Final Exam for Principles of Business

Which of the following statements is true of equity theory?

It is based on perceptions, which are not always on the mark.

In the context of the marketing mix, which of the following statements is true of a distribution strategy?

Its key decisions include shipping, warehousing, and selling outlets.

In the context of a SWOT (strengths, weaknesses, opportunities, and threats) analysis, which of the following exemplifies an external threat to a company?

Significant changes in the taxation policies implemented by the government

Which of the following is a difference between strategic planning and tactical planning?

Strategic planning is done by top-level managers, whereas tactical planning is done by middle managers.

Rosy's Sweet Treats is a food truck that sells waffles. In this scenario, which of the following is true of Rosy's Sweet Treats?

The business is a mix of goods and services.

Barry is the branch manager of a large toy store. He has been given the responsibility to communicate with, coach, and motivate supervising managers. In this scenario, Barry most likely requires _____ to perform his role efficiently.

human skills

____refers to how well a product performs its core function.

Quality level

Which of the following is most likely to be a first-line management title in a large company?

Section leader

Determine the fixed cost of a pencil manufacturing company per year if its breakeven point is 300,000 packets of pencils, selling price of each packet of pencil is $3, and the cost of equipment and labor to manufacture one packet of pencil is $1.

$600,000

The fixed cost of Perfect Pizzas, a pizza restaurant, is $400,000 per year. The cost of ingredients and chef to make one pizza is $6. If the customers would pay $10 to buy one pizza, Perfect Pizzas needs to sell at least _____ pizzas to avoid losses.

100,000

Which of the following statements is true of penetration pricing?

A company using penetration pricing makes profit from the volume of sales

Which of the following can be achieved by marketers by acquiring customer loyalty?

Acquisition of new customers

Zetovi Corp. is a multinational communications and information technology company. It manufactures smartphones and other cell phone accessories. The company launched a range of tablets in the market, and it becomes an instant hit. The company then experiences a drastic decline in the sales of its smartphones as a large section of its customer base shifts to tablets. Which of the following concepts is being illustrated in this scenario?

Cannibalization

Hansel owns and runs a fruit juice manufacturing company. He decides that the company will sell packaged fruit juices through wholesalers and retailers. In this scenario, which of the following distribution strategies is Hansel planning to use?

Channel intermediaries

Which of the following are the elements of distribution strategy

Channels of distribution and physical distribution

Who among the following individuals is practicing green marketing?

Claire, who sells solar-powered watches

Pagpartet is a supermarket that sells good quality products and renders excellent client service. Pagpartet's membership program for regular clients offers good discounts on perishable products. Its popularity and business generally increase through word-of-mouth. Consumers who shop at Pagpartet rarely switch to another supermarket for their monthly grocery shopping. In the context of marketing, which of the following concepts does this scenario best illustrate?

Customer loyalty

Arnoury, a car service station, takes feedback from clients after servicing their cars, which gives the clients a sense of importance. Arnoury's management also ensures rectification and improvement of its services based on clients' feedback. Which of the following marketing strategies does this scenario best illustrate?

Customer relationship management

Keitras is a women's apparel store that specializes in winter clothing. It targets university students aged 20-25 with its trendy collection of sweaters, sweatshirts, stockings, and stoles. In the context of consumer market segmentation, which of the following types of market segmentation does Keitras most likely follow?

Demographic segmentation

Which of the following is a difference between demographic segmentation and geographic segmentation?

Demographic segmentation refers to dividing the market based on measurable characteristics about people, whereas geographic segmentation refers to dividing the market based on where consumers live.

Which of the following elements is a personal influence on the consumer decision-making process?

Demographics

Who among the following is likely to enjoy job autonomy?

Esther, who has a free hand and authority in her role as project coordinator

Cadilengy, a nonprofit organization, is conducting a food fair in the month of October. The proceeds of this fair will go to charity. The restaurants and food product companies participating in the fair start distributing pamphlets about the fair in their outlets two months before the event. As a result, the fair gained popularity among the public. Which of the following marketing strategies does this scenario best illustrate?

Event marketing

Katherop, a company that manufactures and supplies baby clothes, conducts a charity program every year to distribute free products to the underprivileged children in rural areas. The company advertises this program to gain attention of its customers. Which of the following marketing strategies does this scenario best illustrate?

Event marketing

__ means establishing only one retail outlet in a given area.

Exclusive distribution

The two key aspects of product quality are level and longevity.

False

____ remain constant regardless of how many products are sold.

Fixed costs

Hartown Medicare, a private hospital advertises at bus stops for blood donation using the slogan: "Donate blood, save lives, stay healthy! You can donate blood at Hartown's 24/7." Which of the following marketing strategies does this scenario best illustrate?

