Marketing Management Final (Ch. 13-21)

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24) Identify the major reasons why new product failures occur.

The following are some of the possible reasons for the failure of new products: • shortage of important ideas in certain areas • fragmented markets • social, economic, and governmental constraints • high cost of development • capital shortages • shorter required development time • poor launch timing, shorter product life cycles • organizational support

21) Non-digital media provide marketers and consumers with opportunities for much greater interaction and individualization than digital media.

FALSE

23) The pervasive nature of advanced communications technologies, such as the Internet, has resulted in greater exposure of customers to advertising content than it was in the 1960s.

FALSE

38) Skunkworks are formal workplaces where intrapreneurial teams attempt to develop new products.

FALSE

86) Concentrated advertising is well suited for products with one selling season or related holiday.

TRUE

101) Only 4 percent of content cascades to more than one person beyond the initial recipient.

TRUE

108) Though the target audience can be profiled in terms of demographic, psychographic, or behavioral segments, it is often useful to do so in terms of usage and loyalty.

TRUE

86) The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments.

TRUE Page Ref: 450 Objective: 1 Difficulty: Easy

87) "Pop-up" stores let retailers promote brands to seasonal shoppers for a limited time.

TRUE Page Ref: 451 Objective: 3 Difficulty: Easy

92) As discount retailers improve their quality and image, consumers have been willing to trade down.

TRUE Page Ref: 452 Objective: 3 AACSB: Analytic skills Difficulty: Easy

90) Supercenters retail grocery items as well as a huge selection of nonfood merchandise.

TRUE Page Ref: 452 Objective: 3 AACSB: Reflective thinking Difficulty: Easy

89) Consumers now receive sales offers through direct-mail letters and catalogs, television, cell phones, and the Internet. The nonstore-based retailers are taking business away from store-based retailers.

TRUE Page Ref: 452 Objective: 3 Difficulty: Easy

94) Firms are increasingly recognizing the importance of influencing consumers at the point of purchase.

TRUE Page Ref: 453 Objective: 3 AACSB: Analytic skills Difficulty: Easy

111) A product's purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value is known as the product's activity cost.

FALSE

106) Perceived value refers to the gap between actual needs and satisfied needs of a customer.

FALSE

28) Of the time US consumers spend with all media, almost half is spent online.

TRUE

8) Fewer than 10 percent of all new products are truly innovative and new to the world.

TRUE

72) What is crowdsourcing?

Crowdsourcing means inviting the Internet community to help create content or software, often with prize money or a moment of glory as an incentive.

36) Companies should use normal investment criteria to budget for new-product developments.

FALSE

36) Microsites are less relevant for companies selling low-interest products.

FALSE

37) Almost all companies use the conventional percentage-of-sales figure while budgeting for new product development.

FALSE

42) Angell Healthcare, the world's largest manufacturer of protective gloves and clothing, adopted a spiral development process, which divided the innovation process into stages with checkpoints at the end of each stage, to develop products that increased overall sales from 4.6 percent to 13 percent in a little over two years.

FALSE

42) Social media ads prompt purchase at least three times more often than e-mails, and the average order value from social media ads is thought to be 17 percent higher.

FALSE

62) When economic conditions are depressed, producers want to move goods to market using longer channels.

FALSE

63) The stage in the new product process that occurs first and has a pass ratio of 1:4 is the ________ stage. A) idea screening B) product development C) test marketing D) product soft launch E) concept testing

34) Which of the following is an advantage of using magazines as an advertising medium? A) high-quality reproduction B) short ad purchase lead time C) high efficiency in circulation D) no ad competition in same medium E) low cost of advertising

58) The ________ creativity technique begins with a thought that is written down, then proceeds to develop other thoughts that are linked to the first thought, and finally a new idea materializes by associating all of the thoughts. A) mind mapping B) contextual analysis C) attribute listing D) reverse assumption analysis E) morphological analysis

58) Which of the following problems is most likely when a company chooses to use a sales agency instead of company salespeople? A) The company will find it difficult to control the sales process. B) They do not take title to goods or negotiate purchases or sales. C) The value-added per sale is the lowest for sales agencies. D) Agencies will pay less attention to customers who buy the most or in large volumes. E) Sales agencies are often difficult to access due to strict contractual obligations.

7) The "Got Milk" campaign was intended to boost sagging milk consumption among Californians in the 1990s. The campaign ads highlighted the inconvenience of running out of milk when intended to be used with certain foods, such as cookies or muffins, advising consumers to stock up on milk to avoid such inconveniences. The "Got Milk?" campaign is an example of ________ advertising. A) informational B) reminder C) institutional D) comparative E) reinforcement

1) An ________ is a specific communications task and achievement level to be accomplished with a specific audience in a specific period of time. A) advertising medium B) advertising objective C) advertising channel D) advertising budget E) advertising copy

1) An advertising ________ is a specific communications task and achievement level to be accomplished with a specific audience in a specific period of time. A) medium B) objective C) channel D) budget E) copy

147) Which of the following is a medium of visual identity for a company? A) annual reports B) dress codes C) press releases D) seminars E) trade shows

15) Unlike physical products, services cannot be seen, tasted, felt, heard, or smelled before they are bought. This is known as the ________ aspect of services. A) inseparability B) intangibility C) variability D) perishability E) heterogeneity

2) Which of the following is an example of a pure tangible good? A) massage B) shampoo C) e-mail D) restaurant meal E) air travel

30) Which of the following activities is a reverse-flow channel of marketing? A) raw materials movement B) product recycling C) materials ordering D) finished goods storage E) customer order placement

39) Which of the following is a disadvantage of using the Internet as an advertising medium? A) limited audience selectivity B) increasing clutter C) lack of interactive possibilities D) relatively high costs involved E) fleeting ad exposure time

57) Which marketing channel is associated with the highest value added per sale? A) retail stores B) sales force C) distributors D) Internet E) telemarketing

58) Which of the following is a disadvantage of using newsletters as an advertising medium? A) low audience selectivity B) high chances of runaway costs C) lack of adequate control D) relatively high costs E) lack of interactive possibilities

64) ________ is the number of times the average buyer buys a product during the period. A) Buyer turnover B) Purchase frequency C) Customer retention rate D) Advertising impressions E) Total number of exposures

65) The zone of ________ is a range where a service dimension is deemed satisfactory, anchored by the minimum level consumers are willing to accept and the level they believe can and should be delivered. A) immunity B) tolerance C) reliability D) assurance E) flexibility

82) JBJ Sports is a leading sports goods maker from Atlanta. It has recently initiated a program in association with the Children of God Foundation, which bids to raise funds to promote nutritional awareness and education of young children from Bangladesh. The company plans to donate $1 for every item it sells in the North American market. Also, JBJ has roped in professional sports teams associated with it to wear the Children of God logo on their team gear. Which of the following best describes the motivation for JBJ's involvement in the program? A) entertaining key clients or rewarding key employees B) expressing commitment to the community or on social issues C) permitting merchandising or promotional opportunities D) stimulating quicker or greater purchase of particular brands E) identifying with a particular target market or lifestyle

86) A(n) ________ appeal is a creative strategy that elaborates on a nonproduct-related benefit or image. A) logical B) transformational C) reasonable D) informational E) rational

130) What is the significance of performing business analysis?

Business analysis is performed to study a proposal's business attractiveness. Management prepares sales, cost, and profit projections to determine whether they satisfy company objectives.

116) ________ out of every 10 US consumers owned a smart phone in 2014. A) Two B) Four C) Six D) Eight E) Ten

48) Which of the following types of advertising timing patterns calls for spending all the advertising dollars in a single period? A) frequency capping B) flighting C) concentration D) pulsing E) continuity

52) Flighting as an advertising timing pattern is most useful when ________. A) purchase cycle is rather frequent B) substantial advertising budget is available C) items are seasonal D) tightly defined buyer categories exist E) there are expanding market situations

55) The customer service representatives at a call center have been asked to handle each call in not more than five minutes. At the same time, they have been asked to answer all customer queries in detail and provide appropriate solutions. What kind of service gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception

89) ________ is a "hybrid" data collection technique that combines self-explicated importance ratings with pair-wise trade-off tasks. A) Sales wave analysis B) Simulative data testing C) Adaptive conjoint analysis D) Business analysis E) Exponential data collection

97) In consumer-goods market testing, the company seeks to estimate four variables. These four variables are: trial, first repeat, adoption, and ________. A) guaranteed response B) price sensitivity C) purchase frequency D) usage convenience E) preferential treatment

68) E&OE is trying to minimize its inventory costs, which are extremely high. The company has realized that it can achieve this by maintaining a near-zero inventory and producing more only once a product is ordered. Which of the following is true for E&OE? A) Inventory costs are lower than order-processing costs. B) Running costs are higher than inventory-carrying costs. C) Setup costs for the products are low. D) Order-processing costs are high. E) Order-processing costs are lower than setup costs.

C Page Ref: 467 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

90) Describe the communication-effect research method of evaluating advertising effectiveness.

Communication-effect research, called copy testing, seeks to determine whether an ad is communicating effectively. Marketers should perform this test both before an ad is put into media and after it is printed or broadcast. Pretest critics maintain that agencies can design ads that test well but may not necessarily perform well in the marketplace. Proponents maintain that useful diagnostic information can emerge and that pretests should not be used as the sole decision criterion anyway. Many advertisers use posttests to assess the overall impact of a completed campaign. If a company hoped to increase brand awareness from 20 percent to 50 percent and succeeded in increasing it to only 30 percent, then the company is not spending enough, its ads are poor, or it has overlooked some other factor.

50) What are the major characteristics of sales promotions as an element of the marketing communications mix?

Companies use sales promotion tools — coupons, contests, premiums, and the like — to draw a stronger and quicker buyer response, including short-run effects such as highlighting product offers and boosting sagging sales. Sales promotion tools offer three distinctive benefits: 1. Ability to be attention-getting — They draw attention and may lead the consumer to the product. 2. Incentive — They incorporate some concession, inducement, or contribution that gives value to the consumer. 3. Invitation — They include a distinct invitation to engage in the transaction now.

51) Which of the following is a disadvantage of using direct mail as an advertising medium? A) low audience selectivity B) lack of flexibility C) high competition within same medium D) relatively high cost E) lack of personalization of advertising message

54) ________ call(s) for the producer to establish a schedule of discounts and allowances that intermediaries see as equitable and sufficient. A) Exclusive dealings B) Mutual services C) Territorial rights D) Price policy E) Tying agreements

98) Which of the following statements is true of the two-step approach to mass communications? A) The influence of mass media on public opinion is more direct, powerful, and automatic than marketers have supposed. B) Communications through mass media bypasses opinion leaders and reaches the individual buyers. C) The two-step flow supports the notion that consumption styles are primarily influenced by a "trickle-down" or "trickle-up" effect from mass media. D) According to the two-step flow, people interact primarily within their own social groups and acquire ideas from opinion leaders in their groups. E) Two-step communication suggests that mass communicators should direct messages to groups of buyers who interpret the message and act accordingly.

103) Rotter Garder Inc. is a large-scale paint manufacturer and is known for its wide range of decorative paint products and industrial coatings. In addition to making paints, the company also owns and operates the retail stores that sell its products. This is an example of a(n) ________ vertical marketing system. A) administered B) contractual C) referent D) corporate E) regulated

104) Premiums, as a consumer promotion tool, are defined as ________. A) offers to consumers of savings off the regular price of a product, flagged on the label or package B) certificates entitling the bearer to a stated saving on the purchase of a specific product C) programs providing rewards related to the consumer's frequency and intensity in purchasing the company's products or services D) merchandise offered at a relatively low cost or free as an incentive to purchase a particular product E) values in cash or in other forms that are proportional to patronage of a certain vendor or group of vendors

119) Mobile ad spending approached ________ worldwide in 2013. A) $14 million B) $18 million C) $48 million D) $18 billion E) $48 billion

122) ________ "Face Retirement" app used 3D "virtual makeover" imaging technology to show people what they might look like as they approached retirement age as part of a campaign to encourage young people to save for retirement. A) Charles Schwab's B) Ameritrade's C) Prudential's D) Bank of America's E) Fidelity Investments's

126) Nadya is designing a mobile ad to promote her company's widgets. Where should the company's logo appear in the mobile ad? A) in the middle of the ad B) centered at the bottom C) centered at the top D) in the corner E) it should not appear

127) JSE Securities Exchange is the largest stock exchange in Africa. The JSE provides a market where securities can be traded freely under a regulated procedure. The company acts as an intermediary between the traders. JSE is an example of a(n) ________. A) internal broker B) infomediary C) customer community D) market maker E) third party arbitrator

13) Which one of the following would be considered high in credence qualities? A) an interior of a house B) a restaurant C) a haircut D) psychotherapy E) a computer

142) When Goodyear began selling its popular tire brands through Sears, Walmart, and Discount Tire, independent dealers that sold the same tires at higher prices were angry. This is an example of a(n) ________ conflict. A) horizontal B) vertical C) intermediate D) multichannel E) parallel

16) Which of the following is an example of an interactive marketing communication platform? A) product demonstrations B) factory tours C) company museums D) TV shopping E) community relations

19) The number of different persons or households exposed to a particular media schedule at least once during a specified time period is known as ________. A) range B) impact C) intensity D) reach E) frequency

21) The qualitative value of an exposure through a given medium is known as ________. A) frequency B) reach C) amplitude D) impact E) range

3) Which of the following firms is most likely to seek radical innovation? A) a traditional publishing company B) a small scale FMCG company C) a firm that procures and markets wheat D) a high-tech firm in telecommunications E) a firm that sells mineral water

34) During which of the following stages in new product development decision making do managers analyze if they can find a good thought consumers say they would try? A) idea generation B) idea screening C) business analysis D) concept development and testing E) product development and testing

39) The qualitative value of an exposure through a given medium is known as ________. A) frequency B) reach C) amplitude D) impact E) range

39) ________ refers to training and motivating employees to serve customers well. A) External marketing B) Promotional marketing C) Direct marketing D) Internal marketing E) Interactive marketing

4) Most new-product activities are devoted to ________. A) changing the target markets B) developing new-to-the-world products C) introducing backward integration D) improving existing products E) changing the existing market dynamics

42) Luke is considering the various options available to him to promote an energy drink, Turbozade, that has decreasing sales volumes after having peaked some time back. Which of the following marketing communications tools should Luke focus marketing efforts on to keep the sales volume up? A) advertising B) direct marketing C) events and experiences D) sales promotions E) publicity

46) Which of the following allows a firm to maintain control over service level and obtain more dedicated and knowledgeable selling? A) selective distribution B) intensive distribution C) push strategy D) exclusive distribution E) pull strategy

47) In which of the following types of advertising timing patterns do exposures appear evenly throughout a given period? A) concentration B) pulsing C) flighting D) continuity E) frequency capping

5) Of the time US consumers spend with all media, almost ________ is spent online. A) one-quarter B) one-third C) two-thirds D) one-half E) three-quarters

5) Spike Inc. is a sportswear manufacturer that recently launched its new line of customizable running shoes. The shoes come with a digital component that allows them to adapt to the runner's biomechanics. To promote this new product, Spike launches an advertising campaign and entices a famous athlete to endorse the product. This is an example of a ________. A) trade promotion B) reverse flow C) push strategy D) pull strategy E) backward flow

61) According to consumer-packaged goods companies, which of the following effects is attributed to the heavy use of sales promotion? A) increased brand loyalty B) focus on long-run marketing planning C) improved brand-quality image D) increased price sensitivity E) greater coupon redemption rates

65) Which of the following consumer promotion tools offers a free amount of a product or service delivered door-to-door, sent in the mail, picked up in a store, attached to another product, or featured in an advertising offer? A) coupons B) rebates C) premiums D) samples E) price packs

70) ________ is a consumer promotion tool that involves inviting prospective purchasers to try the product without cost in the hope that they will buy. A) Sampling B) Premium C) Cross-promotion D) Free trial E) Rebate

71) Which of the following consumer promotion tools involves using one brand to advertise another noncompeting brand? A) tie-in promotion B) frequency programs C) specialty advertising D) cross-promotion E) patronage awards

80) Mountain Dew is a brand known for sponsorships of adventure events such as snowboarding and skateboarding competitions. What is the most likely objective of Mountain Dew's sponsorship of these events? A) to enhance corporate image B) to express commitment to the community or on social issues C) to entertain key clients or reward key employees D) to create perceptions of key brand image associations E) to become part of a personally relevant moment in consumers' lives

81) ________ has enrolled more than half a million mothers in Vocalpoint, a group built on the premise that highly engaged individuals want to learn about products and share their opinions with companies and other individuals. A) Blendtec B) SodaStream C) Google D) P&G E) Vimeo

9) Which of the following conditions necessitates that the objective of advertising should be to stimulate more usage of a product? A) the advertised product belongs to a nascent product category B) the company is not the market leader C) the advertised brand is superior to the market leader D) the product class is mature E) brand usage for the product is very high

90) ________ is a source of a spokesperson's credibility that describes how objective and honest the spokesperson is perceived to be. A) Likability B) Expertise C) Experience D) Trustworthiness E) Compassion

96) ________ testing is a customer test that involves placing the product within the firm to see how it performs in different applications. A) Beta B) Research C) Sales-wave D) Alpha E) Simulated

99) Which of the following is a characteristic of the affordable method of establishing a marketing communications budget? A) fixed annual budget B) suitable for long-range planning C) priority given to role of promotion as an investment D) calculated to reflect what the company can spare for marketing communications E) based on the immediate impact of promotion on sales volume

11) Which of the following is an example of a limited-service retailer? A) Customers at TAB pick out the products they want and pay at the checkout counter. B) Salespeople at Eli are always on hand to offer shoppers advice and assistance in choosing products. C) Mina's allows customers to checkout their own purchases in order to reduce the staff count. D) As CLO's offers a number of merchandise-return privileges, customers need information and assistance while shopping. E) Alison's stocks a number of specialty products and the store's salespeople generally help shoppers with all their needs.

D Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

38) Mass merchandisers and discount stores typically fall into the ________ group with respect to margins and volume. A) mixed markup, high-volume B) low-volume, mixed markup C) low-volume, low-markup D) high-volume, low-markup E) high-markup, lower-volume

D Page Ref: 456 Objective: 2 AACSB: Analytic skills Difficulty: Easy

49) Which of the following is true for distributor brands? A) They sell at higher volumes than national brands and are also known as generics. B) They are usually sold at higher prices than national brands because production costs are higher. C) They are always of better quality than national brands as production is strictly monitored. D) Distributor brands can be sold at lower prices yet generate a higher profit margin because of their lower cost structure. E) Advertising and sales promotion costs for distributor brands are much higher than those for national brands.

D Page Ref: 460 Objective: 4 AACSB: Reflective thinking Difficulty: Easy

64) ________ costs for a manufacturer consist of setup costs and running costs. A) Inventory-carrying B) Containerization C) Wholesaling D) Order-processing E) Transportation

D Page Ref: 467 Objective: 2 Difficulty: Easy

101) Gabrielle is the chief marketing officer of Boyd Pharmaceuticals. She is meeting with Trent, the chief financial officer to decide on the company's marketing communications budget. After extensive discussions, they decide that the size of the budget will be calculated as a fraction of the overall turnover. What method did Gabrielle and Trent use to arrive at the marketing communications budget? A) affordable method B) objective-and-task method C) competitive-parity method D) activity-based method E) percentage-of-sales method

127) When it comes to ad design and copy, mobile ads should use which of the following guidelines? A) Use lots of bright colors but limit ad copy to a pair of phrases. B) Do not use color and limit ad copy to one phrase. C) Use no more than three bright colors and use as much copy as you want. D) Use four bright colors and limit ad copy to one phrase. E) Use at least one bright color, but no more than two, and limit ads to a pair of phrases.

142) Which of the following functions of public relations departments involves presenting news and information about the organization in the most positive light? A) corporate communications B) product publicity C) lobbying D) counseling E) press relations

58) Apple hosts a large number of ________, which become customers' primary source of product information after warranties expire and are organized by product lines and type of user (consumer or professional). A) niche networks B) social networks C) microblogs D) blogs E) online communities

145) ________ is the effect one person has on another's attitude or purchase probability. A) Sharing power B) Collaborative power C) Market influence D) Brand power E) Personal influence

21) Which of the following is true regarding services? A) Services are typically produced, stored, and then consumed. B) Services are generally low in experience and credence qualities. C) Service providers develop similar marketing programs for personal services and business services. D) There is less risk associated with the purchase of services than with the purchase of goods. E) Provider-client interaction is a special feature of services marketing.

26) In order to map out the service process, the points of customer contact, and the evidence of service from the customer's point of view, service firms should develop a ________. A) marketing plan B) service floor plan C) Gantt chart D) business plan E) service blueprint

28) Which of the following is an advantage of using newspapers as an advertising medium? A) long lifespan B) high reproduction quality C) huge "pass-along" audience D) high level of targeting E) good local market coverage

3) To which of the following categories of services does a cell phone belong? A) major service with accompanying minor services B) major service with accompanying minor goods C) pure service D) pure tangible good E) tangible good with accompanying services

32) Aisha is a marketing manager with Injoos, a company that manufactures packaged fruit juices. Knowing that several other companies exist in the market that offer similar products, Aisha decides to build a customer base from among those who prefer to avoid mass media and other targeted promotions. Which of the following marketing communications tools would be her best option to build a favorable impression among the prospective customers? A) advertising B) personal selling C) sales promotions D) direct marketing E) public relations

5) Which of the following is the best example of a new-to-the-world product? A) Walmart, the retail giant, opens new stores in an underdeveloped African country. B) Pestorica, a publishing company, decides to launch a new sports magazine. C) Tata Motors, an Indian automobile company, acquires Jaguar to extend its business. D) An Asian company licenses a US apparel brand name though the brand is not familiar in Asia. E) Kids-Med, a company that produces childcare products, launches a non-contact thermometer.

50) Which of the following is an advantage of using radio as an advertising medium? A) higher attention than television B) standardized rate structures C) long duration of ad exposure D) high quality reproduction E) high geographic selectivity

53) Advertisements for which of the following product categories would be most effective when used with a flighting pattern? A) breakfast cereal B) detergents C) beer D) electric bulbs E) refrigerator

7) Jordan's firm enters new markets by tweaking products for new customers, uses variations on a core product to stay one step ahead of the market, and creates interim solutions for industry-wide products. In other words, it uses ________. A) disruptive technologies B) incremental innovation C) complex innovations D) discontinuous innovations E) radical innovations

7) What percentage of total digital ad spending is accounted for by search advertising? A) 1 percent B) 7 percent C) 17 percent D) 30 percent E) 43 percent

83) Which of the following is NOT an example of viral marketing? A) Quicksilver puts out surfing videos and surf-culture books for teens. B) Johnson & Johnson has a popular parenting advice Web site. C) Walmart places videos with money-saving tips on YouTube. D) Mountain Dew has a record label and offers free downloads. E) Hasbro places a Facebook ad about its TV channel.

69) Morphological analysis starts by forming a new dimension and then thinks about the possible problems of the dimension.

FALSE

112) Communications effectiveness depends solely on the content of a message, irrespective of how it is expressed.

FALSE

113) Value-augmenting services include installation, staff training, maintenance and repair services, and financing.

FALSE

114) Cannibalized income is additional income to a company as a result of a new product.

FALSE

115) Retailer cooperatives allow nonmember retailers to buy through them and share the profits.

FALSE

119) Loyal brand buyers tend to change their buying patterns as a result of competitive promotions.

FALSE

121) Examples of manufacturer promotions include price cuts and feature advertising.

FALSE

125) A price-off pack is an example of a consumer franchise building sales promotions.

FALSE

18) Puffery refers to simple exaggerations in advertisements that are not meant to be believed and are considered illegal.

FALSE

22) The rapid diffusion of multipurpose smart phones, broadband and wireless Internet connections, and ad-skipping digital video recorders (DVRs) have augmented the effectiveness of the mass media.

FALSE

23) Shorter product life cycles are common in industries characterized by low level of competition.

FALSE

25) In this new communication environment, advertising is often the single most important element of a marketing communications program for sales and building brand and customer equity.

FALSE

25) It is difficult for marketers to trace the effects of online marketing communications.

FALSE

26) Personal selling refers to person-to-person oral, written, or electronic communications that relate to the merits or experiences of purchasing or using products or services.

FALSE

26) Relative to online marketing communications, traditional media offers advantages related to contextual placement.

FALSE

27) Beauty pioneer Estée Lauder does not utilize Internet marketing because the multimillion-dollar cosmetics business uses three means of communication: "telephone, telegraph, and tell a woman."

FALSE

31) When Tough Mudder launched in 2010, it spent its entire $8,000 communication budget on mobile advertising, which generated plenty of word of mouth.

FALSE

32) Marketing channel functions such as storage and movement and communications constitute a backward flow of activities.

FALSE

33) A Web site's physical attractiveness is ensured when the site downloads quickly, the first page is easy to understand, and it is easy to navigate to other pages that open quickly.

FALSE

34) A zero-level marketing channel typically uses a wholesaler and a retailer.

FALSE

37) Average click-through for pay-per-click ads is about 0.08 percent.

FALSE

45) Clickable graphic icons and buttons that link to more details of a marketing offer have lower click-through rates than links that simply utilize an Internet address.

FALSE

46) Public relations is incapable of reaching prospects who prefer to avoid mass media and targeted promotions.

FALSE

48) Advertising and publicity play the most important roles in the conviction stage of buyer readiness.

FALSE

67) At the PopSugar blog site, a team of bloggers tracks green consumer products for 5 million unique visitors per month.

FALSE

67) Attribute listing lists several ideas and considers each in relationship to the others.

FALSE

69) Facebook is an early warning system for firms that permits rapid response, whereas Twitter allows deeper dives to engage consumers in more meaningful ways.

FALSE

70) A DROP-error occurs when the company accepts a bad idea.

FALSE

76) A service results in ownership on the part of the client.

FALSE

76) Brands in highly differentiated product classes require heavy advertising to establish a unique image.

FALSE

77) Print advertising, newspapers and magazines, is generally acknowledged as the most powerful advertising medium.

FALSE

77) The production of a service is never tied to a physical product.

FALSE

78) A category concept defines the product's attributes and features.

FALSE

81) A pure service requires a capital-intensive good, but the primary item is a service.

FALSE

81) The higher the forgetting rate associated with a brand, product category, or message, the lower the warranted level of repetition.

FALSE

88) Department stores only face competition from other department stores as other retailing forms are not a threat to their sales and profitability.

FALSE Page Ref: 452 Objective: 3 AACSB: Reflective thinking Difficulty: Easy

95) Retailers can target their customers more effectively by using only a single channel to reach them.

FALSE Page Ref: 454 Objective: 2 Difficulty: Easy

97) In order to clearly differentiate themselves from competitors, retailers must keep merchandise and prices always consistent.

FALSE Page Ref: 455 Objective: 2 AACSB: Analytic skills Difficulty: Easy

105) Private label or store brands are also known as generics.

FALSE Page Ref: 460 Objective: 4 AACSB: Analytic skills Difficulty: Easy

97) Atronix Solutions is a major manufacturer of electronic measuring devices in the United States. The company often threatens to terminate its relationship with its intermediaries if they do not agree with its terms and conditions. What channel power does Atronix use? What are its effects?

Here, the manufacturer is using coercive power. This power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power.

53) Identify two general guidelines for Search Engine Optimization and paid search ads.

Student answers will vary. Here are four general guidelines: • Broader search terms ("MP3 player" or "iPod") are useful for general brand building; more specific ones identifying a particular product model or service ("Apple iPod classic 160GB") are useful for generating and converting sales leads. • Search terms need to be spotlighted on the appropriate pages of the marketer's Web site so search engines can easily identify them. • Any one product can usually be identified by means of multiple keywords, but marketers must bid on each keyword according to its likely return on revenue. It also helps to have popular sites link back to the marketer's Web site. • Data can be collected to track the effects of paid search.

113) Provide five examples of things a marketer might track to measure buzz.

Student answers will vary. Marketers might track scale (how far the campaign reached), speed (how fast it spread), share of voice in that space, share of voice in that speed, whether it achieved positive lift in sentiment, whether the message was understood, whether it was relevant, whether it had sustainability (and was not a one-shot deal), and how far it moved from its source. Other marketers might characterize the source of the word of mouth. One example evaluates blogs by their relevance, sentiment, and authority. Another group measures the types of investments customers make in engaging with brands (e.g., efforts on blogs, microblogs, cocreation, forums and discussion boards, product reviews, social networks, photo and video sharing.

135) When asked about their preferred brand of instant noodles outside a supermarket setting, customers could not remember Nissin's name, but relied on the distinct packaging to help them spot the noodles while shopping. Describe how this problem can be addressed through the objective of Nissin's marketing communications.

Student answers will vary. The objective for Nissin's marketing communications objective should be to build brand awareness, i.e. fostering the consumer's ability to recognize or recall the brand within the category, in sufficient detail to make a purchase. Recognition is easier to achieve than recall — consumers asked to think of a brand of frozen entrées are more likely to recognize Stouffer's distinctive orange packages than to recall the brand. Brand recall is important outside the store; brand recognition is important inside the store. Brand awareness provides a foundation for brand equity.

112) Out-of-pocket costs are what the customer spends on regular maintenance and repair costs.

TRUE

112) Vertical marketing systems achieve economies through size, bargaining power, and elimination of duplicated services.

TRUE

113) A corporate vertical marketing system combines successive stages of production and distribution under single ownership.

TRUE

113) In response to a short-term oversupply of wine in the marketplace, the makers of Kendall-Jackson developed two new brands by using rapid prototyping — designing products on a computer and producing rough models to show potential consumers for their reactions — to quickly bring its ideas to life.

TRUE

115) Sales promotions often attract brand switchers, who are primarily looking for low price, good value, or premiums.

TRUE

115) Two-sided messages are more effective with more educated audiences and those who are initially opposed.

TRUE

116) In a one-sided message, presenting the strongest argument first arouses attention and interest, important in media where the audience often does not attend to the whole message.

TRUE

139) The supply-side measurement method focuses on potential exposure to a brand by assessing the extent of media coverage, and the demand-side method focuses on exposure reported by consumers.

TRUE

153) MPR can hold down promotion cost because it costs less than direct-mail and media advertising.

TRUE

155) Dual compensation pays existing channels for sales made through new channels.

TRUE

21) Companies that fail to develop new products leave their existing offerings vulnerable to increased domestic and foreign competition.

TRUE

21) Marketing communications allow companies to link their brands to other people, places, events, brands, experiences, feelings, and things.

TRUE

43) Williams-Sonoma reported a tenfold increase in response rates when it adopted personalized e-mail offerings based on individuals' on-site and catalog shopping behavior.

TRUE

44) To increase the effectiveness of e-mails, some researchers are employing "heat mapping," which tracks eye movements with cameras to measure what people read on the computer screen.

TRUE

45) Advertising allows the buyer to receive and compare the messages of various competitors.

TRUE

47) In general, personal selling is used more with complex, expensive, and risky goods and in markets with fewer and larger sellers.

TRUE

49) In the growth stage of a product's life cycle, demand has its own momentum through word of mouth and interactive marketing.

TRUE

60) Add-on services such as credit, delivery, installation, and repairs provided by the marketing channel are referred to as service backup.

TRUE

61) Products such as heating and cooling systems are usually sold and maintained by the company or by franchised dealers.

TRUE

66) An intensive distribution strategy serves well for products such as snack foods and soft drinks.

TRUE

66) Employees can be a source of ideas for improving production, products, and services.

TRUE

68) A "do-feel-learn" response sequence is considered appropriate when the audience has high involvement but perceives little or no differentiation within the product category.

TRUE

74) The private non-profit sector is a provider of services.

TRUE

88) A manufacturer is using reward power when it offers intermediaries an extra benefit for performing specific acts or functions.

TRUE

90) Service companies try to demonstrate their service qualities through physical evidence and presentation.

TRUE

91) Inseparability in the context of a service means that there is a provider-client interaction involved as the provider is part of the service.

TRUE

122) List some differentiation strategies retailers can use to compete successfully in the market.

To better differentiate themselves and generate consumer interest, retailers can use the following strategies: (1) Feature exclusive national brands that are not available at competing retailers; (2) feature mostly private-label merchandise; (3) feature blockbuster distinctive merchandise events; (4) feature surprise or ever-changing merchandise; (5) feature the latest or newest merchandise first; (6) offer merchandise-customizing services; and (7) offer a highly targeted assortment. Page Ref: 455 Objective: 2 Difficulty: Easy

49) A Web site's ease of use and physical attractiveness are important to marketers because consumers use them to judge a site's performance. Please explain three things marketers should do to ensure high ratings on each.

Two criteria consumers use to judge a site's performance are ease of use and physical attractiveness. • Ease of use means: The site downloads quickly, the first page is easy to understand, and it is easy to navigate to other pages that open quickly. • Physical attractiveness is ensured when: Individual pages are clean and not crammed with content, typefaces and font sizes are very readable, and the site makes good use of color (and sound).

116) Loyal brand buyers tend to change their buying patterns as a result of competitive promotions.

false

123) The supply-side method identifies the effect sponsorship has on consumers' brand knowledge.

false

128) The public relations function of lobbying involves advising management about public issues, and company positions and image during good times and bad.

false

129) The main objective of marketing public relations is to secure editorial space in print and broadcast media to promote or "hype" a product, service, idea, place, person, or organization.

false

132) MPR can build credibility by placing stories in the media to bring attention to a product, service, person, organization, or idea.

false

113) Sales promotions in markets of high brand similarity can produce a high sales response in the short run but little permanent gain in brand preference over the longer term.

true

115) The historical approach correlates past sales to past advertising expenditures using advanced statistical techniques.

true

117) Dominant brands offer sales promotion deals less frequently, because most deals subsidize only current users.

true

93) An advertising objective is a specific communications task and achievement level to be accomplished with a specific audience in a specific period of time.

true

97) Established brands usually are supported with lower advertising budgets, measured as a ratio to sales.

true

100) Which of the following is usually referred to as a full-blown test market? A) an internal focus group B) a discussion group C) a country D) a city or a few cities E) a laboratory

129) Why should mobile ad developers avoid complex viewing experiences? A) They take a toll on consumers' battery. B) Consumers may have limited data availability. C) Consumers may have limited time. D) All of the above E) None of the above

64) Gloria goes to the same bagel shop every morning because the workers there remember her name and know her order. They always make her feel welcome. The employees of this bagel shop excel at which of the following determinants of service quality? A) reliability B) responsiveness C) assurance D) empathy E) tangibles

A) impact on market share of sponsor B) amount of time a brand is clearly visible on a television screen C) amount of relevant newsprint mentioning the sponsor D) influence on consumers' brand knowledge of the sponsor E) net impact on the sponsor's bottom line

56) ________ serve bulk industries such as coal, lumber, and heavy equipment, assuming title and risk from the time an order is accepted to its delivery. A) Producers' cooperatives B) Cash and carry wholesalers C) Truck wholesalers D) Drop shippers E) Rack jobbers

D Page Ref: 462 Objective: 1 Difficulty: Easy

3) Which of the following is an example of informational advertising? A) Volkswagen famed "Drivers Wanted" campaign B) Pringles campaign with the tagline "Once You Pop, the Fun Don't Stop" C) KFC's fast-food range that it claims to be "Finger Lickin' Good" D) The California Milk Processor Board's famous "Got Milk" campaign E) Excedrin's ads that claim it stops the toughest headache

90) ________ exhibit replacement cycles dictated by physical wear or obsolescence associated with changing style, features, and performance. A) Frequently purchased products B) High-moving goods C) Inexpensive products D) Commodity products E) Infrequently purchased products

92) The top rung of the loyalty ladder is the ________ rung. A) word of mouth/buzz B) repeat purchase C) satisfaction D) evangelism E) ownership

103) If the expected service falls below the perceived service, customers are disappointed.

