BUAD479 exam 2 practice questions

Customer value has two sides: capturing value through customer __________ and delivering value through customer __________. A. share of wallet; satisfaction B. profitability; experience C. profitability; satisfaction D. revenue; experience

B

Gulf Coast, a wholesale shrimp distributor, groups its customers by regions in the United States, such as Midwest, Northeast, and Southwest. For each region, Gulf Coast tailors a different set of advertisements and promotions. The supplier is segmenting its market according to ________. A. personality characteristics B. geographic location C. behavioral factors D. demographics E. benefits sought

B

Marketing capabilities are among the building blocks of a company's business model—how it creates value and captures profits in the marketplace. Which of the following is NOT an example of a firm's capabilities? A. Brand management B. Customer database C. Marketing Communications D. Customer relationship management

B

Psychographic segmentation categorizes markets according to ___________________. A. people's product usage pattern. B. preference to behave in certain ways. C. characteristics of the organization. D. a person's zipcode.

B

Subscription-based services such as Netflix offer free, limited-time trials to new customers. Some services may extend the free trial period to customers who opt to unsubscribe to the service. This example is BEST associated with which broad strategy designed to acquire customers? A. Increase marketing investment B. Offer discounts and incentives C. Generate positive word-of-mouth D. Increase market size E. Increase the effectiveness of acquisition programs

B

The intensity of competition in a market can be low, moderate, or high. Which of the following conditions are NOT characteristic of markets with highly intense competition? A. Price wars B. Rapidly escalating profits C. High advertising spending D. Frequent new product introductions

B

The manager of a chain of gyms is concerned about falling prey to marketing myopia by not defining his competitive landscape properly. How should he define the business to avoid falling into this trap? A. Full-service fitness centers with personal trainers. B. Solutions for good health C. The best exercise value for the price. D. Cutting-edge workout equipment unmatched by other facilities

B

There are six forces that represent the major influences on an industry's profit potential and on the competitive opportunities for companies within that industry. Which of these forces is most affected by the presence or absence of significant barriers to entry? A. Buyers B. Potential entrants C. Potential substitutes D. Complements

B

Which of the following statements best illustrates geographic segmentation? A. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners. B. GE built a downsized microwave oven to hang under kitchen cabinets. C. In China, KFC sells a chicken that is spicier the further away it is from coastal areas. D. A fast food hamburger restaurant is only open for breakfast on weekdays and Saturdays but not Sundays.

C

_________describes the net present value of future profits anticipated over the lifetime of a customer's purchases. CLV Margin cost Gross Profit

CLV

Sue is considering purchasing a new vacuum cleaner. Which of the following sets is she using when she is ready to make the final decision? Choice set Awareness set Consideration set Total set

Choice set

Advertisements that rely on cognitive appeals when selling a functional automobile use all of the following EXCEPT: A. personality B. instructions for learning more about the performance of the vehicle. C. a favorable price quote. D. claims about its superior performance compared to competitive vehicles.

A

Assume that Park Paper Products believes its customers typically use satisficing decision making when purchasing paper products. Which of the following would likely be the least effective market strategy? A. Focus advertising on the technical reasons why products are best in class B. Make products easy to find C. Offer products at an affordable price D. Design colorful packaging to make products stand out from other offerings E. Secure a large amount of shelf space

A

Emotional message are more likely to be effective in: A. low involvement purchases. B. high involvement purchases.

A

Which of the following choices is NOT one of the frameworks discussed for understanding how consumers make decisions? A. Optimizing versus satisfying decision making B. High-involvement versus low-involvement decision making C. Compensatory versus noncompensatory decision making D. Cognitive versus emotional decision making

A

Which of the following is NOT an offensive competitive strategy? A. Launching a fighter brand B. Offering differentiation C. Comparative advertising D. First-mover advantage

A

Which of the following is most likely to use more of the cognitive processes compared to emotional factors? Real estate loan Rolex Watch Sports Car Honeymoon

A

Which of the following options would NOT be included in selling toothpaste to target customers who believe that all brands of toothpastes are similar when those consumers are expected to satisfice? A. Advertise heavily B. Give the toothpaste an affordable price. C. Design colorful packaging to make the toothpaste stand out. D. Make the toothpaste easy to find.

