MKT Test

22) In developing an advertising program, marketing managers can make the five major decisions known as the five Ms. List and explain each of these Ms.

The five major decisions are: 1. Mission — sales goals and advertising objectives 2. Money — factors to consider: stage in PLC, market share and consumer base, competition and clutter, advertising frequency, and product substitutability 3. Message — message generation, message evaluation and selection, message execution, and social-responsibility review 4. Media — reach, frequency, impact, major media types, specific media vehicles, media timing, and geographical media allocation 5. Measurement — communication impact and sales impact.

18) Organic growth refers to increasing the profitability of the organization by increasing employee productivity.

FALSE

22) The rapid diffusion of multipurpose smart phones, broadband and wireless Internet connections, and ad-skipping digital video recorders (DVRs) have augmented the effectiveness of the mass media.

FALSE

26) A company's best prospects are customers who have never bought its products.

FALSE

26) Personal selling refers to person-to-person oral, written, or electronic communications that relate to the merits or experiences of purchasing or using products or services.

FALSE

34) A zero-level marketing channel typically uses a wholesaler and a retailer.

FALSE

40) Many companies now focus on departments as opposed to processes, because processes can be a barrier to smooth performance.

FALSE

65) Intensive distribution is becoming a mainstay for specialists looking for an edge in markets increasingly driven by price.

FALSE

68) Bloggers do not need to disclose their relationship with marketers whose products they endorse.

FALSE

76) Cash donations are the most productive contribution that businesses can make to a nonprofit or community group.

FALSE

78) Social marketing is a new trend in marketing.

FALSE

127) Although personal communication is often more effective than mass communication, mass media might be the major means of stimulating personal communication.

TRUE

129) Desktop marketing gives marketers information and decision structures on computer dashboards.

TRUE

129) Two-step communication suggests that mass communicators should direct messages specifically to opinion leaders and let them carry the message to others.

TRUE

135) A marketing audit is an orderly examination of the organization's macro- and micromarketing environments, marketing objectives and strategies, marketing systems, and specific activities.

TRUE

137) Although supply-side exposure methods provide quantifiable measures, equating media coverage with advertising exposure ignores the content of the respective communications.

TRUE

138) To succeed in the future, marketing must be more holistic and less departmental.

TRUE

93) Early buyers might be willing to pay for high-value-added channels, but later buyers will switch to lower-cost channels.

TRUE

98) AT&T found word of mouth was one of its most effective drivers of its sales.

TRUE

136) The supply-side method identifies the effect sponsorship has on consumers' brand knowledge.

FALSE

39) Venture teams are cross-functional groups charged with developing a specific product or business.

TRUE

Permission marketing presumes that consumers know what they want.

True

39) Which of the following tools or combinations of tools is most influential at the comprehension stage of buyer readiness? A) sales promotion and advertising B) advertising and personal selling C) publicity and personal selling D) reminder advertising and publicity E) sales promotion and personal selling

B

18) A product- or brand-management organization is characterized as a(n) ________ system. A) hub-and-spoke B) waterfall C) internal marketing D) top-down E) lateral

A

2) ________ advertising aims to create brand awareness and knowledge of new products or new features of existing products. A) Informative B) Corporate C) Reinforcement D) Persuasive E) Reminder

A

51) One opportunity for designing a cause program so the sponsoring company is not overlooked among other corporate sponsors is to support a(n) ________, or a disease that afflicts fewer than 200,000 people. A) orphan cause B) overlooked calamity C) behavioral campaign D) social marketing plan E) value campaign

A

52) Which of the following is an advantage of using magazines as an advertising medium? A) high-quality reproduction B) short ad purchase lead time C) high efficiency in circulation D) no ad competition in same medium E) low cost of advertising

A

53) Which of the following covers payment terms and producer guarantees? A) conditions of sale B) pricing policies C) exclusive dealings D) mutual services E) territorial rights

A

19) During the 2012 election, much of the $690 million raised online by the Obama campaign resulted from carefully targeted and tested e-mails.

TRUE

21) Marketing communications allow companies to link their brands to other people, places, events, brands, experiences, feelings, and things.

TRUE

25) Direct mail permits target market selectivity and allows early testing and response measurement.

TRUE

27) Direct marketing has the ability to test different elements of an offer strategy under real marketplace conditions.

TRUE

27) In building brand equity, marketers should be "media neutral" and evaluate all communication options on effectiveness and efficiency.

TRUE

28) Of the time US consumers spend with all media, almost half is spent online.

TRUE

29) Internal marketing requires that everyone in the organization buy into the concepts and goals of marketing and engage in choosing, providing, and communicating customer value.

TRUE

31) The Internet and catalog retailing industry includes 20,000 companies with combined annual revenue of $350 billion.

TRUE

32) A Web site's ease of use means the site downloads quickly, the first page is easy to understand, and it is easy to navigate to other pages that open quickly.

TRUE

32) Companies producing a variety of products and brands often establish a product- (or brand-) management organization.

TRUE

32) Direct marketers use the RFM formula to select customers according to how much time has passed since their last purchase, how many times they have purchased, and how much they have spent since becoming a customer.

TRUE

33) All functions in a marketing channel use up scarce resources and can be shifted among channel members.

TRUE

33) If a company exaggerates the features of its products in its product catalogue, it can be classified as deception.

TRUE

34) Business-to-business telemarketing is increasing.

TRUE

34) J.D. Power found that consumers who were "delighted" with an automotive manufacturer's Web site were more likely to test drive one of its vehicles as a result.

TRUE

35) One of the key recommendations for managing Web site privacy "touch points" is preventing human intrusion by using automation whenever possible.

TRUE

35) The flow of materials to refurbish products for resale constitutes a reverse flow.

TRUE

36) Because the retail trade tends to think of profitability in terms of product categories, some companies are switching to a category management organizational model.

TRUE

2) A salesperson sends e-mails to persuade prospects to buy the products of his company. This is a type of ________ marketing. A) buzz B) virtual C) word-of-mouth D) direct E) viral

D

30) Which of the following benefits is offered by sales promotion tools? A) Sales promotion tools are more authentic and credible to buyers than others such as advertising, public relations, and personal selling. B) Sales promotion tools can reach prospects who prefer to avoid mass media and targeted promotions. C) Sales promotion tools are typically an indirect form of "soft-sell" and hence, better received by customers. D) Sales promotion tools incorporate some concession, inducement, or contribution that gives value to the consumer. E) Sales promotion tools allow buyers personal choices and encourage them to respond directly.

D

43) Under which of the following conditions is the frequency the most important factor in media selection? A) when introducing flanker brands B) when launching infrequently purchased brands C) when going into undefined target markets D) when there is high consumer resistance to the product E) when there is modest competition to the brand in the market

D

92) Which of the following marketing communications principles implies that communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience? A) principle of closure B) principle of duality C) principle of delegation D) principle of congruity E) principle of neutrality

D

145) ________ is the effect one person has on another's attitude or purchase probability. A) Sharing power B) Collaborative power C) Market influence D) Brand power E) Personal influence

E

6) How much was total digital ad spending in 2013? A) $40.1 million B) $42.8 million C) $18.4 billion D) $40.1 billion E) $42.8 billion

E

72) ________ is continuous advertising at low levels, reinforced periodically by waves of heavier activity. A) Flighting B) Frequency capping C) Pulsing D) Concentration E) Session capping

C

62) Which of the following steps in the innovation-adoption model of marketing communications corresponds to the cognitive stage that a buyer passes through? A) interest B) evaluation C) trial D) awareness E) adoption

D

Once a SWOT analysis has been completed, the strategic planner is ready to proceed to the goal formulation stage of the strategic-planning process model.

True

70) A salesperson who relies on creative methods for selling a company's tangible or intangible offerings is called a(n) ________. A) demand creator B) deliverer C) order taker D) missionary E) solution vendor

A

81) One of the possible objectives of marketing communications is helping consumers evaluate a brand's perceived ability to meet a currently relevant need. Which of the following is a negatively oriented relevant brand need? A) normal depletion B) sensory gratification C) social approval D) intellectual stimulation E) value enhancement

A

101) Compensation plans may need to vary depending on the type of salespersons. Which type of salesperson benefits from no ceiling or caps on commissions, overachievement commissions for exceeding quotas, and prize structures that allow multiple winners? A) stars B) core performers C) dogs D) cash cows E) laggards

A

126) An Internet service provider (ISP) is a(n) ________ company. A) pure-click B) brick and click C) brick-and-mortar D) m-commerce E) one-level

A

139) People who are technology enthusiasts, venturesome, and who enjoy tinkering with new products and mastering their intricacies are called ________. A) innovators B) early adopters C) early majority D) investigators E) experimenters

A

2) Which of the following elements of the marketing communications mix refers to any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor via print, broadcast, network, electronic, and display media? A) advertising B) personal selling C) sales promotion D) direct marketing E) public relations

A

127) In IBM's BANT acronym, A stands for ________. A) action B) authority C) activate D) austerity E) autonomy

B

83) Modern firms use the ________ tool to design products on a computer and then produce rough models to show potential consumers for their reactions. A) morphological analysis B) rapid prototyping C) concept testing D) perceptual mapping E) conjoint analysis

B

1) An advertising ________ is a specific communications task and achievement level to be accomplished with a specific audience in a specific period of time. A) medium B) objective C) channel D) budget E) copy

B

51) An intensive distribution strategy serves well for ________. A) premium cars B) commercial trucks C) private label products D) industrial equipment E) newspapers

E

131) Brick-and-click companies are those that have launched a Web site without any previous existence as a firm.

FALSE

123) After a test, the most customer-appealing offer will be the most profitable offer to make.

FALSE

37) When customers fall into different user groups with distinct buying preferences and practices, a product team structure is desirable.

FALSE

77) Print advertising, newspapers and magazines, is generally acknowledged as the most powerful advertising medium.

FALSE

78) A category concept defines the product's attributes and features.

FALSE

Brick-and-click companies are those that have launched a Web site without any previous existence as a firm.

False

Customer satisfaction is the only way by which a firm can increase its profitability.

False

113) A corporate vertical marketing system combines successive stages of production and distribution under single ownership.

TRUE

29) In 2013, total digital ad spending surpassed TV advertising for the first time.

TRUE

108) Which of the following terms describes the practice of retailers purchasing a greater quantity during a sales promotion period than they can immediately sell? A) diverting B) panic buying C) straight rebuy D) buyout E) forward buying

E

38) Market managers are staff people, with duties like those of a product manager.

TRUE

19) Advertising elasticities were estimated to be higher for established (0.3) than for new (0.1) products.

FALSE

36) Companies should use normal investment criteria to budget for new-product developments.

FALSE

36) Microsites are less relevant for companies selling low-interest products.

FALSE

12) In 2010, three top B-to-B ________ were Thermo Scientific lab and research supplies ($10.8 billion), Henry Schien dental, medical, and vet supplies ($7.5 billion) and WESCO International electrical and industry maintenance supplies ($5 billion). A) inbound telemarketers B) catalog sellers C) outbound telemarketers D) infomercial marketers E) mobile marketers

B

144) What function does a company's public relations department perform when it promotes understanding of the organization through internal and external communications? A) lobbying B) corporate communications C) press relations D) product publicity E) counseling

B

82) One of the possible objectives of marketing communications is helping consumers evaluate a brand's perceived ability to meet a currently relevant need. Which of the following is a positively oriented relevant brand need? A) problem removal B) social approval C) normal depletion D) problem avoidance E) incomplete satisfaction

B

27) A direct marketing channel is a ________ channel. A) one-level B) two-level C) zero-level D) three-level E) reverse-flow

C

59) Social marketing programs designed to discourage cigarette smoking or excessive consumption of alcohol are examples of ________ campaigns. A) cognitive B) active C) behavioral D) value E) normative

C

13) The average click-through in terms of the percentage of consumers who click on a link for ________ is about 0.8 percent. A) search engine optimization B) pay-per-click ads C) standard banner ads D) microsites E) rich media banner ads

C

82) ________ operates an international word-of-mouth media network powered by 1 million demographically diverse, ordinary people who volunteer to talk up the products they deem worth promoting. A) Brand Advocates B) Vocalpoint C) P&G D) BzzAgent E) Influentials

D

46) Which of the following allows a firm to maintain control over service level and obtain more dedicated and knowledgeable selling? A) selective distribution B) intensive distribution C) push strategy D) exclusive distribution E) pull strategy

D

62) A ________ error occurs when the company dismisses a good idea. A) probability B) performance C) double counting D) DROP E) GO

D

80) Which method for establishing the total marketing communications budget sets communication budgets to achieve the same amount of share-of-voice as competitors? A) comparative-parity method B) objective-and-task method C) affordable method D) competitive-parity method E) percentage-of-sales method

D

58) Apple hosts a large number of ________, which become customers' primary source of product information after warranties expire and are organized by product lines and type of user (consumer or professional). A) niche networks B) social networks C) microblogs D) blogs E) online communities

E

18) Puffery refers to simple exaggerations in advertisements that are not meant to be believed and are considered illegal.

