Chapter 1 Introductory Marketing

A __________ occurs when a person feels deprived of basic necessities such as food, clothing, and shelter.

need Text term definition—need.

Which of the following would a marketer use as a synonym for the marketing mix?

the four Ps of marketing Key term definition—marketing mix.

The marketing mix refers to

the marketing manager's controllable factors that can be used to solve marketing problems. Key term definition—marketing mix.

Conducting marketing research is an excellent way to address the first objective in marketing, which is to discover consumers'

needs, to create products that could satisfy them. The importance of discovering and satisfying consumer needs in order to develop and offer successful products is critical to understanding marketing.

Studies of new product launches indicate that about __________ percent of the products fail.

40 While marketers are improving the ways they can generate new-product ideas, experts estimate that it takes 3,000 raw ideas to generate one commercial success. Market intelligence agency Mintel estimates that 33,000 new products are introduced worldwide each month. In addition, studies of new-product launches indicate that about 40 percent of the products fail.

Mizuno designs and sells high quality baseball gloves. Who does not benefit from the firm's marketing activities for its gloves?

Actually, all stakeholders should benefit from Mizuno's marketing efforts, even society at large.

An organization's stockholders, its suppliers, its employees, its customers, and society at large all share what in common with regard to an organization?

All are stakeholders and should benefit from the marketing of an organization's offering.

Which of the following statements about environmental forces is most accurate?

Some environmental forces can actually enhance a firm's marketing opportunities. The five environmental forces may serve as accelerators or brakes on marketing, sometimes expanding an organization's marketing opportunities and at other times restricting them.

If you followed the suggestions of Robert M. McMath, which of the following provides the best advice for a marketer for Colgate, when launching a new version of the toothpaste?

Study past toothpaste product failures and learn from them. Robert M. McMath, who has studied more than 110,000 new-product launches, including for toothpaste, has two key suggestions for marketers: (1) focus on what the customer benefit is and (2) learn from the past.

All of the following are true about marketing except which?

Successful marketing usually results in one "winner" and one or more "losers."

Suppose you want a snack after taking this exam. Dominos is located across the street from your College of Business classroom. Unfortunately, you forgot your wallet in the haste of getting to class on time to take the test. Therefore, you have no means to pay for the pizza. Which of the following reasons explain why marketing fails to occur here between you and Dominos?

The ability to satisfy a need is missing. Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. Because you have forgotten your wallet, there is no ability on your part to satisfy your need because you have no money (currency or credit card) to fulfill your part of the exchange process.

Which of the following statements about marketing activities is most accurate?

The marketing department both shapes and is shaped by its relationship with internal and external groups. A marketing department relates to many people, organizations, and forces. Note that the marketing department both shapes and is shaped by its relationship with these internal and external groups (see Figure 1-1). The marketing department works closely with a network of other departments and employees to help provide the customer-satisfying products required for the organization to survive and prosper.

Which of the following statements about marketing departments is most accurate?

The marketing department must work closely with other departments and employees to help provide the customer-satisfying products required for the organization to survive and prosper. The marketing department works closely with a network of other departments, like R&D and manufacturing, to help provide the customer-satisfying products required for the organization to survive and prosper. See Figure 1-1.

The marketing mix refers to

The marketing manager's controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem. Key term definition—marketing mix.

The ability to buy a soda from a vending machine demonstrates which element of the marketing mix?

place Place refers to the means of getting the product to the consumer.

The marketing department of an organization is responsible for facilitating

relationships, partnerships, and alliances with the organization's customers, shareholders, suppliers, and other organizations.

To serve both buyers and sellers, marketing seeks to discover and __________ the needs and wants of prospective customers.

satisfy To serve both buyers and sellers, marketing seeks (1) to discover the needs and wants of prospective customers and (2) to satisfy them.

Which of the following groups would be the least likely target market for a company producing canned food in single-serving sizes?

school kitchens Of the possible markets listed, single-serving cans meet a special need for singles, campers, senior citizens, and vending machines. School kitchens traditionally serve large quantities of food; the time it would take to open single-serving cans for hundreds of children makes the product impractical and therefore would not satisfy a specific need.

The five major environmental forces in a marketing decision are

social, technological, economic, competitive, and regulatory. Key term definition—environmental forces.

Environmental forces refer to

the marketing manager's uncontrollable forces in a marketing decision involving social, economic, technological, competitive, and regulatory forces. Key term definition—environmental forces.

