotional activities |

|b. |focuses on the value of empowerment, teamwork, and customer value |

|c. |shows how marketing benefits the marketer |

|d. |relies on the synergy created by exchange |

|e. |includes the processes marketers use to establish and maintain relationships with customers |

ANS: E

According to the American Marketing Association, marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

PTS: 1 REF: 3 OBJ: 01-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product

5. _____ is a key ingredient in the philosophy of marketing; it occurs when people give up something in order to receive something that they would rather have.

|a. |Exchange |

|b. |Synergy |

|c. |Transformation |

|d. |Leveraging |

|e. |Reciprocity |

ANS: A PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product

6. In order for exchange to occur:

|a. |a complex societal system must be involved |

|b. |organized marketing activities must also take place |

|c. |a profit-oriented organization must be involved in the process |

|d. |money or other legal tender is required |

|e. |each party must have something the other party considers to be valuable |

ANS: E

Exchange involves the trade of items of value, but does not necessarily involve formal organizations, profit, or money/legal tender.

PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Product

9. For an exchange to take place:

|a. |there must be at least two parties involved |

|b. |money must be used in the transaction |

|c. |each party must feel obligated to accept the offer |

|d. |at least one party must have something of value that the other party desires |

|e. |neither party must communicate with the other |

ANS: A PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

10. Indonesian logging companies harvest the rainforests for timber and assume that a market exists for their products. The typical Indonesian logging company has a(n) _____ orientation.

|a. |exchange |

|b. |product |

|c. |production |

|d. |sales |

|e. |environmental |

ANS: C

The logging companies do not focus on the needs and desires of the marketplace.

PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: App

TOP: AACSB Ethics| TB&E Model Product

11. The concept of exchange is important to marketing because:

|a. |if all the conditions for an exchange are in place, then the exchange will be completed |

|b. |exchange provides money to marketers |

|c. |marketing activities help to create exchange |

|d. |marketing activities are a requirement for exchange to take place |

|e. |money is the only medium of exchange for business marketers |

ANS: C

Marketing activities help the exchange to take place, but marketing can occur without an exchange.

PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Product

14. Which of the following is NOT a marketing management philosophy?

|a. |sales orientation |

|b. |societal marketing orientation |

|c. |market orientation |

|d. |profitability orientation |

|e. |production orientation |

ANS: D PTS: 1 REF: 4-6 OBJ: 01-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

15. Firms with a _____ orientation focus on the internal capabilities of the firm rather than on the desires and needs of the marketplace.

|a. |sales |

|b. |production |

|c. |market |

|d. |customer |

|e. |customer-benefit |

ANS: B PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product

16. A company that sets its goals and strategies based on what its current equipment can produce, what products engineering can design, and what the company itself can do best, has a(n) _____ orientation.

|a. |marketplace |

|b. |sales |

|c. |market |

|d. |exchange |

|e. |production |

ANS: E PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Product

19. A firm with a production orientation is most likely to survive if:

|a. |there are many small competitors in the marketplace |

|b. |demand for the product it produces exceeds supply |

|c. |the needs of the marketplace are constantly shifting |

|d. |supply for the product it produces exceeds demand |

|e. |any of the above conditions exist |

ANS: B

The production orientation can survive in the short term under a variety of conditions; however, if market needs change, long-term survival is difficult.

PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

20. A firm that adopts a(n) _____ orientation to marketing will fail to consider whether what the firm produces most efficiently also meets the needs of the marketplace.

|a. |customer |

|b. |exchange |

|c. |product |

|d. |market |

|e. |production |

ANS: E

The production orientation forces a company to build whatever it builds best, that is, whatever it has the experience and expertise in doing.

PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

22. The _____ orientation assumes people will buy more if aggressive selling techniques are used.

|a. |market |

|b. |sales |

|c. |customer |

|d. |production |

|e. |exchange |

ANS: B

The sales orientation assumes aggressive selling is what is needed to increase demand.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Pricing

23. A _____ orientation assumes marketing means selling things and collecting money. It also assumes people will buy more goods and services if aggressive marketing techniques are used.

|a. |sales |

|b. |production |

|c. |market |

|d. |customer |

|e. |marketplace |

ANS: A PTS: 1 REF: 5 OBJ: 01-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

25. If a company uses a sales orientation, consumer complaints would most likely result in:

|a. |a modification of the sales presentation |

|b. |product reinvention |

|c. |continuous market research |

|d. |philanthropy |

|e. |attempts to cut production costs |

ANS: A

The sales orientation relies on aggressive sales techniques to fuel business.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

29. Companies that rely on the marketing concept and that have implemented a market orientation strategy recognize that:

|a. |price is the most important variable for customers |

|b. |sales depend predominantly on an aggressive sales force |

|c. |what the customer thinks he or she is buying is what is important |

|d. |a company has to apply scientific management techniques to survive |

|e. |selling and marketing are essentially the same thing |

ANS: C

The perceived product and perceived value are what the customer is buying, and the marketing concept and market orientation have endeavored to understand those perceptions.

PTS: 1 REF: 5-6 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

30. A company that has a market orientation and adheres to the marketing concept does NOT:

|a. |integrate all the activities of the firm to satisfy customer wants |

|b. |focus on consumer needs and wants |

|c. |differentiate the firm's products from its competitor's products |

|d. |fuel sales growth through the application of aggressive sales techniques |

|e. |concentrate on long-term goal achievement (such as profits and growth) for the firm |

ANS: D

Aggressive sales techniques are part of the sales orientation and are not needed if a company is meeting needs and wants of its customers.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Product

31. The statement, "Marketing should be introduced at the beginning rather than the end of the production cycle and integrated into each phase of the business," is consistent with a(n) _____ orientation.

|a. |production |

|b. |market |

|c. |retail |

|d. |sales |

|e. |enterprise |

ANS: B

Understanding the competitive arena and competitors' strengths and weaknesses is a critical component of market orientation.

PTS: 1 REF: 5-6 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Product

36. The marketing concept involves:

|a. |focusing on customers' wants so that the organization can distinguish its product (or products) from the competitors' |

| |products |

|b. |satisfying management's needs and wants with the idea of maximizing profits in the short run |

|c. |selling as much product as possible under the assumption people will buy more goods and services if aggressive selling |

| |techniques are used |

|d. |selling as much as possible under the assumption consumers will buy more at lower prices |

|e. |focusing on production in order to increase product quality and lower prices |

ANS: A PTS: 1 REF: 5-6 OBJ: 01-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

37. The marketing concept includes a goal orientation to remind managers that:

|a. |achieving long-term organizational goals is as important as satisfying customers |

|b. |customers must be satisfied no matter what the long-term effect on the firm |

|c. |the only reason for any business to exist is to make a profit |

|d. |the objective is to find a target market that differs from that of the competition |

|e. |functional integration of all departments is useful but not essential |

ANS: A

The goal orientation refers to the company's goals, such as profit, growth, service, and survival.