FALSE

69) If a small Iowa college builds awareness among applicants from Nebraska, increases the target audience's knowledge about its offerings, communicates in a way that makes the target audience like it and prefer it to other colleges, builds intent to apply, and gets the target audience to attend, they are using an AIDA model of consumer responses.

FALSE

70) San Francisco bakery Mission Pie benefited from sending tweet alerts about its events on TreeHugger.com.

FALSE

The production concept is one of the newest concepts in business.

False

144) Closing signs from the buyer include physical actions, statements or comments, and questions.

TRUE

100) Who is primarily responsible for efficiency control? A) BAMT B) marketing auditor C) middle management D) line and staff management E) top management

D

90) ________ is a source of a spokesperson's credibility that describes how objective and honest the spokesperson is perceived to be. A) Likability B) Expertise C) Experience D) Trustworthiness E) Compassion

D

159) What are the ten deadly marketing sins? Please include the signs that the sin exists and a suggested solution for each.

Deadly Sin #1: The company is not sufficiently market focused and customer driven. Signs: There is evidence of poor identification of market segments, poor prioritization of market segments, no market segment managers, employees who think it is the job of marketing and sales to serve customers, no training program to create a customer culture, and no incentives to treat the customer especially well. Solutions: Use more advanced segmentation techniques, prioritize segments, specialize the sales force, develop a clear hierarchy of company values, foster more "customer consciousness" in employees and company agents, and make it easy for customers to reach the company and respond quickly to any communication. Deadly Sin #2: The company does not fully understand its target customers. Signs: The latest study of customers is three years old; customers are not buying your product like they once did; competitors' products are selling better; and there is a high level of customer returns and complaints. Solutions: Do more sophisticated consumer research, use more analytical techniques, establish customer and dealer panels, use customer relationship software, and do data mining. Deadly Sin #3: The company needs to better define and monitor its competitors. Signs: The company focuses on near competitors, misses distant competitors and disruptive technologies, and has no system for gathering and distributing competitive intelligence. Solutions: Establish an office for competitive intelligence, hire competitors' people, watch for technology that might affect the company, and prepare offerings like those of competitors. Deadly Sin #4: The company does not properly manage relationships with stakeholders. Signs: Employees, dealers, and investors are not happy; and good suppliers do not come. Solutions: Move from zero-sum thinking to positive-sum thinking; and do a better job of managing employees, supplier relations, distributors, dealers, and investors. Deadly Sin #5: The company is not good at finding new opportunities. Signs: The company has not identified any exciting new opportunities for years, and the new ideas the company has launched have largely failed. Solutions: Set up a system for stimulating the flow of new ideas. Deadly Sin #6: The company's marketing planning process is deficient. Signs: The marketing plan format does not have the right components, there is no way to estimate the financial implications of different strategies, and there is no contingency planning. Solutions: Establish a standard format including situational analysis, SWOT, major issues, objectives, strategy, tactics, budgets, and controls; ask marketers what changes they would make if they were given 20 percent more or less budget; and run an annual marketing awards program with prizes for best plans and performance. Deadly Sin #7: Product and service policies need tightening. Signs: There are too many products and many are losing money; the company is giving away too many services; and the company is poor at cross-selling products and services. Solutions: Establish a system to track weak products and fix or drop them; offer and price services at different levels; and improve processes for cross-selling and up-selling. Deadly Sin #8: The company's brand-building and communications skills are weak. Signs: The target market does not know much about the company; the brand is not seen as distinctive; the company allocates its budget to the same marketing tools in about the same proportion each year; and there is little evaluation of the ROI impact of marketing communications and activities. Solutions: Improve brand-building strategies and measurement of results; shift money into effective marketing instruments; and require marketers to estimate the ROI impact in advance of funding requests. Deadly Sin #9: The company is not organized for effective and efficient marketing. Signs: Staff lacks 21st-century marketing skills, and there are bad vibes between marketing/sales and other departments. Solutions: Appoint a strong leader and build new skills in the marketing department, and improve relationships between marketing and other departments. Deadly Sin #10: The company has not made maximum use of technology. Signs: There is evidence of minimal use of the Internet, an outdated sales automation system, no market automation, no decision-support models, and no marketing dashboards. Solutions: Use the Internet more, improve the sales automation system, apply market automation to routine decisions, and develop formal marketing decision models and marketing dashboards.

70) Some business practices, such as deceptive advertising, exclusive dealing, and predatory competition, sharply divide critics regarding whether they are clearly unethical or illegal.

FALSE

Loyal customers are the best ambassadors for a brand.

False

8) Fewer than 10 percent of all new products are truly innovative and new to the world.

TRUE

86) Concentrated advertising is well suited for products with one selling season or related holiday.

TRUE

Walmart and Target stores could be part of the distribution channel for a marketer of hair care products.

True

103) ________ are consumer promotion tools that provide a price reduction after purchase rather than at the retail shop. A) Rebates B) Cents-off deals C) Price packs D) Coupons E) Premiums

A

20) A product-management organization ________. A) often proves to be cost-effective B) simplifies the process of developing a national strategy C) focuses on building market share rather than customer relationships D) reduces an organization's staffing requirements E) allows product managers to achieve functional expertise

C

75) Established brands usually are supported with lower advertising budgets, measured as a ratio to sales.

TRUE

20) High-tech firms that function in a market with high technological uncertainty, high market uncertainty, and high investment costs are not likely to seek radical innovation.

FALSE

137) A marketing audit only benefits a company that is in trouble; companies in good health do not need to conduct them.

FALSE

139) Sales representatives who are paid mostly in commissions require more supervision than other salespeople.

FALSE

140) Identify three different types of personal communication channels.

Personal communications channels derive their effectiveness from individualized presentation and feedback and include direct marketing, personal selling, and word of mouth. Advocate channels consist of company salespeople contacting buyers in the target market. Expert channels consist of independent experts making statements to target buyers. Social channels consist of neighbors, friends, family members, and associates talking to target buyers.

Customer-perceived value is based on the difference between benefits the customer gets and costs he or she assumes for different choices.

True

49) Integron Inc., a company that manufactures office furniture, has recently observed a dip in its profitability. Salespeople visit an average prospect at least six times before closing a deal. What suggestion can you give the company to reduce this expense of direct marketing and increase its profitability?

Student answers will vary. The company can replace some of the sales calls with telemarketing. This would help them reduce the costs and increase profitability.

116) In a one-sided message, presenting the strongest argument first arouses attention and interest, important in media where the audience often does not attend to the whole message.

TRUE

118) If messages are too conflicting, audiences will counterargue and disbelieve them.

TRUE

119) Motivational or "borrowed interest" devices — such as the presence of cute babies, frisky puppies, popular music, or provocative sex appeals — are often employed to attract attention and raise involvement with an ad.

TRUE

31) A functional organization allows for adequate planning as the number of products and markets of a firm increases.

FALSE

22) Paid media includes company-generated advertising, publicity, and other promotional efforts.

TRUE

10) Which of the following is a factor considered when a customer is evaluated based on the RFM formula? A) the amount of time passed after the customer's last visit B) the product categories purchased by the customer C) the mode of payment used by the customer D) the location from which the customer has bought goods E) the type of feedback provided by the customer

A

11) Which of the following is an element of an offer strategy? A) the medium used for delivery B) the number of customers in the locality C) the vision of the company D) the skills required for production E) the details of customer order received

A

78) ________ power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power. A) Coercive B) Reward C) Legitimate D) Expert E) Referent

A

79) What percentage of word-of-mouth content cascades to more than one person beyond the initial recipient? A) 4 percent B) 6 percent C) 8 percent D) 10 percent E) 25 percent

A

110) To succeed in the future, marketing must ________. A) become more holistic B) build brands through promotion rather than performance C) be more departmental D) focus on free-spending E) rely more on mass marketing

A

13) Which of the following is an example of an advertising platform? A) posters and leaflets B) company magazines C) fairs and trade shows D) sales presentations E) continuity programs

A

9) Which of the following is NOT one of the seven design elements featured in effective Web sites (as identified by Rayport and Jaworski)? A) change B) context C) content D) customization E) commerce

A

139) In the future, there will be greater emphasis on precision marketing as opposed to mass marketing.

TRUE

63) According to the hierarchy-of-effects model, which of the following corresponds to the behavioral stage that a buyer passes through? A) awareness B) knowledge C) purchase D) preference E) conviction

C

64) When GlaxoSmithKline sponsored a weight-loss community in preparation for the launch of its first weight-loss drug, Alli, which of the following was the key benefit of the online community? A) Consumers did not have commercial interests or company affiliations. B) Democratization of innovation for lowest-common denominator solutions. C) Two-way information flow led to useful, hard-to-get customer information and insights. D) A point of contact for product recalls. E) One-way communication with customers.

C

7) ________ refer to the marketing communications element that involves company-sponsored activities and programs designed to create daily or special brand-related interactions with consumers. A) Publicity campaigns B) Trade promotions C) Advertisements D) Public relations E) Events and experiences

E

149) A public is any group that has an actual or potential interest in or impact on a company's ability to achieve its objectives.

TRUE

87) Channel power is the ability to alter channel members' behavior so that they take actions they would not have taken otherwise.

TRUE

77) Many companies focus on multiple cause-related marketing programs to simplify execution and maximize impact.

FALSE

A marketer who wants to position his line of cameras as the "Cadillac" of all cameras is focused on connecting with customers.

False

126) In IBM's BANT acronym, B stands for ________. A) budget B) background C) baseline D) benchmark E) basic

A

A) advertising allowance B) free samples C) contests for sales reps D) display allowance E) discount coupons

C

95) One of the measures of online word of mouth at DuPont was the effort's ________, or whether it was not a one-shot deal. A) authority B) sentiment C) relevance D) scale E) sustainability

E

151) Compatibility refers to the degree to which the innovation matches the values and experiences of the individuals.

FALSE

Forecasting is the art of anticipating what buyers are likely to do under a given set of conditions.

True

129) In IBM's BANT acronym, T stands for ________. A) touch B) tempt C) team D) timeline E) turn over

D

13) Sales agents and brokers are called facilitators in a marketing channel.

FALSE

Attracting tourists to Wisconsin is an example of marketing properties.

False

139) What is geofencing? Provide an example.

The idea of geofencing is to target customers with a mobile promotion when they are within a defined geographical space, typically near or in a store. The local-based service requires just an app and GPS coordinates, but consumers have to opt in. Neiman-Marcus is piloting geofencing in its stores so its salespeople know when their more valuable customers are on the premises and can look at their purchase history to provide more personalized service.

83) Which of the following is NOT an example of viral marketing? A) Quicksilver puts out surfing videos and surf-culture books for teens. B) Johnson & Johnson has a popular parenting advice Web site. C) Walmart places videos with money-saving tips on YouTube. D) Mountain Dew has a record label and offers free downloads. E) Hasbro places a Facebook ad about its TV channel.

E

109) Marketers can set communications objectives at any level of the hierarchy-of-effects model.

TRUE

118) The historical approach correlates past sales to past advertising expenditures using advanced statistical techniques.

TRUE

105) Rapid prototyping refers to designing products on a computer and then producing rough models to show potential consumers for their reactions.

TRUE

107) Consumer preferences for alternative product concepts can be measured with conjoint analysis.

TRUE

After a company has chosen a channel system, it must select, train, motivate, and evaluate individual intermediaries for each channel.

True

133) If Jose is describing chip processing speeds and memory capacity, he is describing the ________ of his firm's offering in the FABV approach. A) features B) advantages C) benefits D) value E) macroenvironment

A

5) Which of the following is an example of a trade promotion? A) free samples B) discount coupons C) display allowances D) contests for sales reps E) premiums

C

58) ________ marketing by nonprofit or government organizations furthers a cause. A) Corporate societal B) Brand C) Causal D) Social E) Place

D

130) In which developed Asian market is mobile marketing becoming a central component of customer experiences? A) Hong Kong B) Japan C) Singapore D) South Korea E) All of the above

E

156) Exclusive dealings and tying agreements are illegal and prohibited by law.

