Principles of Marketing- Practice Test

In today's market environment, you might pay $16 for a vinyl LP record by your favorite musical artist. Approximately how much of that price goes to activities related to marketing (promotion, distribution, profit margins)?

$8.00

​The definition of marketing implies that ____ should receive benefits from exchange relationships.

both customers and businesses

​Changing the hours of operation for a service business involves the ____ component of the marketing mix.

​distribution

When the right combination of circumstances occurs at the right time to allow an organization to take action toward a target market, the firm is faced with a

​market opportunity

Within a business organization, a profit center that is self-supporting in terms of sales, markets, production, and other resources is known as a

​strategic business unit.

What is the final step in establishing an implementation timetable?

Assigning responsibility for completing each activity

Which of the following would NOT be a customer cost considered in the determination of product value?

Benefits received in the exchange for the products

Amazon Prime has one of the highest customer loyalty ratings in the entertainment industry with a significant percentage of current video streaming subscribers continuing to renew their subscription with Amazon on a yearly or month-to-month basis. In addition, many customers have cancelled their cable or satellite subscriptions and rely almost exclusively on streaming services such as Amazon Prime and Netflix for their entertainment. Amazon Prime video streaming is available as part of Amazon's $99/year Amazon Prime suite of offerings that includes free 2-day shipping on many Amazon.com orders. Customers can also choose to pay by the month for $12.99/month. If a significant percentage of subscribers continue their service on an annual basis, Amazon is able to build a stable revenue stream based on repeat purchasers. A quick snapshot of one customer revealed that the customer had subscribed to Prime for five years and generated over $700 in revenue to Amazon. Which of the following marketing terms best captures the importance of customer loyalty and its impact on Amazon?

Customer lifetime value

____ is (are) most likely to improve ethical behavior in a marketing organization.

Eliminating unethical individuals and improving the organization's ethical standards

Which of the following agencies regulates marketing activities the most?

Federal Trade Commission

In a period of economic recovery, the best marketing strategy for UPS would be characterized by which of the following features?

Flexibility

Barney has to decide whether to travel to Chicago by train or airplane. Traveling by train would take longer, giving him potentially less time to spend in Chicago. However, traveling by air would be much more expensive. The train as a form of transportation is what type of competitor to air travel?

Generic

____ competitors provide very different products that satisfy the same basic customer need.

Generic

During the 2010s, Nestlé was sharply criticized after it was discovered that some of its global suppliers and contractors were using child labor on their cocoa farms. Nestlé itself did not use child labor and had ethical policies that forbade the use of child labor. Why did consumers still hold Nestlé accountable?

It is the most visible and powerful member of the supply chain.

The Consumer Financial Protection Bureau settled a claim with the Bank of America for deceiving customers and unfairly billing them for services such as credit monitoring and identity theft protection. Bank of America agreed to provide refunds to 2.9 million people and pay $45 million in fines for their illegal credit card practices. Their deceptive practices dated to 2000 where they had billed customers for products such as "Privacy Guard" or "Privacy Assist" without first obtaining authorization for the products. The $45 million in fines includes $25 million as a civil penalty that will be paid to the Office of the Comptroller of the Currency and $20 million to the Consumer Financial Protection Bureau. The Bureau also claims that Bank of America deceived about 1.4 million customers into making about $268 million in payments by, among other things, improperly telling them the first 30 days of coverage were free or the benefits were greater than existed. Refer to Scenario 3.3. Which environmental force is Bank of America responding to by agreeing to pay fines and refunds to consumers?

Legal and regulatory

Kraft made the announcement that it was eliminating artificial food additives. Which of the following most likely influenced Kraft's decision?

Marketing environment

Target's tagline "Expect More, Pay Less" emphasizes which marketing mix variable?

Pricing

Marketers live in a world of constant change, and their ability to adapt to the pace of change will dictate the degree to which their marketing strategies are successful. Moreover, the changes can come in any or all of the different parts of the marketing environment. ​ Which one of the following statements is true?

The negative effects of technology include concerns over privacy and intellectual property protection.