The four Ps are commonly known as

the marketing mix or controllable factors. The four Ps are the marketing manager's controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem.

The marketing manager's controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem are referred to as

the marketing mix. Key term definition—marketing mix.

The element of the marketing mix that describes a means of getting the product to the consumer is known as

the place. Text term definition—place.

The element of the marketing mix that describes what is exchanged for a product is known as

the price. Text term definition—price.`

Market segments refer to

the relatively homogenous groups of prospective buyers that result from the market segmentation process Key term definition—market segments.

In marketing, the idea of exchange refers to

the trade of things of value between buyer and seller so that each is better off after the trade Key term definition—exchange.

Marketing seeks to discover the needs and wants of prospective customers and satisfy them. Essential to this process is the idea of exchange, which refers to

the trade of things of value between buyer and seller so that each is better off after the trade. Key term definition—exchange.

To serve both buyers and sellers, marketing seeks to __________ and satisfy the needs and wants of prospective customers.

discover To serve both buyers and sellers, marketing seeks (1) to discover the needs and wants of prospective customers and (2) to satisfy them.

In Figure 1-2, "A" represents __________ and "B" represents __________.

discovering consumer needs; satisfying consumer needs A principal activity of a firm's marketing department is to scrutinize its consumers through effective research to understand what they need and want and the forces that shape those needs and wants. It then seeks to satisfy those needs by successfully implementing a marketing program possessing the right combination of the marketing mix—the 4 Ps. See Figure 1-2.

Which of the following is not an environmental force?

ecological Key term definition—environmental forces.

The uncontrollable forces in a marketing decision involving social, economic, technological, competitive, and regulatory forces are referred to as

environmental forces. Key term definition—environmental forces.

The trade of things of value between buyer and seller so that each is better off after the trade is referred to as

exchange Key term definition—exchange.

TUMI brand briefcases are very expensive, high-end briefcases that are generally sold in specialty luggage shops. Which of the following groups of people would be the most likely target market for TUMI briefcases?

executives Any of these people could use a briefcase. However, as a group, executives would include the greatest number with the greatest need for and ability to purchase a TUMI briefcase.

The Terrafugia Transition is a 19-foot, two-seater, road-drivable, light-sport aircraft with an anticipated price of $279,000. The most likely prospective customers for this flying car would include

executives for whom time is extremely important. A prospective customer includes anyone who would benefit from owning a product. However, the most likely prospective customer in this case would be an executive for whom time is extremely important. Both the benefits of the Terrafugia Transition and the willingness and ability to pay for it are needed for prospective customers to become actual customers.

To avoid new-product failure, new-product expert Robert M. McMath suggests

focusing on customer benefits and learning from the past. Robert M. McMath, who has studied more than 110,000 new-product launches, has two key suggestions for marketers: (1) focus on what the customer benefit is, and (2) learn from the past.

All of the following are environmental forces that affect an organization except which?

geographical Environmental forces involving social, economic, technological, competitive, and regulatory considerations also shape an organization's marketing actions. See Figure 1-1.

A typical marketing department both shapes and ____________ its relationship with internal and external groups.

is shaped by Figure 1-1 shows the key people, groups, and forces inside and outside the organization that influence its marketing activities. The marketing department is engaged in facilitating relationships, partnerships, and alliances with the organization's customers, shareholders/owners (or often representatives of groups served by a nonprofit organization), suppliers, and other organizations. The marketing department interacts with these internal and external groups in a dynamic relationship (note the two-way arrows).

In marketing, each __________ consists of people who are relatively similar to each other in terms of their consumption behavior.

market segment Market segments are the relatively homogenous groups of prospective buyers that (1) have common needs and (2) will respond similarly to a marketing action. Each market segment consists of people who are relatively similar to each other in terms of their consumption behavior.

The phrase "relatively homogeneous collections of prospective buyers" is most descriptive of

market segments. Market segments are the relatively homogenous groups of prospective buyers that (1) have common needs and (2) will respond similarly to a marketing action.

The __________ department of an organization is responsible for facilitating relationships, partnerships, and alliances with the organization's customers, shareholders, suppliers, and other organizations.

marketing The marketing department is responsible for facilitating relationships, partnerships, and alliances with the organization's customers, shareholders, suppliers, and other organizations. See Figure 1-1.

