Chapter 1—An Overview of Marketing
Chapter 1
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
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
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
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
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
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
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
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
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
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
94. What is the fundamental objective of most businesses?
|a. |employee empowerment, teamwork, and relationship marketing |
|b. |satisfied stakeholders |
|c. |low costs and high quality |
|d. |customer loyalty and retention |
|e. |survival, profits, and growth |
ANS: E
The use of marketing allows businesses to achieve this objective.
PTS: 1 REF: 11 OBJ: 01-4 TYPE: Comp
Chapters 3 & 4
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
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
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
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
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
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.
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
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.
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.
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
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.
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.
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
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
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
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
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
Chapter 2
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
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.
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
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.
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.
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.
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
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
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
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
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
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
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.
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.
Chapter 5
MULTIPLE CHOICE
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.
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.
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
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
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
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
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
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
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.
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.
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
Chapter 21
1. _____ is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer segments.
|a. |Organizational optimization |
|b. |Consumer relationship marketing (CRM) |
|c. |Total quality management (TQM) |
|d. |Customer relationship management (CRM) |
|e. |Market aggregation |
ANS: D PTS: 1 REF: 293 OBJ: 19-1 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy
5. Customer relationship management:
|a. |is often described as a closed-loop system |
|b. |only involves personnel in marketing and management departments |
|c. |organizes the company around functional departments |
|d. |is a very simplistic method of encouraging customer satisfaction |
|e. |is only a theory and has not been proven successful in any practical way |
ANS: A
CRM is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer segments.
PTS: 1 REF: 293 OBJ: 19-1 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy
6. To initiate the CRM cycle, a company must first:
|a. |establish marketing objectives |
|b. |decide on a segmentation strategy |
|c. |establish customer relationships with the organization |
|d. |determine the level of interaction customers have with the organization |
|e. |acquire and capture customer data for product categories |
ANS: C PTS: 1 REF: 293 OBJ: 19-1 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy
14. In a CRM environment, _____ is defined as the informal process of collecting customer information through customer contacts and feedback on product performance.
|a. |corporate modification |
|b. |attitude adjustment |
|c. |organizational perception |
|d. |stimulus/response research |
|e. |learning |
ANS: E PTS: 1 REF: 295-296 OBJ: 19-2 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Customer
15. _____ is the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization.
|a. |Knowledge management |
|b. |Learning |
|c. |Database marketing |
|d. |Interactive marketing |
|e. |Information marketing |
ANS: A PTS: 1 REF: 295 OBJ: 19-2 TYPE: Def
17. _____ refers to the latitude organizations bestow on their representatives to negotiate mutually satisfying commitments with customers.
|a. |Consumer learning |
|b. |Customerization |
|c. |Empowerment |
|d. |Autonomy |
|e. |Interaction |
ANS: C PTS: 1 REF: 296 OBJ: 19-2 TYPE: App
24. In a CRM system, _____ are all areas of the business where customers have contact with the company and data may be gathered and used to guide and direct the decision making within that business unit.
|a. |touch points |
|b. |focus areas |
|c. |data mining |
|d. |information search periods |
|e. |observational points |
ANS: A PTS: 1 REF: 297 OBJ: 19-3 TYPE: Def
32. An organization should view every transaction as:
|a. |simply a financial exchange |
|b. |deleterious to customer relationship management |
|c. |the opportunity to collect vast amounts of data about the customer |
|d. |the creation of customer-organization multiplicity |
|e. |the closing of a channel |
ANS: C PTS: 1 REF: 298 OBJ: 19-4 TYPE: Comp
33. When viewed as an interaction between the organization and the customer, a transaction can produce all of the following customer data EXCEPT:
|a. |name, address, and phone number |
|b. |information about the customer's relationship with other customers |
|c. |past purchase history |
|d. |information about the customer's relationship with the organization |
|e. |average amount spent on purchases |
ANS: B PTS: 1 REF: 298 OBJ: 19-4 TYPE: Comp
34. A(n) _____ is a central repository for data from various functional areas of the organization. These data can be shared by all of the organization's departments.
|a. |information mine |
|b. |knowledge distribution center |
|c. |information extraction unit |
|d. |information intermediary |
|e. |data warehouse |
ANS: E PTS: 1 REF: 298-299 OBJ: 19-5 TYPE: Def
57. Which of the following techniques used to analyze marketing databases considers whether a customer has made a purchase recently as well as how often that customer makes a purchase?
|a. |recency-frequency-monetary analysis (RFM) |
|b. |predictive modeling |
|c. |customer valuation |
|d. |data mining |
|e. |lifetime value analysis |
ANS: A PTS: 1 REF: 300 OBJ: 19-6 TYPE: Def
TOP: AACSB Technology| TB&E Model Customer
58. The basic assumption of _____ is that marketing to repeat customers is more profitable than marketing to first-time buyers.
|a. |customer segmentation |
|b. |predictive modeling |
|c. |customer valuation |
|d. |data manipulation |
|e. |lifetime value analysis |
ANS: E
Lifetime value analysis is a data manipulation technique that projects the future value of the customer over a period of years using the assumption that marketing to repeat customers is more profitable than marketing to first-time buyers.
PTS: 1 REF: 300 OBJ: 19-6 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
60. _____ uses a past set of occurrences to predict the likelihood that some other occurrence, such as a response or purchase, will take place in the future.
|a. |Customer manipulation |
|b. |Predictive modeling |
|c. |Data mining |
|d. |Lifetime value analysis |
|e. |Causal research |
ANS: B PTS: 1 REF: 301 OBJ: 19-6 TYPE: Def
Chapter 9—Decision Support Systems and Marketing Research
1. Everyday information about developments in the marketing environment that managers use to prepare and adjust marketing plans is referred to as:
|a. |competitive intelligence |
|b. |marketing information |
|c. |decision support information |
|d. |marketing research |
|e. |observation |
ANS: B
This describes marketing information, and accurate and timely information is the lifeblood of marketing decision making.
PTS: 1 REF: 139 OBJ: 09-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Knowledge
2. A(n) _____ is an interactive, flexible, computerized information system that enables managers to obtain and manipulate information as they are making decisions.
|a. |expert system |
|b. |marketing information system |
|c. |artificial intelligence system |
|d. |marketing decision support system |
|e. |database marketing system |
ANS: D
This is the definition of a marketing decision support system.
PTS: 1 REF: 139 OBJ: 09-1 TOP: AACSB Technology
KEY: CB&E Model Strategy MSC: BLOOMS Knowledge
4. A true marketing decision support system possesses all of the following characteristics EXCEPT:
|a. |flexible |
|b. |discovery oriented |
|c. |interactive |
|d. |accessible |
|e. |synergistic |
ANS: E
A true marketing decision support system is interactive, flexible, discovery oriented, and accessible.
5. _____ is the creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns.
|a. |Electronic targeting |
|b. |Sampling procedure specification |
|c. |Database marketing |
|d. |Competitive data mining |
|e. |Consumer behavior marketing |
ANS: C
This is the definition of database marketing.
6. _____ is the process of planning, collecting, and analyzing data relevant to a marketing decision. The results of this analysis are then communicated to management.
|a. |Data collection |
|b. |Artificial intelligence |
|c. |Decision support |
|d. |Marketing research |
|e. |Single-source research |
ANS: D
This is the definition of marketing research.
PTS: 1 REF: 140 OBJ: 09-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Research MSC: BLOOMS Knowledge
10. Marketing research has three functional roles. These roles are:
|a. |normative, descriptive, and explanatory |
|b. |predictive, normative, and persuasive |
|c. |descriptive, diagnostic, and predictive |
|d. |flexible, interactive, and discovery-oriented |
|e. |descriptive, explanatory, and predictive |
ANS: C
The three roles are descriptive, diagnostic, and predictive.
PTS: 1 REF: 140 OBJ: 09-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Research MSC: BLOOMS Knowledge
21. In contrast to marketing research problems, management decision problems are:
|a. |action oriented |
|b. |pervasive |
|c. |narrower in scope |
|d. |synergistic |
|e. |information oriented |
ANS: A
The marketing research problem is information oriented, but the management decision problem is action oriented.
PTS: 1 REF: 141 OBJ: 09-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Research MSC: BLOOMS Comprehension
23. Data previously collected for purposes other than the one at hand are an important source of information as the researcher defines the problem. These data are called _____ data.
|a. |single-source |
|b. |secondary |
|c. |primary |
|d. |consensual |
|e. |convenience |
ANS: B
This is the definition of secondary data.
25. Trade groups, commercial publications, and government departments can be used as sources of:
|a. |secondary data |
|b. |consensual information |
|c. |primary data |
|d. |artificial intelligence |
|e. |marketing audits |
ANS: A
Innumerable outside sources of secondary information exist, such as trade and industry associations, business periodicals, and government departments and agencies.
33. The research design specifies:
|a. |follow-up procedures for the research |
|b. |the information that will be found |
|c. |how the final report will be written |
|d. |how the information gathered will be used to predict external environmental changes |
|e. |the research questions to be answered |
ANS: E
The research design specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed.
34. Information collected for the first time for the purpose of solving a particular problem under investigation is called _____ data.
|a. |primary |
|b. |secondary |
|c. |dichotomous |
|d. |observation |
|e. |convenience |
ANS: A
This is the definition of primary data.
PTS: 1 REF: 142 OBJ: 09-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Research MSC: BLOOMS Knowledge
37. What is the chief advantage of primary data?
|a. |Low cost compared to secondary data |
|b. |Relevance to the problem at hand |
|c. |Availability to any interested party for use |
|d. |Accessibility through computerized databases |
|e. |Avoiding interviewer biases |
ANS: B
Primary data are information collected for the first time for the purpose of solving a particular problem under investigation.
41. The most popular method for gathering primary data is _____, in which a researcher interacts with people to obtain facts, opinions, and attitudes.
|a. |heuristic oriented |
|b. |survey research |
|c. |experiments |
|d. |observation research |
|e. |single-source research |
ANS: B
Survey research takes several forms and is the most popular method for gathering primary data.
42. In-home personal interviews:
|a. |offer high-quality data at a high cost |
|b. |offer the ability to obtain high-quality data at a low cost |
|c. |are becoming increasingly more popular |
|d. |are less expensive than mall intercepts |
|e. |offer information of moderate quality but at a low cost |
ANS: A
The cost of interviewer time and mileage is high, but these interviews yield high-quality information.
43. Which type of survey research method involves interviewing people in the common areas of shopping malls?
|a. |Telephone interviews |
|b. |Panel surveys |
|c. |Mall intercept interview |
|d. |Centralized interviews |
|e. |Interactive research |
ANS: C
This is the definition of a mall intercept interview.
