Exam 2 Marketing

"Why create a perceptual map?" asked Don. Andrea, the senior marketing manager, gave him four reasons. Which of the following are valid reasons?

"We can easily show where we are positioned and how large the market is."

Which BRIC country's economic growth in the 21st century can largely be attributed to the expansion of its literate population and the impositions of social programs that have allowed more than half of its 201 million citizens to enter the middle class?

Brazil

A complex product that is best described in writing will be difficult to explain to consumers who are unable to read. For this reason, a segment in which many consumers could not read would be considered unattractive because the consumers would not be responsive.

False

A decrease in a company's product depth will always hurt its marketing efforts.

False

Exporting refers to a situation where a company maintains ownership of its plants, operational facilities, and offices in a foreign country in which it sells its products.

False

Global distribution networks that involve wholesalers, exporters, importers, and different transportation systems generally lower costs and prices for products.

False

In training service providers, service quality goals should be general to allow for the various needs of consumers.

False

NASCAR redirected its marketing efforts when a survey indicated that almost 50 percent of its fans were female. This is an example of psychographic segmentation.

False

Procedural fairness pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss).

False

Russia lags behind most European countries in use of the Internet.

False

Renatta was an employee of the month at Sonic Subs, primarily because she provided excellent customer service by serving food quickly. This relates to the reliability service dimension.

False (Responsiveness)

A customized mailbox for your house is an example of a convenience product.

False (Specialty Product)

________ involves defining the firm's marketing mix variables so that target customers have a clear, distinctive, desirable understanding of the firm's offerings relative to competitors' offerings.

Positioning

Which of the BRIC nations is most literate?

Russia

________ is another term for private-label brands.

Store brands

A product is anything that is of value to a consumer and can be offered through a voluntary marketing exchange.

True

Even as growth in its gross domestic product has slowed, China maintains a thriving retail market of the same magnitude as the United States.

True

Firms would prefer to manufacture in a country that has a trade surplus, or a higher level of exports than imports.

True

Global expansion often begins when a firm receives an order for its product or service from another country.

True

It would be logical for bathing suit marketers to use geographic segmentation.

True

New product development adds value to a firm's products and services through innovation.

True

For each target market, Showall Corporation, a manufacturer of imaging equipment, will engage in positioning, adjusting its marketing mix variables in order to give customers

a clear, distinctive, and desirable understanding of their products relative to competing products.

When Cisco Systems Inc. of San Jose, California, and Tata Consultancy Services of Mumbai, India, entered into a relationship, they both continued to develop market-ready infrastructure and network solutions for customers, but they relied on each other to provide the training and skills that one or the other might have lacked. This relationship is best described as

a strategic alliance.

The United States imports more goods than it exports. This is known as

a trade deficit.

The level of economic development, as well as differences in product and technical standards, helps determine the need for and level of product

adaptation

The National Institutes of Health (NIH) sponsors medical foundations to conduct research to treat rare diseases. The research is then disseminated to the medical community, thus encouraging the development of drugs and therapies more quickly and at a lower cost than would be possible if the research were privately funded. This is an example of

an R&D consortia.

The first step in the segmentation process is to

articulate the vision or objectives of the company's marketing strategy clearly.

In most cases, countries use tariffs to reduce foreign competition, but tariffs are also used

as a response to perceived unfair trade practices.

What aspect of the product is being described when a used-car salesperson explains that each car comes with a one-year extended warranty and a two-year maintenance plan?

associated services

The product life cycle is theoretically ________ with regard to sales and profits.

bell-shaped

Social networking sites that compete directly with Facebook have a difficult time surviving; however, LinkedIn has survived by focusing on the needs of business professionals, who seek to network with colleagues, share their expertise, post online résumés, and look for new jobs. What segmentation method is LinkedIn using?

benefit segmentation

Suppose that you work for an advertising agency and are brought into a meeting where everyone is asked to generate ideas for names for a new beach resort. You are engaged in ________, a form of new idea generation.

brainstorming

Ferrari is well known as a brand of luxury sports cars; accordingly, it has leveraged its brand name to introduce clothing offerings emblazoned with its horse logo. It has also licensed its logo to 68 different products, from sunglasses to guitars. Ferrari might be at risk of which of the following?

brand dilution

Wang tried a new fruit-flavored beverage and thought it was awful. He was especially disappointed because he had liked the dried fruit snacks marketed under the same brand name. Now he wasn't sure he even wanted to buy the snacks he had liked before. This highlights a problem in branding known as

brand dilution.