Jakubowski Farms Gourmet Bread Base is the brand name for a mix designed for use in bread making machines. The mixes are sold in 2-pound canisters for $14.99 plus shipping. People learn about the product through word-of-mouth and bread machine demonstrations the company's founder gives to groups in Wisconsin, where she lives. The products are only available through the mail. This is a description of the company's

marketing mix. The bread mix is the product. The price is $14.99 plus shipping. The promotion is word-of-mouth and public demonstrations. The place is through the mail. These four elements are the marketing mix—product, price, promotion, and place.

A __________ is a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.

marketing program Key term definition—marketing program.

After an assessment of needs, a marketing manager must translate ideas from consumers into concepts for products that a firm may develop. The concepts must then be converted into a meaningful

marketing program. Effective relationship marketing strategies help marketing managers discover what prospective customers need. They must translate this information into some concepts for products the firm might develop. These concepts must then be converted into a tangible marketing program.

Kraft produces Lunchables, a prepackaged meal usually consisting of several crackers, small slices of meat, and small slices of cheese. Other items in the product line contain small bottles of Chiquita Strawberry Banana Fruit smoothie, Capri-Sun juice, or Kool-Aid. The box is bright yellow and the quantity of food contained within it is small. The target market for Kraft Lunchables is most likely

moms with school-age children who pack a simple, healthy lunch for them. Although anyone can enjoy Lunchables, a target market is a specific group of potential consumers toward which an organization directs its marketing program. In this case, Lunchables' smaller portions and bright packaging are targeted toward moms with school-age children.

A want is a(n) ____ that is shaped by a person's knowledge, culture, and personality.

need Text term definition—want.

Which of the following is not an environmental force?

commercial Environmental forces involving social, economic, technological, competitive, and regulatory considerations also shape an organization's marketing activities. See Figure 1-1.

A student wants to buy a smartphone so she can share pictures with her friends. An insurance claims adjuster wants to buy a smartphone to document accidents (take pictures, write a report, etc.). If they both purchase the same model smartphone, such as an Apple iPhone, which statement is most accurate?

Both the adjuster and the student are potential customers because in their own way, they both benefit from the smartphone. Prospective customers include both individuals, buying for themselves and their households, and organizations that buy for their own use (such as manufacturers) or for resale (such as wholesalers and retailers). A prospective customer includes anyone who could benefit from owning a product, whether previously owning one or not.

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large is referred to as

Marketing

________________ is/are responsible for establishing the organization's mission and objectives.

Senior management An organization's mission and objectives determine what business it is in and what goals it seeks. Within the organization, management is responsible for establishing these goals. The marketing department works closely with a network of other departments and employees to help provide the customer-satisfying products required for the organization to survive and prosper.

A college student is taking a full course load, working 20 hours per week, and still has to take out a student loan to cover tuition. One day, he sees a classmate driving a new Lexus LFA sports coupe (price: $375,000) and feels he just has to have one for himself. What factor is most likely to prevent a successful marketing exchange between the student and the local Lexus dealer located in an affluent suburb about 20 miles from his university?

The student does not have the resources to qualify for a $375,000 auto loan. Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. In this example, the most likely factor preventing the student from engaging in a marketing transaction is that he does not have the resources to qualify for a loan to purchase the car.

A farmhand would like to buy a moped scooter to commute to his job at a nearby ranch. He doesn't know how to find a dealer and doesn't have Internet access. Which of the following reasons explain why marketing fails to occur here?

There is no way for the parties involved to communicate. Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. The farmhand is unable to communicate with those that would be willing to sell him a scooter, particularly those who use Internet-based "want ads" such as Craigslist.

A local college of business offers an outstanding graduate business school education program. Marissa pays the tuition to attend and earns her MBA with a concentration in marketing management. Upon graduating, she is offered a high-paying, fulfilling position. Was this a marketing exchange?

Yes, because paying tuition was exchanged for knowledge that directly led to Marissa's high-paying, fulfilling new job. Exchange is the trade of things of value between buyer and seller so that each benefits. In this instance, Marissa is the customer and the college is the marketer. An exchange occurred when Marissa paid her tuition to the college and received the education required to earn a degree that resulted in the job offer.

The American Red Cross creates advertisements to encourage people to donate blood. After viewing one, Amanda decided to donate a pint of blood. After she did, Amanda felt happy that she had performed a good deed. Did an exchange occur in a marketing sense?

Yes, because the donated blood was exchanged for a feeling of satisfaction. Exchange is the trade of things of value between buyer and seller so that each benefits. An exchange occurred when Amanda exchanged her donated blood for a feeling of satisfaction, which she valued. The Red Cross received the donated blood to serve the needs of society in times of accident or disaster.