PTS: 1 REF: 5-6 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

38. The marketing concept stresses that the social and economic justification for an organization's existence is the satisfaction of customer needs and wants while:

|a. |producing a good or service at the lowest possible cost |

|b. |improving the general standard of living |

|c. |constantly increasing sales volumes |

|d. |applying scientific management techniques to improve efficiency |

|e. |simultaneously meeting organization objectives |

ANS: E

The marketing concept holds that the needs and wants of both the customer and the firm be served.

PTS: 1 REF: 5-6 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

40. An organization with a(n) _____ believes that it exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests.

|a. |sales orientation |

|b. |market orientation |

|c. |ethical business mission |

|d. |focused target market strategy |

|e. |societal orientation |

ANS: E PTS: 1 REF: 6 OBJ: 01-2 TYPE: Def

TOP: AACSB Diversity| TB&E Model Customer

45. Which of the following statements about the societal orientation is true?

|a. |Companies that protect the environment by using all-natural materials in their products are showing a societal marketing|

| |orientation. |

|b. |Marketers cannot deliver all benefits sought by customers because these benefits may not be in the long-term best |

| |interests of the customers. |

|c. |The societal marketing concept is an important refinement of the market concept. |

|d. |Organizations have both a social and economic justification for their existence. |

|e. |All of these statements about the societal orientation are true. |

ANS: E PTS: 1 REF: 6 OBJ: 01-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Customer

48. Organizations that sell products that are often unsought (such as life insurance and retirement plans) may find themselves adopting a _____ orientation because the companies are marketing products that most people do not want.

|a. |sales |

|b. |production |

|c. |marketing |

|d. |product |

|e. |customer |

ANS: A

Aggressive selling is sometimes used by companies that sell products their customers do not want to buy.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: App

TOP: AACSB Reflective Thinking| TB&E Model Promotion

57. _____ gives customers the feeling their concerns are being addressed and at the same time gives employees the feeling their expertise matters to management.

|a. |Management-employee synergy |

|b. |Organizational entropy |

|c. |Managerial reciprocity |

|d. |Empowerment |

|e. |Delegation |

ANS: D PTS: 1 REF: 9 OBJ: 01-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

58. Market-oriented firms primarily focus their efforts upon:

|a. |improving the technological skills and competitive advantages of the firm |

|b. |satisfying the organization's needs for low overhead |

|c. |achieving the company’s societal responsibilities inexpensively |

|d. |distributing goods and services |

|e. |satisfying the wants and needs of their customers |

ANS: E

Market-oriented firms are focused outward toward their customers.

PTS: 1 REF: 6 OBJ: 01-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

59. Which of the following statements about a typical sales-oriented business is true?

|a. |The company develops its products to meet the needs of specific groups of people. |

|b. |The primary goal of the company is profit through customer satisfaction. |

|c. |The company invests the majority of its resources in promoting its products and services. |

|d. |The company is in business to satisfy customers' wants and needs and deliver superior value. |

|e. |All of these statements about a typical sales-oriented business are true. |

ANS: C

See Review Learning Outcome 3.

PTS: 1 REF: 6 | 10 OBJ: 01-3 TYPE: Comp

TOP: AACSB Analytic| TB&E Model Customer

60. _____ is defined as the relationship between benefits and the sacrifice necessary to obtain those benefits.

|a. |Opportunity cost |

|b. |Marketing utility |

|c. |Market quality |

|d. |Satisfaction percentage |

|e. |Customer value |

ANS: E PTS: 1 REF: 6 OBJ: 01-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

61. Marketers interested in offering customer value can:

|a. |offer products that perform |

|b. |give the consumer facts |

|c. |offer organization-wide commitment to service and after-the-sale support |

|d. |avoid unrealistic pricing |

|e. |do all of these |

ANS: E PTS: 1 REF: 6-7 OBJ: 01-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Customer

64. When customer expectations regarding product quality, service quality, and value-based price are met or exceeded, _____ is created.

|a. |a value line |

|b. |a quality rift |

|c. |planning excellence |

|d. |customer satisfaction |

|e. |expectation satisfaction |

ANS: D PTS: 1 REF: 7 OBJ: 01-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Customer

66. _____ is a strategy that entails forging long-term partnerships with customers.

|a. |Commitment selling |

|b. |Relationship marketing |

|c. |Transactional marketing |

|d. |Market engineering |

|e. |Organization-customer synergy |

ANS: B PTS: 1 REF: 8 OBJ: 01-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

71. Which of the following measures would be the best indicator of whether your organization's personnel have a customer orientation?

|a. |Ask each employee's boss if that person is customer-oriented. |

|b. |Assess each employee's impact on the profitability of the firm. |

|c. |Survey customers on how oriented the organization's personnel are to customer needs and desires. |

|d. |Assess how well each employee has contributed to the marketing success of the firm by examining every financial |

| |statement created by the organization. |

|e. |Test employees on their knowledge of customer service techniques. |

ANS: C

The key to assessing how customer-oriented a firm's personnel are is to ask the customer. Only the customer can provide this type of information.

PTS: 1 REF: 8 OBJ: 01-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

73. Some market-oriented firms give employees expanded authority to solve customer problems on the spot. This is known as:

|a. |training |

|b. |deregulation |

|c. |empowerment |

|d. |commissioning |

|e. |mediating |

ANS: C PTS: 1 REF: 9 OBJ: 01-3 TYPE: Def

TOP: AACSB Communication| TB&E Model Customer

76. _____ is the collaborative efforts of people to achieve common objectives.

|a. |Effort training |

|b. |Teamwork |

|c. |Empowerment |

|d. |OJT training |

|e. |Mediation |

ANS: B PTS: 1 REF: 9 OBJ: 01-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

Chapter 3 (Current text edition chapters 3 & 4)

MULTIPLE CHOICE

1. _____ is the concern of business for the long-range welfare of both the company and its relationships to the society within which it operates.

|a. |Consumerism |

|b. |Corporate social responsibility |

|c. |Cultural sensitivity |

|d. |Conventional morality |

|e. |Environmental consideration |

ANS: B PTS: 1 REF: 29 OBJ: 03-1 TYPE: Def

TOP: AACSB Ethics| TB&E Model Strategy

3. Corporate social responsibility is defined as the:

|a. |belief that the legal system defines ethical behavior |

|b. |development of inclusive codes of ethics |

|c. |rules by which social rewards are attained |

|d. |concern for social welfare by businesses |

|e. |coordination of social programs for publicity purposes |

ANS: D PTS: 1 REF: 29 OBJ: 03-1 TYPE: Def

TOP: AACSB Ethics| TB&E Model Strategy

4. Corporate social responsibility:

|a. |is mandated by federal law |

|b. |requires companies to sacrifice economic performance for the sake of their stakeholders |

|c. |does not influence competition |

|d. |may not always result in profit and growth |

|e. |is unaffected by environmental changes |

ANS: D PTS: 1 REF: 29 OBJ: 03-1 TYPE: Comp

TOP: AACSB Ethics| TB&E Model Strategy

7. _____ is the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profit and help the world at the same time.