FALSE

103) P&G's Vocalpoint is a group built on the premise that moms who have conversations with three to five women each day are more influential than women who speak to 25 to 30 other women during the day.

FALSE

104) Concept testing means validating the product concept by discussing within the design group.

FALSE

114) Advanced supply-distributor arrangements for administered vertical marketing systems do not rely on distribution programming.

FALSE

23) Earned media includes company-generated advertising, publicity, and other promotional efforts.

FALSE

70) San Francisco bakery Mission Pie benefited from sending tweet alerts about its events on TreeHugger.com.

FALSE

88) Services have five distinctive characteristics, one of these being "pure service."

FALSE

89) Intangibility with regards to a service means that the service cannot be duplicated across providers.

FALSE

89) When a manufacturer requests a behavior that is warranted under the contract, the manufacturer is using coercive power.

FALSE

91) Coercive and referent power are subjective and depend on the ability and willingness of parties to recognize them.

FALSE

109) What are the two most trusted sources of brand information?

Recommendations from friends and family and online customer reviews.

74) Use reverse assumption analysis to analyze a school.

Student answers will vary. Instead of assuming that a school is a place where teachers teach according to a set syllabus and timetable, you could assume that a school is a place where students choose what they want to learn and how they want to learn it. Students could choose people to teach them, depending on what they want to study.

117) Incessant price reductions, coupons, deals, and premiums can devalue a product in buyers' minds.

TRUE

82) Electronic shopping is a form of direct marketing.

TRUE Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

73) Ravake is a manufacturer of high-end designer apparel. Competition in the apparel industry is severe and the market is driven by price. What distribution strategy would be best suited to help Ravake obtain an edge over its competitors?

The company can use exclusive distribution. It severely limits the number of intermediaries and reduces costs. This would help the company maintain greater control over service levels.

122) Crafted Jewels is a jewelry manufacturer that sells its designs to various jewelry retailers. The retailers often complain that the company's online store acts as a competitor and reduces their profitability. What type of conflict is this? Briefly explain.

This is a case of multichannel conflict. It exists when the manufacturer has established two or more channels that sell to the same market.

76) What are the features of an ideal advertising campaign?

To increase the odds for a successful marketing communications campaign, marketers must attempt to increase the likelihood that each step occurs. For example, the ideal ad campaign would ensure that: • The right consumer is exposed to the right message at the right place and at the right time. • The ad causes the consumer to pay attention but does not distract from the intended message. • The ad properly reflects the consumer's level of understanding of and behaviors with the product and the brand. • The ad correctly positions the brand in terms of desirable and deliverable points-of-difference and points-of-parity. • The ad motivates consumers to consider purchase of the brand. • The ad creates strong brand associations with all these stored communications effects so they can have an impact when consumers are considering making a purchase.

104) The higher the forgetting rate associated with a brand, product category, or message, the lower the warranted level of repetition.

false

114) Incessant price reductions, coupons, deals, and premiums can devalue a product in buyers' minds.

true

145) When a public relations department of a company advises management about public issues, and company positions and image during good times and bad, it is performing the function of ________. A) counseling B) corporate communications C) product publicity D) lobbying E) press relations

79) What percentage of word-of-mouth content cascades to more than one person beyond the initial recipient? A) 4 percent B) 6 percent C) 8 percent D) 10 percent E) 25 percent

81) One of the possible objectives of marketing communications is helping consumers evaluate a brand's perceived ability to meet a currently relevant need. Which of the following is a negatively oriented relevant brand need? A) normal depletion B) sensory gratification C) social approval D) intellectual stimulation E) value enhancement

82) Which of the following types of power is objectively observable? A) coercive power B) legitimate power C) group power D) expert power E) referent power

88) Which of the following ads depict an informational appeal? A) Thompson Water Seal can withstand intense rain, snow, and heat. B) The California Milk Processor Board ran the successful "Got Milk?" ad to boost declining sales. C) VW advertised to active, youthful people with its famed "Drivers Wanted" campaign. D) Pringles advertised "Once You Pop, the Fun Don't Stop" for years. E) KFC has marketed its fast-food products under the slogan, "Finger Lickin' Good."

1) ________ are sets of interdependent organizations participating in the process of making a product or service available for use or consumption. A) Marketing channels B) Interstitials C) Communication channels D) Sales territories E) Marketing terrains

107) Qualities such as candor, humor, and naturalness make a spokesperson ________, which is an important component of spokesperson credibility. A) likable B) an expert C) trustworthy D) transformational E) informational

107) Which of the following consumer promotion tools refers to explicit or implicit promises by sellers that the product will perform as specified or that the seller will fix it or refund the customer's money during a specified period? A) product warranties B) coupons C) free trials D) rebates E) patronage awards

117) Which of the following is the "third screen"? A) mobile phones B) in-vehicle entertainment systems C) televisions D) computers E) elevator screens

126) An Internet service provider (ISP) is a(n) ________ company. A) pure-click B) brick and click C) brick-and-mortar D) m-commerce E) one-level

15) Which of the following is an example of a public relations and publicity communication platform? A) lobbying B) company museums C) street activities D) company blogs E) incentive programs

16) Which of the following will most help service providers overcome the limitation of intangibility of services when positioning itself? A) using brand symbols B) sharing services C) working with larger groups D) cultivating non-peak demand E) creating a service blueprint

17) ________ tracks eye movements with cameras to measure what people read on a computer screen. A) Heat mapping B) An interstitial C) A pay-per-click ad D) A click-through rate E) Animation

2) Mountain Dew's Dewmocracy promotional campaign — including advertising, events, a Web site and social media efforts designed to engage consumers in brand-related activities — is an example of ________. A) paid media B) earned media C) individualization D) word-of-mouth E) mobile marketing

2) Which of the following elements of the marketing communications mix refers to any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor via print, broadcast, network, electronic, and display media? A) advertising B) personal selling C) sales promotion D) direct marketing E) public relations

26) Which of the following entities is present in a zero-level marketing channel? A) consumers B) retailers C) brokers D) jobbers E) wholesalers

29) Door-to-door sales, home parties, mail order, telemarketing, TV selling, Internet selling, and manufacturer-owned stores are examples of ________. A) zero-level channels B) jobbers C) wholesalers D) manufacturer's representatives E) consumers

3) Tracy works for a cellular phone company that offers trade-in allowances toward the upgrade of new phones, which is an example of ________. A) a sales promotion B) interactive marketing C) word-of-mouth marketing D) personal selling E) events and experiences

34) Walmart has decided to hire extra clerks during the holiday season. It is said to be ________. A) matching its supply with the existing demand B) generating non-peak demand C) increasing its customer participation D) sharing its services E) facilitating for its future expansion

43) Which of the following terms refers to add-on services such as credit, delivery, installation, and repairs, and is provided by a marketing channel? A) service backup B) product accessories C) external products D) product variety E) service extensions

45) Which of the following media timing factors expresses the rate at which new customers enter the market? A) buyer turnover B) purchase frequency C) media reach D) weighted number of exposures E) advertising impressions

45) Which of the following types of distribution involves severely limiting the number of channel intermediaries? A) exclusive B) selective C) intensive D) aggressive E) retail

73) ________ seeks to determine whether an ad is communicating effectively. A) Copy testing B) Flighting C) Pulsing D) Frequency capping E) Square inch analysis

84) Who will most likely be willing to pay for high-value-added channels? A) early buyers of a product B) internal customers of a company C) small and matured buyers of an industry D) consumers of low involvement products E) repeat customers of a product

89) When a public relations department of a company advises management about public issues, and company positions and image during good times and bad, it is performing the function of ________. A) counseling B) corporate communications C) product publicity D) lobbying E) press relations

99) Which of the following is a sales promotion tool that typically does NOT build brand image? A) consumer refund offers B) free samples C) premiums related to the product D) frequency awards E) coupons that include a selling message

144) Five characteristics influence the rate of adoption of an innovation. One of these is ________. A) marketing expertise B) relative advantage C) packaging attractiveness D) government regulations E) place of value exchange

44) ________ is a measure of communications effectiveness that describes the percentage of target market exposed to a communication. A) Frequency B) Reach C) Width D) Depth E) Range

55) Which of the following is an advantage of using Yellow Pages as an advertising medium? A) low competition B) high believability C) short ad purchase lead time D) greater scope for creativity E) lack of clutter

Use of Power (Scenario) Broomer manufactures fashion apparel for women, men, and children. Its products are in high demand and apparel stores are more than willing to carry and sell Broomer's garments. The company recently introduced a new clothing line named "Inducer," targeted at youth. However, the new line is not well received by the market, and sales fail to take off even three months after its launch. 75) In an effort to boost sales, Broomer offers its retailers a higher margin for promoting and selling products from the "Inducer" line to customers. This is an example of ________ power. A) coercive B) reward C) passive D) expert E) referent

29) Intercom Inc., together with its subsidiaries, primarily engages in the generation, transmission, and distribution of electric power in the United States. The company observes that its growth has stagnated over a period of two years. In an attempt to promote growth, it considers adding new features to the existing products and introducing a few new products. The company forms a committee consisting of three top executives, one of the production mangers, a few operational managers, and a representative of the HR department to generate ideas. This team is called a(n) ________ team. A) virtual B) venture C) fundamental D) elemental E) transitory

55) Electrobar, a European manufacturer of industrial kitchenware, sells to industrial canteens, restaurants, hotels, and so forth. The company provides a one-year warranty on all products and also allows customers to pay in installments — they pay 50 percent on delivery and the rest as equal installments. This refers to which element in the "trade-relations mix"? A) price policy B) conditions of sale C) distributors' territorial rights D) exclusive dealings E) mutual services and responsibilities

66) ________ are certificates that entitle the bearer to a stated saving on the purchase of a specific product. A) Samples B) Coupons C) Rebates D) Price packs E) Premiums

7) The "Got Milk" campaign was intended to boost the sagging milk consumption among Californians in the 1990s. The campaign ads highlighted the inconvenience of running out of milk when intended to be used with certain foods, such as cookies or muffins, advising consumers to stock up on milk to avoid such inconveniences. The "Got Milk?" campaign an example of ________. A) informational advertising B) reminder advertising C) institutional advertising D) comparative advertising E) reinforcement advertising

7) Which of the following is an example of a pure service? A) air travel B) psychotherapy C) baby oil D) a laptop E) a restaurant meal

86) According to media researcher Duncan Watts, the key to setting a song on the path to popularity is a phenomenon called ________. A) sampling B) cumulative advantage C) influence farming D) entertainment trendspotting E) buzz firing

9) Which of the following is true for self-service retailing? A) These retailers carry more shopping goods and services such as credit and merchandise-return privileges. B) This service model is favored by discount stores and customers who want to save money. C) It results in high staffing costs compared to other forms of retailing. D) Salespeople are ready to assist in every phase of the "locate-compare-select" process. E) Customers need more information and assistance than in other forms of retailing.

B Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

136) Briefly describe "brand awareness" as an objective of marketing communications.

Brand awareness refers to fostering the consumer's ability to recognize or recall the brand within the category, in sufficient detail to make a purchase. Recognition is easier to achieve than recall. Brand recall is important outside the store; brand recognition is important inside the store. Brand awareness provides a foundation for brand equity.

133) Which of the following factors forms the basis of assessing sponsorship activities through supply-side methods? A) consumers' brand knowledge B) impact on sponsor's bottom line C) extent of media coverage D) brand exposure reported by consumers E) sales pattern of sponsored products

4) ________ advertising aims to create liking, preference, conviction, and purchase of a product or service. A) Corporate B) Reminder C) Persuasive D) Reinforcement E) Informational

8) What percentage of total digital ad spending is accounted for by mobile? A) 1 percent B) 7 percent C) 17 percent D) 30 percent E) 43 percent

100) Which of the following is NOT true about the two-step process by which mass communications affect personal attitudes? A) The influence of mass media is mediated by opinion leaders, people whose opinions others seek or who carry their opinions to others. B) The influence of mass media on public opinion is not as direct, powerful, and automatic as marketers have supposed. C) The two-step flow supports the notion that consumption styles are primarily influenced by a trickle-up or trickle-down effect from mass media. D) People interact primarily within their own social groups and acquire ideas from opinion leaders in their groups. E) Two-step communication suggests that mass communicators should direct messages specifically to opinion leaders and let them carry the message to others.

121) Poga International, a multinational beverage corporation identifies that one of its competitors is launching an apple flavored drink. The company decides to launch an apple flavor brand along with its competitor. What timing strategy is used here? A) first entry B) blunt entry C) parallel entry D) late entry E) exchange entry

16) Which of the following is NOT one of the ways to maximize the marketing value of e-mails? A) Give the customer a reason to respond. B) Personalize the content of your e-mails. C) Offer something the customer can get via direct mail. D) Make it easy for customers to opt in as well as unsubscribe. E) Combine e-mail with other communications.

23) Service quality depends on who provides them, when and where, and to whom. Thus, services are highly ________. A) inseparable B) tangible C) variable D) perishable E) intangible

23) The weighted number of exposures (WE) of an advertising message over a given medium is given by ________. A) WE = reach * frequency B) WE = (reach * frequency) / impact C) WE = reach * frequency * impact D) WE = (reach + frequency) / impact E) WE = frequency / reach

29) Which of the following is a disadvantage of using newspapers as an advertising medium? A) lack of flexibility B) high costs of advertisement space C) poor reproduction quality D) low believability E) absence of local market coverage

3) A manufacturer uses the company's sales force and trade promotions to carry, promote, and sell products to end users. Which of the following strategies is this manufacturer using? A) personalization strategy B) tailoring strategy C) push strategy D) pull strategy E) consumer promotion strategy

31) A ________ divides the innovation process into stages with a checkpoint at the end of each stage. A) reverse assumption analysis technique B) skunkworks system C) stage-gate system D) spiral development process E) new-product department technique

32) Cocktail lounges in restaurants are examples of ________. A) differential pricing B) cultivating nonpeak demand C) complementary services D) reservation systems E) shared services

35) Which of the following circumstances are best suited for personal selling? A) when the products used are simple and easy-to-use B) when there is minimal risk involved in buying or using the products C) when the market has fewer and larger sellers D) when the products being marketed are inexpensive and easily available E) when prospective customers are spread across a wide geographic area

36) Which of the following is a disadvantage of using outdoor media for advertising? A) low flexibility B) low repeat exposure C) limited audience selectivity D) high costs E) greater competition

36) ________ is finding the most cost-effective media to deliver the desired number and type of exposures to the target audience. A) Media scheduling B) Content analysis C) Media selection D) Communication design E) Copy testing

37) Which element of the marketing communications mix allows for amplified expressiveness? A) sales promotion B) public relations C) advertising D) direct and interactive marketing E) personal selling

4) ________ aims to create liking, preference, conviction, and purchase of a product or service. A) Corporate advertising B) Reminder advertising C) Persuasive advertising D) Reinforcement advertising E) Informational advertising

43) In which of the following does a customer respond to the functional quality of a service? A) Sara's preferred hair stylist is some miles away, but Sara goes to him because his styles suit her looks. B) Kathy tries out a new restaurant every week, because she likes to experience the variety. C) Bill has gone to the same chiropractor for the past fifteen years, because he is friendly and takes the time to listen to Bill. D) Ray's mechanic charges high prices for service, but his work is good and worth the price. E) Alex has no interest in theater, but goes often because her best friend loves plays.

47) Which of the following is a disadvantage of using newspapers as an advertising medium? A) lack of flexibility B) high costs of advertisement space C) poor reproduction quality D) low believability E) absence of local market coverage

5) Comparative advertising works best when ________. A) it elicits cognitive and behavioral motivations simultaneously B) the firm is trying to minimize brand dilution C) consumers are processing advertising in a detailed, analytical mode D) it elicits affective motivation, followed by cognitive motivation E) the advertising message uses negative fear appeals

5) Which of the following is an example of a trade promotion? A) free samples B) discount coupons C) display allowances D) contests for sales reps E) premiums

51) ________ is an advertising timing pattern that calls for advertising during a period, followed by a period with no advertising, followed by a second period of advertising activity. A) Pulsing B) Continuity C) Flighting D) Concentration E) Frequency capping

52) Many people believe that customer focus does not help to create better, or new, products. This belief rests on which of the following ideas? A) Such new product developments decrease the chances of success. B) Customers do not consider the cost of design when making suggestions. C) Customers are at times unaware of what they really want. D) It increases the cost of testing a product or service. E) Having too much customer focus leads to a negative brand image.

54) Which of the following is a disadvantage of using outdoor media for advertising? A) low flexibility B) low repeat exposure C) limited audience selectivity D) high costs E) greater competition

54) ________ is continuous advertising at low-weight levels, reinforced periodically by waves of heavier activity. A) Flighting B) Frequency capping C) Pulsing D) Concentration E) Session capping

55) In an attempt to improve the product, a company that manufactures screwdrivers discusses the modification of each attribute, such as replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. This creativity technique is called ________. A) attribute listing B) mind mapping C) morphological analysis D) lateral analysis E) reverse analysis

6) Which of the following is an example of a business and sales force promotion? A) advertising allowance B) free samples C) contests for sales reps D) display allowance E) discount coupons

66) Which of the following types of advertising timing patterns calls for spending all advertising dollars in a single period? A) frequency capping B) flighting C) concentration D) pulsing E) continuity

91) Which of the following sources of a spokesperson's credibility describes his or her attractiveness? A) expertise B) trustworthiness C) likability D) integrity E) experience

92) Which of the following elements of the marketing communications mix consists of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers, or the trade? A) advertising B) public relations C) sales promotion D) events and experiences E) personal selling

94) Which of the following personal communications channels consist of family members, neighbors, friends, and associates talking to target buyers? A) expert channels B) advocate channels C) social channels D) formal channels E) sponsored channels

96) Personal influence in marketing communications carries great weight when the ________. A) product being marketed is a convenience item B) purchase of the product is considered to be safe and risk-free C) product suggests something about the user's status or taste D) product being marketed is purchased on a frequent basis E) product or service in questions is used without being recommended by others

97) Which of the following is a form of mass communications channel? A) interactive marketing B) personal selling C) public relations D) word-of-mouth marketing E) sales presentations

109) Which of the following retailer practices involves buying more units than needed of a product under a sales promotion in a region where the manufacturer offers a promotion deal and shipping the surplus to their stores in non-deal regions? A) diverting B) panic buying C) hoarding D) stockpiling E) forward buying

35) ________ refers to simple exaggerations in advertisements that are not meant to be believed and that are permitted by law. A) Puffery B) Boosterism C) Astroturfing D) Doublethink E) Subliminal advertising

88) The trade-off approach may be easier to use when there ________. A) are many variables B) are only a few alternatives C) are observers that are biased D) are possible offers that are limited E) is only one highly desirable solution

14) Internet users spend ________ of their time online searching for information. A) 5 percent B) 10 percent C) 12 percent D) 15 percent E) 20 percent

56) Which of the following is a disadvantage of using Yellow Pages as an advertising medium? A) high competition B) poor local market coverage C) low believability D) lack of adequate reach E) high total costs

63) Faith is a big fan of a popular musical group, so she created a place for other fans to communicate with each other online. Faith created a ________. A) forum B) microblog C) blog D) social network E) microsite

91) To estimate replacement sales, management must research the product's ________, the number of units that fail in year one, two, three, and so on. A) survival-age distribution B) life-cycle ratio C) obsolescence rate D) business turnover ratio E) product-performance usage

1) ________ refers to the means by which firms attempt to inform, persuade, and remind consumers — directly or indirectly — about the products and brands they sell. A) Human resource development B) Marketing communications C) Financial management D) Operations management E) Planning

100) A(n) ________ includes the producer, wholesaler(s), and retailer(s) acting as a unified system. A) parallel marketing channel B) vertical marketing system C) extensive marketing channel D) internal marketing system E) conventional marketing channel

53) The ________ technique for stimulating creativity lists all the characteristics of an object and then modifies each to try to arrive at a new idea. A) reverse assumption analysis B) lateral marketing C) attribute listing D) forced relationship E) morphological analysis

63) According to the hierarchy-of-effects model, which of the following corresponds to the behavioral stage that a buyer passes through? A) awareness B) knowledge C) purchase D) preference E) conviction

75) A ________ is a salesforce promotion tool that aims at inducing the sales force or dealers to increase their sales results over a stated period, with prizes (money, trips, gifts, or points) going to those who succeed. A) trade show B) frequency program C) sales contest D) sweepstake E) patronage award

8) ________ advertising aims to convince current purchasers that they made the right choice. A) Persuasive B) Informational C) Reinforcement D) Reminder E) Comparative

8) ________ aims to convince current purchasers that they made the right choice. A) Persuasive advertising B) Informational advertising C) Reinforcement advertising D) Reminder advertising E) Comparative advertising

105) ________ is a consumer promotion tool that involves inviting prospective purchasers to try the product without cost in the hope that they will buy. A) Sampling B) Premium C) Cross-promotion D) Free trial E) Rebate

150) What is the trade-off in return for the benefits associated with an integrated multichannel marketing system? A) increased market coverage B) customers who buy in one channel are more profitable than customers who buy across different channels C) lower channel costs D) two or more channels may end up competing for the same customer E) customized selling

99) Which of the following is an advantage of sales-wave research? A) It gives surprisingly accurate results on advertising effectiveness. B) It allows the brand to gain favorable shelf position. C) It guarantees immediate brand recognition and high sales volume. D) It can be implemented quickly with a fair amount of security. E) It easily creates a buzz in the minds of customers.

148) Winstar is a large-scale manufacturer with more than a hundred partners across the globe. When making decisions concerning distribution and channel optimization, the company invites members from its channel partners to be part of its advisory committee. This helps the company maintain harmony with its partners. Which of the following conflict resolution techniques is Winstar using? A) diplomatic counselling B) mediation C) arbitration D) co-optation E) joint membership

4) Which of the following elements of the marketing communications mix involves a variety of short-term incentives to encourage trial or purchase of a product or service? A) advertising B) direct marketing C) public relations D) personal selling E) sales promotion

156) Exclusive dealings and tying agreements are illegal and prohibited by law.

FALSE

156) MPR's contribution to a company's bottom line is the easiest to measure among all the available promotion tools.

FALSE

142) How would merchant wholesaler HCN operate?

Merchant wholesalers are independently owned businesses that take title to the merchandise they handle. They are full-service and limited-service jobbers, distributors, and mill supply houses. Page Ref: 462 Objective: 1 AACSB: Analytic skills Difficulty: Easy

67) Selective distribution severely limits the number of intermediaries and is appropriate when the producer wants to maintain control over the service level and outputs offered by the resellers.

FALSE

69) If a small Iowa college builds awareness among applicants from Nebraska, increases the target audience's knowledge about its offerings, communicates in a way that makes the target audience like it and prefer it to other colleges, builds intent to apply, and gets the target audience to attend, they are using an AIDA model of consumer responses.

FALSE

127) Although personal communication is often more effective than mass communication, mass media might be the major means of stimulating personal communication.

TRUE

129) Two-step communication suggests that mass communicators should direct messages specifically to opinion leaders and let them carry the message to others.

TRUE

132) Price pressure will increase for undifferentiated products than differentiated products.

TRUE

135) An ideal event is unique but not encumbered with many sponsors, lends itself to ancillary marketing activities, and reflects or enhances the sponsor's brand or corporate image.

TRUE

109) Merchant wholesalers are independently owned businesses that take title to the merchandise they handle.

TRUE Page Ref: 462 Objective: 1 AACSB: Analytic skills Difficulty: Easy

105) The rationale behind place advertising is that marketers are better off reaching people where they work, play, and shop.

true

125) Media coverage and telecasts only expose the brand and don't necessarily embellish its meaning in any direct way.

true

58) Which of the following is an example of a trade promotion? A) free samples B) discount coupons C) display allowances D) contests for sales reps E) premiums

59) Which of the following is an example of a business and sales force promotion? A) advertising allowance B) free samples C) contests for sales reps D) display allowance E) discount coupons

14) A pull strategy is particularly appropriate when there is low brand loyalty in a category, brand choice is made in the store, the product is an impulse item, and product benefits are well understood.

FALSE

105) A recent Nielsen survey found that online customer reviews were the most trusted source of brand information.

FALSE

105) Reliability refers to the company's willingness to help customers and provide them with prompt service.

FALSE

111) Problem removal and normal depletion are examples of positively oriented relevant brand needs.

FALSE

116) Adding more marketing channels increases the channel cost of selling.

FALSE

117) Fear appeals work best when they are rather strong and reinforce what the audience already believes.

FALSE

121) Trustworthiness is that source of a spokesperson's credibility that describes his or her attractiveness.

FALSE

125) Survival-age distribution refers to the number of customers that the product has in year one, two, three, and so on.

FALSE

126) Personal influence carries especially great weight when products are inexpensive, risk-free, or purchased frequently.

FALSE

127) Modular function deployment methodology takes the list of desired customer attributes generated by market research and turns them into a list of engineering attributes that engineers can use.

FALSE

128) Some firms might delay a new product launch until after the competitor has borne the cost of educating the market and its product may reveal flaws the late entrant can avoid. This can be classified as a parallel entry.

FALSE

130) The percentage-of-sales method leads to a budget set by market opportunities rather than by the availability of funds.

FALSE

14) Persuasive advertising aims to create brand awareness and knowledge of new products or new features of existing products.

FALSE

150) The public relations function of lobbying involves advising management about public issues as well as company positions and image during good times and bad.

FALSE

150) The step in the consumer-adoption process where a consumer considers whether to try the innovation is interest.

FALSE

154) MPR can build credibility by placing stories in the media to bring attention to a product, service, person, organization, or idea.

FALSE

19) Advertising elasticities were estimated to be higher for established (0.3) than for new (0.1) products.

FALSE

21) Kraft utilized customers to name its new flavor of its iconic Vegemite product, and their selection, iSnack 2.0, increased sales dramatically.

FALSE

39) If Apple wanted to generate or convert sales leads, it should focus on broader search terms.

FALSE

59) Lot size refers to the total number of units a channel can transmit from the manufacturer's place to the service outlet.

FALSE

64) Intensive distribution relies on only some of the intermediaries willing to carry a particular product.

FALSE

65) Intensive distribution is becoming a mainstay for specialists looking for an edge in markets increasingly driven by price.

FALSE

66) The less the sender's field of experience overlaps that of the receiver, the more effective the message is likely to be.

FALSE

67) All the response hierarchy models assume that a buyer passes through affective, cognitive, and behavioral stages, in that order.

FALSE

68) Bloggers do not need to disclose their relationship with marketers whose products they endorse.

FALSE

82) All services require the client to be present.

FALSE

83) Outdoor advertising is more effective at creating new brand associations than enhancing brand awareness or brand image.

FALSE

84) Credence qualities of a service are difficult to evaluate before purchase, but easy to evaluate after consumption.

FALSE

87) While goods meet personal needs, services meet business needs.

FALSE

90) A manufacturer obtains referent power when it has special knowledge that intermediaries value.

FALSE

93) The quality of services is independent of who provides them.

FALSE

95) External marketing describes the training and motivation required by employees in order to properly serve the customers.

FALSE

84) A retailer cooperative is a retail firm that is owned by its customers.

FALSE Page Ref: 450 Objective: 1 Difficulty: Easy

134) What are the steps involved in developing effective marketing communications?

1. Identify target audience 2. Determine objectives 3. Design communications 4. Select channels 5. Establish budget 6. Decide on media mix 7. Measure results 8. Manage integrated marketing communications

10) Services high in ________ have characteristics that the buyers can evaluate before purchase. A) search qualities B) experience qualities C) credence qualities D) privacy qualities E) storing qualities

149) Which of the following channel conflict resolution techniques is used only if everything else proves ineffective? A) legal recourse B) mediation C) arbitration D) co-optation E) superordinate goals

2) A merchant is a(n) ________ in the marketing channel. A) wholesaler B) broker C) sales agent D) warehouse E) advertising agency

147) The degree to which the beneficial results of an innovation's use are observable or describable to others is called ________. A) divisibility B) communicability C) compatibility D) relative advantage E) plainness

7) Using the push strategy is most appropriate when ________. A) consumers are able to perceive differences between brands B) the product being sold is an impulse item C) there is high brand loyalty for the product D) the product is a high involvement purchase E) consumers choose the brand before they go to the store

93) When Gerard and his team seek to evaluate blogs according to three dimensions — relevance, sentiment, and authority — they are focused on characterizing the ________ of word of mouth. A) speed B) source C) scale D) share E) space

96) One of the measures of online word of mouth at DuPont was the effort's ________, or how fast it spread. A) authority B) speed C) relevance D) scale E) sustainability

10) Which of the following is one of the elements of a site's ease of use? A) Individual pages are clean and not crammed with content. B) The first page is easy to understand. C) Typefaces and font sizes are very readable. D) The site makes good use of color. E) The site has user-centric privacy controls.

102) Which of the following products is most likely to undergo alpha and beta testing? A) food products B) industrial goods C) consumer products D) commodities E) FMCG products

69) Regular maintenance and repair costs are known as ________. A) service contract costs B) out-of-pocket costs C) fixed costs D) facilitating services costs E) value-augmentation costs

A) Samples B) Coupons C) Rebates D) Price packs E) Premiums

109) A franchise organization is an example of a(n) ________ vertical marketing system. A) corporate B) administered C) contractual D) regulatory E) controlled

93) Which of the following is an example of a trade promotion? A) free samples B) discount coupons C) display allowances D) contests for sales reps E) premiums

95) Sales promotion expenditures increased as a percentage of budget expenditure for a number of years. Growth has, however, recently slowed. Which of the following is a factor that has contributed to the growth of sales promotion expenditures? A) Many brands have come to be seen as dissimilar. B) The efficiency of advertising as a promotion has improved. C) The trade demands more deals from manufacturers. D) Consumers have become less price-oriented. E) The number of brands in the market has decreased.

122) Some firms might delay the launch of their products until after the competitor has borne the cost of educating the market. Such an entry is called ________ entry. A) strategic payoff B) parallel C) balancing D) late E) compensating

20) Along which of the following parameters should marketers evaluate communication options when building brand equity? A) popularity B) innovativeness C) technological sophistication D) efficiency E) novelty

43) Which of the following advertising practices involves advertisers paying filmmakers to have their products make cameo appearances in movies and television shows? A) brand extension B) flyposting C) co-branding D) product placement E) ambush marketing

38) Advertising and publicity tools play the most important roles in influencing buying decisions at the ________ stage of buyer readiness. A) comprehension B) conviction C) ordering D) reordering E) awareness-building

A) breakfast cereal B) detergents C) beer D) electric bulbs E) refrigerator

128) The two-step flow supports the notion that consumption styles are primarily influenced by a "trickle-down" or "trickle-up" effect from mass media.

FALSE

69) Manufacturers can obtain greater control over the selling process by using a sales agency.

FALSE

107) The zone of tolerance for a service is the perceived economic benefits in relationship to the economic costs.

FALSE

123) After a test, the most customer-appealing offer will be the most profitable offer to make.

FALSE

17) If the product class is mature, then the advertising objective is to convince the market of the brand's superiority.

FALSE

18) Organic growth refers to increasing the profitability of the organization by increasing employee productivity.

FALSE

79) Full-service retailers generally have the lowest costs of all retail types.

FALSE Page Ref: 448 Objective: 1 Difficulty: Easy

154) Multichannel conflicts are common when the members of one channel obtain a lower price based on larger-volume purchases.

TRUE

102) Consumers are more likely to share a viral video ad when the brand uses pulsing so it is not too intrusive in the video.

TRUE

126) Dragalong income refers to additional income whereas cannibalized income refers to reduced income.

TRUE

137) Although supply-side exposure methods provide quantifiable measures, equating media coverage with advertising exposure ignores the content of the respective communications.

TRUE

148) Media coordination can occur across and within media types, but marketers should combine personal and nonpersonal communications channels through multiple-vehicle, multiple-stage campaigns to achieve maximum impact and increase message reach and impact.

TRUE

149) By using full-service marketing communications agencies, integrated and more effective marketing communications at a much lower total communications cost can be achieved.

TRUE

15) Companies should first think of the target market and then design the supply chain backward from that point. This strategy is called demand chain planning.

TRUE

152) Creative public relations can affect public awareness at a fraction of the cost of advertising.

TRUE

19) Companies typically must create a strong R&D and marketing partnership to pull off a radical innovation.

TRUE

19) Doritos brand's "Crash the Super Bowl" contest resulted in a healthy uptick in Twitter, Facebook, and other social media activity.

TRUE

29) In 2013, total digital ad spending surpassed TV advertising for the first time.

TRUE

32) A Web site's ease of use means the site downloads quickly, the first page is easy to understand, and it is easy to navigate to other pages that open quickly.

TRUE

33) All functions in a marketing channel use up scarce resources and can be shifted among channel members.

TRUE

34) J.D. Power found that consumers who were "delighted" with an automotive manufacturer's Web site were more likely to test drive one of its vehicles as a result.

TRUE

35) One of the key recommendations for managing Web site privacy "touch points" is preventing human intrusion by using automation whenever possible.

TRUE

35) The flow of materials to refurbish products for resale constitutes a reverse flow.

TRUE

38) Search engine optimization (SEO) describes activities designed to improve the likelihood that a link for a brand is as high as possible in the rank order of all nonpaid links when consumers search for relevant terms.

TRUE

39) Venture teams are cross-functional groups charged with developing a specific product or business.

TRUE

65) Cocreation can help a company create favorable word of mouth.

TRUE

65) Social media allow marketers to build or tap into online communities, inviting participation from consumers and creating a long-term marketing asset in the process.

TRUE

70) If the Coolest Cooler introduced its cooler to the general market and developed communications around the idea that it was going to develop awareness, interest, evaluation, trial, and then adoption, it would be using the innovation-adoption model of consumer responses.

TRUE

71) When it comes to social media, only some consumers want to engage with some brands, and, even then, only some of the time.

TRUE

75) A service is essentially intangible.

TRUE

85) The experience qualities of a good or service can be evaluated after purchase.

TRUE

100) Although newspapers are timely and pervasive, magazines are typically more effective at building user and usage imagery.

true

94) The job of translating target customer requirements into a working prototype is helped by a set of methods referred to as ________. A) quality function deployment B) quality control processes C) rapid prototyping D) marketing control E) control system formation

119) List the four categories of non-store retailing and briefly explain each.

