Chapter 1

15) Selecting which segments of a population to serve is called ________. A) market segmentation B) positioning C) customization D) target marketing E) differentiation

D) target marketing

88) Human needs are shaped by culture and individual personality.

False

17) Which of the following customer questions is answered by a company's value proposition? A) "Why should I buy your brand rather than a competitor's?" B) "What is your company's estimated customer equity?" C) "What are the costs involved in the production of your brand?" D) "What is the budget allocated by your company for research and development?" E) "What is the financial stability of your company?"

A) "Why should I buy your brand rather than a competitor's?"

12) A(n) ________ is the set of actual and potential buyers of a product or service. A) market B) control group C) subsidiary D) focus group E) audience

A) market

47) Through ________, companies today are strengthening their connections with all partners, from providers of raw materials and components to those involved in the delivery of final goods and services. A) supply chain management B) direct marketing C) customer relationship marketing D) customized marketing E) inventory management

A) supply chain management

41) Which of the following terms refer to customers who make repeat purchases and tell others about their positive experiences with a product or service? A) barnacles B) customer evangelists C) butterflies D) surrogate customers E) market mavens

B) customer evangelists

32) When customers don't know what they want or don't even know what's possible, the most effective marketing strategy is ________ marketing. A) customer-driven B) customer-driving C) societal D) ambush E) affinity

B) customer-driving

75) Kao Corp., a deodorant-manufacturer, invited teenage girls to make an ad that would encourage other girls to buy the product. This program is an example of ________. A) societal marketing B) the production concept C) the selling concept D) partner relationship management E) consumer-generated marketing

E) consumer-generated marketing

37) Which of the following marketing strategies should marketing managers focus on to manage detailed information about individual customers and carefully manage customer touchpoints to maximize customer loyalty? A) customer divestment B) customer-managed relationships C) the societal marketing concept D) partner relationship management E) customer relationship management

E) customer relationship management

91) Market offerings are limited to physical products.

False

87) Marketing is managing profitable customer relationships.

True

89) The difference between human needs and wants is that needs are not created by marketers.

True

93) A market is the set of actual and potential buyers of a product or service

True

95) The selling concept holds that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort.

True

97) The societal marketing concept calls on marketers to balance consumer wants and desires, company profits, and society's interests.

True

98) Marketing mix refers to the set of marketing tools the firm uses to implement its marketing strategy.

True

38) ________ is determined by a customer's evaluation of the benefits and costs of a market offering relative to those of competing offers. A) Customer-perceived value B) Customer lifetime value C) Share of customer D) Customer-managed relationship E) Brand value proposition

A) Customer-perceived value

82) Which of the following statements is true about creating customer loyalty and retention? A) Losing a customer means losing the entire stream of purchases that the customer would make over a lifetime of patronage. B) Customer delight creates a rational preference and not an emotional relationship with the brand. C) The aim of customer relationship management is to focus solely on customer delight. D) Losing a customer hardly makes a difference to a company's sales. E) The aim of customer relationship management is to focus solely on customer satisfaction.

A) Losing a customer means losing the entire stream of purchases that the customer would make over a lifetime of patronage.

44) A room upgrade offered by a hotel to a guest who often stays in the hotel is an example of ________. A) a frequency marketing program B) a basic relationship C) a club marketing program D) partner relationship management E) sustainable marketing

A) a frequency marketing program

48) The final step in the marketing process is ________. A) capturing value from customers B) creating customer delight C) creating customer lifetime value D) understanding the marketplace E) designing a customer-driven marketing strategy

A) capturing value from customers

73) Elisandra, a marketing manager at a regional chain restaurant, has decided to organize a contest calling for customers to create commercials for the restaurant. Winning entries will be posted on the organization's home page. Elisandra's plan is an example of ________. A) consumer-generated marketing B) partner relationship management C) customer lifetime value D) community development around a brand E) customer divestment

A) consumer-generated marketing

8) A ________ is some combination of products, services, information, or experiences provided to consumers to satisfy a need or want. A) market offering B) value proposition C) brand positioning D) market segment E) market mix