|a. |Sustainability |

|b. |Philanthropy |

|c. |Cause marketing |

|d. |Creative ethics |

|e. |International ethics |

ANS: A PTS: 1 REF: 29 OBJ: 03-1 TYPE: Def

TOP: AACSB Ethics| TB&E Model Strategy

TOP: AACSB Ethics| TB&E Model Strategy

9. The pyramid of corporate social responsibilities contains all of the following components EXCEPT:

|a. |economic responsibilities |

|b. |ethical responsibilities |

|c. |cultural responsibilities |

|d. |legal responsibilities |

|e. |philanthropic responsibilities |

ANS: C

See Review Learning Outcome 1.

PTS: 1 REF: 29-30 OBJ: 03-1 TYPE: Def

TOP: AACSB Ethics| TB&E Model Strategy

15. The four components of the pyramid of corporate social responsibility are:

|a. |sustainability, creativity, profit, and culture |

|b. |organizational culture, creativity imagery, economic performance, and objectivity |

|c. |organizational, financial, social, and cultural responsibilities |

|d. |sustainability, legality, creativity, and competition |

|e. |economic, legal, ethical, and philanthropic responsibilities |

ANS: E PTS: 1 REF: 29-30 OBJ: 03-1 TYPE: Def

TOP: AACSB Ethics| TB&E Model Strategy

16. Which of the following statements describes ethics?

|a. |Ethics are the moral principles or values that generally govern the conduct of an individual. |

|b. |Ethics is the standard of behavior by which conduct is judged. |

|c. |Morals are a foundation for ethical behavior. |

|d. |Ethical values are situation specific and time oriented. |

|e. |All of the statements describe ethics. |

ANS: E PTS: 1 REF: 30 OBJ: 03-2 TYPE: Comp

TOP: AACSB Ethics| TB&E Model Strategy

17. Which of the following sayings best describes how people with conventional morality act?

|a. |Don't put all of your eggs in one basket. |

|b. |When in Rome, do as the Romans do. |

|c. |Be wary of strangers bearing gifts. |

|d. |A rolling stone gathers no moss. |

|e. |Don't count your chickens before they hatch. |

ANS: B PTS: 1 REF: 31 OBJ: 03-2 TYPE: Comp

TOP: AACSB Ethics| TB&E Model Strategy

20. The use of ethical decision making:

|a. |can be influenced by top managers |

|b. |is influenced by the probability of harmful outcomes |

|c. |depends on the number of people to be affected |

|d. |depends on the magnitude of possible consequences |

|e. |is accurately described by all of the choices |

ANS: E PTS: 1 REF: 31 OBJ: 03-2 TYPE: Comp

TOP: AACSB Ethics| TB&E Model Strategy

22. Which of the following factors does NOT tend to influence ethical decision making and judgments?

|a. |probability of a harmful outcome |

|b. |length of time between decision and the onset of consequences |

|c. |level of multiculturalism |

|d. |number of people to be affected |

|e. |potential magnitude of the consequences |

ANS: C PTS: 1 REF: 31 OBJ: 03-2 TYPE: Comp

TOP: AACSB Ethics| AACSB Diversity| TB&E Model Strategy

24. A human resources manager is creating a code of ethics for the employees of the retirement home she works for. Which of the following is NOT an ethics principle she should keep in mind as she creates this code?

|a. |The principles should not upset current retirement home workers and future job applicants. |

|b. |Any decisions should be fair to all concerned: retirement home nurses, cleaning personnel, and administrative staff. |

|c. |Input on the code should be gained from other knowledgeable individuals or groups. |

|d. |Principles can deviate from common practices because of the prestigious nature of the facility. |

|e. |She should not have to pull rank or use coercion to implement her ethics code. |

ANS: D

An unethical code would presume that the company is an exception to a common practice in the industry.

PTS: 1 REF: 31-32 OBJ: 03-2 TYPE: Comp

TOP: AACSB Ethics| TB&E Model Strategy

25. A(n) _____ is a defined group that managers feel is most likely to buy a firm's product.

|a. |target market |

|b. |buying center |

|c. |aggregated unit |

|d. |consumer cluster |

|e. |demographic sample |

ANS: A PTS: 1 REF: 32 OBJ: 03-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

27. Which of the following statements best describes the typical target market?

|a. |A target market will remain stable over time, with the same group of consumers. |

|b. |Target markets change over time as consumers drop in or out of the market, and as tastes change. |

|c. |Target markets are not strongly affected by changes in the external environment. |

|d. |Target markets only change when the features and benefits of the product offering change. |

|e. |Target markets cannot be specifically defined according to age, income, or location because these factors are |

| |continually changing. |

ANS: B

Target markets are defined and described, but they are always changing in response to environmental changes.

PTS: 1 REF: 32 OBJ: 03-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

29. The external environment:

|a. |can be controlled in much the same manner as the internal marketing mix |

|b. |cannot be influenced by marketing managers |

|c. |does not change over time |

|d. |does not have an impact on Fortune 500 companies |

|e. |must be continually monitored by marketing managers |

ANS: E PTS: 1 REF: 32 OBJ: 03-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

30. The external environment is a strong influence on a target market and can be a source of _____ for the marketing manager.

|a. |opportunities and threats |

|b. |threats and strengths |

|c. |environmental loopholes |

|d. |opportunities and weaknesses |

|e. |product myopia |

ANS: A

The external environment can provide opportunities to serve new and changing needs, as well as warnings about changes that could threaten the current position of the firm. Students will need to remember what a SWOT analysis is to answer this question.

PTS: 1 REF: 32 OBJ: 03-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

31. Marketing managers cannot control _____, but they can at times influence it.

|a. |where advertising is placed |

|b. |the external environment |

|c. |the sales force |

|d. |the distribution strategy |

|e. |how products are priced |

ANS: B

The external environment is basically uncontrollable, but the other four answers are part of the marketing mix.

PTS: 1 REF: 32-33 OBJ: 03-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

33. What is apparently the most difficult external variable for marketing managers to forecast, influence, or integrate into marketing plans?

|a. |technology |

|b. |social factors |

|c. |demography |

|d. |competition |

|e. |economic conditions |

ANS: B

Social factors and changes are difficult to foresee, because they are usually slow and/or small changes. Also, it is very difficult for one company to affect social factors in any appreciable manner.