Which of the following statements about marketing is most accurate?

You have significant marketing expertise since you make marketing-related decisions every day.

The relatively homogenous groups of prospective buyers that have common needs and will respond similarly to a marketing action is referred to as

a market segment. Key term definition—market segments.

People with both the desire and ability to buy a specific offering are referred to as

a market. Key term definition—market.

A marketing program refers to

a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. Key term definition—marketing program.

The element of the marketing mix that describes a good, service, or idea to satisfy consumers' needs is known as

a product. Text term definition—product.

Whether an individual is buying for personal or household use or an organization is buying for its own use or for resale, the individual or organization would be considered

a prospective customer. Prospective customers include both individuals, buying for themselves and their households, and organizations that buy for their own use (such as manufacturers) or for resale (such as wholesalers and retailers).

All of the following are examples of products or services that satisfy a consumer need except which?

a sales tax

Which of the following is a factor required for marketing to occur?

a way for interested parties to communicate Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange.

John receives a coupon on his iPhone advising him about the location of a Domino's Pizza store. This is an example of which?

a way for parties to communicate Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. When John receives a coupon on his phone or drives by the Domino's store location, this communication barrier between John (the buyer) and the Domino's Pizza owner (the seller) is overcome.

A local university offers business courses for a target market of people who currently work and want to take refresher courses for certification in their business field (marketing, accounting, etc.). Which of the following would be the most effective way to communicate with the target market, bearing in mind that communication must be both effective and economical?

advertise in the local newspaper The local newspaper is the most effective and economical of the alternatives to communicate with this target market.

Which of the following people would most likely be the best target market for tickets to the home games of the Indianapolis Colts professional football team?

all people in the Indianapolis and surrounding areas interested in football Football fans nearby are the Indianapolis Colts' target market—people with both the desire and ability to easily attend home games in Indianapolis.

The best description of the market for cosmetic dentistry, where costs can be as much as $15,000 for teeth straightening and whitening, is

anyone who has the time, the money, and the desire to undergo the procedures. Potential customers make up a market, which consists of people with both the desire and the ability to buy a specific product. In this case, it is anyone who has the time, the money, and the desire to undergo cosmetic dentistry procedures.

Discovering consumer needs leads directly to

concepts for new products. A principal activity of a firm's marketing department is to scrutinize its consumers through effective research to understand what they need and want and the forces that shape those needs and wants. It then seeks to satisfy those needs by successfully implementing a marketing program possessing the right combination of the marketing mix—the four Ps. See Figure 1-2.

Marketers often discover consumer needs by

conducting effective marketing research. The first objective in marketing is discovering the needs of prospective customers. Marketers often use customer surveys, concept tests, and other forms of marketing research to better understand customer ideas.

The marketing mix elements are called __________ because they are the responsibility of the marketing department in an organization.

controllable factors Text term definition—controllable factors.

Satisfying consumer needs is accomplished by

designing a marketing program. A principal activity of a firm's marketing department is to scrutinize its consumers through effective research to understand what they need and want and the forces that shape those needs and wants. It then seeks to satisfy those needs by successfully implementing a marketing program possessing the right combination of the marketing mix—the four Ps. See Figure 1-2.

A student would like to buy a cross-over SUV from a local dealer, but she thinks the payments will be too high. Marketing does not occur in this situation because

one of the involved parties does not have the ability to satisfy its needs. Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. In this example, the student has the desire but not the ability—a lack of funds—to buy the cross-over SUV.

A target market refers to

one or more specific groups of potential consumers toward which an organization directs its marketing program Key term definition—target market.

All markets ultimately are composed of

people Key term definition—market.

For marketing to occur, there must be two or more parties involved. Dr. Pepper Snapple Group distributes Country Time lemonade in cans through supermarkets at a price comparable to that of soft drinks. The most likely "second" party needed for marketing to occur would be

people with a desire for a cool beverage other than soda or water. Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. In this example, consumers may want/need a new beverage alternative and Dr. Pepper Snapple Group wishes to sell them one—Country Time lemonade.

In a marketing context, a market refers to

people with both the desire and the ability to buy a specific offering Key term definition—market.

The __________ element of the marketing mix is demonstrated when Amazon delivers packages to a customer's front porch via the U.S. Postal Service.

place Place refers to the means of getting the product to the consumer. Here, carriers distribute the packages by "placing" them on the customer's front porch.

