CLEP Marketing Practice Test 1& 2
Which of the following symbols is a trademark? A. Image B. Image C. Image D. (D) All of the above E. (E) None of the above
*All of the above*
Advertising can make industrial customers aware of A. new products or brands B. product features C. organizations D. representatives E. All of the above
*All of the above*
Which of the following statements could occur in market maturity? A. Industry sales become stable. B. Profits can increase for an individual company. C. Individual firms drop out of the industry. D. Promotion costs rise. E. All of the above
*All of the above*
Which type of joint venturing offers a low-risk method of getting into a foreign market and yields income from the beginning? A. Licensing B. Contract manufacturing C. Management contracting D. Joint ownership E. Both (A) and (B) are correct.
* Contract manufacturing*
Ron and Dee own a floor tile retail outlet. They want to achieve a 40% markup at retail for all of the merchandise that they sell. If one style of floor tile retails at $3 per tile, what is the maximum that Ron and Dee can pay for the tile? A. $2.06 B. $2.10 C. $2.14 D. $2.22 E. Cannot be determined from the information given
*$2.14* Cost + Markup = Retail Sales Price x + (.40)x = 3 1.4x = 3 x = 2.14
Given the standard commission used in advertising agencies, what would an agency receive for a magazine ad that cost $20,000? A. $1,500 B. $1,750 C. $2,000 D. $3,000 E. $5,000
*$3,000*
Sally Rudolph is selling a new shirt, which she made, to her friend for $1,000. The shirt cost Sally $400. What is her markup? A. $40 B. $100 C. $300 D. $400 E. $600
*$600* The shirt would be marked up $600. To calculate the amount of markup, you use the formula Amount of Markup = Selling Price - Cost. If the shirt sold for $1,000, and the cost to Sally was $400, then $1,000 - $400 = $600.
A store owner pays $400 for a chair. He marks the price of the chair up by 60%. What is the new selling price of the chair after the 60% markup? A. $640 B. $800 C. $450 D. $550 E. $600
*$640* If the cost of the chair is $400, and the markup percent is 60%, then the new selling price of the chair after markup is $640. $400 x .60 = $240 . Adding $240 to the original selling price ($400 + $240 = $640)
Ogden & Ogden receive an invoice for $100, which they pay in nine days. The terms on the invoice indicate 2/10 net 30. How much money did Ogden & Ogden send to the seller? A. $100 B. $98 C. $102 D. $2.00 E. $96.45
*$98* The terms on an invoice 2/10 net 30, indicate that the buyers will get a two percent discount if they pay the bill early. This is to increase the amount of cash flow for the seller and to encourage early payment of bills.
If Bob Peters sells a set of steak knives for $1,000, and he has a markup (or selling price) of $600, what is his markup percent? A. 10% B. 20% C. 50% D. 60% E. Cannot be determined from the information given
*60 %* Markup/Selling Price = Percent Markup
Which of the following is an important advantage of direct marketing? A. Low cost B. Ability to tailor messages to a specific audience C. Fast response time between placing and shipping the order D. Ability to use just-in-time inventory management E. High rate of consumer acceptance
*Ability to tailor messages to a specific audience*
In marketing, an analysis of a person's day-to-day patterns of living is referred to as a person's AIOs, which are also known as A. Awareness, Interests, Opinions B. Activities, Interests, Opinions C. Actions, Incentives, Objections D. Actions, Integrity, Observations E. Awareness, Incentives, Observations
*Activities, Interests, Opinions*
The production of a new car model includes which of the following activities? A. Predicting the types of cars different types of people will buy B. Actually making the car C. Determining the features of the car D. Selling the car E. Developing a sales promotion campaign for the car
*Actually making the car*
In regard to industrial marketing, the following example best exemplifies what type of pricing? "The seller determines the price (or a series of prices) for a given product, and the customer pays that specified price." A. Bid pricing B. Negotiated pricing C. Administered pricing D. Retail pricing E. Economic pricing
*Administered pricing*
Given the following choices, which is NOT considered a retailing activity? A. The Alpha Kappa Psi Fraternity sells coffee to faculty members in the morning at a local college. B. Because your car broke down, you are forced to call a tow truck to tow your car to be fixed, for which you are charged $50. C. A soap company salesperson comes to your door and sells you $10 worth of soap. D. You purchase a new suit at Macy's Department Store for $259. E. All of the above are examples of retailing.