A) market offering

83) Seagull Terrace offers its customers good accommodations, local delicacies, and amazing seaside views. The overall experience provided at the motel is a part of its ________. A) market offering B) target market C) market segment D) product positioning E) marketing mix

A) market offering

14) The art and science of choosing target markets and building profitable relationships with them is called ________. A) marketing management B) positioning C) marketing mix D) market offering E) differentiation

A) marketing management

28) The marketing concept that starts with a well-defined market, focuses on customer needs, and integrates all the marketing activities that affect customers takes a(n) ________. A) outside-in perspective B) product-centered make-and-sell philosophy C) inside-out perspective D) consumer-generated marketing approach E) telling-and-selling approach

A) outside-in perspective

21) The ________ concept is aligned with the philosophy of continuous product improvement and the belief that customers will choose products that offer the most in quality, performance, and innovative features. A) product B) production C) societal marketing D) marketing E) selling

A) product

68) Railroads were once operated based on the thinking that users wanted trains that would offer the most in quality, performance, and innovative features. The railroad managing companies overlooked the fact that there could be other modes of transportation. This reflects the ________ concept. A) product B) production C) selling D) marketing E) societal marketing

A) product

18) Which of the following marketing management orientations focuses primarily on improving efficiencies along the supply chain? A) production concept B) product concept C) selling concept D) marketing concept E) societal marketing concept

A) production concept

84) Carol Veldt's plan also involves a seasonal promotional gimmick which she wants to promote aggressively. This is an example of the ________ concept. A) selling B) marketing C) product D) production E) societal marketing

A) selling

11) ________ is the act of obtaining a desired object from someone by offering something in return. A) Valuation B) Exchange C) Market offering D) Confiscation E) Donation

B) Exchange

51) Apart from retaining good customers, most marketers want to constantly increase their "share of customer." What does this mean in marketing terms? A) Marketers want to increase their market share. B) Marketers want to increase the share they get of the customer's purchasing in their product categories. C) Marketers want to diversify their operations and customize their products to cater to the entire market. D) Marketers want to continuously increase their customers' levels of satisfaction. E) Marketers want to turn satisfied customers into delighted customers.

B) Marketers want to increase the share they get of the customer's purchasing in their product categories.

6) ________ are human needs that are shaped by culture and individual personality. A) Necessities B) Wants C) Demands D) Values E) Exchanges

B) Wants

43) Hank is an assistant marketing director for a firm in a market with many low-margin customers. What type of relationship with these customers would be the most profitable for him? A) full partnerships B) basic relationships C) causal relationships D) club marketing programs E) inverse relationships

B) basic relationships

55) In the context of customer relationship groups, a potentially profitable and short-term customer is referred to as a ________. A) true friend B) butterfly C) stranger D) barnacle E) market maven

B) butterfly

71) Sally recently purchased Brand X lotion. In comparing her perception of how the lotion made her skin feel and look to her expectations about Brand X lotion, Sally was measuring her level of ________. A) share of customer B) customer satisfaction C) customer equity D) customer-perceived value E) customer lifetime value

B) customer satisfaction

31) An organization that understands and anticipates customer needs even better than customers themselves do and creates products and services to meet current and future needs is said to practice ________ marketing. A) customer-driven B) customer-driving C) affinity D) societal E) ambush

B) customer-driving

7) When backed by buying power, wants become ________. A) social needs B) demands C) physical needs D) self-esteem needs E) exchanges

B) demands

65) An organic farmer has identified three distinct groups that might be interested in his products: vegetarians, health-conscious individuals, and people identified as trendsetters who try out new products in the market before others. These three groups are examples of ________. A) marketing mixes B) market segments C) value propositions D) market offerings E) marketing intermediaries

B) market segments

13) Consumer research, product development, communication, distribution, pricing, and service are all core ________ activities. A) positioning B) marketing C) outsourcing D) production E) logistics

B) marketing

46) Greater consumer control means that companies can no longer rely on ________. A) promoting brand-consumer interaction B) marketing by intrusion C) creating market offerings and messages that involve consumers D) developing marketing concepts with an outside-in perspective E) marketing by attraction

