Marketing Management Final Exam
A business that has a 55 percent customer retention rate has an an average customer life of ___________ years. 3.37 2.22 2.86 1.54
2.22
(Mini Case) Suppose below is a table that provides the firm's ratings for five criteria: Table 2: Ratings Segment (1)Segment (2)Segment (3)Segment (4)Size4132Growth Rate1243Profit Margin3412Cost of reaching2423Competitors3214 Also, the firm assigns the weights to these five criteria based on their relative importance: segment size (10%), segment's growth rate (20%), profit margin (30%), cost of reaching (30%), and competitors (10%). What is the weighted average rating of Segment (1)? 2.2 2.4 2.6 2.55
2.4 (4*10%+1*20%+3*30%+2*30%+3*10%=2.4)
Atlanta Computer Corp. has developed a new software that allows their servers to host twice as much web space as its rivals. The current price of one server from the competitors is $3800. The comparison of costs incurred between using Atlanta's server with its new software and using its competitor's are listed in the following table. Given the available information above, what is the EVC of a server with Atlantic's software? One server with Atlanta's software Two servers with a competitor's software Labor Costs $3,000 $6,000 Electricity Costs $2,500 $2,900 Software licenses Costs $3,500 $2,800 $12,800 $9,000 $6,500 $10,300
$10,300 (1) RV=$3,800, the price from the competitors; (2) Positive DV: Savings in labor cost =$6,000-$3,000=$3,000 Savings in electricity cost = $2,900-$2,500 =$400 Saving from an additional server (note that the new software that allows their servers to host twice as much web space as its rivals. ) =$3,800, the price of a server from the competitors (3) negative DV: Cost more in licenses = $2,800-$3,500=-700 Thus, EVC = 3,800+3,000+400+3,800-700=$10,300
Suppose the benchmark competitive product has a price of $300, costs $200 to install, and averages $400 in usage and maintenance costs. Your product costs $250 to install, and averages $300 in usage and maintenance costs. In this situation, the economic value of your product is ________. $450 $250 $350 $550
$350 (300+(400-300)+(200-250)
Suppose Tesla has developed a new type of seat belts that is easier to install than the seat belts currently in use. The cost of a standard seat belt is $12, and the labor cost of install one standard belt is $5. The new belts take 10% less time to install with a resulting labor cost of $4.50 per belt. A typical car requires five seat belts. What is the EVC of these new seat belts per car to Tesla? $52 $17 $62.5 $68
$62.5
(Mini Case) Below is a table that provides top-level information for four different market segments in the smartphone market. Based upon the information provided, your task is to identify which segment is the most attractive to select as target markets. Table 1: Basic Information Segment Name Seg. Size Seg. Growth RateProfit MarginCost of ReachingCompetitors(1) Fashion focused100 million5%HighLowStrong(2) Simply the Best25 million7%Very HighHighLess Strong(3) Smart Shoppers75 million20%LowLowSuper Strong(4) Highly informed50 million15%MediumMediumSuper Friendly Step 1: Rate each segment under each of the five criteria on a 4-point scale based on the above information (1=poor; 2=fair; 3=good; 4=very good). We get a table of ratings: Table 2: Ratings Segment (1)Segment (2)Segment (3)Segment (4)(A) Size4132(B) Growth Rate1243(C) Profit Margin3412(D) Cost of reaching2423Competitors3214 Based on Table 1, which row in Table 2 has incorrect ratings? (B) Growth Rate (D) Cost of reaching (A) Size (C) Profit Margin
(D) Cost of reaching
Two firms decide whether to launch a new product: (i) If both firms choose to launch a new product, then each firm will receive $50 million due to incurring new expenses; (ii) if just one firm chooses to launch a new product, the firm launching a new product grabs market share from the other firm, and will receive $30 million, while the other firm which chooses not to launch will receive $45 million; (iii) if neither firm choose to launch a new product, then each firm will receive $40 million from current market. Assume both firms wants to maximize its revenue, so what will be their best move? -Both firms choose to launch a new product -Neither firm chooses to launch a new product -Just one firm chooses to launch a new product
-Both firms choose to launch a new product
Which of the following is NOT an external performance metrics for a business? -Customer Loyalty -Gross Profit -Customer Lifetime Value -Customer Satisfaction
-Gross Profit
Which of the following is true of channel advantage? -It is a source of marketing advantage. -It is dependent on cost advantage -It is achieved through the use of scope effect -It allows a business to control market access, but not channels in a market
-It is a source of marketing advantage.