Idea marketing

____ involves using all the media platforms to promote a product.

Integrated marketing communication

Which of the following statements is true of ownership utility?

It adds value by making it easier for customers to possess the goods that they purchase.

Which of the following statements is true of cost-based pricing?

It determines the price by adding a fixed margin to the per-unit cost of a product.

Which of the following statements is true of product-use-based market segmentation?

It helps small companies in narrowing the target markets for their products.

__ refers to promoting goodwill for a company by providing information and assistance to customers.

Missionary selling

Flectamp, a new cell phone manufacturer, introduced a smart phone model, Linkul X3.4, which gets charged on solar power Television advertisements about this product show that the phone needs to be charged only once a week. Hence, several customers pre-booked this model before its launch. But after the launch of Linkul X3.4, 80 percent of its customer reviews on the Internet were bad. In the context of customer satisfaction, which of the following traps did Flectamp most likely fall into?

Overpromising

Spalkyn, a footwear company, allows its customers to shop online on its website or mobile app or at its physical stores. At the company's physical stores, customers are given the option to pick up their products or have them delivered. In the context of marketing, which of following utilities does Spalkyn most likely provide?

Ownership utility

Tyler Connor, a famous politician who supports the ruling party of the island country of Blavanka, endorses a publishing house named Cenzefor that he owns. Many Blavankan writers want to get their books published by Cenzefor because of Connor's connection with the brand. Which of the following marketing strategies does this scenario best illustrate?

People marketing

Which of the following marketing strategies can be best employed for attracting tourists?

Place marketing

In the year 1906, Kendreed, a company that sold kitchen utensils, had only one model of each of its products. The company did not feel the need to differentiate its wares because it did not analyze its business from a customer's point of view. In the context of the evolution of marketing, which of the following eras does this scenario most likely refer to?

The production era

Which of the following is true of contingency planning?

The senior manager spearheads this process but with input from the other levels of management.

Paul is an employee at a marketing firm. He is someone who prefers to be instructed by his seniors and avoids taking major responsibilities. He rarely uses his own judgment or creativity while doing a task in fear of putting things at risk. Paul's conduct in the workplace is consistent with the assumptions of _____

Theory X

The management of a telecommunications company informs the members of its sales team that if they continue to underperform, the management will have no other option but to downsize the team. In this scenario, the approach adopted by the management reflects the assumptions of _____.

Theory X

Which of the following statements is true of loyal customers?

They forgive marketers' mistakes.

Coastharp, a furniture e-commerce website, allows its customers to book one-hour slots during which they wish to get their furniture delivered. They can also book another one-hour slot to get the delivered furniture assembled at their convenience. The company holds back orders and delays deliveries when customers are not available to receive them. In the context of marketing, which of the following utilities does Coastharp most likely provide through its service?

Time utility

Cannibalization occurs when a producer offers a new product that takes sales away from its existing products.

True

Product diffusion happens at different speeds, depending on the individual consumer and on the product itself.

True

_________is the ability of goods and services to satisfy consumer wants.

Utility

Proleisis Corporation is a company that has 250 stockholders. Although owned by such a large number of stockholders, the major decisions of the company are taken by the 12-member board of directors. The board has enormous authority over the company, and the company functions according to the decisions of the board. Based on the given information, the company has:

a high degree of centralization.

An example of a pure service is:

an accountant providing financial consultation to a firm.

Blue Legion, a well-known jeans manufacturer, is the main sponsor for a rock concert. Although the tickets to the concert are exorbitantly priced, the public feels that since the concert is being sponsored by a company like Blue Legion, it must be worth it. The scenario illustrates that Blue Legion has a good _____.

brand equity

Crystal Corp. is an independent distributor that distributes cosmetics, apparels, shoes, and bags to other business customers on a large scale. It does not take legal title to the goods it distributes. In this scenario, it can be said that Crystal Corp. is a(n) _____.

broker

In the introduction stage of the product life cycle, companies are primarily focused on:

building customer awareness of the product.

Brendon Steels, a steel manufacturer, sells its steel rods and steel slabs to Widget Corp. that, in turn, sells them to various construction companies. In this scenario, Widget Corp. is a _

channel intermediary

Understanding the _____ begins with analysis of market share.

competitive environment

Aubosh, a car manufacturing company, is in a contract with Bolivin Tires. Under this contract, Aubosh purchases tires from Bolivin Tires for all its mid-range cars. In this scenario, Aubosh buys __

component parts and processed materials

Glinda goes to the supermarket for her monthly grocery shopping. As she waits in the line at the cash register, she sees her favorite kiwi-flavored candies on a stand and puts some into her shopping cart. In the context of product classifications, the candies purchased by Glinda are

convenience products

Team selling works best for:

large and complex accounts.