50. Telephone interviews offer:
|a. |speed in gathering data |
|b. |a potential for reaching all households |
|c. |few nonresponses |
|d. |the ability to collect large amounts of complex data |
|e. |the lowest-cost method for obtaining data |
ANS: A
Telephone interviews are one of the fastest means for collecting data. See Exhibit 9.2.
75. _____ research depends on watching what people do.
|a. |Anonymous viewership |
|b. |Observation |
|c. |Interactive |
|d. |Personal scanner |
|e. |Survey |
ANS: B
Observation research is a method that relies on four types of observation: people watching people, people watching an activity, machines watching people, and machines watching an activity.
89. A(n) _____ sample is characterized by every element in the population having a known statistical likelihood of being selected.
|a. |irregular |
|b. |probability |
|c. |nonprobability |
|d. |convenience |
|e. |piggyback |
ANS: B
This is the definition of a probability sample.
93. A _____ sample is any sample in which little or no attempt is made to obtain a representative cross section of the population.
|a. |frame |
|b. |random |
|c. |probability |
|d. |nonprobability |
|e. |representational |
ANS: D
This is the definition of a nonprobability sample.
94. Nonprobability samples:
|a. |require more expensive marketing research than probability sampling |
|b. |include any sample in which little is done to obtain a representative cross section of the population |
|c. |by definition must be representative of the population |
|d. |often start out with random numbers to ensure selection of subjects is truly random |
|e. |offer an easy method for determining sampling error |
ANS: B
A nonprobability sample is any sample in which there is little or no attempt to obtain a representative cross section of the population.
103. Which of the following is a type of probability sample?
|a. |Judgment sample |
|b. |Convenience sample |
|c. |Random sample |
|d. |Quota sample |
|e. |Snowball sample |
ANS: C
A random sample is a type of probability sample in which every member of the population has a known and equal chance of selection. The other types of samples are nonprobability samples. See Exhibit 9.4.
116. All of the following are advantages associated with the use of Internet surveys EXCEPT:
|a. |decreased costs |
|b. |ability to contact hard-to-reach respondents |
|c. |reduced measurement error |
|d. |ability to get survey results much more rapidly |
|e. |ability to personalize the survey |
ANS: C
Measurement error is not an advantage associated with the use of Internet surveys.
118. All of the following are advantages associated with online focus groups EXCEPT:
|a. |good participation rates |
|b. |cost-effectiveness |
|c. |narrow geographic scope |
|d. |accessibility |
|e. |honesty of respondents |
ANS: C
Online focus groups offer a broad geographic scope.
123. Marketing research should not be undertaken when:
|a. |the perceived costs are greater than the projected benefits |
|b. |there are no secondary data in existence to guide the project definition |
|c. |it will take a long time to complete |
|d. |the actual costs are less than the forecasted benefits |
|e. |the perceived costs are the same as the forecasted benefits |
ANS: A
Research should be undertaken only when the expected value of the information is greater than the cost of obtaining it.
PTS: 1 REF: 154-155 OBJ: 09-6 TOP: AACSB Reflective Thinking
KEY: CB&E Model Research MSC: BLOOMS Analysis
124. An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors is called:
|a. |competitive research |
|b. |competitive intelligence |
|c. |industrial espionage |
|d. |an audit |
|e. |differential competitive advantage |
ANS: B
This is the definition of competitive intelligence.
MSC: BLOOMS Synthesis
Chapter 11—Developing and Managing Products
2. New-to-the-world products, where the product category itself is new, are also called:
|a. |discontinuous innovations |
|b. |moderate innovations |
|c. |slow-diffusing products |
|d. |venture products |
|e. |creative offerings |
ANS: A
These products create an entirely new market.
13. _____ occurs when an existing product is targeted toward new market segments. It is another type of new-product development because the product is new to that segment.
|a. |Brainstorming |
|b. |Diffusing |
|c. |Repositioning |
|d. |Screening |
|e. |Reciprocity |
ANS: C
Repositioned products are existing products targeted at new markets or market segments, or ones repositioned to change the current market’s perception of the product.
14. Companies that are most likely to succeed in the development and introduction of new products typically are characterized by all of the following EXCEPT:
|a. |establish an environment conducive to achieving new-product objectives |
|b. |make the long-term commitment needed to support innovation and new-product development |
|c. |capitalize on experience to achieve and maintain competitive advantage |
|d. |use a company-specific approach, driven by corporate objectives and strategies, with a well-defined new-product strategy|
| |at its core |
|e. |introduce ten new products every year |
ANS: E
Introducing a specific number of new products each year is not one of the factors identified for success.
16. The first stage of the new-product development process is:
|a. |screening and concept testing |
|b. |establishing the new-product strategy |
|c. |exploring opportunities |
|d. |developing a business analysis |
|e. |the building of a prototype |
ANS: B
See Exhibit 11.1. New-product strategy is the first subset of the organization’s new-product development plan. It specifies what roles new products play in the organization’s overall plan and describes goals.
18. Which of the following is the LEAST likely source for new-product ideas?
|a. |A company’s distributors |
|b. |Its customers |
|c. |Its employees |
|d. |Its financial lenders |
|e. |Its competitors |
ANS: D
Customers, employees, distributors, and competitors are interacting with the marketplace and may have ideas for goods to serve customer needs. The bank from which the company gets its debt financing is the least likely alternative here.
20. The process of converting applications for new technologies into marketable products is called:
|a. |basic research |
|b. |product modification |
|c. |marketing development |
|d. |product development |
|e. |correlation analysis |
ANS: D
Product development is a marketing strategy that entails the creation of marketable new products.
21. _____ is a process where a group thinks of as many ways to vary a product or solve a problem as possible without considering the practicality of the ideas.
|a. |New-product brain dumping |
|b. |Screening |
|c. |A focus group interview |
|d. |Brainstorming |
|e. |Diffusion |
ANS: D
The goal of brainstorming is to get a group to think of unlimited ways to vary a product or solve a problem, no matter how ridiculous it may seem.
24. Which of the following stages of the new-product development process is the first filter, which serves to eliminate new-product ideas that are inconsistent with the organization’s new-product strategy or are obviously inappropriate for some other reason?
|a. |Applied diffusion |
|b. |Introductory diffusion |
|c. |Business analysis |
|d. |Test marketing |
|e. |Idea screening |
ANS: E
Most new-product ideas are rejected at this stage, called the idea screening stage.
25. At what stage of the new-product development process are most new-product ideas rejected?
|a. |Test marketing |
|b. |Diffusion |
|c. |Business analysis |
|d. |Idea screening |
|e. |Idea generation |
ANS: D
Screening is the stage when the bulk of the ideas are rejected for being incompatible or impractical.
30. _____ evaluate new-product ideas usually before any prototype has been created.
|a. |Concept tests |
|b. |Simulated market tests |
|c. |Market tests |
|d. |User tests |
|e. |Venture analyses |
ANS: A
Concepts test are often used at the screening stage to rate concept (or product) alternatives.
PTS: 1 REF: 175 OBJ: 11-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Product MSC: BLOOMS Knowledge
34. In the _____ stage of new-product development, the technical feasibility of manufacturing the new product is examined as a prototype is produced.
|a. |screening |
|b. |development |
|c. |market testing |
|d. |concept testing |
|e. |business analysis |
ANS: B
During the development stage, the technical feasibility of manufacturing the product at a reasonable cost is thoroughly examined. This stage can be long and expensive and can involve a great deal of testing. Products are often modified after the testing.
35. A team-oriented approach to new-product development is referred to as:
|a. |simultaneous product development |
|b. |synergistic product development |
|c. |commercialized product development |
|d. |synchronized product development |
|e. |parallel product development |
ANS: A
The development process works best when all the involved areas (research and development, marketing, engineering, production, and even suppliers) work together rather than sequentially, a process call simultaneous product development.
37. _____ is a limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.
|a. |Use testing |
|b. |Test marketing |
|c. |Concept testing |
|d. |Laboratory testing |
|e. |Discontinuous innovation |
ANS: B
After products and marketing programs have been developed, they are usually tested in the marketplace using test marketing, which is the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.
39. A(n) _____ typically entails showing members of the product’s target market advertising and other promotional materials for several products, including the test product. These people are then taken to a mock or real store, where their purchases are recorded.
|a. |adoption-rate test |
|b. |real test market |
|c. |concept test |
|d. |simulated (laboratory) market test |
|e. |consumer juried test |
ANS: D
This is a description of a simulated (laboratory) market test.
PTS: 1 REF: 177-178 OBJ: 11-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Product | CB&E Model Research MSC: BLOOMS Knowledge
40. The maker of Purell hand sanitizer tested consumers’ reactions to its Purell Sanitizing Wipes by getting consumers to look through a newspaper with grocery store ads, make out a grocery list, and then “shop” in a mock store filled with real products, including the new product. This is an example of a(n):
|a. |adoption-rate test |
|b. |simulated (laboratory) market test |
|c. |concept test |
|d. |use test |
|e. |juried consumer test |
ANS: B
Simulated (laboratory) market tests typically entail showing members of the target market advertising for a variety of products and then monitoring purchase behavior in a mock or real store.
PTS: 1 REF: 177-178 OBJ: 11-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Product MSC: BLOOMS Application
41. Which of the following has been found to be an efficient substitute for traditional methods of conducting test markets?
|a. |Product sampling |
|b. |Simulated product adoption |
|c. |Online test marketing |
|d. |Simulated diffusion |
|e. |Market concentration |
ANS: C
The text describes Proctor & Gamble’s online test marketing.
42. The final stage in the new-product development process is:
|a. |product testing |
|b. |market testing |
|c. |commercialization |
|d. |product prototyping |
|e. |simulated marketing |
ANS: C
Commercialization is the decision to market a product.
43. During the _____ stage of the new-product development process, production starts, inventories are built up, the product is shipped to distribution points, the sales force is trained, and advertising and promotion begin.
|a. |commercialization |
|b. |product testing |
|c. |market analysis |
|d. |product prototyping |
|e. |simulated marketing |
ANS: A
The commercialization stage is the decision to market a product and sets several task in motion.
46. A product that is perceived as new by a potential adopter, whether the product is “new to the world” or simply new to the individual, is called a(n):
|a. |innovation |
|b. |diffusion |
|c. |discontinuous product |
|d. |laggard |
|e. |simulated new product |
ANS: A
An innovation is a product perceived as new by a potential adopter.
48. The process by which the adoption of an innovation spreads is referred to as:
|a. |diffusion |
|b. |circulation |
|c. |transmission |
|d. |dissemination |
|e. |dispersion |
ANS: A
This is the definition of diffusion.
50. _____ are eager to try new ideas and products. They typically have higher incomes, are better educated, and are more cosmopolitan than other categories of adopters.
|a. |Early adopters |
|b. |Innovators |
|c. |Early majority |
|d. |Late majority |
|e. |Laggards |
ANS: B
These are characteristics of innovators, who are almost obsessed with trying new ideas and products.
