Marketing Test 1 Review Questions

If Julio Ruiz has an income of $30,000, pays $6,000 in rent, $1,200 in utilities, and $5,000 in taxes per year, his disposable income is

$25,000

Which category of income are marketers most interested in?

Disposable Income

Beth Hines is buying furniture for her apartment for the first time. She is spending considerable time and effort comparing the products that different stores offer. Which type of problem-solving process is she using?

Extended

Mark is shopping for a new suit to wear to an important interview. He really wants to impress his prospective employer and is shopping at many stores to find the right outfit. Martin is using which type of consumer problem-solving process?

Extended problem solving

Which of the following are the most frequently sentenced organizational crimes?

Fraud and antitrust violations

____ describe the similarities among potential customers within a market segment and explain the differences among people in different market segments.

Market segment profiles

Refer to Scenario 6.2. Currently, GE uses several sales forecasting methods. One method is to sell the different locomotive engines to buyers in different countries, and then measuring the purchasing response in each. In this case, GE Transportation is using the _____ method to forecast future sales.

Market test

Refer to Scenario 3.1. Suppose that the Soljur Sports company was actually discriminating against Meyer Sporting Goods with its price increase. Which of the following acts prohibits this type of business behavior?

Robinson-Patman

Which of the following industries is most commonly regulated by state regulatory agencies?

Utility companies

The sales forecasting method that consists of making a product available to buyers in one or more locations and measuring purchase response is

a market test.

Abercrombie & Fitch is developing a program to get to know its customers. Which of the following is not a reason why A&F needs to understand consumer buying behavior?

all customers are the same when it comes to buying behavior

Often, the Delphi technique is used in conjunction with an expert forecasting survey. The major objective is to

allow experts to work separately to reach a consensus as to their forecasts.

The Decca Electric Corporation produces light bulbs that are used in refrigerator manufacturing. Currently, only three other companies produce bulbs used in the production of refrigerators, with Decca as the leader in market share. In this case, Decca Electric Corporation would be considered

an oligopoly.

The three major types of reference groups are:

aspirational, disassociative, and membership.

Having used both Secret and Sure deodorants, Annette feels that Secret is a good product and the one that best meets her needs. She has formed a(n) ____ about Secret.

attitude

Problem recognition occurs when a consumer

becomes aware that there is a difference between a desired state and an actual condition.

The Gap has recently produced a new line of athletic wear that closely competes with a designer label in its quality, utility, and appearance. However, it is about half the cost of the designer brand. Product managers for The Gap line plan to use price sensitivity, brand loyalty, and end use as variables to segment their target market. These are all _______ variables for market segmentation.

behavioristic

Using the breakdown approach to sales potential, estimates are made

by starting with general economic conditions.

When selecting specific target markets, a firm should

choose the segments most in line with the firm's objectives and long-term growth.

When organizing perceptual inputs, people tend to mentally fill in missing elements in a pattern or statement. This principle is called

closure.

Refer to Scenario 6.1. Lil' Angels Kids Spa is currently using a(n)____ targeting strategy.

concentrated

When shopping for detergent, Josh looks at Tide, Fresh Start, Surf, and All and chooses the one that is on sale. These four brands make up his ____ set.

consideration

Many well-known restaurants and corporations are changing to a completely smoke-free environment, and fewer restaurants offer smoking and nonsmoking sections. These firms are responding to changes in

cultural values.

The Classic Hotel Group has begun to offer entire floors of rooms in its hotels that are smoke-free, adults-only, and pet-friendly. The Classic Hotel Group is responding to changes in

cultural values.

Kelly's Kids is a home-based business that sells high-quality children's clothing at premium prices using in-home parties. These in-home parties typically cater to families with small children and middle- to upper-middle-class income. Kelly's Kids is using ____ variables to segment its market.

demographic

With its Venus razor, Gillette was the first marketer to offer a triple blade razor specifically designed for women. This is an example of market segmentation using ____ variables.

demographic

Many health care companies are making adaptations to meet the needs of an aging population as the demand for medical services and products such as diabetes supplies increases. This change in marketing strategy is best explained by a change in

demographics.

Consumer confidence is at a low during periods of

depression.

The best approach for a company to take when monitoring its competitors is

developing a system for gathering ongoing information about competitors.

Procter & Gamble markets Cheer detergent to young singles and couples and Tide detergent to families. Procter & Gamble is using a(n) ____ targeting strategy for laundry detergents

differentiated

Chloe and Max are searching for a health club to join. This purchase will likely be affected by ____ involvement.

enduring

After Home Depot gathers information related to its marketing environment, it attempts to define current environmental changes and predict future changes. This determines possible opportunities and threats facing the company. It illustrates the process that is called

environmental analysis

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

environmental scanning.

The Lazy-Boy Furniture Company collects information about a wide variety of competitive, economic, political, legal and regulatory, technological, and sociocultural forces that affect its marketing activities. This process is called

environmental scanning.

Refer to Scenario 7.2. Since Alicia and Carlos were using gas mileage as one of their evaluative criteria, they are most likely in the ____ phase of the consumer buying process.

evaluation of alternatives

A group of brands that a consumer views as alternatives for possible purchase is called a(n)

evoked set.