PTS: 1 REF: 33 OBJ: 03-4 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

35. When a company engages in _____, it is implementing strategies that attempt to shape the external environment in which it operates.

|a. |synergistic control |

|b. |environmental management |

|c. |transactional management |

|d. |market control |

|e. |reactive management |

ANS: B PTS: 1 REF: 33 OBJ: 03-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

38. _____ factors are the environmental factors concerned with the changes in people's values, lifestyles, and family roles.

|a. |Social |

|b. |Economic |

|c. |Political |

|d. |Competitive |

|e. |Demographic |

ANS: A PTS: 1 REF: 33 OBJ: 03-4 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

43. Consumer preference for low-carb diets has greatly modified the way food is being marketed. This concern with health issues is an example of a(n) _____ factor.

|a. |economic |

|b. |political and legal |

|c. |technological |

|d. |demographic |

|e. |social |

ANS: E PTS: 1 REF: 33 OBJ: 03-4 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product| TB&E Model Customer

45. What do self-sufficiency, upward mobility, and conformity have in common?

|a. |These are no longer valued attitudes. |

|b. |They are attitudes that can easily be changed. |

|c. |These are three perceptions that Americans have of the Asian lifestyle. |

|d. |These are three of the core values that have influenced lifestyles in the United States. |

|e. |They are the determinants of a component lifestyle. |

ANS: D

The fourth value is work ethic.

PTS: 1 REF: 33 OBJ: 03-4 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

48. A(n) _____ is the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle.

|a. |aggregated lifestyle |

|b. |component lifestyle |

|c. |psychographic mode of living |

|d. |demographically defined lifestyle |

|e. |targeted lifestyle |

ANS: B PTS: 1 REF: 33-34 OBJ: 03-4 TYPE: Def

TOP: AACSB Diversity| TB&E Model Product

55. The growth of dual-income families has resulted in:

|a. |burnout |

|b. |a sense of entitlement |

|c. |decreased discretionary income |

|d. |decreased GNP |

|e. |increased purchasing power |

ANS: E PTS: 1 REF: 34 OBJ: 03-4 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

56. Which of the following events has had a greater effect on marketing than any other social change?

|a. |the growing number of one-child families |

|b. |the increasing number of immigrants from Northern Europe |

|c. |the growing number of people on the Internet |

|d. |the increasing number of working women |

|e. |the growing number of people of retirement age who are continuing work |

ANS: D PTS: 1 REF: 34 OBJ: 03-4 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

58. The study of people's vital statistics, such as their ages, births, deaths, and locations, is called:

|a. |cultural sociology |

|b. |psychometrics |

|c. |ecology |

|d. |ethnography |

|e. |demography |

ANS: E PTS: 1 REF: 34-35 OBJ: 03-5 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

59. Which of the following is NOT a demographic characteristic of a population?

|a. |income level |

|b. |age |

|c. |values |

|d. |education |

|e. |birthrate |

ANS: C

Values are a social factor.

PTS: 1 REF: 34-35 OBJ: 03-5 TYPE: Comp

TOP: AACSB Diversity| TB&E Model Customer

69. A multicultural society is characterized by:

|a. |a population of recent immigrants that are closely related by custom and tradition |

|b. |a conglomeration of small and large ethnic groups that have little in common |

|c. |even distribution of all ethnic groups in a geographic region |

|d. |effective mass-marketing techniques |

|e. |one large dominating racial or ethnic group in a geographic area |

ANS: C PTS: 1 REF: 39 OBJ: 03-6 TYPE: Def

TOP: AACSB Diversity| TB&E Model Distribution| TB&E Model Customer

71. A furniture retailer that specializes in selling entire rooms of furniture has hired you to identify 25 geographic target markets that can be described as multicultural societies. What types of locations should you offer this firm?

|a. |cities that have historically had low immigration rates |

|b. |traditional test markets |

|c. |regions that are dominated by one ethnic group and that have multiple smaller ethnic groups |

|d. |unindustrialized areas |

|e. |locations in which all major ethnic groups in the area are equally represented |

ANS: E

Multicultural societies are not defined by geography, history, or products produced, but by the racial and ethnic composition of the population.

PTS: 1 REF: 39 OBJ: 03-6 TYPE: App

TOP: AACSB Diversity| TB&E Model Customer

74. The higher your _____, the higher your purchasing power:

|a. |gross income |

|b. |social class |

|c. |disposable income |

|d. |cost of living |

|e. |inflation index |

ANS: C

Purchasing power is measured by comparing income to the relative cost of a set standard of goods an services. It is a aligned with net income, or income minus a standard set of expenses. Assuming a constant income, the higher the cost of living (the expenses), the lower the purchasing power.

PTS: 1 REF: 39-40 OBJ: 03-7 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

76. Factors, such as interest rates, inflation, and consumer income that influence the marketing environment, are called _____ factors.

|a. |economic |

|b. |socio-demographic |

|c. |political |

|d. |government |

|e. |consumption |

ANS: A PTS: 1 REF: 39 OBJ: 03-7 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

77. _____ is measured by comparing the relative cost of a standard of goods and services in different geographic areas.

|a. |Gross individual profit |

|b. |Purchasing power |

|c. |Net profit |

|d. |Relative pricing |

|e. |Price escalation |

ANS: B PTS: 1 REF: 39-40 OBJ: 03-7 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

78. When income is high relative to the cost of living, consumers _____.

|a. |have more discretionary income |

|b. |begin anticipating a period of price deceleration |

|c. |stop buying luxury goods and services |

|d. |have significantly less disposable income |

|e. |anticipate price escalation by stockpiling |

ANS: A PTS: 1 REF: 39-40 OBJ: 03-7 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Customer

79. _____ is the primary determinant of a person's earnings.

|a. |Multiculturalism |

|b. |Lifestyle |

|c. |Education |

|d. |The aging of the baby boomers |

|e. |Global competition |

ANS: C PTS: 1 REF: 39 OBJ: 03-7 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

80. ____ is measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year.

|a. |Inflation |

|b. |Recession |

|c. |Depression |

|d. |Consumer break-even |

|e. |Price escalation |

ANS: A PTS: 1 REF: 40 OBJ: 03-7 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Pricing

81. When planning marketing strategies during times of inflation, marketers must be aware inflation causes consumers to:

|a. |purchase more goods and services to support their psychological selves, such as counseling and stress management |

| |training |

|b. |consume more meals away from home |

|c. |buy in small quantities until inflation is over |

|d. |decrease their brand loyalty to products they have traditionally used |

|e. |put more money into savings accounts because prices are too high |

ANS: D

In times of inflation, consumers are more price conscious and less brand-loyal.

