MKT 319

Suppose the firm earns an annual profit margin of $400,000. The customer retention rate is 70 percent, and the firm's discount rate is 12 percent. If the margin multiple is 1.67, then what is the customer lifetime value? $33,600 $80,000 $280,000 $668,000

$668,000

What is the calculated defection rate if a firm starts the year with 100 customers and ends the year with 80 of these same customers? 40 percent 60 percent 80 percent 20 percent

20 percent

Customer lifetime value (CLV) depends on which of the following factors? All of the indicated factors Profit margin Retention Rate Discount Rate None of the indicated factors

All of the indicated factors

Which of the following shows the correct formula for calculating customer lifetime value? CLV = r + m/(1+d-r) CLV = m × r/(1+d-r) CLV = d × r/(1+m-r) CLV = r × d/(1+m-r)

CLV = m × r/(1+d-r)

________________ is the ongoing process of identifying and creating new value with individual customers and sharing these benefits over a lifetime of association with them. Perceptual Mapping Multidimensional scaling Customer Relationship Management Target marketing

Customer Relationship Management

Which of the following is NOT a method used to increase unit sales volume resulting in improved profits? -Decrease customer retention -Increase customer use -Attract customers from competitors -Secure new business

Decrease customer retention

Which of the following is the first of the six marketing imperatives? Set strategic direction and positioning Determine and recommend which markets to address Identify and target market segments Design the marketing offer

Determine and recommend which markets to address

Positioning requires the firm to make all of the following key decisions EXCEPT: -Select customer targets -Frame competitor targets -Design the value proposition -Determine the firm's asset utilization

Determine the firm's asset utilization

_______________ focuses on how and where the customer secures the product. Price Promotion Product Distribution

Distribution

A firm embracing marketing as a philosophy has a(n) ______________. Technology Orientation Finance Orientation Operations orientation External orientation

External Orientation

_______________ include country, region, county size, city or SMSA size, population density, and climate. Demographic variables Behavioral variables Geographic variables Social/psychological variables

Geographic variables

Inhospitable markets imply that which of the following strategies should be implemented? Maintain Harvest Acquisition Standardization

Harvest

Most firms invest heavily in sophisticated accounting systems and data analysis tools to help managers answer questions that include all of the following EXCEPT: How ethical are our employees? Are our current products profitable? Should we discontinue this old product and if so, when? Should we introduce a new product?

How ethical are our employees?

_______________ are those firms offering similar benefits but with different products, technology, and/or business models? Direct competitors De novo start-ups Indirect competitors Strategic alliances

Indirect competitors

All of the following are examples of external sources of data that relate to the firm's product line EXCEPT: -Industry studies conducted by the firm's own personnel -Competitors' product catalogs -Industry trade associations -Trade industry press

Industry studies conducted by the firm's own personnel

Which of the following stages of the product life cycle often follows many years of research and development by one or more firms? Introduction Early growth Late growth Maturity

Introduction

Which of the following is NOT an example of a product in the decline stage of the product life cycle? Laptop computers Carbon Paper Chemical-film cameras Videotapes

Laptop computers

Which of the following is NOT an example of a consumer's demographic variable? Age Language Lifestyle characteristics Nationality

Lifestyle characteristics

Which of the following is NOT mentioned in the text as a specific benefit from a reward program? Makes loyal customers more price-sensitive encourages loyal customers to spend more time with the firm stimulates loyal customers to spread positive word of mouth the firm gains insight into customer behavior

Makes loyal customers more price-sensitive

_______________ is the conceptual process of grouping together actual and potential customers in a market for the purpose of selecting targets for effort and for designing marketing programs. Market penetration Market segmentation Market expansion Market extension

Market segmentation

The _______________ is the total benefits package the firm offers to its customers. Marketing offer marketing mix post purchase dissonance target market

Marketing offer

Which of the following is the final stage of the six marketing imperatives? Secure support from other functions Monitor and control execution and performance Determine and recommend which markets to address Set strategic direction and positioning

Monitor and control execution and performance

Which of the following prohibits former employees from working for competitors for a defined time period? Non-compete agreement Nondisclosure agreement Strategic alliance agreement Novo start-up agreement

Non-compete agreement

Which of the following is NOT a reason that firms underinvest in mature products? -Limited view of the competition -Political power of mature-product champions -Fear of Cannibalization -Inertia

Political power of mature-product champions

All of the following are examples of demographic variables for organizations EXCEPT: Firm size Profitability Legal entity Power structure

Power structure

For which of the following strategies does the firm place most marketing effort upstream on direct customers like manufacturers and distributors? Pull Strategy Cross-sell strategy Push strategy Virtual strategy

Push strategy

_______________ is the first stage of the purchase-decision process. Recognizing problems Acquiring information Evaluating alternatives post-purchase process