Although the overwhelming bulk of goods and services are sold through stores, nonstore retailing has been growing much faster than store retailing. Nonstore retailing falls into four major categories: Direct selling, also called multilevel selling and network marketing, is a multibillion-dollar industry, with hundreds of companies selling door-to-door or at home sales parties. A salesperson goes to the home of a host who has invited friends; the salesperson demonstrates the products and takes orders. Pioneered by Amway, the multilevel (network) marketing sales system works by recruiting independent businesspeople who act as distributors. The distributor's compensation includes a percentage of sales made by those he or she recruits, as well as earnings on direct sales to customers. These direct-selling firms, now finding fewer consumers at home, are developing multidistribution strategies. Direct marketing has roots in direct-mail and catalog marketing. It includes telemarketing, television direct-response marketing, and electronic shopping. As people become more accustomed to shopping on the Internet, they are ordering a greater variety of goods and services from a wider range of web sites. Automatic vending offers a variety of merchandise, including impulse goods such as soft drinks, coffee, candy, newspapers, magazines, and other products such as hosiery, cosmetics, hot food, and paperbacks. Vending machines are found in factories, offices, large retail stores, gasoline stations, hotels, restaurants, and many other places. They offer 24-hour selling, self-service, and merchandise that is stocked to be fresh. Buying service is a storeless retailer serving a specific clientele, usually employees of large organizations, who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership. Page Ref: 449 Objective: 1 Difficulty: Easy

A) advertising allowance B) free samples C) contests for sales reps D) display allowance E) discount coupons

131) Mobile phone company HCF delayed the introduction of a new cell phone model with innovative features so that the launch could coincide with that of its competitor, LCM, which was introducing a phone with similar features. What kind of entry did HCF use? How can this benefit the company?

HCF used a parallel entry strategy. The market may pay more attention when two companies are advertising the new product.

10) Which of the following is the most accurate description of a value network? A) a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings B) a system of organizations and resources involved in moving a product from supplier to customer C) an arrangement whereby an organization transforms inputs into finished goods D) a network that allows an organization take the finished products to the end-users E) a communication network that allows an organization to transfer information to end-customers

103) During ________ testing, the company's technical people observe how customers use the product, a practice that often exposes unanticipated problems of safety and servicing and alerts the company to customer training and servicing requirements. A) beta B) research C) sales-wave D) alpha E) simulated

108) A group of small grocery shops forms a new business entity to buy products directly from manufacturers. The group buys products in bulk that are then distributed among members. This helps the shops obtain better profit margins. Which of the following types of vertical marketing systems can be observed here? A) contractual B) corporate C) administered D) controlled E) regulatory

124) Which of the following is the most complete and accurate description of a pure-click company? A) These are companies that launch a Web site without any previous existence as a firm. B) These firms' business models are based on advertising revenue. C) These are established companies that have an online site for selling products. D) These companies get paid every time a user visits their Web site. E) These companies sell online space to other Web sites and are paid for the service.

147) Co-optation is an effort by one organization to win the support of the leaders of another by ________. A) including them in advisory councils B) engaging in mediation and arbitration C) encouraging joint memberships in trade associations D) encouraging employee exchanges E) offering strategic justifications

16) Pager, a simple personal device for short messages, became famous in the 1990s. Troveron Communications launched a pager in the early twenty-first century. Due to the introduction of mobile phones and text messaging, the pager industry was on a decline. The company's innovations were not well received by the market and the product was a failure. Which of the following is the most likely reason for the product's failure in this case? A) poor launch timing of the product B) a small and fragmented target market C) high cost of development D) social and economic constraints E) hasty product development

41) Toyota has an advantage over Lexus due to the fact that there are more Toyota dealers, which helps customers save on transportation and search costs in buying and repairing an automobile. Which of the following service outputs relates to this competitive advantage? A) spatial convenience B) service backup C) lot size D) waiting time E) delivery time

99) What is the major difference between a conventional marketing channel and a vertical marketing system (VMS)? A) Elements in a conventional marketing channel act as separate businesses whereas the elements in a VMS act as a unified system. B) A VMS has many intermediaries whereas a conventional marketing channel has a limited number of intermediaries. C) A VMS is characterized by an independent producer whereas a conventional marketing channel is characterized by multiple producers. D) A conventional marketing channel has elements such as retailers and wholesalers whereas these elements are not present in a VMS. E) Producers have complete control over the other members in a conventional marketing channel whereas this control is minimal in a VMS.

101) A(n) ________ vertical marketing system combines successive stages of production and distribution under single ownership. A) corporate B) administered C) contractual D) regulatory E) controlled

103) ________ are consumer promotion tools that provide a price reduction after purchase rather than at the retail shop. A) Rebates B) Cents-off deals C) Price packs D) Coupons E) Premiums

12) Which of the following is generally acknowledged as the most powerful advertising medium and reaches a broad spectrum of consumers at low cost per exposure? A) television B) radio C) newspapers D) magazines E) billboards

120) ________ are bite-sized software programs that can be downloaded to smart phones. A) Mobile apps B) Mini-billboards C) Loyalty programs D) Virtual maps E) Cookies

128) Exxon Consulting works as an agent on behalf of business consumers to collect information on various industrial products. When faced with buying decisions, businesses can approach Exxon to obtain detailed information on the various options available to them. The company earns revenue by selling such information to various customers. Exxon Consulting can be called a(n) ________. A) infomediary B) market maker C) customer community D) third party arbitrator E) informant

129) Consumer surveys suggest that one of the most significant inhibitors of online shopping is the absence of ________. A) pleasurable experiences B) competitive prices C) adequate technical information D) after-sales service E) facilities to compare offerings

130) Which of the following is an example of a brick-and-click company? A) IFB Industries, a company that sells products using various channels such as Internet, retailers, direct outlets, and franchisees. B) Opera, a Web browser and Internet suite developed by Opera Software, performs common tasks such as displaying Web sites and sending and receiving e-mail messages. C) Atrutron, a company that offers its customers access to the Internet using data transmission technology. D) eBay Inc., an American company, facilitates online auctions and shopping to people and businesses across the globe to buy and sell a broad variety of goods and services. E) Yahoo! Inc., an American corporation, provides services via the Internet such as directories, e-mail, news, advertising, online mapping, and so on.

134) Adopters of new products move through five stages. These stages begin with ________ and follow with interest, evaluation, trial, and adoption. A) awareness B) investigation C) trial D) innovation E) diffusion

134) M-commerce refers to ________. A) conducting business using mobile channels B) the use of mass media communications to attract customers C) providing mobile and on-site services to customers D) the use of a specific medium to communicate with prospects E) using the Internet as a medium for doing business

136) Robert has heard about the latest cell phone from LG Electronics that features Wi-Fi hotspot technology. Wi-Fi hotspot is a technology that allows users to share mobile internet with other Wi-Fi enabled devices. Robert visits the company's Web site to read more about the phone. Robert is in the ________ stage of consumer-adoption process. A) interest B) awareness C) evaluation D) trial E) adoption

139) People who are technology enthusiasts, venturesome, and who enjoy tinkering with new products and mastering their intricacies are called ________. A) innovators B) early adopters C) early majority D) investigators E) experimenters

14) According to researchers, which of the following is the correct order in which content of print advertisements matter? A) picture-headline-copy B) copy-picture-headline C) headline-copy-picture D) picture-copy-headline E) copy-headline-picture

140) ________ channel conflict occurs between channel members at the same level. A) Horizontal B) Vertical C) Multichannel D) Administrative E) Contractual

141) ________ is a marketing communications tool that includes a variety of programs to promote or protect a company's image or individual products. A) Public relations B) Advertising C) Sales promotion D) Personal selling E) Direct marketing

143) A manufacturer wants to achieve rapid market penetration through a low-price policy. However, the manufacturer's dealers prefer to work with high margins and pursue short-run profitability. The major reason for this conflict is ________. A) goal incompatibility B) unclear roles C) ambiguous rights D) differences in perception E) dependence on the manufacturer

16) ________ refers to simple exaggerations in advertisements that are not meant to be believed and that are permitted by law. A) Puffery B) Boosterism C) Astroturfing D) Doublethink E) Subliminal advertising

17) Which of the following is an example of a word-of-mouth marketing communication platform? A) chat rooms B) billboards C) factory tours D) incentive programs E) trade shows

30) In which of the following cases is a service provider trying to increase non-peak demand? A) A fine dining restaurant is promoting a breakfast service in addition to its popular lunch and dinner options. B) An upscale restaurant has a cocktail lounge where customers can wait until a table is ready. C) AXA Bank set up automated teller machines so that its customers could avoid standing in line. D) Chesterton College hired part-time teachers as enrollment increased significantly. E) Big department stores usually hire extra staff to handle the rush during the holiday season.

30) Which of the following is an advantage of using television as an advertising medium? A) high attention and reach B) low absolute cost C) absence of clutter D) long duration of ad exposure E) high audience selectivity

31) Which of the following is a disadvantage of using television as an advertising medium? A) high absolute cost B) low audience attention C) lack of reach among audience D) high audience selectivity E) absence of clutter

31) Which of the following is generally acknowledged as the most powerful advertising medium and reaches a broad spectrum of consumers at low cost per exposure? A) television B) radio C) newspapers D) magazines E) billboards

33) According to researchers, which of the following is the correct order in which content of print advertisements matter? A) picture-headline-copy B) copy-picture-headline C) headline-copy-picture D) picture-copy-headline E) copy-headline-picture

33) Which of the following marketing communications tools is most effective at the later stages of the buying process? A) personal selling B) public relations C) advertising D) sales promotions E) direct marketing

48) Which of the following is a major disadvantage of using the Internet as a marketing channel? A) It is less effective for complex products. B) It lacks convenience and practicality. C) It cannot be used to reach a wide audience. D) It is considered expensive. E) It causes the company to lose direct contact with customers.

48) Which of the following is an advantage of using television as an advertising medium? A) high attention and reach B) low absolute cost C) absence of clutter D) long duration of ad exposure E) high audience selectivity

49) Although Brenda previously used the U.S. Postal Service because it offered better prices on package shipping, she now uses only FedEx, because it gives her the facility of shipping from any FedEx Kinkos location 24 hours a day. Which of the following factors led to Brenda's customer switching behavior? A) inconvenience B) pricing C) response to service failure D) ethical problems E) involuntary switching

49) Armon Apparels designs, manufactures, and distributes athletic apparel and accessories for men and women. The company has only nine distributors across the United States. These distributors control a nationwide network of 600 retailers. The company does not sell its products through other channels. This is an example of ________ distribution. A) selective B) intensive C) exclusive D) internal E) passive

52) Which of the following products is most likely to be sold using an exclusive distribution strategy? A) designer luggage B) cigarettes C) alcoholic beverages D) car fuel E) medicine

53) Which of the following covers payment terms and producer guarantees? A) conditions of sale B) pricing policies C) exclusive dealings D) mutual services E) territorial rights

55) ________ seeks to determine whether an ad is communicating effectively. A) Copy testing B) Flighting C) Pulsing D) Frequency capping E) Square inch analysis

56) Electro Locomotors (EL) Inc. engages in the manufacture, distribution, and marketing of custom vehicles in Brazil. Bono, a hybrid car brand that the company produces, is a market leader in the hybrid vehicles segment. With the increased global focus on nature-friendly vehicles and governmental subsidies for companies that manufacture hybrid vehicles, competition has increased for flex-fuel cars like Bono. The heads of the R&D team at EL are in a creative session to generate ideas for improvements to Bono. They consider each part of the car and discuss the possibilities of improvements in each of them. Identify the creativity technique used here. A) attribute listing B) forced relationship analysis C) morphological analysis D) reverse assumption analysis E) mind mapping

56) Which of the following channels is associated with the lowest cost per transaction? A) Internet B) telemarketing C) retail stores D) distributor E) sales force

60) For which of the following product categories are consumers least likely to engage with on social networks? A) Purex laundry detergent B) USA Today C) Red Cross D) Salvation Army E) NBC News

61) Morboro Energy Inc. is a large chain of fuel stations in Europe. The company decided to expand its business by incorporating restaurants and automobile service stations as a part of its fuel outlets. This is an example of ________. A) lateral marketing B) brand extension C) market development D) internal marketing E) brand personification

63) Which of the following media timing factors expresses the rate at which new customers enter the market? A) buyer turnover B) purchase frequency C) media reach D) weighted number of exposures E) advertising impressions

and provide reviews on the cars' performance, their prices, and other factors. Which of the following personal communications channels is Top Gear closest to in description? A) expert channel B) formal channel C) social channel D) sponsored channel E) advocate channel

of the following terms best represents this practice? A) channel integration B) mass customization C) online personalization D) push strategy E) internal marketing

10) Which of the following types of retailing generally entails the highest costs? A) full-service B) self-service C) limited-selection D) limited service E) self-selection

A Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

12) Bill and Josh are considering opening a retail store. They have identified their target market and location and are finalizing the details of the merchandise they will carry. Since the neighborhood is rundown and the customers in the area are very price-conscious, Bill and Josh want to offer goods from well-known brands, but at lower rates than the full retail prices of the products. They choose to stock excess production from manufacturers or goods that have remained unsold at other retailers. This is a description of a(n) ________ retailer. A) off-price B) specialty C) discount D) department E) catalog

A Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

62) ________ encompass sales forecasting, production planning, and inbound materials transportation. A) Market logistics B) Containerization C) Transportation D) Nonstore retailing E) Wholesaling

A Page Ref: 464 Objective: 1 AACSB: Analytic skills Difficulty: Easy

65) As inventory draws down, management must know at what stock level to request additional stock. This stock level is called the ________. A) reorder point B) least fixed point C) point of divergence D) inflection point E) critical point

A Page Ref: 467 Objective: 2 Difficulty: Easy

70) Beyond the optimal order quantity, total cost per unit increases because ________. A) inventory-carrying cost per unit increases B) inventory-carrying cost per unit decreases C) order-processing cost per unit increases D) order-processing cost per unit increases though inventory cost decreases E) inventory-processing cost per unit falls slowly

A Page Ref: 467-468 Objective: 2 AACSB: Communications Difficulty: Easy

74) ________ consists of putting goods in boxes or trailers that are easy to transfer between two transportation modes. A) Containerization B) Haulage C) Inventory carrying D) Order processing E) Warehousing

A Page Ref: 468 Objective: 2 AACSB: Analytic skills Difficulty: Easy

73) An item described as low-risk and low-opportunity is a ________. A) nuisance item B) bottleneck item C) variable item D) critical item E) commodity

A Page Ref: 468 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

80) What is a brand-positioning map?

A brand-positioning map is a perceptual map showing the current positions of various existing brands competing with each other.

17) Explain the concept of a value network.

A company can be seen as being at the center of a value network, a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings. A value network includes a firm's suppliers and its suppliers' suppliers, and its immediate customers and their end customers. The value network includes valued relationships with others such as university researchers and government approval agencies. A company needs to orchestrate these parties in order to deliver superior value to the target market. Managing a value network means making increasing investments in information technology (IT) and software. Firms have introduced supply chain management (SCM) software and invited such software firms as SAP and Oracle to design comprehensive enterprise resource planning (ERP) systems to manage cash flow, manufacturing, human resources, purchasing, and other major functions within a unified framework.

47) What is a spiral development process?

A spiral development process recognizes the value of returning to an earlier stage to make improvements before moving forward.

37) Briefly explain the various levels of marketing channels.

A zero-level channel, also called a direct marketing channel, consists of a manufacturer selling directly to the final customer. The major examples are door-to-door sales, home parties, mail order, telemarketing, TV selling, Internet selling, and manufacturer-owned stores. A one-level channel contains one selling intermediary, such as a retailer. A two-level channel contains two intermediaries. In consumer markets, these are typically a wholesaler and a retailer. A three-level channel contains three intermediaries. In the meatpacking industry, wholesalers sell to jobbers, essentially small-scale wholesalers, who sell to small retailers.

108) What are four pieces of advice for getting a viral ad shared?

According to a viral advertising expert from Harvard Business School: Utilize brand pulsing so the brand is not too intrusive within the video; open with joy or surprise to hook those fickle viewers who are easily bored; build an emotional roller coaster within the ad to keep viewers engaged throughout; and surprise but don't shock — if an ad makes viewers too uncomfortable, they are unlikely to share it.

47) What are the advantages and disadvantages of online marketing communications?

Advantages — companies can offer or send tailored information or messages that engage consumers by reflecting their special interests and behavior; marketers can easily trace their effects by noting how many unique visitors or "UVs" click on a page or ad, how long they spend with it, what they do on it, and where they go afterward; the Internet offers contextual placement, which means marketers can buy ads on sites related to their own offerings; marketers can place advertising based on keywords customers type into search engines to reach people when they've actually started the buying process. Disadvantages — consumers can screen out messages; software-powered Web sites generate bogus clicks, which can throw off metrics; marketers can lose control of online messages, which can be hacked or vandalized.

51) What is the role of advertising as a communications tool in marketing for business markets?

Although marketers rely more on sales calls in business markets, advertising still plays a significant role: • Advertising can provide an introduction to the company and its products. • If the product has new features, advertising can explain them. • Reminder advertising is more economical than sales calls. • Advertisements offering brochures and carrying the company's phone number or Web address are an effective way to generate leads for sales representatives. • Sales representatives can use copies of the company's ads to legitimize their company and products. • Advertising can remind customers how to use the product and reassure them about their purchase.

96) Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile phones, and media devices. It also sells software, services, and third-party digital content. Apple is a highly respected brand across the globe. What kind of channel power does this respect give Apple?

Apple is so highly respected that intermediaries are proud to be associated with it. This gives Apple referent power.

102) The most advanced supply-distributor arrangements for ________ vertical marketing systems rely on distribution programming. A) corporate B) administered C) contractual D) regulatory E) controlled

105) A(n) ________ VMS consists of independent firms at different levels of production and distribution, integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone. A) administered B) contractual C) corporate D) regulated E) referent

12) The average click-through in terms of the percentage of consumers who click on a link for ________ is about 2 percent. A) search engine optimization B) pay-per-click ads C) standard banner ads D) microsites E) rich media banner ads

104) Gabrielle is the chief marketing officer of Boyd Pharmaceuticals. She is meeting with Trent, the chief financial officer to decide on the company's marketing communications budget. They pore over the sales reports and other financial records and determine the amount of resources they can spare for marketing communications, after resources have been allocated to other functions, such as R&D, logistics, etc. What method did Gabrielle and Trent use to arrive at the marketing communications budget? A) objective-and-task method B) affordable method C) competitive-parity method D) activity-based method E) percentage-of-sales method

107) In a retailer cooperative, ________. A) profits are equally divided among members B) members plan their advertising jointly C) nonmembers cannot buy through the co-op D) members rely on distribution programming E) members standardize their selling practices

133) A(n) ________ is any good, service, or idea that is perceived as new, no matter how long its history. A) commodity B) innovation C) adoption D) invention E) novel product

144) What function does a company's public relations department perform when it promotes understanding of the organization through internal and external communications? A) lobbying B) corporate communications C) press relations D) product publicity E) counseling

146) The most effective communications mix tool at later stages of the buying process is ________ because it is particularly effective at building buyer preference, conviction, and action. A) sales promotions B) personal selling C) advertising D) direct and interactive marketing E) events

18) Devin, an online marketing manager for the Gilt Groupe, sends more than 3,000 variations of its daily e-mail for its flash-sale site based on recipients' past ________, browsing history, and purchase history. A) complaints B) click-throughs C) comments D) ratings E) interstitials

19) BRZ Shoes positions itself as a young, adventurous brand. Its logo and brand communication try to give consumers a feeling of excitement and bravery. These ads appeal to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social

19) The starting point in planning marketing communications is a ________ that profiles all interactions customers in the target market may have with the company and all its products and services. A) marketing budget B) communications audit C) market research program D) publicity campaign E) product launch

20) The number of times within a specified time period that an average person or household is exposed to an advertising message is known as ________. A) impact B) frequency C) amplitude D) reach E) depth

22) Which of the following channel functions constitute only a backward flow? A) movement of physical goods B) placing orders with manufacturers C) persuasive communication D) storage of physical goods E) overseeing actual transfer of ownership

24) Which of the following will help a service provider overcome the limits imposed by the inseparability of services? A) using differential pricing B) working with larger customer groups C) providing complementary services D) concentrating on physical evidence and presentation E) standardizing the service process

28) ________ teams are cross-functional groups charged with developing a specific product or business. A) Virtual B) Venture C) Fundamental D) Elemental E) Transitory

29) A travel agency offers weekend discounts for car rentals. What can be deduced from this? A) It is increasing peak-time efficiency. B) It is using differential pricing. C) It is using linear pricing. D) It is cultivating peak demand. E) It is providing complementary services.

3) Which of the following is NOT one of the four main categories of online marketing communications? A) Web sites B) guerrilla marketing C) search ads D) display ads E) e-mail

30) Place advertising, or out-of-home advertising, is a broad category that includes many creative and unexpected forms to grab consumers' attention, including all of the following EXCEPT ________. A) billboards B) yellow pages C) public spaces D) product placement E) point of purchase

31) The Caesar Park Hotel generally caters to business customers during the week, but has now decided to promote minivacation weekends for non-business customers as well. What is the Caesar Park Hotel trying to do? A) It is implementing premium pricing. B) It is trying to cultivate nonpeak demand. C) It is promoting complementary services. D) It is putting reservation systems in place. E) It is implementing differential pricing.

32) ________ are informal workplaces, sometimes garages, where intrapreneurial teams attempt to develop new products. A) Stage-gate systems B) Skunkworks C) Funnels D) Opportunity spaces E) Research centers

35) Which of the following is a disadvantage of using magazines as an advertising medium? A) low geographic and demographic selectivity B) long ad purchase lead time C) low-quality reproduction D) small "pass-along" readership E) lack of credibility

37) Often, a service problem arises from a customer's lack of understanding or ineptitude. Which of the following can help to minimize customer failures? A) giving customers exclusive primary service packages B) redesigning processes to simplify service encounters C) using differential pricing and shared services D) minimizing service intangibility E) working with more customers at the same time

4) A computer falls into the ________ category of service mix. A) pure tangible good B) tangible good with accompanying services C) hybrid D) major service with accompanying minor goods E) pure service

41) Susanna wanted to check out a new salon in her locality, so she decided to go for a hair styling session. She was very happy with the way her stylist connected and related with her concerns. She is judging the service based on its ________. A) promotional marketing B) functional quality C) technical quality D) search qualities E) external marketing

44) Firms have decided to raise fees and lower service for those customers who barely pay their way and to coddle big spenders to retain their patronage as long as possible. This is an example of organizing customers by ________. A) retailer convenience B) profit tiers C) psychographic characteristics D) social influence E) customer preference

44) The popular music talent show, American Idol, has been generally acknowledged as the most profitable TV series in U.S. history, in terms of advertising and merchandising revenue. Major sponsors of the show include Coca-Cola, AT&T Wireless, and iTunes, among many others. Cups bearing the logo of Coca-Cola were a prominent prop found on the show's judges' tables. The show also urged viewers to vote for contestants using AT&T sms services. Contestants were routinely shown rehearsing for their performances with the help of Apple iPods. Which of the following advertising practices is apparent in this example? A) ambush advertising B) product placement C) angel dusting D) co-branding E) subliminal advertising

46) ________ is the number of times the average buyer buys a product during the period. A) Buyer turnover B) Purchase frequency C) Customer retention rate D) Advertising impressions E) Total number of exposures

50) Angela switched to a new hair stylist after getting a bad haircut from her previous stylist. This is an example of which of the following factors leading to customer switching behavior? A) service encounter failure B) core service failure C) response to service failure D) involuntary switching E) competition

59) Increasingly, new-product ideas arise from ________ that combines two product concepts or ideas to create a new offering. A) reverse assumption analysis B) lateral marketing C) attribute listing D) forced relationships E) morphological analysis

59) The social network which focuses on career-minded professionals is ________. A) Facebook B) LinkedIn C) MySpace D) Twitter E) Gawker

60) The customer service representatives at G.K.'s customer service center must know as much about the products as possible, so that they can help the customers solve their difficulties without sounding hesitant or unsure of themselves. Which of the following determinants of service quality are they being asked to demonstrate? A) responsiveness B) assurance C) empathy D) reliability E) tangibility

61) Josh gets his bike serviced at Dean's Garage even though there's another garage much closer to home. He prefers Dean's because the work is usually done quickly and the staff try to solve the issues with the bike as soon as possible. Dean's Garage excels at which of the following five determinants of service quality? A) reliability B) responsiveness C) assurance D) empathy E) tangibles

62) The ________ determinant of service quality refers to the knowledge and courtesy of employees and their ability to convey trust and confidence in the service they provide. A) conscientious B) assurance C) empathy D) reliability E) responsiveness

62) Which of the following is a blog network? A) Facebook B) Sugar C) MySpace D) Groupon E) YouTube

78) Becoming part of a personally relevant moment in consumers' lives through ________ can broaden and deepen a company or brand's relationship with the target market. A) advertisements B) events and experiences C) sales promotions D) public relations E) direct marketing efforts

78) Which of the following increases the likelihood a brand is discussed in face-to-face, oral communications? A) brand novelty B) brand salience C) brand excitement D) brand surprise E) brand edginess

8) Which of the following elements of the marketing communications mix includes a variety of programs directed internally to employees of the company or externally to consumers, other firms, the government, and media to promote or protect a company's image or its individual product communications? A) direct marketing B) public relations and publicity C) personal selling D) advertising E) sales promotion

83) A new firm typically starts as a local operation selling in a fairly circumscribed market by ________. A) finding and developing new intermediaries B) using a few existing intermediaries C) forming partnerships with the market leader D) creating a special channel E) forming partnerships with other firms

83) Modern firms use the ________ tool to design products on a computer and then produce rough models to show potential consumers for their reactions. A) morphological analysis B) rapid prototyping C) concept testing D) perceptual mapping E) conjoint analysis

86) With ________, respondents see different hypothetical offers formed by combining varying levels of the attributes, then rank the various offers. A) gap level analysis B) conjoint analysis C) perceptual mapping D) concept testing E) morphological analysis

88) What function does a company's public relations department perform when it promotes understanding of the organization through internal and external communications? A) lobbying B) corporate communications C) press relations D) product publicity E) counseling

89) ________ is one of the sources of a spokesperson's credibility that refers to the specialized knowledge that he or she claims to possess. A) Trustworthiness B) Expertise C) Acquaintance D) Likability E) Professionalism

91) Which of the following is a medium of visual identity for a company? A) annual reports B) dress codes C) press releases D) seminars E) trade shows

97) ________ social media ground control and command center in Round Rock, Texas, has 70 employees and processes 25,000 daily social media events in 11 different languages, responding to most queries and complaints within 24 hours. A) DuPont's B) Dell's C) Gatorade's D) Wells Fargo's E) Nestlé's

Marketing Management, 14e (Kotler/Keller) Chapter 13 Designing and Managing Services 1) Which of the following is a characteristic of a service? A) It is essentially tangible. B) It does not result in the ownership of anything. C) Its production is majorly tied to a physical product. D) Services are typically produced and consumed at different times. E) A client's presence is not required for rendering a service.

1) ________ includes all the activities in selling goods or services directly to final consumers for personal, nonbusiness use. A) Wholesaling B) Retailing C) Procurement D) Promoting E) Warehousing

B Page Ref: 447 Objective: 1 AACSB: Analytic skills Difficulty: Easy

8) In the ________ type of retailing, customers usually find their own goods, although they can ask salespeople for assistance. A) self-service B) self-selection C) full-service D) limited service E) limited-selection

B Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

14) E&OE produces and markets its own brand of skincare products using herbal remedies and natural ingredients through standalone stores as well as an online portal. E&OE is a(n) ________ retailer. A) off-price B) specialty C) discount D) department E) extreme value

B Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

16) Companies who sell products door-to-door or at home sales parties are engaging in ________. A) franchising B) network marketing C) direct-response marketing D) corporate selling E) direct marketing

B Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

18) Which of the following is an example of direct marketing? A) E&OE sells its herbal skincare products exclusively through its stand-alone stores. B) TCJ is a telemarketing firm that sells products from a number of different suppliers. C) Jayne's sells most of its products to customers through home sales parties. D) J3 is a storeless retailer that organizes the retail activity of the employees of four firms. E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.

B Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

19) The ________ marketing sales system works by recruiting independent businesspeople who act as distributors. A) catalog B) multilevel C) direct-response D) corporate E) direct

B Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

27) A ________ is wholesaler-sponsored group of independent retailers engaged in bulk buying and common merchandising. A) retailer cooperative B) voluntary chain C) consumer cooperative D) merchandising conglomerate E) franchise organization

B Page Ref: 450 Objective: 1 Difficulty: Easy

52) Because shelf space is scarce, many supermarkets now charge a ________ for accepting a new brand, to cover the cost of listing and stocking it. A) retainer B) slotting fee C) residual fee D) contingent fee E) royalty

B Page Ref: 460 Objective: 4 AACSB: Analytic skills Difficulty: Easy

59) Agricultural assemblers, petroleum bulk plants and terminals, and auction companies are examples of ________. A) full-service wholesalers B) specialized wholesalers C) limited-service wholesalers D) merchant wholesalers E) brokers

B Page Ref: 462 Objective: 1 AACSB: Analytic skills Difficulty: Easy

66) A stock order point of 10 means ordering the product ________. A) every 10 days B) when stock falls to 10 units C) every 10 units D) when stock falls to 9 units E) in batches of 10 items

B Page Ref: 467 Objective: 2 AACSB: Analytic skills Difficulty: Easy

71) Companies are reducing their inventory costs by treating inventory items differently, positioning them according to risk and opportunity. High-risk, low-opportunity items are known as ________. A) nuisance items B) bottleneck items C) variable items D) critical items E) commodities

B Page Ref: 468 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

77) If the shipper owns its own truck or air fleet, it becomes a ________. A) containerized carrier B) private carrier C) contract carrier D) common carrier E) diversified carrier

B Page Ref: 468 Objective: 2 Difficulty: Easy

11) ________ is an element of the marketing communications mix that involves people-to-people oral, written, or electronic communications that relate to the merits or experiences of purchasing or using products or services. A) Personal selling B) Sales promotion C) Word-of-mouth marketing D) Public relations E) Advertising

135) Identify the stage in the consumer adoption process in which the customer is stimulated to seek information about the innovation. A) awareness B) adoption C) interest D) evaluation E) trial

144) When Estee Lauder set up a Web site to sell its Clinique and Bobbi Brown brands, Dayton Hudson reduced space for Estee Lauder products in its department stores in response to the ________ conflict. A) horizontal channel B) multichannel C) vertical channel D) grid channel E) end-customer

51) Dean recently had a BRZ broadband connection installed. However, the connection was bad and he didn't get the quality he required. He contacted BRZ about the problem, but the company did not solve his problem. Dean switched to Blue Broadband. Which of the following was the cause of Dean's switching behavior? A) involuntary switching B) competition C) response to service failure D) service encounter failures E) inconvenience

72) ________ is continuous advertising at low levels, reinforced periodically by waves of heavier activity. A) Flighting B) Frequency capping C) Pulsing D) Concentration E) Session capping

5) Reynold's is a grocery chain that has always catered to mid-market customers. However, the owner, Mal, has noticed that an influx of new residents are buying mostly the lower-cost products and products on discount. To attract customers, Mal decides to make a gradual switch to the discount store format, but to do this, he will have to cut costs wherever possible. Which of the following types of service should Mal avoid in order to lower costs? A) limited service B) self-selection C) full-service D) self-service E) limited-selection

C Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

52) How do the stages of buyer readiness affect the composition of a product's marketing communications mix?

Communication tools vary in cost-effectiveness at different stages of buyer readiness. Advertising and publicity play the most important roles in the awareness-building stage. Customer comprehension is primarily affected by advertising and personal selling. Customer conviction is influenced mostly by personal selling. Closing the sale is influenced mostly by personal selling and sales promotion. Reordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising.

124) Why is the Web experience different for mobile phone users than for people who are surfing from a computer? A) smaller screen sizes B) longer download times C) lack of software D) all of the above E) none of the above

138) Which of the following is the mental step in the consumer-adoption process where the customer starts considering whether to try an innovation? A) adoption B) trial C) awareness D) evaluation E) interest

106) Marketing communications budgets tend to be higher when there ________. A) is high channel support B) exists hardly any change in the marketing program over time C) are infrequent product purchases in large quantities D) are differentiated products and nonhomogeneous customer needs E) are many easily reachable customers spread over small geographic territories

106) Which of the following consumer promotion tools involves using one brand to advertise another noncompeting brand? A) tie-in promotion B) frequency programs C) specialty advertising D) cross-promotion E) patronage awards

22) The fact that services are typically produced and consumed simultaneously is known as the ________ aspect of services. A) perishability B) intangibility C) heterogeneity D) inseparability E) variability

24) Producers often shift some functions to intermediaries. Which of the following is the most significant benefit of doing this? A) It increases customer loyalty. B) It provides the producer with greater control over operations. C) It reduces the amount of direct customer interaction. D) It lowers the producer's costs and prices. E) It ensures greater information security.

26) What is the gross rating points (GRP) for a media schedule that reaches 60 percent of homes with an average exposure frequency of 4 and impact of 1.5? A) 15 B) 160 C) 360 D) 240 E) 10

33) Which of the following is a disadvantage of using direct mail as an advertising medium? A) low audience selectivity B) lack of flexibility C) high competition within same medium D) relatively high cost E) lack of personalization of advertising message

33) Which of the following questions is answered during the business analysis of ideas? A) Will this product meet our profit goals? B) Have we got a technically and commercially sound product? C) Can we find a cost-effective, affordable marketing strategy? D) Can this product meet sales expectations? E) Can we find a good concept consumers say they would try?

36) Customers today want separate prices for each service element and they also want the right to select the elements they want. The customers are said to be pressing for ________. A) complementary services B) perishable services C) variable services D) unbundled services E) shared services

36) Which of the following marketing communications tools is most effective at influencing customers at the conviction stage of buyer readiness? A) advertising B) publicity C) sales promotion D) personal selling E) events and experiences

59) The most important determinant of service quality is ________ which refers to the ability to perform the promised service dependably and accurately. A) empathy B) assurance C) responsiveness D) reliability E) tangibles

76) A(n) ________ is a possible product the company might offer to the market. A) test brand B) alpha product C) beta version product D) product idea E) product concept

76) ________ is the time necessary to prepare a promotional program prior to launching it. A) Sell-in time B) Link time C) Setup time D) Lead time E) Hold time

89) ________ is the rung of the customer loyalty ladder where the customer convinces others to purchase/join. A) Word of mouth/buzz B) Repeat purchase C) Satisfaction D) Evangelism E) Ownership

60) A group of college graduates decides to start a business. Though they are knowledgeable in various business domains, they are unable to arrive at a valuable business idea. They decide to search for ideas in a structured manner. They meet and start discussing everyone's ideas. Each idea is recorded and then the thoughts that come up in relation to the ideas are written down and discussed. This process helps them to finalize a business plan. What technique is used here? A) morphological analysis B) forced relationship analysis C) reverse assumption analysis D) attribute listing E) mind mapping

113) Rolex calls itself the "Official Timekeeper" of the Wimbledon and Australian Open lawn tennis championships, by virtue of its sponsorships of the marquee events. What is the most likely objective for Rolex's sponsorship deal with these events? A) to permit merchandising or promotional opportunities B) to express commitment to the community or on social issues C) to create experiences and evoke feelings D) to identify with a particular target market or lifestyle E) to increase salience of company or product name

14) It has been observed that most new products have shorter product life cycles. What is the reason for this? A) Most new products do not use technology. B) Most new products are not backed by a marketable idea. C) New products do not get adequate management support. D) Social and governmental constraints lead to this failure. E) Rivals quickly copy products that are successful.