55. All of the following are categories of adopters in the diffusion process of innovations EXCEPT:
|a. |laggards |
|b. |innovators |
|c. |early majority |
|d. |early adopters |
|e. |doubters |
ANS: E
The five categories of adopters are innovators, early adopters, early majority, late majority, and laggards.
58. The _____ adopt a product because most of their friends have already done so, and their adoption is usually the result of pressure to conform because they rely on group norms.
|a. |laggards |
|b. |early adopters |
|c. |early majority |
|d. |innovators |
|e. |late majority |
ANS: E PTS: 1 REF: 180 OBJ: 11-4
TOP: AACSB Reflective Thinking KEY: CB&E Model Product | CB&E Model Strategy
MSC: BLOOMS Knowledge
63. Which is the last adopter category to adopt an innovation?
|a. |Late majority |
|b. |Laggards |
|c. |Late diffusers |
|d. |Reluctant adopters |
|e. |Traditionalists |
ANS: B
Laggards represent the final 16 percent to adopt an innovation. By the time they adopt an innovation, it has probably become outmoded and replaced by something else.
64. All of the following are product characteristics influencing the rate of adoption EXCEPT:
|a. |complexity |
|b. |compatibility |
|c. |relative advantage |
|d. |observability |
|e. |distribution |
ANS: E
While it is a marketing factor that may influence the rate of adoption of a new product, distribution is not a product factor influencing the rate of adoption.
65. Which product factor influencing the rate of adoption represents the degree of difficulty involved in understanding and using a new product?
|a. |Complexity |
|b. |Compatibility |
|c. |Relative advantage |
|d. |Observability |
|e. |Trialability |
ANS: A
The more complex the product, the slower is its diffusion.
67. Which product characteristic affecting the rate of adoption represents the degree to which the new product is consistent with existing values and product knowledge, past experiences, and current needs?
|a. |Complexity |
|b. |Compatibility |
|c. |Relative advantage |
|d. |Observability |
|e. |Trialability |
ANS: B
Products that are compatible with others will gain from existing product knowledge, past experiences, and current needs.
71. The product characteristic affecting the rate of adoption characterized by the degree to which a product is perceived as superior to existing substitutes is:
|a. |compatibility |
|b. |complexity |
|c. |relative advantage |
|d. |product differentiation |
|e. |competitive advantage |
ANS: C
The relative advantage is the degree to which a product is perceived to be superior to existing substitutes.
76. The degree to which a product can be used on a limited basis represents which product characteristic influencing the rate of adoption?
|a. |Complexity |
|b. |Trialability |
|c. |Observability |
|d. |Relative advantage |
|e. |Sampling |
ANS: B
Trialability is the degree to which a product can be tried on a limited basis.
81. All the brands that satisfy a particular type of need such as shaving products, laundry detergent, soft drinks, and furniture make up a(n):
|a. |product life cycle stage |
|b. |primary group |
|c. |adopter category |
|d. |product category |
|e. |reference group |
ANS: D
This is the definition of a product category.
PTS: 1 REF: 181 OBJ: 11-5 TOP: AACSB Reflective Thinking
KEY: CB&E Model Product MSC: BLOOMS Comprehension
85. The phase of the product life cycle in which healthy profits usually begin to appear is the _____ stage.
|a. |growth |
|b. |decline |
|c. |introductory |
|d. |maturity |
|e. |commercialization |
ANS: A
Because losses often occur during the introductory stage, profits first appear in the growth stage.
87. At the beginning of the maturity stage of the product life cycle, sales typically:
|a. |become flat and do not change |
|b. |increase at an increasing rate |
|c. |decrease at a decreasing rate |
|d. |decrease at an increasing rate |
|e. |increase at a decreasing rate |
ANS: E
In the maturity stage, sales are still increasing, but the rate of increase has slowed down.
89. In which stage of the product life cycle do marginal competitors start dropping out of the market?
|a. |Introduction |
|b. |Growth |
|c. |Maturity |
|d. |Decline |
|e. |Shake-out |
ANS: C
In the maturity stage, sales increase at a decreasing rate, and as prices and profits continue to fall, marginal competitors start dropping out of the market.
|Chapter 8 – Segmentation |
| |
| |
|A market is people or organizations that have: |
|a. |
|the ability, willingness, and power to buy |
| |
|b. |
|a medium of exchange and products they desire |
| |
|c. |
|needs and wants and an ability and willingness to buy |
| |
|d. |
|unmet needs or wants and products or services that satisfy those unmet needs or wants |
| |
|e. |
|communication, financial, and capital resources |
| |
| |
|ANS: C |
|A market is defined as having four imperative characteristics: people or organizations, needs and wants, ability to |
|buy, and willingness to buy. |
| |
| |
| |
|A(n) _____ is a subgroup of individuals or organizations sharing one or more characteristics that cause them to have |
|similar product needs. |
|a. |
|market universe |
| |
|b. |
|market segment |
| |
|c. |
|aggregated market |
| |
|d. |
|segmentation base |
| |
|e. |
|population sample |
| |
| |
|ANS: B |
|This is the definition of a market segment. |
| |
| |
| |
|_____ is the process of dividing a market into meaningful groups that are relatively similar and identifiable. |
|a. |
|Perceptual mapping |
| |
|b. |
|Positioning |
| |
|c. |
|Micromarketing |
| |
|d. |
|Market sampling |
| |
|e. |
|Market segmentation |
| |
| |
|ANS: E |
|This is the definition of market segmentation. |
| |
| |
| |
|The purpose of market segmentation is to: |
|a. |
|reduce the market down to a size the firm can handle |
| |
|b. |
|divide the market into equal size and profit regions for sales territories |
| |
|c. |
|group a large number of markets together, enabling a company to serve them simultaneously |
| |
|d. |
|develop a generalized definition of the market as a whole |
| |
|e. |
|enable the marketer to tailor marketing mixes to meet the needs of one or more specific groups |
| |
| |
|ANS: E |
|The purpose of segmentation is to group similar consumers and to serve their needs with a specialized marketing mix. |
| |
| |
| |
|All of the following are steps in the market segmenting process EXCEPT: |
|a. |
|determining the objectives of the segmentation strategy |
| |
|b. |
|profiling and analyzing segments |
| |
|c. |
|designing, implementing, and maintaining appropriate marketing mixes |
| |
|d. |
|selecting a market or product category for study |
| |
|e. |
|choosing a basis or bases for segmenting the market |
| |
| |
|ANS: A |
|The steps in segmenting a market are (1) select a market or product category for study; (2) choose a basis or bases |
|for segmenting the market; (3) select segmentation descriptors; (4) profile and analyze segments; (5) select target |
|markets; and (6) design, implement, and maintain appropriate marketing mixes. |
| |
| |
| |
| |
|All of the following are criteria for successful market segmentation EXCEPT: |
|a. |
|substantiality |
| |
|b. |
|identifiability and measurability |
| |
|c. |
|accountability |
| |
|d. |
|accessibility |
| |
|e. |
|responsiveness |
| |
| |
|ANS: C |
|The four criteria are substantiality, identifiability and measurability, accessibility, and responsiveness. |
| |
| |
| |
| |
| |
|To be useful, a segmentation scheme must produce segments that meet four basic criteria. The criteria are: |
|a. |
|segmentability, targetability, reliability and validity, and homogeneity |
| |
|b. |
|tangibility, inseparability, nonperishability, and uniqueness |
| |
|c. |
|substantiality, identifiability and measurability, accessibility, and responsiveness |
| |
|d. |
|reliability, flexibility, tangibility, and unbiased |
| |
|e. |
|complexity, compatability, relative advantage, trialability, and observability |
| |
| |
|ANS: C |
|Useful segments should be substantial, identifiable and measurable, accessible, and responsive to different marketing |
|mixes. |
| |
| |
| |
|According to the criterion of _____ a selected segment must be large enough to warrant developing and maintaining a |
|special marketing mix. Serving the specific needs of this segment must be commercially viable, even if the number of |
|potential customers is small. |
|a. causality |
|b. accountability |
|c. responsiveness |
|d. accessibility |
|e. substantiality |
| |
|ANS: E |
| |
| |
|_____ are characteristics of individuals, groups, or organizations that marketers use to divide a total market into |
|segments. |
|a. |
|Differentiation guides |
| |
|b. |
|Segmentation bases |
| |
|c. |
|Perceptual maps |
| |
|d. |
|Responsiveness quotients |
| |
|e. |
|Accessibility quotients |
| |
| |
|ANS: B |
|This is the definition of segmentation bases. |
| |
| |
| |
|Income, ethnic background, gender, and age are all examples of _____ segmentation bases. |
|a. |
|geodemographic |
| |
|b. |
|organizational |
| |
|c. |
|demographic |
| |
|d. |
|socioeconomic |
| |
|e. |
|psychographic |
| |
| |
|ANS: C |
|These are demographic characteristics of consumers. |
| |
| |
| |
| |
|_____ segmentation is based on personality, motives, and lifestyles. |
|a. |
|Psychographic |
| |
|b. |
|Demographic |
| |
|c. |
|Benefit |
| |
|d. |
|Family life cycle |
| |
|e. |
|Character |
| |
| |
|ANS: A |
|Personality, motives, and lifestyles are bases of psychographic segmentation. |
| |
| |
|_____ is the process of grouping customers into market segments according to the benefits sought from the product. |
|a. |
|Benefit segmentation |
| |
|b. |
|Value-added segmentation |
| |
|c. |
|Lifestyle segmentation |
| |
|d. |
|Macrosegmentation |
| |
|e. |
|Psychographic segmentation |
| |
|ANS: A |
|This is the definition of benefit segmentation. |
| |
| |
| |
|Which type of segmentation divides a market by the amount of product bought or consumed? |
|a. |
|Benefit segmentation |
| |
|b. |
|Characteristic segmentation |
| |
|c. |
|Usage-rate segmentation |
| |
|d. |
|Demographic segmentation |
| |
|e. |
|Psychographic segmentation |
| |
|ANS: C |
|This is the definition of usage-rate segmentation. |
| |
| |
| |
|A(n) _____ strategy entails selecting one segment of a market to target and focuses on understanding the needs, |
|motives, and satisfactions of the members of that segment, as well as on developing a highly specialized marketing |
|mix. |
|a. |
|universal product |
| |
|b. |
|undifferentiated targeting |
| |
|c. |
|concentrated targeting |
| |
|d. |
|market development |
| |
|e. |
|product development |
| |
|ANS: C |
|Concentrated targeting strategy selects one segment of a market for targeting marketing efforts. |
| |
| |
| |
|When a firm serves two or more well-defined market segments with a distinct marketing mix for each, it is using a(n) |
|_____ targeting strategy. |
|a. |
|undifferentiated |
| |
|b. |
|concentrated |
| |
|c. |
|niche |
| |
|d. |
|multisegment |
| |
|e. |
|pluralistic |
| |
|ANS: D |
|A firm that chooses to serve two or more well-defined market segments and develops a distinct marketing mix for each |
|has a multisegment targeting strategy. |
| |
| |
| |
| |
| |
| |
| |
| |
|Product positioning is the process of: |
|a. |
|finding the correct location for retail outlets to sell a product category |
| |