Yoshi Ramen restaurant opened in 2017 and struggled to build a customer base for lunch, dinner, or event catering options. When the owners were planning the restaurant, they had projected they would sell 60 to 80 bowls daily with an average lunch price of $8.00 They believed that dinner sales could generate between 100 and 120 bowls per day at $12 per customer. However, the actual daily lunch and dinner totals were much less and the owners were barely breaking even and wondered if they should close the business. However, Yoshi Ramen began an aggressive promotion effort, offered lunch and dinner specials and promoted the restaurant as a family-friendly place where everyone could enjoy fresh, ramen dishes. As a result of their marketing efforts, the restaurant is selling out of its product almost daily and has built a takeaway business as well. They are selling 100 lunches daily with an average price of $10 and approximately 200 dinner plates at $15. The owners are pleased with the revenue stream they're generating from the restaurant and considering opening a second location or adding space to accommodate more customers at the existing location. Using the data regarding number of bow

Sales analysis

If all the gas stations in a city collaborated to determine what gas prices should be charged, they would be violating the

Sherman Antitrust Act

What is the major difference between social responsibility and marketing ethics?

Social responsibility deals with the total effect of marketing decisions on society, whereas marketing ethics relates to individual and group evaluations in marketing situations.

Which of the following statements about social responsibility is correct?

Social responsibility refers to a company's obligation to maximize its positive impact and minimize its negative impact on society.

The Federal Drug Administration (FDA) has established the following requirements relating to the ingredients labeling on food products: Labels must be placed on the product in a location most likely to be seen by the consumer. Labels must include quantity of and type of ingredients included in the food product. Labels must be printed in a specific font size ​ Regarding these requirements, which one of the following statements is correct?

This is an example of marketing ethics as determined by a government regulator.

____ is a customer's subjective assessment of benefits relative to costs in determining the worth of a product.

Value

Research suggests that a relationship exists between ______ and an organizational climate that supports marketing ethics and social responsibility.

a stakeholder orientation

The marketing plan is

a written document detailing activities to be performed to implement and control marketing actions.

The marketing concept is a philosophy that states that an organization should try to satisfy customers' needs and also

achieve the organization's goals.

The unethical practice of shipping surplus inventory to wholesalers and retailers at an excessive rate, typically before the end of a quarter, is called

channel stuffing

The Buddhas Brew Kombucha has become highly efficient in developing and manufacturing new kombucha products for the market. It far surpasses its competitors in these areas. Recently, major medical journals have started describing how kombucha can be highly advantageous for consumer health. This is likely to give Buddhas Brew Kombucha a ______________ because it is able to match its skills with opportunities in the marketplace.

competitive advantage

The reputation and well-known brand name of Mercedes-Benz automobiles represents a ____ for Mercedes-Benz.

core competency

Nick Clark is managing director for Southern Mutual Company, a financial services firm. Nick firmly believes that dress and grooming are important elements in creating a positive first impression and provides training to his account managers regarding the dress code and grooming policy. Southern Mutual does not allow any facial hair for men and stresses that women should pull their hair back away from their face because research suggests they will be perceived negatively. The Southern Mutual Company dress and grooming policies are an example of the importance of ______ in influencing ethical decision making.

corporate culture

A set of values, beliefs, goals, norms, and rituals shared by members of an organization is called

corporate culture.

Miriam got a new job that pays extremely well. This is good because two years ago she was forced to go into bankruptcy when she couldn't repay her debts. She would like to purchase a used car so she can drive to work. However, she knows it will be hard to get the bank to provide her with a car loan at favorable interest rates due to her recent bankruptcy. She has therefore saved her money diligently so she will have enough to pay for the car outright. In this case, Miriam lacks

credit

Collecting information from secondary sources such as business, government, trade, and general-interest publications plays an important role in

environmental scanning.