FALSE

The customer relationship management process involves all the activities related to receiving and approving orders, shipping the goods on time, and collecting payment.

False

43) How do direct mail response rates relate to a campaign's long-term impact? Provide an example.

Response rates typically understate a campaign's long-term impact. Suppose only 2 percent of the recipients who receive a direct-mail piece advertising Samsonite luggage place an order. A much larger percentage became aware of the product (direct mail has high readership), and some percentage may have formed an intention to buy at a later date (either by mail or at a retail outlet). Some may mention Samsonite luggage to others as a result of the direct-mail piece. To better estimate a promotion's impact, some companies measure the impact of direct marketing on awareness, intention to buy, and word of mouth.

101) Only 4 percent of content cascades to more than one person beyond the initial recipient.

TRUE

154) Multichannel conflicts are common when the members of one channel obtain a lower price based on larger-volume purchases.

TRUE

20) The newest and fastest-growing channels for communicating and selling directly to customers are digital.

TRUE

20) What you say (ad copy) is more important than the number of times you say it (ad frequency).

TRUE

29) Direct mail can produce prospect leads, strengthen customer relationships, inform and educate customers, remind customers of offers, and reinforce recent customer purchase decisions.

TRUE

41) When Johnson & Johnson's ads popped up on brokers' Web sites whenever the stock market fell by 100 points or more, it was an example of an interstitial.

TRUE

78) Although newspapers are timely and pervasive, magazines are typically more effective at building user and usage imagery.

TRUE

35) There are three types of product-team structures: vertical, triangular, and horizontal.

TRUE

40) Internet users spend only 5 percent of their time actually searching for information.

TRUE

47) DB Bank is launching a new investment product targeting senior citizens in the United States. The company decides to use direct marketing for selling the product. What direct marketing strategy would allow the company early testing and response measurement of the product?

The company can use direct mail to communicate with prospects. It permits target market selectivity, can be personalized, is flexible, and allows early testing and response measurement.

42) What are the elements of a direct mail offer? How can each be tested?

The offer strategy has five elements — the product, the offer, the medium, the distribution method, and the creative strategy. Fortunately, all can be tested. The direct-mail marketer also must choose five components of the mailing itself: the outside envelope, sales letter, circular, reply form, and reply envelope. A common direct marketing strategy is to follow up direct mail with an e-mail. The different elements of an offer strategy, such as products, product features, copy platform, mailer type, envelope, prices, or mailing lists, can be tested under real market conditions.

146) What is the purpose of profitability control?

The purpose of profitability control is to examine where the company is making and losing money. Companies should measure the profitability of their products, territories, customer groups, segments, trade channels, and order sizes to help determine whether to expand, reduce, or eliminate any products or marketing activities.

146) What are the six steps in personal selling?

The six steps are: 1. prospecting and qualifying 2. preapproach 3. presentation and demonstration 4. overcoming objections 5. closing 6. follow-up and maintenance

73) What are the three main platforms for social media?

The three main platforms for social media include: 1. online communities and forums 2. blogs (individual blogs and blog networks such as Sugar and Gawker) 3. social networks (like Facebook, Twitter, and YouTube)

Consumers now receive sales offers through direct-mail letters and catalogs, television, cell phones, and the Internet. The nonstore-based retailers are taking business away from store-based retailers.

True

Customer profitability analysis is best conducted with the tools of an accounting technique called activity-based costing.

True

103) During ________ testing, the company's technical people observe how customers use the product, a practice that often exposes unanticipated problems of safety and servicing and alerts the company to customer training and servicing requirements. A) beta B) research C) sales-wave D) alpha E) simulated

A

108) A group of small grocery shops forms a new business entity to buy products directly from manufacturers. The group buys products in bulk that are then distributed among members. This helps the shops obtain better profit margins. Which of the following types of vertical marketing systems can be observed here? A) contractual B) corporate C) administered D) controlled E) regulatory

A

17) Which of the following is a disadvantage of direct marketing? A) invasion of privacy B) inability to build brand awareness C) low chances of customers avoiding messages D) inability to control marketing communication E) inability to maintain information security

A

141) ________ is a marketing communications tool that includes a variety of programs to promote or protect a company's image or individual products. A) Public relations B) Advertising C) Sales promotion D) Personal selling E) Direct marketing

A

40) Which of the following equations accurately describes the total number of exposures (E) of an advertising message through a given medium? A) E = reach × frequency B) E = (reach × frequency) / impact C) E = reach × frequency × impact D) E = (reach + frequency) / impact E) E = frequency / reach

A

66) The first step in the social marketing planning process is ________. A) determining the focus of the program B) selecting the target audience C) setting objectives and goals D) designing the market offering E) finding a source of funding

A

105) A(n) ________ VMS consists of independent firms at different levels of production and distribution, integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone. A) administered B) contractual C) corporate D) regulated E) referent

B

Use of Power (Scenario) Broomer manufactures fashion apparel for women, men, and children. Its products are in high demand and apparel stores are more than willing to carry and sell Broomer's garments. The company recently introduced a new clothing line named "Inducer," targeted at youth. However, the new line is not well received by the market, and sales fail to take off even three months after its launch. 75) In an effort to boost sales, Broomer offers its retailers a higher margin for promoting and selling products from the "Inducer" line to customers. This is an example of ________ power. A) coercive B) reward C) passive D) expert E) referent

B

146) The most effective communications mix tool at later stages of the buying process is ________ because it is particularly effective at building buyer preference, conviction, and action. A) sales promotions B) personal selling C) advertising D) direct and interactive marketing E) events

B

147) Which of the following is a medium of visual identity for a company? A) annual reports B) dress codes C) press releases D) seminars E) trade shows

B

16) A company selling in a national market often organizes its sales force along ________. A) functional groups B) geographic lines C) product teams D) brand groups E) product categories

B

27) Transforming into a true market-driven company requires organizing around ________. A) sales B) customer segments C) products D) functions E) brands

B

28) ________ teams are cross-functional groups charged with developing a specific product or business. A) Virtual B) Venture C) Fundamental D) Elemental E) Transitory

B

57) Which marketing channel is associated with the highest value added per sale? A) retail stores B) sales force C) distributors D) Internet E) telemarketing

B

58) Which of the following is a disadvantage of using newsletters as an advertising medium? A) low audience selectivity B) high chances of runaway costs C) lack of adequate control D) relatively high costs E) lack of interactive possibilities

B

6) When is a pull strategy appropriate? A) when there is low brand loyalty B) when consumers are able to perceive differences between brands C) when brand choice is made in the store D) when it is a low involvement purchase E) when the product is an impulse item

B

63) Which of the following represents the objective of a social marketing campaign aimed at changing people's values? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity to implement lifestyle changes.

B

77) Broomer threatens to withdraw all its other products from the retailers' stores if they are unwilling to push products from the "Inducer" line. This is an example of ________ power. A) reward B) coercive C) legitimate D) expert E) referent

B

78) Which of the following increases the likelihood a brand is discussed in face-to-face, oral communications? A) brand novelty B) brand salience C) brand excitement D) brand surprise E) brand edginess

B

83) A new firm typically starts as a local operation selling in a fairly circumscribed market by ________. A) finding and developing new intermediaries B) using a few existing intermediaries C) forming partnerships with the market leader D) creating a special channel E) forming partnerships with other firms

B

84) Online customer reviews are the second-most trusted source of brand information. What is the most trusted source? A) print advertising B) recommendations from friends and family C) salesperson recommendation D) celebrity endorsements E) Facebook recommendations

B

A) Samples B) Coupons C) Rebates D) Price packs E) Premiums

B

8) What percentage of total digital ad spending is accounted for by mobile? A) 1 percent B) 7 percent C) 17 percent D) 30 percent E) 43 percent

C

110) In a ________ marketing system, two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity. A) reverse flow B) vertical C) horizontal D) lateral E) forward flow

C

70) Flighting as an advertising timing pattern is most useful when ________. A) purchase cycle is rather frequent B) substantial advertising budget is available C) items are seasonal D) tightly defined buyer categories exist E) there are expanding market situations

C

100) Which of the following is usually referred to as a full-blown test market? A) an internal focus group B) a discussion group C) a country D) a city or a few cities E) a laboratory

D

69) A sales representative whose expertise is in unraveling customers' problem is called a(n) ________. A) order taker B) missionary C) technician D) solution vendor E) demand creator

D

64) The original and oldest form of direct marketing is ________. A) billboards B) banner advertising C) mail campaigns D) outbound telemarketing calls E) field sales calls

E

50) Which of the following is an advantage of using radio as an advertising medium? A) higher attention than television B) standardized rate structures C) long duration of ad exposure D) high quality reproduction E) high geographic selectivity

E

Activity-based costing does not consider indirect, variable, and overhead costs.

False

Brand personality is the specific mix of human traits that may be attributed to a particular brand.

True

Unprofitable customers who defect to a competitor should be encouraged to do so.

True

31) When Tough Mudder launched in 2010, it spent its entire $8,000 communication budget on mobile advertising, which generated plenty of word of mouth.

FALSE

56) ________ are a means for consumers to share text, images, audio and video information with each other and with companies, and vice versa. A) Social media B) Interstitials C) Microsites D) Pay-per-click ads E) Mobile ads

A

The market forecast shows expected market demand, not maximum market demand.

True

119) Mobile ad spending approached ________ worldwide in 2013. A) $14 million B) $18 million C) $48 million D) $18 billion E) $48 billion

D

Prospect theory maintains that consumers frame decision alternatives in terms of gains and losses according to a value function.

True

147) The degree to which the beneficial results of an innovation's use are observable or describable to others is called ________. A) divisibility B) communicability C) compatibility D) relative advantage E) plainness

B

104) BzzScapes are digital tools to activate widespread opinion-sharing throughout its own social media site and each member's personal social circles.

TRUE

152) Jaycee was using ________ when his organization tried to win the support of the leaders of one of his distributors by including them in advisory councils, boards of directors, and the like. A) dual compensation B) employee exchange C) co-optation D) joint membership E) strategic justification

C

Price pressure will increase for undifferentiated products than differentiated products.

True

22) Which of the following channel functions constitute only a backward flow? A) movement of physical goods B) placing orders with manufacturers C) persuasive communication D) storage of physical goods E) overseeing actual transfer of ownership

B

12) Which of the following observations is true? A) In today's business environment, marketers are mainly middlemen. B) Marketing has the sole ownership of customer interactions. C) Only when all employees realize their job is to create, serve, and satisfy customers does the company become an effective marketer. D) Marketers must clearly differentiate all customer-facing processes, such that every customer receives a personalized marketing message. E) Marketers must avoid collaborating with other organizational departments, as it blurs functional responsibilities.

C

32) TV advertising is considered to be particularly advantageous because ________. A) the low volume of nonprogramming material on television makes it difficult for consumers to ignore or forget ads B) it provides detailed product information and effectively communicates user and usage imagery C) it can vividly demonstrate product attributes and persuasively explain their corresponding consumer benefits D) TV channels are very targeted, ads are relatively inexpensive to produce and place, and short closings allow for quick response E) it lets companies achieve a balance between broad and localized market coverage

C

113) Which of the four characteristics of a marketing audit is described by the fact that outside consultants can bring necessary objectivity to the process? A) comprehensive B) systematic C) independent D) periodic E) opinion-based

C

125) Experts recommend mobile ad copy should occupy only ________ percent of the screen, avoiding complex viewing experiences that may take a toll on consumers' battery and data availability as well as their time. A) 30 B) 40 C) 50 D) 60 E) 70

C

148) Which of the following terms refers to the degree to which the innovation can be tried on a limited basis? A) compatibility B) relative advantage C) divisibility D) communicability E) complexity

C

16) Which of the following is NOT one of the ways to maximize the marketing value of e-mails? A) Give the customer a reason to respond. B) Personalize the content of your e-mails. C) Offer something the customer can get via direct mail. D) Make it easy for customers to opt in as well as unsubscribe. E) Combine e-mail with other communications.