|b. |
|finding the right channel of distribution for a product |
| |
|c. |
|creating the desired image of the firm’s product |
| |
|d. |
|competing with competitors’ products in the retailers’ stores for the best position on the shelf |
| |
|e. |
|pricing the product to be at a competitive level with other brands on the market |
| |
| |
|ANS: C |
|Positioning is developing a specific marketing mix to influence potential customers’ overall perception of a brand, |
|product line, or organization in general. |
| |
| |
| |
|_____ is the development of a specific marketing mix to influence potential customers’ overall perception of a brand, |
|product line, or organization in general and is related to the place a product occupies in consumers’ minds relative |
|to competing offerings. |
|a. |
|Market differentiation |
| |
|b. |
|Diversification |
| |
|c. |
|Combination marketing |
| |
|d. |
|Positioning |
| |
|e. |
|Market aggregation |
| |
| |
|ANS: D |
|This is the definition of positioning. |
| |
| |
| |
|The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings is |
|referred to as a product’s: |
|a. |
|status |
| |
|b. |
|equity |
| |
|c. |
|frame |
| |
|d. |
|role |
| |
|e. |
|position |
| |
| |
|ANS: E |
|This is the definition of a product’s position. |
| |
| |
| |
| |
|Which of the following is a means of displaying or graphing, in two or more dimensions, the location of products, |
|brands, or groups of products in customers’ minds? |
|a. |
|Perceptual mapping |
| |
|b. |
|Product positioning |
| |
|c. |
|Market segmentation |
| |
|d. |
|Product tracing |
| |
|e. |
|Laddering |
| |
| |
|ANS: A |
|This is the definition of perceptual mapping |
| |
|A manufacturer of an all-natural fruit and veggie bar targeted to people who want nutritious snacks has asked for |
|marketing research to explain the reasons for the recent failure of its Apple-Broccoli bar. This type of research is |
|described as: |
|a. descriptive |
|b. predictive |
|c. diagnostic |
|d. normative |
|e. historical |
| |
|ANS: C |
|To help understand why attendance at the team’s games was so poor, the Atlanta Falcons used marketing research to |
|gather factual information. The organization used in-game surveys and end-of-season surveys of ticket holders. The |
|gathering of factual statements is an example of marketing research in its _____ role. |
|a. historical |
|b. descriptive |
|c. predictive |
|d. normative |
|e. objective |
| |
|ANS: B |
|Marketing research has three functional roles. These roles are: |
|a. normative, descriptive, and explanatory |
|b. predictive, normative, and persuasive |
|c. descriptive, diagnostic, and predictive |
|d. flexible, interactive, and discovery-oriented |
|e. descriptive, explanatory, and predictive |
| |
| |
|ANS: C |
|In contrast to marketing research problems, management decision problems are: |
|a. action oriented |
|b. pervasive |
|c. narrower in scope |
|d. synergistic |
|e. information oriented |
| |
|ANS: A |
Chapter 6—Consumer Decision Making
2. The steps of the consumer decision-making process in order are:
|a. |need recognition, alternative aggregation, reevaluation, purchase decision, postpurchase behavior |
|b. |need positioning, stimulus response reactions, evaluation of alternatives, purchase decision, postpurchase behavior |
|c. |need positioning, alternative aggregation and divestment, purchase decision, postpurchase evaluation |
|d. |information search, need positioning, evaluation of alternatives, product trial, purchase decision, postpurchase |
| |satisfaction |
|e. |need recognition, information search, evaluation of alternatives, purchase, and postpurchase behavior |
ANS: E
See Exhibit 6.1.
3. Which step in the consumer decision-making process is a result of an imbalance between actual and desired states?
|a. |Evaluation of alternatives |
|b. |Want recognition |
|c. |Purchase |
|d. |Need recognition |
|e. |Postpurchase behavior |
ANS: D
Need recognition is the result of an imbalance between actual and desired states.
5. Which of the following is any unit of input affecting one or more of the five senses: sight, smell, taste, touch, and hearing?
|a. |Tactic |
|b. |Need |
|c. |Stimulus |
|d. |Want |
|e. |Desire |
ANS: C
Stimuli can be either internal, such as occurrences you experience, or external, which are influences from an outside source. Both affect one or more of the five senses.
11. After a need or want is recognized, a consumer may search for information about the various alternatives available to satisfy it. This occurs during which part of the consumer decision-making process?
|a. |Evaluation of alternatives |
|b. |Information search |
|c. |Cognitive dissonance |
|d. |Consideration stage |
|e. |Product identification |
ANS: B
After recognizing a need or want, consumers search for information about the various alternatives available to satisfy it.
14. Which of the following is an information source that is not associated with advertising or promotion?
|a. |External |
|b. |Nonmarketing-controlled |
|c. |Marketing-controlled |
|d. |Unbiased |
|e. |Primary |
ANS: B
Nonmarketing-controlled information sources do not originate with marketers promoting the product.
15. An external information search is especially important when:
|a. |there is a great deal of past experience |
|b. |there are high costs associated with making an incorrect decision |
|c. |the cost of gathering information is high |
|d. |buying frequently purchased, low-cost items |
|e. |there is little risk of making an incorrect decision |
ANS: B
If a consumer perceives a purchase to involve high risk (financial, social, etc.), an external search will lower the risk by providing more information.
20. All of the following influence the extent to which an individual conducts an external search for information EXCEPT:
|a. |perceived risk |
|b. |knowledge |
|c. |prior experience |
|d. |social class |
|e. |level of interest |
ANS: D
Social class wouldn’t necessarily affect the amount of information search a consumer would conduct.
21. A group of brands, resulting from an information search, from which a buyer can choose is referred to as the buyer’s:
|a. |evoked set |
|b. |primary set |
|c. |inert set |
|d. |complete set |
|e. |justifiable set |
ANS: A
A buyer’s evoked set is the set of alternatives from which a buyer can choose; also called consideration set.
25. Extending a well-known and respected brand name from one product category to another product category is referred to as:
|a. |brand stretching |
|b. |brand extensions |
|c. |brand bouncing |
|d. |brand transfer |
|e. |brand building |
ANS: B
Brand extensions are common a way companies employ categorization to their advantage.
30. All of the following are ways consumers can reduce cognitive dissonance EXCEPT:
|a. |justifying the decision |
|b. |seeking new information |
|c. |sending a letter to the marketer |
|d. |avoiding contradictory information |
|e. |returning the product |
ANS: C
Cognitive dissonance is the inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.
31. How can marketers reduce consumers’ cognitive dissonance?
|a. |Offer guarantees |
|b. |Offer sales promotions |
|c. |Avoid contradictory information |
|d. |Change the product |
|e. |Ignore it |
ANS: A
Cognitive dissonance is an inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions, and marketers can reduce it by sending a postpurchase thank you or letter, displaying product superiority in ads, or offering guarantees.
32. _____ is the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior.
|a. |Economic value |
|b. |Involvement |
|c. |Opportunity cost |
|d. |Temporal cost |
|e. |Perceived level of personal risk |
ANS: B
This is the definition of involvement.
33. The types of products people purchase using routine response behavior are typically:
|a. |frequently purchased, low-cost items |
|b. |frequently purchased, high-cost items |
|c. |infrequently purchased, low-cost items |
|d. |infrequently purchased, high-cost items |
|e. |all types of items, regardless of price or frequency of purchase |
ANS: A
Routine response behavior is the type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services.
34. _____ is characterized by low involvement, a short time frame, an internal-only information search, and low costs.
|a. |Limited decision making |
|b. |Routine response behavior |
|c. |Emotional buying |
|d. |Intensive decision making |
|e. |Temporally-limited behavior |
ANS: B See Exhibit 6.2.
37. The type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category is referred to as:
|a. |routine response behavior |
|b. |limited decision making |
|c. |extensive decision making |
|d. |uninvolved decision making |
|e. |affective decision making |
ANS: B
This is the definition of limited decision making.
41. When a consumer is purchasing an unfamiliar, expensive product or an infrequently bought item, he or she is practicing:
|a. |extensive decision making |
|b. |cognitive harmonizing |
|c. |limited problem solving |
|d. |strategic behavior |
|e. |stimulus discrimination |
ANS: A
This is the definition of extensive decision making.
45. All of the following factors directly influence consumers’ level of involvement in the purchase process EXCEPT:
|a. |consumer’s age |
|b. |previous experience with the product |
|c. |financial risk associated with the product |
|d. |social visibility of the purchased item |
|e. |perceived risk of negative consequences as a result of the purchase |
ANS: A
Age is a demographic variable that doesn’t necessarily influence a consumer’s level of involvement.
54. An enduring belief that a specific mode of conduct is personally or socially preferable to an alternative mode of conduct is called a(n):
|a. |lifestyle |
|b. |self-concept |
|c. |attitude |
|d. |value |
|e. |perception |
ANS: D
This is the definition of a value.
55. Homogeneous groups of people who share elements of the overall culture as well as unique elements of their own group are called:
|a. |autonomous personal units |
|b. |probability samples |
|c. |subcultures |
|d. |normative groups |
|e. |dissociative groups |
ANS: C
58. A(n) _____ is a group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms.
|a. |extended family |
|b. |subculture |
|c. |dissociative group |
|d. |social class |
|e. |procreational family |
ANS: D
This is the definition of social class.
60. Social influences on consumer buying decisions include:
|a. |society, culture, and family |
|b. |reference groups, society, opinion leaders, and family |
|c. |personality, lifestyle, and reference groups |
|d. |reference groups, opinion leaders, and family |
|e. |lifestyle, reference groups, and family |
ANS: D
Lifestyle and personality are individual influences. Culture and society are cultural factors.
61. A group in society, such as family, friends, or a professional organization, that influences an individual’s purchasing behavior is called a(n):
|a. |reference group |
|b. |conformist group |
|c. |opinion group |
|d. |social group |
|e. |influential group |
ANS: A
This is the definition of reference group.
62. Reference groups can be categorized very broadly as either:
|a. |primary or secondary |
|b. |persuasive or nonpersuasive |
|c. |direct or indirect |
|d. |positive or negative |
|e. |personal or nonpersonal |
ANS: C
The two categorizations of reference group are direct and indirect.