14) Which one of the following is highest in search qualities? A) a play at a theater B) a meal at a restaurant C) a haircut D) psychotherapy E) a computer

143) As Ben manages communications for his company's watch brand, which has reached the decline stage in the product life cycle, which of the following marketing communications mix tools is he most likely to continue? A) interactive marketing B) advertising C) personal selling D) direct marketing E) sales promotion

143) Joseph, a student of Columbia University, finds many of his classmates have purchased an iPad tablet from Apple. The iPad, launched a few months before has been identified as a very useful product and many students in the US have rated it highly. Considering all these, Joseph also decides to purchase an iPad. Which of the following is the adopter group to which Joseph belongs? A) early adopter B) innovator C) late majority D) laggard E) early majority

54) The ________ technique used for stimulating creativity identifies a problem and then considers the dimension, the medium, and the power source. A) attribute listing B) reverse assumption analysis C) mind mapping D) lateral marketing E) morphological analysis

6) How much was total digital ad spending in 2013? A) $40.1 million B) $42.8 million C) $18.4 billion D) $40.1 billion E) $42.8 billion

6) ________ advertising aims to stimulate repeat purchase of products and services. A) Reinforcement B) Comparative C) Persuasive D) Informational E) Reminder

6) ________ aims to stimulate repeat purchase of products and services. A) Reinforcement advertising B) Comparative advertising C) Persuasive advertising D) Informational advertising E) Reminder advertising

77) ________ begins with the promotional launch and ends when approximately 95 percent of the deal merchandise is in the hands of consumers. A) Lead time B) Hold time C) Setup time D) Link time E) Sell-in time

98) A large FMCG company decides to test market Kora, a new brand of face cleanser, to be launched soon. The company initially distributes a few free samples to some prospective consumers. Later it offers the product to the customers at a discounted price and observes that not only more than seventy percent of the customers are purchasing it but the same number are also satisfied using it. The company keeps using this process 3-4 times to obtain a correct count of the number of people purchasing the product repeatedly. Which of the following testing methods is being used here? A) simulated testing B) controlled testing C) full test marketing D) parallel testing E) sales-wave research

2) Which of the following is true for retailing? A) Manufacturers are not considered to be retailers as they are engaged in producing the product. B) Vending machines are considered to be retailing only if they are located within stores. C) Retailing deals only with goods; it does not include services. D) Selling from a consumer's home is direct selling, but not retailing. E) Wholesalers are only considered to be retailers if they are selling to final consumers.

E Page Ref: 447 Objective: 1 AACSB: Analytic skills Difficulty: Easy

21) Telemarketing is a type of ________. A) direct selling B) network marketing C) multilevel selling D) close-range marketing E) direct marketing

E Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

22) Electronic shopping is a type of ________. A) direct selling B) network marketing C) multilevel selling D) corporate selling E) direct marketing

E Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

33) Electronic shelf labeling allows retailers to ________. A) check inventory levels instantaneously B) order electronically from suppliers C) run continual promotional messages D) advertise sales and special offers E) change price levels instantaneously

E Page Ref: 452 Objective: 3 Difficulty: Easy

36) In supermarkets and other retail outlets, RFID is used to ________. A) change prices instantaneously B) check for spoilage or damage to goods C) advertise special offers and discounts D) run continual promotional messages E) monitor inventory and track goods

E Page Ref: 455 Objective: 2 Difficulty: Easy

118) DMM Industries, a manufacturer of composite metal products, sells its products using a conventional marketing channel. The company decides to adopt a vertical marketing system to improve its performance. What advantages could this provide?

Each entity in a conventional channel is a separate business seeking to maximize its own profits, even if this goal reduces profit for the system as a whole. A vertical marketing system, by contrast, acts as a unified system. This would make the company more profitable. VMSs achieve economies through size, bargaining power, and elimination of duplicated services.

153) A customer survey at a mall revealed that Zoe is considered to be an early adopter. What does this mean?

Early adopters are opinion leaders who carefully search for new technologies that might give them a dramatic competitive advantage. They are less price sensitive and willing to adopt the product if given personalized solutions and good service support.

115) Customers of a proposed truck may want a certain acceleration rate, which is a desired customer attribute. Engineers can turn this into the required horsepower and other engineering attributes through a process known as alpha testing.

FALSE

122) The most highly credible source would score high on at least two of the three dimensions — expertise, trustworthiness, and likability.

FALSE

131) Brick-and-click companies are those that have launched a Web site without any previous existence as a firm.

FALSE

151) Compatibility refers to the degree to which the innovation matches the values and experiences of the individuals.

FALSE

155) MPR is effective in blanketing local communities and reaching specific groups and hence has to be planned separately from the less cost-effective advertising.

FALSE

20) High-tech firms that function in a market with high technological uncertainty, high market uncertainty, and high investment costs are not likely to seek radical innovation.

FALSE

106) Social influence can lead to disproportionally positive online ratings, and subsequent raters are more likely to be influenced by previous negative ratings than positive ones.

FALSE

108) A major drawback of conjoint analysis is that it cannot be used to measure objective attributes such as estimated market share and profit.

FALSE

108) The payment equity for a service is a range from the minimum level of service consumers are willing to accept to the level they believe can and should be delivered.

FALSE

109) The trade-off approach may be easier to use when there are only a few variables and alternatives.

FALSE

110) Beta testing tests the product within the firm to see how it performs in different applications.

FALSE

110) If the length of the downtime increases, the cost incurred decreases.

FALSE

114) One-sided presentations that praise a product are found to be more effective than two-sided arguments that also mention shortcomings.

FALSE

114) Sales promotion consists of a collection of incentive tools designed to mainly stimulate long-term brand associations of products or services with consumers or the trade.

FALSE

13) Sales agents and brokers are called facilitators in a marketing channel.

FALSE

136) The supply-side method identifies the effect sponsorship has on consumers' brand knowledge.

FALSE

15) Reinforcement advertising aims to stimulate repeat purchase of products and services.

FALSE

151) The main objective of marketing public relations is to secure editorial space in print and broadcast media to promote or "hype" a product, service, idea, place, person, or organization.

FALSE

30) The amount spent on search ads in 2013 was $12.8 billion.

FALSE

79) Salt is an example of a hybrid.

FALSE

79) When a company combines two product concepts or ideas to create a new offering, it is called reverse assumption analysis.

FALSE

80) A hybrid consists of unequal parts of goods and services, with services being in the majority.

FALSE

86) Furniture is high in credence qualities.

FALSE

87) An advertiser makes "local buys" when it buys TV time in just a few markets or in regional editions of magazines.

FALSE

83) A superstore is a storeless retailer serving a specific clientele who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership.

FALSE Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

80) Discount stores usually stock leftover goods, overruns, and irregular merchandise, sold at less than retail.

FALSE Page Ref: 449 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

93) Electronic shelf labeling allows retailers to check inventory levels instantaneously.

FALSE Page Ref: 452 Objective: 3 AACSB: Analytic skills Difficulty: Easy

108) Wholesalers exclude manufacturers and farmers because they are engaged primarily in production, but include retailers, as they are selling to the end consumer.

FALSE Page Ref: 461 Objective: 1 Difficulty: Easy

111) More stocking locations mean goods can be delivered to customers more quickly, and warehousing and inventory costs are lower.

FALSE Page Ref: 463 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

110) Most companies today are trying to increase the order-to-payment cycle.

FALSE Page Ref: 466 Objective: 2 AACSB: Use of IT Difficulty: Easy

116) The order-processing cost per unit increases with the number of units ordered because the order costs are spread over more units.

FALSE Page Ref: 467-468 Objective: 2 AACSB: Analytic skills Difficulty: Easy

74) Why should firms avoid too much democratization of innovation?

Groundbreaking ideas can be replaced by lowest-common-denominator solutions.

138) What can US marketers learn about mobile marketing by looking overseas?

In developed Asian markets such as Hong Kong, Japan, Singapore, and South Korea, mobile marketing is fast becoming a central component of customer experiences. In developing markets, high smart-phone penetration also makes mobile marketing attractive. For example, Coca-Cola created a national campaign asking Beijing residents to send text messages guessing the high temperature in the city every day for just over a month for a chance to win a one-year supply of Coke products. The campaign attracted more than 4 million messages over the course of 35 days.

138) How does American Express utilize m-commerce?

It runs a "Link-Like-Love" social commerce program, which sends cardmembers couponless personalized offers from merchants based on their Facebook "likes" and Facebook Places check-ins that are automatically redeemed through card use. Via a partnership with Foursquare, cardmembers could also automatically receive and redeem promotional offers from merchants based on their Foursquare activity.

46) Interno Computers Inc., together with subsidiaries, designs, manufactures, and markets personal computers and mobile communication and media devices, as well as sells related software, services, peripherals, networking solutions, and applications worldwide. The company is planning to launch a high-end portable digital music player worldwide. What is the best way to organize this product launch?

Large companies, like Interno, often establish a new-product department headed by a manager with substantial authority and access to top management whose responsibilities include generating and screening new ideas, working with the R&D department, and carrying out field testing and commercialization. This model is necessary here as the product is going to be launched worldwide.

75) A group of young students run an Internet center. In an attempt to increase their profitability they start a cafe alongside the existing business. Explain the type of marketing used here.

Lateral marketing is used here. It combines two product concepts or ideas to create a new offering.

126) Describe the four steps in market logistics planning.

Market logistics includes planning the infrastructure to meet demand, then implementing and controlling the physical flows of materials and final goods from points of origin to points of use, to meet customer requirements at a profit. Market logistics planning has four steps: Deciding on the company's value proposition to its customers. (What on-time delivery standard should we offer? What levels should we attain in ordering and billing accuracy?). Selecting the best channel design and network strategy for reaching the customers. (Should the company serve customers directly or through intermediaries? What products should we source from which manufacturing facilities? How many warehouses should we maintain and where should we locate them?). Developing operational excellence in sales forecasting, warehouse management, transportation management, and materials management. Implementing the solution with the best information systems, equipment, policies, and procedures. Page Ref: 464 Objective: 1 AACSB: Analytic skills Difficulty: Easy

16) What are marketing channels? Briefly explain some of the different types of intermediaries.

Marketing channels are sets of interdependent organizations participating in the process of making a product or service available for use or consumption. They are the set of pathways a product or service follows after production, culminating in purchase and consumption by the final end user. Some intermediaries — such as wholesalers and retailers — buy, take title to, and resell the merchandise; they are called merchants. Others — brokers, manufacturers' representatives, sales agents — search for customers and may negotiate on the producer's behalf but do not take title to the goods; they are called agents. Still others — transportation companies, independent warehouses, banks, advertising agencies — assist in the distribution process but neither take title to goods nor negotiate purchases or sales; they are called facilitators.

51) What is a microsite? Provide an example of a firm that is likely to benefit from the use of a microsite.

Microsites are individual Web pages or clusters of pages that function as supplements to a primary site. They're particularly relevant for companies selling low-interest products. People rarely visit an insurance company's Web site, for example, but the company can create a microsite on used-car sites that offers advice for buyers of used cars and a good insurance deal at the same time.

11) What does the term organic growth mean?

Organic growth refers to the development of new products from within.

46) Social media play a key role in earned media. Distinguish between earned media and paid media.

Paid media includes company-generated advertising, publicity, and other promotional efforts. Earned media is all the PR and word-of-mouth benefits a firm receives without having directly paid for anything — all the news stories, blogs, and social network conversations that deal with a brand.

140) Identify three different types of personal communication channels.

Personal communications channels derive their effectiveness from individualized presentation and feedback and include direct marketing, personal selling, and word of mouth. Advocate channels consist of company salespeople contacting buyers in the target market. Expert channels consist of independent experts making statements to target buyers. Social channels consist of neighbors, friends, family members, and associates talking to target buyers.

27) What is the role of print media in advertising? What are the major advantages and disadvantages associated with print advertising media?

Print media offer a stark contrast to broadcast media. Because readers consume them at their own pace, magazines and newspapers can provide detailed product information and effectively communicate user and usage imagery. At the same time, the static nature of the visual images in print media makes dynamic presentations or demonstrations difficult, and print media can be fairly passive. The two main print media — magazines and newspapers — share many advantages and disadvantages. Although newspapers are timely and pervasive, magazines are typically more effective at building user and usage imagery. Newspapers are popular for local — especially retailer — advertising. Although advertisers have some flexibility in designing and placing newspaper ads, relatively poor reproduction quality and short shelf life can diminish the ads' impact.

133) Differentiate between pure-click companies and brick-and-click companies.

Pure-click companies are those that have launched a Web site without any previous existence as a firm, while brick-and-click companies are existing companies that have added an online site for information or e-commerce. There are several kinds of pure-click companies: search engines, Internet service providers (ISPs), commerce sites, transaction sites, content sites, and enabler sites. Brick-and-click companies are formed by adding an e-commerce channel to an existing business.

36) What are the various functions performed by members of a marketing channel? Provide examples.

Some of the functions that the members of a marketing channel perform (storage and movement, title, and communications) constitute a forward flow of activity from the company to the customer; other functions (ordering and payment) constitute a backward flow from customers to the company. Still others (information, negotiation, finance, and risk taking) occur in both directions.

133) Mal's father and grandfather ran Reynold's, a general store in the town of Bayswater. When Mal inherited the store, the town was expanding rapidly and a number of multinational franchisors showed interest in entering the town. Mal wants to turn Reynold's into a franchise of Blue Sun, a fast-food chain. Why shouldn't Mal go the franchise route?

Student answers may vary. Most franchises offer franchisees limits or negligible independence in the questions of staffing, pricing, store decor, sourcing and processes. Mal may have to make changes that he does not agree with. He may not have the freedom to run the business as he thinks best. Page Ref: 450 Objective: 1 AACSB: Reflective thinking Difficulty: Moderate

138) Supermarket chain Reynold's is considering making a switch to stocking almost exclusively private-label products in order to offer customers the lowest prices. Offer reasons why Reynold's should think twice before opting to stock exclusively private-label products.

Student answers may vary. Reynold's should think twice about opting for private-label products because consumers prefer certain national brands, and many product categories are not feasible or attractive on a private-label basis. Page Ref: 459 Objective: 4 AACSB: Analytic skills Difficulty: Moderate

129) Sandy's Stores is a small chain of grocery stores located in a few neighboring towns. The stores have always been largely self-service, but the company is considering making a switch to full-service stores. What can Sandy's do to justify this move?

Student answers may vary. To justify the increased staff costs of full-service retailing, Sandy's can add higher-value products to its line-up. The company can begin carrying a higher proportion of specialty goods. Page Ref: 445 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

143) Jayne runs a small grocery store in a small town. As there are only few customers, the store does not require to stock goods in large quantities. Explain why sourcing products from a wholesaler will be beneficial for Jayne.

Student answers may vary. Wholesalers are able to select items and build the assortments Jayne needs, saving considerable work. Wholesalers achieve savings for Jayne by buying large carload lots and breaking the bulk into smaller units. Thus, Jayne can benefit from lower bulk prices while buying only as much as the store can sell. Wholesalers also hold inventories, thereby reducing inventory costs and risks for Jayne. Page Ref: 462 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

13) What is incremental innovation? Give an example of incremental innovation.

Student answers will vary. Incremental innovation refers to entering new markets by tweaking products for new customers, using variations on a core product to stay one step ahead of the market, and creating interim solutions for industry-wide problems. When Scott Paper couldn't compete with Fort Howard Paper Co. on price for the lucrative institutional toilet tissue market, it borrowed a solution from European companies: a dispenser that held bigger rolls. Scott made the larger rolls of paper and provided institutional customers with free dispensers, later doing the same thing with paper towels. Scott not only won over customers in a new market; it became less vulnerable to competitors, such as Fort Howard, which could lower prices but weren't offering the larger rolls or tailor-made dispensers.

133) Marco is working on promoting his company's Glazer brand of electronic razors. Market research suggests that the target audience possesses an intent to use Glazers, but is dithering over actually making the purchase. How can he modify the communications program to get customers to purchase Glazer razors?

Student answers will vary. Marco's task, once the intent to make a purchase has been fostered in consumers, is to lead them to the actual buying action. This can be achieved by offering the razors at a low introductory purchase to encourage initial use among customers, offering a discount on the price, or holding a promotional event where they can actually try out the product firsthand.

107) What is viral marketing? Please provide an example.

Student answers will vary. Viral marketing is a form of online word of mouth, or "word of mouse," that encourages consumers to pass along company-developed products and services or audio, video, or written information to others online. Student examples will vary, but an example from the text is Blendtec's Will It Blend? videos.

39) Dell computers is a manufacturer of computers. Dell accepts orders for computers online and ships the products to the customer. Explain the likely physical flow of materials in this case.

Suppliers to Transporters to Warehouses to Dell to Transporters to Customers

105) Rapid prototyping refers to designing products on a computer and then producing rough models to show potential consumers for their reactions.

TRUE

106) The appearance of physical facilities, equipment, personnel, and communication materials are the tangibles that convey service quality to consumers.

TRUE

107) Consumer preferences for alternative product concepts can be measured with conjoint analysis.

TRUE

113) Volkswagen's famed "Drivers Wanted" advertising campaign aimed at attracting active, youthful people uses a transformational appeal as its creative strategy.

TRUE

16) When Staples introduced a new $69.99 paper-shredding device called the MailMate in 2006 by striking a two-episode deal with NBC's popular television program, The Office, it was using product placement.

TRUE

92) A service provider can work with larger groups to get around the limitations of inseparability.

TRUE

104) Postpurchase services include shipping and delivery, gift wrapping, adjustments and returns.

TRUE Page Ref: 457 Objective: 2 Difficulty: Easy

107) Wholesaling includes all the activities in selling goods or services to those who buy for resale or business use.

TRUE Page Ref: 461 Objective: 1 Difficulty: Easy

115) As inventory draws down, management must know at what stock level to place a new order. This stock level is called the order point.

TRUE Page Ref: 467 Objective: 2 AACSB: Analytic skills Difficulty: Easy

112) Inventory cost increases at an accelerating rate as the customer-service level approaches 100 percent.

TRUE Page Ref: 467 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

28) Briefly describe the current marketing communications environment.

Technology and other factors have profoundly changed the way consumers process communications, and even whether they choose to process them at all. The rapid diffusion of multipurpose smart phones, broadband and wireless Internet connections, and ad-skipping digital video recorders (DVRs) have eroded the effectiveness of the mass media. In 1960, a company could reach 80 percent of US women with one 30-second commercial aired simultaneously on three TV networks: ABC, CBS, and NBC. Today, the same ad would have to run on 100 channels or more to achieve this marketing feat. Consumers not only have more choices of media, they can also decide whether and how they want to receive commercial content.

24) Describe how advertising objectives are set to reflect the product class.

The advertising objective should emerge from a thorough analysis of the current marketing situation. If the product class is mature, the company is the market leader, and brand usage is low, the objective is to stimulate more usage. If the product class is new, the company is not the market leader, but the brand is superior to the leader, then the objective is to convince the market of the brand's superiority.

23) Explain the classification of advertising objectives.

The classification of advertising objectives includes: • Informative advertising aims to create brand awareness and knowledge of new products or new features of existing products. • Persuasive advertising aims to create liking, preference, conviction, and purchase of a product or service. Some persuasive advertising uses comparative advertising, which makes an explicit comparison of the attributes of two or more brands. Comparative advertising works best when it elicits cognitive and affective motivations simultaneously, and when consumers are processing advertising in a detailed, analytical mode. • Reminder advertising aims to stimulate repeat purchase of products and services. • Reinforcement advertising aims to convince current purchasers that they made the right choice.

74) National Beverage Corp. produces and distributes a wide range of beverages. It offers a selection of flavored soft drinks, juices, sparkling waters, energy drinks, nutritionally enhanced waters, and other specialty beverages. What distribution strategy will be most suitable for the company's products?

The company has to use intensive distribution, which places the goods or services in as many outlets as possible. This strategy serves well for products consumers buy frequently or in a variety of locations.

22) In developing an advertising program, marketing managers can make the five major decisions known as the five Ms. List and explain each of these Ms.

The five major decisions are: 1. Mission — sales goals and advertising objectives 2. Money — factors to consider: stage in PLC, market share and consumer base, competition and clutter, advertising frequency, and product substitutability 3. Message — message generation, message evaluation and selection, message execution, and social-responsibility review 4. Media — reach, frequency, impact, major media types, specific media vehicles, media timing, and geographical media allocation 5. Measurement — communication impact and sales impact.

139) What is geofencing? Provide an example.

The idea of geofencing is to target customers with a mobile promotion when they are within a defined geographical space, typically near or in a store. The local-based service requires just an app and GPS coordinates, but consumers have to opt in. Neiman-Marcus is piloting geofencing in its stores so its salespeople know when their more valuable customers are on the premises and can look at their purchase history to provide more personalized service.

73) Gravity is a company that markets customized T-shirts to its customers. Gravity runs an ad that seeks to attract more customers. Apply the macromodel of the communications process to describe the communication between Gravity and its target customers.

The macromodel of the communications process comprises of nine key factors in effective communication. Two represent the major parties — sender (Gravity) and receiver (audience). Two represent the major tools — message (content of the ad) and media (print, TV, radio, etc). Four represent the major communications functions — encoding (creation and transmission of the ad by Gravity), decoding (the reception and comprehension of the ad by the audience), response (either ignoring the message or buying Gravity shirts), and feedback (customers providing information about the ad to measure its effectiveness). The last element is noise, random and competing messages that may interfere with the intended communication. Examples of noise in this case could be misunderstood messages from the ad, similar ads from competitors, etc.

128) What are some of the reasons sales promotion expenditures might increase as a percentage of budget expenditure?

The promotion becomes more accepted by top management as an effective sales tool; competitors used promotions frequently; consumers became more price-oriented, and trade demanded more deals from manufacturers.

121) List some recent trends in retailing.

The recent trends in retail include the following: New retail forms and combinations Growth of intertype competition Competition between store-based and nonstore-based retailing Growth of giant retailers Decline of middle-market retailers Growing investment in technology Global profile of major retailers Growth of shopper marketing Page Ref: 451-452 Objective: 3 AACSB: Analytic skills Difficulty: Easy

111) According to researchers, what steps can improve the likelihood of starting a buzz?

The steps that can improve the likelihood of starting a buzz include: • Identify influential individuals and companies and devote extra effort to them. • S Supply key people with product samples. • Work through community influentials. • Develop word-of-mouth referral channels to build business. • Provide compelling information that customers want to pass along.

73) What are the three main platforms for social media?

The three main platforms for social media include: 1. online communities and forums 2. blogs (individual blogs and blog networks such as Sugar and Gawker) 3. social networks (like Facebook, Twitter, and YouTube)

50) Identify three ways a marketer might transform online marketing touch points related to privacy on the Web site into a positive customer experience.

The three ways include: 1. develop user-centric privacy controls to give customer control 2. avoid multiple intrusions 3. prevent human intrusion by using automation whenever possible

25) Give a brief description of the various factors that affect advertising budget decisions.

The various factors that affect advertising budget decisions include: • Stage in the product life cycle — New products typically merit large advertising budgets to build awareness and to gain consumer trial. Established brands usually are supported with lower advertising budgets, measured as a ratio to sales. • Market share and consumer base — High-market-share brands usually require less advertising expenditure as a percentage of sales to maintain share. To build share by increasing market size requires larger expenditures. • Competition and clutter — In a market with a large number of competitors and high advertising spending, a brand must advertise more heavily to be heard. Even simple clutter from advertisements not directly competitive to the brand creates a need for heavier advertising. • Advertising frequency — The number of repetitions needed to put the brand's message across to consumers has an obvious impact on the advertising budget. • Product substitutability — Brands in less-differentiated or commodity-like product classes (beer, soft drinks, banks, and airlines) require heavy advertising to establish a unique image.

52) What is paid search advertising and why is it increasing in popularity?

Thirty-five percent of all searches are reportedly for products or services. Marketers bid in a continuous auction on search terms that serve as a proxy for the consumer's product or consumption interests. When a consumer searches for any of the words with Google, Yahoo!, or Bing, the marketer's ad may appear above or next to the results, depending on the amount the company bids and an algorithm the search engines use to determine an ad's relevance to a particular search. Advertisers pay only if people click on the links, but marketers believe consumers who have already expressed interest by engaging in search are prime prospects. Average click-through in terms of the percentage of consumers who click on a link is about 2 percent, much more than for comparable online display ads, which range from 0.08 for standard banner ads with graphics and images to 0.14 for rich media (expandable banners) ads that incorporate audio and/or video.

12) I-ball, a cell phone manufacturer introduces a cell phone targeted at customers ages 70 and above. It has features such as loud volume, large keys, and so forth. How do you classify this product innovation? What could be a possible disadvantage of this product?

This can be considered a new-to-the-world product. New-to-the-world products are products that create an entirely new market. The product has the greatest cost and risk of all product types.

121) Flash Designs is an apparel manufacturing company and has adopted a franchising model to distribute and sells its garments. The company recently received complaints from a particular franchisee that another competing franchisee was infringing on its territory. What type of conflict is this?

This is an example of horizontal channel conflict, between channel members at the same level.

21) Cortron Consultants provides business consulting services for startups. It helps customers design their supply chains by first evaluating the target market and then proceeds backward from that point. What is this strategy of reverse design called? Briefly explain.

This strategy is called demand chain planning. This helps the companies have a clear focus on the target market.

102) Puffery refers to simple exaggerations in advertisements that are not meant to be believed and are considered illegal.

false

106) Outdoor advertising is more effective at creating new brand associations than enhancing brand awareness or brand image.

false

107) The macroscheduling decision calls for allocating advertising expenditures within a short period to obtain maximum impact.

false

110) An advertiser makes "local buys" when it buys TV time in just a few markets or in regional editions of magazines.

false

111) Sales promotion consists of a collection of incentive tools designed to mainly stimulate long-term brand associations of products or services with consumers or the trade.

false

118) Examples of manufacturer promotions include price cuts and feature advertising.

false

119) Sales promotion tools that typically are not brand building include price-off packs, contests and sweepstakes, consumer refund offers, and trade allowances.

true

120) Manufacturers handle forward buying and diverting by producing and delivering less than the full order in an effort to smooth production.

true

121) Additional costs beyond the cost of specific promotions include the risk that promotions might decrease long-run brand loyalty.

true

126) The supply-side measurement method focuses on potential exposure to the brand by assessing the extent of media coverage, and the demand-side method focuses on exposure reported by consumers.

true

127) A public is any group that has an actual or potential interest in or impact on a company's ability to achieve its objectives.

true

131) MPR can hold down promotion cost because it costs less than direct-mail and media advertising.

true

137) The redemption rate for paper coupons (10 percent) far exceeds that of mobile coupons (1 percent).

FALSE

153) Conflicts between various franchisees of a company are an example of vertical channel conflict.

FALSE

149) At the interest stage of the consumer-adoption process, the consumer becomes aware of the innovation but lacks information about it.

FALSE

25) What practices guide innovation at W. L. Gore?

First, it works with potential customers. Second, Gore has a distinctly egalitarian culture; it lets employees choose projects and appoints few product leaders and teams. The company likes to nurture "passionate champions" who convince others a project is worth their time and commitment, and leaders have positions of authority because they have followers. Third, all research associates spend 10 percent of their work hours on "dabble time," developing their own ideas. Promising ideas are judged according to a "Real, Win, Worth" exercise: Is the opportunity real? Can we win? Can we make money? Fourth, Gore knows when to let go.

128) Sandy's Stores is a small chain of grocery stores located in a few neighboring towns. The stores have always been largely self-service, but the company is considering making a switch to full-service stores. Offer reasons why Sandy's should stick with its current system.

Student answers may vary. As Sandy's is primarily a grocery chain, it is unlikely that customers will need much help in locating products. The high staffing cost of full-service retailing will only increase operational costs for Sandy's, without conferring any benefit. Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

120) True Value is a retailer-owned cooperative with over 4,000 independent retail locations worldwide. Members of True Value own their individual stores and operate independently. True Value helps its members procure materials at a low cost. What kind of marketing system is True Value? Explain briefly.

True Value is a type of contractual VMS. It is a retail cooperative wherein retailers take the initiative and organize a new business entity to carry on wholesaling and possibly some production.

133) MPR is effective in blanketing local communities and reaching specific groups and hence has to be planned separately from the less cost-effective advertising.

false

134) MPR's contribution to a company's bottom line is the easiest to measure among all the available promotion tools.

false

94) Persuasive advertising aims to create brand awareness and knowledge of new products or new features of existing products.

false

95) Reinforcement advertising aims to stimulate repeat purchase of products and services

false

96) If the product class is mature, then the advertising objective is to convince the market of the brand's superiority.

false

98) Brands in highly-differentiated product classes require heavy advertising to establish a unique image.

false

101) Researchers studying print advertisements report that the picture, headline, and copy matter in that order.

true

103) Reach of an advertising message is most important when launching new products, flanker brands, extensions of well-known brands, or infrequently purchased brands.

true

108) The forgetting rate is the rate at which the buyer forgets the brand; the higher the forgetting rate, the more continuous the advertising should be.

true

109) Concentrated advertising is well suited for products with one selling season or related holiday.

true

112) Sales promotions often attract brand switchers, who are primarily looking for low price, good value, or premiums.

true

122) An ideal event is also unique but not encumbered with many sponsors, lends itself to ancillary marketing activities, and reflects or enhances the sponsor's brand or corporate image.

true

102) Pricing has no negative effect on customer loyalty.

FALSE

84) Creative strategies refer to the ________. A) way marketers translate their messages into a specific communication B) amount of creative content in a communications message C) degree of innovation involved in the marketing of a product D) novelty of a marketing communication E) type of medium used to deliver a marketing communication

101) Secondary service features are the features that the customer himself adds to the service.

FALSE

112) Identify and describe the rungs on the customer loyalty ladder in ascending order.

1. Satisfaction — Sticks with your organization as long as expectations are met. 2. Repeat purchase — Returns to your company to buy again. 3. Word of mouth/buzz — Puts his or her reputation on the line to tell others about you. 4. Evangelism — Convinces others to purchase/join. 5. Ownership — Feels responsible for the continued success of your organization.

23) Identify the channel function that constitutes both backward and forward flow. A) obtaining funds for financing B) storage of physical goods C) persuasive communication D) movement of physical goods E) overseeing actual transfer of ownership

31) Which of the following statements correctly reflects a characteristic of public relations as a marketing communications tool? A) Public relations can reach prospects who prefer to avoid mass media and targeted promotions. B) They incorporate some concession, inducement, or contribution that gives value to the consumer. C) Given their live, real-time quality, public relations tools are more actively engaging for consumers. D) Public relations communications can be prepared to appeal to the addressed individual. E) Public relations tools create an immediate and interactive episode between two or more persons.

35) A ________ process recognizes the value of returning to an earlier stage to make improvements before moving forward. A) spiral development B) reactive development C) market testing D) proactive development E) concept testing

44) Atburex is a furniture manufacturing company in the United States. The company provides a 60-day credit period and also offers on-site delivery and installation. These special benefits refer to which of the following service outputs? A) service backup B) large product variety C) spatial convenience D) large lot size E) short waiting time

47) Which of the following channel alternatives is most suited to handle complex products and transactions? A) sales forces B) the Internet C) dealers D) telemarketers E) direct mails

50) Exclusive dealing arrangements are mainly used by companies looking for an edge in markets increasingly driven by ________. A) price B) efficiency C) product variety D) add-on services E) spatial convenience

78) ________ power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power. A) Coercive B) Reward C) Legitimate D) Expert E) Referent

102) Which of the following is an advantage of using the percentage-of-sales method to determine the marketing communications budget? A) The percentage-of-sales method encourages stability when competing firms spend approximately the same portion of their sales on communications. B) The percentage-of-sales method views sales as the determiner of communications rather than as the result. C) The percentage-of-sales method leads to a budget set by market opportunities rather than the availability of funds. D) The percentage-of-sales method encourages experimentation with countercyclical communication or aggressive spending. E) The percentage-of-sales method encourages building the communication budget by determining what each product and territory deserves.

106) A group of small sellers takes the initiative and organizes a new business entity to carry on wholesaling and possibly some production. This entity is called a(n) ________. A) retailer cooperative B) franchise organization C) area-based cartel D) sponsored voluntary chain E) alternate selling channel

11) Companies should first think about the target market and then design the supply chain backward from that point. This strategy is called ________ planning. A) demand chain B) resource C) external channel D) materials E) strategic business

111) Which of the following is a major advantage of adding more channels for selling? A) It helps the company increase its market coverage. B) It helps the company reduce its fixed costs. C) It reduces the likelihood of channel conflict. D) It is the best strategy for selling low-involvement consumer products. E) It results in economies of scale.

13) Which of the following is an example of an advertising platform? A) posters and leaflets B) company magazines C) fairs and trade shows D) sales presentations E) continuity programs

145) General Motors' executives work for a short time in some dealerships, and some dealership owners work in GM's dealer policy department. This strategy helps the company avoid conflicts with its dealers. This is an example of the ________ strategy. A) employee exchange B) dual compensation C) joint membership D) co-optation E) diplomacy

145) Which of the following is NOT one of the four important contributions an effectively trained company sales force can make to consumer marketing? A) remind end-consumers about the product B) increase stock position C) build enthusiasm D) conduct missionary selling E) manage key accounts

146) RX Corp. is a large manufacturer of electronic goods and sells its products through distributors and retailers. In order to keep pace with the growing use of the Internet, the company decides to start selling online. The company faces stiff opposition from its retailers as they believe that this will significantly reduce their profits. The company attempts to eliminate this resistance by offering its retailers commissions for processing and delivering orders received via the Web. This is an example of which of the following conflict resolution strategies? A) dual compensation B) joint membership C) arbitration D) co-optation E) strategic pricing

15) Which of the following strategies for new-product development incorporates buyers' preferences in the final design of the product? A) quality function deployment B) market leadership C) cost leadership D) incremental innovation E) disruptive technology

18) BRZ Shoes targets the youth market with vibrant, visually appealing ads in modern styles. BRZ ads appeal to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social

18) Which of the following is an example of a personal selling communication platform? A) sales presentations B) company blogs C) telemarketing D) TV shopping E) press kits

2) ________ advertising aims to create brand awareness and knowledge of new products or new features of existing products. A) Informative B) Corporate C) Reinforcement D) Persuasive E) Reminder

2) ________ aims to create brand awareness and knowledge of new products or new features of existing products. A) Informative advertising B) Corporate advertising C) Reinforcement advertising D) Persuasive advertising E) Reminder advertising

22) Which of the following equations accurately describes the total number of exposures (E) of an advertising message through a given medium? A) E = reach * frequency B) E = (reach * frequency) / impact C) E = reach * frequency * impact D) E = (reach + frequency) / impact E) E = frequency / reach

25) Which of the following is an example of a zero-level channel? A) A company takes online orders from customers and ships the products to them. B) An organization uses a combination of direct salespeople and sales agencies to increase sales. C) A company sells its products through wholesalers and retailers. D) A company sells its products through chains of supermarkets and other large sellers. E) A large company forms alliances with smaller companies to increase sales coverage.