*All of the above are examples of retailing.*
Which statement is correct about the market growth stage? A. Industry profits tend to increase in the beginning of the stage. B. Industry profits decrease toward the end of the stage. C. More companies enter the industry. D. Industry sales increase. E. All the above are correct statements.
*All the above are correct statements.*
Which of the following statements is NOT true about the product life cycle? A. As industry sales rise, industry profits also rise. B. Each stage may have a different target market. C. In general, competition tends to move toward pure competition. D. Industry profits start to decrease in market growth. E. Both (A) and (D)
*As industry sales rise, industry profits also rise.*
If a firm were to obtain information about light, medium, and heavy users of a product as a means to segment their market, the firm would be practicing what kind of segmentation? A. Geographic B. Behavioral C. Demographic D. Psychographic E. Geodemographic
*Behavioral*
Positioning is A. giving a product meaning that distinguishes it from its competition B. occupying a specific place in consumers minds relative to competing products C. not as important as segmentation D. primarily meant for large multinational companies E. Both (A) and (B) are true
*Both (A) and (B) are true*
A capital item (a necessary element in setting price) is best described as A. a building or other type of major equipment B. office supplies purchased by the individuals C. raw materials that become part of the physical good D. long-lasting products that can be depreciated E. Both (A) and (D)
*Both (A) and (D)*
When marketers focus on comparing their product versus a competitor's product, they A. formulate a SWOT analysis B. should be concerned with total product offering C. look at the relative quality D. Both (B) and (C) E. All of the above
*Both (B) and (C)*
What level of familiarity exists when a consumer buys paper clips for the office, and she/he does not notice the brand name of the product? A. Brand rejection B. Brand recognition C. Brand nonrecognition D. Brand preference E. Brand insistence
*Brand nonrecognition*
Setting prices as low as possible typically supports which of the following pricing objectives? A. Market share leadership B. Product quality leadership C. Current profit maximization D. Survival E. Just-in-time policy
*Current profit maximization*
Which of the following factors is at the core of the marketing concept? A. Mass marketing B. Aggressive selling C. Brand preference D. Low prices E. Customer satisfaction
*Customer satisfaction*
Which of the following is NOT true about the three types of convenience products (staples, impulse products, and emergency products)? A. Staples are products that are bought routinely, without much thought. B. With impulse products, much of the buyer's behavior affects place utility. C. Customers shop extensively when purchasing these items. D. Emergency products are purchased when urgently needed. E. With staples, branding helps customers cut shopping efforts.
*Customers shop extensively when purchasing these items.*
Which form of entry into a foreign market causes the most risk? A. Exporting B. Joint venturing C. Joint ownership D. Licensing E. Direct investment
*Direct investment*
Turner Corporation sells its product to several competing channels that will reach the same target market. Turner Corporation is using what type of distribution? A. Exclusive distribution B. Intensive distribution C. Dual distribution D. Both (A) and (B). E. None of the above
*Dual distribution*
Which of the following pricing policies seems to be the one favored by e-commerce and Internet-based businesses? A. Complementary pricing policies B. Dynamic pricing policies C. Standard pricing policies D. Fixed pricing policies E. Prestige pricing
*Dynamic pricing policies*
Pake Productions wants to mark down a new line of stereo speakers that they have in the stores. After the speakers are marked down, Pake Productions wants to calculate the markdown percentage. If the original price of the speakers was $200, and the new price of the speakers is $160, what is the markdown percent? A. $40 B. $50 C. 25% D. 20% E. Both (C) and (D) are correct.