65. A value or attitude deemed acceptable by a group is called a(n):
|a. |expectation |
|b. |reference |
|c. |aspiration |
|d. |opinion |
|e. |norm |
ANS: E
Norms are considered acceptable behavior by a given reference group.
68. Which category of reference groups represents groups in which a consumer does not have membership?
|a. |Direct |
|b. |Indirect |
|c. |Primary |
|d. |Secondary |
|e. |Incomplete |
ANS: B
Indirect reference groups are groups consumers do not belong to, but they might aspire to belong to one (aspirational group) or not want to be associated with one (nonaspirational group).
71. Opinion leaders are:
|a. |wealthy, well-educated individuals |
|b. |experts on all high-involvement consumer goods |
|c. |usually the same individuals for all social classes |
|d. |people who influence others |
|e. |easy to locate and target |
ANS: D
Opinion leaders are individuals who influence the opinions of others.
74. Cultural values and norms are passed down to children through the process of:
|a. |accumulation |
|b. |encroachment |
|c. |assimilation |
|d. |socialization |
|e. |manifestation |
ANS: D
Children are socialized to learn the culture within which they are raised.
77. All of the following are individual factors influencing consumer buying decisions EXCEPT:
|a. |gender |
|b. |age |
|c. |family |
|d. |personality |
|e. |life cycle stage |
ANS: C
A person’s buying decisions are influenced by personal characteristics that are unique to each individual, such as gender; age and life cycle stage; and personality, self-concept, and lifestyle. Family is a social factor influencing consumer buying decisions.
78. _____ is an orderly series of stages in which consumers’ attitudes and behavioral tendencies change through maturity, experience, and changing income and status.
|a. |Socialization |
|b. |The wheel of consumerism |
|c. |The family life cycle |
|d. |Lifestyle consumption |
|e. |Acculturation |
ANS: C
Families go through an orderly series of stages, and consumption attitudes and behaviors are influenced by one’s stage in the series.
79. An individual’s _____ is a composite of psychological makeup and environmental forces. It includes people’s underlying dispositions, especially their most dominant characteristics.
|a. |acculturation |
|b. |socialization |
|c. |personality |
|d. |autonomy |
|e. |attitude |
ANS: C
This describes personality, which is a way of organizing and grouping the consistencies of an individual’s reactions to situations.
80. _____ is how consumers perceive themselves in terms of attitudes, perceptions, beliefs, and self-evaluations.
|a. |Socialization |
|b. |Personality |
|c. |Socialization |
|d. |Normalization |
|e. |Self-concept |
ANS: E
This is the definition of self-concept.
81. Which of the following represents the way an individual actually perceives himself or herself?
|a. |Personal image |
|b. |Ideal self-image |
|c. |Real self-image |
|d. |Lifestyle image |
|e. |Defined self-image |
ANS: C
Self-image can be real, which is how a consumer actually perceives himself or herself, or ideal, which is the way an individual would like to be.
83. The process by which people select, organize, and interpret stimuli into a meaningful and coherent picture is called:
|a. |identification |
|b. |retention |
|c. |comprehension |
|d. |perception |
|e. |cognitive adaptation |
ANS: D
This is the definition of perception.
93. Ranked from the lowest to the highest level, Maslow’s hierarchy of needs model includes:
|a. |safety, esteem, social, physiological, and self-actualization needs |
|b. |physiological, social, esteem, economic, and self-actualization needs |
|c. |psychological, safety, economic, esteem, and social needs |
|d. |physiological, safety, social, esteem, and self-actualization needs |
|e. |safety, economic, social, esteem, and self-development needs |
ANS: D
See Exhibit 6.6.
94. According to Maslow’s hierarchy of needs model, the first needs most people would try to satisfy are their _____ needs.
|a. |safety |
|b. |physiological |
|c. |economic |
|d. |esteem |
|e. |derived |
ANS: B
The needs in order of lowest to highest are: physiological, safety, social, esteem, and self-actualization.
107. _____ is the learned ability to differentiate between similar objects such as packages of different brands of aspirin.
|a. |Incentive discrimination |
|b. |Stimulus generalization |
|c. |Selective perception |
|d. |Selective generalization |
|e. |Stimulus discrimination |
ANS: E
This is describing stimulus discrimination, which is a learned ability to differentiate among similar products.
109. Which of the following is an organized pattern of knowledge that an individual holds as true about his or her world?
|a. |Belief |
|b. |Value |
|c. |Affect |
|d. |Attitude |
|e. |Descriptor |
ANS: A
This is the definition of a belief.
111. _____ are learned tendencies to respond consistently toward a given object.
|a. |Motivational cues |
|b. |Cultures |
|c. |Lifestyles |
|d. |Perceptions |
|e. |Attitudes |
ANS: E
This is the definition of attitudes.
112. An attitude toward a product is:
|a. |easy to change |
|b. |a person’s point of view about the product |
|c. |the same as a belief |
|d. |the same as “intention to buy” |
|e. |of short duration |
ANS: B
“Point of view” is a simpler way to state “learned tendency to respond consistently.” Both denote an opinion.
Chapter 7—Business Marketing
2. A product is defined as a business product rather than a consumer good on the basis of its:
|a. |intended use |
|b. |physical characteristics |
|c. |price |
|d. |distribution method |
|e. |tangible attributes |
ANS: A
The key characteristic distinguishing business products from consumer products is intended use, not physical characteristics.
7. All of the following are current roles of the Internet in business marketing EXCEPT:
|a. |reduce costs |
|b. |eliminate distributors |
|c. |build channel partnerships and trust |
|d. |brand building and development |
|e. |integrate online and traditional media |
ANS: B
See Exhibit 7.2
PTS: 1 REF: 105 OBJ: 07-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Analysis
18. A particular segment of the business market includes those individuals and organizations that purchase goods and services for the purpose of making a profit. They achieve this goal by using purchased goods and services to make other goods, to become part of other goods, or to facilitate the daily operations of the organization. This group is called the _____ segment of the business market.
|a. |institution |
|b. |reseller |
|c. |wholesaler |
|d. |producer |
|e. |government |
ANS: D
This describes the producer segment of business customers.
23. Businesses that buy finished goods and sell them for a profit are called:
|a. |inventory carriers |
|b. |producers |
|c. |distribution networks |
|d. |resellers |
|e. |business facilitators |
ANS: D
The reseller market includes retail and wholesale businesses that buy finished goods and resell them for a profit.
26. The U.S. government is:
|a. |not a business market segment |
|b. |the world’s largest single customer |
|c. |an organization accounting for over 50 percent of the U.S. gross national product |
|d. |mainly a military equipment purchaser |
|e. |using one centralized purchasing office for the entire government |
ANS: B
The U.S. federal government is the world’s largest customer. The other alternatives do not apply because various branches of the government have separate purchasing departments, and billions of dollars are spent on food, clothing, desks, and other standard supply items (not just military hardware).
27. One segment of the business market has primary goals that differ from the ordinary business goals such as profit, market share, or return on investment. This segment includes many schools, churches, and civic clubs. Which business market is this?
|a. |Institutions |
|b. |OEMs |
|c. |Services |
|d. |Providers |
|e. |Resellers |
ANS: A
Institutions such as schools, churches, and hospitals have service or activity goals but not profit goals and are an important business market.
31. The government uses a system called NAICS to classify North American business establishments. NAICS stands for:
|a. |Non-American Industry Classification System |
|b. |North and South American Institutional Coding Services |
|c. |Non-American Industrial Corporation System |
|d. |North American Institution Code System |
|e. |North American Industry Classification System |
ANS: E
The North American Industry Classification System (NAICS) is an industry classification system for classifying North American business establishments.
34. Managers can use the NAICS data to:
|a. |create a more focused mission statement |
|b. |eliminate risk |
|c. |classify consumer behavior |
|d. |identify potential new customers |
|e. |determine purchase motives |
ANS: D
NAICS data can be converted to market potential estimates, market share estimates, and sales forecasts. It can also be used for identifying potential new customers.
35. All of the following are demand characteristics of business markets EXCEPT:
|a. |inelastic demand |
|b. |fluctuating demand |
|c. |joint demand |
|d. |stable demand |
|e. |derived demand |
ANS: D
Business markets are characterized by derived demand, inelastic demand, joint demand, and fluctuating demand.
36. The demand for consumer goods often affects the demand for business products. This characteristic of business markets is called _____ demand.
|a. |elastic |
|b. |inelastic |
|c. |fluctuating |
|d. |derived |
|e. |joint |
ANS: D
The demand for business products is called derived demand because organizations buy products to be used in producing their customers’ products.
40. When two or more items are used in combination to produce a final product, they are said to have _____ demand.
|a. |derived |
|b. |inelastic |
|c. |joint |
|d. |fluctuating |
|e. |elastic |
ANS: C
This is the definition of joint demand.
43. When demand for a product is _____, an increase or decrease in the price of the product will not significantly affect demand for the product.
|a. |responsive |
|b. |elastic |
|c. |inelastic |
|d. |derived |
|e. |bundled |
ANS: C
This is the definition of inelastic demand.
52. The distribution structure in business marketing typically:
|a. |includes at least one wholesaler |
|b. |is direct |
|c. |is complex and multistage |
|d. |uses a three-step channel |
|e. |uses retail distributors |
ANS: B
Direct channels, where manufacturers market directly to users, are much more common in business markets than in consumer markets.
53. _____ is commonplace in business marketing and can sometimes occur over several months.
|a. |Negotiation |
|b. |Need mediation |
|c. |Customerization |
|d. |Purchase arbitration |
|e. |Disintermediation |
ANS: A
Negotiating is common in business marketing.
54. If a business needs a particular good or service and decides to look among its own customers for a provider of that good or service, the business is:
|a. |working to create purchase arbitration |
|b. |opening itself up to prosecution for illegal activities |
|c. |acting unethically |
|d. |trying to eliminate derived demand barriers |
|e. |practicing reciprocity |
ANS: E
Reciprocity is the practice of business purchasers choosing to buy from their own customers.
58. _____ is the primary promotional method for the sale of all business products.
|a. |Direct mail |
|b. |Advertising |
|c. |Personal selling |
|d. |Public relations |
|e. |Trade promotions |
ANS: C
Business sales tend to be large in dollar amounts and quantities and may require negotiation; thus, they may rely heavily on the salesperson’s ability to communicate and work with the customer.
