MKT 301 - Chapter 1

The Brandenburg family makes $7,000 per month. About $1,800 goes toward taxes and savings. They spend $5,200 on goods and services. Based upon the information in the text, about how much of their money goes toward marketing activities?

$2,600

Samuel spent $500 on a new television set. How much of this price is likely to go toward marketing expenses?

About $250

Which of the following statements is true about marketing?

All types of organizations need marketing.

Anthony works at a local electronics retailer. He has two customers in particular that he sees regularly. One customer, Mr. Johnson, comes in frequently asking about new deals. However, he rarely buys anything, and when he does buy something it is usually small. The other customer, Mr. Montoya, comes in a little less frequently. He does not purchase products all the time, but when he does the products are expensive. Anthony recognizes that Mr. Montoya is a more valuable customer over time than Mr. Johnson. He has therefore worked hard to develop a strong relationship with Mr. Montoya. What marketing method is Anthony most likely using to direct his actions?

Customer lifetime value

What is the major focus of the marketing concept?

Customer satisfaction

Which of the following equations describes customer value?

Customer value= customer benefits - customer costs

Which stakeholders are the focal point of all marketing activities?

Customers

During the holiday season, a Bluetooth speaker was in such high demand that it sold out quickly at a local Walmart. When Walmart tried to order more, it learned that the suppliers had so many orders to fill that it would not be able to fill Walmart's order for two weeks. What type of marketing mix variable does this problem involve?

Distribution

What is the first step for marketers in implementing the marketing concept?

Establish an information system to discover customers' real needs

Customers consciously calculate the value of a product in benefits and costs for most purchases.

False

Marketers have complete control over marketing mix variables.

False

Valerie works at a pharmaceutical firm that develops medicines for rare diseases. The company develops a new medication for a disease that very few people have. In fact, less than 100 people are said to have this disease in the entire country. As a result, the drug will be priced high, but the firm will work closely with insurance companies to get the medicine to the right people without sacrificing much revenue. Her friend Rick, who is taking business classes, tells her that this is too small to be a target market. Is Rick's statement true?

False

_______ is a strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment.

Green marketing

Which of the following institutions would be most likely to market an idea as their main product?

Greenpeace

Which of the following statements describes a benefit that marketing offers?

It enhances consumer awareness.

Which of the following sentences is true about a marketing exchange?

It requires four conditions to take place.

The marketing concept is based upon the idea that an organization should try to provide products that satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals. During which orientation (time period) are marketers most likely to adopt the marketing concept?

Market orientation

When McDonald's decided to eliminate artificial flavorings and preservatives from its vanilla ice cream, it was most likely responding to which of the following?

Marketing environment forces

Which of the following statements about the marketing environment is false?

Marketing environment forces are uncontrollable, so marketers do not plan for them.

Which of the following is a major benefit of marketing?

Marketing knowledge enhances consumer awareness.

Which of the following marketing mix variables has Walmart generally emphasized in its marketing activities?

Price

Lime is using social media to ask consumers about the qualities they desire in an electric scooter. The firm hopes to develop a new type of electric scooter based on the feedback it receives. Which marketing mix variable is Lime addressing?

Product

Jim manages a small factory that produces circuit boards. Jim operates from the belief that a good product creates demand. He focuses much of his energy on developing operational efficiencies and increasing output. The company's salesperson Darlene, however, views customer relationships and personal selling as being the highest priority. Between the two of them, the firm has become known for its quality products and excellent customer relationships. Refer to Scenario 1.4. What type of orientation has Jim adopted?

Production

Denise works as a direct seller for Rodan + Fields. She is determined to sell as many products to as many people as possible. Although she generally has a good relationship with customers, she has been known to be overly aggressive in trying to sell products. She often convinces consumers to purchase more expensive products even after they say they are not interested. As a result of Denise's high sales, she has become a top performer. Recently, however, Denise's sponsor has been informed of complaints that customers have levied against Denise accusing her of "badgering" them into buying products. The sponsor meets with Denise and tells her it is unacceptable to pressure consumers into purchasing items they do not want. Refer to Scenario 1.1. Which variable of the marketing mix does this issue involve?

