CH 6

16. A manufacturer of a popular brand of orange juice introduces lemonade under the same brand name. This is known as private labeling.

*False* A company uses a family brand by marketing different products under the same umbrella name.

21. Convenience goods are available at every possible location because of exclusive distribution.

*False* An intensive distribution is strategy based on making the product available to consumers at every possible location so that consumers can buy with a minimum effort. Profit is low but sales volume is high, with the sales burden usually carried by the manufacturer's national advertising. Strategy of pushing product onto retailers or creating pull by advertising to consumers.

24. Booklets, catalogs, brochures, sales kits, and annual reports are examples of personal selling materials.

*False* Booklets, catalogs, brochures, sales kits, and annuals reports are *collateral materials*. They are the accessory items companies produce to integrate and supplement advertising and PR activities.

15. Differences between products that are readily apparent to the consumer are known as induced differences.

*False* Differences between products may be perceptible, hidden, or induced. Perceptible differences between products are readily apparent to consumers. Induced differences are the differentiating characteristics "induced" by advertising and promotion, unique branding, packaging, distribution, merchandising, and advertising.

2. In terms of user status, discount users choose one brand exclusively.

*False* In terms of user status, sole users choose one brand exclusively. Discount users are semi-sole users of competing brand B. Discount users wont buy Brand A at full price but will consider buying it at a discounted price. Semi-sole users usually use Brand A but have a substitute brand if it is unavailable or if the alternative is offered at a discount.

14. In the maturity stage of the product life cycle prices tend to rise.

*False* In the maturity stage the market becomes saturated with competing products and the number of new customers dwindles, causing industry sales to plateau. Competition intensifies and profits diminish.

3. In volume segmentation, marketers rely on user-status variables to define consumers as light, medium, or heavy users of products.

*False* In volume segmentation, marketers measure people's usage rates to define consumers as light, medium, or heavy users of products.

1. The process of market segmentation is a three-step process that begins with planning and ends with market identification.

*False* Market segmentation has two steps: (1) identify groups of people/organizations that have certain shared needs and (2) aggregating/ combining these groups into larger market segments according to their interest in the brand's utility.

12. Product concept refers to the way the marketer mixes and blends the 4 Ps to create the company's marketing strategy.

*False* Marketing mix refers to the way the marketer mixes and blends the 4 Ps to create the company's marketing strategy.

20. Network marketing refers to a centrally managed distribution system that serves a group of stores or other businesses.

*False* Network marketing is a form of direct distribution/multilevel marketing where individuals act as independent distributors for a manufacturer or private-label. A vertical marketing system refers to a centrally managed distribution system that serves a group of stores or other businesses.

25. Free samples and premiums are linked to the communications function of the marketing mix and not the product element.

*False* Promotions linked to the communications function of the marketing mix include displays, events, and trade shows. Promotions linked to the product element of the marketing mix include free samples and premiums. Promotions linked to the price element include coupons, volume discounts, and end-of-month sales.

19. The price of goods is not influenced by the costs of production and distribution.

*False* The price of goods depends to some extent on the costs of production and distribution.

17. The product's package is a component of the promotion element of the marketing mix.

*False* The product's package is a component of the product element of the marketing mix.

13. When sales volume begins to rise rapidly, the product enters the maturity stage of the product life cycle.

*False* When sales volume begins to rise rapidly, the product enters the growth stage of the product life cycle.

8. VALS, a psychographic segmentation scheme, divides consumers into eight psychological categories, including "I am driven" (motto: nothing ventured, nothing gained) and "I measure twice" (motto: an ounce of prevention).

*False* Yankelovich developed the MindBase system after discovering that people with similar demographic backgrounds differ in motivations and feelings, receptivity to marketing messages, and rely on different media. MindBase is a psychographic segmentation scheme that finds shared behavior patterns among broad clusters of consumers and divides them into eight psychological categories. including: *"I am expressive"* (Carpe Diem) *"I am driven"* (nothing ventured, nothing gained) *"I am at capacity"* (time is of the essence) *"I am rock steady"* (do the right thing) *"I am down to earth"* (ease on down the road) *"I am sophisticated"* (sense and sensibility) *"I measured twice"* (motto: an ounce of prevention) *"I am devoted"* (home is where the heart is)

11. The target market for a company manufacturing dolls is most likely to be young children.

*True*

5. Demographic segmentation is a way to define population groups by their statistical characteristics: sex, age, ethnicity, education, occupation. income, and other quantifiable factors.

*True*

18. Brand equity refers to the totality of what consumers, distributors, dealers, and competitors feel and think about a brand over an extended period of time.