In the context of goal setting in an organization, the most effective strategic goals are:

defined in clear numerical terms.

Kiddiecon is a company that makes stationery products for children. The company relies on door-to-door sales strategy to sell its products. It is evident that Kiddiecon is engaged in ____

direct selling

Dominic's Store offers a wide variety of clothes, furniture, cosmetics, and office supplies at significantly lower prices and provides less service than most department stores. In this scenario, Dominic's Store most likely is a(n) ___

discount store

iTem is a retailer that sells a wide range of merchandise to the public through its website. It is evident that iTem is engaged in _

e-tailing

The top-level managers of a soft drink bottling company initiate the strategic planning process. They complete their first task of the process, which is to define the mission of the organization. In the context of the strategic planning process, their next task would be to:

evaluate the organization's competitive position.

Amanda, a primary school teacher, puts in extra effort in her teaching in a particular term. She is aware that if her class performs well, she will be nominated for the award that is received by the teacher whose class scores the highest in the state. This scenario is reflective of the assumptions of the _____ theory.

expectancy

Jack works in a cargo shipping company as a section leader. As a part of his job, he needs to train and evaluate the employees. He also makes sure that the employees constantly remain motivated to carry out their tasks efficiently. Thus, as a section leader, he is heavily involved in the day-to-day production process of the company. In the context of the management hierarchy, Jack is a _____ manager in the company

first-line

Renetoge is a company that manufactures wooden furniture and sells them to furniture retailers and e-commerce websites. The company gives discounts to its regular multinational clients when they buy in bulk. Relationship managers in Renetoge visit clients on a regular basis for discussions. In the context of customer relationship management, Renetoge most likely establishes _____ with its customers.

full partnerships

Mars is an independent distributer that distributes goods, such as keyboards, monitors, and computer cabinets to various business users. The company takes legal possession of the goods it distributes. The company warehouses the products, ships them to its customers, provides promotional assistance to the manufacturers, provides product repairs, and credit to customers. It is evident that Mars Inc. is a __

full-service merchant wholesaler

CityProtect Corp., a medium-sized financial services company, has a departmentalization structure where the employees are grouped together based on their area of expertise. Thus, the firm has separate teams that handle loans, stock broker services, accounting services, insurance plans, etc. This is an example of _____ departmentalization.

functional

Boncidio Inc., a cell phone manufacturer, introduced a new cell phone model. 85 percent of this phone is made from biodegradable materials. This product attracts customers who give importance to using environment-friendly products in their daily lives. In the context of social responsibility and technology, Boncidio best illustrates _____.

green marketing

Lucy opens a restaurant that uses only organic ingredients in its dishes. The restaurant quickly gains popularity as its customers recommend it to their friends and family. In this scenario, Lucy's restaurant business is benefiting from _____.

guerrilla marketing

Joanne works in the marketing department of a toy manufacturing company. Her company offers discounts for soft toys but sells electronic toys at a price higher than that of its competitors. In this scenario, Joanne's company has adopted the _____ strategy.

high/low pricing

Although as a manager Anette may not have the best technical skills, she makes up for it through her excellent communication, team building, and coaching skills. Thus, in the context of management skills, Anette exhibits strong _____

human skills

One of the benefits of licensing is:

instant name recognition.

Longevo, a watch manufacturing company, offers watches in a wide range of designs to suit all age groups. To adequately cover its wide and diversified consumer base, the company makes use of all the traditional and new age media platforms for its promotions. The promotional strategy used by Longevo is _____.

integrated marketing communication

Saffexo is a low-cost toiletries producer in the town of Lucitona. It sells its products through almost all the retail stores in the town of Lucitona. In the context of distribution strategies, Saffexo has adopted the strategy of _____.

intensive distribution

Kiddiecon, a company that manufactures stationery products for children, signs a contract with an animation studio to use one of its popular cartoon characters as a design on its school bags. Kiddiecon's contract with the animation studio is an example of _____.

licensing

Zollien, a manufacturer of men's shirts and jackets, has reached an agreement with Arbrada Inc. According to the agreement, Zollien will pay Arbrada a substantial fee for the right to use Arbrada's name and logo on some of its clothing lines. This type of arrangement is known as:

licensing.