59. All of the following are considered types of business products EXCEPT:
|a. |raw materials |
|b. |convenience goods |
|c. |major equipment |
|d. |accessory equipment |
|e. |component parts |
ANS: B
The types of business products are major equipment, accessory equipment, raw materials, component parts, processed materials, supplies, and business services
Chapter 10 (5th Textbook Edition —Product Concepts)
MULTIPLE CHOICE
3. Why is creation of a product the starting point for the marketing mix?
|a. |The production department must know what to produce first. |
|b. |Production strategy is the first of the four Ps listed in the marketing mix. |
|c. |Determination of the price, promotional campaign, and distribution network cannot begin until the product has been |
| |specified. |
|d. |Product development takes the longest amount of time to complete. |
|e. |Actually, the product does not have to be the starting point--promotional strategies are often the starting point. |
ANS: C
The product is the first decision around which the others are based.
7. The consumer product classification system is based on:
|a. |how the market is segmented |
|b. |the way the products are manufactured |
|c. |the way products are used |
|d. |the physical attributes of the product |
|e. |the amount of effort consumers spend to acquire the product |
ANS: E
Products are classified by the amount of effort that is normally expended in the acquisition process.
8. _____ products are purchased with little shopping effort. These products typically are purchased regularly, usually with little planning, and require wide distribution.
|a. |Convenience |
|b. |Specialty |
|c. |Branded shopping |
|d. |Unbranded shopping |
|e. |Generic |
ANS: A PTS: 1 REF: 132 OBJ: 09-2 TYPE: Def
12. The convenience product marketing strategy includes:
|a. |wide distribution of the product |
|b. |higher than ordinary prices |
|c. |few retail outlets other than convenience stores |
|d. |significantly lower promotion budgets |
|e. |products that are not easily substitutable |
ANS: A
To sell large amounts of products that consumers are unwilling to search for, there must be a large number of retail outlets.
13. Compared to the other classifications of consumer products, shopping products are:
|a. |widely available so they need little or no promotion |
|b. |usually less expensive than convenience products |
|c. |purchased without significant planning |
|d. |usually more expensive than convenience products and are found in fewer stores |
|e. |purchased immediately after the consumer realizes he or she needs them |
ANS: D
Shopping products are typically items such as clothing, automobiles, and major appliances. Consumers usually compare items across brands or stores.
16. The two types of shopping products are:
|a. |unsought and convenience |
|b. |generic and family |
|c. |exclusive and intensive |
|d. |heterogeneous and homogeneous |
|e. |consumer and business |
ANS: D PTS: 1 REF: 132 OBJ: 09-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
17. _____ are products consumers see as being basically the same, so consumers shop for the lowest price.
|a. |Low-prestige specialty products |
|b. |Product equivalents |
|c. |Heterogeneous shopping products |
|d. |Generic convenience products |
|e. |Homogeneous shopping products |
ANS: E PTS: 1 REF: 132 OBJ: 09-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
19. _____ products are seen by consumers to differ in quality, style, suitability, and lifestyle compatibility. Comparisons between these products are often quite difficult because they may have unique features and different levels of quality and price.
|a. |Product equivalents |
|b. |Comparative convenience products |
|c. |Homogeneous shopping products |
|d. |Product counterparts |
|e. |Heterogeneous shopping products |
ANS: E PTS: 1 REF: 132 OBJ: 09-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
22. _____ products are searched for extensively, and substitutes are not acceptable. These products may be quite expensive, and often distribution is limited.
|a. |Exclusive shopping |
|b. |Homogeneous convenience |
|c. |Branded shopping |
|d. |Specialty |
|e. |Heterogeneous convenience |
ANS: D PTS: 1 REF: 132 OBJ: 09-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
27. _____ products are products that are not known about or not actively searched for by consumers. These products require aggressive personal selling and highly persuasive advertising.
|a. |Hidden |
|b. |Specialty |
|c. |Equity |
|d. |Unsought |
|e. |Shopping |
ANS: D PTS: 1 REF: 133 OBJ: 09-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
31. A product line is a group of products that are closely related because the:
|a. |products share the same product managers |
|b. |products all function in a similar manner and provide similar benefits |
|c. |same company developed the idea for each product |
|d. |products are all sold under the same brand name |
|e. |products are all priced about the same |
ANS: B
A product line is a group of closely related products offered by the organization that basically perform the same tasks and provide the same benefits.
35. Product mix width may be defined as:
|a. |the number of different product categories found within an industry |
|b. |the average number of products within each product line in the company |
|c. |the average number of products offered by the company |
|d. |the number of different product lines an organization offers for sale |
|e. |the extensiveness of the coverage of the line from high end (expensive) to low end (inexpensive) |
ANS: D PTS: 1 REF: 133 OBJ: 09-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
74. When a company markets several different products under the same brand name, it is referred to as a(n) _____ brand.
|a. |family |
|b. |generic |
|c. |bargain |
|d. |dealer |
|e. |umbrella |
ANS: A PTS: 1 REF: 137 OBJ: 09-4 TYPE: Def
Chapter 12 (5th Textbook Edition — Services and Nonprofit Organization Marketing)
MULTIPLE CHOICE
3. A(n) _____ is the result of applying human or mechanical efforts to people or objects.
|a. |application processor |
|b. |profit intermediary |
|c. |tangible product |
|d. |service |
|e. |nonprofit organization |
ANS: D PTS: 1 REF: 159 OBJ: 11-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
21. It is difficult to achieve consistency and standardization of services because of which service characteristic?
|a. |customization |
|b. |simultaneous production and consumption |
|c. |intangibility |
|d. |perishability |
|e. |heterogeneity |
ANS: E PTS: 1 REF: 160 OBJ: 11-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
24. Due to service _____, services cannot be stored, warehoused, or inventoried.
|a. |tangibility |
|b. |variability |
|c. |intangibility |
|d. |perishability |
|e. |heterogeneity |
ANS: D PTS: 1 REF: 161 OBJ: 11-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
27. Which of the following is NOT a service component customers use to evaluate service quality?
|a. |validity |
|b. |empathy |
|c. |assurance |
|d. |responsiveness |
|e. |reliability |
ANS: A PTS: 1 REF: 161 OBJ: 11-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
41. Which of the following is NOT an example of a type of service processing that can occur?
|a. |people processing |
|b. |product processing |
|c. |possession processing |
|d. |information processing |
|e. |mental stimulus processing |
ANS: B PTS: 1 REF: 163 OBJ: 11-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
43. Which of the following services is an example of possession processing?
|a. |a theatrical performance |
|b. |an X-ray of a broken bone |
|c. |an advertising agency |
|d. |marriage counseling |
|e. |heating system repair |
ANS: E
Possessions processing occurs when the service is directed to the customers’ physical possessions.
45. Which of the following services is an example of mental stimulus processing?
|a. |taxi cab service |
|b. |insurance |
|c. |a professional tennis match |
|d. |veterinarian care |
|e. |a hair cut |
ANS: C PTS: 1 REF: 163 OBJ: 11-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
46. Which of the following services is an example of information processing?
|a. |investment advice |
|b. |a funeral service |
|c. |pet neutering |
|d. |the fitting of orthodontic braces |
|e. |attendance at a Major League Baseball game |
ANS: A
Information processing describes services that use brain power directed at a customer’s assets.
50. The service offering of G&R Talent Agency is performers suitable for appearances on college campuses. This service is an example of the agency's _____ service.
|a. |standardized |
|b. |customized |
|c. |supplementary |
|d. |core |
|e. |component |
ANS: D
The core service is what the consumer is buying.
52. _____ is the strategy that uses technology to deliver customized services on a mass basis.
|a. |Mass standardization |
|b. |Aggregated services |
|c. |Technological processing |
|d. |Mass customization |
|e. |Aggregated marketing |
ANS: D PTS: 1 REF: 163 OBJ: 11-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
53. The ability of each hotel guest to use his or her room’s television to check out of the hotel room and to confirm additional charges on bills in the hotel's restaurants and gift shops is an example of:
|a. |a cooperative service |
|b. |mass customization |
|c. |aggregated standardization |
|d. |a market development strategy |
|e. |mental stimulus processing |
ANS: B PTS: 1 REF: 163 OBJ: 11-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
59. Promotion strategies for dealing with the unique features of services include all of the following EXCEPT:
|a. |using personal sources of information |
|b. |creating strong organizational images |
|c. |stressing tangible cues |
|d. |using postpurchase communication |
|e. |satisfying patronage-oriented objectives |
ANS: E
Patronage-oriented objectives are part of a service pricing strategy.
PTS: 1 REF: 164 OBJ: 11-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
Chapter 13 (5th Textbook Edition — Marketing Channels)
MULTIPLE CHOICE
1. A _____ is a business structure of interdependent organizations that reaches from the point of product origin to the consumer.
|a. |facilitating agency or place member |
|b. |marketing mix intermediary |
|c. |selective distribution channel |
|d. |marketing channel or channel of distribution |
|e. |transportation channel or channel of movement |
ANS: D PTS: 1 REF: 171 OBJ: 12-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
3. Distribution channels aid in overcoming barriers to exchange that are created in the production process by overcoming all of the following types of discrepancies EXCEPT:
|a. |possession |
|b. |assortment |
|c. |quantity |
|d. |spatial |
|e. |temporal |
ANS: A
Channels facilitate the end goal of possession of the goods, but they do not help to overcome a discrepancy of possession.
PTS: 1 REF: 172 OBJ: 12-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
4. A discrepancy of _____ is the difference between the amount of product produced and the amount an end user wants to buy.
|a. |space |
|b. |quantity |
|c. |assortment |
|d. |accumulation |
|e. |possession |
ANS: B PTS: 1 REF: 172 OBJ: 12-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product
6. If a retail outlet does not offer all the items necessary in order for the buyer to use or to receive full satisfaction from a product purchased there, there is a:
|a. |discrepancy of assortment |
|b. |discrepancy of quantity |
|c. |spatial discrepancy |
|d. |temporal discrepancy |
|e. |discrepancy of possession |
ANS: A PTS: 1 REF: 172 OBJ: 12-1 TYPE: Def
25. The three basic functions channel intermediaries perform are:
|a. |transactional, logistical, and facilitating |
|b. |contacting, negotiating, and ownership |
|c. |promoting, distributing, and bulk-breaking |
|d. |assorting, accumulating, and allocating |
|e. |financing, mediating, and storing |
ANS: A PTS: 1 REF: 174 OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
26. Transactional channel functions include all of the following activities EXCEPT:
|a. |contacting buyers |
|b. |promoting the products to be sold |
|c. |taking the risks associated with product inventories |
|d. |negotiating the sale |
|e. |physical distribution and sorting |
ANS: E
See also Exhibit 12.2.