*E. Both (C) and (D) are correct.* 25% & 20%
A potato farmer in Alamosa, Colorado, would be likely to have which type of demand for his potato crop? A. Inelastic demand B. No demand; everyone buys potatoes from Idaho C. Elastic demand D. Unitary elasticity of demand E. All of the above
*Elastic demand*
Which type of distribution technique used a single outlet in a fairly large geographic area to distribute a product or service such as Jaguar and Rolls-Royce automobiles? A. Selective B. Universal C. Intensive D. Exclusive E. None of the above
*Exclusive*
Which of the following is NOT part of the Multiple Buying Influence, when making a decision to buy a new copy machine in a business? A. General public B. Influencer C. Buyer D. Decider E. Gatekeeper
*General public*
When Progresso makes Cajun gumbo soup for Louisiana and nacho cheese soup for Texas, what kind of segmentation is it practicing? A. Geographic B. Behavioral C. Demographic D. Psychographic E. Political
*Geographic*
Bob opened a new restaurant featuring "Crab Legs à la Bob." As he experimented with the price of the offering, he found that no matter if he raised or lowered his price, the total revenue from the "Crab Legs à la Bob" stayed the same. He could conclude that his product had what kind of elasticity? A. He can draw no conclusions from the information given. B. His demand is elastic. C. His demand is inelastic. D. He has a situation where there is unitary elasticity.
*He has a situation where there is unitary elasticity.*
Which of the following choices is an example of a manufacturer's brand? A. Heinz ketchup B. Diehard batteries C. Craftsman tools D. Kenmore appliances E. All of the above
*Heinz ketchup*
Some customers feel that certain brands of refrigerators are very similar and have the same attributes. By shopping for the best price, or lowest price, what kinds of products are these? A. Specialty products B. Heterogeneous products C. Convenience products D. Regularly sought products E. Homogeneous products
*Homogeneous products*
What are the two basic types of conflicts in channels of distribution? A. Horizontal and vertical B. Discrepancy of quantity and assortment C. Assorting and sorting D. Both (B) and (C) E. None of the above
*Horizontal and vertical*
Which of the following economies creates a new rich class and a small, but growing, middle-class that both demand new types of imported goods? A. Subsistence economy B. Raw-material-exporting economy C. Industrialized economy D. Industrializing economy E. None of the above.
*Industrializing economy*
Which type of distribution would best be used for products such as soap, food, and personal care products when consumers desire wide availability of the products? A. Intensive distribution B. Exclusive distribution C. Vertical distribution D. Horizontal distribution E. Selective distribution
*Intensive distribution*
Which of the following choices best defines a change in a person's thought process caused by prior experience? A. Cue B. Response C. Learning D. Belief E. Reinforcement
*Learning*
Which of the following statements about marketing is FALSE? A. Marketing attempts to affect the products and services you buy. B. Marketing does not apply to nonprofit organizations. C. Advertising and sales promotion are marketing functions. D. Marketing can affect the prices you will pay for a product. E. Marketing includes decisions about how to sell products.
*Marketing does not apply to nonprofit organizations.*
Which of the following choices is NOT a level in the hierarchy of needs? A. Money needs B. Safety needs C. Physiological needs D. Social needs E. All of the above are levels in the hierarchy of needs.
*Money needs*
Which of the following is NOT a function of channels of distribution? A. Alleviating discrepancies in assortment B. Alleviating discrepancies in quantity C. Providing customer service D. New product development E. Creating utility
*New product development*
Which of the following statements is NOT true when developing a marketing strategy? A. It allows flexibility in providing for customer service. B. It allows the hiring of high-quality personnel. C. It may help to resolve problems in regard to service. D. It provides for the use of high technology, allowing for lower cost services. E. None of the above.
*None of the above*
Which of the following is NOT one of the steps in the adoption process? A. Confirmation B. Trial C. Awareness D. Decision E. Payment
*Payment*
Which of the following is one of the reasons that personal selling can be more effective than advertising in a complex selling situation? A. Personal selling is cheaper on a per contact basis. B. Personal selling can reach more customers within a given time period. C. Personal selling can deal with inelastic demand. D. Personal selling can probe customers to learn more about their needs. E. Only (A) and (B) are true.