Marketers who cannot forge a close personal bond with every customer but actively gather data and pursue a connection with customers who initiate contact have a _____ with the customers.

limited relationship

Gregory works for Ocan Foods, a food supplier. His main responsibility is to make tactical decisions involving the actual movement of goods along his company's supply chain. Gregory is involved in

logistics

A__________is an organization with a flexible structure that brings together specialists from different areas of the organization to work on individual projects on a temporary basis.

matrix organization

Clembor AgroSciences, an agrochemical company, mainly focuses on selling its products in rural markets. The company promotes goodwill by sending teams of salespeople to instruct farmers on the right usage of the products and responding to their agriculture-related queries. In this scenario, Clembor AgroSciences is engaged in ___

missionary selling

The fixed cost of Widget Corp., a keyboard manufacturing company, is $600,000 per year. The cost of equipment and labor to make one keyboard is $10. If the customers would pay $25 to buy one keyboard, Widget Corp. needs to sell _____ keyboards to make profits.

more than 40,000

TrinkCan is a soda manufacturing company. People can buy the company's soda from grocery stores, restaurants, vending machines, and online. In this scenario, it is evident that TrinkCan has adopted

multichannel retailing

In the context of management planning,__________refers to very specific, short-term planning that applies tactical plans to daily, weekly, and monthly functions.

operational planning

As one of the senior HR managers, Ramona is responsible for conducting orientation sessions for new employees in her company. In her sessions, Ramona uses a visual representation to explain the composition and structure of the company to the new employees. In this scenario, Ramona uses a(n) __

organization chart

Liza, an HR manager, wants to explain the hierarchy of the organization to a group of trainees. She also wants to describe to them their positions within the broader organization. For this purpose, she uses a visual representation of the company's structure. In this case, Liza uses a(n) _____.

organization chart

Daquip is a baseball kit manufacturer. It sells its products to final consumers through its own stores at a huge discount. From the given scenario, it can be concluded that Daquip is a(n)

outlet store

Fit & Flare is a fitness equipment manufacturer. It sells its equipment directly to the public through its own stores at a huge discount. From the given scenario, it can be concluded that Fit & Flare is a(n)

outlet store

A home décor company manufactures a range of bedding products such as bedspreads, pillows, and mattresses. The range of bedding products represents the _____ of the company.

product line

Streetlore, a footwear manufacturing company, makes business and casual shoes for both men and women. The company also makes school bags for children between the ages of five to ten years. The entire line of goods made by Streetlore represents the _____ of the company.

product mix

Vermontz, an automobile company, pays a film studio to include its new sports car in two scenes of its latest action movie. The company feels this would help them gain maximum visibility, and the fans would also develop a positive association with the brand when they will see their favorite actor using the car in the film. Vermontz's business deal with the film studio exemplifies __

product placement

Allied Bakeries sells processed food and beverages manufactured by Winston Corp. to the public. In this scenario, Allied Bakeries is a ___

retailer

Glubert Corp., an adhesive manufacturing company, makes a deal with an insurance company to provide its employees with life insurances that come with low monthly premiums. In the context of Maslow's hierarchy of needs theory, the company is fulfilling the _____ needs of its employees.

safety

Austere Realty, a real estate company, ensures that its web page always shows up high among the list of results whenever a user looks for information related to property and housing on the Internet. In this scenario, Austere Realty is actively engaged in __

search engine optimization

Sending products by__________is the least expensive option available to producers.

ship

Joel wants to buy his best friend a home audio system for his birthday. He visits a few electronic stores and looks at different brands of audio systems and compares their prices. He finally purchases a wireless Bluetooth home audio system from a store that offers good quality within a reasonable price. In the context of product classifications, Joel's purchase falls under the category of _____.

shopping products

Lydia works for a sports shoe manufacturing company that is based in the U.S. However, she manages one of the manufacturing units of the company in Brazil. As the unit is small in size, Lydia is in charge of supervising only 20 out of the 50 employees who work there. In this case, Lydia has a small _____

span of control

The span of control is also called the ____

span of management

Neone is an energy drink manufacturer. The marketing strategies of Neone are focused on males who are in the age group of 16 to 25 years and who enjoy sports and other outdoor activities. The company advertises its products at skateboard parks, basketball venues, and ski resorts. The customer group that Neone focuses on is called its

target market

Lawrence, the CEO of a media company, treats employees from all the levels of the organization in the same manner. The fair treatment is not just limited to his conduct with his employees, but it is also visible in the kind of perks and benefits they receive. Lawrence is strictly against discriminating in the workplace, and this motto of his keeps his employees greatly motivated. In this scenario, Lawrence follows ___

the equity theory

The _____ of a firm includes managers who set the overall direction of the firm, articulating a vision, establishing priorities, and allocating time, money, and other resources.

top management

Lynk Corp. drives perishable goods, such as eggs, bread, and muffins to small grocery stores. In addition to taking legal title of the goods it distributes, Lynk Corp. also checks the stock and suggests reorder quantities to the grocery stores. It is evident that Lynk Corp. is a(n) ___

truck jobber