Which of the following is true of product line advantage? -It is a source of competitive advantage that is independent of differentiation advantage -A narrow line of products creates more selling opportunities for the sales force and channel partners -It is important to expand a business's product line during the emerging stage of the product life cycle -Businesses with narrow product lines are more profitable during the emerging and growing stages of a product life cycle
-It is important to expand a business's product line during the emerging stage of the product life cycle
Which of the following is true of variable cost advantage? As volume increases, the cost per unit generally increases. -Businesses with a substantial market share advantage generally achieve a higher unit cost. -Scale effect occurs for a manufacturer who doubles production capacity. -Scale effect and scope effect are the only two ways to achieve variable cost advantage
-Scale effect occurs for a manufacturer who doubles production capacity.
Which of the following statement is correct? -companies with high customer satisfaction on average provide better returns for investors -Measures of business performance such as sales revenue and market share will be good enough to assess business success or failure -The marketing cost of retaining customers is much higher than the cost of replacing them -In a customer-focused business, the analysis of customer feedback is performed only by the senior management
-companies with high customer satisfaction on average provide better returns for investors
Head-to-head positioning requires a product to ________________________ -compete with competitors on similar product attributes in the same target market -compete with competitors on similar product attributes but in a different target market -compete with products from competitors of the same size and country of origin -compete against very similar products from its own company
-compete with competitors on similar product attributes in the same target market
Which of the following statement about quantifying customer values is NOT correct? -all the products conjoint analysis asks customers to choose from are hypothetical products -conjoint analysis uses sophisticated statistical techniques to measure the aggregate value of product attributes directly -all three approaches of quantifying customer value can be used in different industries -Consumer survey is the most straight forward approach
-conjoint analysis uses sophisticated statistical techniques to measure the aggregate value of product attributes directly
Which of the following is NOT considered as a customer loyalty component? -purchase amount -customer lifetime value -product preference -customer history
-customer lifetime value
In crafting a value proposition, which of the following is NOT the key to be considered? -how and why your product is relevant to solve customers' problems -compelling reason why customers should choose you over your competitors -emphasize on all the costs customers have to incur in using the product -specify key benefits customers can get
-emphasize on all the costs customers have to incur in using the product
The effect that people will assign high value to the items they own than they don't own is named: -Value difference effect -endowment effect -Cornell Cup effect -"eyes of the beholders" effect
-endowment effect
Which of the following is a form of the emphatic design? -creating a database of customers' demographic details -filming customer product use -using social media to interact with customers -creating a database of customers' buying habits
-filming customer product use
Moreno Motors Inc. identifies that bikers are usually the first users of their newly launched products. The firm sends consultants to biker rallies to discover how bikers who use Moreno motorcycles modify them to extend their usage, as well as the desired benefits. Recent visits revealed that bikers were seeking items, such as bolt-on chrome products, horsepower performance enhancers, and improved braking systems in Moreno motorcycles. In this example, Moreno Motors Inc. is studying which of the following groups of customers? -mainstream customers -lead users -captive customers -loyal customers
-lead users
Which of the following is NOT a variable used in psychographic segmentation? -values and attitudes -interests and hobbies -marital status -lifestyle
-marital status
Which of the following statement is NOT correct? -the same customer may value the same product differently -The major benefit of a strong customer focus is long-run survival. -minimum customer focus results in a reduction in the cost of marketing and sales -managing customer values is very challenging, because values differ across people and time
-minimum customer focus results in a reduction in the cost of marketing and sales
For flat-panel TVs, assume the number of households in the U.S. will grow to 120 million. If we further assume that 80% of the households would buy a flat-panel TV at an average price of $500, and each household would buy one TV every 4 years (meaning every year each household's purchase unit would be 0.25 unit). Suppose the current market demand of flat-panel TVs is $4 billion. Then what is the Marketing Development Index for flat-panel TV? 12 8.33 41.7 33
33
Mini Case: there are 3 questions Automation Inc. is a company that provides wireless telecommunications network in several cities in the Midwest region, and the company plans to know more about its customers. The company found that one of his customers has a short customer history of 55, an above-average purchase amount of 75, a low repurchase desirability of 25, a weak product preference of 20, and the customer does not recommend the company's services to potential customers. (i) Based on the values provided, what is this customer's loyalty index? 42 35 39 31