C

17) After creating a product prototype, a company tests it within the firm to see how it performs in different applications. The company refines the prototype to correct the mistakes found in in-house testing. What should be the next step? A) commercializing the product B) performing concept testing C) conducting beta testing with customers D) creating a marketing strategy for the product E) performing business analysis

C

27) Identify a shortcoming of giving the responsibility to develop new products to the product managers of a company. A) They would not be familiar with the industry standards. B) Product managers would not have an operational focus. C) Product managers are often busy managing existing lines. D) They will find it difficult to gain support from employees. E) Product managers are less likely to use participative management.

C

5) Comparative advertising works best when ________. A) it elicits cognitive and behavioral motivations simultaneously B) the firm is trying to minimize brand dilution C) consumers are processing advertising in a detailed, analytical mode D) it elicits affective motivation, followed by cognitive motivation E) the advertising message uses negative fear appeals

C

53) The ________ technique for stimulating creativity lists all the characteristics of an object and then modifies each to try to arrive at a new idea. A) reverse assumption analysis B) lateral marketing C) attribute listing D) forced relationship E) morphological analysis

C

145) General Motors' executives work for a short time in some dealerships, and some dealership owners work in GM's dealer policy department. This strategy helps the company avoid conflicts with its dealers. This is an example of the ________ strategy. A) employee exchange B) dual compensation C) joint membership D) co-optation E) diplomacy

A

39) The qualitative value of an exposure through a given medium is known as ________. A) frequency B) reach C) amplitude D) impact E) range

D

47) Which of the following channel alternatives is most suited to handle complex products and transactions? A) sales forces B) the Internet C) dealers D) telemarketers E) direct mails

A

140) ________ channel conflict occurs between channel members at the same level. A) Horizontal B) Vertical C) Multichannel D) Administrative E) Contractual

A

93) Which of the following is an example of a trade promotion? A) free samples B) discount coupons C) display allowances D) contests for sales reps E) premiums

C

82) ________ means presenting the product concept to target consumers, symbolically or physically, and getting their reactions. A) Perceptual mapping B) Brand-positioning mapping C) Brand attribute mapping D) Concept development E) Concept testing

E

109) The fixed amount in a salesperson's salary is primarily designed to stimulate and reward efforts from salespeople.

FALSE

17) If the product class is mature, then the advertising objective is to convince the market of the brand's superiority.

FALSE

A fad is more predictable and durable than a trend.

False

148) Define sale-variance analysis and microsales analysis.

Sales-variance analysis measures the relative contribution of different factors to a gap in sales performance. Microsales analysis looks at specific products, territories, and so forth that failed to produce expected sales.

132) Price pressure will increase for undifferentiated products than differentiated products.

TRUE

The marketing funnel identifies the profitability of consumers at each stage in the decision process

False

The marketing funnel identifies the profitability of consumers at each stage in the decision process.

False

The overall rate of ad blocking on Web browsers is 22 percent.

False

Cabot (Scenario) Cabot, a large car manufacturer, has four popular car brands in different segments. It has a manufacturing facility near Detroit, MI, where parts common to all the four brands are manufactured. Other specific parts like the brake system, windshield, bonnet, locks, and so on are manufactured in separate plants. Each make has its own product manager and support staff. All product managers report to the CEO of the company. 124) Cabot's CEO's annual compensation is an example of a ________ cost. A) direct B) variable C) traceable common D) nontraceable common E) manufacturing

D

4) ________ advertising aims to create liking, preference, conviction, and purchase of a product or service. A) Corporate B) Reminder C) Persuasive D) Reinforcement E) Informational

C

10) Which of the following conditions necessitates that the objective of advertising should be to stimulate more usage of a product? A) The advertised product belongs to a nascent product category. B) The company is not the market leader. C) The advertised brand is superior to the market leader. D) The product class is mature. E) Brand usage for the product is very high.

D

101) The least costly way of consumer-goods market testing is ________. A) simulated test marketing B) controlled test marketing C) a few test markets D) sales-wave research E) test marketing in 25 percent of the country

D

80) Social marketing programs take little time to develop and are generally easy to implement.

FALSE

81) The higher the forgetting rate associated with a brand, product category, or message, the lower the warranted level of repetition.

FALSE

83) Outdoor advertising is more effective at creating new brand associations than enhancing brand awareness or brand image.

FALSE

142) Which of the following characteristics is closely associated with late majority adopter groups? A) superior technological knowledge B) low price sensitiveness C) opinion leadership D) deliberate pragmatism E) high risk aversion

E

103) P&G's Vocalpoint is a group built on the premise that moms who have conversations with three to five women each day are more influential than women who speak to 25 to 30 other women during the day.

FALSE

105) A recent Nielsen survey found that online customer reviews were the most trusted source of brand information.

FALSE

106) A contractual sales force consists of part-time employees who work exclusively for the company.

FALSE

108) A major drawback of conjoint analysis is that it cannot be used to measure objective attributes such as estimated market share and profit.

FALSE

137) The redemption rate for paper coupons (10 percent) far exceeds that of mobile coupons (1 percent).

FALSE

14) A pull strategy is particularly appropriate when there is low brand loyalty in a category, brand choice is made in the store, the product is an impulse item, and product benefits are well understood.

FALSE

14) Persuasive advertising aims to create brand awareness and knowledge of new products or new features of existing products.

FALSE

150) The public relations function of lobbying involves advising management about public issues as well as company positions and image during good times and bad.

FALSE

150) The step in the consumer-adoption process where a consumer considers whether to try the innovation is interest.

FALSE

151) The main objective of marketing public relations is to secure editorial space in print and broadcast media to promote or "hype" a product, service, idea, place, person, or organization.

FALSE

77) Targeting refers to the process of deciding which customers will get scarce products during product shortages.

FALSE

Exclusive dealings and tying agreements are illegal and prohibited by law.

False

138) Media coverage and telecasts only expose the brand and do not necessarily embellish its meaning in any direct way.

TRUE

24) Marketing communications in almost every medium and form have been on the rise, and some consumers feel they are increasingly invasive.

TRUE

30) Points are established for varying RFM levels; the more points, the more attractive the customer.

TRUE

98) A group of entrepreneurs is planning to start a food processing company. Comment on the likely evolution of the company's marketing channels.

The firm is likely to start as a local operation selling in a fairly circumscribed market, using a few existing intermediaries. At this stage, it is often difficult to convince the available intermediaries to handle the firm's line. If the firm is successful, it might branch into new markets with different channels. In smaller markets, the firm might sell directly to retailers; in larger markets, through distributors.

79) The term sales representative covers a broad range of positions, tasks, and responsibilities. List and briefly describe each of the positions.

The positions include: • deliverer: the major task is the delivery of a product • order taker: who acts predominantly as an inside order taker or outside order taker • missionary: a salesperson who is not expected or permitted to take an order but whose major task is to build goodwill or to educate the actual or potential user • technician: a salesperson with a high level of technical knowledge • demand creator: one who relies on creative methods for selling tangible products • solution vendor: one whose expertise is in the solving of a customers' problems.

A belief is a person's enduring favorable or unfavorable evaluation, emotional feeling, and action tendency toward some object or idea.

False

Anchoring heuristic comes into play when consumers base their predictions on the quickness and ease with which a particular example of an outcome comes to mind.

False

PlanetFeedback.com is a website where consumers can post compliments about products and services. This is an example of a government-related public resource, which is one of the main ways marketers can research competitors' product strengths and weaknesses online.

False

Regulation of technological changes has been relaxed by the U.S. government over recent years.

False

Selling through creative advertising is the most important element in business marketing.

False

Services constitute the bulk of most countries' production and marketing efforts.

False

The aim of customer relationship management is to keep the costs of meeting and tracking consumers as low as possible.

False

The task environment of a firm consists of demographic, economic, natural, and technological environments, as well as the political-legal system and the social-cultural arena.

False

When State Farm uses consumer research to create a mental map of consumers that indicates consumers perceive State Farm as​ conservative, safe,​ responsive, and​ convenient, it is interested in​ subliminal perceptions.

False

department store chain to target the upcoming Thanksgiving weekend. Which of the following advertising timing patterns is best suited for running these ads? A) continuity B) flighting C) pulsing D) concentration E) frequency capping

D

135) What are mobile apps and how are they used?

Mobile apps are bite-sized software programs that can be downloaded to smart phones. Apps can perform useful functions — adding convenience, social value, incentives, and entertainment and making consumers' lives a little or a lot better.

"What will we do if it happens?" is a question that managers typically ask while conducting a scenario analysis.

True

In Maslow's Hierarchy of Needs, a sense of belonging and love are examples of social needs.

True

Members within a social class tend to behave more alike compared to members from two different social classes.

True

One of the ways a company like Caterpillar could increase the customer-perceived value of an offer, relative to a competitor like Komatasu, is to increase the total customer benefit by improving psychological benefits of its product, services, people, and/or image.

True

Place marketers include economic development specialists, real estate agents, commercial banks, local business associations, and advertising and public relations agencies.

True

The airline industries implement yield pricing by offering discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires.

True

The goal of exploratory research is to shed light on the real nature of the problem and to suggest possible solutions or new ideas.

True

The network marketing sales system works by recruiting independent business people who act as distributors.

True

105) Company call center executives provide procedural information to clients who call in about the specifications and operation of the product. These call center employees can be called ________. A) technical support people B) sales assistants C) telemarketers D) deliverers E) consultants

A

147) Co-optation is an effort by one organization to win the support of the leaders of another by ________. A) including them in advisory councils B) engaging in mediation and arbitration C) encouraging joint memberships in trade associations D) encouraging employee exchanges E) offering strategic justifications

A

23) Identify the channel function that constitutes both backward and forward flow. A) obtaining funds for financing B) storage of physical goods C) persuasive communication D) movement of physical goods E) overseeing actual transfer of ownership

A

14) Internet users spend ________ of their time online searching for information. A) 5 percent B) 10 percent C) 12 percent D) 15 percent E) 20 percent

A

45) Which of the following types of distribution involves severely limiting the number of channel intermediaries? A) exclusive B) selective C) intensive D) aggressive E) retail

A

56) Which of the following is a disadvantage of using Yellow Pages as an advertising medium? A) high competition B) poor local market coverage C) low believability D) lack of adequate reach E) high total costs

A

80) A manufacturer is using legitimate power when it ________. A) requests a behavior that is warranted under the selling contract B) threatens to withdraw a resource or terminate a relationship C) offers intermediaries an extra benefit for performing specific acts or functions D) makes the intermediaries sell more of a particular product by offering rewards E) sells more products by making use of its reputation in the market

A

9) Which of the following is a major advantage of using direct mail? A) Direct mail permits target market selectivity. B) It is the best suited tool for selling complex products. C) Campaign testing is not needed for direct mail. D) Direct mail has very high conversion rates. E) It is the best method to sell industrial products.

A

91) Part-time paid employees who work exclusively for the company are a part of the ________ sales force. A) direct B) virtual C) contractual D) implicit E) brokered

A

91) To estimate replacement sales, management must research the product's ________, the number of units that fail in year one, two, three, and so on. A) survival-age distribution B) life-cycle ratio C) obsolescence rate D) business turnover ratio E) product-performance usage

A

119) If Ming was interested in capturing distribution metrics for her retail organization, which of the following might she consider? A) customer complaints B) share of shelf C) effective reach D) trial rate E) market share

B

28) Which of the following is true of building a creative marketing organization? A) It is enough if firms are customer-oriented. B) Companies must watch trends and be ready to capitalize on them. C) Firms should focus more on efficiency rather than innovation. D) Companies should attempt to minimize risks as much as possible. E) Firms should focus on protecting their existing markets and physical resources.

B

57) Which of the following is a disadvantage of using the Internet as an advertising medium? A) limited audience selectivity B) increasing clutter C) lack of interactive possibilities D) relatively high costs involved E) fleeting ad exposure time

B

58) Which of the following statements demonstrates behavioral loyalty toward a brand? A) 2Wheels has very customer-friendly return policies for its products. B) I always buy 2Wheels products when I'm looking for bike accessories. C) Most of my friends agree that 2Wheels is the best place for durable biking gear. D) 2Wheels has the friendliest customer service people I've ever met. E) I think that 2Wheels products are the highest-quality products in their price range.