B) marketing by intrusion

77) A church targeting different demographic groups to increase attendance is an example of ________. A) affinity marketing B) not-for-profit marketing C) societal marketing D) evangelism marketing E) affiliate marketing

B) not-for-profit marketing

39) It is most accurate to say that when customers purchase products they act on ________ as they judge values and costs. A) objective value B) perceived value C) customer lifetime value D) company image E) society's interests

B) perceived value

67) Henry Ford's philosophy was to perfect the Model-T so that its cost could be reduced further for increased consumer affordability. This reflects the ________ concept. A) product B) production C) selling D) marketing E) societal marketing

B) production

62) As part of the rapid globalization of today's economy, companies are selling more domestically produced goods in international markets and ________. A) taking a local view of their industry B) purchasing more supplies abroad C) reducing competition within their industry D) downplaying concerns for social responsibility E) competing solely in traditional marketplaces

B) purchasing more supplies abroad

50) The portion of the customer's purchasing that a company gets in its product categories is known as ________. A) customer-perceived value B) share of customer C) customer insight D) consumption function E) induced consumption

B) share of customer

53) Keith, a clothing store owner, offers product suggestions to customers based on their current purchases. Which of the following is Keith targeting to increase? A) shared value B) share of customer C) social responsibility D) customer-generated marketing E) customer loyalty

B) share of customer

78) Your state's department of education has budgeted a significant amount of money for a radio, print, television, and online advertising campaign emphasizing the long-term benefits, both educationally and professionally, of reading every day. This is an example of a(n) ________ campaign. A) ambush marketing B) social marketing C) inbound marketing D) consumer-generated marketing E) affiliate marketing

B) social marketing

61) Government agencies design ________ to encourage energy conservation and discourage smoking, excessive drinking, and drug use. A) club marketing programs B) social marketing campaigns C) consumer-generated marketing campaigns D) ambush marketing campaigns E) frequency marketing programs

B) social marketing campaigns

76) Iceco Inc., an ice-cream manufacturing company, encourages all stakeholders, including the top management and employees at all levels in their stores, to consider individual and community welfare in their day-to-day decisions. This action undertaken by Iceco reflects ________. A) environmentalism B) social responsibility C) the selling concept D) partner relationship management E) marketing myopia

B) social responsibility

58) Following the change in consumer values and consumption patterns after the Great Recession, marketers have changed their marketing strategies to emphasize the ________ of their products. A) image B) value C) durability D) safety E) uniqueness

B) value

52) ________ is one of the best ways to increase share of customer. A) Targeting new customers B) Using bait and switch C) Cross-selling D) Divesting E) Partnership marketing

C) Cross-selling

1) Which of the following is NOT an accurate description of modern marketing? A) Marketing is the creation of value for customers. B) Marketing involves managing profitable customer relationships. C) Marketing emphasizes selling and advertising exclusively. D) Marketing involves satisfying customers' needs. E) Marketing is building value-laden exchange relationships with customers.

C) Marketing emphasizes selling and advertising exclusively.

34) ________ refers to socially and environmentally responsible marketing that meets the needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. A) Ambush marketing B) Evangelism marketing C) Sustainable marketing D) Database marketing E) Affinity marketing

C) Sustainable marketing

60) Which of the following statements about the Internet is most accurate? A) Companies are relying less on the Internet to build relationships with customers and marketing partners. B) After the dot-com meltdown of 2000, fewer consumers are using the Internet to buy products and services. C) The Internet makes it easy for consumers to view, respond to, and create marketing content. D) Consumer e-commerce looks promising, but business-to-business e-commerce is declining. E) The digital shift means that marketers can always control conversations about their brands.

C) The Internet makes it easy for consumers to view, respond to, and create marketing content.