35 (customer history+purchase amount+desire to repurchase+product preference+would recommend)/5
Calculate the market potential of Royston light bulbs if it has a current market demand of 180 million bulbs at a market development index of 40. 600 million 220 million 22 million 450 million
450 million 180/40*100=450 million
For the U.S. soft drink market, of the 300 million people in the U.S., 80% of the population is the maximum number of consuming units. The average soft drink consumer buys 365 soft drinks a year at an average price of $0.78 per drink. What is the annual market potential of soft drink in dollar value? 85,848 million 87,600 million 68,328 million 187.2 million
68,328 million
Which of the following is NOT a reason to segment a market? There is a potential market action to reach it. -All the buyers in the entire market have similar wants and needs. -The ability to assign buyers to a segment is simple and cost-effective -It would cause an increase in market share or profit.
All the buyers in the entire market have similar wants and needs.
Which of the following is NOT included in the four steps of developing new customer solutions with the help of a product's lead users? Ask lead users to recommend new customers learn how to develop value-added features to improve usage learn how lead users extend product usage re-engineer product or develop new ones that offers more complete customer solutions
Ask lead users to recommend new customers
Which of the following statement is NOT correct? -Businesses with a marketing advantage typically have prices much lower than average prices -An advantage in brand or company reputation helps to support price and margins, even in business-to-business markets -Major sources of competitive advantage are cost advantage, differentiation advantage, and marketing advantage -Every business must manage its costs, but not every business can have a cost advantage
Businesses with a marketing advantage typically have prices much lower than average prices
A new coffee shop, BestCoffeeTime, opened in the fall of 2019. It is located next street to Coffee House to compete with Coffee House. For the 4th quarter of 2019, BestCoffeeTime started the quarter with 1,000 customers, and during the quarter they gained 2,200 new customers, and had 430 customers churn (left). Coffee House was worried about losing customers to BestCoffeeTime, so it checked data on the 4th quarter. It started the 4th quarter with 15,200 customers, and had 1000 new customers, and 300 customers churn. Which coffee shop was more successful in terms of customer retention for the 4th quarter? -Coffee House -Their CR are the same -BestCoffeeTime
Coffee House
Which of the following statement about understanding customer experience is correct? -Empathic design uses statistical surveys to collect quantitative information about customer needs. -Reverse innovation begins by identifying new product benefits. -Lead users are users who purchase a product only after it has been used by the majority of mainstream users. -Companies seeking disruptive innovations need more than incremental product improvements that come from lead user analysis
Companies seeking disruptive innovations need more than incremental product improvements that come from lead user analysis
Which of the following statements about pricing strategy is most accurate? Firms should always consider charging prices exactly at consumers' economic values to gain profits as much as possible The business with the lowest price offers customers the best economic value Competition-based pricing starts with a good understanding of customer needs and benefits that a product offers relative to competitors' products The cost of making a product and the desire profit margin are the two primary determinants in a value-based price
Competition-based pricing starts with a good understanding of customer needs and benefits that a product offers relative to competitors' products
Which of the following is an illustration of Operational Excellence in company's distinct competency? -The Ritz-Carlton Hotel sends next-day air packages to their customers for their forgotten items -Following the latest trends, Apple equipped the iPhone X and its iOS 11 operating system with a number of eye-catching functions including facial recognition, an updated 3D touch and interactive animated emoji -Dell Company found a more efficient delivery system of eliminating intermediate distributors to shorten 3~4 days' delivery time to customer -Telsa Model 3 keeps earning perfect five-star safety rating from the National Highway Traffic Safety Administration
Dell Company found a more efficient delivery system of eliminating intermediate distributors to shorten 3~4 days' delivery time to customer
Which of the following statement does NOT reflect "value is in the eyes of the beholders"? -The priceless painting "The Starry Night" by Vincent van Gogh was never sold out before Van Gogh passed away (in the year 1890) -Dollar stores charges most of its products with just one dollar, i.e., an iPhone screen protector is charged at the same price as a Wilson basketball -The same ice cream is charged with different prices in retail stores and on the beaches
Dollar stores charges most of its products with just one dollar, i.e., an iPhone screen protector is charged at the same price as a Wilson basketball.