*True* Brand equity refers to the totality of what consumers, distributors, dealers, and competitors feel and think about a brand over an extended period of time.

4. In addition to tangible benefits customers are often motivated by symbolism—what the brand name means to them, to associates, or to some social reference group.

*True* Customers are motivated by tangible benefits and symbolism - what a brand means to them, their associates, or to some social reference group. Behavioristic segments are defined by user status, usage rates, benefits sought, purchase occasion.

10. Market concentration reduces the number of geographic targets for an advertiser.

*True* Many countries' markets for industrial goods are concentrated in one region or several metropolitan areas. Market concentration reduces the number of geographic targets for an advertiser.

23. Telemarketing, a direct marketing technique, can help increase productivity through person-to-person phone contact.

*True* Telemarketing (a direct marketing technique) can help increase productivity through person-to-person phone contact, increase response rate to direct-mail advertising, and develop a customer database for future mailings/promotions.

9. Marketers can obtain lists of companies in particular NAICS divisions for direct mailings.

*True* The North American Industry Classification System codes (NAICS) help companies segment markets and do research. Marketers can even obtain lists of companies in particular NAICS divisions for direct mailings.

22. The usual purpose of advertising is to inform, persuade, and remind customers about particular products and services.

*True* The usual purpose of advertising is to inform, persuade, and remind customers about particular products and services.

6. VALS, a psychographic classification system, assigns consumers to one of eight groups based on two dimensions: primary motivation and resources.

*True* VALS is a psychographic classification system that uses two dimensions - primary motivation and resources - to assign consumers to one of eight groups: Innovators, Thinkers, Achievers, Experiencers, Believers, Strivers, Makers, and Survivors. VALS help marketers to: 1. Identify who to target 2. Uncover what target market buys and does 3. Locate concentrations of where target group lives 4. Identify best way to communicate with them 5. Gain insight into why target group behaves the way it does

7. Psychographics enables marketers to view people as individuals with feelings and inclinations.

*True* With psychographics, marketers group people by their values, attitudes, personality, and lifestyle. Psychographics enables marketers to view people as individuals with feelings and inclinations. Then they can classify people based on what they believe, the way they live, and the products, services, and media they use.

62. The difference between regular soup and organic soup is not readily visible. The organic brand differentiates itself by claiming to be healthier as it uses natural ingredients and vegetables that have been grown without the use of harmful chemical fertilizers. This is an example of a(n): a. Hidden difference b. Perceptible difference c. Induced difference d. Conceptual filter e. Perceptual filter

*a. Hidden difference* Hidden differences are not readily apparent.

65. Cyber-shot, VAIO, and BRAVIA are just some of the brand names used by Sony, one of the leading manufacturers of consumer electronics, to markets its digital cameras, laptops, and LCD televisions, respectively. These are all examples of _____. a. Individual brands b. Local brands c. Aggregate brands d. Private labels e. Licensed brands

*a. Individual brands* An individual brand assigns a unique name to every product a manufacturer produces, often accompanied by a designated target market and separate personality and image for each brand. A private label brand is produced by the manufacturer and then sold to retailers/ distributors/ dealers who put their own brand on it. Private label are typically sold at lower prices in large retail chain stores

51. Consumer demand for a whole product category and not just the company's own brand is called _____ demand. a. Primary b. Selective c. Perceptible d. Collateral e. Aggregate

*a. Primary* Primary demand refers to the consumers' desire for the whole product category and not any specific brand.

47. The _____ refers to the consumer's perception of the product as a bundle of values of utilitarian and symbolic values that satisfy functional, social, psychological, and other wants and needs. a. Product concept b. Marketing mix c. Product life cycle d. Communications mix e. Product differentiation strategy

*a. Product concept* The total product concept is the consumer's perception of a product as a bundle of utilitarian and symbolic values that satisfy functional, social, psychological, and other wants and needs.

29. In terms of user status, _____ perceive two or more brands to have superior attributes and will buy at full price. a. Repertoire users b. Aware nontriers c. Sole users d. Semi-sole users e. Trial/rejectors

*a. Repertoire users* Repertoire users will buy at full price because they consider two or more brands to have superior attributes. Repertoire users are the primary brand switchers and the respond to persuasive information based on their fluctuating wants and desires. Repertoire users should be the primary target for brand messages.

45. The _____ process determines the content, look, and feel of product advertisements. a. Target marketing b. Distribution c. Brand equity creation d. Segmentation e. Benchmarking

*a. Target marketing* Once the market segmentation process is complete, a company can proceed to the target marketing process. This will determine the content, look, and feel of its advertising.