In many cases, companies that enter a market after innovative products have been introduced can achieve long-term competitive advantages by continuing to develop a better mousetrap. For example, MicroPro was the first company to introduce a word processing program, but SSI cornered a large market share when it introduced the Word Perfect program. Today, however, Microsoft's Word is the dominant word-processing software program and has continued to endure due to the popularity of the Microsoft Office Suite of products. MicroPro's WordStar possessed a ___________ advantage while Microsoft enjoyed a ___________ advantage.

first-mover; late-mover

Emily Ross is an administrative assistant for Erik Boseman, who is brand manager for a consumer products company. Erik works with a variety of suppliers and customers and is very busy. Erik has asked Emily to screen his calls to make sure that only those people with whom he is working are able to speak with him, advising her to say things like "I'm sorry, he's in a meeting" or "He just stepped out of the office and won't return until tomorrow." Emily is growing increasingly concerned about these practices and dislikes lying to people who call. She feels that Erik is being dishonest, and she'd rather be more transparent and honest with people when they call rather than making up a story that isn't true. Emily doesn't want to compromise her own personal values to be an effective administrative assistant. Emily's dilemma represents the ________ factor that influences the ethical decision-making process.

individual

The Consumer Financial Protection Bureau settled a claim with the Bank of America for deceiving customers and unfairly billing them for services such as credit monitoring and identity theft protection. Bank of America agreed to provide refunds to 2.9 million people and pay $45 million in fines for their illegal credit card practices. Their deceptive practices dated to 2000 where they had billed customers for products such as "Privacy Guard" or "Privacy Assist" without first obtaining authorization for the products. The $45 million in fines includes $25 million as a civil penalty that will be paid to the Office of the Comptroller of the Currency and $20 million to the Consumer Financial Protection Bureau. The Bureau also claims that Bank of America deceived about 1.4 million customers into making about $268 million in payments by, among other things, improperly telling them the first 30 days of coverage were free or the benefits were greater than existed. Refer to Scenario 3.3. If the Consumer Financial Protection Bureau decides to contact the Federal Trade Commission (FTC) to investigate Bank of America and its practices regarding deceptive billing practices, and if the FTC believes that

issue a cease-and-desist order.

Businesses that strive to determine what customers need or want and then develop products to satisfy those needs and wants are operating in a(n) ____ orientation.

market

Jo's Coffee Shop wants to increase customer satisfaction. Currently, only 75% of customers indicate they are satisfied with the services offered. In the next six months, it plans on implementing a number of changes to improve its services. Jo's Coffee plans to implement a survey at the end of the six-month period to determine whether customer satisfaction has improved. Jo's wants 90% of its customers to indicate they are satisfied with its service. This is an example of a ________________.

marketing objective

Customer costs include anything the buyer must give up in order to obtain the benefits the product provides. The most obvious customer cost is

monetary price

Anika knows that her company has a formal code of conduct, but she does not see this code being equally and consistently applied to all employees. Anika believes that this sporadic enforcement of the formal code only enhances the ____ for committing unethical acts.

opportunity

Actions that promote human health and welfare address the ____ dimension of the pyramid of social responsibility.

philanthropic

​The Boston Consulting Group's matrix is based on the

philosophy that a product's market growth rate and its market share are important determinants of its marketing strategy.

Marketers that attempt to influence and change the various environmental forces have a(n) ____ response to these forces.

proactive

Failure to maintain product quality and integrity in production may result in _____ if products are found to be defective.

product recalls

Businesses that view sales as the major means of increasing profits are operating with a _____ orientation.

sales

C.J. Foods, a pet food maker, purchased Lortscher Animal Nutrition, Inc. (LANI), a miller and ingredient supplier, and now operates this division as a separate profit center within the firm. In this example, LANI is a(n) ____ unit of C.J. Foods.

strategic business

Managers at the Tycho Manufacturing are engaged in a complex process of revising their organization's mission and goals and developing corporate strategy, marketing objectives, marketing strategy, and, eventually, a marketing plan. This process is called

strategic planning

Various stakeholders and ____ determine the acceptable standards of conduct involving ethics.

the organization's ethical climate

The essence of marketing is

to develop satisfying exchanges from which both customers and marketers benefit.