Which following statement about marketing potential is NOT correct? For any technology, the market demand has an upper limit that can be exceeded without a change in technology or a new way of using the product. A broad market definition includes all potential substitute products A narrow market definition, one adopted by design, is not always a limitation A broad market vision enables a business to see unserved needs that no one is addressing
For any technology, the market demand has an upper limit that can be exceeded without a change in technology or a new way of using the product.
Which of the following statements is true about customer retention and customer life expectancy? -Customer life expectancy decreases exponentially with customer retention. -The higher the customer retention rate, the lower the short-term profit impact. -In general, it can cost five times more to replace than to keep a customer. -As customer retention increases, the customer's life expectancy decreases.
In general, it can cost five times more to replace than to keep a customer.
Which of the following is a weakness of conjoint analysis? -The results are less accurate than we can get from an EVC analysis -Customers often under report values. Plus, there are ambiguous responses from customers -Customers are asked to make trade-off choices as if they are doing real shopping -It is increasingly complicated to conduct analysis with many product attributes.
It is increasingly complicated to conduct analysis with many product attributes.
Which of the following is true about market potential? It refers to the upper limit of the market demand for any technology It refers to the number of customers who purchase a specific product at a given point in time It is preferable to use a time horizon greater than 10 years, while estimating a market's potential, as market potential remains constant over time It is easy to locate published information on the market potential for any given market
It refers to the upper limit of the market demand for any technology
Which of the following products at the time of its introduction was NOT an example of a discontinuous innovation? Last year, Lay's, the famous brand of potato chips, just released several new potato chip flavors such as hot dill pickle remix and kettle cooked classic beer cheese Dragon Naturally Speaking is a speech recognition software program that allows you to use your voice instead of a keyboard to input text into a word processing program Napster was the first software that allowed an individual to easily search for and exchange MP3 music files with other individuals (in some cases illegally) In the early 1900s, after years of driving a horse and buggy, people started driving their first automobile
Last year, Lay's, the famous brand of potato chips, just released several new potato chip flavors such as hot dill pickle remix and kettle cooked classic beer cheese
For flat-panel TVs, assume the number of households in the U.S. will grow to 120 million. If the consuming units decrease to 75% of the household, and the average price increases to $550, and each household would buy one TV every 4 years (meaning every year each household's purchase unit would be 0.25 unit). Suppose the current annual market demand of flat-panel TVs remains to be $4 billion. Then which of the following about MDI is correct? 67<MDI<80, the market has limited growth potential MDI>80, the market reaches a leveling-off period 33<MDI<67, the market has moderate growth potential MDI<33, the market has considerable growth potential
MDI<33, the market has considerable growth potential
Which of the following is NOT an illustration of Customer Intimacy in company's distinct competency? Staples, the office supply giant, created a club where customers join at no cost and get at least 5% discount on fast-moving items. Staples track sales by customer, and that gives the company all kinds of data it can use to satisfying its market USAA is a Texas-based insurer that caters mainly to people in the military. It segments its customer base by life stage and other characteristics, and develops products for each of these segments. Nike quality and durability enables it to command high prices for products. In 2016, Nike won the Olympics for the United States athletes who wore their sneaker brand, and results also show NBA players have better performance in the game when wearing their sneakers Home Depot clerks spend whatever time is required with a customer to figure out which product will solve their home-repair problem. Their first priority is to make sure the customer gets the right product, whether its retail price comes to $59 or 59 cents
Nike quality and durability enables it to command high prices for products. In 2016, Nike won the Olympics for the United States athletes who wore their sneaker brand, and results also show NBA players have better performance in the game when wearing their sneakers
Suppose there are two assignments, A and B, and you have to decide one of the two assignments to complete. The following table shows how many points you will get, depending on your choice and all the rest of class' choices: (1) If the majority of the class (>=50%) choose Option A: (2) If the majority of the class (>=50%) choose Option B (1.1) People choosing Option A get 0 bonus (2.1) People choosing Option A get additional 0.25 as a bonus (1.2) People choosing Option B get additional 0.25 as a bonus (2.2) People choosing Option B get additional 0.3 as a bonus Which assignment will be your better option? Option A Option B No difference between A and B