25) Which of the following steps will help service firms to increase their quality control? A) standardizing the service-performance process B) providing complementary services to customers C) giving personnel authority in handling situations D) adopting differential pricing E) cultivating nonpeak demand

28) A jobber in a three-level marketing channel is a(n) ________. A) small-scale wholesaler B) external broker C) advertising agent D) independent evaluator E) communication channel

30) A team formed at Intercom Inc. to generate ideas for new products conducts frequent meetings and engages in activities such as mind mapping and brainstorming. Most of the meetings are conducted at informal locations away from office. These workplaces are called ________. A) skunkworks B) idea funnels C) research centers D) stage-gate systems E) contextual bases

38) Which of the following is a disadvantage of using Yellow Pages as an advertising medium? A) high competition B) poor local market coverage C) low believability D) lack of adequate reach E) high total costs

40) Which of the following equations accurately describes the total number of exposures (E) of an advertising message through a given medium? A) E = reach × frequency B) E = (reach × frequency) / impact C) E = reach × frequency × impact D) E = (reach + frequency) / impact E) E = frequency / reach

42) In which of the following does a customer respond to the technical quality of a service? A) Sara's preferred hair stylist is some miles away, but Sara goes to him because his styles suit her looks. B) Kathy tries out a new restaurant every week, because she likes to experience the variety. C) Bill has gone to the same chiropractor for the past fifteen years, because he is friendly and takes the time to listen to Bill. D) Ray avoids going to the bank as far as possible because the manager is rude and unhelpful. E) Alex has no interest in theater, but goes often because her best friend loves plays.

42) Moonburst is a newly-launched brand of energy drinks, one among many other recently introduced competing brands. The advertising agency handling Moonburst's account decides that to promote Moonburst better, it has to zero in on an advertising medium that would offer immunity from the clutter of other brands, flexibility to alter its advertising message, and fit in with the modest advertising budget. Also, the medium has to provide a high repeat exposure of the advertising message to the target audience. The advertising agency would be happy to trade-off audience selectivity and creative possibilities, if the medium satisfies the above criteria. Which of the following would be the best option for Moonburst? A) outdoor media B) radio C) magazines D) television E) Yellow Pages

49) Which of the following is a disadvantage of using television as an advertising medium? A) high absolute cost B) low audience attention C) lack of reach among audience D) high audience selectivity E) absence of clutter

52) Which of the following is an advantage of using magazines as an advertising medium? A) high-quality reproduction B) short ad purchase lead time C) high efficiency in circulation D) no ad competition in same medium E) low cost of advertising

56) ________ are a means for consumers to share text, images, audio and video information with each other and with companies, and vice versa. A) Social media B) Interstitials C) Microsites D) Pay-per-click ads E) Mobile ads

57) Dollar Shave Club's irreverent online video on YouTube is an example of ________. A) social media B) an interstitial C) a microsite D) a pay-per-click ad E) a mobile ad

57) Which of the following is the correct order of stages that a buyer is assumed to pass through, by the four classic response hierarchy models? A) cognitive stage — affective stage — behavioral stage B) affective stage — cognitive stage — behavioral stage C) behavioral stage — affective stage — cognitive stage D) cognitive stage — behavioral stage — affective stage E) affective stage — behavioral stage — cognitive stage

58) When Aaron went to his doctor for his annual checkup, he was asked to undergo a number of tests. Although the doctor assured Aaron that the tests were routine, Aaron thinks that the doctor is hiding a grave problem from him. What kind of a gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception

6) A flight with complementary drinks is an example of a ________. A) major service with accompanying minor goods and services B) pure service C) pure tangible good D) tangible good with accompanying services E) hybrid

6) Most established companies focus on ________ innovation when they aim to enter new markets by tweaking existing products, or they want to stay one step ahead in the market by using variations on a core product. A) incremental B) continuous C) spontaneous D) radical E) competitive

60) Moonburst is a newly launched brand of energy drinks, one among many other recently introduced competing brands. The advertising agency handling Moonburst's account decides that to better promote Moonburst, it has to zero in on an advertising medium that would offer immunity from the clutter of other brands, flexibility to alter its advertising message, and the ability to fit in with the modest advertising budget. Also, the medium has to provide a high repeat exposure of the advertising message to the target audience. The advertising agency would be happy to trade-off audience selectivity and creative possibilities if the medium satisfies the above criteria. Which of the following would be the best option for Moonburst? A) outdoor media B) radio C) magazines D) television E) Yellow Pages

64) Which of the following is a sales promotion tool that typically does not build brand image? A) consumer refund offers B) free samples C) premiums related to the product D) frequency awards E) coupons that include a selling message

66) According to the dynamic process model, two different types of expectations have opposite effects on perceptions of service quality. One of these is that ________. A) increasing customer expectations of what the firm will deliver improve the perceptions of overall service quality B) increasing customer expectations of what the firm will deliver decrease the perceptions of overall service quality C) decreasing customer expectations of what the firm should deliver decrease the perceptions of overall service quality D) decreasing customer expectations of what the firm will deliver improve the perceptions of overall service quality E) increasing customer expectations of what the firm should deliver improve the perceptions of overall service quality

67) ________ are consumer promotion tools that provide a price reduction after purchase rather than at the retail shop. A) Rebates B) Cents-off deals C) Price packs D) Coupons E) Premiums

68) A ________ refers to any place at which a company seeks to manage a relationship with a customer, whether through people, technology, or some combination of the two. A) customer-service interface B) product-customer interface C) tangible user interface D) attentive user interface E) crossing-based interface

72) Which of the following consumer promotion tools refers to explicit or implicit promises by sellers that the product will perform as specified or that the seller will fix it or refund the customer's money during a specified period? A) product warranties B) coupons C) free trials D) rebates E) patronage awards

40) Which of the following is a disadvantage of using newsletters as an advertising medium? A) low audience selectivity B) high chances of runaway costs C) lack of adequate control D) relatively high costs E) lack of interactive possibilities

74) Which of the following retailer practices involves buying more units than needed of a product under a sales promotion in a region where the manufacturer offers a promotion deal and shipping the surplus to their stores in nondeal regions? A) diverting B) panic buying C) hoarding D) stockpiling E) forward buying

76) Because of the acceptance that the other Broomer products have in the market, retailers are willing to stock items from the new "Inducer" line of clothing. This is an example of ________ power. A) referent B) passive C) legitimate D) coercive E) reward

77) Marketing communication strategy can be decided by conducting an image analysis by profiling the target audience in terms of ________. A) brand knowledge B) purchase patterns C) demographic characteristics D) income levels E) psychographic characteristics

77) ________ is a form of online word of mouth, or "word of mouse," that encourages consumers to pass along company-developed products and services or audio, video or written information to others online. A) Viral marketing B) Guerrilla marketing C) Microsite marketing D) Interstitial marketing E) Public relations

79) A manufacturer offers its intermediaries an extra benefit for performing a promotional activity. This is an example of the use of ________ power. A) reward B) coercive C) functional D) expert E) referent

8) A firm uses its sales force to sell to large accounts and outbound telemarketing to sell to medium-sized accounts. The firm is using ________ marketing. A) hybrid B) pull C) personalized D) vertical E) internal

80) A manufacturer is using legitimate power when it ________. A) requests a behavior that is warranted under the selling contract B) threatens to withdraw a resource or terminate a relationship C) offers intermediaries an extra benefit for performing specific acts or functions D) makes the intermediaries sell more of a particular product by offering rewards E) sells more products by making use of its reputation in the market

81) Hewlett-Packard is a highly respected brand. Many retailers want to be associated with the brand because of this reputation. What kind of power does Hewlett-Packard obtain due to this reputation? A) referent B) functional C) legitimate D) coercive E) reward

85) A producer must modify its channel design and arrangements if ________. A) consumer buying patterns change B) the competition in the market stabilizes C) the product is in the growth stage of its life cycle D) the market size remains unchanged for a particular period E) the firm's profits stabilize

85) Which of the following is NOT a limitation of online reviews? A) People trust and value positive reviews more than negative reviews. B) Online reviews can be biased. C) Raters are influenced by previous, positive ratings. D) Social influence can lead to disproportionally positive online ratings. E) Online reviews can be fake.

85) ________ is a marketing communications tool that includes a variety of programs to promote or protect a company's image or individual products. A) Public relations B) Advertising C) Sales promotion D) Personal selling E) Direct marketing

87) Which of the following is NOT one of the steps that can improve the likelihood of starting positive buzz? A) Identify underserved, inactive individuals and devote extra effort to them. B) Supply key people with product samples. C) Work through community influentials. D) Develop word-of-mouth referral channels to build business. E) Provide compelling information that customers want to pass along.

9) Which of the following is NOT one of the seven design elements featured in effective Web sites (as identified by Rayport and Jaworski)? A) change B) context C) content D) customization E) commerce

92) ________ contribution lists the changes in income to other company products caused by the introduction of a new product. A) Supplementary B) Dragalong C) Gross D) Cumulative E) Net

15) A factory outlet is an example of a(n) ________ retailer. A) off-price B) specialty C) discount D) department E) catalog

A Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

30) Which of the following is a benefit of franchising for franchisees? A) The franchisee finds it easier to borrow money from financial institutions. B) The franchisee receives ownership of the franchisor's trade mark. C) The franchisee must change its operations to suit those of the franchisor's. D) The franchisee collects royalty payments from the franchisor. E) The franchisee is paid by the franchisor for being part of the system.

A Page Ref: 450 Objective: 1 Difficulty: Easy

32) Which of the following is true for the retail industry? A) Discount stores and catalog showrooms are competing for the same customers. B) Upscale retailers see a decline in sales as middle-market retailers thrive. C) Small, specialized retailers are crowding out larger, more diverse retailers. D) Store retailing sees no competition from non-store retailing. E) Discount stores are not doing as well as middle-market retailers.

A Page Ref: 452 Objective: 3 Difficulty: Easy

40) Most retailers will put low prices on some items in order to increase traffic to the store. These low-priced products are known as ________. A) loss leaders B) price ceilings C) price skimmers D) price floors E) cold calls

A Page Ref: 456 Objective: 2 AACSB: Analytic skills Difficulty: Easy

45) In your neighborhood there is a small men's store that has a limited selection of clothing, but the selection that is carried is of very high quality and price. Services include free alterations and tailoring, personalized record keeping, and free dry cleaning. The inside of the store has deep leather chairs and couches and thick pile carpet. Upon entering the store, a customer feels "special and rich." In terms of differentiation, what is this retailer trying to communicate by its decorations and service level? A) differentiation based on services mix and atmosphere B) differentiation based on prepurchase services C) differentiation based on postpurchase services and atmosphere D) differentiation based on ancillary services and atmosphere E) differentiation based on prepurchase and postpurchase services

A Page Ref: 457 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

42) Which of the following is a prepurchase service offered by retailers? A) accepting orders over the telephone B) shipping the product C) delivery to the customer's doorstep D) general information E) interior decoration of the retail outlet

A Page Ref: 457 Objective: 2 Difficulty: Easy

61) ________ refers to buying large carload lots and dividing them into smaller units before shipping them out to consumers. A) Bulk breaking B) Containerization C) Wholesaling D) Warehousing E) Broking

A Page Ref: 462 Objective: 1 AACSB: Analytic skills Difficulty: Easy

123) The growth of "house brands" has skyrocketed in recent years. What benefits do intermediaries receive from sponsoring their own brands?

A private label brand (also called a reseller, store, house, or distributor brand) is a brand that retailers and wholesalers develop. These brands can be more profitable. Intermediaries search for manufacturers with excess capacity that will produce private label goods at low cost. Other costs, such as research and development, advertising, sales promotion, and physical distribution, are also much lower, so private labels can generate a higher profit margin. Retailers also develop exclusive store brands to differentiate themselves from competitors. Many price-sensitive consumers prefer store brands in certain categories. These preferences give retailers increased bargaining power with marketers of national brands. Page Ref: 460 Objective: 4 AACSB: Reflective thinking Difficulty: Easy

117) What is a vertical marketing system (VMS)? What are the various types of VMSs?

A vertical marketing system includes the producer, wholesaler(s), and retailer(s) acting as a unified system. One channel member, the channel captain, owns or franchises the others or has so much power that they all cooperate. There are three types of VMSs: corporate, administered, and contractual. • A corporate VMS combines successive stages of production and distribution under single ownership. • An administered VMS coordinates successive stages of production and distribution through the size and power of one of the members. Manufacturers of dominant brands can secure strong trade cooperation and support from resellers. • A contractual VMS consists of independent firms at different levels of production and distribution, integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone.

39) Which of the following tools or combinations of tools is most influential at the comprehension stage of buyer readiness? A) sales promotion and advertising B) advertising and personal selling C) publicity and personal selling D) reminder advertising and publicity E) sales promotion and personal selling

74) Alan is an executive with an ad agency that has been entrusted with accounts for a used-car showroom, a home appliances maker, and a soap company. With reference to response hierarchy models, how does Alan plan communication strategies for the three accounts effectively?

All of the four classic response hierarchy models assume that the buyer passes through cognitive (learn), affective (feel), and behavioral stages (do), in that order. Since buying a car, used or new, represents a significant investment for the buyer, it can be said that the buyer has involvement in the purchase decision and perceives high differentiation with the product category. Hence a "learn-feel-do" sequence is considered appropriate for the used-car showroom account. Similarly, a buyer intending to purchase home appliances, such as a dishwasher or a refrigerator, has high involvement in the purchase decision, even though he perceives little differentiation within the product category. Hence, a "do-feel-learn" approach may be appropriate when planning communications for the home appliances account. Finally, a buyer has low involvement in purchasing soap that has very little differentiation within its category. For the soap company account, Alan should consider a "learn-do-feel" sequence for planning communications.

146) E&OE is looking to reduce its inventory costs for all its products. The company realizes that its inventory depends on the setup costs of its various products. How do setup costs affect E&OE's inventory costs?

As inventory draws down, management must know at what stock level to place a new order. The company needs to balance order-processing costs and inventory-carrying costs. Order-processing costs for E&OE consist of setup costs and running costs (operating costs when production is running) for the item. If setup costs are low, E&OE can produce the item often, and the average cost per item is stable and equal to the running costs. If setup costs are high, E&OE can reduce the average cost per unit by producing a long run and carrying more inventory. The larger the average stock carried, the higher the inventory-carrying costs. Page Ref: 467 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

121) VW chose to launch its GTI in the United States with a(n) ________, which was downloaded 2 million times in three weeks. A) interstitial B) app C) mini-billboard D) Facebook page E) LinkedIn ad

131) A pioneer in China, ________ created a national campaign asking Beijing residents to send text messages guessing the high temperature in the city every day for just over a month for a chance to win a one-year supply of its products. A) PepsiCo B) Coca-Cola C) Red Bull D) Poland Spring E) Unilever

144) Stacey wants to use a highly relevant, engaging, and implicit communications mix mode to use a "soft sell" approach for her new makeup line. The communications mix mode that has these characteristics is ________. A) sales promotions B) events and experiences C) advertising D) direct and interactive marketing E) personal selling

147) ________ refers to a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time. A) Brand engagement B) Integrated marketing communications C) Market research D) Customerization E) Marketing research

4) Total Beverages, a maker of fruit juices and health drinks, recently launched a new brand of packaged drinking water called AquaPure. In order to induce distributors to carry the product, Total offers all its intermediaries a free refrigerator to store bottles of AquaPure. This is an example of a ________. A) consumer promotion B) push strategy C) backward flow D) reverse flow E) pull strategy

11) Services high in ________ qualities have characteristics that the buyer can evaluate after purchase. A) privacy B) experience C) credence D) search E) stock

114) Which of the following is NOT one of the four distinctive characteristics of a mobile device? A) It is tied to one user. B) It allows marketers to personalize messages. C) It is virtually always "on." D) It allows for immediate consumption as it is a distribution channel with a payment system. E) It is highly interactive given it allows for geotracking and picture and video taking.

129) Becoming part of a personally relevant moment in consumers' lives through ________ can broaden and deepen a company or brand's relationship with the target market. A) advertisements B) events and experiences C) sales promotions D) public relations E) direct marketing efforts

132) JBJ Sports is a leading sporting goods manufacturer from Atlanta. It has recently initiated a program in association with the Food4Kids Foundation, which raises funds to promote nutritional awareness of young children. The company plans to donate $1 for every item it sells in the North American market. Also, JBJ has roped in professional sports teams associated with it to wear the Food4Kids logo on their team gear. Which of the following best describes the motivation for JBJ's involvement in the program? A) entertaining key clients or rewarding key employees B) expressing commitment to the community or on social issues C) permitting merchandising or promotional opportunities D) stimulating quicker or greater purchase of particular brands E) identifying with a particular target market or lifestyle

151) If a producer wants to achieve rapid market penetration through a low-price policy, while a dealer wants to work with high margins to pursue short-run profitability, the source of the channel conflict is ________. A) unclear roles and rights B) goal incompatibility C) differences in perception D) intermediaries' dependence on the manufacturer E) strategic justification

37) Which of the following is an advantage of using Yellow Pages as an advertising medium? A) low competition B) high believability C) short ad purchase lead time D) greater scope for creativity E) lack of clutter

38) The number of times within a specified time period that an average person or household is exposed to an advertising message is known as ________. A) impact B) frequency C) amplitude D) reach E) depth

42) As a service output produced by marketing channels, product variety refers to the ________. A) units the channel permits a customer to purchase at once B) assortment provided by the marketing channel C) add-on services provided by the channel D) ability of a product to provide incremental value E) degree to which the channel makes it easy for customers to purchase a product

53) Which of the following is a disadvantage of using magazines as an advertising medium? A) low geographic and demographic selectivity B) long ad purchase lead time C) low-quality reproduction D) small "pass-along" readership E) lack of credibility

56) Which of the following factors found in the macromodel of the communications process refers to random and competing messages that may interfere with the intended communication? A) negative feedback B) noise C) attenuation D) phase lag E) selective distortion

56) Which of the following is an example of a gap between service delivery and external communications? A) The employees at GBL have been asked to take time to listen to customers, but they must serve them fast as well. B) Amanda chose to shop at Alison's Fashions because the store's website offered on-the-spot alterations. However, when she did buy a dress, she had to wait a week to get it altered. C) Customers at LUX appreciate the personalized services the salespeople offer, but do not like the store design. D) Clearwater Spa attendants are well-trained in massage therapy and the services they offer, but customers rarely return because they don't like the attendants' impersonal service. E) When sales dropped, Styx modernized its stores in order to retain customers, but didn't realize that the product quality was the main problem.

57) Which of the following is a disadvantage of using the Internet as an advertising medium? A) limited audience selectivity B) increasing clutter C) lack of interactive possibilities D) relatively high costs involved E) fleeting ad exposure time

6) When is a pull strategy appropriate? A) when there is low brand loyalty B) when consumers are able to perceive differences between brands C) when brand choice is made in the store D) when it is a low involvement purchase E) when the product is an impulse item

62) The popular music talent show American Idol has been generally acknowledged as the most profitable TV series in US history, in terms of advertising and merchandising revenue. Major sponsors of the show include Coca-Cola, AT&T Wireless, and iTunes, among others. Cups bearing the Coca-Cola logo were a prominent prop found on the show's judges' tables. The show also urged viewers to vote for contestants using AT&T's sms service. Contestants were routinely shown rehearsing for their performances with the help of Apple iPods. Which of the following advertising practices is apparent in this example? A) ambush advertising B) product placement C) angel dusting D) co-branding E) subliminal advertising

77) Broomer threatens to withdraw all its other products from the retailers' stores if they are unwilling to push products from the "Inducer" line. This is an example of ________ power. A) reward B) coercive C) legitimate D) expert E) referent

8) Which of the following is true for services? A) All services are people-based, while goods are equipment-based. B) Service providers can be both for-profit or nonprofit. C) All service companies follow the same process to deliver their services. D) The client's presence is a hindrance during the service delivery process. E) Service providers develop similar marketing programs for personal services and business services.

82) One of the possible objectives of marketing communications is helping consumers evaluate a brand's perceived ability to meet a currently relevant need. Which of the following is a positively oriented relevant brand need? A) problem removal B) social approval C) normal depletion D) problem avoidance E) incomplete satisfaction

83) One of the possible objectives of marketing communications is helping consumers evaluate a brand's perceived ability to meet a currently relevant need. Which of the following relevant brand needs is most likely emphasized by an advertisement for a luxury car? A) problem removal B) sensory gratification C) normal depletion D) intellectual stimulation E) problem avoidance

84) Online customer reviews are the second-most trusted source of brand information. What is the most trusted source? A) print advertising B) recommendations from friends and family C) salesperson recommendation D) celebrity endorsements E) Facebook recommendations

85) A(n) ________ appeal is a creative strategy that elaborates on product or service attributes or benefits. A) aesthetic B) informational C) bandwagon D) emotional E) transformational

87) Universal Services Inc. provides communication services to residential and business customers in rural and small urban communities primarily in northern England. The company offers services such as local and long distance voice, data, and Internet and broadband product offerings. The company, in an attempt to increase the attractiveness of its offerings, decides to provide special voice and data packages to its customers. The company designs eight different packs that offer varying voice and data benefits to customers. The company then asks a few of its customers to rank the packs in order to choose two best packs. Which of the following testing methods is being used in this scenario? A) virtual reality testing B) conjoint analysis C) perceptual mapping D) product fabrication E) rapid prototyping

95) Which of the following methodologies takes the list of desired customer attributes (CAs) generated by market research and turns them into a list of engineering attributes (EAs) that engineers can use? A) quality control processes B) quality function deployment C) rapid prototyping D) marketing control E) control system formation

46) Which of the following is the strongest differentiator for brick-and-mortar stores who want to emphasize their superiority over online retailers? A) product quality B) the shopping experience C) product range D) pricing E) the retailer's reputation

B Page Ref: 457 Objective: 2 AACSB: Analytic skills Difficulty: Easy

53) ________ includes all the activities in selling goods or services to those who buy for resale or business use. A) Retailing B) Wholesaling C) Procurement D) Promoting E) Warehousing

B Page Ref: 461 Objective: 1 Difficulty: Easy

54) Which of the following is considered a wholesaler? A) retailers B) brokers C) producers D) manufacturers E) farmers

B Page Ref: 461 Objective: 1 Difficulty: Easy

127) Differentiate between brokers and agents.

Brokers and agents both perform wholesaling functions. They facilitate buying and selling, on commission of 2 percent to 6 percent of the selling price and generally specialize by product line or customer type. Brokers bring buyers and sellers together and assist in negotiation; they are paid by the party hiring them—food brokers, real estate brokers, insurance brokers. Agents represent buyers or sellers on a more permanent basis. Most manufacturers' agents are small businesses with a few skilled salespeople: Selling agents have contractual authority to sell a manufacturer's entire output; purchasing agents make purchases for buyers and often receive, inspect, warehouse, and ship merchandise; commission merchants take physical possession of products and negotiate sales. Page Ref: 464 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

105) Gabrielle is the chief marketing officer of Boyd Pharmaceuticals. She is meeting with Trent, the chief financial officer to decide on the company's marketing communications budget. They decide to trust in the prevailing collective wisdom of the industry as a whole, and not wanting to instigate a communications war, settle on spending only as much as their nearest market rival does on marketing communications. What method did Gabrielle and Trent use to arrive at the marketing communications budget? A) objective-and-task method B) affordable method C) competitive-parity method D) activity-based method E) percentage-of-sales method

118) Which of the following best characterizes average consumers' current media consumption patterns? A) Consumers spend more time listening to the radio than on their mobile phones, but less time on magazines and newspapers. B) Consumers spend more time reading magazines and newspapers than on their mobile phones, but less time listening to the radio. C) Consumers spend more time on mobile devices than on radio, magazines, and newspapers combined. D) Consumers spend an average of two hours and 52 minutes on radio, magazines, and newspapers combined. E) Consumers spend an average of one hour and 46 minutes on mobile devices.

141) Alcart Solutions is a large distributor of Aldor phones in Canada. The company distributes products to various retailers in the New Brunswick province. Recently Aldor received several complaints from its retailers that their orders are not delivered on time. They also complain that Alcart offers preferential treatment to some of the other retailers in the region. This is an example of ________ conflict. A) multichannel B) horizontal C) vertical D) intermediate E) parallel

27) A direct marketing channel is a ________ channel. A) one-level B) two-level C) zero-level D) three-level E) reverse-flow

32) TV advertising is considered to be particularly advantageous because ________. A) the low volume of nonprogramming material on television makes it difficult for consumers to ignore or forget ads B) it provides detailed product information and effectively communicates user and usage imagery C) it can vividly demonstrate product attributes and persuasively explain their corresponding consumer benefits D) TV channels are very targeted, ads are relatively inexpensive to produce and place, and short closings allow for quick response E) it lets companies achieve a balance between broad and localized market coverage

4) Which of the following is an advantage of online communications for marketers? A) Consumers cannot effectively screen out your messages. B) Companies can accurately track how effective their ads are because software filters out all bogus hits. C) Companies can offer tailored information or messages that engage consumers. D) Advertisers maintain complete control over the message. E) Advertisers do not need to worry as much about context.

41) Which of the following marketing communications tools is most influential at the maturity stage of a product's life cycle? A) sales promotions B) direct marketing C) advertising D) publicity E) interactive marketing

57) ________ works by listing all the normal assumptions about an entity and then turning them around. A) Lateral marketing B) Attribute listing C) Reverse assumption analysis D) Forced relationships E) Morphological analysis

59) Pepe Homes manufactures a range of bathroom accessories and fittings that include bathtubs, shower stalls, etc. While deciding on an effective advertising media vehicle for its planned advertising campaign, the marketing department decides that its advertising objectives would be best achieved if they used a medium that would portray their brand as prestigious and a symbol of luxury. To this effect, the medium should offer marketers a high degree of audience selectivity and high-quality reproduction. Which of the following advertising media would best serve the advertising purposes of Pepe Homes? A) outdoor media B) radio C) magazines D) television E) newspapers

10) Which of the following statements is true of the factors that affect an advertising budget? A) High-market-share brands usually require proportionately high advertising expenditure as a percentage of sales to maintain share. B) Brands in less-differentiated or commodity-like product classes require very less advertising to establish a unique image. C) New products typically merit large advertising budgets to build awareness and to gain consumer trial. D) In a market with few competitors and moderate advertising spending, a brand must advertise more heavily to be heard. E) Established brands usually are supported with high advertising budgets, measured as a ratio to sales.

11) Which of the following statements is true of the factors that affect an advertising budget? A) High-market-share brands usually require proportionately high advertising expenditure as a percentage of sales to maintain share. B) Brands in less-differentiated or commodity-like product classes require less advertising to establish a unique image. C) New products typically merit large advertising budgets to build awareness and to gain consumer trial. D) In a market with few competitors and moderate advertising spending, a brand must advertise more heavily to be heard. E) Established brands usually are supported with high advertising budgets, measured as a ratio to sales.

110) A ________ is a sales force promotion tool that aims at inducing the sales force or dealers to increase their sales results over a stated period, with prizes (money, trips, gifts, or points) going to those who succeed. A) trade show B) frequency program C) sales contest D) sweepstake E) patronage award

110) In a ________ marketing system, two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity. A) reverse flow B) vertical C) horizontal D) lateral E) forward flow

123) Which of the following is NOT one of the ways companies can utilize cell phones to market to or track consumers? A) utilize GPS data to provide location-based offers B) utilize digital in-store signs that dispense coupons to smart phones C) utilize cookies to track mobile activity D) track behavior across tablets and mobile devices using screen identities E) track loyalty program participation

125) Experts recommend mobile ad copy should occupy only ________ percent of the screen, avoiding complex viewing experiences that may take a toll on consumers' battery and data availability as well as their time. A) 30 B) 40 C) 50 D) 60 E) 70

13) TV advertising is considered to be particularly advantageous because ________. A) the low volume of nonprogramming material on television makes it difficult for consumers to ignore or forget ads B) it provides detailed product information and effectively communicates user and usage imagery C) it can vividly demonstrate product attributes and persuasively explain their corresponding consumer benefits D) TV channels are very targeted, ads are relatively inexpensive to produce and place, and short closings allow for quick response E) it lets companies achieve a balance between broad and localized market coverage

13) The average click-through in terms of the percentage of consumers who click on a link for ________ is about 0.8 percent. A) search engine optimization B) pay-per-click ads C) standard banner ads D) microsites E) rich media banner ads

131) Audi models featured prominently in the 2010 blockbuster Iron Man 2, including main character Tony Stark's personal R8 Spyder. Which of the following is the most rational explanation for Audi's decision to associate itself with the movie? A) to express commitment to the community or on social issues B) to identify with a particular target market or lifestyle C) to create experiences and evoke feelings D) to become part of a personally relevant moment in consumers' lives E) to entertain key clients or reward key employees

137) Armordo is a famous vacuum cleaner brand in Africa. Clara has heard of Armordo and she knows that the product is a success. She has started considering whether or not to buy the vacuum cleaner. What stage of the consumer-adoption process is Clara in? A) awareness B) adoption C) evaluation D) trial E) interest

14) Which of the following is an example of an events and experiences platform? A) fairs and trade shows B) continuity programs C) factory tours D) sales presentations E) community relations

148) The easiest measure of marketing public relations effectiveness is the ________. A) resultant effect on the company's sales figures B) effect it has on its market capitalization C) number of exposures carried by the media D) changes observed in consumers' brand knowledge E) impact it has on the company's market share

148) Which of the following terms refers to the degree to which the innovation can be tried on a limited basis? A) compatibility B) relative advantage C) divisibility D) communicability E) complexity

15) When Johnson & Johnson's Tylenol headache reliever would pop up on brokers' Web sites whenever the stock market fell by 100 points or more, they were using a(n) ________. A) microsite B) pay-per-click ad C) interstitial D) search ad E) banner ad

152) Jaycee was using ________ when his organization tried to win the support of the leaders of one of his distributors by including them in advisory councils, boards of directors, and the like. A) dual compensation B) employee exchange C) co-optation D) joint membership E) strategic justification

17) A brand that is action-oriented and causes consumers to engage in physical actions appeals to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social

17) After creating a product prototype, a company tests it within the firm to see how it performs in different applications. The company refines the prototype to correct the mistakes found in in-house testing. What should be the next step? A) commercializing the product B) performing concept testing C) conducting beta testing with customers D) creating a marketing strategy for the product E) performing business analysis

17) Which of the following organizations uses top-notch industry talent to produce and distribute public service announcements for nonprofits and government agencies? A) the Association of National Advertisers B) the International Advertising Association C) the Ad Council D) the National Advertising Review Council E) the Advertising Research Foundation

18) ________ is finding the most cost-effective media to deliver the desired number and type of exposures to the target audience. A) Media scheduling B) Content analysis C) Media selection D) Communication design E) Copy testing

20) ________ refer(s) to logos, symbols, characters, and slogans that service providers use in order to make the service and its key benefits more tangible. A) Brand engagement B) Brand orientation C) Brand elements D) Brand loyalty E) Brand equity

24) Under which of the following conditions is the reach of media the most important factor in media selection? A) when introducing frequently purchased brands B) when going into a defined target market C) when launching extensions of well-known brands D) when there are strong competitors to a brand E) when there is high consumer resistance to the product

27) Identify a shortcoming of giving the responsibility to develop new products to the product managers of a company. A) They would not be familiar with the industry standards. B) Product managers would not have an operational focus. C) Product managers are often busy managing existing lines. D) They will find it difficult to gain support from employees. E) Product managers are less likely to use participative management.

27) Jake had an appointment at the doctor's, but couldn't make it on time because he was caught in traffic. By the time he reached the doctor's office, the doctor had already begun with the next patient. This illustrates the ________ of services. A) variability B) heterogeneity C) perishability D) intangibility E) homogeneity

27) What is the weighted number of exposures of a media schedule that reaches 80 percent of the target audience, with an exposure frequency of 4 and impact value of 2? A) 320 B) 10 C) 640 D) 160 E) 240

3) When Lola asked what the advertising campaign should say, she was concerned with which of the five Ms? A) Mission B) Money C) Message D) Media E) Measurement

35) Kaya, a chain of skin clinics, requests each new visitor to fill up their own details on a printed form. This is a step in ________. A) increasing its peak-time efficiency B) creating nonpeak demand C) increasing consumer participation D) sharing its services E) facilitating its future expansions

38) ________ refers to the normal work of preparing, pricing, distributing, and promoting the service to customers. A) Interactive marketing B) Internal marketing C) External marketing D) Promotional marketing E) Direct marketing

41) Pepe Homes manufactures a range of bathroom accessories and fittings that include bath-tubs, shower stalls, etc. While deciding on an effective advertising media vehicle for its planned advertising campaign, the marketing department decides that its advertising objectives would be best achieved if they used a medium that would portray their brand as prestigious and a symbol of luxury. To this effect, the medium should offer the marketers a high degree of audience selectivity and high-quality reproduction. Which of the following advertising media would best serve the advertising purposes of Pepe Homes? A) outdoor media B) radio C) magazines D) television E) newspapers

41) The weighted number of exposures (WE) of an advertising message over a given medium is given by ________. A) WE = reach × frequency B) WE = (reach × frequency) / impact C) WE = reach × frequency × impact D) WE = (reach + frequency) / impact E) WE = frequency / reach

42) Under which of the following conditions is the reach of media the most important factor in media selection? A) when introducing frequently purchased brands B) when going into a defined target market C) when launching extensions of well-known brands D) when there are strong competitors to a brand E) when there is high consumer resistance to the product

45) Charles Schwab's best customers are instantly directed to customer service representatives, while other customers have to wait longer. Charles Schwab is trying to ________. A) monitor its service systems B) empower the customers C) retain the patronage of profitable customers D) increase consumer participation E) standardize the service-performance process

47) Customers who view a service as homogeneous ________. A) only patronize a preferred service provider B) judge services on the basis of the providers C) care less about the provider than about the price D) pick a service provider based on functional attributes E) opt for the service with the highest price, irrespective of quality

5) Which of the following is an example of a hybrid service? A) teaching B) car C) restaurant meal D) soap E) air travel

50) Advertisements for which of the following products categories would merit a continuous advertising timing pattern the most? A) air conditioners B) life insurance C) breakfast cereal D) automobiles E) holiday package tours

56) ________ represents the proportion of company advertising of a product to all advertising of that product. A) Share of wallet B) Share of mind C) Share of voice D) Share of market E) Share of cost

57) Ellen came across an ad for a new restaurant which promised authentic French cuisine. When she ate there, however, she was disappointed to find that the food was mediocre and not very authentic. Which of the following gaps of service performance does this demonstrate? A) gap between service-quality specifications and service delivery B) gap between perceived service and expected service C) gap between service delivery and external communications D) gap between consumer expectation and management perception E) gap between management perception and service-quality specification

57) Which of the following elements of the marketing communications mix consists of a collection of incentive tools, mostly short-term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade? A) advertising B) public relations C) sales promotion D) events and experiences E) personal selling

58) LCH is a leading electronics company that produces and markets its own brand of desktop and laptop computers for both individual consumers and businesses. Which of the following sequences of consumer responses is relevant as a marketing communications model for LCH's products? A) learn-do-feel B) feel-learn-do C) do-feel-learn D) feel-do-learn E) do-learn-feel

60) All response hierarchy models of the communication process assume the buyer passes through cognitive, affective, and behavioral stages, in that order. Which of the following product categories lends itself most appropriately to such a "learn-feel-do" sequence? A) clothes B) dishwashers C) real estate D) personal computer E) air tickets

60) Sales promotion expenditures increased as a percentage of budget expenditure for a number of years, although its growth has recently slowed. Which of the following is a factor that has contributed to the growth of sales promotion expenditures? A) many brands have come to be seen as dissimilar B) the efficiency of advertising as a promotion has improved C) the trade demands more deals from manufacturers D) consumers have become less price-oriented E) the number of brands in the market has decreased

63) Leo's manager has asked him and his teammates to demonstrate caring towards customers. They are instructed to learn the customers' names, and use the customers' names while interacting with them. Repeat customers should get special attention, and the team members should remember their preferences and habits. The manager is asking the team to be ________. A) assuring B) candid C) empathetic D) reliable E) responsive

64) When GlaxoSmithKline sponsored a weight-loss community in preparation for the launch of its first weight-loss drug, Alli, which of the following was the key benefit of the online community? A) Consumers did not have commercial interests or company affiliations. B) Democratization of innovation for lowest-common denominator solutions. C) Two-way information flow led to useful, hard-to-get customer information and insights. D) A point of contact for product recalls. E) One-way communication with customers.