Promotion

Lumos Labs, the maker of brain-training app Lumosity, released advertisements that claimed its app was able to prevent Alzheimer's. The Federal Trade Commission fined Lumos Labs $2 million, saying that the company did not have the science to back up its ads. What type of marketing mix variable is involved in this situation?

Promotion

_____ deepens the buyer's trust in the company, and as the customer's confidence grows, this, in turn, increases the firm's understanding of the customer's needs.

Relationship marketing

REI has a 100% satisfaction guarantee on its items. It allows customers to return products up to one year after purchase. This is an attempt by REI to reduce what type of cost?

Risk

Charlotte loves her mom's edible cookie dough recipe, and she assumes everyone else will too. She starts a cookie dough business. Charlotte views promotion, such as advertising and personal selling, as the most important activities needed to sell her product. She figures that consumers only have to learn about her product before becoming loyal and steadfast customers. What type of orientation does Charlotte seem to embrace?

Sales orientation

Shannon is driving in downtown Santa Fe. She is not very familiar with the area and is running late for her appointment. She heads to a nearby paid parking lot and is told that it costs $20 to park. Shannon is irritated by the price. Although there are likely other paid parking lots that are less expensive, Shannon pays the price to park there. Different cost considerations impacted Shannon's decision, but clearly one stood out over all the others. Which cost exerted the most influence over Shannon's decision to park in the $20 parking lot?

The non-monetary cost of time

It is possible for a customer to have a negative lifetime value.

True

You are advising a local nonprofit on strategy. The nonprofit supports cancer research and relies entirely on donations. You recommend that the nonprofit engage in marketing activities. The executive director tells you that because it is a nonprofit that does not engage in selling activities and has a small budget, the nonprofit has no use for marketing. You disagree and explain that marketing is not just for for-profit organizations. You explain the different ways the nonprofit can engage in marketing without changing its practices or the mission. Which of the following marketing activities would be most feasible for this nonprofit?

Use inexpensive digital marketing tools to inform the community about an upcoming fundraising event

The marketing environment includes _______, economic, political, legal and regulatory, technological, and _______ forces.

competitive; sociocultural

Subaru developed a new luxury car model, but, after performing some market tests, it realized that it was pricing its vehicles too high, even for the luxury market. Subaru had to make some changes in its marketing mix. Unfortunately, it made the mistake of launching its product right when a recession hit. As unemployment rose, sales of luxury products such as Subaru's new luxury vehicle tend to decrease. In this case, the pricing of its vehicle is a(n) _______ force for Subaru, while the economic downturn is a(n) _______ factor.

controllable; uncontrollable

A Subaru representative has a solid relationship with Phil, a satisfied customer. Phil loves Subaru and will not accept anything else. The representative determines that if Phil continues to do business with Subaru every time he wants to purchase a new car, his total value to the company would be $350,000. This includes purchases made by customers who were referred to the firm by Phil. The Subaru representative has calculated Phil's _______.

customer lifetime value

Jameson manages a well-known cell phone company. This company has been voted as having the best cell phone service. Consumers appreciate the fact that they can call from almost anywhere in the world and the service still gets through. Jameson knows that the company's product far surpasses that of the competition. One thing has been bothering him, though. In order to put so many resources into ensuring the best service, Jameson has cut back on employees at the firm's customer call center. Recently, consumers have begun complaining about long wait times when they call in with a problem or concern. Although its cell phone service is still considered one of the best, customer satisfaction with the firm's customer service has plummeted. Jameson does not understand why consumers are getting so upset. He believes the exceptional cell phone service more than makes up for long waiting periods and other issues with its customer service. "After all," he says, "They can't have it all. If I invest more in customer service, that means less investment on ensuring the quality of our product offering." Refer to Scenario 1.3. Jameson has asked you, a marketing consultant, to give him advice. He cannot understand how a cell phone company with the best product offering in the cell phone service industry could get such low satisfaction ratings simply because the customer service is not up to par. You suggest that Jameson has a narrowly defined view of the company's product offering. You tell Jameson that successful marketers should define their products as what they _______.

