MGMT 421: Chapter 8

25. A small retailer provides an allowance to a customer upon the purchase of a washing machine. This is called a _____. A. subsidy B. trade-in C. discount D. rebate

B. trade-in

7. Questionnaires used for primary research should: A. address at least two issues at a time. B. use familiar jargon. C. be sequenced randomly. D. be prepared by laymen.

B. use familiar jargon.

3. _____ involves prodding businesses to improve the quality of their products and to expand consumer knowledge. A. Consumerism B. Promotion C. Diversification D. Segmentation

A. Consumerism

23. _____ are reductions from a product's normal list price and are given to customers as an inducement to buy more of the same product. A. Discounts B. Allowances C. Subsidies D. Trade-ins

A. Discounts

20. Which of the following statements best describes leader pricing? A. It is a strategy wherein certain products are chosen for their promotional value and priced low to entice customers into retail stores. B. It is a strategy of setting high price levels for given lines of merchandise. C. It is a strategy aimed at obtaining the "cream" of the target market at a high price before dealing with other market segments. D. It is a strategy of offering the same products and quantities to different customers at different prices.

A. It is a strategy wherein certain products are chosen for their promotional value and priced low to entice customers into retail stores.

4. What is meant by the term competitive edge? A. It refers to a particular characteristic that makes one firm more attractive to customers than other firms. B. It refers to a concept that two or more people, working together in a coordinated way, can accomplish more than the sum of their independent efforts. C. It refers to an organized effort to gather information about markets or customers. D. It refers to an assessment of the strengths and weaknesses of current and potential competitors.

A. It refers to a particular characteristic that makes one firm more attractive to customers than other firms.

14. What happens during the maturity stage of the product life cycle? A. Promotion costs climb, and competitors cut prices to attract business. B. Marketing strategy typically encourages strong brand loyalty. C. Prices are usually high, sales are low, and development, promotion, and distribution costs are high. D. Management considers pruning items from the product line to eliminate unprofitable ones.

A. Promotion costs climb, and competitors cut prices to attract business.

28. A unit pricing policy is most likely to be used by a _____. A. grocery store B. producer C. building contractor D. service firm

A. grocery store

10. Marketing mix refers to the _____. A. proper blending of the basic elements of product, price, promotion, and place into an integrated marketing program B. process of identifying and evaluating the various layers of a market C. part of the total market toward which promotional efforts are concentrated D. process of acquiring customers that involves obtaining individual-level consumer information

A. proper blending of the basic elements of product, price, promotion, and place into an integrated marketing program

18. A _____ price is one which is set relatively high initially in order to obtain the "cream" of the target market before competitors enter. A. skimming B. penetration C. predatory D. bait

A. skimming

8. Which of the following statements is true of database marketing? A. It does not require someone with the technology know-how to keep the system up and running because it is fairly easy to use. B. It is a quick and efficient process for obtaining meaningful consumer information and making marketing decisions to acquire customers. C. It is the act of simulating the conditions under which a product is to be marketed. D. It refers to the act of promoting the sale of a product at the point of purchase.

B. It is a quick and efficient process for obtaining meaningful consumer information and making marketing decisions to acquire customers.

5. _____ is the systematic gathering, recording, and analyzing of data about the merchandising of goods and services. A. Competitor analysis B. Market research C. Competitive intelligence D. SWOT analysis

B. Market research

29. Which of the following is an example of a strictly business-oriented service? A. Health and beauty B. Market research firm C. Real estate D. Insurance and policy

B. Market research firm

12. Which of the following statements characterizes the growth stage of the product life cycle? A. Prices are usually high, sales are low, and development, promotion, and distribution costs are high. B. Marketing strategy in this stage typically encourages strong brand loyalty. C. Promotion costs climb, and competitors cut prices to attract business. D. Management considers pruning items from the product line to eliminate unprofitable ones.

B. Marketing strategy in this stage typically encourages strong brand loyalty.

21. _____ is the amount added to the cost of a product to determine selling price. A. Push money B. Markup C. Marginal value D. Cumulative

B. Markup

1. Which of the following statements is true of the marketing concept? A. The survival of any business depends solely on making a profit. B. Special consideration must be given to the needs, desires, and wishes of present and prospective customers. C. Being consumer oriented often involves coercing consumers to buy a product, irrespective of its quality. D. The systems approach is not used as part of the marketing concept.

B. Special consideration must be given to the needs, desires, and wishes of present and prospective customers.

13. The sales of a product are rising rapidly and profits are peaking. This product is in the _____ stage of the product life cycle. A. introduction B. growth C. maturity D. decline

B. growth

6. A primary marketing research technique used by most companies is _____. A. leaflet distribution B. telephone surveys C. trade association reports D. target marketing reports

B. telephone surveys

2. Which of the following is a strategy used by companies with a reputation for superior marketing? A. Uniform pricing for all products B. Low customer engagement C. Attention to packaging D. Waging price wars with competitors

C. Attention to packaging

22. In a store, an item is priced extremely low by a dealer, but the salesperson points out the disadvantages of the item and switches customers to items of higher quality and price. What is this pricing policy called? A. Leader pricing B. Prestige pricing C. Bait pricing D. Odd pricing

C. Bait pricing

15. In which stage of the product life cycle does competition become more aggressive with declining prices and profits? A. Introduction B. Growth C. Maturity D. Decline

C. Maturity

24. A(n) _____ is given to customers for accepting less of something or as an adjustment for variation in quality. A. discount B. rebate C. allowance D. subsidy

C. allowance

26. A _____ is an item priced at or below the actual cost price to attract customers into the store and buy more profitable items. A. prestige buy B. trade-in C. loss leader D. premium product

C. loss leader

17. John wants to start his own fruit juice and beverage company. He is aware of the large number of competitors in this industry and of the fact that his product should not be very costly. To differentiate his product from that of his competitors, he decides to sell his beverages in specially designed containers that keep the juice fresh for 7 days even without refrigeration. John is focusing on the _____ component of the marketing mix. A. place B. pricing C. packaging D. product

C. packaging

27. Which pricing strategy is a building contractor most likely to use? A. Break-even pricing strategy B. Unit pricing strategy C. Loss leader pricing strategy D. Cost-plus pricing strategy

D. Cost-plus pricing strategy

30. While implementing a marketing strategy, _____ involves adding products that are unrelated to the present product line. A. Penetration B. Acquisition C. Specialization D. Diversification

D. Diversification

11. Which of the following statements is true of the introduction stage of the product life cycle? A. Management considers pruning items from the product line to eliminate unprofitable ones. B. Marketing strategy typically encourages strong brand loyalty. C. Promotion costs climb, and competitors cut prices to attract business. D. Many products never get beyond this stage.

D. Many products never get beyond this stage.

19. A penetration price refers to: A. the high prices set by fur retailers. B. a published price that remains the same for a long time. C. the different price levels set for different lines of merchandise. D. a price set relatively low to secure market acceptance.

D. a price set relatively low to secure market acceptance.

16. Promotion efforts may be cut and plans may be made to phase out a product during the _____ stage of the product life cycle. A. introduction B. growth C. maturity D. decline

D. decline

9. Market segmentation refers to the: A. change in a brand's status due to its failure in the marketplace. B. mix of the uncontrollable elements of a marketing plan. C. simulation of the conditions under which a product is to be marketed. D. process of identifying and evaluating various layers of a market.

D. process of identifying and evaluating various layers of a market.