Recognizing problems

_____________ is the number of customers at the end of the year, divided by the number of customers at the start of the year. Retention Rate Defection Rate Churn Rate Discount Rate

Retention Rate

According to the five-forces model, three of the five forces the firm faces are competition and includes all of the following EXCEPT: Shadow competitors Current direct competitors New direct competitors Indirect competitors

Shadow competitors

_______________ is the competitive threat that occurs when the firm's supplier decides to incorporate functions that the firm currently performs into its own operations. -Customers integrating backward -Customers integrating forward -Suppliers integrating backward -Suppliers integrating forward

Suppliers integrating forward

A firm with a(n) _________________ orientation focuses on research, development, and engineering and pays little attention to customer value. Technology Operations Sales Finance

Technology

In which of the following processes does the firm divide the market into groups of customers? The market segmentation process The pricing process The distribution process The promotion process

The market segmentation process

_______________ impacts customers' ability to search for and make decisions about purchases, but also the types of goods and services that they purchase. Economic Resources Time availability Cognitive Resources Environmental Resources

Time availability

Which of the following best describes Xerox as a competitor in the following example? "Xerox copying machines compete with computers, fax machines, computer modems, and video conferencing." -Xerox is a direct competitor -Xerox is an indirect competitor -Xerox is a de novo start-up -Xerox is a merger

Xerox is an indirect competitor

Which of the following market segment criteria refers to whether the firm can reach the segment via communications and distribution channels? Accessible Stable Measurable Actionable

accessible

Positioning statements should meet all of the following criteria EXCEPT: Be common Be compelling Be sustainable Be authentic

be common

The question "How does GE allocate resources across its home appliance portfolio: refrigerators, dishwashers, washers, and driers?" is an example of which level of collecting competitor data? Governmental Corporate Business unit Market Segment

business unit

Which of the following types of resources address people's ability to process information to make purchase decisions? economic resources time availability environmental resources cognitive resources

cognitive resources

Which of the following subconstructs of fit would apply in the following example? "A firm is skilled at manufacturing, promoting, and distributing a product in its home market and ascertains through market research that a foreign market seems attractive. However, the problem is that the firm has no presence in, and little knowledge of, the foreign market." Product-market fit Product-company fit Company-market fit Company-political fit

company-market fit

In which of the following growth options is the level of risk clearly the greatest? Market penetration Product extension Conglomeration Market expansion

conglomeration

The question "What effort is GE placing into innovation versus increasing efficiency?" is an example of which level of collecting competitor data? Governmental Corporate Business unit Market Segment

corporate

Disadvantages of internal development include all of the following EXCEPT: Cost Resource access Expertise Time

cost

In a competitor's organization, the behaviors, norms, beliefs, and values that together describe what the competitor stands for and how its members operate and behave is called _______________. infrastructure processes culture value chain

culture

A firm's ________________ offer current customers similar benefits with similar products, technology, and/or business models. new direct entrants indirect competitors current direct competitors current suppliers

current direct competitors

Sources of secondary data include all of the following EXCEPT: News releases The Internet Patent filings Customer surveys

customer surveys

In the customer lifetime value formula, "d" represents ______________. discount rate defection rate declining rate doubled rate

discount rate

The _______________ choice to exiting an industry requires that the firm solve a marketing problem by identifying the right customer for the business. harvest divest maintain liquidate

divest

Options for implementing a growth strategy include all of the following EXCEPT: Internal development Insourcing Re-engineering Divestment

divestment

_______________ concern on the financial aspects like price and credit terms. functional benefits psychological benefits Economic benefits environmental benefits

economic benefits

Even when monopoly positions cannot be achieved, firms that successfully pioneer new markets may enjoy ______________. These are a set of benefits that may accrue simply because the pioneer was the first entrant. follow-the-leader advantage segmenter advantage me-too advantage first-mover advantages

first-mover advantages

Incorporating activities previously conducted by customers is referred to as _______________. -forward horizontal integration -forward integration -backward horizontal integration -backward vertical integration

forward integration

According to Maslow's hierarchy of needs, all of the following are examples of physiological needs EXCEPT: food drink friendship shelter

friendship

_______________ are generally concerned with such dimensions as performance level, performance reliability, time and place availability, accuracy, and ease of use. Psychological Benefits Economic Benefits Functional Benefits Environmental Benefits

functional benefits

_______________ means emphasizing increases in short-term cash flow at the expense of maintaining market share or sales volume. segmenting concentrating maintaining harvesting

harvesting

A proper market segmentation perspective assumes _______________ of needs and wants for all product categories. homogeneity heterogeneity cultural bias factor similarities

heterogeneity

Which of the following is NOT an example of a product class? Theater iPods Television Home videos

iPods

A(n) _______________ strategy means that the firm copies the leader, but is more effective in execution. imitation innovation concentration divestment