72) A gym equipment manufacturer encourages customers to become members of the firm's Web site. Membership provides customers with exercise tips as well as discounts on gym equipment and workout apparel. This is an example of ________. A) a frequency marketing program B) a basic customer relationship C) a club marketing program D) the selling concept E) consumer-generated marketing

C) a club marketing program

33) The societal marketing concept seeks to establish a balance between ________. A) customer lifetime value and customer equity B) an inside-out perspective and an outside-in perspective C) consumer short-run wants and consumer long-run welfare D) marketing mixes and market offerings E) customer-driven marketing and customer-driving marketing

C) consumer short-run wants and consumer long-run welfare

54) Which of the following refers to the total combined customer lifetime value of all of the company's current and potential customers? A) share of customer B) marketing mix C) customer equity D) target market E) customer-perceived value

C) customer equity

36) Building and maintaining profitable customer relationships by delivering superior customer value and satisfaction is called ________. A) customer lifetime value B) customer-perceived value C) customer relationship management D) partner relationship management E) customer equity

C) customer relationship management

45) The marketing world is most likely embracing ________ because consumers wield greater power nowadays with a wealth of platforms for airing and sharing their brand views with other consumers. A) partner relationship management B) supply chain management C) customer-managed relationships D) market segmentation E) consumer ethnocentrism

C) customer-managed relationships

70) FedEx offers its customers fast and reliable package delivery. When FedEx customers weigh these benefits against the monetary cost of using FedEx along with any other costs of using the service, they are acting upon ________. A) brand loyalty B) customer equity C) customer-perceived value D) customer lifetime value E) a societal marketing campaign

C) customer-perceived value

63) Greg Williams now has the buying power to purchase the desktop computer that he has wanted for the last six months. Greg's want now has become a(n) ________. A) need B) necessity C) demand D) exchange E) transaction

C) demand

10) When marketers set low expectations for a market offering, they run the risk of ________. A) disappointing loyal customers B) having to use an outside-in rather than an inside-out perspective C) failing to attract enough customers D) failing to understand their customers' needs E) incorrectly identifying a target market

C) failing to attract enough customers

Difficulty: Moderate 81) In which of the following situations has a company most actively embraced customer-managed relationships? A) American Airlines awards frequent flyer points to returning customers. B) Paige Premium Denim jeans provide a superior quality and a perfect fit. C) iRobot invites enthusiastic Roomba owners to develop and share their own uses for the company's robotic vacuum cleaner. D) Best Buy distinguishes between its best customers and its less profitable customers, stocking merchandise to appeal to each group. E) Toyota develops a marketing presence on social networks and other online communities.

C) iRobot invites enthusiastic Roomba owners to develop and share their own uses for the company's robotic vacuum cleaner

27) A firm that uses the selling concept takes a(n) ________ approach. A) outside-in B) niche marketing C) inside-out D) societal marketing E) customer-driven

C) inside-out

42) Which of the following strategies would a company most likely use to increase customer satisfaction? A) decreasing the variety of offered services B) divesting C) lowering prices D) "firing" unprofitable customers E) limiting customer experiences with a brand

C) lowering prices

2) According to management guru Peter Drucker, "The aim of marketing is to ________." A) maximize profits of the company B) emphasize customer wants and not customer needs C) make selling unnecessary D) fulfill unrealistic customer expectations E) sell products

C) make selling unnecessary

35) The set of marketing tools a firm uses to implement its marketing strategy is called the ________. A) promotion mix B) product mix C) marketing mix D) market offering E) marketing effort

C) marketing mix

85) Renovations of the guest rooms at the Seagull Terrace and plans to add an indoor pool area are examples of the ________ concept. A) selling B) marketing C) product D) production E) societal marketing

C) product

66) Jolene's firm markets preplanning services for a mortician. She finds that most of her target market avoids discussing future funeral needs. She convinces people to invest in the firm's services through her large-scale promotional efforts. Jolene's firm most likely practices the ________. A) production concept B) marketing concept C) selling concept D) product concept E) societal marketing concept

C) selling concept

26) Which of the following follows a customer-centered "sense-and-respond" philosophy rather than a product-centered "make-and-sell" philosophy? A) market segmentation B) the production concept C) the marketing concept D) the inside-out perspective E) marketing myopia

C) the marketing concept

59) Which of the following statements is true about the recession that began in 2008? A) The economic crisis caused a short-term change in consumers' spending habits. B) The average home value increased after the stock market plunge. C) Decreasing energy prices provided consumers with unexpected savings. D) Consumers brought spending more in line with their incomes. E) Consumers quickly regained confidence in the economy.