The Arizona Biltmore in Phoenix is a resort hotel located less than a mile from the Biltmore Fashion Park, a large upscale shopping mall. The hotel wants to promote its proximity to the shopping center as well as its many other amenities to convention-goers from other states. Which of the following marketing actions would most likely help The Arizona Biltmore communicate with potential convention attendees?

place an ad in the in-flight magazines of all the major airlines targeting business/first-class fliers Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. The Arizona Biltmore needs to concentrate on "communication."

The element of the marketing mix demonstrated when an art gallery suggests a $2 donation at the door is

price Price is what is exchanged for the product; in this case, access to an art gallery.

To attend a winter concert presented by the community chorus, every person had to donate one unwrapped toy at the concert hall door. The donation is most closely related to the __________ element of the marketing mix.

price Price is what is exchanged for the product; in this case, access to the concert. The toy donation was exchanged for the privilege of listening to the music.

Which element of the marketing mix is affected when the Mandarin Oriental hotel in New York increases its weekend rates to $795 per night?

price The price is what is exchanged for the product; in this case, rate change increases the price of the product.

The owners of Old School Brand Authentic Antique Foods researched Civil War records to come up with recipes used for the old-fashioned cookies the company produces and markets. The cookies are which part of the company's marketing mix?

product A product is a good, service, or idea to satisfy consumers' needs, so a cookie is an example of a product.

The four Ps of the marketing mix are

product, price, promotion, and place. The four Ps are the marketing manager's controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem.

All of the following constitute the four Ps of the marketing mix except which?

profitability The four Ps are the marketing manager's controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem.

When a company places an ad on Google, the action is a tactic of the __________ element of the marketing mix.

promotion Promotion is a means of communication between the seller and buyer, such as Google advertising.

The __________ element of the marketing mix is demonstrated when a company places an ad on a highway billboard.

promotion Promotion is a means of communication between the seller and buyer, such as billboard advertising.

The owners of Old School Brand Authentic Antique Foods researched Civil War records to come up with recipes for the old-fashioned products they market. An offer to be featured in an upcoming edition of Taste of Home magazine would be considered as part of the __________ element of the marketing mix.

promotion Promotion is a means of communication between the seller and buyer. Taste of Home magazine would be likely to communicate to the target market for old-fashioned food products.

The element of the marketing mix that describes a means of communication between the seller and buyer is known as

promotion Text term definition—promotion.

A local candidate running for office would very much like to have your vote. She promises that she will "make the country better." Because all candidates for public office say this, you doubt you'll see real results and decide not to vote for her. Marketing will not occur in this situation because

something to exchange is missing. Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. In this example, your vote is the "something of value" that is exchanged. Here, you will not engage in the "exchange" process with this candidate because you doubt you will receive something of value in return.

All of the following are departments within a typical organization except which?

suppliers Figure 1-1 shows the key people, groups, and forces outside the organization that influence its marketing activities. The marketing department is one of several departments in a typical organization. Other departments include human resources, information systems, finance, manufacturing, and research and development (R&D). Suppliers exist outside the organization.

The United States Army was both praised and criticized for its use of a popular video game, America's Army, which was designed to reach potential recruits. The game's creator, Colonel Casey Wardynski, wanted to provide a sense of the training and teamwork one could find in the Army's military environment. The game was designed for "boys 14 years or older," which represent the Army's

target market. A target market consists of one or more specific groups of potential consumers toward which an organization directs its marketing program. In this case, although 14-year-old boys cannot serve in the military, a positive attitude or association with the game and its content now can lead to potential recruits in the future—the Army's target market.

One or more specific groups of potential consumers toward which an organization directs its marketing program is referred to as a

target market. Key term definition—target market.

Marketing refers to

the activity for creating, communicating, delivering, and exchanging offerings that benefit its customers, the organization, its stakeholders, and society at large

A business student is preparing for the Graduate Management Admission Test (GMAT) so he can get into a good graduate business school. He knows that any money he spends on a tutor will be worthwhile if he can improve his scores. He's heard that there is a great tutor in his local community but has no idea who she is. Marketing does not occur in this situation because

there is no way for the parties to communicate with one another. Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange. In this example, the student has been unable to communicate with the tutor he'd like to use.

All of the following are factors required for marketing to occur except which?

two or more parties (individuals or organizations) with the same wants Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange.

Which of the following conditions are necessary for marketing to occur?

two or more parties with unsatisfied needs, a desire and an ability to satisfy them, a way to communicate, and something to exchange Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to be satisfied; (3) a way for the parties to communicate; and (4) something to exchange.