27. Marketing channels perform all of the following logistical activities EXCEPT:
|a. |sorting |
|b. |storing |
|c. |grading |
|d. |risk taking |
|e. |assorting products into homogeneous or heterogeneous collections |
ANS: D
Risk taking is a transactional activity. See Exhibit 12.2
PTS: 1 REF: 174 OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
29. _____ describes the process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption.
|a. |Contract logistics |
|b. |Logistics |
|c. |Cross-docking |
|d. |Disintermediation |
|e. |Channel facilitation |
ANS: B PTS: 1 REF: 174 OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
31. Which of the following is NOT a sorting activity?
|a. |assorting |
|b. |accumulation |
|c. |sorting out |
|d. |allocation |
|e. |possession |
ANS: E
See Exhibit 12.2.
33. Which of the following are examples of facilitating functions performed by wholesaling intermediaries?
|a. |sorting and storing |
|b. |risk taking and promotion |
|c. |assorting, accumulating, grading, and allocating |
|d. |researching and financing |
|e. |financial management and storing |
ANS: D
See Exhibit 12.2.
PTS: 1 REF: 174 OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Research
35. One configuration of a marketing channel entails producers selling to consumers with no intermediaries involved. This is called a:
|a. |limited distribution system |
|b. |conventional channel |
|c. |vertical marketing system |
|d. |reciprocal channel |
|e. |direct channel |
ANS: E
See Exhibit 12.3 and Exhibit 12.4.
PTS: 1 REF: 175 OBJ: 12-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Distribution
37. A channel typically used for industrial products is the _____ channel.
|a. |direct |
|b. |industrial distributor |
|c. |wholesaler |
|d. |retailer |
|e. |extended |
ANS: A
See Exhibit 12.4.
39. Companies selling standardized items of moderate or low value to other businesses (not to consumers) often use:
|a. |retailers |
|b. |industrial distributors |
|c. |direct marketing organizations |
|d. |agents and brokers |
|e. |disintermediation |
ANS: B PTS: 1 REF: 175 OBJ: 12-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
41. _____ distribution occurs when a producer selects two or more different channels to distribute the same products to target markets.
|a. |Selective |
|b. |Intensive |
|c. |Multiple |
|d. |Contractual |
|e. |Cumulative |
ANS: C PTS: 1 REF: 176 OBJ: 12-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
49. _____ coordinates and integrates all of the activities performed by channel members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value.
|a. |Yield management |
|b. |Channel power |
|c. |Materials handling |
|d. |Supply chain management |
|e. |Physical distribution |
ANS: D PTS: 1 REF: 176 OBJ: 12-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer
59. _____ is distribution aimed at maximum market coverage. It is used for many convenience goods and supplies that need to be available in every outlet where the potential customer might want to buy them.
|a. |Selective distribution |
|b. |Channel franchising |
|c. |Intensive distribution |
|d. |Horizontal channeling |
|e. |Exclusive distribution |
ANS: C PTS: 1 REF: 178 OBJ: 12-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Distribution | TB&E Model Product
62. _____ distribution is achieved by screening dealers to eliminate all but a few in any single geographic area. Shopping goods and some specialty products that consumers are willing to search for are sold this way.
|a. |Intensive |
|b. |Selective |
|c. |Exclusive |
|d. |Dual |
|e. |Controlled |
ANS: B PTS: 1 REF: 178 OBJ: 12-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
66. The most restrictive form of market coverage, _____ distribution, entails establishing only one or a few dealers within a given geographic area. Because buyers need to be willing to search or travel to acquire the product, this form of distribution is limited to consumer specialty goods, a few shopping goods, and major industrial equipment.
|a. |selective |
|b. |intensive |
|c. |exclusive |
|d. |dual |
|e. |premium |
ANS: C PTS: 1 REF: 179 OBJ: 12-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
98. The mode of transportation that provides the most accessibility is:
|a. |pipelines |
|b. |airfreight |
|c. |truck freight |
|d. |water transport |
|e. |railroad |
ANS: C
Motor carriers (trucks) can go to more locations than any of the other modes of transportation.
100. One major advantage of pipelines over other modes of transportation is:
|a. |availability |
|b. |points served |
|c. |flexibility |
|d. |speed |
|e. |dependability |
ANS: E
Pipelines are rarely interrupted by weather, traffic, or labor disputes.
101. Which of the following describes a disadvantage associated with water transportation?
|a. |cannot be used for international trade |
|b. |high cost |
|c. |capability |
|d. |lack of speed |
|e. |product weight restrictions |
ANS: D
Shipping via water is the slowest mode of transportation.
102. Which of the following transportation modes can most easily determine the location of a package en route between shipper and receiver?
|a. |air |
|b. |truck |
|c. |rail |
|d. |pipe |
|e. |water |
ANS: A
In addition to speed, air transport offers an important additional benefit to shippers, the ease of tracing shipments. See Exhibit 12.5.
Chapter 16 (5th Textbook Edition —Integrated Marketing Communications)
MULTIPLE CHOICE
1. _____ is communications by marketers that inform, persuade, and remind potential buyers of a product in order to influence an opinion or elicit a response.
|a. |Distributive communication |
|b. |Perceptual communication |
|c. |Statistically provable advertising |
|d. |Promotion |
|e. |Publicity |
ANS: D PTS: 1 REF: 207 OBJ: 14-1 TYPE: Def
TOP: AACSB Communication | TB&E Model Promotion
4. The main function of a promotional strategy is to:
|a. |convince the target customers that a firm's products offer competitive advantages over those of its competition |
|b. |find a niche in the marketplace for the firm and its products |
|c. |provide the firm with research information about the success of its marketing effort |
|d. |create efficient distribution channels |
|e. |guarantee control over the length of the stages of the product life cycle |
ANS: A
The function of a promotional strategy is to convince the target customers that the goods and services offered provide a competitive advantage over the competition.
5. A _____ is defined as a set of unique features of a company and its products perceived by the target market as significant and superior to the competition.
|a. |comparative differentiation |
|b. |competitive advantage |
|c. |marketing mix |
|d. |special benefit |
|e. |promotional plan |
ANS: B PTS: 1 REF: 207 OBJ: 14-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
11. The promotional mix consists of:
|a. |advertising, publicity, direct marketing, and personal selling |
|b. |public relations, direct marketing, personal selling, and publicity |
|c. |product, promotion, price, and place |
|d. |advertising, personal selling, sales promotion, and public relations |
|e. |advertising, telemarketing, public relations, and sales promotions |
ANS: D PTS: 1 REF: 207-210 OBJ: 14-2 TYPE: Def
TOP: AACSB Communication | TB&E Model Promotion
14. _____ is any form of sponsor-identified, impersonal paid mass communication.
|a. |Advertising |
|b. |Publicity |
|c. |Promotion |
|d. |Public relations |
|e. |Nonpaid communication |
ANS: A PTS: 1 REF: 208 OBJ: 14-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Promotion
16. Which of the following statements about advertising is true?
|a. |The total costs of advertising are typically low. |
|b. |The signs on the outsides of buses and taxis are not a form of advertising. |
|c. |The cost per contact in advertising is low. |
|d. |Innovative media are not used in advertising. |
|e. |Advertising is any form of communication in which the sponsor is identified. |
ANS: C
The total costs of advertising are typically high even though the cost of contact is low. To be advertising, the communication must be paid for. Innovative media are used in advertising. The signs are a form of advertising because they are paid for and they identify their sponsors.
18. The marketing function that evaluates public attitudes, identifies areas within the organization that are of public interest, and executes a program of action to gain public understanding is:
|a. |public relations |
|b. |advertising |
|c. |implicit communications |
|d. |personal selling |
|e. |sales promotion |
ANS: A PTS: 1 REF: 208 OBJ: 14-2
TOP: AACSB Reflective Thinking | TB&E Model Promotion
20. Public information about a company, good, or service appearing in the mass media as a news item is:
|a. |personal selling |
|b. |advertising |
|c. |mass communications |
|d. |publicity |
|e. |sales promotion |
ANS: D PTS: 1 REF: 208-209 OBJ: 14-2 TYPE: Def
23. Which of the following statements about sales promotions is true?
|a. |Public relations cannot effectively be used with sales promotions. |
|b. |Sales promotion is a type of direct marketing. |
|c. |Marketers view sales promotions as more effective when they are created as long-term stimulation tools. |
|d. |Trade shows, coupons, premiums, and vacation giveaways are types of sales promotions. |
|e. |All sales promotions must be aimed outside the organization. |
ANS: D
Sales promotions can be used to improve the effectiveness of advertising and public relations activities. Sales promotions are most effective as short-term tools. Sales promotions are commonly directed at the organization's employees as well as to consumers and dealers.
24. _____ consists of all marketing activities that stimulate consumer purchasing such as coupons, contests, free samples, and trade shows.
|a. |Sales promotion |
|b. |Publicity |
|c. |Personal selling |
|d. |Advertising |
|e. |Sponsorship |
ANS: A PTS: 1 REF: 209 OBJ: 14-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Promotion
28. _____ is a purchase situation in which two or more people communicate in an attempt to influence each other.
|a. |Implicit communication |
|b. |Personal selling |
|c. |Mass communication |
|d. |Public relations |
|e. |Synergistic communication |
ANS: B PTS: 1 REF: 209-210 OBJ: 14-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Promotion
68. What are the three basic tasks of promotion?
|a. |informing, persuading, and convincing |
|b. |persuading, convincing, and reminding |
|c. |informing, convincing, and reminding |
|d. |informing, persuading, and reminding |
|e. |persuading, comparing, and reminding |
ANS: D PTS: 1 REF: 214 OBJ: 14-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Promotion
70. Informative promotion is generally used:
|a. |when memory stimulus is needed |
|b. |when the brand name is well-known to consumers |
|c. |during the early stages of the product life cycle |
|d. |during an attempt to gain the immediate action of a consumer |
|e. |when advertising a simple, nontechnical, mature product |
ANS: C
Informative promotion is a necessary ingredient for increasing demand for a product category and is used when the product is introduced.
75. The goal of persuasive promotion is to:
|a. |stimulate a purchase or other action |
|b. |increase brand awareness |
|c. |describe available services |
|d. |remind the consumers of where to buy the product |
|e. |maintain top-of-mind consumer awareness |
ANS: A
Persuasion generally attempts to motivate a consumer to purchase a product.