B

59) Increasingly, new-product ideas arise from ________ that combines two product concepts or ideas to create a new offering. A) reverse assumption analysis B) lateral marketing C) attribute listing D) forced relationships E) morphological analysis

B

6) Greta is attempting to get as many orders as possible. Which direct marketing tool is generally associated with the highest order response rate? A) e-mail to an internal company list B) direct mail to an internal company list C) e-mail to a general list D) direct mail to a general list E) banner advertising on the company's Web site

B

64) ________ is the number of times the average buyer buys a product during the period. A) Buyer turnover B) Purchase frequency C) Customer retention rate D) Advertising impressions E) Total number of exposures

B

7) ________, or reducing the number of organizational levels to get closer to the customer, is one of the important shifts in marketing and business practices. A) Merging B) Flattening C) Globalizing D) Focusing E) Justifying

B

89) ________ is one of the sources of a spokesperson's credibility that refers to the specialized knowledge that he or she claims to possess. A) Trustworthiness B) Expertise C) Acquaintance D) Likability E) Professionalism

B

131) Which of the following questions is LEAST relevant during the preapproach stage of the sales process? A) How is the purchasing process conducted at the company? B) How is the purchasing department structured? C) How can I overcome psychological resistance? D) Is purchasing centralized? E) What is the best contact approach?

C

14) Which of the following is an example of an events and experiences platform? A) fairs and trade shows B) continuity programs C) factory tours D) sales presentations E) community relations

C

3) When Lola asked what the advertising campaign should say, she was concerned with which of the five Ms? A) Mission B) Money C) Message D) Media E) Measurement

C

8) ________ advertising aims to convince current purchasers that they made the right choice. A) Persuasive B) Informational C) Reinforcement D) Reminder E) Comparative

C

72) What is crowdsourcing?

Crowdsourcing means inviting the Internet community to help create content or software, often with prize money or a moment of glory as an incentive.

6) Which of the following business practices focuses specifically on designing the organization and setting up processes to respond quickly to changes in the environment? A) benchmarking B) outsourcing C) focusing D) accelerating E) globalizing

D

89) ________ is the rung of the customer loyalty ladder where the customer convinces others to purchase/join. A) Word of mouth/buzz B) Repeat purchase C) Satisfaction D) Evangelism E) Ownership

D

59) LCH is a leading electronics company that produces and markets its own brand of desktop and laptop computers, for both individual consumers and businesses. During the planning process, LCH conducts a ________, which profiles all interactions customers in the target market may have with LCH, its computers, and its services. A) sales promotion B) brand association C) brand contact D) response hierarchy model E) communication audit

E

50) In order to promote ethical cultures, companies should do all of the following EXCEPT ________. A) disseminate a written code of ethics B) build a company tradition of ethical behavior C) hold people responsible for observing ethical and legal guidelines D) ensure every employee knows and observes relevant laws E) encourage business practices that are not clearly ethical or unethical

E

51) The Internet provides marketers and consumers with opportunities for much greater interaction and ________ than do other marketing channels. A) control B) data security C) high involvement selling D) order conversion E) individualization

E

23) If a specific campaign does not break even in the short run, it will not be profitable in the long run if we factor in customer lifetime value by calculating the average customer longevity, average customer annual expenditure, and average gross margin, minus the average cost of customer acquisition and maintenance (discounted for the opportunity cost of money).

FALSE

32) Marketing channel functions such as storage and movement and communications constitute a backward flow of activities.

FALSE

33) A Web site's physical attractiveness is ensured when the site downloads quickly, the first page is easy to understand, and it is easy to navigate to other pages that open quickly.

FALSE

33) The product-management organization replaces the functional organization in the firm.

FALSE

37) Average click-through for pay-per-click ads is about 0.08 percent.

FALSE

38) Skunkworks are formal workplaces where intrapreneurial teams attempt to develop new products.

FALSE

39) If Apple wanted to generate or convert sales leads, it should focus on broader search terms.

FALSE

79) When a company combines two product concepts or ideas to create a new offering, it is called reverse assumption analysis.

FALSE

90) A manufacturer obtains referent power when it has special knowledge that intermediaries value.

FALSE

91) Coercive and referent power are subjective and depend on the ability and willingness of parties to recognize them.

FALSE

"Friends Don't Let Friends Drive Drunk," is an example of marketing information to an interested audience.

False

A customer touch point is when the customer makes a purchase.

False

A firm in a homogeneous market that has the ability to augment its product is more likely to need to meet a competitive price reduction than one that does not have the ability to augment its product.

False

73) Ravake is a manufacturer of high-end designer apparel. Competition in the apparel industry is severe and the market is driven by price. What distribution strategy would be best suited to help Ravake obtain an edge over its competitors?

The company can use exclusive distribution. It severely limits the number of intermediaries and reduces costs. This would help the company maintain greater control over service levels.

21) Cortron Consultants provides business consulting services for startups. It helps customers design their supply chains by first evaluating the target market and then proceeds backward from that point. What is this strategy of reverse design called? Briefly explain.

This strategy is called demand chain planning. This helps the companies have a clear focus on the target market.

An environmental threat is a challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit.

True

Clubs that are open to everyone who purchases a product or service are good for building a customer database.

True

Consumers are more engaged and attentive with their smart phones than when they are online.

True

Customer lifetime value describes the net present value of the stream of future profits expected over the customer's lifetime purchases.

True

Experiments call for selecting matched groups of subjects, subjecting them to different treatments, controlling extraneous variables, and checking whether observed response differences are statistically significant.

True

Volvo has the reputation of being one of the safest cars on the road. For those that value safety, Volvo would be the logical choice. This is an example of the lexicographic heuristic of consumer choice.

True

67) Gordron Inc. manufactures and markets medical equipment. To ensure that its salespeople are knowledgeable enough to answer all product queries, the company hires only those individuals who have a good understanding of both the medical profession and the mechanics of the equipment used. Which of the following is the most accurate classification of Gordron's salesforce? A) technicians B) demand creators C) deliverers D) order takers E) missionaries

A

1) Appointing teams to manage customer-value-building processes and break down walls between departments is part of which of the following shifts in business practices? A) reengineering B) outsourcing C) benchmarking D) supplier partnering E) customer partnering

A

106) A group of small sellers takes the initiative and organizes a new business entity to carry on wholesaling and possibly some production. This entity is called a(n) ________. A) retailer cooperative B) franchise organization C) area-based cartel D) sponsored voluntary chain E) alternate selling channel

A

25) Which of the following is an example of a zero-level channel? A) A company takes online orders from customers and ships the products to them. B) An organization uses a combination of direct salespeople and sales agencies to increase sales. C) A company sells its products through wholesalers and retailers. D) A company sells its products through chains of supermarkets and other large sellers. E) A large company forms alliances with smaller companies to increase sales coverage.

A

28) A jobber in a three-level marketing channel is a(n) ________. A) small-scale wholesaler B) external broker C) advertising agent D) independent evaluator E) communication channel

A

43) Which of the following terms refers to add-on services such as credit, delivery, installation, and repairs, and is provided by a marketing channel? A) service backup B) product accessories C) external products D) product variety E) service extensions

A

84) Who will most likely be willing to pay for high-value-added channels? A) early buyers of a product B) internal customers of a company C) small and matured buyers of an industry D) consumers of low involvement products E) repeat customers of a product

A

85) A producer must modify its channel design and arrangements if ________. A) consumer buying patterns change B) the competition in the market stabilizes C) the product is in the growth stage of its life cycle D) the market size remains unchanged for a particular period E) the firm's profits stabilize

A

88) A medical "detailer" that represents an ethical pharmaceutical house, who builds goodwill or educates the actual or potential user but is not permitted to take an order, is an example of a ________. A) missionary salesperson B) technician C) demand creator D) solution vendor E) deliverer

A

108) What are four pieces of advice for getting a viral ad shared?

According to a viral advertising expert from Harvard Business School: Utilize brand pulsing so the brand is not too intrusive within the video; open with joy or surprise to hook those fickle viewers who are easily bored; build an emotional roller coaster within the ad to keep viewers engaged throughout; and surprise but don't shock — if an ad makes viewers too uncomfortable, they are unlikely to share it.

136) Briefly describe "brand awareness" as an objective of marketing communications.

Brand awareness refers to fostering the consumer's ability to recognize or recall the brand within the category, in sufficient detail to make a purchase. Recognition is easier to achieve than recall. Brand recall is important outside the store; brand recognition is important inside the store. Brand awareness provides a foundation for brand equity.

7) Greta is marketing a product that is technologically advanced and requires a great deal of explanation. Which direct response tool should she use? A) direct mail B) e-mail C) infomercial D) inbound telemarketing E) outbound telemarketing

C

36) ________ is finding the most cost-effective media to deliver the desired number and type of exposures to the target audience. A) Media scheduling B) Content analysis C) Media selection D) Communication design E) Copy testing

C

37) Which element of the marketing communications mix allows for amplified expressiveness? A) sales promotion B) public relations C) advertising D) direct and interactive marketing E) personal selling

C

41) The weighted number of exposures (WE) of an advertising message over a given medium is given by ________. A) WE = reach × frequency B) WE = (reach × frequency) / impact C) WE = reach × frequency × impact D) WE = (reach + frequency) / impact E) WE = frequency / reach

C

60) All response hierarchy models of the communication process assume the buyer passes through cognitive, affective, and behavioral stages, in that order. Which of the following product categories lends itself most appropriately to such a "learn-feel-do" sequence? A) clothes B) dishwashers C) real estate D) personal computer E) air tickets

C

16) The management of Raleigh Bicycles observes that the company's selling costs are affected by the increased number of visits that salespeople make to meet dealers. The company decides to reduce its personal selling costs by making sales calls to dealers via telephone. This marketing strategy used by Raleigh is an example of ________. A) inbound telemarketing B) search marketing C) internal marketing D) outbound telemarketing E) paid-search marketing

D

34) Which of the following is the main advantage of radio as an advertising medium? A) low competition B) more attention than television C) longer duration of ad exposure D) flexibility E) standardized rate structures

D

36) Which of the following marketing communications tools is most effective at influencing customers at the conviction stage of buyer readiness? A) advertising B) publicity C) sales promotion D) personal selling E) events and experiences

D

37) The number of different persons or households exposed to a particular media schedule at least once during a specified time period is known as ________. A) range B) impact C) intensity D) reach E) frequency

D

4) Most new-product activities are devoted to ________. A) changing the target markets B) developing new-to-the-world products C) introducing backward integration D) improving existing products E) changing the existing market dynamics

D

42) Luke is considering the various options available to him to promote an energy drink, Turbozade, that has decreasing sales volumes after having peaked some time back. Which of the following marketing communications tools should Luke focus marketing efforts on to keep the sales volume up? A) advertising B) direct marketing C) events and experiences D) sales promotions E) publicity

D

60) A social marketing program which aims to alter ideas about abortion is an example of a(n) ________ campaign. A) cognitive B) active C) behavioral D) value E) normative

D

79) When Apple introduced the iPod in October, 2001, it was the first-of-its-kind product that offered sizable storage capacity for songs and a portable device that was not seen before in the market. Which of the following is most likely to have been the marketing communications objective for the iPod at the time of its introduction? A) developing brand awareness B) building customer traffic C) enhancing purchase actions D) establishing product category E) enhancing firm image

D

81) ________ has enrolled more than half a million mothers in Vocalpoint, a group built on the premise that highly engaged individuals want to learn about products and share their opinions with companies and other individuals. A) Blendtec B) SodaStream C) Google D) P&G E) Vimeo

D

96) ________ testing is a customer test that involves placing the product within the firm to see how it performs in different applications. A) Beta B) Research C) Sales-wave D) Alpha E) Simulated

D

150) What are direct, traceable common, and nontraceable common costs? Give an example of each.

Direct costs are costs that we can assign directly to the proper marketing entities, such as materials costs and sales-force salaries. Traceable common costs are incurred indirectly but can be attributed on a plausible basis to various marketing entities, such as rent expenses. Nontraceable common costs are costs whose assignments are highly arbitrary, such as "corporate image" expenditures.

100) When Fred sends in the box top from his cereal to receive a free DVD of a cartoon featuring one of his favorite characters, he is responding to a ________. A) self-liquidating premium B) with-pack premium C) reduced-price pack D) banded pack E) free in-the-mail premium

E

15) Reinforcement advertising aims to stimulate repeat purchase of products and services.

FALSE

23) Earned media includes company-generated advertising, publicity, and other promotional efforts.

FALSE

42) Social media ads prompt purchase at least three times more often than e-mails, and the average order value from social media ads is thought to be 17 percent higher.