Option B
Which of the following statement about perceptual maps is NOT correct? Perceptual maps visualize how customers view brands or products in their minds The brands' location points on the map are based on average rating from customer surveys Perceptual maps show brands' locations only; no information about customers' ideal product preferences Perceptual maps are plotted only based on two attributes
Perceptual maps show brands' locations only; no information about customers' ideal product preferences
EVC=
Reference Value (RV)+Differentiation Value (DV)
(Mini Case) Suppose below is a table that provides the firm's ratings for five criteria: Table 2: Ratings Segment (1)Segment (2)Segment (3)Segment (4)Size4132Growth Rate1243Profit Margin3412Cost of reaching2423Competitors3214 Also, the firm assigns the weights to these five criteria based on their relative importance: segment size (10%), segment's growth rate (20%), profit margin (30%), cost of reaching (30%), and competitors (10%). Based on the above information, which segment is the most attractive? Segment (2) Segment (1) Segment (3) Segment (4)
Segment (2)
Suppose there are 10 companies, including your company and other 9 competitors, in the market, deciding one segment as their target segment between Segment A and Segment B. The total market value of Segment A is $400 million dollars, and the total market value of Segment B is $150 million dollars. Assume their revenue from segmentation decisions will be determined as follows: (i) all the companies choosing segment A equally split $400 millions, i.e., each firm gets 400millionsthetotalnumberofcompanieschoosingseg.A ; (ii) all the companies choosing segment A equally split $150 millions, i.e., each firm gets 150millionsthetotalnumberofcompanieschoosingseg.B. Suppose a predicted survey indicates that 6 of your competitors plan to choose segment A, and the other 3 plan to choose segment B Which segment is more attractive to your company? Segment B A and B are equally attractive Segment A
Segment A
Suppose there are 10 companies, including your company and other 9 competitors, in the market, deciding one segment as their target segment between Segment A and Segment B. The total market value of Segment A is $800 million dollars, and the total market value of Segment B is $300 million dollars. Assume their revenue from segmentation decisions will be determined as follows: (i) all the companies choosing segment A equally split $800 millions, i.e., each firm gets 800millionsthetotalnumberofcompanieschoosingsegmentA; (ii) all the companies choosing segment A equally split $300 millions, i.e., each firm gets 300millionsthetotalnumberofcompanieschoosingSeg.B. Suppose a predicted survey indicates that 7 of your competitors plan to choose segment A, and the other 2 plan to choose segment B. Which segment is more attractive to your company? A and B are equally attractive Segment A Segment B
Segment B
In the year 1996, Harley-Davidson introduced their own line of perfumes and colognes. Featuring iconic scents such as Black Fire, Destiny, Legendary, Hot Rod, and territory, Harley owners were finally able to complete the all-encompassing Harley-Davidson lifestyle and smell like their favorite bikes at all times. The line of perfumes and colognes were called "Hot Road" and featured woody aromas with hints of tobacco. It turned out this new line of products failed very quickly. Which of the following is the most likely reason to the failure of this new product line? Product was not new to the customers/market Strong response from the competitors It couldn't satisfy customers' needs on critical factors Not consistent with the current brand image
Strong response from the competitors
At the time of its introduction, which of the following products was the best example of a continuous innovation? Naturalpoint Trakir, which replaces the computer mouse by tracking head movements and then translating those head movements into cursor commands Sunsilk Silky Straight shampoo and conditioner with tip-targeting technology that seeks out weathered or damaged hair the first Apple iPhone Atari, the first video game system
Sunsilk Silky Straight shampoo and conditioner with tip-targeting technology that seeks out weathered or damaged hair
Which of the following is a potential problem that a customer can face at the order entry stage of the customer order cycle? -The wrong product is delivered -The order is in process but the customer is not aware of order status -The order is priced incorrectly -The product is delivered late or damaged
The order is priced incorrectly
Which of the following statements about common segmentation methods is most accurate? -Within a segment, the needs of potential buyers should be different; across/between segments, the needs of buyers should be similar -The purpose of needs-based segmentation is to offer product benefits that satisfy the needs of target customers -A business with a strong market orientation rarely divides its served market into customer segments -Psychographic influence that shapes customer needs includes shopping and buying behaviors such as usage rate and brand loyalty, and purchase patterns.