D) Consumers brought spending more in line with their incomes.

30) Which of the following is a characteristic of customer-driven marketing? A) Companies understand customer needs even better than customers themselves do. B) Customers are unaware of their needs. C) Products are created that meet both existing and latent needs, now and in the future. D) Customers know what they want. E) Customers don't know what is possible.

D) Customers know what they want.

23) Which of the following statements is true of the selling concept? A) It requires minimum promotion efforts. B) It creates long-term, profitable customer relationships. C) It takes an outside-in perspective. D) It is typically practiced with unsought goods. E) It follows the customer-centered sense-and-respond philosophy.

D) It is typically practiced with unsought goods.

3) ________ is defined as a social and managerial process by which individuals and organizations obtain what they need and want through value creation and exchange.

D) Marketing

79) Which of the following is the most likely result of a marketing strategy that attempts to serve all potential customers? A) All customers will be delighted. B) Customer-perceived value will increase. C) All customers will directly turn into customer evangelists. D) Not all customers will be satisfied. E) Customers will not show interest in any other company's products.

D) Not all customers will be satisfied.

57) A financial services firm has several loyal customers who conduct business with them exclusively. However, the company has noticed that this customer group is the least profitable for the company, and in some cases, it increases their losses when engaging in business with this group. Which of the following customer groups is being referred to in this scenario? A) butterflies B) true friends C) strangers D) barnacles E) cash cows

D) barnacles

4) According to the five-step model of the marketing process, which of the following is the final step in creating value for customers? A) designing a customer-driven marketing strategy B) understanding the marketplace and customer needs C) constructing an integrated marketing program that delivers superior value D) building profitable relationships and creating customer delight E) capturing value from customers to create profit and customer equity Answer: D

D) building profitable relationships and creating customer delight

80) Which of the following statements reflects the marketing concept? A) focusing on making continuous product improvements B) undertaking a large-scale selling and promotion effort C) emphasizing an inside-out perspective D) considering customer focus and value as the paths to sales and profits E) focusing on a product-centered make-and-sell philosophy

D) considering customer focus and value as the paths to sales and profits

49) "Losing a customer once means losing the entire stream of possible purchases that the customer would make over an extended period of patronage." The above statement specifically indicates loss in terms of ________. A) customer-perceived value B) marketing offerings C) partner relationship management D) customer lifetime value E) value proposition

D) customer lifetime value

22) Which of the following is the aim of the product concept? A) improve the marketing of a firm's best products B) market only those products with high customer appeal C) focus on the target market and make products that meet those customers' demands D) focus on making continuous product improvements E) ensure that product promotion has the highest priority

D) focus on making continuous product improvements

86) Carol Veldt has decided to ask selected guests to participate in an extensive survey about their experience at Seagull Terrace and about their requirements in terms of amenities and cuisines. By implementing the suggestions she receives from guests, Carol would be following the ________ concept. A) production B) product C) selling D) marketing E) societal marketing

D) marketing

9) Which of the following terms refers to sellers being preoccupied with their own products and losing sight of underlying consumer needs? A) vendor lock-in B) social loafing C) value proposition D) marketing myopia E) conspicuous consumption

D) marketing myopia

69) Some fast-food restaurants offer tasty and convenient food at affordable prices, but in doing so they contribute to a national obesity epidemic and environmental problems. These fast-food restaurants overlook the ________ philosophy. A) marketing concept B) product concept C) production concept D) societal marketing concept E) selling concept

D) societal marketing concept

64) Cathy's Clothes is a small yet successful retail chain that sells women's clothing and accessories with a focus on buyers who have relatively modest means. For this specific purpose, the firm has rolled out several marketing initiatives aimed at women of a specific demographic. This is an example of ________. A) ambush marketing B) social marketing C) societal marketing D) target marketing E) cause marketing

D) target marketing

25) Which of the following marketing orientations holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do? A) the product concept B) the production concept C) the selling concept D) the marketing concept E) the societal marketing concept