do to satisfy customers

The essence of marketing is to develop satisfying _______ from which both customers and marketers benefit.

exchanges

Marketing environmental forces are often _______.

interdependent

Apple is known for its innovation. It conducts in-depth marketing research to determine what customers want. Its electronic devices are constantly upgraded so customers can purchase the newest models. The company creates buzz around its product offerings by discussing the product months before it is launched. This anticipation builds up until the product is launched, resulting in wide-scale sales that often result in stores selling out of the newest product. Refer to Scenario 1.2. From the information provided about Apple and its marketing strategies, Apple most likely embraces a _______.

market orientation

Denise works as a direct seller for Rodan + Fields. She is determined to sell as many products to as many people as possible. Although she generally has a good relationship with customers, she has been known to be overly aggressive in trying to sell products. She often convinces consumers to purchase more expensive products even after they say they are not interested. As a result of Denise's high sales, she has become a top performer. Recently, however, Denise's sponsor has been informed of complaints that customers have levied against Denise accusing her of "badgering" them into buying products. The sponsor meets with Denise and tells her it is unacceptable to pressure consumers into purchasing items they do not want. Refer to Scenario 1.1. Denise's sponsor tells her that it is important for her to determine her customer's needs and then find the product that best meets those needs, regardless of price. She recommends that Denise adopt the _______. In other words, Denise should move from a _______, where she is focused on using her aggressive direct selling talents to maximize profits, toward embracing the more customer-centric _______.

marketing concept; sales orientation; market orientation

On your advice, Jameson decides to invest more in customer service training and hiring. Satisfaction increases, but not to the level Jameson thinks it should be. He conducts a marketing research study and found that while most consumers like the product, many would like to see additional services available. However, what type of service customers want tends to vary by customer. Jameson has come to believe that customers just do not know how to assess value correctly. Jameson appears to believe that determining value is a(n) _______ process, while in reality the process of assessing value is highly _______.

objective, subjective

Apple is known for its innovation. It conducts in-depth marketing research to determine what customers want. Its electronic devices are constantly upgraded so customers can purchase the newest models. The company creates buzz around its product offerings by discussing the product months before it is launched. This anticipation builds up until the product is launched, resulting in wide-scale sales that often result in stores selling out of the newest product. Refer to Scenario 1.2. Apple's emphasis on marketing research is used to enhance the _____ variable of the marketing mix, while its skills at creating buzz for its newest product offering months before its release is an example of _____ variable.

product, promotion

Sheryl works at Southwest Airlines as a digital marketer. A major part of her job is communicating with customers, answering questions and letting them know about how the airline offers them the best in customer value. Sheryl is working to create long-term, mutually beneficial arrangements in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges with customers. This is an example of _______.

relationship marketing

Jim manages a small factory that produces circuit boards. Jim operates from the belief that a good product creates demand. He focuses much of his energy on developing operational efficiencies and increasing output. The company's salesperson Darlene, however, views customer relationships and personal selling as being the highest priority. Between the two of them, the firm has become known for its quality products and excellent customer relationships. Refer to Scenario 1.4. Recently, Darlene has found that they have begun to reach market saturation. She is having trouble finding new customers. One solution would be to increase the company's reach, perhaps by opening up locations in other areas. However, she knows this will be expensive. After noticing that many of their customers are planning on expanding and purchasing bigger facilities, Darlene feels that the best option is to increase the company's _______.

share of customer

Customers choose to go to Buffalo Wild Wings based upon the value they place on the total product—including the food, service, atmosphere of the restaurant, and more. The process consumers use to determine value is highly _______.

subjective

Kroger decided to introduce a new product that appeals to Hispanic consumers. While the product is highly successful among Hispanic consumers, other ethnic groups seem to like the product as well. For this product, Hispanic consumers comprise Kroger's _______.

target market