PTS: 1 REF: 40 OBJ: 03-7 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Pricing

82. A period of economic activity when income, production, and employment tend to fall, reducing overall demand, is called:

|a. |stagnation |

|b. |an inflation |

|c. |a recession |

|d. |price escalation |

|e. |a depression |

ANS: C PTS: 1 REF: 40 OBJ: 03-7 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Pricing

85. Which of the following strategies is appropriate for a marketer to use during a time of economic recession?

|a. |Promote product value. |

|b. |Maintain and improve customer services. |

|c. |Emphasize top-of-the-line products in promotions. |

|d. |Offer products that are economical and efficient. |

|e. |Do all of these. |

ANS: E PTS: 1 REF: 40-41 OBJ: 03-7 TYPE: Comp

TOP: AACSB Technology| TB&E Model Pricing

86. Which of the following is sometimes an effective weapon for fighting inflation and recession?

|a. |technology |

|b. |line extensions |

|c. |increased capital gains taxes |

|d. |introducing product-line extensions |

|e. |reducing R&D expenditures |

ANS: A PTS: 1 REF: 40-41 OBJ: 03-8 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Research

87. Research that attempts to expand the frontiers of knowledge rather than solving a specific, pragmatic problem is called:

|a. |technical diversity |

|b. |reactive research |

|c. |applied research |

|d. |experiential research |

|e. |basic research |

ANS: E PTS: 1 REF: 41 OBJ: 03-8 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Research

100. Laws and regulations of various governments and their ongoing development and change are an example of _____ factors and are part of all organizations' external environment.

|a. |economic investment |

|b. |political and legal |

|c. |research and development |

|d. |competitive |

|e. |demographic |

ANS: B PTS: 1 REF: 42 OBJ: 03-9 TYPE: Def

TOP: AACSB Technology| TB&E Model Strategy

101. The _____ Act strengthened the Clayton Act to prevent corporate acquisitions that reduce competition.

|a. |Hart-Scott-Rodino |

|b. |Lanham-Scott |

|c. |Celler-Kefauver Antimerger |

|d. |Robinson-Patman |

|e. |Sherman |

ANS: C

See Exhibit 3.2. The Celler-Kefauver Act bolstered the Clayton Act's provision dealing with interlocking directorates and closed another loophole that had allowed corporate takeovers.

PTS: 1 REF: 42 OBJ: 03-9 TYPE: Def

TOP: AACSB Analytic| TB&E Model Strategy

102. The _____ Act requires large companies to notify the government of their intent to merge.

|a. |Hart-Scott-Rodino |

|b. |Sherman |

|c. |Celler-Kefauver Antimerger |

|d. |Robinson-Patman |

|e. |Lanham |

ANS: A

See Exhibit 3.2.

PTS: 1 REF: 42 OBJ: 03-9 TYPE: Def

TOP: AACSB Analytic| TB&E Model Strategy

103. The Gramm-Leach-Bliley Act and the Health Insurance Portability and Accountability Act are both important laws designed to:

|a. |protect the channels of commerce |

|b. |restrict alcohol and tobacco advertising |

|c. |eliminate certain products from being advertised on children’s television programs |

|d. |protect consumers from identity theft |

|e. |penalize marketers selling merchandise with counterfeit brand names |

ANS: D PTS: 1 REF: 42 OBJ: 03-9 TYPE: Def

TOP: AACSB Analytic| TB&E Model Strategy

Chapter 2

3. Strategic plans require:

|a. |long-term resource commitments |

|b. |a change in organizational structure |

|c. |the addition of new personnel |

|d. |new product development |

|e. |changes in prices |

ANS: A

Strategic plans are long-range plans that involve developing, organizing, and controlling marketing activities.

PTS: 1 REF: 15 OBJ: 02-1 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

4. _____ is the managerial process of creating and maintaining a fit between the organization's objectives and resources and evolving market opportunities.

|a. |Tactical management |

|b. |The market audit |

|c. |Functional planning |

|d. |Environmental scanning |

|e. |Strategic planning |

ANS: E PTS: 1 REF: 15 OBJ: 02-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

7. Which of the following statements about a marketing plan is true?

|a. |Marketing plans can exist as oral traditions. |

|b. |The marketing plan should be viewed as a series of sequential steps. |

|c. |All marketing plans have basically the same content. |

|d. |A marketing plan is created so an organization can meet its marketing objectives. |

|e. |All of the statements about a marketing plan are true. |

ANS: D

By definition, marketing plans are written. Several steps of the marketing plan can be done at the same time. The content of marketing plans varies.

PTS: 1 REF: 15 OBJ: 02-1 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

8. _____ is the process of anticipating events and determining strategies to achieve organizational objectives.

|a. |Planning |

|b. |Portfolio evaluation |

|c. |Forecasting |

|d. |Implementation |

|e. |Evaluation |

ANS: A PTS: 1 REF: 15 OBJ: 02-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

10. Marketing plans should be written to do all of the following EXCEPT:

|a. |compare actual and expected performance |

|b. |provide clearly stated activities |

|c. |create common goals for employees to work toward |

|d. |allow managers to enter the marketplace with an awareness of possibilities and problems |

|e. |control the elements of the external marketing environment |

ANS: E

Marketing environment variables cannot be controlled.

PTS: 1 REF: 16 OBJ: 02-1 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

11. Which of the following is one of the elements of the marketing plan?

|a. |a business mission statement |

|b. |a situation analysis |

|c. |a target market strategy |

|d. |the marketing mix |

|e. |all of the choices |

ANS: E

See Exhibit 2.1.

PTS: 1 REF: 17 OBJ: 02-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

13. The _____ answers the question, "What business are we in, and where are we going?"

|a. |mission statement |

|b. |financial statement |

|c. |situation analysis |

|d. |market strategy |

|e. |strategic plan |

ANS: A PTS: 1 REF: 18 OBJ: 02-2 TYPE: Def

TOP: AACSB Analytic| TB&E Model Strategy

17. The focus of an organization's mission statement should be on:

|a. |the products it wishes to sell |

|b. |the market it wishes to serve |

|c. |its social responsibilities |

|d. |the desires of government regulators |

|e. |technologies it understands well |

ANS: B

The choice of the market to serve determines the product and technology decisions.