*Personal selling can probe customers to learn more about their needs.*
Making goods and services available in the right quantities and locations when the customer wants them is the definition for which one of the following marketing mix variables? A. Promotion B. Place C. Product D. Price E. None of the above
*Place*
Disposable diapers, which are not biodegradable, are what type of new product opportunity? A. Desirable products B. Pleasing products C. Performance products D. Deficient products E. Salutary products
*Pleasing products*
With the high regulation of the U.S. government before the 1980s, carriers of products did not compete in which of these areas, as they do now? A. Promotion B. Price C. Place D. Product E. Service
*Price*
Which of the following is the most widely used positioning strategy? A. Against a competitor B. Away from a competitor C. Product attribute D. User's lifestyle E. User's occupation
*Product attribute*
The "four P's" of a marketing mix are A. Product, Price, Profit, Promotion B. People, Product, Place, Promotion C. Promotion, Production, Price, Place D. Product, Price, Place, Promotion E. Profit, Place, Price, Product
*Product, Price, Place, Promotion*
Which statement best describes why Dual Distribution is becoming more common with producers and retailers? A. It is best applicable for convenience products and business suppliers. B. Retailers want large quantities with a lower price per unit. C. Present channel members are doing an excellent job. D. Both (A) and (C). E. All of the above
*Retailers want large quantities with a lower price per unit.*
Sandy just bought a new Ford Taurus. Three weeks later, she received a rebate check for $300 in the mail. Which of the following forms of promotion was used in this example? A. Advertising B. Direct marketing C. Sales promotion D. Personal selling E. Public relations
*Sales promotion*
ABC Corporation sells only to wholesalers who give their product special attention. ABC Corporation is practicing what type of distribution? A. Selective distribution B. Intensive distribution C. Exclusive distribution D. Ideal market exposure E. None of the above
*Selective distribution*
Which of the following statements is NOT a reason for downward stretching the product line? A. The company is attacked at the high end and decides to counterattack by invading the low end. B. The company finds that slower growth is taking place at the high end. C. The company at the lower end of the market may want to enter the higher end. D. The company initially entered the high end to establish a quality image and intended to roll downward. E. The company adds a low-end unit to plug a market hole that would otherwise attract a new competitor.
*The company at the lower end of the market may want to enter the higher end.*
What is the key to creating value and customer satisfaction? A. Total quality B. Everyday low prices C. Manufacturing superiority D. Celebrity advertising E. Sales promotions
*Total quality*
Which of the following is NOT a regrouping activity used by channel specialists to adjust discrepancies? A. Assorting B. Accumulating C. Transforming D. Bulk-Breaking E. Sorting
*Transforming*
Which of the following is the best example of a product a consumer would consider under the extensive problem-solving process? A. Milk B. Washing machine C. Pair of shoes D. Toilet paper E. T-shirt
*Washing machine*
Stetson's use of the American cowboy in its advertising is an example of a positioning strategy based on A. a product attribute B. the product's users C. a cultural icon D. against competition E. a product benefit
*a cultural icon*
Family units in Smallisland Country make all the products they consume. This is an example of A. an economy where marketing is efficient B. a pure market-oriented economy C. a planned economy D. an economy where the role of middlemen is important E. a pure subsistence economy
*a pure subsistence economy*
Alarid Company purchases goods from a manufacturer who then turns around and sells them to a retailer who sells them to final customers. The Alarid Company is participating in a(n) A. regrouping activity B. accumulating activity C. channel of distribution D. bulk-breaking project E. None of the above
*channel of distribution*
The public relations tool that is mostly internally oriented is the A. press release B. company newsletter C. financial statement D. network television spot E. balance of payments statement
*company newsletter*
A major reason why some shoppers are reluctant to make Internet purchases is because of A. higher prices B. inferior quality C. concern about security D. greater inconvenience E. poor selection
*concern about security*
A coupon on a bottle of Pepsi offering a deal on a bag of potato chips is called A. cross-ruff coupon B. scanner-delivered coupon C. instant redemption coupon D. response offer coupon E. bounce back coupon
*cross-ruff coupon*
John Randall is a purchasing agent for a rather large delivery service. John has just agreed to purchase a 1992 Chevy van from his brother's construction company, although he has never driven it or seen it. This buying approach would be an example of A. description buying B. test buying C. inspection buying D. sampling buying E. negotiated contract buying