The purpose of needs-based segmentation is to offer product benefits that satisfy the needs of target customers
Which of the following statement about distinct competency is most accurate? The rationale of choosing a distinct competency is the same as that of choosing target segments Firms with operational excellence are more likely to target customers who care new, trendy and innovative products Firms with customer intimacy are more likely to target customers who shop for retail goods at discount and care low prices Firms with product leadership are more likely to target customers who are concerned with getting precisely what they need, willing to compromise on price and delivery time
The rationale of choosing a distinct competency is the same as that of choosing target segments
Which of the following statement about Economic Value to the Customer (EVC) is NOT correct? -EVC can be negative -When calculating Differentiation Value, we need to exhaustive all the possibilities -When calculating EVC, we only consider economic benefits, not psychological benefits -EVC is the customers' maximum willingness-to-pay in dollar value
When calculating EVC, we only consider economic benefits, not psychological benefits
Which of the following statement is correct? The best way to identify groups of similar customers is to segment customers on the basis of demographics, lifestyles, and usage behaviors When differences in customer needs are small or demographics are not distinctive, a business may elect to use a mass-market strategy A sub-segment strategy is built around just one core customer need and the business's generic positioning strategy. The benefit of needs-based market segmentation is that it allows us to identify in advance the individual customers who would fall into each segment.
When differences in customer needs are small or demographics are not distinctive, a business may elect to use a mass-market strategy
Which of the following new products is the best example of the LOWEST level of risk from the company's point of view? adding Ball Park Beef Franks with Cheese to the Ball Park Franks line offering online marketing classes rebranded under a new college name moving from production of land-line telephones to smartphones changing the formula from Coca-Cola to New Coke and then back to Coca Cola Classic
adding Ball Park Beef Franks with Cheese to the Ball Park Franks line
Automation Inc. is a company that provides wireless telecommunications network in several cities in the Midwest region, and the company plans to know more about its customers. The company found that one of his customers has a short customer history of 35, an above-average purchase amount of 75, a low repurchase desirability of 25, a weak product preference of 20, and the customer does not recommend the company's services to potential customers. (iii) If the same customer has a long customer history, a high repurchase probability, a strong product preference, and recommends the company's wireless telecommunications services to his friends and acquaintances, what type of customer would he be? an unprofitable customer a loyal customer a captive customer a repeat customer
a loyal customer
Which of the following market segment is most likely to be considered as a target segment by a firm? -a market segment with many substitute products -a market segment with high market growth rate -a market segment with low barriers to competitors' entry -a market segment with unfavorable government regulations
a market segment with high market growth rate
From an organization's perspective regarding its new products and innovations, which of the following new-product strategies has the LOWEST level of risk? a brand extension a product line extension a jump in innovation a radical invention
a product line extension
Mini Case Automation Inc. is a company that provides wireless telecommunications network in several cities in the Midwest region, and the company plans to know more about its customers. The company found that one of his customers has a short customer history of 35, an above-average purchase amount of 75, a low repurchase desirability of 25, a weak product preference of 20, and the customer does not recommend the company's services to potential customers. (ii) Based on the customer loyalty index (CLI) for the customer, what type of customer is LEAST likely to be? a repeated Customer a new customer a captive Customer an unprofitable customer