imitation

All of the following are methods used to improve margins and investment returns EXCEPT: Raise prices Increase operating costs Improve the sales mix improve asset utilization

increase operating costs

According to the text, all of the following are methods used to increase customer lifetime value EXCEPT: -increase the profit margin -increase the customer retention rate -increase the discount rate -decrease the customer defection rate

increase the discount rate

Which of the following is NOT one of the five stages of the classic product life cycle? Innovation Early growth Maturity Decline

innovation

In the ______________ and ______________ stages of the product life cycle, firms often set priorities on growth and/or market share. introduction and decline maturity and decline introduction and early growth early growth and decline

introduction and early growth

Which of the following means closing down and selling the assets of a business? harvest maintain liquidate divest

liquidate

The end result of _______________ is the identification of a number of market segments. market penetration market segmentation market expansion market extension

market segmentation

An initial broad approach to defining a market ensures against ________________. product imitation marketing myopia marketing segmentation marketing innovation

marketing myopia

All of the following are examples of internal orientations based on marketing as a philosophy EXCEPT: marketing orientation sales orientation operations orientation finance orientation

marketing orientation

In which of the following stages of the product life cycle are most sales to repeat and loyal users? Introduction Late growth Decline Maturity

maturity

The stage of the life cycle described with slow growth or flat year to year sales is ________________. early growth introduction decline maturity

maturity

In a(n) _____________, two entities combine as equal partners to create a stronger firm. merger acquisition leveraged buyout spin off

merger

The firm with a(n) ________________ orientation typically focuses upon reducing unit costs. finance operations sales technology

operations

_______________ takes place when a firm engages other firms to undertake activities it previously conducted in-house. Insourcing Outsourcing Re-engineering Divestment

outsourcing

Low prices during introduction are typically termed _______________ and the firm must accept low profit margins for a substantial time period. skimming pricing modified pricing penetration pricing mainstream pricing

penetration pricing

For consumers, demographic variables include all of the following EXCEPT: Personality Age Gender Education

personality

The purpose of _______________ is to create a unique and favorable image for the firm's products in the customer's mind. positioning segmentation downsizing cost reduction

positioning

Which of the following pricing strategies is viable if government and/or product-specific entry barriers are high, customer willingness to try is strong, and customers are relatively price insensitive? price skimming price penetration price structuring regulated pricing

price skimming

Family members and organizational work groups are examples of __________________. secondary reference groups primary reference groups aspirational groups tuangou groups

primary reference groups

Ski resorts that expand their range of offerings beyond skiing to include ice-skating, downhill sledding, dog sledding, snowmobiling, and tubing are practicing _______________. Product extension Market expansion Product expansion market extension

product extension

A ______________ is uniquely identified, like having a specific size and color. product form product class product item target market

product item

Which of the following is a subset of the product line? Product form Product item Product class Target market

product item

_______________ addresses the question of whether the product is appropriate for the market. Product-company fit Company-market fit Product-market fit Company-culture fit

product-market fit

Which of the following type of values typically satisfy status, affiliation, reassurance, risk, and security needs? psychological values functional values economic values environmental values

psychological values

Using the ______________, a firm places most marketing effort downstream on indirect customers which are consumers and end users. cross-sell strategy push strategy pull strategy virtual strategy

pull strategy

Which of the following is not an example of impersonal communication? sales promotion data mining sales force advertising

sales force

A well-executed market segment strategy provides a firm with all of the following EXCEPT: -develops a clearer focus on market strategy -identifies opportunities for customization to target segments -secures better insight into the strengths and weaknesses of the firm's internal resources -secures higher levels of customer satisfaction and loyalty

secures better insight into the strengths and weaknesses of the firm's internal resources

Which of the following strategies for firms competing in fragmented markets is described as a way to reduce variation and improve consistency across various suppliers? Direct entry Acquisition Harvesting Standardization

standardization

Generally, _____________ addresses poor product-company fit and/or poor company-market fit without the capital investment and risks inherent with acquisitions. Strategic alliances equity investment Internal development Insourcing

strategic alliances

The two components of performance objectives include ______________ and ______________. -positioning and strategic focus -strategic objectives and operational objectives -implementation programs and operational objectives -operational objectives and tactical focus

strategic objectives and operational objectives

Which of the following is NOT an example of a social need as described by Maslow's hierarchy of needs? affection friendship belonging success

success

he individual who has little direct role in the purchase decision, but often has veto power, is described as which of the following? user gatekeeper speficier buyer

user

The _______________ is the firm's major competitive weapon for attracting, retaining, and growing customers; it also defines the firm's implementation focus. value proposition strategic focus operational focus cross-sell strategy

value proposition

Which of the following is NOT mentioned in the text as a criterion of good market segments? Measurable Differentiated Wealthy Identifiable

wealthy