A

For an average consumer, which of the following BEST describes the purchase of a washing machine in terms of the influences on consumer decision making? A. Search good with a utilitarian purpose B. Experience good with a hedonic purpose C. Search good with a hedonic purpose D. Experience good with a utilitarian purpose

A (Typically, a washing machine can be characterized as a search good, which are goods that generally have a wealth of researchable information available, so consumers can learn nearly everything they need to know about the product before deciding whether to buy. In addition, the characteristics of a washing machine would lend itself to cognitive processing, which serves a utilitarian purpose. For such products, buyers tend to objectively evaluate alternatives within these product categories based on how well they satisfy that purpose.)

What is the specific term for the process of dividing a total market into subgroups so that each group consists of buyers and users who share similar characteristics, but who are different from those in the other groups? Market Targeting Specific Marketing Market Management Market Segmentation

Market Segmentation

An online subscription service has calculated customer lifetime value (CLV) for 100,000 users. Which of the following is a strategic or managerial decision in which CLV could be useful to the company? A. Determining its limits to user acquisition costs B. Determining which users to target for customer development C. Determining investments into customer retention programs D. Determining which users to target based upon estimated profitability E. All answers are applicable here

E

Delta, an American video game manufacturer, targets teens between the ages of 13 and 18, providing free game trials and applications. The firm's marketing approach exemplifies ________ segmentation. gender geographic occasion age and lifecycle income

age and lifecycle

This ad is hoping to trigger which kind of response in its viewer? (soup ads comparing MSG) Cognitive Emotional Neutral

cognitive

Legal protection of trade dress can serve as a type of ______________ strategy. Hint: Trade dress refers to nonfunctional characteristics associated with a product's appearance or feel, such as a distinctive shape or color. defensive offensive

defensive

Harry's caters to the clothing needs of men, manufacturing two different lines of fashion based on the purchasing power of its customers. One product line caters to the needs of affluent, middle-aged men, and the other line targets younger, up-and-coming professionals. Harry's most likely segments the consumer market based on ________ variables. demographic psychographic universal geographic behavioral

demographic

Port Orleans Shipping markets different services to the tourism, defense, and trade segments. The firm designs separate offers for each segment based on their needs. This approach is called ________ marketing. differentiated mass individual concentrated local

differentiated

Company A launches a me-too product that requires minimal investment, enabling the firm to underprice the market leader. The market position most likely occupied by Company A is that of a market: driver nicher follower challenger

follower

"For upscale American families who desire a carefree driving experience, Volvo is a premium-priced automobile that offers the utmost in safety and dependability" is a __________ statement for Volvo in North America. perception market-product positioning differentiation

positioning

True or false: A competitive advantage is considered sustainable when rivals cannot replicate it in the immediate future.

true

The place a product occupies in a consumers' mind relative to the competition in the STP process and potentially influenced by company communications is best defined by: situation analysis targeting positioning segmenting

positioning

Manufacturers of branded pharmaceuticals hold patents that play key roles in their business models. For firms that market generic drugs, which have no legal protection, strong relationships with pharmacy wholesalers are critical. While patents and wholesaler relationships are very different assets, both are types of marketing _______. platforms resources capabilities tactics

resources

The PARTS acronym is used to specify the components of a competitive game and provide a framework for analyzing that game. The S in PARTS stands for: Segment Strategy Sustainable Advantage Scope

scope

A branch manager of a rental car company set a goal to increase customer satisfaction ratings. To achieve this goal, she authorized the sales associates to provide customers with additional price discounts. Although customer satisfaction ratings increased, the brand manager later discovered that 20% of its rental contracts with the highest customer satisfaction ratings were also unprofitable. This group of highly satisfied but unprofitable customers represents the company's __________. star customers lost causes free riders vulnerable customers dealers

free riders

Gerber's Good Start® line of formulas for infants and toddlers has high defection rates after a couple of years. Which of the following best characterizes the most likely reason for defection among Gerber's Good Start® most loyal customers? Value switchers Target switchers Deliberative switchers Lifestyle switchers Dissatisfied switchers