*description buying*
In terms of direct marketing expenses, the second biggest category after telemarketing is A. radio direct response B. television infomercials C. direct mail D. magazine direct marketing E. Internet marketing
*direct mail*
As XYZ Company produces larger quantities of watches, the cost of producing each watch goes down. This is known as A. micro-marketing B. possession utility C. economies of scale D. marketing concept E. transaction efficiency
*economies of scale*
The Yearous Group saw an increase in total revenue when the company decreased the price of its golf bags. The marketing manager can assume that the demand is A. unitarily elastic B. elastic C. inelastic D. All of the above E. None of the above
*elastic*
Forbidding an intermediary to carry products of a competing manufacturer is known as A. tying agreement B. monopoly C. exclusive dealing D. strategic channel alliance E. vertical marketing system
*exclusive dealing*
The simplest way to enter a foreign market is through A. joint venturing B. licensing C. management contracting D. direct investment E. exporting
*exporting*
Rent, heating and air-conditioning, interest, and executive salaries would all be examples of A. standard costs B. variable costs C. fixed costs D. independent costs E. monopoly costs
*fixed costs*
The most important factor pushing marketers toward integrated marketing communication is A. increasing competition B. decreasing costs of advertising C. declining use of sales promotions D. spiraling costs of personal selling E. increased reliance on one medium of advertising
*increasing competition*
The two major economic factors that reflect a country's attractiveness as an export market are A. industrial structure and income distribution B. political stability and attitudes C. cultural environment and government bureaucracy D. joint venturing and direct investment E. contract manufacturing and management contracting
*industrial structure and income distribution*
New product planning is becoming increasingly important in a modern economy because A. most profits go to innovators or fast companies that quickly copy products from other companies B. it is not always profitable just to sell "me-too" products C. the failure rate of new products is becoming increasingly low D. every product must pass FTC laws to be bought and sold E. All of the above are true
*it is not always profitable just to sell "me-too" products*
An organized way of continually gathering and analyzing data to provide marketing managers with the most up-to-date information they need to make decisions is called A. decision support systems (DSS) B. time series models C. marketing research D. marketing information systems (MIS) E. consumer panels
*marketing information systems (MIS)*
The American market is changing and therefore businesses must adapt to these changes. Today, most successful companies are moving away from A. target marketing B. market segmentation C. market positioning D. mass marketing E. direct marketing
*mass marketing*
The practice of tailoring products and marketing programs to suit the needs of specific individuals is called A. niche marketing B. mass marketing C. segment marketing D. micro-marketing E. macro-marketing
*micro-marketing*
All of the following are considered to be major variables for segmenting markets EXCEPT A. geographic B. demographic C. behavioral D. moods E. psychographic
*moods*
A strategy that consists of the seller's development of two or more brands in the same product category is called A. brand repositioning decision B. brand extension decision C. multibrand decision D. family brand decision E. brand quality decision
*multibrand decision*
Packaging is of importance to marketers because A. it provides better shelf placement in grocery stores B. packaging costs over 95% of a manufacturer's selling price C. the Federal Packaging and Labeling Act holds restrictions on packaging sizes D. new packages can make a difference in a new marketing strategy E. labels are inaccurate, and no one reads them anyway
*new packages can make a difference in a new marketing strategy*
If an organization is conducting marketing activities other than for the goals of profit, market share, or return on investment (ROI), these marketing activities are referred to as A. a waste of time B. nonbusiness marketing C. strategic marketing D. promotional marketing E. nonmarketing activities
*nonbusiness marketing*
All of the following would be ways to segment a market within the category of "psychographic segmentation" EXCEPT A. social class B. personality C. occupation D. lifestyle E. interests
*occupation*
Generally speaking, a department store salesperson who stands behind a counter and performs a cashier's role can be classified as a(n) A. order getter B. order taker C. public relations specialist D. missionary salesperson E. copywriter
*order taker*
A "perceptual map" is a marketing tool that helps managers with A. positioning decisions B. product design C. packaging decisions D. deciding where in the country to sell a product E. determining shipping costs
*positioning decisions*