D) the marketing concept

24) Which of the following marketing orientations calls for aggressive promotional efforts and focuses on creating transactions rather than long-term customer relationships? A) the marketing concept B) the production concept C) the product concept D) the selling concept E) the societal marketing concept

D) the selling concept

56) Customers can be classified into four relationship groups based on their profitability and projected loyalty. Which customer type is associated with high profitability and long-term loyalty? A) barnacles B) strangers C) butterflies D) true friends E) cash cows

D) true friends

5) According to the five-step model of the marketing process, a company should ________ before designing a customer-driven marketing strategy. A) determine how to deliver superior value to customers B) build profitable relationships with customers C) use customer relationship management to create full partnerships with key customers D) understand the marketplace and customer needs and wants E) construct an integrated marketing program

D) understand the marketplace and customer needs and wants

16) Which of the following refers to a set of benefits that a company promises to deliver to customers to satisfy their needs? A) customer lock-in B) a cartel C) marketing mix D) value proposition E) market segmentation

D) value proposition

29) The selling concept is typically practiced ________. A) to balance consumers' wants, company's requirements, and the society's long-run interests B) with products that offer the most in terms of quality, performance, and innovative features C) when the company focuses on building long-term customer relationships D) with goods that buyers normally do not think of buying E) by customer-driven companies

D) with goods that buyers normally do not think of buying

20) Which of the following statements is true of the production concept? A) It considers customer focus and value to be the paths to sales and profits. B) It follows the customer-centered sense-and-respond philosophy. C) It takes an outside-in perspective. D) It calls for sustainable marketing. E) It leads to companies focusing too narrowly on their own operations.

E) It leads to companies focusing too narrowly on their own operations.

74) At Gina's retail stores, the posted policy reads, "Without our customers, we don't exist." Gina and her staff aim to delight each customer, and they are quick to offer discounts or extra services whenever a customer is anything less than satisfied. Gina and her staff strive to make every customer a repeat customer. It is most accurate to say that instead of focusing on each individual transaction, Gina and her staff put a priority on ________. A) managing partner relationships B) selling new products C) attracting "butterflies" D) converting "barnacles" to "strangers" E) capturing customer lifetime value

E) capturing customer lifetime value

40) The primary key to delivering customer satisfaction is to match product performance with ________. A) the competitor products' performance B) competitive prices C) aggressive advertising D) limited customer services E) customer expectations

E) customer expectations

19) Which of the following marketing management concepts is most likely to lead to marketing myopia? A) customer-driven marketing concept B) customer-driving marketing concept C) societal marketing concept D) marketing concept E) product concept

E) product concept

101) The meaning of value is perceived identically by all consumers.

False

103) Customer-managed relationships are marketing relationships that are controlled by customers, therefore, they are of no significance to marketers.

False

104) In consumer-generated marketing, marketers play a bigger role in shaping consumers' brand experiences and those of others.

False

105) To increase its "share of customer," a firm concentrates on retaining as many customers as possible over its lifetime.

False

109) Fast Food, Inc. views marketing as the process of finding and retaining profitable customers by providing them with the food they want. Fast Food, Inc. practices societal marketing.

False

90) When backed by buying power, needs become wants.

False

92) When sellers focus on existing needs and lose sight of underlying customer wants, they suffer from marketing myopia.

False

94) Market segmentation is the process of seeking fewer customers and reduced demand for profit maximization only.

False

96) An organization's department follows a customer-centered sense-and-respond philosophy. The department is most likely practicing the product concept.

False

99) For most marketers, customer relationship management (CRM) is exclusively a matter of customer data management.

False

100) Customer-perceived value is defined as the customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers.

True

102) Many companies now use customer profitability analysis to identify and weed out unprofitable customers.

True

106) The new digital world makes it easy for consumers to take marketing content, that once lived only in advertising, with them wherever they go and share it with friends.

True

107) An experience such as a vacation can be defined as a market offering.

True

108) The production concept and the product concept are marketing management orientations that are more likely to lead to marketing myopia.

True

110) Large-scale marketing approaches that foster two-way customer relationships are made possible by new communication technologies.

True