PTS: 1 REF: 18 OBJ: 02-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

20. _____ occurs when a business is defined in terms of goods and services rather than by the benefits customers seek from it.

|a. |A circle trap |

|b. |A market barrier entry |

|c. |A reactive focus |

|d. |Unempowerment |

|e. |Marketing myopia |

ANS: E PTS: 1 REF: 18 OBJ: 02-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product

21. A popular technique for managing a large organization with different technologies and markets is to divide it into:

|a. |strategic business units |

|b. |different technologies |

|c. |strategic target markets |

|d. |design matrices |

|e. |tactical segments |

ANS: A PTS: 1 REF: 18 OBJ: 02-2 TYPE: Def

TOP: AACSB Analytic| TB&E Model Strategy

22. The acronym SBU refers to:

|a. |stock in business units |

|b. |strategic business unit |

|c. |standard business utilization |

|d. |strategic barter units |

|e. |samples by units |

ANS: B PTS: 1 REF: 18 OBJ: 02-2 TYPE: Def

TOP: AACSB Analytic| TB&E Model Strategy

25. An SBU:

|a. |competes with the same companies as the other SBUs in the parent organization |

|b. |shares the same mission with all the other SBUs in the parent organization |

|c. |controls its business independent of other SBUs in the organization |

|d. |usually benefits from the combined corporate raw materials purchases |

|e. |still has strategic planning performed back at corporate headquarters |

ANS: C

SBUs have separate business functions from one another and have their own mission statements, markets, and planning.

PTS: 1 REF: 18 OBJ: 02-2 TYPE: Def

TOP: AACSB Analytic| TB&E Model Strategy

27. After management agrees on a mission statement, it must set objectives. Which of the following is NOT a characteristic of a good objective?

|a. |profitable |

|b. |realistic |

|c. |measurable |

|d. |time-specific |

|e. |consistent |

ANS: A

Good objectives are not necessarily stated in terms of profit.

PTS: 1 REF: 18 OBJ: 02-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Pricing

28. A _____ is defined as a statement of what is to be accomplished through marketing activities.

|a. |mission statement |

|b. |business plan |

|c. |marketing objective |

|d. |goal-driven directive |

|e. |marketing criteria |

ANS: C PTS: 1 REF: 18 OBJ: 02-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

30. When an organization creates a mission statement that is too narrow, _____ results.

|a. |marketing synergy |

|b. |marketing myopia |

|c. |directional marketing |

|d. |an internal threat |

|e. |sustainable competitive advantage |

ANS: B

Marketing myopia defines a business in terms of goods and services rather than in terms of benefits customers seek. See Review Learning Outcome 2.

PTS: 1 REF: 18 OBJ: 02-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product

35. For marketing objectives to be realized, they must meet all of the following criteria EXCEPT:

|a. |be consistent with organization objectives |

|b. |be measurable |

|c. |be attainable |

|d. |be challenging |

|e. |be set within a one-year time frame |

ANS: E

There is no one-year time frame restriction for marketing objectives although specifying a particular time frame makes an objective more clear and precise.

PTS: 1 REF: 18 OBJ: 02-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

37. A _____ is a formal study conducted by an organization to ascertain its current status and capabilities and its future expectations.

|a. |situation analysis |

|b. |marketing audit |

|c. |trend analysis |

|d. |strategic alternative selection |

|e. |competitive advantage audit |

ANS: A PTS: 1 REF: 19 OBJ: 02-4 TYPE: Def

TOP: AACSB Analytic| TB&E Model Research

39. The SWOT acronym refers to a firm’s analysis of its:

|a. |sales, width of product mix, observations, and technology |

|b. |situations, wealth, organizational strengths, and target markets |

|c. |strengths, weaknesses, opportunities, and threats |

|d. |service levels, willingness to spend, organizational culture, and total revenues |

|e. |strategies, willingness to change, objectives, and trends |

ANS: C PTS: 1 REF: 19 OBJ: 02-4 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

43. _____ is defined as the collection and interpretation of information about forces, events, and relationships that may affect the organization.

|a. |Market sampling |

|b. |An internal audit |

|c. |Opportunity analysis |

|d. |Environmental scanning |

|e. |Stakeholder analysis |

ANS: D PTS: 1 REF: 19 OBJ: 02-4 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Research

61. _____ show costs declining at a predictable rate as experience with a product increases.

|a. |Liquidity growth curves |

|b. |EOQ graphs |

|c. |Breakeven analyses |

|d. |Experience curves |

|e. |Supply/demand curves |

ANS: D PTS: 1 REF: 20 OBJ: 02-5 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product| TB&E Model Pricing

62. Which of the following is NOT a source of a cost competitive advantage?

|a. |reengineering |

|b. |experience curves |

|c. |break-even analyses |

|d. |efficient labor |

|e. |production innovation |

ANS: C PTS: 1 REF: 20-21 OBJ: 02-5 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Pricing

67. Which of the following is a type of strategic alternative that matches products and markets?

|a. |vertical integration |

|b. |product penetration |

|c. |divestment |

|d. |horizontal integration |

|e. |market penetration |

ANS: E PTS: 1 REF: 22 OBJ: 02-6 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

68. _____ is a strategy of increasing market share for present products in existing markets.

|a. |Market penetration |

|b. |Product development |

|c. |Market development |

|d. |Diversification |

|e. |Product penetration |

ANS: A PTS: 1 REF: 22 OBJ: 02-6 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

70. _____ is a strategy that attracts new customers to existing products.

|a. |Product development |

|b. |Market development |

|c. |Market penetration |

|d. |Product penetration |

|e. |Diversification |

ANS: B PTS: 1 REF: 22 OBJ: 02-6 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

75. _____ is a strategy that creates new products for present markets.

|a. |Product penetration |

|b. |Market penetration |

|c. |Product development |

|d. |Market development |

|e. |Diversification |

ANS: C PTS: 1 REF: 22 OBJ: 02-6 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

76. _____ is the strategy of increasing sales by introducing new products into new markets.

|a. |Product penetration |

|b. |Product development |

|c. |Market penetration |

|d. |Market development |

|e. |Diversification |

ANS: E PTS: 1 REF: 22 OBJ: 02-6 TYPE: Def

TOP: AACSB Diversity| TB&E Model Strategy| TB&E Model International Perspective

102. A(n) _____ describes and estimates the size and sales potential of market segments of interest to the firm and assesses key competitors in these market segments.

|a. |marketing orientation |

|b. |environmental scan |

|c. |marketing mix audit |

|d. |target market strategy |

|e. |market opportunity analysis |

ANS: E PTS: 1 REF: 24 OBJ: 02-7 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

105. The _____ is the unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.

|a. |internal environmental mix |

|b. |marketing mix |

|c. |product mix |

|d. |product line |

|e. |market portfolio |

ANS: B PTS: 1 REF: 25 OBJ: 02-8 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

106. The starting point of any firm's marketing mix is the:

|a. |analysis of what production equipment is available and owned by the company |

|b. |design of the promotion campaign to be used for the product |

|c. |selection of the places through which the good or service will be sold |

|d. |determination of the product's price, enabling future revenues and budgets to be estimated |

|e. |development of the good or service to be sold |

ANS: E

The product is the starting point for any marketing mix. Without it, pricing, distribution, and promotion are irrelevant. The production capacity can be changed to fit the proposed product.