65) Which of the following sequences accurately represents the hierarchy-of-effects model of marketing communications? A) attention-interest-desire-action B) awareness-interest-evaluation-trial-adoption C) awareness-knowledge-liking-preference-conviction-purchase D) exposure-reception-cognitive response-attitude-intention-behavior E) knowledge-persuasion-decision-implementation-confirmation

67) When customers calculate the perceived economic benefits of a continuously provided service in relationship to the economic costs, they are gauging the ________. A) private equity B) brand equity C) payment equity D) customer-service equity E) product-service equity

68) Advertisements for which of the following product categories would merit a continuous advertising timing pattern the most? A) air conditioners B) life insurance C) breakfast cereal D) automobiles E) holiday package tours

68) ________ are consumer promotion offers to consumers of savings off the regular price of a product, flagged on the label or package. A) Coupons B) Rebates C) Price packs D) Premiums E) Samples

69) ________ is an advertising timing pattern that calls for advertising during a certain period, followed by a period with no advertising, followed by a second specific period of advertising activity. A) Pulsing B) Continuity C) Flighting D) Concentration E) Frequency capping

70) Flighting as an advertising timing pattern is most useful when ________. A) purchase cycle is rather frequent B) substantial advertising budget is available C) items are seasonal D) tightly defined buyer categories exist E) there are expanding market situations

70) The product's purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value gives the ________. A) service warranty cost B) out-of-pocket cost C) life-cycle cost D) facilitating services cost E) value-augmentation cost

72) When Johnson Controls reached beyond its climate control equipment and components business to manage integrated facilities by offering products and services that optimize energy use, it was said to be providing ________. A) facilitating services B) a primary service package C) value-augmenting services D) service contracts E) service warranties

74) Share of ________ represents the proportion of company advertising of a product to all advertising of that product. A) wallet B) mind C) voice D) market E) cost

80) Which of the following extrinsic factors is most likely to sway a consumer's decision about whether to contribute to social media? A) whether they are having fun B) whether they are learning C) whether it affects their self-image D) whether the brand is novel E) whether their family is having fun

81) Audi models featured prominently in the 2010 blockbuster Iron Man 2, including main character Tony Stark's personal R8 Spyder. Which of the following is the most rational explanation for Audi's decision to associate itself with the movie? A) to express commitment to the community or on social issues B) to identify with a particular target market or lifestyle C) to create experiences and evoke feelings D) to become part of a personally relevant moment in consumers' lives E) to entertain key clients or reward key employees

83) Which of the following factors forms the basis of assessing sponsorship activities through supply-side methods? A) consumers' brand knowledge B) impact on sponsor's bottom line C) extent of media coverage D) brand exposure reported by consumers E) sales pattern of sponsored products

88) The bottom rung of the customer loyalty ladder is ________. A) word of mouth/buzz B) repeat purchase C) satisfaction D) evangelism E) ownership

9) Some services require that the client be present to conduct the service. Which of the following is an example of such a service? A) pest control B) furniture polishing C) surgery D) car repairing E) tax services

9) Which of the following elements of the marketing communication mix involves use of mail, telephone, fax, e-mail, or Internet to communicate with or solicit response or dialogue from specific customers and prospects? A) advertising B) personal selling C) direct marketing D) public relations E) sales promotion

92) The easiest measure of marketing public relations effectiveness is ________. A) the resultant effect on the company's sales figures B) the effect it has on its market capitalization C) the number of exposures carried by the media D) the changes observed in consumers' brand knowledge E) the impact it has on the company's market share

93) The highest loss a project can create is called ________. A) rapid prototyping income B) payback income C) maximum investment exposure D) incremental yearly exposure E) cannibalized income

93) Which of the following personal communication channels consist of company salespeople contacting buyers in the target market? A) expert channels B) social channels C) advocate channels D) independent channels E) informal channels

94) To monitor the Gatorade brand on social networks around the clock, ________ created a Mission Control Center — set up like a broadcast television control room — in the middle of the marketing department in its Chicago headquarters. A) Coca-Cola B) Cadbury Schweppes C) PepsiCo D) P&G E) Nestlé

7) In ________ retailing, salespeople are ready to assist in every phase of the "locate-compare-select" process. A) self-service B) self-selection C) full-service D) limited service E) limited-selection

C Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

13) H&A is a retail chain that specializes in selling goods at very low prices. To achieve this, it stocks a very narrow assortment of basic necessities and offers customers a "no-frills" shopping experience. H&A is an example of a(n) ________ store. A) off-price B) specialty C) hard-discount D) superstore E) convenience

C Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

17) Which of the following is an example of direct selling? A) E&OE sells its herbal skincare products exclusively through its stand-alone stores. B) TCJ is a telemarketing firm that sells products from a number of different suppliers. C) Jayne's sells most of its products to customers through home sales parties. D) J3 is an online shopping portal where customers can buy directly from manufacturers. E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.

C Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

23) Which of the following is true of store retailers? A) A hard-discount store offers a wider merchandise mix than discount stores at higher prices. B) A discount store offers leftover goods, overruns, and irregular merchandise sold at less than retail. C) A specialty store generally stocks a very narrow product line. D) An extreme value store generally has a broad selection of high-markup, brand-name goods. E) A catalog showroom is a large, low-cost, low-margin, high-volume, self-service store.

C Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

24) A ________ is a storeless retailer serving a specific clientele—usually employees of large organizations—who are authorized to buy from a list of retailers that have agreed to give discounts in return for inclusion on the list. A) direct-selling vendor B) direct marketing vendor C) buying service D) automatic vendor E) corporate retailer

C Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

25) An independent retailer using a central buying organization and joint promotion efforts with other retailers is part of a ________. A) corporate chain store B) voluntary chain C) retailer cooperative D) merchandising conglomerate E) franchise organization

C Page Ref: 450 Objective: 1 Difficulty: Easy

26) A ________ is a retail firm owned by its customers. Members contribute money to open their own store, vote on its policies, elect a group to manage it, and receive dividends. A) retailer cooperative B) voluntary chain C) consumer cooperative D) merchandising conglomerate E) franchise organization

C Page Ref: 450 Objective: 1 Difficulty: Easy

29) Which of the following is true for franchisees? A) The franchisee is paid by the franchisor to be part of the franchise system. B) The franchisee licenses a trade mark to the franchisor. C) The franchisee must change its operations to suit those of the franchisor's. D) The franchisee collects royalty payments from the franchisor. E) The franchisee owns the trade or service mark.

C Page Ref: 450 Objective: 1 Difficulty: Easy

31) Jake wants to open a Subway franchise in his small town. To do this, he must pay the company a ________ fee. A) slotting B) title C) royalty D) merchandising E) residual

C Page Ref: 450 Objective: 1 Difficulty: Easy

35) In the corporate headquarters of a supermarket chain, ________ are responsible for developing brand assortments and listening to salespersons' presentations. A) central buyers B) brokers C) specialist buyers D) agents E) specialized wholesalers

C Page Ref: 455 Objective: 2 Difficulty: Easy

37) Which of the following is true for direct product profitability analysis? A) It is highly correlated with the gross margin on a product. B) It is negligible compared to the gross margin on a product. C) It bears little relation to the gross margin on a product. D) It is significantly lower than the gross margin on a product. E) It is exactly the same as the gross margin on a product.

C Page Ref: 456 Objective: 2 AACSB: Analytic skills Difficulty: Easy

43) Which of the following is a postpurchase service offered by retailers? A) accepting orders over the telephone B) advertising and window displays C) delivery to the customer's doorstep D) general information E) interior decoration of the retail outlet

C Page Ref: 457 Objective: 2 Difficulty: Easy

50) ________ are unbranded, plainly packaged, less expensive versions of common products such as spaghetti, paper towels, and canned peaches. A) Common carriers B) Shills C) Generics D) Private labels E) Marques

C Page Ref: 460 Objective: 4 AACSB: Analytic skills Difficulty: Easy

51) In addition to its store brands and nationally well-known brands of detergents, Reynold's also carries much cheaper varieties of detergents that are not advertised and have little-known names. They are often manufactured from lower-quality ingredients and save on packaging and advertising costs. These are known as ________. A) common carriers B) shills C) generics D) private labels E) marques

C Page Ref: 460 Objective: 4 AACSB: Analytic skills Difficulty: Moderate

60) Which of the following is true of brokers? A) Brokers represent buyers or sellers on a semipermanent basis. B) Most brokers are small businesses with a few skilled salespeople. C) Brokers bring buyers and sellers together and assist in negotiation. D) Selling brokers have contractual authority to sell a manufacturer's entire output. E) Purchasing brokers make purchases for buyers and often receive, inspect, warehouse, and ship merchandise.

C Page Ref: 462 Objective: 1 AACSB: Analytic skills Difficulty: Easy

55) ________ are independently owned businesses that take title to the merchandise they handle. They are full-service and limited-service jobbers, distributors, and mill supply houses. A) Brokers B) Agents C) Merchant wholesalers D) Specialized wholesalers E) Retailers' branches

C Page Ref: 462 Objective: 1 Difficulty: Easy

57) ________ sell and deliver a limited line of semiperishable goods to supermarkets, grocery stores, hospitals, restaurants, and hotels. A) Producers' cooperatives B) Cash and carry wholesalers C) Truck wholesalers D) Drop shippers E) Rack jobbers

C Page Ref: 462 Objective: 1 Difficulty: Easy

67) Optimal order quantities exist when the curves for the order-processing cost per unit and inventory-carrying cost per unit ________. A) are collinear B) are diagonal to each other C) intersect D) are parallel to each other E) equal zero

C Page Ref: 467 Objective: 2 AACSB: Analytic skills Difficulty: Easy

124) List the major types of limited-service wholesalers and explain how each type functions.

Cash and carry wholesalers sell a limited line of fast-moving goods to small retailers for cash. Truck wholesalers sell and deliver a limited line of semiperishable goods to supermarkets, grocery stores, hospitals, restaurants, and hotels. Drop shippers serve bulk industries such as coal, lumber, and heavy equipment. They assume title and risk from the time an order is accepted to its delivery. Rack jobbers serve grocery retailers in nonfood items. Delivery people set up displays, price goods, and keep inventory records; they retain title to goods and bill retailers only for goods sold to the end of the year. Producers' cooperatives assemble farm produce to sell in local markets. Mail-order wholesalers send catalogs to retail, industrial, and institutional customers; orders are filled and sent by mail, rail, plane, or truck. Page Ref: 462 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

94) What is channel power? Explain the various types of channel power.

Channel power is the ability to alter channel members' behavior so they take actions they would not have taken otherwise. • Coercive power: A manufacturer threatens to withdraw a resource or terminate a relationship if intermediaries fail to cooperate. This power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power. • Reward power: The manufacturer offers intermediaries an extra benefit for performing specific acts or functions. Reward power typically produces better results than coercive power, but intermediaries may come to expect a reward every time the manufacturer wants a certain behavior to occur. • Legitimate power: The manufacturer requests a behavior that is warranted under the contract. As long as the intermediaries view the manufacturer as a legitimate leader, legitimate power works. • Expert power: The manufacturer has special knowledge of the intermediaries' value. Once the intermediaries acquire this expertise, however, expert power weakens. The manufacturer must continue to develop new expertise so intermediaries will want to continue cooperating. • Referent power: The manufacturer is so highly respected that intermediaries are proud to be associated with it. Companies such as IBM, Caterpillar, and Hewlett-Packard have high referent power. Coercive and reward power are objectively observable; legitimate, expert, and referent power are more subjective and depend on the ability and willingness of parties to recognize them.

70) Briefly explain the various service outputs that marketing channels produce.

Channels produce five service outputs: 1. Lot size: The number of units the channel permits a typical customer to purchase on one occasion. 2. Waiting and delivery time: The average time customers wait for receipt of goods. Customers increasingly prefer faster delivery channels. 3. Spatial convenience: The degree to which the marketing channel makes it easy for customers to purchase the product. 4. Product variety: The assortment provided by the marketing channel. Normally, customers prefer a greater assortment because more choices increase the chance of finding what they need, although too many choices can sometimes create a negative effect. 5. Service backup: Add-on services (credit, delivery, installation, repairs) provided by the channel. The greater the service backup, the greater the work provided by the channel.

76) AT&T found that one of the most effective drivers of its sales, along with unaided advertising awareness was ________. A) a blog B) an online forum C) social networks D) WOM E) pay-per-click ads

82) ________ operates an international word-of-mouth media network powered by 1 million demographically diverse, ordinary people who volunteer to talk up the products they deem worth promoting. A) Brand Advocates B) Vocalpoint C) P&G D) BzzAgent E) Influentials

85) Consumer preferences for alternative product concepts can be measured through ________, a method for deriving the utility values that consumers attach to varying levels of a product's attributes. A) concept testing B) perceptual mapping C) gap level analysis D) conjoint analysis E) morphological analysis

137) Compare and contrast the use of negative and positive appeals in advertising messages.

Communicators use negative appeals such as fear, guilt, and shame to get people to do things (brush their teeth, have an annual health checkup) or stop doing things (smoking, abusing alcohol, overeating). Fear appeals work best when they are not too strong, when source credibility is high, and when the communication promises, in a believable and efficient way, to relieve the fear it arouses. Messages are most persuasive when moderately discrepant with audience beliefs. Stating only what the audience already believes at best just reinforces beliefs, and if the messages are too discrepant, audiences will counterargue and disbelieve them. Communicators also use positive emotional appeals such as humor, love, pride, and joy. Motivational or "borrowed interest" devices — such as the presence of cute babies, frisky puppies, popular music, or provocative sex appeals — are often employed to attract attention and raise involvement with an ad. These techniques are thought necessary in the tough new media environment characterized by low-involvement consumer processing and competing ad and programming clutter. Attention-getting tactics are often too effective. They may also detract from comprehension, wear out their welcome fast, and overshadow the product.

129) Briefly explain the three choices available to companies when deciding the timing of market entry.

Companies face three choices when deciding the timing. 1. First entry: The first firm entering a market usually enjoys the "first mover advantages" of locking up key distributors and customers and gaining leadership. But if rushed to market before it has been thoroughly debugged, the first entry can backfire. 2. Parallel entry: The firm might time its entry to coincide with the competitor's entry. The market may pay more attention when two companies are advertising the new product. 3. Late entry: The firm might delay its launch until after the competitor has borne the cost of educating the market, and its product may reveal flaws the late entrant can avoid. The late entrant can also learn the size of the market.

43) How do companies organize new product development?

Companies handle the organizational aspect of new-product development in several ways. Many assign responsibility to product managers. Some employ new-product managers who report to category managers. A few companies have growth leaders, a full-time job for its most creative and successful managers. Some companies have a high-level management committee charged with reviewing and approving proposals. Large companies often establish a new-product department headed by a manager with substantial authority and access to top management whose responsibilities include generating and screening new ideas, working with the R&D department, and carrying out field testing and commercialization.

116) What is concept testing? What is its importance? Explain two modern techniques used for concept testing.

Concept testing means presenting the product concept to target consumers, physically or symbolically, and getting their reactions. The more the tested concepts resemble the final product or experience, the more dependable concept testing is. Concept testing of prototypes can help avoid costly mistakes, but it may be especially challenging with radically different, new-to-the-world products. Rapid prototyping can be used to design products on a computer and then produce rough models to show potential consumers for their reactions. Companies are also using virtual reality to test product concepts. Virtual reality programs use computers and sensory devices (such as gloves or goggles) to simulate reality.

18) Sweet Treats is a startup confectionery manufacturer that sells chocolates, toffees, marshmallows, jelly candies, and so on. Should the firm adopt a push or a pull strategy? Explain your answer.

Considering that Sweet Treats is a startup, its products are likely to have low brand loyalty. Moreover, its products are likely to be impulse items. Thus, a push strategy would be more suitable.

10) Which of the following conditions necessitates that the objective of advertising should be to stimulate more usage of a product? A) The advertised product belongs to a nascent product category. B) The company is not the market leader. C) The advertised brand is superior to the market leader. D) The product class is mature. E) Brand usage for the product is very high.

103) Which of the following is a disadvantage of using a percentage-of-sales method to determine the marketing communications budget? A) It discourages stability when competing firms spend approximately the same percentage of their sales on communications. B) By using a percentage-of-sales method, communication expenditures tend to be extremely high irrespective of what a company can afford. C) It discourages management from thinking of the relationship among communication cost, selling price, and profit per unit. D) Dependence of the percentage-of-sales method on year-to-year sales fluctuations interferes with long-range planning. E) The percentage-of-sales method views sales as the result in itself rather than the determiner of communications.

115) Marcel downloaded an episode of his daughter's favorite program to his cell phone to ward off a tantrum while they were shopping. Which of the four distinctive characteristics was most critical to enable this action? A) It is tied to one user. B) It allows marketers to personalize messages. C) It is virtually always "on." D) It allows for immediate consumption as it is a distribution channel with a payment system. E) It is highly interactive given it allows for geotracking and picture and video taking.

141) Jason is a technology enthusiast who is happy to conduct alpha and beta testing and report on early weaknesses of consumer electronics products. He is most likely to fall in the ________ adopter category. A) late majority B) early C) early majority D) innovator E) laggard

34) Which of the following statements is true of the role of advertising in business markets? A) Advertising is unsuitable for explaining any new features that a product might have. B) Sales calls are more economical than reminder advertisements. C) Sales calls are more effective than advertisements at reminding customers how to use a product and reassure them about their purchase. D) Sales representatives can use copies of the company's ads to legitimize their company and products. E) Advertisements are the least preferred tools when intended to generate leads for sales representatives.

62) Which of the following steps in the innovation-adoption model of marketing communications corresponds to the cognitive stage that a buyer passes through? A) interest B) evaluation C) trial D) awareness E) adoption

65) In which of the following types of advertising timing patterns do exposures appear evenly throughout a given period? A) concentration B) pulsing C) flighting D) continuity E) frequency capping

1) Which of the following is an example of paid media? A) word-of-mouth about the brand B) news stories about the brand C) social network conversations about the brand D) a trade show booth about the brand E) consumers' Instagram photos that include the brand

10) ________ is an element of the marketing communications mix that involves online activities and programs designed to engage customers or prospects and directly or indirectly raise awareness, improve image, or elicit sales of products and services. A) Personal selling B) Direct marketing C) Sales promotion D) Interactive marketing E) Public relations

101) The least costly way of consumer-goods market testing is ________. A) simulated test marketing B) controlled test marketing C) a few test markets D) sales-wave research E) test marketing in 25 percent of the country

101) Which of the following consumer promotion tools offers a free amount of a product or service delivered door-to-door, sent in the mail, picked up in a store, attached to another product, or featured in an advertising offer? A) coupons B) rebates C) premiums D) samples E) price packs

11) Individual Web pages or clusters of pages that function as supplements to a primary site are ________. A) search engine optimization B) pay-per-click ads C) delighters D) microsites E) touch points

111) ________ time is the time necessary to prepare a promotional program prior to launching it. A) Sell-in B) Link C) Setup D) Lead E) Hold

140) Troma Inc. is a famous manufacturer of cookware that follows a traditional distributor-retailer system to distribute its products. The company abstains from the use of automated supply chain management (SCM) systems mainly due to the fear of unknown. However, rapidly escalating operational costs and inefficiencies have made it necessary for the company to implement an SCM system. The company goes for a big-bang installation of SCM system to become more competitive and cost effective. Identify the adopter group to which Troma belongs. A) innovator B) early adopter C) early majority D) laggard E) late majority

143) Which of the following describes the public relations function of lobbying? A) sponsoring efforts to publicize specific products B) advising management about public issues, and company positions and image during good times and bad C) presenting news and information about the organization in the most positive light D) dealing with legislators and government officials to promote or defeat legislation and regulation E) promoting understanding of the organization through internal and external communications

146) Relative advantage of an innovation refers to the degree to which ________. A) it matches the values and experiences of the individuals B) it is difficult to understand or use C) it can be tried on a limited basis D) it appears superior to existing products E) the benefits of use are observable or describable to others

146) ________ refers to the task of securing editorial space — as opposed to paid space — in print and broadcast media to promote or "hype" a product, service, idea, place, person, or organization. A) Advertising B) Media planning C) Communication design D) Publicity E) Copy testing

15) Which of the following is the main advantage of radio as an advertising medium? A) low competition B) more attention than television C) longer duration of ad exposure D) flexibility E) standardized rate structures

2) New-to-the-world products are ________. A) low-cost products designed to obtain an edge in highly competitive markets B) new product enhancements that supplement established products C) new versions of an existing product that has been less successful D) new products that create an entirely new market E) existing products that are targeted to new geographical markets

25) Under which of the following conditions is the frequency the most important factor in media selection? A) when introducing flanker brands B) when launching infrequently purchased brands C) when going into undefined target markets D) when there is high consumer resistance to the product E) when there is modest competition to the brand in the market

28) When a theater sells matinee movie tickets at low prices, it aims to shift some demand from the peak to the off-peak period. What is the strategy that the theater is said to be adopting? A) It is providing complementary services. B) It is increasing peak-time efficiency. C) It is using linear pricing. D) It is using differential pricing. E) It is sharing services.

30) Which of the following benefits is offered by sales promotion tools? A) Sales promotion tools are more authentic and credible to buyers than others such as advertising, public relations, and personal selling. B) Sales promotion tools can reach prospects who prefer to avoid mass media and targeted promotions. C) Sales promotion tools are typically an indirect form of "soft-sell" and hence, better received by customers. D) Sales promotion tools incorporate some concession, inducement, or contribution that gives value to the consumer. E) Sales promotion tools allow buyers personal choices and encourage them to respond directly.

33) Which of the following is an example of a complementary service? A) Big department stores usually hire extra staff to handle the rush during the holiday season. B) The Caesar Park Hotel generally caters to business customers during the week, but has now decided to promote minivacation weekends for non-business customers as well. C) More paramedics are on hand to assist physicians during times when emergency admissions are highest. D) AXA Bank set up automated teller machines so that its customers could avoid standing in line. E) Chesterton College hires part-time teachers when enrollment goes up.

34) Which of the following is the main advantage of radio as an advertising medium? A) low competition B) more attention than television C) longer duration of ad exposure D) flexibility E) standardized rate structures

37) The number of different persons or households exposed to a particular media schedule at least once during a specified time period is known as ________. A) range B) impact C) intensity D) reach E) frequency

135) When Japanese teenagers carry DOCOMO phones from NTT and use them to order goods, they are engaged in ________. A) B2B e-commerce B) brick-and-click commerce C) infomediation D) dilution E) m-commerce

43) Under which of the following conditions is the frequency the most important factor in media selection? A) when introducing flanker brands B) when launching infrequently purchased brands C) when going into undefined target markets D) when there is high consumer resistance to the product E) when there is modest competition to the brand in the market

43) Which of the following marketing communications tools is most influential at the reordering stage of buyer readiness? A) events and experiences B) publicity C) direct marketing D) sales promotion E) interactive marketing

44) What is the gross rating points (GRP) for a media schedule that reaches 60 percent of homes with an average exposure frequency of 4 and impact of 1.5? A) 10 B) 15 C) 160 D) 240 E) 360

46) The ________ rates the various elements of the service bundle and identifies required actions. A) company performance analysis B) voice of customer measurement C) customer factor measurement D) importance-performance analysis E) customer importance analysis

49) Ted is a media buyer with Shelvey Partners, an ad agency in San Francisco. He is currently working on charting a media plan for a departmental store chain's ads that are targeted at the upcoming Thanksgiving weekend. Which of the following advertising timing patterns is best suited for running these ads? A) continuity B) flighting C) pulsing D) concentration E) frequency capping

51) Surgeons and ER nurses would be considered ________ for surgical equipment. A) venture agents B) internal customers C) buzz agents D) lead users E) connectors

53) Which of the following is an example of a gap between management perception and the service-quality specifications? A) The college brochure showed state-of-the-art classrooms, but when the visitors walked in, they saw peeling walls and dull lighting. B) A nurse visits a patient to show care, but the patient interprets this as an indication that something is very wrong. C) The hotel administrators think that guests want better food, but guests are more concerned with the courtesy of the waiters. D) A service center manager has asked his subordinates to provide fast service, but has not specified a time for the service to be performed. E) Customer service representatives are asked to give ample time to each customer, but must serve a minimum of 50 customers a day.

54) The customer service representatives at a call center have been asked to handle each call in not more than five minutes. A recent customer survey by the company revealed that customers appreciate it when employees take the time to answer their questions fully and listen to their grievances. What kind of service gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception

61) When planning communications for a detergent brand, which of the following sequences of buyer responses should the marketer choose on which to base the communications model? A) feel-do-learn B) do-feel-learn C) feel-learn-do D) learn-do-feel E) learn-feel-do

61) Which of the following advertising practices involves advertisers paying filmmakers to have their products make cameo appearances in movies and television shows? A) brand extension B) flyposting C) co-branding D) product placement E) ambush marketing

62) A ________ error occurs when the company dismisses a good idea. A) probability B) performance C) double counting D) DROP E) GO

62) Which of the following is an example of a manufacturer promotion? A) price cuts B) feature advertising C) retailer coupons D) high-value trade-in credit E) retailer contests or premiums

69) Premiums, as a consumer promotion tool, are defined as ________. A) offers to consumers of savings off the regular price of a product, flagged on the label or package B) certificates entitling the bearer to a stated saving on the purchase of a specific product C) programs providing rewards related to the consumer's frequency and intensity in purchasing the company's products or services D) merchandise offered at a relatively low cost or free as an incentive to purchase a particular product E) values in cash or in other forms that are proportional to patronage of a certain vendor or group of vendors

71) Expensive equipment manufacturers not only install the equipment but also train the staff and undertake the maintenance and repair activities of the equipment. By doing so, they are providing ________. A) payment equity B) value-augmenting services C) differential pricing D) facilitating services E) a primary service package

79) When Apple introduced the iPod in October, 2001, it was the first-of-its-kind product that offered sizable storage capacity for songs and a portable device that was not seen before in the market. Which of the following is most likely to have been the marketing communications objective for the iPod at the time of its introduction? A) developing brand awareness B) building customer traffic C) enhancing purchase actions D) establishing product category E) enhancing firm image

80) Which method for establishing the total marketing communications budget sets communication budgets to achieve the same amount of share-of-voice as competitors? A) comparative-parity method B) objective-and-task method C) affordable method D) competitive-parity method E) percentage-of-sales method

84) Brown & Smith Inc. engages in the design, development, making, and retail selling of designer jewelry in North America. Before approving a new design, the company draws it on a computer and then produces models to show potential consumers and get their reactions. This allows the company to analyze the possible customer reaction. Identify the concept testing method used here. A) conjoint analysis B) perceptual mapping C) virtual reality testing D) rapid prototyping E) digital fabrication

84) Which of the following parameters forms the basis for measuring sponsorship effectiveness using demand-side methods? A) impact on market share of sponsor B) amount of time a brand is clearly visible on a television screen C) amount of relevant newsprint mentioning the sponsor D) influence on consumers' brand knowledge of the sponsor E) net impact on the sponsor's bottom line

87) Which of the following ads depict a transformational appeal? A) Thompson Water Seal can withstand intense rain, snow, and heat. B) DIRECTV offers better HD options than cable or other satellite operators. C) NBA phenomenon LeBron James pitching Nike, Sprite, and McDonald's. D) Pringles advertised "Once You Pop, the Fun Don't Stop" for years. E) Excedrin stops the toughest headache pain.

87) Which of the following describes the public relations function of lobbying? A) sponsoring efforts to publicize specific products B) advising management about public issues, and company positions and image during good times and bad C) presenting news and information about the organization in the most positive light D) dealing with legislators and government officials to promote or defeat legislation and regulation E) promoting understanding of the organization through internal and external communications

9) The predominant response function for advertising is often concave, but when it is S-shaped, ________. A) sales are flat, and advertising does not generate any sales impact B) any increase in advertising spending results in a proportionally positive increase in sales C) any increase in advertising spending results in a proportionally negative decrease in sales D) some positive amount of advertising is necessary to generate any sales impact, but sales increases eventually flatten out E) advertising is not necessary to generate any sales impact

90) Maria is flagged as a special customer at your firm because she is a satisfied customer, returns to your company to buy, puts her reputation on the line to tell others about you, and convinces others to purchase from you, which suggests she is on the ________ rung of the loyalty ladder. A) word of mouth/buzz B) repeat purchase C) satisfaction D) evangelism E) ownership

90) ________ refers to the task of securing editorial space—as opposed to paid space—in print and broadcast media to promote or "hype" a product, service, idea, place, person, or organization. A) Advertising B) Media planning C) Communication design D) Publicity E) Copy testing

92) Which of the following marketing communications principles implies that communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience? A) principle of closure B) principle of duality C) principle of delegation D) principle of congruity E) principle of neutrality

96) According to consumer-packaged goods companies, which of the following effects is attributed to the heavy use of sales promotion? A) increased brand loyalty B) focus on long-run marketing planning C) improved brand-quality image D) increased price sensitivity E) greater coupon redemption rates

97) Which of the following is an example of a manufacturer promotion? A) price cuts B) feature advertising C) retailer coupons D) high-value trade-in credit E) retailer contests or premiums

department store chain to target the upcoming Thanksgiving weekend. Which of the following advertising timing patterns is best suited for running these ads? A) continuity B) flighting C) pulsing D) concentration E) frequency capping

likely objective of Mountain Dew's sponsorship of these events? A) to enhance corporate image B) to express commitment to the community or on social issues C) to entertain key clients or reward key employees D) to create perceptions of key brand image associations E) to become part of a personally relevant moment in consumers' lives

3) Which of the following is an example of retailing? A) Dylan's sends catalogs to retail, industrial, and institutional customers. B) SEZ U Inc. sells a limited line of fast-moving goods to small retailers for cash. C) BEL Inc. sells FMCG goods to merchant wholesalers and distributors. D) Praxis International sells products to consumers directly through the Internet. E) Hub Styles procures its raw materials directly from farmers in the region.

D Page Ref: 447 Objective: 1 AACSB: Analytic skills Difficulty: Easy

6) A large staff, along with a higher proportion of specialty goods and slower-moving items and many services, are usually features of ________ retailing. A) self-service B) self-selection C) limited service D) full-service E) limited-selection

D Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

4) Discount stores that try to keep prices as low as possible are more likely to function using ________ operations. A) limited service B) self-selection C) full-service D) self-service E) limited-selection

D Page Ref: 448 Objective: 1 Difficulty: Easy

20) In ________, a salesperson goes to the home of a host who has invited friends, demonstrates the products and takes orders. A) catalog marketing B) franchising C) direct-response selling D) network marketing E) direct marketing

D Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Easy

28) Which of the following is true for franchisors? A) The franchisor has to pay the franchisee to be part of the franchise system. B) The franchisor licenses the trade mark from the franchisee. C) The franchisor must change its operations to suit those of the franchisee's. D) The franchisor collects royalty payments from the franchisee. E) The franchisor pays start-up costs for the franchisee.

D Page Ref: 450 Objective: 1 Difficulty: Easy

34) Staples is a giant retailer that concentrates on selling office supplies. Staples is an example of a(n) ________. A) ambush marketer B) supercenter C) megamarketer D) category killer E) guerilla marketer

D Page Ref: 452 Objective: 3 Difficulty: Easy

41) American businessman King Gillette pioneered the sales model in which razor handles were given away for free or sold at a loss, but sales of disposable razor blades were very profitable. This is known as the _______ model. A) two-tiered pricing B) predatory pricing C) cross selling D) loss leading E) product churning

D Page Ref: 456 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

44) Which of the following is an ancillary service offered by retailers? A) accepting orders over the telephone B) advertising and window displays C) delivery to the customer's doorstep D) general information E) alterations and tailoring

D Page Ref: 457 Objective: 2 Difficulty: Easy

142) Which of the following characteristics is closely associated with late majority adopter groups? A) superior technological knowledge B) low price sensitiveness C) opinion leadership D) deliberate pragmatism E) high risk aversion

69) E&OE is trying to minimize its inventory costs, which are extremely high. The company has realized that it can achieve this by maintaining a near-zero inventory and producing only once a product is ordered. Which of the following will be true for E&OE? A) Short production runs will be more expensive than longer ones. B) Setup and order-processing costs will be high. C) The order point will be high. D) Order-processing costs will be lower than the inventory-carrying costs. E) E&OE can reduce the average cost per unit by producing a long run.