a repeated Customer
Customer Satisfaction Index formula (CSI)
average of customer satisfaction ratings
The 80/20 rule is most closely related to which basis of segmentation? demographic needs-based psychographic behavioral
behavioral
Which of the following statement is CORRECT? -The performance benefits of business with negative customer value exceed the cost of purchase (i.e., prices) -businesses with above average customer value produce higher levels of pre-tax return on investment -A larger unit volume allows for production and purchasing economies that lower the per-unit manufacturing cost of a product, thereby creating a scope effect -In any competitive environment, reputation is the principal source of competitive advantage
businesses with above average customer value produce higher levels of pre-tax return on investment
Sears Tires is interested in measuring consumers' willingness-to-pay with the attributes of a tire: Brand (Sears, Goodyear, Goodrich), Miles (30K, 40K, and 50K), Price ($50, $60, $70), and Sidewall (White and Black). The firm invited 50 customers and asked them to choose between a set of 18 hypothetical products profiles and their choices were used for estimation of their value to each attribute. This method is called ______________________ EVC analysis conjoint analysis perceptional map consumer survey
conjoint analysis
What change in customer retention from an increase from 6 to 2 years of an average customer life? (the change in customer retention = customer retention rate with 6 years of customer life − customer retention rate with 2 years of customer life) increase, 33% increase, 30% decrease, 33% decrease, 30%
decrease, 33%
Procter & Gamble (P&G) decided to skip a generation of consumers when it began to market Old Spice deodorant. The target market consists of men aged 18 to 34 years old (Generation Y) who do not remember the Old Spice brand sold to their grandfathers (pre baby boomer) many years ago. P&G is using which type of segmentation variable? psychographic behavioral need demographic
demographic
The emphasis of a marketing strategy for a continuous innovation concentrates on setting a low price using reminder advertising to reeducate consumers obtaining narrow distribution generating awareness
generating awareness
A scope effect refers to _______________ -lowering the per-unit manufacturing cost of a product by increasing the volume of production -increasing revenue by increasing the scope of marketing initiatives -lowering the average unit cost of all products through extension of the product line -improving the efficiency by learning new methods of management and production
lowering the average unit cost of all products through extension of the product line
Kraft produces Lunchables, a prepackaged meal usually consisting of several crackers, small slices of meat, and small slices of cheese. Other items in the product line contain small bottles of Chiquita Strawberry Banana Fruit smoothie, Capri-Sun juice, or Kool-Aid. The box is bright yellow and the quality of food contained within it is small. The target market for Kraft Lunchables is most likely: _______________ baby boomers who are trying to lose weight business travelers on the run teenagers who are hungry for an after-school snack moms with school-age children who pack a simple healthy lunch for them
moms with school-age children who pack a simple healthy lunch for them
Vermont Home Builders conducted a study of the customers in the housing sector, which revealed that there are seven kinds of buyers, each a little different and each differently profitable. Vermont Home Builders decided to focus their attention on the three most profitable segments. In this example, Vermont Home Builders uses which of the following market segmentation strategies? mass-market strategy multi-segment strategy niche-segment strategy subsegment strategy
multi-segment strategy
A rehabilitation center wants to target women in their 20s who have received some permanent disability as the result of a skiing accident. In terms of the criteria used for selecting a target segment, this market would: -be relatively expensive to reach. -not be worth doing since its market size is very small. -not be compatible with the company's current resources. -have no expected growth
not be worth doing since its market size is very small.