FALSE

46) Public relations is incapable of reaching prospects who prefer to avoid mass media and targeted promotions.

FALSE

Consumers' expectations result exclusively from past buying experiences.

False

If a company sought to grow by starting new businesses that have no relation to its current technology, products, or markets, the company would be using a market penetration strategy.

False

The overabundance of information available on the Internet has made it more difficult for consumers to compare product features and prices.

False

The selling concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.

False

The traditional view of marketing works best in economies with many different types of people, each with individual wants, perceptions, preferences, and buying criteria.

False

9) Jill, a Product Manager for Nike, is responsible for evaluating the viability of a radically new product. How should she estimate demand?

Few reliable techniques exist for estimating demand for radical innovations. Focus groups can provide perspective on customer interest and need, but marketers may need a probe-and-learn approach based on observation and feedback of early users' experiences and other means such as online chats or product-focused blogs.

152) Full costing allocates nontraceable common costs to marketing entities and has three major weaknesses. What are they?

Full costing has three major weaknesses: 1. the relative profitability of different marketing entities can shift radically when we replace one arbitrary way to allocate nontraceable common costs by another 2. the arbitrariness demoralizes managers, who feel their performance is judged adversely 3. the inclusion of nontraceable common costs could weaken efforts at real cost control

10) What are the types of new products that a firm can introduce? What are the problems associated with introducing a truly innovative product? What are the necessary conditions to create a radically innovative product?

New products range from new-to-the-world products that create an entirely new market to minor improvements or revisions of existing products. Most new-product activity is devoted to improving existing products. Truly innovative and new-to-the-world products incur the greatest cost and risk. Although radical innovations can hurt the company's bottom line in the short run, if they succeed they can create a greater sustainable competitive advantage than ordinary products and produce significant financial rewards as a result. Companies typically must create a strong R&D and marketing partnership to pull off a radical innovation. The right corporate culture is another crucial determinant; the firm must prepare to cannibalize existing products, tolerate risk, and maintain a future market orientation. Few reliable techniques exist for estimating demand for radical innovations.

147) Which type of questions allow salespeople to understand facts or explore the buyer's present state of affairs?

Situation questions ask about facts or explore the buyer's present situation.

19) Doritos brand's "Crash the Super Bowl" contest resulted in a healthy uptick in Twitter, Facebook, and other social media activity.

TRUE

66) Employees can be a source of ideas for improving production, products, and services.

TRUE

81) The actual success of a social marketing program should be evaluated in terms of the program objectives.

TRUE

85) The forgetting rate is the rate at which the buyer forgets the brand; the higher the forgetting rate, the more continuous the advertising should be.

TRUE

88) A manufacturer is using reward power when it offers intermediaries an extra benefit for performing specific acts or functions.

TRUE

Although consumers may have fairly good knowledge of the range of prices involved, very few can accurately recall specific prices of products.

True

Relationship marketing aims to build mutually satisfying long-term relationships with key parties.

True

Retailing includes all the activities involved in selling goods or services directly to final consumers.

True

The subscription manager at Cosmopolitan magazine keeps track of the subscription renewal rate, which is a good measure of customer lifetime value.

False

42) Describe the functional organization of a marketing department in terms of its structure, advantages, and disadvantages.

The most common form of marketing organization consists of functional specialists reporting to a marketing vice president. The main advantage of a functional marketing organization is its administrative simplicity. It can be quite a challenge for the department to develop smooth working relationships, however. This form also can result in inadequate planning as the number of products and markets increases and each functional group vies for budget and status. The marketing vice president constantly weighs competing claims and faces a difficult coordination problem.

53) ________ refers to the ability to meet humanity's needs without harming future generations. A) Greenwashing B) Sustainability C) Ecological footprinting D) Scalability E) Legal practice

B

54) Cause-related marketing is part of ________. A) sustainability B) corporate societal marketing C) social media D) global marketing E) community marketing

B

63) What situations are not conducive to database marketing?

Building a customer database may not be worthwhile when: • the product is a once-in-a-lifetime purchase (a grand piano) • customers show little loyalty to a brand (there is a lot of customer churn) • the unit sale is very small (a candy bar) so customer lifetime value is low • the cost of gathering information is too high • there is no direct contact between the seller and ultimate buyer

15) Which of the following is the main advantage of a functional marketing organization? A) easy coordination B) lower staff requirements C) administrative simplicity D) reduced competition between functional groups E) smooth working relationships

C

4) Which of the following is an advantage of online communications for marketers? A) Consumers cannot effectively screen out your messages. B) Companies can accurately track how effective their ads are because software filters out all bogus hits. C) Companies can offer tailored information or messages that engage consumers. D) Advertisers maintain complete control over the message. E) Advertisers do not need to worry as much about context.

C

41) Which of the following marketing communications tools is most influential at the maturity stage of a product's life cycle? A) sales promotions B) direct marketing C) advertising D) publicity E) interactive marketing

C

Activity-based costing tries to identify the real costs associated with serving each customer.

False

68) A "do-feel-learn" response sequence is considered appropriate when the audience has high involvement but perceives little or no differentiation within the product category.

TRUE

Firms that can develop substitute materials for finite non renewable resources have an excellent opportunity.

True

26) Which of the following entities is present in a zero-level marketing channel? A) consumers B) retailers C) brokers D) jobbers E) wholesalers

A

61) Morboro Energy Inc. is a large chain of fuel stations in Europe. The company decided to expand its business by incorporating restaurants and automobile service stations as a part of its fuel outlets. This is an example of ________. A) lateral marketing B) brand extension C) market development D) internal marketing E) brand personification

A

63) Faith is a big fan of a popular musical group, so she created a place for other fans to communicate with each other online. Faith created a ________. A) forum B) microblog C) blog D) social network E) microsite

A

79) A manufacturer offers its intermediaries an extra benefit for performing a promotional activity. This is an example of the use of ________ power. A) reward B) coercive C) functional D) expert E) referent

A

107) In a retailer cooperative, ________. A) profits are equally divided among members B) members plan their advertising jointly C) nonmembers cannot buy through the co-op D) members rely on distribution programming E) members standardize their selling practices

B

47) What is a spiral development process?

A spiral development process recognizes the value of returning to an earlier stage to make improvements before moving forward.

37) Briefly explain the various levels of marketing channels.

A zero-level channel, also called a direct marketing channel, consists of a manufacturer selling directly to the final customer. The major examples are door-to-door sales, home parties, mail order, telemarketing, TV selling, Internet selling, and manufacturer-owned stores. A one-level channel contains one selling intermediary, such as a retailer. A two-level channel contains two intermediaries. In consumer markets, these are typically a wholesaler and a retailer. A three-level channel contains three intermediaries. In the meatpacking industry, wholesalers sell to jobbers, essentially small-scale wholesalers, who sell to small retailers.

102) The most advanced supply-distributor arrangements for ________ vertical marketing systems rely on distribution programming. A) corporate B) administered C) contractual D) regulatory E) controlled

B

144) Stacey wants to use a highly relevant, engaging, and implicit communications mix mode to use a "soft sell" approach for her new makeup line. The communications mix mode that has these characteristics is ________. A) sales promotions B) events and experiences C) advertising D) direct and interactive marketing E) personal selling

B

52) ________ gives products the appearance of being more environmentally friendly without living up to that promise. A) Ambush marketing B) Greenwashing C) Astroturfing D) Viral marketing E) Green politics

B

55) Which of the following is an advantage of using Yellow Pages as an advertising medium? A) low competition B) high believability C) short ad purchase lead time D) greater scope for creativity E) lack of clutter

B

105) ________ is a consumer promotion tool that involves inviting prospective purchasers to try the product without cost in the hope that they will buy. A) Sampling B) Premium C) Cross-promotion D) Free trial E) Rebate

D

97) Which of the following is an example of a manufacturer promotion? A) price cuts B) feature advertising C) retailer coupons D) high-value trade-in credit E) retailer contests or premiums

D

143) Joseph, a student of Columbia University, finds many of his classmates have purchased an iPad tablet from Apple. The iPad, launched a few months before has been identified as a very useful product and many students in the US have rated it highly. Considering all these, Joseph also decides to purchase an iPad. Which of the following is the adopter group to which Joseph belongs? A) early adopter B) innovator C) late majority D) laggard E) early majority

E

136) What are some challenges associated with mobile marketing and how should advertisers overcome them?

Even with newer-generation smart phones, the Web experience can be very different for users given smaller screen sizes, longer download times, and the lack of some software capabilities. Marketers should design simple, clear, and clean sites, paying even greater attention than usual to user experience and navigation. Mobile ad copy should occupy only 50 percent of the screen, avoiding complex viewing experiences that may take a toll on consumers' battery and data availability as well as on their time. Brands should limit their ads to a pair of phrases — the offer and the tagline. Brands should place their logo in the corner of the mobile ad frame. Finally, ads should use at least one bright color, but no more than two. Calls to action should be highlighted with a bright color.

155) MPR is effective in blanketing local communities and reaching specific groups and hence has to be planned separately from the less cost-effective advertising.

FALSE

40) A business analysis is performed mainly to identify if a company has got a technically and commercially sound product.

FALSE

69) Manufacturers can obtain greater control over the selling process by using a sales agency.

FALSE

69) Morphological analysis starts by forming a new dimension and then thinks about the possible problems of the dimension.

FALSE

97) Atronix Solutions is a major manufacturer of electronic measuring devices in the United States. The company often threatens to terminate its relationship with its intermediaries if they do not agree with its terms and conditions. What channel power does Atronix use? What are its effects?

Here, the manufacturer is using coercive power. This power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power.

37) How did the Obama campaign use direct marketing during the 2012 election?

Much of the $690 million raised online by the Obama campaign resulted from carefully targeted and tested e-mails. Every day, the campaign used small groups of supporters to test as many as 18 different versions of e-mails varying in subject line, amounts requested, and sender. The winning combination went to the broad base of tens of millions of supporters. Campaign analysts found that a casual tone (such as the word hey) was often effective in subject lines and that supporters seemed to never tire of the e-mails.

48) Given the disadvantages associated with online marketing communications, is it worth it for companies to use them? In your response, please identify the disadvantages of online marketing communications.

Online marketing communications are challenging because consumers can screen out messages; software-powered Web sites generate bogus clicks, which can throw off metrics; marketers can lose control of online messages, which can be hacked or vandalized. Consumers control the flow of information by selecting who they interact with and engaging selectively in the information. However, almost half of consumer media time is spent online, and marketers must reach consumers where they are.

139) Name a few products for which personal influence plays a significant role in marketing communications.

Personal influence carries especially great weight when products are expensive, risky, or purchased infrequently, and when products suggest something about the user's status or taste. On that count, life insurance, real estate, health services, automobiles, luxury items, consultation services, etc. can be expected to be significantly influenced by word-of-mouth and endorsements by credible sources.

141) When does personal influence carry the most weight?

Personal influence carries especially great weight when products are expensive, risky, or purchased infrequently, and when products suggest something about the user's status or taste. People often ask others to recommend a doctor, plumber, hotel, lawyer, accountant, architect, insurance agent, interior decorator, or financial consultant. If we have confidence in the recommendation, we normally act on the referral. Service providers clearly have a strong interest in building referral sources.

89) Corporate philanthropy can pose problems even when done with the best intentions. Explain.

Philanthropic efforts by companies can be overlooked — even resented — if the company is seen as exploitive or fails to live up to a "good guys" image.

73) Gravity is a company that markets customized T-shirts to its customers. Gravity runs an ad that seeks to attract more customers. Apply the macromodel of the communications process to describe the communication between Gravity and its target customers.

The macromodel of the communications process comprises of nine key factors in effective communication. Two represent the major parties — sender (Gravity) and receiver (audience). Two represent the major tools — message (content of the ad) and media (print, TV, radio, etc). Four represent the major communications functions — encoding (creation and transmission of the ad by Gravity), decoding (the reception and comprehension of the ad by the audience), response (either ignoring the message or buying Gravity shirts), and feedback (customers providing information about the ad to measure its effectiveness). The last element is noise, random and competing messages that may interfere with the intended communication. Examples of noise in this case could be misunderstood messages from the ad, similar ads from competitors, etc.

126) Personal influence carries especially great weight when products are inexpensive, risk-free, or purchased frequently.