D Page Ref: 467 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

50) Companies such as Edison Nation and the Big Idea Group have sprung up to tap into ________ possibilities, often combining its own design, branding, engineering, and sales teams with online participants, forming a community for devising new products. A) stage-gating B) cocreation C) microstocking D) buzzing E) crowdsourcing

59) LCH is a leading electronics company that produces and markets its own brand of desktop and laptop computers, for both individual consumers and businesses. During the planning process, LCH conducts a ________, which profiles all interactions customers in the target market may have with LCH, its computers, and its services. A) sales promotion B) brand association C) brand contact D) response hierarchy model E) communication audit

77) A(n) ________ is an elaborated version of a product idea expressed in consumer terms. A) test brand B) alpha product C) beta product D) business schedule E) product concept

78) Which of the following is the marketing communications objective for a new-to-the-world product, such as electric cars? A) enhancing brand awareness B) developing brand attitude C) increasing brand purchase intention D) encouraging repeat purchases E) establishing category need

82) ________ means presenting the product concept to target consumers, symbolically or physically, and getting their reactions. A) Perceptual mapping B) Brand-positioning mapping C) Brand attribute mapping D) Concept development E) Concept testing

98) Which of the following is a sales promotion tool that is consumer franchise building in nature? A) price-off packs B) contests and sweepstakes C) consumer refund offers D) trade allowances E) frequency awards

1) Which of the following is most closely related with the organic growth of an organization? A) acquiring a product or service brand B) entering new marketplaces C) increasing the operational profitability D) increasing productivity of employees E) developing new products from within

100) When Fred sends in the box top from his cereal to receive a free DVD of a cartoon featuring one of his favorite characters, he is responding to a ________. A) self-liquidating premium B) with-pack premium C) reduced-price pack D) banded pack E) free in-the-mail premium

104) An administered VMS coordinates successive stages of production and distribution through ________. A) an automated central control unit B) single ownership C) the combined efforts of all its members D) the establishment of contractual obligations E) the size and power of one of the members

108) Which of the following terms describes the practice of retailers purchasing a greater quantity during a sales promotion period than they can immediately sell? A) diverting B) panic buying C) straight rebuy D) buyout E) forward buying

11) Marketers often cut the cost of advertising dramatically by using consumers as their creative team. This strategy is known as ________. A) disintermediation B) public relations C) vertical integration D) reintermediation E) crowdsourcing

112) ________ time begins with the promotional launch and ends when approximately 95 percent of the deal merchandise is in the hands of consumers. A) Lead B) Hold C) Setup D) Link E) Sell-in

12) Marketers often cut the cost of advertising dramatically by using consumers as their creative team. This strategy is known as ________. A) disintermediation B) public relations C) vertical integration D) reintermediation E) crowdsourcing

12) Services high in ________ are those services that have characteristics the buyer normally finds hard to evaluate even after consumption. A) trial qualities B) search qualities C) experience qualities D) privacy qualities E) credence qualities

12) Which of the following elements of the marketing communications mix involves face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders? A) advertising B) sales promotion C) word-of-mouth marketing D) public relations E) personal selling

120) For a frequently purchased new product, the seller estimates repeat sales as well as first-time sales. A high rate of repeat purchasing means customers ________. A) value price more than differentiation B) do not support innovation on brands C) value differentiation more than price D) prefer personalized products rather than standard ones E) are satisfied with the product

125) A large retail chain in the United States decides to expand its operations by adding an online site for e-commerce. This is called a(n) ________ company. A) B2B B) brick-and-mortar C) m-commerce D) pure-click E) brick-and-click

128) Carlos is training his new graphic design intern on the use of color in mobile ads. Which of the following is good advice when it comes to the use of color? A) Only use one bright color. B) Do not use bright colors. C) Use at least three bright colors. D) Use at least four bright colors. E) Use a bright color to highlight calls to action.

130) In which developed Asian market is mobile marketing becoming a central component of customer experiences? A) Hong Kong B) Japan C) Singapore D) South Korea E) All of the above

32) Which of the following is an advantage of using radio as an advertising medium? A) higher attention than television B) standardized rate structures C) long duration of ad exposure D) high quality reproduction E) high geographic selectivity

40) Which of the following marketing communications tools has the highest cost-effectiveness in the introduction stage of the product life cycle? A) personal selling B) sales promotion C) interactive marketing D) direct marketing E) events and experiences

40) ________ describes the employees' skill in serving the client. A) External marketing B) Internal marketing C) Promotional marketing D) Direct marketing E) Interactive marketing

45) What is the weighted number of exposures of a media schedule that reaches 80 percent of the target audience, with an exposure frequency of 4 and impact value of 2? A) 10 B) 160 C) 240 D) 320 E) 640

46) Which of the following is an advantage of using newspapers as an advertising medium? A) long lifespan B) high reproduction quality C) huge "pass-along" audience D) high level of targeting E) good local market coverage

48) Belling Hotels provides complimentary breakfast buffets to all its guests. This is an example of a ________. A) primary service package B) service interface C) service support D) service frequency E) secondary service feature

49) ________ means inviting the Internet community to help create content or software, often with prize money or a moment of glory involved. A) Stage-gating B) Cocreation C) Microstocking D) Buzzing E) Crowdsourcing

51) An intensive distribution strategy serves well for ________. A) premium cars B) commercial trucks C) private label products D) industrial equipment E) newspapers

52) MGC Inc. organizes a company-wide picnic once a year. The organizers arranged for the best possible menu thinking that food would be a priority, but the staff were disappointed because the activities were very poorly planned. What kind of a gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception

61) Which of the following is NOT a benefit of a social media presence for a brand? A) Social media allows marketers to establish a public voice and presence online. B) Social media can cost-effectively reinforce other communication activities. C) Social media can encourage companies to stay innovative and relevant. D) Social media can be used to build or tap into online communities. E) Social media allows companies to have a short-term focus.

63) Which of the following is a sales promotion tool that is consumer franchise building in nature? A) price-off packs B) contests and sweepstakes C) consumer refund offers D) trade allowances E) frequency awards

64) According to the hierarchy-of-effects model, which of the following corresponds to the affective stage that a buyer passes through? A) attention B) exposure C) reception D) adoption E) conviction

7) ________ refer to the marketing communications element that involves company-sponsored activities and programs designed to create daily or special brand-related interactions with consumers. A) Publicity campaigns B) Trade promotions C) Advertisements D) Public relations E) Events and experiences

73) When sellers agree to provide free maintenance and repair services for a specified period of time at a specified contract price, they are offering ________. A) a complementary service B) payment equity C) a service blueprint D) differential pricing E) an extended warranty

73) Which of the following terms describes the practice of retailers purchasing a greater quantity during a sales promotion period than they can immediately sell? A) diverting B) panic buying C) straight rebuy D) buyout E) forward buying

79) Rolex calls itself the "Official Timekeeper" of the Wimbledon and Australian Open lawn tennis championships, by virtue of its sponsorships of the marquee events. What is the most likely objective for Rolex's sponsorship deal with these events? A) to permit merchandising or promotional opportunities B) to express commitment to the community or on social issues C) to create experiences and evoke feelings D) to identify with a particular target market or lifestyle E) to increase salience of company or product name

86) Which of the following functions of public relations departments involves presenting news and information about the organization in the most positive light? A) corporate communications B) product publicity C) lobbying D) counseling E) press relations

91) When another customer complains about the hair salon where Georgeanna is a loyal customer, she defends it because she feels responsible for the continued success of the hair salon. This behavior suggests she has reached the ________ rung of the loyalty ladder. A) word of mouth/buzz B) repeat purchase C) satisfaction D) evangelism E) ownership

95) One of the measures of online word of mouth at DuPont was the effort's ________, or whether it was not a one-shot deal. A) authority B) sentiment C) relevance D) scale E) sustainability

39) A store selling expensive artwork and luxury goods typically falls into the ________ group with respect to margins and volume. A) mixed markup, high-volume B) low-volume, mixed markup C) low-volume, low-markup D) high-volume, low-markup E) high-markup, low-volume

E Page Ref: 456 Objective: 2 AACSB: Analytic skills Difficulty: Easy

47) A brand developed by a retailer and/or wholesaler that is available only in selected retail outlets is called a ________ brand. A) generic B) franchisee C) marque D) national E) private-label

E Page Ref: 459 Objective: 4 AACSB: Analytic skills Difficulty: Easy

48) Though it is sold only in Wal-Mart stores, Wal-Mart's Ol'Roy dog food has surpassed Nestlé's Purina brand as the top-selling dog food. Ol'Roy is an example of a ________. A) generic product B) national brand C) franchise D) copy-cat brand E) private label

E Page Ref: 459 Objective: 4 AACSB: Analytic skills Difficulty: Moderate

58) The owner of supermarket chain Reynold's has realized that customers want a wider variety of goods than is currently available. However, Reynold's cannot afford the costs of storing excess inventory. Additionally, the owner is not willing to take the risk that the new products will remain unsold. Which of the following types of wholesalers can help Reynold's meet customer demand while minimizing costs? A) Producers' cooperatives B) Cash and carry wholesalers C) Truck wholesalers D) Drop shippers E) Rack jobbers

E Page Ref: 462 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

63) The elapsed time between an order's receipt, delivery, and payment is called the ________. A) variable-costs-to-payment cycle B) product-to-payment cycle C) inventory-to-sale cycle D) order-to-inventory cycle E) order-to-payment cycle

E Page Ref: 466 Objective: 2 AACSB: Analytic skills Difficulty: Easy

76) The trucking firm hired by your transportation manager provides a trucking service between the city of Sacramento and the surrounding towns on a regular schedule and at fixed prices. The trucking firm saves transportation costs by transporting the goods using trains as well as trucks, instead of trucks alone. Your transportation manager has hired a(n) ________. A) airship carrier B) airtruck carrier C) trainship carrier D) fishyback carrier E) piggyback carrier

E Page Ref: 468 Objective: 2 AACSB: Analytic skills Difficulty: Easy

75) Which of the following is an example of a private carrier? A) MET is a transporter that operates only in the Chicago area and charges fixed prices. B) BCL is a family firm that owns only three trucks, but takes small orders for transport. C) VTV owns a fleet of trucks and transports goods for any client for a fee. D) COM is a shipping firm that transports goods by road and rail across the U.S. E) BEL Inc. manufactures parts for automobiles and transports its products to customers itself.

E Page Ref: 468 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

72) HCN recently introduced a product that the distributor considers a "bottleneck" item. What is the risk/opportunity relationship for bottleneck items? A) low risk, mediocre opportunity B) low risk, high opportunity C) low risk, low opportunity D) high risk, mediocre opportunity E) high risk, low opportunity

E Page Ref: 468 Objective: 2 Difficulty: Easy

136) What are some challenges associated with mobile marketing and how should advertisers overcome them?

Even with newer-generation smart phones, the Web experience can be very different for users given smaller screen sizes, longer download times, and the lack of some software capabilities. Marketers should design simple, clear, and clean sites, paying even greater attention than usual to user experience and navigation. Mobile ad copy should occupy only 50 percent of the screen, avoiding complex viewing experiences that may take a toll on consumers' battery and data availability as well as on their time. Brands should limit their ads to a pair of phrases — the offer and the tagline. Brands should place their logo in the corner of the mobile ad frame. Finally, ads should use at least one bright color, but no more than two. Calls to action should be highlighted with a bright color.

157) Identify when exclusive distribution deals are legal and when they break the law.

Exclusive arrangements are legal as long as they do not substantially lessen competition or tend to create a monopoly and as long as both parties enter into them voluntarily. Exclusive dealing often includes exclusive territorial agreements. The producer may agree not to sell to other dealers in a given area, or the buyer may agree to sell only in its own territory. The first practice increases dealer enthusiasm and commitment. It is also perfectly legal — a seller has no legal obligation to sell through more outlets than it wishes. The second practice, whereby the producer tries to keep a dealer from selling outside its territory, has become a major legal issue. Producers of a strong brand sometimes sell it to dealers only if they will take some or all of the rest of the line. This practice is called full-line forcing. Such tying agreements are not necessarily illegal, but they do violate US law if they tend to lessen competition substantially.

40) A business analysis is performed mainly to identify if a company has got a technically and commercially sound product.

FALSE

63) STIHL, which manufactures handheld outdoor power equipment sold to six independent US distributors and six STIHL-owned marketing and distribution centers who sell to a nationwide network of more than 8,000 servicing retail detailers, is a good example of intensive distribution.

FALSE

66) Firms benefit when they democratize innovations and replace groundbreaking ideas with lowest-common-denominator solutions.

FALSE

84) The macroscheduling decision calls for allocating advertising expenditures within a short period to obtain maximum impact.

FALSE

100) Consumers are more likely to transmit negative WOM and pass on information about their own negative consumption experiences.

FALSE

91) Growth in the retail market is centered firmly in the middle market, leaving luxury retailers and discounting specialists struggling.

FALSE Page Ref: 452 Objective: 3 AACSB: Analytic skills Difficulty: Easy

98) The gross margin on a product bears a direct relation to the direct product profit.

FALSE Page Ref: 456 Objective: 2 AACSB: Analytic skills Difficulty: Easy

100) Mass merchandisers are usually high-markup, lower-volume stores.

FALSE Page Ref: 456 Objective: 2 Difficulty: Easy

103) Accepting telephone and mail orders is an example of the ancillary services that a retailer offers.

FALSE Page Ref: 457 Objective: 2 AACSB: Analytic skills Difficulty: Easy

113) If setup costs are high, the manufacturer can produce the item often, and the average cost per item is stable and equal to the running costs.

FALSE Page Ref: 467 Objective: 2 AACSB: Analytic skills Difficulty: Easy

9) Jill, a Product Manager for Nike, is responsible for evaluating the viability of a radically new product. How should she estimate demand?

Few reliable techniques exist for estimating demand for radical innovations. Focus groups can provide perspective on customer interest and need, but marketers may need a probe-and-learn approach based on observation and feedback of early users' experiences and other means such as online chats or product-focused blogs.

81) What are some of the ways a firm can draw new ideas from its customers?

Forming a brand community; using Web sites for new ideas, including feedback forms and specialized search engines like Technorati and Daypop to find blogs and postings relevant to their businesses; using a customer advisory board; observing how customers are using its products and asking customers about their dream products are all ways to get new ideas from customers.

134) What are four distinctive characteristics of a mobile device?

Four distinctive characteristics of a mobile device include: 1. it is uniquely tied to one user 2. it is virtually always "on" given it is typically carried everywhere 3. it allows for immediate consumption because it is in effect a channel of distribution with a payment system 4. it is highly interactive given it allows for geotracking and picture and video taking

120) In what ways does franchising benefit the franchisor? In what ways does it benefit the franchisee?

Franchising benefits both the franchisor and the franchisee. Franchisors gain the motivation and hard work of employees who are entrepreneurs rather than "hired hands," the franchisees' familiarity with local communities and conditions, and the enormous purchasing power of being a franchisor. Franchisees benefit from buying into a business with a well-known and accepted brand name. They find it easier to borrow money for their business from financial institutions, and they receive support in areas ranging from marketing and advertising to site selection and staffing. Page Ref: 450 Objective: 1 AACSB: Analytic skills Difficulty: Easy

132) GameTech International Inc. engages in the design, development, and marketing of interactive electronic bingo systems primarily in the United States. The company has plans to enter developing markets such as Brazil and India. TechToys, GameTech's major competitor has already started operations in India. GameTech decides to delay its entry to India and to closely observe TechToys' operations in India. What is the possible rationale behind this delaying decision?

GameTech is using the late entry strategy. The firm will delay its launch until after the competitor has borne the cost of educating the market. It can also avoid the mistakes that TechToys make. The company can also learn the size of the market.

48) What are the benefits of brainstorming? How would one run an effective brainstorming session?

If done correctly, group brainstorming sessions can create insights, ideas, and solutions that would have been impossible without everyone's participation. If done incorrectly, they are a painful waste of time that can frustrate and antagonize participants. To ensure success, experts recommend the following: • A trained facilitator should guide the session, and the right physical environment must be used. • The right participants must be chosen. Sometimes it is useful to have a real mixture with many different points of view. • Participants must see themselves as collaborators working toward a common goal. • Rules need to be set up and followed so conversations don't get off track. Some structure is needed, though flexibility is desired too. • Participants must be given proper background preparation and materials so they can get into the task quickly. • Individual sessions before and after the brainstorming can be useful for thinking and learning about the topic ahead of time and for reflecting afterward on what happened. • During the session, each participant must be encouraged to participate and think freely and constructively. It may be useful to give participants time to think and gather their thoughts based on what they have heard. • To help stimulate thinking, participants may be told to identify and challenge existing assumptions, role-play some aspect of the situation they are analyzing, or consider borrowing ideas from other firms, even outside the industry. • Brainstorming sessions must lead to a clear plan of action and implementation so the ideas that materialize can provide tangible value. • Brainstorming can do more than just generate ideas — it should help build teams and leave participants better informed and energized.

72) What are the characteristics of an ideal ad campaign?

In an ideal ad campaign, the right consumer is exposed to the right message at the right place and at the right time. The consumer is not distracted from the intended message. The ad properly reflects the consumer's level of understanding of and behaviors with the product and the brand. The ad correctly positions the brand in terms of desirable and deliverable points-of-difference and points-of-parity. The ad motivates consumers to consider purchase of the brand.

95) Describe the challenges and opportunities that international markets pose.

International markets pose distinct challenges, including variations in customers' shopping habits, but opportunities at the same time. Behavior of markets and preferences for intermediaries differ across countries. Foreign markets provide an opportunity for growth and expansion. Many pitfalls also exist in global expansion, and retailers must also be able to defend their home turf from the entry of foreign retailers.

125) Why do retailers prefer to deal with wholesalers rather than directly with manufacturers?

In general, retailers prefer to deal with wholesalers rather than directly with manufacturers (and vice versa) as wholesalers are better at performing the following functions: Selling and promoting: Wholesalers' sales forces help manufacturers reach many small business customers at a relatively low cost. They have more contacts, and buyers often trust them more than they trust a distant manufacturer. Buying and assortment building: Wholesalers are able to select items and build the assortments their customers need, saving them considerable work. Bulk breaking: Wholesalers achieve savings for their customers by buying large carload lots and breaking the bulk into smaller units. Warehousing: Wholesalers hold inventories, thereby reducing inventory costs and risks to suppliers and customers. Transportation: Wholesalers can often provide quicker delivery to buyers because they are closer to the buyers. Financing: Wholesalers finance customers by granting credit, and finance suppliers by ordering early and paying bills on time. Risk bearing: Wholesalers absorb some risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence. Market information: Wholesalers supply information to suppliers and customers regarding competitors' activities, new products, price developments, and so on. Management services and counseling: Wholesalers often help retailers improve their operations by training sales clerks, helping with store layouts and displays, and setting up accounting and inventory-control systems. They may help industrial customers by offering training and technical services. Page Ref: 462-463 Objective: 2 AACSB: Analytic skills Difficulty: Easy

29) What are the four types of advertising timing patterns available to marketers when launching a new product?

In launching a new product, the advertiser must choose among continuity, concentration, flighting, and pulsing. • Continuity means exposures appear evenly throughout a given period. Generally, advertisers use continuous advertising in expanding market situations, with frequently purchased items, and in tightly defined buyer categories. • Concentration calls for spending all the advertising dollars in a single period. This makes sense for products with one selling season or related holiday. • Flighting calls for advertising during a period, followed by a period with no advertising, followed by a second period of advertising activity. It is useful when funding is limited, the purchase cycle is relatively infrequent, or items are seasonal. • Pulsing is continuous advertising at low-weight levels, reinforced periodically by waves of heavier activity. It draws on the strength of continuous advertising and flights to create a compromise scheduling strategy. Those who favor pulsing believe the audience will learn the message more thoroughly, and at a lower cost to the firm.

54) Compare and contrast paid search ads, banner ads, and interstitials. In your response, please identify the advantages and disadvantages of each advertising format.

In paid search ads, a marketer's ad is shown based on keywords the consumer is searching, and the ads may appear above or next to the results, depending on the amount the company bids and an algorithm the search engines use to determine an ad's relevance to a particular search. Marketers pay only if the consumer clicks through on the ad. Marketers believe that consumers who click the ads are pre-screened prospects. Search ads have a 2 percent click-through rate, which is higher than banner ads or interstitials. However, Internet users only spend about 5 percent of their time online searching for information. Further, the increased popularity of search ads means popular keywords are more expensive. Marketers must be creative with their ad placements and keyword bids. Banner ads are small, rectangular boxes containing text and perhaps a picture that companies pay to place on relevant Web sites. The larger the audience, the higher the cost. In the early days of the Internet, viewers clicked on 2 percent to 3 percent of the banner ads they saw, but that percentage has quickly plummeted, and advertisers have explored other forms of communication. They are important because of the amount of time consumers spend online when they are not searching, but they have to be more attention-getting and influential, better targeted, and more closely tracked than they used to be. Interstitials are advertisements, often with video or animation, that pop up between page changes within a Web site or across Web sites. They can be targeted based on a consumer's needs or anticipated needs, as opposed to what the consumer is looking for. Because consumers find such pop-up ads intrusive and distracting, many use software to block them.

117) Explain the concepts of sales-wave research and simulated test marketing.

In sales-wave research, consumers who initially try the product at no cost are reoffered it, or a competitor's product, at slightly reduced prices. The offer may be made as many as five times (sales waves), while the company notes how many customers select it again and their reported level of satisfaction. During simulated test marketing, 30-40 qualified shoppers are asked about brand familiarity and preferences in a specific product category and attend a brief screening of both well-known and new TV commercials and print ads. One ad advertises the new product but is not singled out for attention. Consumers receive a small amount of money and are invited into a store where they may buy items.

53) How do the stages in a product's life cycle influence the marketing communications mix?

In the introduction stage of the product life cycle, advertising, events and experiences, and publicity have the highest cost-effectiveness, followed by personal selling to gain distribution coverage and sales promotion and direct marketing to induce trial. In the growth stage, demand has its own momentum through word of mouth and interactive marketing. Advertising, events and experiences, and personal selling all become more important in the maturity stage. In the decline stage, sales promotion continues strong, other communication tools are reduced, and salespeople give the product only minimal attention.

123) Manufacturers handle forward buying and diverting by producing and delivering less than the full order in an effort to smooth production.

TRUE

91) Describe the methods used to measure sponsorship activities.

It's a challenge to measure the success of events. The supply-side measurement method focuses on potential exposure to the brand by assessing the extent of media coverage, and the demand-side method focuses on exposure reported by consumers. Supply-side methods approximate the amount of time or space devoted to media coverage of an event, for example, the number of seconds the brand is clearly visible on a television screen or the column inches of press clippings that mention it. These potential "impressions" translate into a value equivalent to the dollar cost of actually advertising in the particular media vehicle. Although supply-side exposure methods provide quantifiable measures, equating media coverage with advertising exposure ignores the content of the respective communications. The advertiser uses media space and time to communicate a strategically designed message. Media coverage and telecasts only expose the brand and don't necessarily embellish its meaning in any direct way. Although some public relations professionals maintain that positive editorial coverage can be worth 5 to 10 times the equivalent advertising value, sponsorship rarely provides such favorable treatment. The demand-side method identifies the effect sponsorship has on consumers' brand knowledge. Marketers can survey event spectators to measure recall of the event as well as resulting attitudes and intentions toward the sponsor.

157) What are the major functions performed by marketing public relations? Illustrate with examples.

MPR goes beyond simple publicity and plays an important role in the following tasks: • Launching new products: The amazing commercial success of toys such as LeapFrog, Beanie Babies, and even the latest kids' craze, Silly Bandz, owes a great deal to strong publicity. • Repositioning a mature product: In a classic PR case study, New York City had extremely bad press in the 1970s until the "I Love New York" campaign. • Building interest in a product category: Companies and trade associations have used MPR to rebuild interest in declining commodities such as eggs, milk, beef, and potatoes and to expand consumption of such products as tea, pork, and orange juice. • Influencing specific target groups: McDonald's sponsors special neighborhood events in Latino and African American communities to build goodwill. • Defending products that have encountered public problems: PR professionals must be adept at managing crises, such as those weathered by such well-established brands as Tylenol, Toyota, and BP in 2010. • Building the corporate image in a way that reflects favorably on its products: Steve Jobs's heavily anticipated Macworld keynote speeches have helped to create an innovative, iconoclastic image for Apple Corporation.

150) What is integrated marketing communications? What is its significance in the current marketing environment?

Many companies still rely on only one or two communication tools. This practice persists in spite of the fragmenting of mass markets into a multitude of minimarkets, each requiring its own approach; the proliferation of new types of media; and the growing sophistication of consumers. The wide range of communication tools, messages, and audiences makes it imperative that companies move toward integrated marketing communications. Companies must adopt a "360-degree view" of consumers to fully understand all the different ways that communications can affect consumer behavior in their daily lives. The American Marketing Association defines integrated marketing communications (IMC) as "a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time." This planning process evaluates the strategic roles of a variety of communications disciplines — for example, general advertising, direct response, sales promotion, and public relations — and skillfully combines these disciplines to provide clarity, consistency, and maximum impact through the seamless integration of messages.

44) Explain how stage-gate systems are used by companies to manage innovation and new product launches.

Many top companies use the stage-gate system to divide the innovation process into stages, with a gate or checkpoint at the end of each. The project leader, working with a cross-functional team, must bring a set of known deliverables to each gate before the project can pass to the next stage. To move from the business plan stage into product development requires a convincing market research study of consumer needs and interest, a competitive analysis, and a technical appraisal. Senior managers review the criteria at each gate to make one of four decisions: go, kill, hold, or recycle. Stage-gate systems make the innovation process visible to all and clarify the project leaders and team's responsibilities at each stage. The gates or controls should not be so rigid, however, that they inhibit learning and the development of novel products. Many firms have parallel sets of projects working through the process, each at a different stage. Some firms use a spiral development process that recognizes the value of returning to an earlier stage to make improvements before moving forward.

88) What are the adjustments that marketers need to apply to the cost-per thousand measure when selecting specific media vehicles?

Marketers need to apply several adjustments to the cost-per-thousand measure. First, they should adjust for audience quality. For a baby lotion ad, a magazine read by 1 million young mothers has an exposure value of 1 million; if read by 1 million teenagers, it has an exposure value of almost zero. Second, adjust the exposure value for the audience-attention probability. Readers of Vogue may pay more attention to ads than do readers of Newsweek. Third, adjust for the medium's editorial quality (prestige and believability). People are more likely to believe a TV or radio ad and to become more positively disposed toward the brand when the ad is placed within a program they like. Fourth, consider ad placement policies and extra services (such as regional or occupational editions and lead-time requirements for magazines).

151) How is coordination of media achieved through integrated marketing communications?

Media coordination can occur across and within media types, but marketers should combine personal and nonpersonal communications channels through multiple-vehicle, multiple-stage campaigns to achieve maximum impact and increase message reach and impact. Promotions can be more effective when combined with advertising, for example. The awareness and attitudes created by advertising campaigns can increase the success of more direct sales pitches. Advertising can convey the positioning of a brand and benefit from online display advertising or search engine marketing that offers a stronger call to action. Many companies are coordinating their online and offline communications activities. Web addresses in ads (especially print ads) and on packages allow people to more fully explore a company's products, find store locations, and get more product or service information. Even if consumers don't order online, marketers can use Web sites in ways that drive them into stores to buy.

75) Provide a general description of the four classic response hierarchy models.

Micromodels of marketing communications concentrate on consumers' specific responses to communications. All the response hierarchy models assume the buyer passes through cognitive, affective, and behavioral stages, in that order. This "learn-feel-do" sequence is appropriate when the audience has high involvement with a product category perceived to have high differentiation, such as an automobile or house. An alternative sequence, "do-feel-learn," is relevant when the audience has high involvement but perceives little or no differentiation within the product category, such as an airline ticket or personal computer. A third sequence, "learn-do-feel," is relevant when the audience has low involvement and perceives little differentiation, such as with salt or batteries. By choosing the right sequence, the marketer can do a better job of planning communications.

135) What are mobile apps and how are they used?

Mobile apps are bite-sized software programs that can be downloaded to smart phones. Apps can perform useful functions — adding convenience, social value, incentives, and entertainment and making consumers' lives a little or a lot better.

54) Karl Lipton is the marketing communications coordinator for a major electronics manufacturer. He is assigned with charting out a communications strategy for a new range of mobile phones developed by his company. How will Karl's communications strategy look over the course of the mobile phones' life cycle?

Mobile phones have relatively short life cycles. In the introduction stage of the phones' life cycle, advertising, events and experiences, and publicity have the highest cost-effectiveness. In-store personal selling helps improve distribution coverage, while sales promotions such as discounted accessories, freebies etc., help induce trial. In the growth stage, demand has its own momentum through word of mouth and interactive marketing. Web sites are effective tools during the growth stage. As the phones reach the maturity stage, advertising, promotional events and experiences, and personal selling again become more important. As the phones enter the decline stage of their life cycle, sales promotion takes over as the most important tool in the marketing communications mix, even as other communication tools are reduced, and salespeople give the phones only minimal attention.

145) ShoeZone is a shoe retailer with outlets across the country. The company is trying to reduce its inventory and warehousing costs, but needs to keep delivery speeds as short as possible. What can ShoeZone do to achieve this?

More stocking locations mean goods can be delivered to customers more quickly, but warehousing and inventory costs are higher. To reduce these costs, ShoeZone might centralize its inventory in one place and use fast transportation to fill orders. Page Ref: 467 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

10) What are the types of new products that a firm can introduce? What are the problems associated with introducing a truly innovative product? What are the necessary conditions to create a radically innovative product?

New products range from new-to-the-world products that create an entirely new market to minor improvements or revisions of existing products. Most new-product activity is devoted to improving existing products. Truly innovative and new-to-the-world products incur the greatest cost and risk. Although radical innovations can hurt the company's bottom line in the short run, if they succeed they can create a greater sustainable competitive advantage than ordinary products and produce significant financial rewards as a result. Companies typically must create a strong R&D and marketing partnership to pull off a radical innovation. The right corporate culture is another crucial determinant; the firm must prepare to cannibalize existing products, tolerate risk, and maintain a future market orientation. Few reliable techniques exist for estimating demand for radical innovations.

48) Given the disadvantages associated with online marketing communications, is it worth it for companies to use them? In your response, please identify the disadvantages of online marketing communications.

Online marketing communications are challenging because consumers can screen out messages; software-powered Web sites generate bogus clicks, which can throw off metrics; marketers can lose control of online messages, which can be hacked or vandalized. Consumers control the flow of information by selecting who they interact with and engaging selectively in the information. However, almost half of consumer media time is spent online, and marketers must reach consumers where they are.

110) From a consumer's perspective, what are the limitations of getting information from an online review?

Online reviews can be biased or fake. Research has shown that social influence can lead to disproportionally positive online ratings, and subsequent raters are more likely to be influenced by previous positive ratings than negative ones. Consumers posting reviews are susceptible to conformity pressures and adopting norms of others.

139) Name a few products for which personal influence plays a significant role in marketing communications.

Personal influence carries especially great weight when products are expensive, risky, or purchased infrequently, and when products suggest something about the user's status or taste. On that count, life insurance, real estate, health services, automobiles, luxury items, consultation services, etc. can be expected to be significantly influenced by word-of-mouth and endorsements by credible sources.

141) When does personal influence carry the most weight?

Personal influence carries especially great weight when products are expensive, risky, or purchased infrequently, and when products suggest something about the user's status or taste. People often ask others to recommend a doctor, plumber, hotel, lawyer, accountant, architect, insurance agent, interior decorator, or financial consultant. If we have confidence in the recommendation, we normally act on the referral. Service providers clearly have a strong interest in building referral sources.

118) List and explain the four service levels offered by retailers.

Retailers meet widely different consumer preferences for service levels and specific services. The four levels of service usually offered by retailers are: (1) self-service, (2) self-selection, (3) limited service, and (4) full service. Self-service: Self-service is the cornerstone of all discount operations. Many customers are willing to carry out their own "locate-compare-select" process to save money. Self-selection: Customers find their own goods, although they can ask for assistance. Limited service: These retailers carry more shopping goods and services such as credit and merchandise-return privileges. Customers need more information and assistance. Full-service: Salespeople are ready to assist in every phase of the "locate-compare-select" process. Customers who like to be waited on prefer this type of store. The high staffing cost, along with the higher proportion of specialty goods and slower-moving items and the many services, result in high-cost retailing. Page Ref: 448 Objective: 1 AACSB: Analytic skills Difficulty: Easy

122) Sales promotion tools that typically are not brand building include price-off packs, contests and sweepstakes, consumer refund offers, and trade allowances.

TRUE

126) Compare and contrast advertising and sales promotion as marketing communication tools.

Sales promotion expenditures increased as a percentage of budget expenditure for a number of years, although its growth has recently slowed. Several factors contributed to this growth, particularly in consumer markets. Promotion became more accepted by top management as an effective sales tool, the number of brands increased, competitors used promotions frequently, many brands were seen as similar, consumers became more price-oriented, the trade demanded more deals from manufacturers, and advertising efficiency declined. But the rapid growth of sales promotion created clutter. Loyal brand buyers tend not to change their buying patterns as a result of competitive promotions. Advertising appears to be more effective at deepening brand loyalty, although we can distinguish added-value promotions from price promotions. Price promotions may not build permanent total-category volume. Small-share competitors may find it advantageous to use sales promotion because they cannot afford to match the market leaders' large advertising budgets, nor can they obtain shelf space without offering trade allowances or stimulate consumer trial without offering incentives. Dominant brands offer deals less frequently, because most deals subsidize only current users.

119) GameTech International Inc. engages in the design, development, and marketing of interactive electronic bingo systems primarily in the United States. Some top managers want to collect sales-wave research, but others disagree, offering several disadvantages. List these disadvantages.

Sales-wave research can be implemented quickly, conducted with a fair amount of security, and carried out without final packaging and advertising. However, because customers are preselected, it does not indicate trial rates the product would achieve with different sales incentives, nor does it indicate the brand's power to gain distribution and favorable shelf position.

55) Briefly describe the process of measuring the results of marketing communications.

Senior managers want to know the outcomes and revenues resulting from their communications investments. Too often, however, their communications directors supply only inputs and expenses: press clipping counts, numbers of ads placed, media costs. In fairness, communications directors try to translate inputs into intermediate outputs such as reach and frequency (the percentage of target market exposed to a communication and the number of exposures), recall and recognition scores, persuasion changes, and cost-per-thousand calculations. Ultimately, behavior-change measures capture the real payoff. After implementing the communications plan, the communications director must measure its impact. Members of the target audience are asked whether they recognize or recall the message, how many times they saw it, what points they recall, how they felt about the message, and what their previous and current attitudes are toward the product and the company. The communicator should also collect behavioral measures of audience response, such as how many people bought the product, liked it, and talked to others about it.

72) Why are social media important to marketers?

Social media provide a means for consumers/companies to share text, images, audio, and video information with each other and with companies/consumers. Social media allow marketers to establish a public voice and presence online. They can cost-effectively reinforce other communication activities. Because of their day-to-day immediacy, they can also encourage companies to stay innovative and relevant. Marketers can build or tap into online communities, inviting participation from consumers and creating a long-term marketing asset in the process.

136) Imagine that you are in charge of creating a distinctive store atmosphere at a clothing retailer. What can you do to make your store stand out in the customer experience?