71. Which of the following is true about resellers? a. They operate between the producer and the consumer or industrial purchaser. b. They deal in production rather than trade. c. They are the intermediaries employed by manufacturers in direct distribution. d. They include both wholesalers and retailers, but not manufacturers' representatives. e. They are used primarily in network marketing.

*a. They operate between the producer and the consumer or industrial purchaser.* Because it is so expensive for manufacturers to market national brands (or manufacturer's brands), some companies use a private-labeling strategy. They manufacture the product and sell it to resellers (distributors or dealers), who put their own brand on the product.

84. Which of the following types of marketing communication is similar to taking the store to the customer? a. Network marketing b. Direct marketing c. Public relations d. Viral marketing e. Sales promotions

*b. Direct marketing* Direct marketing is like taking the store to the customer.

73. _____ occurs when individuals act as independent distributors for a manufacturer or private-label marketer. a. Indirect marketing b. Network marketing c. Viral marketing d. Relationship marketing e. Guerrilla marketing

*b. Network marketing*

38. By marketing products to people who desire a luxurious lifestyle. a company is using ____ segmentation. a. Volume b. Psychographic c. Geodemographic d. Geographic e. Need-based

*b. Psychographic* With psychographics, marketers group people by their values, attitudes, personality, and lifestyle. Psychographics enables marketers to view people as individuals with feelings and inclinations.

30. In terms of user status, aware nontriers: a. Typically use a particular brand but have an alternative selection if it is not available or if the alternative is promoted with a discount. b. Use competitive products in the category but have not taken a liking to a particular brand. c. Perceive two or more brands to have superior attributes and will buy at full price. d. Choose one brand exclusively. e. Respond to a brand's IMC messages but do not like the product.

*b. Use competitive products in the category but have not taken a liking to a particular brand.* Aware nontriers use competitive products in the category but haven't taken a liking to Brand A. A different advertising message could help, but these people rarely offer much potential.

66. Pantene, Head & Shoulders, and Herbal Essences are all shampoos marketed by Procter & Gamble. Each of these brands has their own distinct image and target markets. These are examples of _____ brands. a. Private b. Licensed c. Individual d. Family e. Aggregate

*c. Individual* An individual brand assigns a unique name to every product a manufacturer produces, often accompanied by a designated target market and separate personality and image for each brand.

67. Which of the following is true of a manufacturer's brand? a. It is typically sold at lower prices in large retail chain stores. b. The responsibility for creating the brand image rests with the distributor or retailer. c. It is expensive for manufacturers to market such brands. d. It is sold to retailers for a fee who put the manufacturer's brand on their own in-house products. e. It is of lesser value compared to private labels.

*c. It is expensive for manufacturers to market such brands.* Because it is so expensive for manufacturers to market national brands (also called manufacturer's brands), some companies use a private-labeling strategy. They manufacture the product and sell it to resellers (distributors or dealers), who put their own brand on the product. Private labels, typically sold at lower prices in large retail chain stores

54. _____ refers to sales promotion efforts aimed at the retail trade. a. Intensive distribution b. A pull strategy c. Direct marketing d. A push strategy e. Selective demand

*d. A push strategy* A push strategy refers to sales promotion efforts aimed at the retail trade to encourage distributors and dealers to stock, display, and advertise the new products

68. When companies manufacture a product and sell it to resellers (distributors or dealers), who put their own brand on the product, it is called a(n) _____ strategy. a. Individual branding b. Brand licensing c. Family branding d. Private-labeling e. National branding

*d. Private-labeling* Because it is so expensive for manufacturers to market national brands (or manufacturer's brands), some companies use a private-labeling strategy. In a private-labeling strategy, companies manufacture a product and sell it to resellers (distributors or dealers), who put their own brand on the product.

75. Many industrial companies market their products through reps or distributors to _____ who may use the product as a component in their own product, which is then sold to their customers. a. Resellers b. Brokers c. Private labels d. Jobber e. Original equipment manufacturers

*e. Original equipment manufacturers* Many industrial companies' reps or distributors market their products to original equipment manufacturers (OEMS) that use the product as a component in their own product.

46. Which of the following statements about the target marketing process is true? *a.* The target marketing process solely determines the budget of a company's advertising activities. *b.* The first step in the target marketing process is to develop primary demand in a target market. *c.* To perform the target marketing process correctly. an advertiser must select only one target market. *d.* The target marketing process begins with determining the availability of advertising resources. *e.* The first step in target marketing is to assess which of the newly created segments offer the greatest profit potential.

*e. The first step in target marketing is to assess which of the newly created segments offer the greatest profit potential.* The first step in target marketing is to assess which of the newly created segments offer the greatest profit potential and which can be most successfully penetrated.