Until 1996, U.S. carmakers sent very few right-hand-drive cars to Japan while German car makers exported several models with the steering wheel on the right to accommodate the way the Japanese drive their cars on the left side of the road. American car manufacturers could blame their failure to a great degree on too little market attractiveness not satisfying customer needs on critical factors incomplete market and product protocol an insignificant point of difference
not satisfying customer needs on critical factors
Customer Retention formula
number of customers at the end of the period-number of customers acquired during period/number of customers at the start of period
Assume Zoom, the leading enterprise video communication provider, wants to evaluate the zoom meetings' economic value, which of the following is the LEAST likely to be considered as a reference product in the EVC analysis? phone calls Facetime Microsoft Teams Google meet
phone calls
Which of the following experience is NOT included in the total customer experience? purchase experiences replacement experiences usage experiences pre-purchase evaluation
pre-purchase evaluation
Which of the following is a type of marketing advantage? service quality -product line advantage -brand reputation -variable costs
product line advantage
Which of the following factor is NOT the key to success for companies pursuing product leadership? commercialize ideas quickly provide products at competitive prices and minimize any inconvenience creative culture relentless pursue newest solutions to problems with their newest products
provide products at competitive prices and minimize any inconvenience
A discontinuous innovation is a product that disrupts consumers' normal routine but does not require totally new learning is not purchased by innovators and early adopters initiates obsolescence of a product class requires consumers to learn entirely new patterns of behavior and product usage
requires consumers to learn entirely new patterns of behavior and product usage
NaturalBeauty Inc. is a firm that manufactures a range of herbal cosmetic products under the brand name NaturalBeauty. To improve its odds of developing successful disruptive innovations, the firm listens to its lead customers and identifies product benefits that are not met by the existing cosmetic products in the market. After careful analysis, the firm chooses the most lucrative opportunity and uses an "invent to order" process to develop a new product. In this example, NatureFresh Inc. is using which of the following methods? managing customer touch points market penetration reverse innovation empathic design
reverse innovation
(Mini Case) Below is a table that provides top-level information for four different market segments in the smartphone market. Based upon the information provided, your task is to identify which segment is the most attractive to select as target markets. Table 1: Basic Information Segment Name Seg. Size Seg. Growth RateProfit MarginCost of ReachingCompetitors(1) Fashion focused100 million5%HighLowStrong(2) Simply the Best25 million7%Very HighHighLess Strong(3) Smart Shoppers75 million20%LowLowSuper Strong(4) Highly informed50 million15%MediumMediumSuper Friendly Step 2: Assign weights to the five criteria based on their relative importance Which of the following importance weights could be correct? seg. size (10%), seg. growth rate (10%), profit margin (20%), cost of reaching (20%), competitors (30%) seg. size (21%), seg. growth rate (10%), profit margin (27%), cost of reaching (30%), competitors (12%) seg. size (15%), seg. growth rate (10%), profit margin (27%), cost of reaching (21%), competitors (20%) seg. size (22%), seg. growth rate (10%), profit margin (25%), cost of reaching (25%), competitors (25%)
seg. size (22%), seg. growth rate (10%), profit margin (25%), cost of reaching (25%), competitors (25%) (total weights should equal 100)
Which of the following key decision is NOT included in developing a marketing strategy? develop distinct competency identify target segment develop value proposition set up right prices
set up right prices
My Pillow, a company selling pillows, uses infomercials and product demonstrations at events such as state fairs to market its line of pillows that are guaranteed to be "the most comfortable pillow you'll ever own!" The sizes and percentages of the green circles in Figure 1 below revealed the size of each sleeper segment among all the potential users of pillows. Based on the market research above, which segment should My Pillow target? stomach sleeper-soft pillow side sleeper-firm pillow back sleeper-medium pillow stomach sleeper-firm pillow
side sleeper-firm pillow
The following is the value proposition by Southwest Airline. Which element is NOT included in this proposition? To become the world's most loved, most flown, and most profitable airline by offering Warrior Spirit, Servant's Heart and Fun-Loving Attitude and connecting people to what's important in their lives through friendly, reliable, and low-cost air travel. advantages over competitors target segments product category key benefits customers can get
target segments
Which of the following refers to a situation where downward price moves by one competitor force "follower moves" by other competitors in order to minimize lost profits? a monopoly market the prisoner's dilemma a free market situation competitive benchmarking
the prisoner's dilemma