When Paulette shops for lipstick, she always buys Cotton Candy by Revlon. This is an example of

brand loyalty.

Jeremiah always buys Boar's Head cold cuts. He does not even consider alternatives. Jeremiah is a ________ customer.

brand-loyal

The basic reason manufacturers spend time and money building their own brands is to

build brand equity.

Pioneer or breakthrough products

can change consumer preferences.

The number of firms with which the seller needs to deal to get its merchandise to the consumer determines the complexity of a

channel

In China, state control of media is high, so companies are challenged to find ways to get their message to customers. This demonstrates one of the difficulties in crafting a global ________ strategy.

communication

When Curt's Catering first opened, the owner decided to target only events at resorts in its geographic region. Curt's Catering was using a(n) ________ targeting strategy.

concentrated

Marketers sometimes use Hofstede's cultural dimensions to design marketing campaigns

consistent with underlying cultural values in a country.

Celeste listens to music on her iPod and iPhone, but she still buys vinyl records at her local music store on occasion, although they are getting harder to find. Vinyl records are in the ________ stage of the product life cycle.

decline

For many years, General Electric had a corporate strategy of being among the top three firms in any market in which it operated; if it could not achieve a top-three position, it would exit the market. This strategy often resulted in the company ________ when certain product lines failed to meet this expectation.

decreasing product mix breadth

Ashburn Grill is known as the premier restaurant in town. With its elegant dining area, extensive wine list, and gourmet chef, residents and tourists flock to the restaurant. Recently, Ty took a large group to the Ashburn Grill and almost every diner sent their entrée back to the kitchen. The Ashburn Grill was experiencing a(n) ________ gap in service quality.

delivery

The ________ gap can be closed by getting employees to meet or exceed service standards when the service is being delivered by empowering service providers, providing support and incentives, and using technology where appropriate.

delivery

Television advertising has recently expanded to include "mini-ads," which are short ads lasting five to ten seconds. These ads are most useful in advertising to men, since men are more likely than women to channel surf during commercial breaks. Given this fact, this type of advertising will be more useful to marketers engaged in ________ segmentation.

demographic

The value of a brand is often calculated by assessing the

earning potential of the brand over the next 12 months.

The Broadmoor Hotel in Colorado Springs, Colorado, maintains its five-star rating by focusing on five service characteristics: reliability, responsiveness, assurance, empathy, and tangibles. Employees are instructed to always address a guest by name, if possible. To accomplish this, employees are trained to listen and observe carefully to determine a guest's name. Which service characteristic is this an example of?

empathy

Empowerment of employees helps address the delivery gap because

employees directly involved with the customer can respond effectively at the moment the problem occurs.

Using technology and ________ are two ways a delivery gap can be reduced in size.

empowering employees

The first step in the STP process is to

establish the overall strategy or objectives.

Martine wants to sell her products in Europe, since they are doing well in the United States. She does not have a lot of capital and is risk-averse, so she most likely would choose to begin with

exporting her products.

Despite multiple upturns and downturns in its economy, Russia's overall growth prospects appear promising, especially as a consumer market. However, there are still multiple dilemmas for firms trying to market their goods and services. These dilemmas include

fluctuations in oil prices.