Jeff needs to buy his textbooks for the coming semester of college. It is only two weeks before the first day of class, and he still has not made a purchase. Jeff wants to buy them somewhere other than the bookstore since he is still living at his parents' home and won't be on campus until the day before class. Jeff goes online and looks for sites that sell the textbook. Then he remembers that one of his friends had said something earlier about finding the book for a great price. Jeff then calls his friend to get the name of the site. In terms of Jeff's buying decision process, his going online to look for sites was part of _______, and his calling a friend was ______.

external information search; also external information search

A marketer that targets customers based on marital status and the presence and age of children is using

family life cycle.

Population density and city size are ____ variables used for market segmentation.

geographic

Refer to Scenario 6.2. Suppose that GE Transportation decided to produce only locomotive engines for rail lines in the United States. The segmentation variable then would be

geographic location.

Most markets for products are made up of individuals or groups with diverse needs for products and are called ____ markets.

heterogeneous

A person's buying power is a function of

income, wealth, and credit.

Marketers often provide consumers with experience to their products, including free samples and trial offers, to facilitate consumer

learning.

A major determining factor in deciding which type of problem-solving process should be used depends on the individual's intensity of interest in a product and the importance of the product for that person. This is known as an individual's

level of involvement.

Demographic variables such as income and occupation, as well as how people spend their time and the importance of things in their surroundings, are all factors considered in ____ segmentation.

lifestyle

The psychographic variable that includes numerous characteristics related to people's activities, interests, and opinion is

lifestyle.

What type of competitive structure exists when a firm produces a product that has no close substitutes?

monopoly

What type of competitive structure exists when just a few sellers control a large portion of the supply of a product?

oligopoly

Melanie prefers to shop at Target for most of her household needs even though the same products and brands are available at Kmart. She prefers the service, location, and friendliness of the employees at Target. Melanie's reasons that influence her decision to shop at Target are called

patronage motives.

Marketers who attempt to use reference-group influence in advertisements are most likely to succeed when messages indicate that

people in a specific group buy the product and are highly satisfied by it.

The undifferentiated targeting strategy for finding a target market will likely not be successful if

people within the market have heterogeneous needs.

Maslow's hierarchy of needs refers to the five levels of needs that humans seek to satisfy, from most to least important. These needs, in order from most to least important are

physiological, safety, social, and esteem, self-actualization.

Textile companies historically face issues concerning the use of child labor in foreign countries and the various regulations created concerning this labor. The type of marketing environment forces executives for these companies are most likely to try to influence are ____ forces.

political

Refer to Scenario 3.2. The iHome's reduction of energy use, renewable resources as materials, "pod" customization, reduction of construction waste, and tax abatement status is/are examples of reaction to which environmental forces?

political, economic, sociocultural, and technological.

The five major stages of the consumer buying decision process, in order, are

problem recognition, information search, evaluation of alternatives, purchase, and postpurchase evaluation.

The development of a person's self-concept is a function of

psychological and social factors.

The five categories of situational influences are:

purchase reason, time perspective, social surroundings, physical surroundings, and buyer's momentary mood.

While Silk SoymilkTM engages in environmental scanning and analysis, the company is more likely to change its products and marketing strategies to adapt to environmental forces rather than trying to influence these forces. Silk SoymilkTM has a(n) ____ approach to marketing environmental forces.

reactive

Consumers tend to remember information inputs that support their feelings and beliefs and forget inputs that do not. This is known as selective

retention.

While shopping at a local grocery store, Taylor sees a display of his favorite brand of energy drink. He buys some to take home for the weekend. This purchase process would be described as

routinized response behavior.

Shortly after moving into their new home, Mark and Katherine Gould purchase and install smoke detectors and an alarm system. The Goulds are concerned about fulfilling their need for

safety.

When evaluating market segments, assessment of competitors is important because

sales estimates may cause a segment to appear to be lucrative, but there may be several competitors that together have a large share of that segment.

Guess? will be spending $22 million on marketing activities next year and expects to sell 30 million pairs of jeans. These 30 million pairs represent the company's

sales forecast.

Perception is a three-step process that involves

selecting, organizing, and interpreting information inputs.

Refer to Scenario 7.1. A dissatisfied Skola's Auto Repair customer told a friend about his experience. The friend has been a long-time Skola's customer and the next day, didn't remember what he told her. This is an example of

selective retention.

Dave is an owner and manager of three apartment buildings in northern Minnesota. During an exceptionally hot summer the temperatures soared and the toll on the window air conditioners was too much. Seventeen of them have broken down already, and more are probably going to have to be replaced. He has a total of seventy-five apartment units. Dave is now in the process of deciding how to repair the air conditioning. Should he buy new window units for all the buildings, or should he install central air conditioning? What type of decision is Dave facing?

situational involvement and extended problem solving

Claire is a market research analyst for a global consulting firm. She will be traveling to London next month to present her research to a meeting of company executives from around the world. This presentation could be instrumental in the company's decision of whether she should be promoted at the end of this year. Claire has been thinking about the trip, which will be the first time she has been out of the country. She has decided to retire the old college luggage for a more professional-looking version and has begun to evaluate various brands. Claire is most likely facing _____ for this particular purchase.

situational involvement.