FALSE

147) ________ refers to a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time. A) Brand engagement B) Integrated marketing communications C) Market research D) Customerization E) Marketing research

B

103) Compensation plans may need to vary depending on the type of salespersons. Which type of salesperson benefits from multi-tier targets that serve as stepping stones for achievement and sales contests with prizes that vary in nature and value? A) stars B) core performers C) dogs D) cash cows E) laggards

B

129) Becoming part of a personally relevant moment in consumers' lives through ________ can broaden and deepen a company or brand's relationship with the target market. A) advertisements B) events and experiences C) sales promotions D) public relations E) direct marketing efforts

B

53) Which of the following is a disadvantage of using magazines as an advertising medium? A) low geographic and demographic selectivity B) long ad purchase lead time C) low-quality reproduction D) small "pass-along" readership E) lack of credibility

B

110) A ________ is a sales force promotion tool that aims at inducing the sales force or dealers to increase their sales results over a stated period, with prizes (money, trips, gifts, or points) going to those who succeed. A) trade show B) frequency program C) sales contest D) sweepstake E) patronage award

C

128) In IBM's BANT acronym, N stands for ________. A) noticeable B) necessary C) need D) necessity E) notify

C

38) How have consumers benefited from market demassification?

Consumers short of time and tired of traffic and parking headaches appreciate toll-free phone numbers, always-open Web sites, next-day delivery, and direct marketers' commitment to customer service. In addition, many chain stores have dropped slower-moving specialty items, creating an opportunity for direct marketers to promote these to interested buyers instead.

76) A(n) ________ is a possible product the company might offer to the market. A) test brand B) alpha product C) beta version product D) product idea E) product concept

D

91) When another customer complains about the hair salon where Georgeanna is a loyal customer, she defends it because she feels responsible for the continued success of the hair salon. This behavior suggests she has reached the ________ rung of the loyalty ladder. A) word of mouth/buzz B) repeat purchase C) satisfaction D) evangelism E) ownership

E

108) Though the target audience can be profiled in terms of demographic, psychographic, or behavioral segments, it is often useful to do so in terms of usage and loyalty.

TRUE

110) The marketing communications objective of "brand attitude" refers to helping consumers evaluate the brand's perceived ability to meet a currently relevant need.

TRUE

112) Expensive industrial goods and new technologies will normally undergo alpha and beta testing.

TRUE

112) Vertical marketing systems achieve economies through size, bargaining power, and elimination of duplicated services.

TRUE

12) Marketing channels are the set of pathways a product or service follows after production, culminating in purchase and consumption by the final end user.

TRUE

Sigmund Freud assumed that the psychological forces shaping people's behavior are largely unconscious, and that people cannot fully understand their motivations.

True

The basis of cohort segmentation is that the experiences of key defining moments during the time when an individual becomes an adult can influence his or her values, preferences, and buying behaviors for the rest of his or her life.

True

102) Consumers are more likely to share a viral video ad when the brand uses pulsing so it is not too intrusive in the video.

TRUE

35) ________ refers to simple exaggerations in advertisements that are not meant to be believed and that are permitted by law. A) Puffery B) Boosterism C) Astroturfing D) Doublethink E) Subliminal advertising

A

109) Which of the following retailer practices involves buying more units than needed of a product under a sales promotion in a region where the manufacturer offers a promotion deal and shipping the surplus to their stores in non-deal regions? A) diverting B) panic buying C) hoarding D) stockpiling E) forward buying

A

123) When Saul asks his client, "What system are you using to invoice your customers?" he is asking a ________ question. A) situation B) speculation C) problem D) need-payoff E) implication

A

118) Which of the following best characterizes average consumers' current media consumption patterns? A) Consumers spend more time listening to the radio than on their mobile phones, but less time on magazines and newspapers. B) Consumers spend more time reading magazines and newspapers than on their mobile phones, but less time listening to the radio. C) Consumers spend more time on mobile devices than on radio, magazines, and newspapers combined. D) Consumers spend an average of two hours and 52 minutes on radio, magazines, and newspapers combined. E) Consumers spend an average of one hour and 46 minutes on mobile devices.

C

133) Which of the following factors forms the basis of assessing sponsorship activities through supply-side methods? A) consumers' brand knowledge B) impact on sponsor's bottom line C) extent of media coverage D) brand exposure reported by consumers E) sales pattern of sponsored products

C

14) It has been observed that most new products have shorter product life cycles. What is the reason for this? A) Most new products do not use technology. B) Most new products are not backed by a marketable idea. C) New products do not get adequate management support. D) Social and governmental constraints lead to this failure. E) Rivals quickly copy products that are successful.

E

114) One-sided presentations that praise a product are found to be more effective than two-sided arguments that also mention shortcomings.

FALSE

The Coca-Cola Freestyle dispensing machine, which can dispense 125 sparkling and still drinks that consumers can mix via touchscreen allowing consumers to create a beverage to suit their particular taste, is an example of permission marketing.

False

The annual plan control process begins with measuring performance.

False

The best thing a company can do in the face of company mistakes if to discourage the customer from complaining.

False

148) Media coordination can occur across and within media types, but marketers should combine personal and nonpersonal communications channels through multiple-vehicle, multiple-stage campaigns to achieve maximum impact and increase message reach and impact.

TRUE

20) Garolds Stores operates as a low price retailer. It offers home fashion products, such as wall decor, frames, candles, bath and bedding products, furniture, home accents, and kitchen products. The firm has showrooms and retail stores across United States. Customers can buy products in three different ways: (1) they can place orders online and have the products shipped to their homes; (2) they can buy directly from the showrooms and retail outlets; or (3) they can place orders online and pick them up from the nearest showroom. What are the benefits that Garolds Stores could achieve by using various channels to sell to customers?

The company can increase its sales by targeting different segments of customers through various channels. Multichannel marketing allows the company to deliver the right products in the right places in the right way at the least cost.

48) What are the five elements of an offer strategy?

The five elements of the offer strategy are the product, the offer, the medium, the distribution method, and the creative strategy.

80) Briefly explain the various tasks that the salespeople of an organization perform.

The following are the basic tasks that salespeople perform: • prospecting: searching for new leads or prospects • targeting: deciding how to allocate time among prospects and customers • communicating: communicating information about the company's products and services • selling: approaching, presenting, answering questions, overcoming objections, and closing sales • servicing: providing various services to the customers — consulting on problems, rendering technical assistance, arranging financing, expediting delivery • information gathering: conducting market research and doing intelligence work • allocating: deciding which customers will get scarce products during product shortages

Featuring exclusive national brands that are not available at competing retailers is a way of generating consumer interest in a retailer.

True

If a company finds that a consumer has chosen a competitive product over their company's offering, one way to get the consumer back could be by developing a strategy wherein the company "shifts the buyer's ideals" on one or more levels.

True

Marketing channels are the set of pathways a product or service follows after production, culminating in purchase and consumption by the final end user.

True

57) ________ works by listing all the normal assumptions about an entity and then turning them around. A) Lateral marketing B) Attribute listing C) Reverse assumption analysis D) Forced relationships E) Morphological analysis

C

142) When Goodyear began selling its popular tire brands through Sears, Walmart, and Discount Tire, independent dealers that sold the same tires at higher prices were angry. This is an example of a(n) ________ conflict. A) horizontal B) vertical C) intermediate D) multichannel E) parallel

D

43) Which of the following marketing communications tools is most influential at the reordering stage of buyer readiness? A) events and experiences B) publicity C) direct marketing D) sales promotion E) interactive marketing

D

120) Dominant brands offer sales promotion deals less frequently because most deals subsidize only current users.

TRUE

123) Manufacturers handle forward buying and diverting by producing and delivering less than the full order in an effort to smooth production.

TRUE

123) The principle of congruity implies that communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience.

TRUE

99) Viral marketing is a form of online word of mouth, or word of mouse, that encourages consumers to pass along company-developed products and services or audio, video, or written information to others online.

TRUE

45) Dormentor Inc. produces, converts, and markets packaging products including boxboard, container board, and numerous other specialty packaging products. In an attempt to increase its organic growth, the company decides to introduce new products. It asks the managers and employees to send in ideas for new products. Before launching products based on any of these ideas, what are the stages that the company has to go through?

The following are the steps that Dormentor has to go through before launching: 1. It must screen the ideas that are obtained. 2. The ideas that pass the screening should be concept tested. 3. After concept testing a few are screened out and the remaining should be placed for product development. 4. After developing the product, product has to be test marketed. Ideas that are successfully test marketed can be launched.

41) Toyota has an advantage over Lexus due to the fact that there are more Toyota dealers, which helps customers save on transportation and search costs in buying and repairing an automobile. Which of the following service outputs relates to this competitive advantage? A) spatial convenience B) service backup C) lot size D) waiting time E) delivery time

A

141) Jason is a technology enthusiast who is happy to conduct alpha and beta testing and report on early weaknesses of consumer electronics products. He is most likely to fall in the ________ adopter category. A) late majority B) early C) early majority D) innovator E) laggard

D

111) ________ time is the time necessary to prepare a promotional program prior to launching it. A) Sell-in B) Link C) Setup D) Lead E) Hold

D

122) Annual-plan control requires making sure the company isn't overspending to achieve sales goals. The key ratio to watch is ________. A) stock turnover B) gross margin C) return on capital D) cash flow return on investment E) marketing expense-to-sales

E

60) A group of college graduates decides to start a business. Though they are knowledgeable in various business domains, they are unable to arrive at a valuable business idea. They decide to search for ideas in a structured manner. They meet and start discussing everyone's ideas. Each idea is recorded and then the thoughts that come up in relation to the ideas are written down and discussed. This process helps them to finalize a business plan. What technique is used here? A) morphological analysis B) forced relationship analysis C) reverse assumption analysis D) attribute listing E) mind mapping

E

128) Carlos is training his new graphic design intern on the use of color in mobile ads. Which of the following is good advice when it comes to the use of color? A) Only use one bright color. B) Do not use bright colors. C) Use at least three bright colors. D) Use at least four bright colors. E) Use a bright color to highlight calls to action.

E

135) When Japanese teenagers carry DOCOMO phones from NTT and use them to order goods, they are engaged in ________. A) B2B e-commerce B) brick-and-click commerce C) infomediation D) dilution E) m-commerce

E

14) The practice of using call centers, where employees receive calls from customers and provide service by taking orders and answering queries, is called ________. A) customer response marketing B) guerilla marketing C) reactive marketing D) internal marketing E) inbound telemarketing

E

8) OrdOnline, a pure click company offering online auctioning, decides to launch a promotional program to increase its sales. The company identifies customers who have made at least three purchases and spent at least $150 in the past six months and offers discount coupons to these customers. Which of the following strategies is used here for targeting customers? A) viral marketing B) objective screening C) internal targeting D) catalog marketing E) RFM formula targeting

E

86) A company uses sales representatives for selling the company's more complex and customized products to large accounts, while using inside salespeople and Web ordering for low-end selling. Which of the following describes the company's sales force best? A) demand creators B) direct marketing force C) missionary sellers D) technical salesforce E) leveraged salesforce

E

130) The percentage-of-sales method leads to a budget set by market opportunities rather than by the availability of funds.

FALSE

136) Self-audits tend to provide more objective information than audits conducted by external consultants.

FALSE

23) The pervasive nature of advanced communications technologies, such as the Internet, has resulted in greater exposure of customers to advertising content than it was in the 1960s.

FALSE

24) One of the shortcomings of direct marketing is that the firm cannot easily measure the response.

FALSE

25) In this new communication environment, advertising is often the single most important element of a marketing communications program for sales and building brand and customer equity.

FALSE

25) It is difficult for marketers to trace the effects of online marketing communications.

FALSE

26) Relative to online marketing communications, traditional media offers advantages related to contextual placement.

FALSE

124) A business analysis is typically performed after management has developed the product concept and marketing strategy.

TRUE

124) Additional costs beyond the cost of specific promotions include the risk that promotions might decrease long-run brand loyalty.

TRUE

126) Dragalong income refers to additional income whereas cannibalized income refers to reduced income.

TRUE

A marketing audit covers the marketing organization and its system and strategies, rather than the macroenvironment.

False

155) Dual compensation pays existing channels for sales made through new channels.

