Chapter 2 - MKG 300

Which of the following statements about mass marketing is true?

Mass marketing assumes that everyone is basically the same. Mass marketing assumes that everyone is the same, and considers everyone to be a potential customer.

Which of the following types of opportunities tends to involve the greatest risk?

diversification Diversification involves moving into totally new lines of business, such as offering a product that is completely new to a company. These are the riskiest opportunities for a company to pursue because their unfamiliarity makes them difficult for a company to evaluate.

The expected earnings stream of a firm's current and prospective customers over some period of time is defined as customer

equity. Customer equity is defined as the expected earnings stream of a firm's current and prospective customers over some period of time. Following the customer equity approach guides the marketing manager to make marketing decisions that enhance the firm's long-term profits, not just for the next quarter or year.

Which of the following scenarios best describes differentiation?

The firm's marketing mix is distinct from what is available from a competitor. Differentiation means that a company's marketing mix is distinct from what is available from a competitor. A combination of analyses of customers, competitors, and company help the marketing manager identify possible strategies that differentiate a marketing mix from its competition.

Which of the following marketing metrics is used to calculate customer equity and customer lifetime value?

acquisition cost The two marketing metics that are usually involved in estimating customer lifetime value and customer equity are acquisition cost and retention rate.

Target marketing differs from mass marketing in that target marketing

is tailored to fit some specific target customers while mass marketing aims at everyone with roughly the same marketing mix. Target marketing involves creating a marketing strategy that is focused on a particular group of customers. In contrast, mass marketing—the typical production-oriented approach—vaguely aims at "everyone" with the same marketing mix.

The text's discussion of "hit-or-miss" marketing suggests that

it is fairly common for marketing efforts to turn out poorly, so to avoid that fate and get better than average results, a good manager needs to use a logical process for marketing strategy planning. Developing a successful marketing strategy does not need to be a hit-or-miss proposition. Managers need to learn and use a logical process for marketing strategy planning.

Which variable of the marketing mix may involve a physical good, a service, or a blend of both?

product A product offering may involve a physical good, a service, or a blend of both. A good or service should satisfy customers' needs.

What is the purpose of a S.W.O.T. analysis?

to develop screening criteria that will help a company identify what marketing strategy to pursue A S.W.O.T. analysis aids a company in developing a marketing strategy by helping it to develop screening criteria.

Which of the following is true of publicity?

It is an unpaid form of communication. Publicity refers to any unpaid form of nonpersonal presentation of ideas, goods, or services—including earning favorable coverage in newspaper stories and creating web pages that provide product information for interested customers.

Which of the following statements is true of target marketing?

Target marketing is limited to fairly homogeneous market segments. Target marketing is not limited to small market segments—only to fairly homogeneous ones. A very large market—even what is sometimes called the "mass market"—may be fairly homogeneous, and a target marketer will deliberately aim at it.

Which of the following statements is true of the marketing management process?

The marketing management process is the process of planning marketing activities, directing the implementation of the plans, and controlling these plans. The marketing management process is the process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. These are the basic tasks of all marketing managers.

Which of the following statements about the marketing mix variables is false?

The marketing mix variable "price" is more important than "place." All four Ps are needed in a marketing mix. In fact, they should all be tied together. Furthermore, generally no one element is more important than the others; all contribute to one whole. When a marketing mix is being developed, all (final) decisions about the Ps should be made at the same time.

Reyhan operates a food truck. When he started his business, he decided that he would try to locate his truck wherever the largest number of pedestrians could be found. For months he has stationed his truck in the downtown core. Today, however, he decides to position it near a newly opened museum that is drawing big crowds. This is an example of

an operational decision. Reyhan is making a decision about where to locate his truck that reflects his marketing strategy of positioning himself where many pedestrians can be found. This sort of day-to-day decision made in accordance with an existing marketing strategy is an example of an operational decision.

A marketing program

blends all of the firm's marketing plans into one overall plan. A marketing program blends all of the firm's marketing plans into one big plan. The success of the marketing program depends on the care that goes into planning the individual strategies and how well they work together to create value for customers and the firm.

How can expanding into international markets lead to lower prices for a company's products sold in domestic markets?

by improving economies of scale Selling products overseas can improve a company's economies of scale, thereby allowing it to reduce prices domestically.

Which of the following best describes a breakthrough opportunity?

developing an innovative and hard-to-copy marketing strategy A breakthrough opportunity is an opportunity to innovate and develop a hard-to-copy marketing strategy that will be profitable for a long time.

Trying to increase sales by selling present products in new markets is known as

market development. Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product.

The variables that a company puts together in an attempt to satisfy a particular set of customers that it wants to appeal to is called a

marketing mix. A marketing mix is made up of the variables a company puts together to satisfy the target market to which it wants to appeal.

A _____ specifies a target market and a related marketing mix.

marketing strategy A marketing strategy specifies a target market and a related marketing mix. It is a big picture view of what a firm will do in some market.

Which form of promotion involves direct spoken communication between sellers and potential customers that may happen face-to-face, over the telephone, or via a videoconference over the Internet?

personal selling Personal selling involves direct spoken communication between sellers and potential customers. Personal selling may happen face-to-face, over the telephone, or via a videoconference over the Internet.

With which of the four Ps of the marketing mix are retailers, wholesalers, warehouses, and transportation firms associated?

place In the four Ps, "place" represents all the decisions involved in getting the right product to the target market's location. Place encompasses retailers, wholesalers, store locations, warehouses, and even transport companies.

International marketing is attractive for all of the following reasons except that

regulations in foreign countries can be highly complex. While marketers hope to experience new opportunities and advantages by entering international markets, foreign regulations and political instability in other parts of the world make international marketing a risky endeavor.

Natural Essences, a company that manufactures hair products, offers "dollar-off coupons" to adult women to get them to try its shampoos and conditioners. This is an example of:

sales promotion. Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars.

The customer is

the target of a marketing mix. Although some people assume that the customer is part of the marketing mix, this is not so. Rather, the customer should be the target of a marketing mix.