78. _____ promotion is used to keep a familiar brand name in the public's mind and is prevalent during the maturity stage of the product life cycle.
|a. |Influence |
|b. |Amusement |
|c. |Informative |
|d. |Persuasive |
|e. |Reminder |
ANS: E PTS: 1 REF: 214-215 OBJ: 14-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Promotion
81. Which of the following outlines a sequential four-step process for achieving promotional goals?
|a. |communication model |
|b. |hierarchy of impacts |
|c. |AIDA concept |
|d. |Maslow's hierarchy of needs |
|e. |Schramm's model |
ANS: C PTS: 1 REF: 215 OBJ: 14-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
83. AIDA stands for:
|a. |Attitude-Interest-Demand-Activity |
|b. |Attention-Interest-Desire-Action |
|c. |Awareness-Intent-Demand-Action |
|d. |Avoidance-Interest-Desire-Acceptance |
|e. |Attitudes-In-Developing-Acquisitions |
ANS: B PTS: 1 REF: 215 OBJ: 14-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
33. One method used for setting advertising objectives is:
|a. |campaign budgeting |
|b. |objective and task |
|c. |the DAGMAR approach |
|d. |percentage of sales |
|e. |contribution margin |
ANS: C PTS: 1 REF: 226 OBJ: 15-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
34. DAGMAR is an acronym for:
|a. |defining and achieving goals means advertising reach |
|b. |developing aggressive markets |
|c. |designing advertising with market research |
|d. |defining advertising goals for measured advertising results |
|e. |developing aggressive growth markets and revenues |
ANS: D PTS: 1 REF: 226 OBJ: 15-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
Chapter 19 (5th Textbook Edition —Pricing Concepts)
MULTIPLE CHOICE
1. According to the text, price is best described as:
|a. |the perceived value of a good or service |
|b. |money exchanged for a good or service |
|c. |the psychological results of purchasing |
|d. |the cost in dollars for a good or service as set by the producer |
|e. |the value of a barter good in an exchange |
ANS: A PTS: 1 REF: 255 OBJ: 17-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing
2. Revenue:
|a. |equals quantity sold times profit margin |
|b. |equals price minus costs |
|c. |equals return on investment |
|d. |is synonymous with profit |
|e. |equals price of goods times quantity sold |
ANS: E PTS: 1 REF: 255 OBJ: 17-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing
4. Money that is left over after paying for company activities is called:
|a. |return on investment |
|b. |a contribution margin |
|c. |profit |
|d. |net worth |
|e. |a current asset |
ANS: C PTS: 1 REF: 255 OBJ: 17-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing
10. For convenience, pricing objectives can be divided into three categories. They are:
|a. |refundable, competitive, and attainable |
|b. |perceived, actual, and unique-situational |
|c. |differentiated, niche, and undifferentiated |
|d. |profit oriented, sales oriented, and status quo |
|e. |monopolistic, fixed, and variable |
ANS: D PTS: 1 REF: 256-258 OBJ: 17-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
11. An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.
|a. |profit maximization |
|b. |market share pricing |
|c. |demand-oriented pricing |
|d. |sales maximization |
|e. |status quo pricing |
ANS: A PTS: 1 REF: 256 OBJ: 17-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
14. _____ measures the overall effectiveness of management in generating profits with its available assets.
|a. |Return on investment |
|b. |Economic order quantity |
|c. |Target-on-sales |
|d. |Retained earnings |
|e. |Efficiency maximization |
ANS: A PTS: 1 REF: 256 OBJ: 17-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
18. A company using market share pricing has a _____ pricing objective.
|a. |profit-oriented |
|b. |sales-oriented |
|c. |demand-oriented |
|d. |supply-oriented |
|e. |status quo |
ANS: B PTS: 1 REF: 257 OBJ: 17-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
19. Under which of the following conditions will companies with low market share be most likely to fail?
|a. |competing in a slow-growth industry |
|b. |competing in an industry that makes frequently purchased items |
|c. |competing in an industry with few product changes |
|d. |competing in an industry requiring market power and economies of scale |
|e. |competing in none of these industries |
ANS: D
A larger market share is required to boost economies of scale and market power.
PTS: 1 REF: 257 OBJ: 17-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
23. As a short-term pricing objective, _____ can be effectively used on a temporary basis to sell off excessive inventory.
|a. |profit maximization |
|b. |profit-oriented pricing |
|c. |status quo pricing |
|d. |sales maximization |
|e. |market share pricing |
ANS: D
Sales maximization pricing is a short-term price reduction to increase sales.
24. If a company's pricing objective is to meet the competition or to maintain existing prices, it is using _____ pricing.
|a. |head-on |
|b. |target return on investment |
|c. |status quo |
|d. |market share |
|e. |demand-oriented |
ANS: C PTS: 1 REF: 258 OBJ: 17-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
27. Although many factors can influence price, the primary determinants are:
|a. |costs of manufacturing and distribution |
|b. |the demand for the good and the cost to the seller |
|c. |demand by the consumer and perceived quality |
|d. |distribution and promotion strategies |
|e. |stage of the product life cycle and costs to the consumer |
ANS: B PTS: 1 REF: 258 OBJ: 17-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing
28. _____ is defined as the quantity of a product that will be sold at various prices for a specified period.
|a. |Market share |
|b. |Demand |
|c. |Supply |
|d. |Value |
|e. |Revenue |
ANS: B PTS: 1 REF: 258 OBJ: 17-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing
29. The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:
|a. |distribution |
|b. |costs |
|c. |demand |
|d. |promotion |
|e. |quality |
ANS: C
The quantity of a product that people will buy depends on its price.
34. Most demand curves slope:
|a. |horizontally |
|b. |upward and to the right |
|c. |downward and to the left |
|d. |vertically |
|e. |downward and to the right |
ANS: E
For most products when prices increase, demand will decrease.
35. The _____ is the quantity of a product that will be sold in the market at various prices for a specified time period, and _____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.
|a. |demand; equity |
|b. |demand; supply |
|c. |supply; demand |
|d. |inventory; demand |
|e. |inventory; supply |
ANS: B PTS: 1 REF: 258-259 OBJ: 17-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
36. _____ is defined as the quantity of product offered to the market by suppliers at various prices for a specified period.
|a. |Supply |
|b. |Demand |
|c. |Equity |
|d. |Liquidity |
|e. |Current asset |
ANS: A PTS: 1 REF: 258 OBJ: 17-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
38. The point at which there is no inclination for the price to rise or fall is called price:
|a. |equilibrium |
|b. |stability |
|c. |leverage |
|d. |symmetry |
|e. |status quo |
ANS: A PTS: 1 REF: 259 OBJ: 17-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
40. The responsiveness or the sensitivity of consumer demand to changes in price is referred to as _____ and occurs when consumers buy more or less of a product when the price changes.
|a. |the break-even point |
|b. |the point of equilibrium |
|c. |unitary revenue |
|d. |asymmetrical demand |
|e. |elasticity of demand |
ANS: E PTS: 1 REF: 259 OBJ: 17-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
41. When consumers are sensitive to price changes, _____ occurs.
|a. |inelastic demand |
|b. |elastic supply |
|c. |elastic demand |
|d. |inelastic supply |
|e. |unitary elasticity |
ANS: C PTS: 1 REF: 259 OBJ: 17-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Customer
54. _____ use complex mathematical software to profitably fill unused capacity.
|a. |Yield management systems |
|b. |Capacity correlation systems |
|c. |Service forecasting tools |
|d. |Service management systems |
|e. |Capacity management software |
ANS: A PTS: 1 REF: 261 OBJ: 17-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Online/Computer
55. Yield management systems are used to:
|a. |determine the availability of product substitutes in complex industries that are experiencing rapid change |
|b. |profitably fill unused capacity |
|c. |predict necessary service levels to achieve revenue goals |
|d. |determine whether it is financially more feasible to buy a new product or repair a broken one |
|e. |create elastic demand for low-involvement products |
ANS: B PTS: 1 REF: 261 OBJ: 17-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Online/Computer
59. A cost that changes with the level of output is called a(n) _____ cost.
|a. |liquidity |
|b. |variable |
|c. |fixed |
|d. |asset |
|e. |elastic |
ANS: B PTS: 1 REF: 262 OBJ: 17-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
61. _____ costs do not change as output is increased or decreased.
|a. |Asset |
|b. |Variable |
|c. |Fixed |
|d. |Symmetrical |
|e. |Status quo |
ANS: C PTS: 1 REF: 262 OBJ: 17-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
65. _____ cost is the change in total costs associated with a one-unit change in output.
|a. |Variable |
|b. |Intermittent |
|c. |Elastic |
|d. |Marginal |
|e. |Flex |
ANS: D PTS: 1 REF: 262 OBJ: 17-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
66. When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for, the seller is using _____ pricing.
|a. |profit maximization |
|b. |demand-oriented |
|c. |break-even |
|d. |target return |
|e. |markup |
ANS: E PTS: 1 REF: 262 OBJ: 17-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
67. The most popular method used by wholesalers and retailers in establishing a sales price is _____ pricing.
|a. |markup |
|b. |status quo |
|c. |formula |
|d. |marginal revenue |
|e. |break-even |
ANS: A PTS: 1 REF: 262 OBJ: 17-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
69. An independent retailer of specialty kitchen items wants to determine what price she should put on a set of plastic wine glasses. They cost her $7. She desires a markup of 30 percent based on selling price. Which of the following is closest to the price she should charge her customers?
|a. |$19 |
|b. |$12 |
|c. |$15 |
|d. |$10 |
|e. |$18 |
ANS: D
Price = Cost + Markup
Price = 7.00 + .3
Price = $10
PTS: 1 REF: 262 OBJ: 17-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing
70. An educational toy store can buy a world globe for $30. If the store owner sells the globe for $45, what is the markup based on the selling price?
|a. |15 percent |
|b. |20 percent |
|c. |25 percent |
|d. |33 percent |
|e. |50 percent |
ANS: D
Price - Cost = Markup
$45 - $30 = $15
$15 ÷ $45 = 33% markup
PTS: 1 REF: 262 OBJ: 17-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing
76. Profit maximization occurs when:
|a. |total costs equals average fixed revenue |
|b. |average variable costs are larger than average total costs |
|c. |total costs equal total variable costs |
|d. |marginal variable costs equal average revenues |
|e. |marginal revenue equals marginal cost |
ANS: E PTS: 1 REF: 263 OBJ: 17-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
77. _____ is the extra revenue associated with selling an additional unit of output.
|a. |Average revenue |
|b. |Marginal revenue |
|c. |Marginal cost |
|d. |Net profit |
|e. |Average variable cost |
ANS: B PTS: 1 REF: 263 OBJ: 17-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
79. The point at which marginal cost and marginal revenue are equal always results in:
|a. |maximization of elasticity |
|b. |maximization of revenue |
|c. |maximization of costs |
|d. |maximization of profits |
|e. |break-even equilibrium |
ANS: D
Until the point where MC = MR, each unit of sales has contributed to additional profit; therefore, profit, not revenue or costs, has been maximized at MC = MR.
PTS: 1 REF: 263-264 OBJ: 17-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
80. _____ determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned.
|a. |Marginal revenue estimates |
|b. |Price equilibrium analyses |
|c. |Break-even analyses |
|d. |Average total cost (ATC) figures |
|e. |Marginal costs of goods sold |
ANS: C PTS: 1 REF: 264 OBJ: 17-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
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