Lifestyle

A commercial cleaning company spends an average of $500 per year, per customer, in supplies, wages, and account maintenance. An average customer generates $1,000 in revenue per year. Assuming a discount rate of 12% and an annual retention rate of 80%, which of the following is the BEST estimate for the lifetime value of an average customer using the simplified customer lifetime value (CLV) equation? $1,000 $1, 250 $1,750 $500 $2,225

$1250 (Customer lifetime value (CLV) is the expected value of a customer, and it consists of future contribution (revenue less direct and attributable costs) and takes into account that the customer could leave in the future (via retention rate) and time value of money (via discount rate). The simplified CLV equation assumes (1) customers have a constant profit margin m over time, (2) customers have a constant rate of retention r over time, (3) the discount rate i is constant over time, and (4) value is estimated over an infinite horizon. The equation is CLV = mr / (1 + i - r). The term r / (1 + i - r) is referred to as the margin multiple.Calculation of CLV:m = annual revenue - annual cost=$1,000 - $500 = $500margin multiple = r / (1 + i - r) = 0.8 / (1 + 0.12 - 0.8) = 2.5CLV = $500 x 2.5 = $1,250)

Let's say over the past 6 months Rubber Ducky Factory Inc. has spent $5,000 on promoting their company among new parent blogs. These posts introduced the company to 150 potential customers with a retention rate 10% , generating 15 customers. These 15 customers had an average order size of 800 rubber ducks. Each rubber duck costs a $1 to make and sells for $2.50. Assuming a discount rate of 5%, which of the following is the BEST estimate for the lifetime value of an average customer using the simplified customer lifetime value (CLV) equation? $45 $56.25 $22.50

$45 (Calculation of CLV:m = annual revenue - annual cost=$37.50-$15 = $22.50margin multiple = r / (1 + i - r) = 0.1/ (1 + 0.05 - 0.1) = 2CLV = $22.5x 2 = $45)

Assume Marriott Internationals surveyed its customers and asked, "Using a 0-10 scale, how likely is it that you would recommend a Marriott hotel to a friend or colleague?" The results found that 9% of those surveyed were detractors (0-6), 62% were passives (7-8), and 29% were promoters (9-10). What is Marriott's net promoter score (NPS)? 53 91 20 62 33

20 (NPS is a method of diagnosing customer sentiment that goes beyond traditional measures. Unlike customer satisfaction, NPS allows organizations to learn the extent to which the customer is willing to spread position word of mouth.NPS is calculated by subtracting the percentage of detractors from the percentage of promoters yields the Net Promoter Score, which can range from a low of -100 to a high of 100. In this case, NPS is calculated by subtracting 9 (percentage of detractors) from 29 (percentage of promotors), which results in an NPS score of 20.)

This ad is hoping to trigger which kind of response in its viewer? (Always #LikeAGirl ad) Cognitive Emotional Neutral

Emotional

Which of the following is inappropriate for segmenting industrial markets? Geographical segmentation Multivariable segmentation Psychographic segmentation

Psychographic

H. J. Heinz Company has estimated that average customer lifetime values (CLVs) are equally attractive for customers in two of its broad business-to-business segments: restaurants and hospitals. Heinz believes that its restaurant customers are generally loyal to Heinz brands, while hospitals often purchase competing brands such as Hunts (ConAgra Foods). From the perspective of customer development, which of the following is an important piece of information missing from the estimates of customer lifetime value? Customer acquisition costs Upselling Customer profitability Customer retention rate Share of wallet

Share of wallet