Nadine had several unpleasant experiences trying to find the merchandise she needed at a big box hardware store. The employees—when she could find them—rarely seemed to know where anything was outside of their own departments. But on her most recent visit, she was pleasantly surprised to find that the store had installed kiosks where she could get directions quickly and accurately. The store had found a technological solution to the services marketing issue of

heterogeneity

The old restaurant saying "You are only as good as the last meal served" reflects the fact that services are

heterogeneous

Demographic segmentation is segmentation based on

income

A company's product mix consists of

its various product lines.

In a(n) ________, the burden of ownership, control, and profits are shared.

joint venture

Computer game companies constantly monitor computer game-related blogs keeping track of the latest hot products, because they know that their customers crave the "latest and greatest" games. They use this information to create new products that primarily provide the benefit of

keeping up in a market where sales come mostly from new products.

What is a particularly important feature of sustainable packaging?

less of a negative impact on the environment

Which of the following best describes when Johnson & Johnson introduces a travel-sized package for its existing baby oil product?

line extension

Edmund has found that both commercial and residential real estate buyers respond positively to his marketing communication message. Edmund has identified ________ that respond similarly to his marketing efforts.

market segments

A product in the ________ stage of the product life cycle has a high number of competitors and competitive products.

maturity

Which of the following is a key component of a value proposition?

offering name or brand

Education marketers know that the primary motivations of most nontraditional college students are self-respect and self-fulfillment, so they craft their marketing message to emphasize the benefits these consumers are looking for in a college education. What type of segmentation method was used to segment this market?

physcoghraphics

Gross national income (GNI) consists of GDP

plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy).

Whenever Liam calls on potential pest control customers, he emphasizes the fact that, unlike the national franchise competitors, he is a local businessperson and has been in business over 20 years. Liam is ________ his business relative to his competition.

positioning

We often see advertisements touting a product as being made with natural ingredients or being long-lasting. Marketers using these types of promotions are positioning their products based primarily on

product attributes.

The Big Mac Index

suggests that exchange rates should adjust to equalize the cost of a basket of goods and services all over the world.

GDP is defined as

the market value of goods and services produced in a country in a year.

Geert Hofstede's cultural dimensions concept focuses on six dimensions of ________ in a country.

underlying values

In the Circles for a Successful Value Proposition framework, the portion of the customer needs/wants circle that doesn't overlap with anything else represents

unmet customer needs/wants.

When automobile manufacturers introduced SUVs, they distributed and promoted them in the United States, but not in Europe where gasoline is heavily taxed, and roads are much smaller. Car manufacturers recognized that this new line of cars

was not compatible with European market conditions.

Justin is looking to expand his pet grooming business and wants to evaluate the profitability of a potential new market. The area he is looking at has 2,000 homes and Justin estimates that 20 percent of them would be likely to use his service. He charges $45 per grooming and on average customers groom their pets six times a year. Justin estimates his variable costs to expand his business will be $10 per grooming and his fixed costs are $10,000. How much profit would Justin make on this new segment?

72,240

________ segmentation is the most common basis of consumer market segmentation because these segments are easy to define and usually easy to reach.

Demographic

Test marketing refers to customers who modify existing products according to their own ideas to suit their specific needs.

False

The STP process is made up of strategy, targeting, and promotion.

False

The more familiar customers are with a brand, the harder their decision-making process will be.

False

There is only one global product strategy: to sell a product or service similar to that sold in the home country but include minor adaptations.

False

When Pierre asked a few of his regular customers to test his prototype wine press, he was engaging in alpha testing.

False (Beta Testing)

Kellogg's sells many different breakfast cereals, including Corn Flakes, Rice Krispies, Frosted Flakes, Raisin Bran, and Special K. This is an example of the breadth of the Kellogg's product mix.

False (Line Depth)

The Value and Lifestyle Survey (VALS) conducted by Strategic Business Insights (SBI) is a widely used tool for geographic segmentation.

False (Psychographic)

Domestic firms developing a global entry strategy might consider franchising; however, the disadvantages need to be considered. Which of the following is a disadvantage of franchising?

Franchising limits profit potential, since profits will have to be split with the franchisee.