Technology is

the application of knowledge and tools to solve problems and perform tasks more efficiently.

Relying on executive judgment for forecasting may be adequate when

the executive has considerable experience and product demand is relatively stable.

A disadvantage of the concentrated targeting strategy is that

the firm's financial condition is tied to a single and specialized marketing mix.

Which of the following is not a characteristic of a consumer market?

their purchasing decisions are always made by only one individual

The forecasting techniques that assume past sales patterns will continue into the future are all variations of

time series analysis.

Technology assessment is

trying to foresee the effects of new products and processes on the firm's operation and on society in general.

If Morton Salt saw all table salt customers as pretty much alike and thus offered only one marketing mix, it would be using the ____ strategy.

undifferentiated

Shelby's new job with the federal government provides a comfortable income and a fairly stable income. She would like to buy a new car now that she has a job; however, Shelby hesitates to purchase a new car because she is concerned about how poor economic conditions may affect her position in the future. Shelby lacks

willingness to spend.

The _____, of Coleman's social class categories, includes approximately 40 percent of the population, shops for bargains, and buys sports and recreational equipment.

working class.

Which of the following companies would probably be most interested in tracking discretionary income levels

BMW automobiles

Refer to Scenario 3.1. A regular customer of Meyers Sporting Goods feels that some of its advertisements are deceptive. He responded to an ad for sale skateboards one hour after the store opened and found that none were left. Where should he file a complaint?

Better Business Bureau

Lindsay was reviewing her bank statement for last month. She had paid her rent, her car payment, electric and phone bills, and made three trips to the grocery. Lindsay had also bought tickets to a Katy Perry concert and new clothes to wear to the concert. The money spent on Lindsay's rent, car, electric and phone bills was likely from her ____ , while the money spent on the concert tickets and new clothes was from her _____.

Disposable income; discretionary income

Refer to Scenario 3.2. In what type of competitive structure is Clayton Homes most likely operating?

Perfect competition

____ competitors are those that compete in the same product class, but their products have different features, benefits, and prices.

Product

In general, which of the following competitive structures is an organization least likely to operate?

Pure competition

While playing soccer, Bryan suddenly fell and broke his arm. Needing to get to the hospital, he was not only interested in the nearest location, but also the shortest emergency room wait time. He remembered seeing a billboard for The Cleveland Clinic promoting their time-text service where he could call the number GET-TXT-TIME and they would text him the approximate waiting time at the closest three hospital locations. The Cleveland Clinic is providing enhanced service to its patients by capitalizing on which environmental force?

Technological

Which of the following regulatory groups is a system of nongovernmental, independent, local regulatory agencies supported by local businesses?

The Better Business Bureau

Why would a company use the undifferentiated strategy?

The needs of individual consumers in the target market for a specific product are similar, so the organization can satisfy most customers with a single marketing mix.

Which of the following is the best example of utilizing technology to improve consumer relationships?

Waiters recording orders on handheld computers

When a firm continues to violate what the Better Business Bureau believes to be good business practices, what is one of the main actions the bureau will take?

Warn consumers of the unfair practices.

Yvonne and Garret are looking at information about how their organization's products could fit potential customers' needs. This information deals with demographic characteristics, product benefits sought, lifestyles, geographic factors, brand preferences, and usage rates. They are most likely looking at

a market segment profile.

The tobacco industry in the United States is dominated by three large companies. When any one of these companies changes its price on tobacco products, the other two companies quickly adjust their prices to match it. From these characteristics, the tobacco industry could best be described as

an oligopoly.

Refer to Scenario 7.1. Positive feelings generated by satisfaction with Skola's response will become part of Steve's

attitude.

Cole's smart phone is two years old and he would like to have a new one. This time, he wants to make sure that it has a longer battery charge and better geographic coverage since he is traveling three days a week for his new job. Cole is most likely to use _____ for this purchase.

limited problem solving behavior.

The three most widely recognized types of consumer problem solving are:

limited problem solving, extended problem solving, and routinized response behavior.

When a consumer purchases products occasionally or needs information about an unfamiliar brand in a familiar product category, he or she will most likely engage in

limited problem solving.

Tori went to Sam's Wholesale Club to shop for a party she was hosting on the weekend. She knew that she could buy larger quantities of food items than she normally did, and they would also be much less expensive. She checked everything off her list and proceeded to the checkout lines. Passing a display of fresh flowers, she thought "Wouldn't those be nice for the party?" She selected one of the bouquets and placed it in her cart. Tori has most likely engaged in ______ when selecting the food for her party, and ____ when selecting the flowers.

limited problem solving; impulse buying.

The strength of a person's "buying power" depends on economic conditions and

size of resources that can be traded in an exchange.

Our society uses many factors, including occupation, educational level, income, wealth, religion, race, ethnic group, and possessions, to group people into

social classes.