Carefully arranging for a product or service to occupy a clear, distinctive, and desirable place relative to competing products or services in the minds of target consumers is called A. mass marketing B. target marketing C. market segmentation D. green marketing E. positioning
*positioning*
Whenever possible, smart marketers will take a ____ rather than ____ approach to the marketing environment. (Choose the best combination from the options below.) A. reactive .. proactive B. proactive .. reactive C. offensive .. defensive D. defensive .. offensive E. overt .. covert
*proactive .. reactive*
The Magnuson Act of 1975 says that A. producers of goods must warrant their products as merchantable B. a written warranty reduces the responsibility of a producer C. producers must provide a clearly written warranty D. each product must be identified with a readable electronic code E. goods must be clearly labeled and easy to understand
*producers must provide a clearly written warranty*
Ogden Parts Inc. has named a new sales manager with responsibilities for market planning. Ogden's president thinks the sales manager should sell more parts and outsell the competition. It seems that this company is run as if it were in the A. sales era B. production era C. marketing company era D. simple trade era E. marketing department era
*sales era*
The role of price in a market-directed economy is to A. determine the sale prices of clearance items in a retail store B. serve as a rough measure of the value of resources used to produce goods and services C. ensure no consumer pays prices that are too high D. determine the amount of losses that can be sustained by a company E. allocate profits to companies even though they may not be providing the most desirable goods and services
*serve as a rough measure of the value of resources used to produce goods and services*
One would consider an intangible deed performed by one party for another party at a cost as a A. supply B. service C. good D. perishable good E. Both (B) and (D)
*service*
Within the industrial mix, the product variable places a great deal of emphasis on A. price B. services C. environmental influences D. distribution E. sales promotion
*services*
Electronic monitoring systems that link consumers' exposure to TV advertising (measured using television meters) with what they actually buy in stores (measured by store checkout scanners) are called A. motivational research systems B. single-source data systems C. peoplemeters D. subliminal research systems E. focus group data
*single-source data systems*
Marketing a product in a foreign market without any change to the product is called A. straight extension B. product adaptation C. product invention D. communication adaptation E. dual adaptation
*straight extension*
Tariffs are A. taxes on imported products B. predetermined prices planned by several competing companies C. rules on the amount of products that can be imported D. extra money paid to officials for favored status E. illegal in the United States
*taxes on imported products*
Mingilton Meats increased the price of their bologna from $2.00 a pound to $3.00 a pound. After doing this they noticed a decrease in total revenue. This is because A. the demand for the meat is elastic B. the demand for the meat is inelastic C. the demand is unitarily elastic D. the meat was too old to purchase E. Cannot tell from the information given
*the demand for the meat is elastic*
Public relations firms are often evaluated by the number of "hits" they obtain. A "hit" is A. an advertisement that is successful B. a special event tie-in with publicity C. the mention of a company's name in a news story D. a media story that speaks positively about a company E. a media story that speaks negatively about a company
*the mention of a company's name in a news story*
The strategy of choosing one attribute to excel at or to create competitive advantage is called A. overpositioning B. unique selling proposition C. undifferentiated marketing D. relationship marketing E. concentrated marketing
*unique selling proposition*
The combining of two or more stages of the channel under one management, in which each channel member is seen as an extension of their own operations, is described as A. strategic alliances B. horizontal channel integration C. reverse channels D. oligopoly E. vertical channel integration
*vertical channel integration*
By definition, "Price" is A. the sticker on a product that suggests a price B. what is charged for something (product or service) C. calculated by dividing cost with retail selling price D. the term used by marketers defining the cost of a product E. profit-oriented
*what is charged for something (product or service)*
The term "micro-macro dilemma" means that A. people have a hard time making choices between products B. every economy needs a macro-marketing system but not necessarily a micro-marketing system C. what is good for some producers may not be good for society as a whole D. satisfying a customer's wants and needs is difficult because the consumer may not know what his/her wants and needs are E. it is difficult to determine consumer tastes in the globally diverse marketplace
*what is good for some producers may not be good for society as a whole*