________ is one of the fastest-growing markets and has one of the youngest populations in the world.

India

________ provides the equipment or systems needed to perform a task in a job setting.

Instrumental support

________ is the first step in service recovery.

Listening to the customer

How is consumer panel data collected during the test marketing phase of a new product introduction?

Panelists scan their receipts on a home scanning device.

Giant Food Stores in suburban Washington, DC, adjusts its ethnic food aisle offerings based on the ethnic groups living near each store. Giant Foods is using geodemographic segmentation.

True

Perceptual maps include positions of current brands as well as ideal points where a consumer segment would want a product to be.

True

Positioning strategies generally focus either on how the product benefits the consumer or on how it is better than competitors' products.

True

Rafi wants information about the infrastructure in the countries his company is planning to export to, so he should gather information about the transportation and communications capabilities in each country.

True

The communication gap can be reduced by managing customer expectations.

True

The fact that the Apple iPad is easy to try—demo units are available at Apple stores as well as other retail stores—is helping it diffuse more quickly.

True

The zone of tolerance refers to the area between customers' expectations regarding their desired service and the minimum level of acceptable service.

True

To maximize potential, segments and target markets can and should be defined by more than just geography.

True

When consumers see their friends using an innovation, it often persuades them to try it too.

True

Which of the following best describes the direct investment global entry strategy?

With direct investment, a firm maintains total ownership of its plants, operation facilities, and offices in a foreign country.

Global segmentation, targeting, and positioning (STP) are more complicated than local STP, in part because

consumers may view their roles differently in different countries.

When Kellogg's offers different cereals, such as Cocoa Krispies and Special K, it is segmenting the market by ________ segmentation methods.

demographic

Which of the following are the two components of a global marketing strategy?

determining which target markets to pursue and developing a marketing mix to obtain a competitive advantage

Nenisha had developed an extremely successful advertising and promotion campaign for a client in the United States. The client wanted to roll out the same campaign to markets worldwide, but Denisha cautioned against doing this, most likely because

differences in languages, customs, and culture might make the campaign meaningless and ineffective in some markets.

Adidas Group owns Reebok, Rockport, and TaylorMade brands. Adidas uses the different brands to pursue a(n) ________ strategy.

differentiated targeting

Marketing expenditures allocated carefully can result in greater brand recognition, awareness, perceived value, and consumer loyalty for the brand, which all enhance the brand's

equity.

Successful first movers create a market or a product category. They often benefit from being readily recognizable to consumers and

establishing an early market share lead.

Culture affects

every aspect of consumers' purchase decisions.

According to purchasing power parity theory, if ________ is(are) in equilibrium, products will cost the same in each country.

exchange rates

Changes in tariffs and quotas are

government actions that reduce competition from international firms.

When marketers state that services are ________, they are referring to the fact that services are not always of the same quality from one time period to another or from one service provider to another.

heterogeneous

Sanjay is in the new marketing department of a midsized accessories company. He is working on the first marketing plan the firm has ever used. He has defined the mission and objectives, and he just finished a situation analysis for the firm. The next step is to

identify and evaluate opportunities by conducting segmentation, targeting, and positioning analysis.

In a competitive market, perceived value is determined by consumers mostly

in relation to the value of its close competitors.

When considering global marketing opportunities in Bangladesh, Thomas asked the question, "How will we get it there?" Thomas is concerned about ________ capabilities in Bangladesh.

infrastructure

The marketing of services differs from product marketing because services are

inseparable

Automobile manufacturers could build cars specially designed for very short people (for example, under five feet), but it is likely that this segment

is not substantial

Candace's marketing research returned the finding that customers were staying away from her home goods store because of a lack of services like gift cards, return policies, and special orders. Candace was shocked. "Nobody ever asks about that stuff! If it were that important, people would ask about it." Candace is likely suffering from a(n) ________ gap.

knowledge

Service employees at the airlines' flight cancelation desks frequently encounter travelers who get emotional about canceled or delayed flights. The first thing these employees should do is to

listen to the customer.