PTS: 1 REF: 25 OBJ: 02-8 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

109. Making sure products are available when and where customers want them is the job of which element of the marketing mix?

|a. |advertising strategies |

|b. |production strategies |

|c. |product strategies |

|d. |promotion strategies |

|e. |distribution strategies |

ANS: E

Distribution strategies make products available when and where customers want them.

PTS: 1 REF: 25-26 OBJ: 02-8 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Distribution| TB&E Model Product

Chapter 4 (Current text edition chapter 5)

MULTIPLE CHOICE

1. Individuals and organizations utilizing a global vision to effectively market goods and services across national boundaries are engaged in:

|a. |developing international selling schemes |

|b. |implementing standard international marketing |

|c. |implementing global marketing standardization |

|d. |supplementing their foreign vision |

|e. |practicing global marketing |

ANS: E PTS: 1 REF: 47 OBJ: 04-1 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Product

3. Which of the following statements about global marketing is true?

|a. |Marketing to target markets throughout the world has become an imperative for business. |

|b. |Often a U.S. firm's toughest domestic competition comes from foreign companies. |

|c. |Marketing managers must develop a global vision not only to recognize and react to international marketing opportunities|

| |but also to remain competitive at home. |

|d. |Adopting a global vision can be lucrative for a company, and global marketing can offset weak domestic performance. |

|e. |All of these statements about global marketing are true. |

ANS: E PTS: 1 REF: 47 OBJ: 04-1 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model International Perspective

6. Which of the following statements about multinational firms is true?

|a. |Multinationals typically do not change their methods of reaching their global markets if they are successful with their |

| |initial strategy. |

|b. |Multinationals are defined as companies heavily engaged in exporting and importing. |

|c. |All multinationals must enter the fourth stage of globalization before they are fully internationalized. |

|d. |Multinationals often develop their global businesses in stages. |

|e. |The five stages of globalization closely mirror the five stages of the product life cycle. |

ANS: D

Multinationals can go through up to four stages in their quest to globalize their business. Generally, only high-tech firms ever reach the fourth stage. Multinationals are companies that heavily engage in international trade, beyond exporting and importing.

PTS: 1 REF: 49-50 OBJ: 04-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model International Perspective

7. A(n) _____ is a company that is heavily engaged in global trade and moves its resources, goods, services, and skills across national boundaries.

|a. |international facilitator |

|b. |global trader |

|c. |multinational corporation |

|d. |exporting company |

|e. |international merchant |

ANS: C PTS: 1 REF: 49-50 OBJ: 04-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Distribution

10. Which of the following describes a common criticism of multinational companies?

|a. |the transference of the wrong kind of technology to a developing nation |

|b. |excessive employment information |

|c. |countertrading |

|d. |the transference of labor-intensive technology |

|e. |dumping |

ANS: A

Typically, the technology needed to run operations in developing nations is capital-intensive and thus does not substantially increase employment.

PTS: 1 REF: 50 OBJ: 04-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model International Perspective

11. A company that is capital-intensive:

|a. |has an altered fiscal strategy for overseas operations |

|b. |spends more on equipment than on labor |

|c. |makes better use of benchmarking than other types of business |

|d. |creates employment monopolies |

|e. |must engage in countertrading due to restrictive foreign legislature |

ANS: B PTS: 1 REF: 50 OBJ: 04-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model International Perspective

13. With a _____, a firm produces standardized products to be sold the same way all over the world.

|a. |traditional marketing strategy |

|b. |global marketing standardization approach |

|c. |product extension approach |

|d. |culturally based marketing strategy |

|e. |synergistic approach to marketing |

ANS: B PTS: 1 REF: 50 OBJ: 04-2 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Product

14. Global marketing standardization:

|a. |is becoming less popular with the large multinationals |

|b. |encourages product, packaging, and advertising variations for each nation or local market |

|c. |actually raises production costs |

|d. |presumes markets throughout the world are becoming more alike |

|e. |is more popular with consumer products than with industrial goods |

ANS: D

With a global marketing standardization approach, a firm produces standardized products to be sold the same way worldwide. This approach assumes all customers have the same needs and wants.

PTS: 1 REF: 50 OBJ: 04-2 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model International Perspective

16. A business thinking of expanding into global markets needs to examine all of the following external environments EXCEPT:

|a. |culture |

|b. |political structure and actions |

|c. |its marketing mix |

|d. |natural resources |

|e. |demographic makeup |

ANS: C

The marketing mix is the keystone of a company's internal environment.

PTS: 1 REF: 50 OBJ: 04-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Strategy

17. Central to any society is a common set of values shared by its citizens that determines what is socially acceptable. Marketers refer to these values collectively as a country's:

|a. |ethical system |

|b. |culture |

|c. |ethnocentricity |

|d. |national personality |

|e. |socialization |

ANS: B PTS: 1 REF: 50-51 OBJ: 04-3 TYPE: Def

TOP: AACSB Diversity| TB&E Model Customer

24. Which of the following is an important cultural factor that should be considered by global marketers?

|a. |competitive synergy |

|b. |language |

|c. |natural resources |

|d. |technology sensitivity |

|e. |level of economic development |

ANS: B PTS: 1 REF: 51 OBJ: 04-3 TYPE: Comp

TOP: AACSB Diversity| TB&E Model Strategy

26. Which of the following statements about the political environment is true?

|a. |A recession is part of the political environment. |

|b. |A country is either socialistic or capitalistic, but never both. |

|c. |The countries with the least across-the-board regulations and political structures foster the strongest economies. |

|d. |The European Union is purely an economic arrangement and has no political impact on marketing. |

|e. |All of these statements about the political environment are true. |

ANS: C

Recession is an economic factor. Countries are a combination of socialism and capitalism. The European Union is a means for the member nations to pursue an economic, monetary, and political union.

PTS: 1 REF: 51-52 OBJ: 04-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

31. A tax levied on the goods entering a country is called a(n):

|a. |license |

|b. |quota |

|c. |boycott |

|d. |exchange control |

|e. |tariff |

ANS: E PTS: 1 REF: 52 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product

33. A(n) _____ is a limit on the amount of a specific product that can enter a country.

|a. |quota |

|b. |tariff |

|c. |boycott |

|d. |exchange control |

|e. |transfer limit |

ANS: A PTS: 1 REF: 52 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product

36. An exclusion of all products from certain countries or companies by a government or group is called a(n):

|a. |expropriation |

|b. |quota |

|c. |tariff |

|d. |exchange control |

|e. |boycott |

ANS: E PTS: 1 REF: 52 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Product

39. A(n) _____ is a law that compels a company earning foreign currency from its exports to sell it to a central bank rather than sending the money out of the country.

|a. |tariff |

|b. |quota |

|c. |fiscal prerequisite |

|d. |exchange control |

|e. |transfer barrier |

ANS: D PTS: 1 REF: 52 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Pricing