Student answers may vary. Answers can include the use of fragrances, music, store design and layout, and activities. Page Ref: 457 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

132) Mal's father and grandfather ran Reynold's, a general store in the town of Bayswater. When Mal inherited the store, the town was expanding rapidly and a number of multinational franchisors showed interest in entering the town. Mal wants to turn Reynold's into a franchise of Blue Sun, a fast-food chain. What benefits can Mal gain from this move?

Student answers may vary. As the franchisor's brand is usually well-known, Mal obtains the benefit of a brand name that has already been accepted by customers. He could find it easier to get loans and financial help from banks on the basis of the well-known brand name. As the franchisor will provide everything from operational processes to marketing assistance, Mal need not spend time and effort beginning the process from scratch. Page Ref: 450 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

134) Skincare company E&OE retails its products through standalone stores or through its own stores within malls. The management uses this method so that customers are sure of finding only E&OE products at the stores and the brand image remains strong. In this scenario, what can E&OE do to generate consumer interest while retaining its exclusivity?

Student answers may vary. E&OE can do any or all of the following: Feature blockbuster distinctive merchandise events. Feature surprise or ever-changing merchandise. Feature the latest or newest merchandise first. Offer merchandise-customizing services. Offer a highly targeted assortment. Page Ref: 455 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

135) Over the past three years, skincare products retailer E&OE has realized that it is losing sales to competitors who sell products online. E&OE has always cultivated an exclusive upscale image, and the management feels that shifting to the online route will only harm the brand image and sales in the long run. How can E&OE encourage customers to frequent its stores?

Student answers may vary. E&OE can offer more in-store services for its customers. It can offer information about the products, consultation and advice about the kinds of products to choose and allow customers to test or experience the products themselves. The retailer can also revamp the store atmosphere to be more inviting to customers, using music and fragrances and store design to create a pleasurable experience. E&OE can also increase the number of activities and experiences that customers can participate in. Page Ref: 457 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

131) Skincare company E&OE has realized that its customers are very loyal to the brand and play a large part in popularizing it by word of mouth. E&OE wants to leverage this customer loyalty by using it to generate sales outside its store format. How can E&OE achieve this?

Student answers may vary. E&OE can opt for the direct selling method, using multilevel or network marketing. A salesperson can go to the home of a loyal customer who has invited friends; the salesperson demonstrates the products and takes orders. The company can also recruit independent customers who act as distributors. The distributor's compensation includes a percentage of sales made by those he or she recruits, as well as earnings on direct sales to customers. Page Ref: 449 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

144) HCN is a wholesaler that supplies consumer goods products to a number of retailers. HCN has witnessed the worrying trend of its competitors losing out on suppliers, who approach retailers directly. How can HCN strengthen its relationship with manufacturers and prevent this?

Student answers may vary. HCN can work to reach a clear agreement with their manufacturers about their expected functions in the marketing channel. It can gain insight into the manufacturers' requirements by visiting their plants and attending manufacturer association conventions and trade shows. HCN must also fulfill its commitments to the manufacturer by meeting the volume targets, paying bills promptly, and feeding back customer information to the manufacturers. It can also identify and offer value-added services, such as financing, on-site inventory management, parts-tracking software, and chip programming, to help its suppliers. Page Ref: 463 Objective: 3 AACSB: Analytic skills Difficulty: Moderate

141) Reynold's, a supermarket chain, carries the K-Nine range of dog food manufactured by JGB. However, the chain does not interact directly with JGB, but obtains stocks from wholesalers. It has been suggested that Reynold's save costs by sourcing products directly from JGB. However, Mal, the CEO of the Reynold's, insists that wholesalers are the most hassle-free option for Reynold's. What can Mal say to justify this?

Student answers may vary. Mal can justify this using any or all of the following reasons: Wholesalers are able to select items and build the assortments Reynold's needs, saving Reynold's considerable work. Wholesalers achieve savings for Reynold's by buying large carload lots and breaking the bulk into smaller units. Wholesalers hold inventories, thereby reducing inventory costs and risks for Reynold's, who needn't hold the inventory for itself. Wholesalers finance Reynold's by granting credit. Wholesalers supply information regarding competitors' activities, new products, price developments, and so on. Page Ref: 462 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

147) E&OE wants to minimize inventory costs as far as possible. Explain one way by which it can achieve a near-zero inventory.

Student answers may vary. Manufacturers can achieve a near-zero inventory by building for order, not for stock, i.e., manufacturing a product only when it receives an order. However, this system will work only when the customers do not need a product immediately. Page Ref: 468 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

139) Supermarket chain Reynold's is considering stocking a number of private-label products in order to offer customers the lowest possible prices. Explain how this strategy could benefit the company.

Student answers may vary. Private brands can be more profitable for Reynold's if it searches for manufacturers with excess capacity that will produce private label goods at low cost. Other costs, such as research and development, advertising, sales promotion, and physical distribution, are also much lower, so private labels can generate a higher profit margin. Exclusive store brands can also help Reynold's differentiate itself from competitors. Many price-sensitive consumers prefer store brands in certain categories. These preferences could give Reynold's increased bargaining power with marketers of national brands. Page Ref: 459 Objective: 4 AACSB: Analytic skills Difficulty: Moderate

137) Give one example of a retailer that uses stand-alone stores as opposed to stores located in malls. Why do you think retailers opt for this channel?

Student answers may vary. Retailers may opt for standalone stores so that they are not associated with other retailers. It can avoid competition from conflicting attractions in a mall. Customers will be less motivated to check other options available at other retailers. Stand-alone stores may give a retailer an upscale image and prevent dilution of the brand identity. Page Ref: 459 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

140) JGB manufactures the K-Nine brand of dog food that is carried in supermarkets across the country. The company has always used wholesalers instead of selling directly to the retailers. However, recently, the sales team at JGB has noticed that wholesalers don't aggressively promote JGB's product line. They often don't carry enough inventory and therefore don't fill customers' orders fast enough. However, the marketing team insists that the wholesaling route is the best. What reasons can the marketing team offer to justify this?

Student answers may vary. Wholesalers' sales forces help JGB reach many small business customers at a relatively low cost. They have more contacts, and the buyers often trust them more than they trust JGB. Wholesalers can often provide quicker delivery to buyers because they are closer to the buyers. Wholesalers absorb some risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence. Wholesalers supply information regarding competitors' activities, new products, price developments, and so on. Page Ref: 462 Objective: 2 AACSB: Analytic skills Difficulty: Moderate

130) Sandy's Stores is a small chain of grocery stores located in a few neighboring towns. The stores have always been largely self-service, but the company is considering making a switch to full-service stores. Offer one possible reason why this move is justified.

Student answers may vary. Full-service retailing is preferred by customers who like to be waited upon. If most of Sandy's customers show a preference for being waited upon, this can justify the costs of full-service retailing. If Sandy's has a number of products or services for which customers need information or guidance, or stocks high-value or specialized product, full-service retailing will be justified. Page Ref: 445 Objective: 1 AACSB: Analytic skills Difficulty: Moderate

154) Identify the five main characteristics that affect the diffusion of innovations. Describe each and provide an example.

Student answers will vary. Five characteristics influence an innovation's rate of adoption. We consider them for digital video recorders (DVRs) for home use, as exemplified by TiVo. 1. Relative advantage — the degree to which the innovation appears superior to existing products. The greater the perceived relative advantage of using a DVR, say, for easily recording favorite shows, pausing live TV, or skipping commercials, the more quickly it was adopted. 2. Compatibility — the degree to which the innovation matches consumers' values and experiences. DVRs are highly compatible with the preferences of avid television watchers. 3. Complexity — the degree to which the innovation is difficult to understand or use. DVRs are somewhat complex and therefore took slightly longer to penetrate into home use. 4. Divisibility — the degree to which the innovation can be tried on a limited basis. This provided a sizable challenge for DVRs — sampling could occur only in a retail store or perhaps a friend's house. 5. Communicability — the degree to which the benefits of use are observable or describable to others. The fact that DVRs have some clear advantages helped create interest and curiosity. Other characteristics that influence the rate of adoption are cost, risk and uncertainty, scientific credibility, and social approval.

75) Identify three reasons social media are rarely the only source of communications for a brand.

Student answers will vary. Here are five possible reasons social media are rarely the only source of communications for a brand: • Social media may not be as effective in attracting new users and driving brand penetration. • Research by DDB suggests that brands and products vary widely in how social they are online. Consumers are most likely to engage with media, charities, and fashion and least likely to engage with consumer goods. • Although consumers may use social media to get useful information or deals and promotions or to enjoy interesting or entertaining brand-created content, a much smaller percentage want to use social media to engage in two-way "conversations" with brands. • Technology limitations may affect the ability to execute a high quality experience. The Facebook app for contest submissions crashed the first day due to high traffic. • The Internet permits scrutiny, criticism, and even "cheap shots" from consumers and organizations.

55) Identify three ways marketers can maximize marketing effectiveness of e-mails.

Student answers will vary. Here are seven possible ways marketers can maximize marketing effectiveness of e-mails: • Give the customer a reason to respond (e.g., powerful incentives for reading e-mail pitches and online ads, such as trivia games, scavenger hunts, and instant-win sweepstakes). • Personalize the content of your e-mails and use an engaging subject line. • Offer something the customer can't get via direct mail like time-sensitive information. • Make it easy for customers to opt in as well as unsubscribe. • Run controlled split tests to explore how location, color, and other factors affect "Sign Up Now" messages. Controlled split tests assemble online matched samples of consumers with one sample given a test message that manipulates one factor and the other being a status quo control. • Combine e-mail with other communications such as social media. • Employ "heat mapping," which tracks eye movements with cameras to measure what people read on a computer screen.

138) An ad agency has landed an account for Savola, a brand of healthy cooking oil. Describe how the ad can effectively incorporate negative appeals in its messages.

Student answers will vary. Negative appeals such as fear, guilt, and shame are used by communicators to get people to do things (brush their teeth) or stop doing things (smoking). The cooking oil ad can use fear appeals to get consumers to start using its product. This can be achieved by depicting health risks associated with using cooking oils other than Savola, such as hypertension, heart attacks, etc. Guilt appeal can be used to depict a family grieving the death of someone who did not use Savola. Shame appeal could illustrate the case of a parent who cannot play catch with his kids because his fitness is compromised by not using Savola. However, the ad agency should take care to ensure that the negative appeals do not come across as too strong to the audiences, the credibility of the source in the ads is high, and the ad promises to relieve fears of health risks in a believable and efficient way. The ad is most persuasive when moderately discrepant with audience beliefs. If the ad merely says that using unhealthy oil leads to health risks, it only serves to reinforce the belief, and if the message exaggerates the health risks of not using Savola, audiences will only counterargue and disbelieve the ad.

26) Tosho Electronics, a leading Japanese, electronic manufacturer believes shorter product life cycles of new products reduce the scope for R&D and innovation. Offer a possible reason for shorter life cycles.

Student answers will vary. Rivals are quick to copy success of an innovation. An innovative product is copied even before the company recovers the cost of R&D. This leads to shorter life cycles for products.

132) Marco is working on promoting his company's Glazer brand of electronic razors. Preliminary surveys have revealed that even though a sizable portion of the target market has developed a liking for the product due to innovative advertising, few customers would actually consider replacing their current razors with Glazers. How can Marco modify the communications program to get customers to favor Glazers over other brands?

Student answers will vary. Since customers are comfortable with their present electronic razors, Marco's communications strategy should aim to build preference for Glazers. Customers have already developed a liking for Glazers. So, Marco should focus on comparing the quality of Glazers with that of competing brands. This can be done by illustrating the improved features of Glazers that provide clean and hassle-free use. Marco could do well to compare the Glazers with other brands in terms of value, utility, and performance factors as well.

89) Describe the adjustments that an advertiser of high-end laptops has to make to the cost-per-thousand measure.

Student answers will vary. The advertiser needs to apply several adjustments to the cost-per-thousand measure. First, they should adjust for audience quality. The product being high-end laptops, it is better advertised in a magazine read by 1 million college-going kids rather than 2 million housewives, in which case it would have an exposure value of almost zero. Second, the exposure value for the audience-attention probability must be accounted for. Readers of Chip or Digit may pay more attention to gadget ads than do readers of Newsweek. Third, the medium's editorial quality (prestige and believability) should be considered. People are more likely to believe a TV or radio ad and to become more positively disposed toward the brand when the ad is placed within a program they like. To this effect, the ads can be placed within a program like The Big Bang Theory. The fourth adjustment should be made in relation to ad placement policies and extra services (such as regional or occupational editions and lead-time requirements for magazines). Laptop ads would be better received and responded to in magazines that have greater circulation in urban areas with an office-going population or university towns with sizable student populations.

109) Marketers can set communications objectives at any level of the hierarchy-of-effects model.

TRUE

118) The historical approach correlates past sales to past advertising expenditures using advanced statistical techniques.

TRUE

138) Media coverage and telecasts only expose the brand and do not necessarily embellish its meaning in any direct way.

TRUE

20) The newest and fastest-growing channels for communicating and selling directly to customers are digital.

TRUE

20) What you say (ad copy) is more important than the number of times you say it (ad frequency).

TRUE

31) A marketing channel overcomes the time, place, and possession gaps that separate goods and services from those who need or want them.

TRUE

41) When Johnson & Johnson's ads popped up on brokers' Web sites whenever the stock market fell by 100 points or more, it was an example of an interstitial.

TRUE

78) Although newspapers are timely and pervasive, magazines are typically more effective at building user and usage imagery.

TRUE

86) After a company has chosen a channel system, it must select, train, motivate, and evaluate individual intermediaries for each channel.

TRUE

92) In competitive markets with low entry barriers, the optimal channel structure will inevitably change over time.

TRUE

100) What the customer expects from a service is called the primary service package.

TRUE

104) BzzScapes are digital tools to activate widespread opinion-sharing throughout its own social media site and each member's personal social circles.

TRUE

104) Responsiveness is a company's willingness to help customers and provide prompt service.

TRUE

109) A customer-service interface is defined as any place at which a company seeks to manage a relationship with a customer.

TRUE

110) The marketing communications objective of "brand attitude" refers to helping consumers evaluate the brand's perceived ability to meet a currently relevant need.

TRUE

111) Sales-wave research can be implemented quickly and carried out without final packaging and advertising.

TRUE

112) Expensive industrial goods and new technologies will normally undergo alpha and beta testing.

TRUE

116) Sales promotions in markets of high brand similarity can produce a high sales response in the short run but little permanent gain in brand preference over the longer term.

TRUE

118) If messages are too conflicting, audiences will counterargue and disbelieve them.

TRUE

119) Motivational or "borrowed interest" devices — such as the presence of cute babies, frisky puppies, popular music, or provocative sex appeals — are often employed to attract attention and raise involvement with an ad.

TRUE

12) Marketing channels are the set of pathways a product or service follows after production, culminating in purchase and consumption by the final end user.

TRUE

120) Celebrities are likely to be effective when they are credible or personify a key product attribute.

TRUE

120) Dominant brands offer sales promotion deals less frequently because most deals subsidize only current users.

TRUE

123) The principle of congruity implies that communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience.

TRUE

124) A business analysis is typically performed after management has developed the product concept and marketing strategy.

TRUE

124) Additional costs beyond the cost of specific promotions include the risk that promotions might decrease long-run brand loyalty.

TRUE

124) The beginning communications objective associated with a new-to-the world product — like an electric car — is always establishing category need.

TRUE

125) Personal communications channels derive their effectiveness from individualized presentation and feedback and include direct and interactive marketing, word-of-mouth marketing, and personal selling.

TRUE

13) An advertising objective is a specific communications task and achievement level to be accomplished with a specific audience in a specific period of time.

TRUE

131) Marketing communications budgets tend to be higher when there is much change in the marketing program over time and more complex customer decision making.

TRUE

132) Mobile ad copy should occupy only 50 percent of the screen, avoiding complex viewing experiences that may take a toll on consumers' battery and data availability as well as their time.

TRUE

133) In mobile ads, calls to action should be highlighted with a bright color.

TRUE

136) Consumers are more engaged and attentive with their smart phones than when they are online.

TRUE

149) A public is any group that has an actual or potential interest in or impact on a company's ability to achieve its objectives.

TRUE

22) Most established companies focus on incremental innovation rather than radical innovation.

TRUE

22) Paid media includes company-generated advertising, publicity, and other promotional efforts.

TRUE

24) Marketing communications in almost every medium and form have been on the rise, and some consumers feel they are increasingly invasive.

TRUE

24) Social media play a key role in earned media.

TRUE

27) In building brand equity, marketers should be "media neutral" and evaluate all communication options on effectiveness and efficiency.

TRUE

40) Internet users spend only 5 percent of their time actually searching for information.

TRUE

41) A spiral development process recognizes the value of returning to an earlier stage to make improvements before moving forward.

TRUE

64) Crowdsourcing means inviting an Internet community to help create content or software, often with prize money or a moment of glory as an incentive.

TRUE

68) Distributors' territorial rights define the terms under which the producer will enfranchise other distributors.

TRUE

68) Reverse assumption analysis lists all the normal assumptions about an entity and then turns them around.

TRUE

75) Established brands usually are supported with lower advertising budgets, measured as a ratio to sales.

TRUE

78) Soap is an example of a pure tangible good.

TRUE

79) Researchers studying print advertisements report that the picture, headline, and copy matter in that order.

TRUE

80) Reach of an advertising message is most important when launching new products, flanker brands, extensions of well-known brands, or infrequently purchased brands.

TRUE

82) The rationale behind place advertising is that marketers are better off reaching people where they work, play, and shop.

TRUE

83) The search qualities of a service are the characteristics the buyer can evaluate before purchase.

TRUE

85) The forgetting rate is the rate at which the buyer forgets the brand; the higher the forgetting rate, the more continuous the advertising should be.

TRUE

87) Channel power is the ability to alter channel members' behavior so that they take actions they would not have taken otherwise.

TRUE

93) Early buyers might be willing to pay for high-value-added channels, but later buyers will switch to lower-cost channels.

TRUE

94) Customers want unbundled services, with separate prices for each service element and the right to select the elements they want.

TRUE

96) Interactive marketing describes the employees' skill in serving the client.

TRUE

97) Clients judge service not only by its technical quality but also by its functional quality.

TRUE

98) AT&T found word of mouth was one of its most effective drivers of its sales.

TRUE

98) Importance-performance analysis rates the various elements of the service bundle and identifies required actions.

TRUE

99) Customers who view a service as fairly homogeneous care less about the provider than about the price.

TRUE

99) Viral marketing is a form of online word of mouth, or word of mouse, that encourages consumers to pass along company-developed products and services or audio, video, or written information to others online.

TRUE

78) Retailing includes all the activities involved in selling goods or services directly to final consumers.

TRUE Page Ref: 447 Objective: 1 AACSB: Analytic skills Difficulty: Easy

81) The network marketing sales system works by recruiting independent businesspeople who act as distributors.

TRUE Page Ref: 449 Objective: 1 AACSB: Reflective thinking Difficulty: Easy

85) A franchise organization is a corporate retail organization.

TRUE Page Ref: 450 Objective: 1 Difficulty: Easy

96) Featuring exclusive national brands that are not available at competing retailers is a way of generating consumer interest in a retailer.

TRUE Page Ref: 455 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

99) Some high-volume products may have such high handling costs that they are less profitable and deserve less shelf space than low-volume products.

TRUE Page Ref: 456 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

101) Low prices on some items serve as traffic builders or loss leaders for retailers.

TRUE Page Ref: 456 Objective: 2 Difficulty: Easy

102) EDLP can lead to lower advertising costs and higher retail profits.

TRUE Page Ref: 457 Objective: 2 AACSB: Analytic skills Difficulty: Easy

106) The lower price of generics is made possible by lower-cost labeling and packaging and minimal advertising, and sometimes lower-quality ingredients.

TRUE Page Ref: 460 Objective: 4 AACSB: Analytic skills Difficulty: Easy

114) Order-processing costs must be compared with inventory-carrying costs because the larger the average stock carried, the higher the inventory-carrying costs.

TRUE Page Ref: 467 Objective: 2 AACSB: Reflective thinking Difficulty: Easy

117) Companies who want to carry near-zero inventory should build for order, not for stock.

TRUE Page Ref: 468 Objective: 2 Difficulty: Easy

26) Briefly describe the role of television as an advertising medium.

Television is generally acknowledged as the most powerful advertising medium and reaches a broad spectrum of consumers at low cost per exposure. TV advertising has two particularly important strengths. First, it can vividly demonstrate product attributes and persuasively explain their corresponding consumer benefits. Second, it can dramatically portray user and usage imagery, brand personality, and other intangibles. Because of the fleeting nature of the ad, however, and the distracting creative elements often found in it, product-related messages and the brand itself can be overlooked. Moreover, the high volume of nonprogramming material on television creates clutter that makes it easy for consumers to ignore or forget ads.

137) Identify the 7Cs of design elements. Do you feel they are relevant in a mobile advertising context? Why or why not?

The 7Cs of design elements are context, content, community, customization, communication, connection, and commerce. Student opinions may vary regarding their relevance in a mobile advertising context, but they should recognize the advice for mobile advertising: Brands should limit their ads to a pair of phrases — the offer and the tagline. Brands should place their logo in the corner of the mobile ad frame. Finally, ads should use at least one bright color, but no more than two. Calls to action should be highlighted with a bright color.

20) Garolds Stores operates as a low price retailer. It offers home fashion products, such as wall decor, frames, candles, bath and bedding products, furniture, home accents, and kitchen products. The firm has showrooms and retail stores across United States. Customers can buy products in three different ways: (1) they can place orders online and have the products shipped to their homes; (2) they can buy directly from the showrooms and retail outlets; or (3) they can place orders online and pick them up from the nearest showroom. What are the benefits that Garolds Stores could achieve by using various channels to sell to customers?

The company can increase its sales by targeting different segments of customers through various channels. Multichannel marketing allows the company to deliver the right products in the right places in the right way at the least cost.

118) Caribou Coffee Company Inc. operates coffeehouses primarily in the United States. The company wants to launch a new brand of specialty coffee and it has created a few hypothetical combinations. The company wants to select two of the combinations after obtaining a ranking by customers based on their preference. What concept testing method is suited here?

The company can use conjoint analysis, a method for deriving the utility values that consumers attach to varying levels of a product's attributes.

119) Altrudex Inc. is involved in the manufacture, distribution, and sale of consumer electronics. The company sources over half the products it sells from companies it partly or wholly owns. It also owns a large retail chain and sells its products through them. What marketing system is Altrudex using?

The company is using a corporate VMS. A corporate VMS combines successive stages of production and distribution under single ownership.

40) Eureka Forbes, an Asian consumer appliances company, sells its vacuum cleaners through door-to door sales. This allows the company to obtain a high conversion ratio. Comment on the length of the channel in the case of Eureka Forbes' vacuum cleaners.

The company is using a zero-level channel, i.e. the manufacturer sells directly to the final customer. This is the shortest channel.

19) The Norticon Group provides and manages computers and network systems for businesses and communities. Norticon sells its products through various means. It uses its sales force to sell to large customers and telemarketing to sell to smaller customers. The company also sells its products via the Internet. Briefly explain the marketing approach being used by the company.

The company is using hybrid channels or multichannel marketing which involves the use of two or more marketing channels to reach customer segments. In multichannel marketing, each channel targets a different segment of buyers, or different need states for one buyer, and delivers the right products in the right places in the right way at the least cost.

73) Horon Furniture is a manufacturer of office furniture. The company is known for its innovative multipurpose furniture. When designing a new product, the designers list several ideas and consider each in relationship to others. For example, the company considers various options such as an office table, foldable chairs, and filing cabinet, etc. Finally, the company may come up with a foldable office table with chairs attached and with a filing cabinet. Describe the creativity technique used at Horon Furniture.

The company uses forced relationship techniques. This method lists several ideas and considers each in relationship to each of the others.

152) What is the consumer-adoption process? What are the various steps in the process?

The consumer-adoption process is the mental steps through which an individual passes from first hearing about an innovation to final adoption. The steps are the following: 1. Awareness: The consumer becomes aware of the innovation but lacks information about it. 2. Interest: The consumer is stimulated to seek information about the innovation. 3. Evaluation: The consumer considers whether to try the innovation. 4. Trial: The consumer tries the innovation to improve his or her estimate of its value. 5. Adoption: The consumer decides to make full and regular use of the innovation.

98) A group of entrepreneurs is planning to start a food processing company. Comment on the likely evolution of the company's marketing channels.

The firm is likely to start as a local operation selling in a fairly circumscribed market, using a few existing intermediaries. At this stage, it is often difficult to convince the available intermediaries to handle the firm's line. If the firm is successful, it might branch into new markets with different channels. In smaller markets, the firm might sell directly to retailers; in larger markets, through distributors.

71) Explain three techniques for stimulating creativity to generate better ideas.

The following are some of the techniques. Students may explain any three of these techniques. • Attribute listing: List the attributes of an object, such as a screwdriver. Then modify each attribute, such as replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. • Forced relationships: List several ideas and consider each in relationship to each of the others. • Morphological analysis: Start with a problem, such as "getting something from one place to another via a powered vehicle." Now think of dimensions, such as the type of platform (cart, chair, sling, bed), the medium (air, water, oil, rails), and the power source (compressed air, electric motor, magnetic fields). By listing every possible combination, you can generate many new solutions. • Reverse assumption analysis: List all the normal assumptions about an entity and then reverse them. Instead of assuming that a restaurant has menus, charges for food, and serves food, reverse each assumption. • New contexts: Take familiar processes, such as people-helping services, and put them into a new context. • Mind mapping: Start with a thought, such as a car, write it on a piece of paper, then think of the next thought that comes up (say Mercedes), link it to the car, then think of the next association (Germany), and do this with all associations that come up with each new word. Perhaps a whole new idea will materialize.

45) Dormentor Inc. produces, converts, and markets packaging products including boxboard, container board, and numerous other specialty packaging products. In an attempt to increase its organic growth, the company decides to introduce new products. It asks the managers and employees to send in ideas for new products. Before launching products based on any of these ideas, what are the stages that the company has to go through?

The following are the steps that Dormentor has to go through before launching: 1. It must screen the ideas that are obtained. 2. The ideas that pass the screening should be concept tested. 3. After concept testing a few are screened out and the remaining should be placed for product development. 4. After developing the product, product has to be test marketed. Ideas that are successfully test marketed can be launched.

123) UltraMotion Pictures produces and distributes music and television entertainment in the United States. The company distributes music in partnership with a large music retailer, Fromen Tunes. Fromen executives often work for a short time with UltraMotion and some of the UltraMotion executives work at the retail outlets to study Fromen's operations. This strategy minimizes the conflicts between partners. What strategy is being used here? Briefly explain.

This strategy of managing channel conflict is called an employee exchange which involves the exchange of persons between two or more channel levels. Thus participants can grow to appreciate each other's point of view.

127) What challenges do marketers face in managing trade promotions?

The growing power of large retailers has increased their ability to demand trade promotion at the expense of consumer promotion and advertising. The company's sales force and its brand managers are often at odds over trade promotion. The sales force says local retailers will not keep the company's products on the shelf unless they receive more trade promotion money, whereas brand managers want to spend their limited funds on consumer promotion and advertising. Manufacturers face several challenges in managing trade promotions. First, they often find it difficult to police retailers to make sure they are doing what they agreed to do. Manufacturers increasingly insist on proof of performance before paying any allowances. Second, some retailers are doing forward buying — that is, buying a greater quantity during the deal period than they can immediately sell. Retailers might respond to a 10 percent-off-case allowance by buying a 12-week or longer supply. The manufacturer must then schedule more production than planned and bear the costs of extra work shifts and overtime. Third, some retailers are diverting, buying more cases than needed in a region where the manufacturer offers a deal and shipping the surplus to their stores in non-deal regions. Manufacturers handle forward buying and diverting by limiting the amount they will sell at a discount, or by producing and delivering less than the full order in an effort to smooth production. Ultimately, many manufacturers feel trade promotion has become a nightmare. It contains layers of deals, is complex to administer, and often leads to lost revenues.

71) Briefly describe the macromodel of the marketing communications process.

The macromodel of the communications process has nine key factors in effective communication. Two represent the major parties — sender and receiver. Two represent the major tools — message and media. Four represent major communication functions — encoding, decoding, response, and feedback. The last element in the system is noise, random and competing messages that may interfere with the intended communication. Senders must know what audiences they want to reach and what responses they want to get. They must encode their messages so the target audience can decode them. They must transmit the message through media that reach the target audience and develop feedback channels to monitor the responses. The more the sender's field of experience overlaps that of the receiver, the more effective the message is likely to be.

140) List the major objectives of events and experiences as promotion tools.

The major objectives of events and experiences as promotion tools are: 1. To identify with a particular target market or lifestyle 2. To increase salience of company or product name 3. To create or reinforce perceptions of key brand image associations 4. To enhance corporate image 5. To create experiences and evoke feelings 6. To express commitment to the community or on social issues 7. To entertain key clients or reward key employees 8. To permit merchandising or promotional opportunities

29) What are the elements of the marketing communications mix?

The marketing communications mix consists of eight major modes of communication: 1. Advertising — Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor via print, broadcast, network, electronic, and display media. 2. Sales promotion — A variety of short-term incentives to encourage trial or purchase of a product or service including consumer promotions, trade promotions, and business and sales force promotions. 3. Events and experiences — Company-sponsored activities and programs designed to create daily or special brand-related interactions with consumers, including sports, arts, entertainment, and cause events as well as less formal activities. 4. Public relations and publicity — A variety of programs directed internally to employees of the company or externally to consumers, other firms, the government, and media to promote or protect a company's image or its individual product communications. 5. Direct marketing — Use of mail, telephone, fax, e-mail, or Internet to communicate directly with or solicit response or dialogue from specific customers and prospects. 6. Interactive marketing — Online activities and programs designed to engage customers or prospects and directly or indirectly raise awareness, improve image, or elicit sales of products and services. 7. Word-of-mouth marketing — People-to-people oral, written, or electronic communications that relate to the merits or experiences of purchasing or using products or services. 8. Personal selling — Face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders.

38) Members of a marketing channel perform three types of functions. Provide examples of these three functions in the context of a publishing company that publishes books and magazines.

The storage and movement of books from the company to the customer constitutes a forward flow. Ordering books and paying for them constitute a backward flow from customers to the company. Sharing information and risk taking are activities that occur in both directions.

28) What are the legal and social issues associated with advertising?

To break through clutter, some advertisers believe they have to be edgy and push the boundaries of what consumers are used to seeing in advertising. In doing so, marketers must be sure advertising does not overstep social and legal norms or offend the general public, ethnic groups, racial minorities, or special-interest groups. A substantial body of laws and regulations governs advertising. Under US law, advertisers must not make false claims, such as stating that a product cures something when it does not. They must avoid false demonstrations, such as using sand-covered Plexiglas instead of sandpaper to demonstrate that a razor blade can shave sandpaper. It is illegal in the United States to create ads that have the capacity to deceive, even though no one may actually be deceived. The challenge is telling the difference between deception and "puffery" — simple exaggerations that are not meant to be believed and that are permitted by law. Sellers in the United States are legally obligated to avoid bait-and-switch advertising that attracts buyers under false pretenses. Advertising can play a more positive broader social role. The Ad Council is a nonprofit organization that uses top-notch industry talent to produce and distribute public service announcements for nonprofits and government agencies. From its early origins with "Buy War Bonds" posters, the Ad Council has tackled innumerable pressing social issues through the years. One of its recent efforts featured beloved Sesame Street stars Elmo and Gordon exhorting children to wash their hands in the face of the H1N1 flu virus.

142) Marco is working on promoting his company's Glazer brand of electronic razors. The company estimates 50 million potential users and sets a target of attracting 8 percent of the market. He hopes to reach 80 percent of the potential customers with an advertising message. He would be pleased if 25 percent of the prospects that were aware, tried the Glazer. According to further estimates, 40 percent of all triers will become loyal users. If the cost of exposing 1 percent of the target population to one impression is $4500 on an average, determine the necessary advertising budget, according to the objective-and-task method.

Using the objective-and-task method, Marco can arrive at the marketing communications budget by following these steps: 1. The company estimates 50 million potential users and sets a target of attracting 8 percent of the market — that is, 4 million users. 2. The percentage of the market that should be reached by advertising is determined. Marco hopes to reach 80 percent (40 million prospects) with his advertising message. 3. The percentage of aware prospects that should be persuaded to try the brand is then calculated. Marco would be pleased if 25 percent of aware prospects (10 million) tried Glazers. He estimates that 40 percent of all triers, or 4 million people, will become loyal users. This is the market goal. 4. Next, the number of advertising impressions per 1 percent trial rate is estimated. Marco estimates that 40 advertising impressions (exposures) for every 1 percent of the population will bring about a 25 percent trial rate. 5. The number of gross rating points that would have to be purchased is now calculated. A gross rating point is one exposure to 1 percent of the target population. Because Marco wants to achieve 40 exposures to 80 percent of the population, he will want to buy 3,200 gross rating points. 6. Finally, the necessary advertising budget on the basis of the average cost of buying a gross rating point is estimated. To expose 1 percent of the target population to one impression costs an average of $4,500. Therefore, 3,200 gross rating points will cost $14,400,000 (= $4,500 × 3,200) in the introductory year.

99) Print advertising (newspapers and magazines) is generally acknowledged as the most powerful advertising medium.

false

124) Although supply-side exposure methods provide quantifiable measures, equating media coverage with advertising exposure ignores the content of the respective communications.

true

130) Creative public relations can affect public awareness at a fraction of the cost of advertising.

true

71) Explain the three distribution strategies based on the number of intermediaries.

• Exclusive distribution: This strategy focuses on severely limiting the number of intermediaries. It's appropriate when the producer wants to maintain control over the service level and outputs offered by the resellers, and it often includes exclusive dealing arrangements. By granting exclusive distribution, the producer hopes to obtain more dedicated and knowledgeable selling. It requires a closer partnership between seller and reseller and is used in the distribution of new automobiles, some major appliances, and some women's apparel brands. • Selective distribution: This distribution strategy relies on only some of the intermediaries willing to carry a particular product. Whether established or new, the company does not need to worry about having too many outlets; it can gain adequate market coverage with more control and less cost than intensive distribution. • Intensive distribution: This strategy places the goods or services in as many outlets as possible. This strategy serves well for snack foods, soft drinks, newspapers, candies, and gum — products consumers buy frequently or in a variety of locations.

provided by marketing channels with reference to Orion.

• Lot size — Customers may be allowed to book as many tickets as they want, subject to availability. • Waiting and delivery time — This would refer to the average time customers take to book their tickets. • Spatial convenience — This refers to the ease of booking tickets. The location of Orion's retail ticketing outlets and whether the company offers online ticket booking services would be classified under spatial convenience. • Product variety — This refers to the assortment provided by the marketing channel in terms of travel destinations, holiday packages, hotel bookings, car rental services, and the like. • Service backup — This refers to the add-on services provided by the channel such as credit, discounts, delivery, refunds, and so on.

Marketing Management Final (Ch. 13-21)

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