For marketers, one of the benefits of having achieved brand loyalty is

lower marketing costs associated with reaching loyal customers.

Melinda has used Olay beauty products for years, even though there are many competitors on the market. She plans to purchase a recently introduced micro-sculpting cream from Olay's Regenerist line. Olay is in the ________ stage of the product life cycle.

maturityCorrect

Many home design businesses volunteer to provide their latest products for tours-of-homes fundraisers because they know their new products will benefit from

observability

Dartel, a former retailer, has been living in the United States for five years and wants to start a business. He does not have an existing firm or a product, and he doesn't have a lot of capital, but since he loves McDonald's food, he decides to

open a McDonald's franchise.

In the product development process, what takes place between concept testing and market testing?

performing product development

Global pricing strategies should strive to be consistent with

positioning strategies.

When IKEA opened its store in India, it added some features geared to Indian culture, such as offering vegan Swedish meatballs. This was part of IKEA's global ________ strategy.

product or service

A university using benefit segmentation and targeting students who want to get a degree quickly while still working full-time would most likely focus on

providing classes at convenient times and offering online courses.

Baby Boomers represent a huge demographic segment for travel marketers. Baby Boomers are also heavily motivated by self-fulfillment, which creates the possibility of ________ segmentation.

psychographicCorrect

A ________ limits the quantity of imported merchandise, thus minimizing competition faced by domestic products.

quota

Wang wants to sell personal website services to American soldiers in the Middle East. Because of the difficulty of communicating with people in a combat zone, Wang may have trouble with this segment not being

reachable

Ravi is gathering information about the general economic environment in Bangladesh. In doing so, he will look for information about the general economic environment, market size and population growth rate, and

real income.

Global marketers are under constant pressure to simplify distribution channels in order to

reduce costs

For a segmentation strategy to be successful, the customers in the segment must react similarly and positively to the firm's offering. In other words, the market segment must be

responsive

The manager of Oceanside Yacht Club wanted members of the very upscale club to use the bar and dining facilities more frequently. He offered a two-for-one "happy hour" special, but few members showed up. The manager did not have a grasp of what would make his target market

responsive

When Dr. Sharpie invented his Get-It-There (GIT) golf putting device, he knew during the introductory stage

sales would be low and profits nonexistent, but he would attract golf equipment innovators.

Which of the following are benefits of new product development to a firm?

satisfying the changing needs of current and new customers

Gerardo wants to develop an Internet-based auction business and is working through the STP process. After establishing his objectives, describing potential market segments, and evaluating the attractiveness of each segment, Gerardo now has to

select a target market.

If you visit a Kentucky Fried Chicken restaurant in China, along with KFC's regular menu items, you will find congee, a rice porridge that can feature pork, pickles, mushrooms, and preserved egg, on the menu. This is an example of which global product strategy?

sell totally new products or services

Layla is the new manager of a resort hotel. She knows from reviewing customer complaints that service quality at the hotel is not consistently meeting customers' expectations, and she believes that the biggest problem is that her employees are not sure what is expected of them. To improve service quality, Layla will

set specific, measurable goals based on customers' expectations.

The shift of population from rural to urban areas in countries such as India helps global marketers by

simplifying the supply chain needed to make goods and services available.

In the Circles for a Successful Value Proposition framework, the value proposition is represented by

the intersection between customer needs/wants and the firm's product's benefits.

The most important consideration when a firm chooses a global product strategy should be

the needs of the target market.

Glocalization refers to

the selling of the same product or service in both the home-country market and the host country.

Which of the following sis a main component of a value proposition?

the target market

Which of the following defines a value proposition?

the unique value that a product or service provides to customers

Vanessa wants to position her financial services company. She can position her services according to

the value proposition.

Services marketing managers have learned that more employees will support a quality-oriented process if

they are involved in setting the goals.

Frederico was assigned to help create a positioning strategy for his employer's products based on product attributes. He should consider

what the target market would consider the most important features.