40. _____ are trade alliances in which several countries agree to work together to form a common trade area that enhances trade opportunities among those countries.

|a. |Boycotts |

|b. |Regional unifications |

|c. |Market groupings |

|d. |Free trade nations |

|e. |Expropriation members |

ANS: C PTS: 1 REF: 52 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

41. Negotiations (such as GATT or the Uruguay Round) between countries that are made to stimulate global exchange and remove barriers are called _____ agreements.

|a. |trade |

|b. |joint venture |

|c. |CRM |

|d. |exchange |

|e. |licensing |

ANS: A PTS: 1 REF: 52 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

42. _____ is a trade agreement that includes Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, and Uruguay. This agreement eliminated the tariffs among these trading partners.

|a. |NAFTA |

|b. |Maastricht |

|c. |WTO |

|d. |GATT |

|e. |Mercosur |

ANS: E PTS: 1 REF: 52 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

43. The latest round of World Trade Organization (WTO) talks has been contentious. A major goal of this _____ is to bolster the developing economies of Africa, Asia, and Latin America where up to two-thirds of the population works in agriculture.

|a. |Mercosur covenant |

|b. |CAFTA Alliance |

|c. |Doha Round |

|d. |Uruguay Round |

|e. |WTO Round |

ANS: C PTS: 1 REF: 52-53 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model International Perspective

44. The _____ of trade negotiations created the _____, which replaces GATT. This trade agreement dramatically lowers trade barriers worldwide.

|a. |Uruguay Round; World Trade Organization |

|b. |Doha Round; European Union |

|c. |Doha Round; NAFTA |

|d. |Paraguay Round; South American Free Trade Agreement |

|e. |Mercosur; European Union |

ANS: A

The Uruguay Round created the WTO.

PTS: 1 REF: 53 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

45. The _____ is the most ambitious global trade agreement ever negotiated; the agreement has reduced tariffs by one-third worldwide.

|a. |Uruguay Round |

|b. |Mercosur |

|c. |GATT |

|d. |NAFTA |

|e. |Maastricht Treaty |

ANS: A PTS: 1 REF: 52-53 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

46. The North American Free Trade Agreement (NAFTA) did NOT:

|a. |create the world's largest free-trade zone including Canada, the United States, and Mexico |

|b. |substantially reduce economic growth in Mexico |

|c. |allow U.S. and Canadian financial-services companies to own subsidiaries in Mexico |

|d. |remove many tariffs and duties so that Mexico, Canada, and the United States can trade more freely |

|e. |expand opportunities for U.S. businesses in Mexico |

ANS: B

Over the years, Mexico has made economic gains due to NAFTA.

PTS: 1 REF: 53 OBJ: 04-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Distribution

48. The goal of the Central America Free Trade Agreement (CAFTA) is to:

|a. |create free-trade agreements between the United States and other industrialized nations |

|b. |eliminate all protectionism |

|c. |raise prosperity levels in all industrializing nations |

|d. |establish a free trade agreement between the United States and certain Latin American countries |

|e. |make sure all nations achieve the economic and technological development of a takeover economy or better |

ANS: D PTS: 1 REF: 53 OBJ: 04-3 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

49. Which of the following statements about the European Union (EU) is true?

|a. |The EU creates a single Europroduct for a generic Euroconsumer. |

|b. |The EU removes all internal trade barriers and standardizes regulations in European countries for easier trade. |

|c. |The EU can correctly be called the "United States of Europe" because all European voters have agreed to these changes. |

|d. |The existence of the EU eliminates protectionist movements by United Europe against the Japanese and the United States. |

|e. |None of these statements about the EU is true. |

ANS: E

Because of diverse languages and cultures, no "United States of Europe" or a generic Euroconsumer results from United Europe. There exists the possibility of a protectionist movement and increased competition. It does not eliminate all trade barriers.

PTS: 1 REF: 54 OBJ: 04-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

51. A multinational company that makes a labor-intensive product would be interested in the _____ makeup of countries. Factors such as median age, gender, and literacy rates would determine the success of its global expansion.

|a. |demographic |

|b. |lifestyle |

|c. |natural |

|d. |cultural |

|e. |economic |

ANS: A

Demographics include age and educational levels as well as ethnicity and gender.

PTS: 1 REF: 54-55 OBJ: 04-3 TYPE: App

TOP: AACSB Reflective Thinking| TB&E Model International Perspective

54. Vast differences in natural resources create all of the following EXCEPT:

|a. |potential for military intervention |

|b. |shifts in wealth between nations |

|c. |inflation and recession |

|d. |global dependencies |

|e. |export opportunities for countries with no natural resources |

ANS: E

While differences do create shifts in wealth, dependencies, inflation, recession, and the potential for conflict, they only hinder opportunities for the countries that do not have resources.

PTS: 1 REF: 55 OBJ: 04-3 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

55. Which method of entering the global marketplace would be LEAST risky?

|a. |exporting |

|b. |licensing |

|c. |contract manufacturing |

|d. |joint ventures |

|e. |direct investment |

ANS: A

See Exhibit 4.1.

PTS: 1 REF: 55-56 OBJ: 04-4 TYPE: Comp

TOP: AACSB Reflective Thinking| TB&E Model Strategy

63. A(n) _____ is a global intermediary that operates primarily in agriculture and raw materials by bringing the buyer and seller together.

|a. |buyer for export |

|b. |export agent |

|c. |license agent |

|d. |import agent |

|e. |export broker |

ANS: E PTS: 1 REF: 55 OBJ: 04-4 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

64. A cooperative of egg producers believes a profitable market for eggs exists overseas where people are not as concerned about cholesterol. If the cooperative decides to export, it will most likely use a(n):

|a. |commission merchant |

|b. |drop shipper |

|c. |export broker |

|d. |import agent |

|e. |export agent |

ANS: C

Export brokers typically handle agriculture and raw materials.

PTS: 1 REF: 56 OBJ: 04-4 TYPE: App

TOP: AACSB Analytic| TB&E Model Product

65. _____ are foreign sales agents-distributors who live in a foreign country and represent a domestic company in sales situations. They perform the same functions as domestic manufacturers' agents who help with financing and shipping.

|a. |Export agents |

|b. |Export brokers |

|c. |Import broker |

|d. |Buyers for export |

|e. |Licensing agents |

ANS: A PTS: 1 REF: 56 OBJ: 04-4 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Strategy

66. The _____ is an intermediary in the global market who assumes all risks and sells globally for its own account. The domestic manufacturer usually treats it like a domestic customer.

|a. |buyer for export |

|b. |export agent |

|c. |joint venturer |

|d. |contract manufacturer |

|e. |market group |

ANS: A PTS: 1 REF: 55 OBJ: 04-4 TYPE: Def

TOP: AACSB Reflective Thinking| TB&E Model Customer

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