TRUE

125) IBM uses the BANT acronym during which stage of the sales process? A) prospecting and qualifying B) sales preapproach C) sales presentation D) unearthing objections E) demonstrating advantages

A

and provide reviews on the cars' performance, their prices, and other factors. Which of the following personal communications channels is Top Gear closest to in description? A) expert channel B) formal channel C) social channel D) sponsored channel E) advocate channel

A

120) "How does this problem affect your people's productivity?" is an example of a(n) ________ question. A) situation B) implication C) problem D) need-payoff E) challenge

B

94) Which of the following sales positions is most likely to have fixed compensation? A) an FMCG salesperson selling to supermarkets B) a salesperson who handles the industrial customers C) an insurance agent who works part time D) a service representative in charge of handling incoming customer queries E) a telemarketer calling up existing customers to bring in additional sales

B

114) ________ questions ask about the consequences of the buyer's problems. A) Situation B) Problem C) Implication D) Need-payoff E) Solution

C

130) What is the significance of performing business analysis?

Business analysis is performed to study a proposal's business attractiveness. Management prepares sales, cost, and profit projections to determine whether they satisfy company objectives.

115) Retailer cooperatives allow nonmember retailers to buy through them and share the profits.

FALSE

54) The ________ technique used for stimulating creativity identifies a problem and then considers the dimension, the medium, and the power source. A) attribute listing B) reverse assumption analysis C) mind mapping D) lateral marketing E) morphological analysis

E

104) Concept testing means validating the product concept by discussing within the design group.

FALSE

133) In mobile ads, calls to action should be highlighted with a bright color.

TRUE

95) Describe the challenges and opportunities that international markets pose.

International markets pose distinct challenges, including variations in customers' shopping habits, but opportunities at the same time. Behavior of markets and preferences for intermediaries differ across countries. Foreign markets provide an opportunity for growth and expansion. Many pitfalls also exist in global expansion, and retailers must also be able to defend their home turf from the entry of foreign retailers.

When the brand manager for John Deere sets up advertising, sales promotions, events, and public relations to communicate about the value embodied in its products, she is participating in the "communicating value" management function.

True

Frequency programs are designed to reward customers who buy often and in substantial amounts.

True

Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.

True

148) You work as a sales representative in a company that manufactures surgical equipment. Before calling on an important prospect, you decide to search the Internet and find out details about him. What step in the selling process is being carried out here? What is the importance of this step?

This step is called preapproach. This helps to understand aspects such as how the purchasing process is conducted at the company, how is purchasing structured, number of purchasing departments in larger companies, and so forth. This information is useful to qualify the prospect, gather information, or make an immediate sale.

21) Companies that fail to develop new products leave their existing offerings vulnerable to increased domestic and foreign competition.

TRUE

21) Direct marketing produced $2.05 trillion in sales in 2012, accounting for approximately 8.7 percent of GDP.

TRUE

22) A direct marketer must consider returned merchandise and bad debts when s/he determines the needed break-even response rate for direct mail.

TRUE

22) Most established companies focus on incremental innovation rather than radical innovation.

TRUE

24) Social media play a key role in earned media.

TRUE

71) Often the more committed a company is to sustainability and environmental protection, the more dilemmas that can arise.

TRUE

1) Which of the following is most closely related with the organic growth of an organization? A) acquiring a product or service brand B) entering new marketplaces C) increasing the operational profitability D) increasing productivity of employees E) developing new products from within

E

23) Shorter product life cycles are common in industries characterized by low level of competition.

FALSE

44) Explain how stage-gate systems are used by companies to manage innovation and new product launches.

Many top companies use the stage-gate system to divide the innovation process into stages, with a gate or checkpoint at the end of each. The project leader, working with a cross-functional team, must bring a set of known deliverables to each gate before the project can pass to the next stage. To move from the business plan stage into product development requires a convincing market research study of consumer needs and interest, a competitive analysis, and a technical appraisal. Senior managers review the criteria at each gate to make one of four decisions: go, kill, hold, or recycle. Stage-gate systems make the innovation process visible to all and clarify the project leaders and team's responsibilities at each stage. The gates or controls should not be so rigid, however, that they inhibit learning and the development of novel products. Many firms have parallel sets of projects working through the process, each at a different stage. Some firms use a spiral development process that recognizes the value of returning to an earlier stage to make improvements before moving forward.

19) Companies typically must create a strong R&D and marketing partnership to pull off a radical innovation.

TRUE

41) A spiral development process recognizes the value of returning to an earlier stage to make improvements before moving forward.

TRUE

68) Reverse assumption analysis lists all the normal assumptions about an entity and then turns them around.

TRUE

12) I-ball, a cell phone manufacturer introduces a cell phone targeted at customers ages 70 and above. It has features such as loud volume, large keys, and so forth. How do you classify this product innovation? What could be a possible disadvantage of this product?

This can be considered a new-to-the-world product. New-to-the-world products are products that create an entirely new market. The product has the greatest cost and risk of all product types.

16) Pager, a simple personal device for short messages, became famous in the 1990s. Troveron Communications launched a pager in the early twenty-first century. Due to the introduction of mobile phones and text messaging, the pager industry was on a decline. The company's innovations were not well received by the market and the product was a failure. Which of the following is the most likely reason for the product's failure in this case? A) poor launch timing of the product B) a small and fragmented target market C) high cost of development D) social and economic constraints E) hasty product development

A

142) Which of the following functions of public relations departments involves presenting news and information about the organization in the most positive light? A) corporate communications B) product publicity C) lobbying D) counseling E) press relations

E

19) A disadvantage of the product-management organization is that ________. A) it marginalizes a company's smaller brands B) it reduces organizational responsiveness to new products in the marketplace C) product managers generally exercise authority outside their areas of responsibility D) it prevents product managers from gaining sufficient expertise in their product areas E) it fails to build long-term strengths as brand managers normally manage brands for only short periods

E

45) Why do companies use infomercials?

Infomercials combine the selling power of television commercials with the draw of information and entertainment. Infomercials promote products that are complicated or technologically advanced or that require a great deal of explanation.

134) What are the steps involved in developing effective marketing communications?

1. Identify target audience 2. Determine objectives 3. Design communications 4. Select channels 5. Establish budget 6. Decide on media mix 7. Measure results 8. Manage integrated marketing communications

44) Atburex is a furniture manufacturing company in the United States. The company provides a 60-day credit period and also offers on-site delivery and installation. These special benefits refer to which of the following service outputs? A) service backup B) large product variety C) spatial convenience D) large lot size E) short waiting time

A

of the following terms best represents this practice? A) channel integration B) mass customization C) online personalization D) push strategy E) internal marketing

A

80) What is a brand-positioning map?

A brand-positioning map is a perceptual map showing the current positions of various existing brands competing with each other.

47) Define a category-management organization.

A category-management organization is where a company focuses on product categories to manage its brands.

48) What is a customer-management organization? When should a customer-management organization be adopted?

A customer-management organization deals with individual customers rather than the mass market or even market segments. It is suitable when a close customer relationship is advantageous, such as when customers have diverse and complex requirements and buy an integrated bundle of products and services.

138) If a prospective client does not want to buy from you because she feels the price is too high, you are facing an objection due to ________. A) psychological resistance B) logical resistance C) apathy D) relationship inertia E) reactance

B

14) The most common form of marketing organization consists of ________ reporting to a marketing vice president who coordinates their activities. A) zonal managers B) functional specialists C) product managers D) area market specialists E) brand managers

B

151) If a producer wants to achieve rapid market penetration through a low-price policy, while a dealer wants to work with high margins to pursue short-run profitability, the source of the channel conflict is ________. A) unclear roles and rights B) goal incompatibility C) differences in perception D) intermediaries' dependence on the manufacturer E) strategic justification

B

A) expresses the company's sales as a percentage of total market sales B) is sales as a percentage of the total sales to the market C) is market share in relationship to the largest competitor D) is always smaller than overall market share E) measures the relative contribution of different factors to a gap in sales performance

B

69) ________ is an advertising timing pattern that calls for advertising during a certain period, followed by a period with no advertising, followed by a second specific period of advertising activity. A) Pulsing B) Continuity C) Flighting D) Concentration E) Frequency capping

C

88) The bottom rung of the customer loyalty ladder is ________. A) word of mouth/buzz B) repeat purchase C) satisfaction D) evangelism E) ownership

C

89) ________ is a "hybrid" data collection technique that combines self-explicated importance ratings with pair-wise trade-off tasks. A) Sales wave analysis B) Simulative data testing C) Adaptive conjoint analysis D) Business analysis E) Exponential data collection

C

34) During which of the following stages in new product development decision making do managers analyze if they can find a good thought consumers say they would try? A) idea generation B) idea screening C) business analysis D) concept development and testing E) product development and testing

D

44) What is the gross rating points (GRP) for a media schedule that reaches 60 percent of homes with an average exposure frequency of 4 and impact of 1.5? A) 10 B) 15 C) 160 D) 240 E) 360

D

5) Spike Inc. is a sportswear manufacturer that recently launched its new line of customizable running shoes. The shoes come with a digital component that allows them to adapt to the runner's biomechanics. To promote this new product, Spike launches an advertising campaign and entices a famous athlete to endorse the product. This is an example of a ________. A) trade promotion B) reverse flow C) push strategy D) pull strategy E) backward flow

D

54) Which of the following is NOT conducive to database marketing? A) Rushbury Theater relies on the generosity of donors to keep functioning. B) Kenilworthy retails luxury handbags and leather accessories to a select clientele. C) 2Wheels sells its most profitable products to repeat customers. D) Uncle Jim's sells its range of snacks in stores throughout the country. E) PetZone offers obedience classes, a doggie daycare, and other services for pets in the Manhattan area.

D

61) Which of the following advertising practices involves advertisers paying filmmakers to have their products make cameo appearances in movies and television shows? A) brand extension B) flyposting C) co-branding D) product placement E) ambush marketing

D

84) Brown & Smith Inc. engages in the design, development, making, and retail selling of designer jewelry in North America. Before approving a new design, the company draws it on a computer and then produces models to show potential consumers and get their reactions. This allows the company to analyze the possible customer reaction. Identify the concept testing method used here. A) conjoint analysis B) perceptual mapping C) virtual reality testing D) rapid prototyping E) digital fabrication

D

likely objective of Mountain Dew's sponsorship of these events? A) to enhance corporate image B) to express commitment to the community or on social issues C) to entertain key clients or reward key employees D) to create perceptions of key brand image associations E) to become part of a personally relevant moment in consumers' lives

D

4) Which of the following elements of the marketing communications mix involves a variety of short-term incentives to encourage trial or purchase of a product or service? A) advertising B) direct marketing C) public relations D) personal selling E) sales promotion

E

35) Business-to-consumer telemarketing is increasing.

FALSE

When economic conditions are depressed, producers want to move goods to market using longer using channels.

False

110) From a consumer's perspective, what are the limitations of getting information from an online review?

Online reviews can be biased or fake. Research has shown that social influence can lead to disproportionally positive online ratings, and subsequent raters are more likely to be influenced by previous positive ratings than negative ones. Consumers posting reviews are susceptible to conformity pressures and adopting norms of others.

11) What does the term organic growth mean?

Organic growth refers to the development of new products from within.

27) What is the role of print media in advertising? What are the major advantages and disadvantages associated with print advertising media?

Print media offer a stark contrast to broadcast media. Because readers consume them at their own pace, magazines and newspapers can provide detailed product information and effectively communicate user and usage imagery. At the same time, the static nature of the visual images in print media makes dynamic presentations or demonstrations difficult, and print media can be fairly passive. The two main print media — magazines and newspapers — share many advantages and disadvantages. Although newspapers are timely and pervasive, magazines are typically more effective at building user and usage imagery. Newspapers are popular for local — especially retailer — advertising. Although advertisers have some flexibility in designing and placing newspaper ads, relatively poor reproduction quality and short shelf life can diminish the ads' impact.

74) Use reverse assumption analysis to analyze a school.

Student answers will vary. Instead of assuming that a school is a place where teachers teach according to a set syllabus and timetable, you could assume that a school is a place where students choose what they want to learn and how they want to learn it. Students could choose people to teach them, depending on what they want to study.

65) Cocreation can help a company create favorable word of mouth.

TRUE

28) What are the legal and social issues associated with advertising?

To break through clutter, some advertisers believe they have to be edgy and push the boundaries of what consumers are used to seeing in advertising. In doing so, marketers must be sure advertising does not overstep social and legal norms or offend the general public, ethnic groups, racial minorities, or special-interest groups. A substantial body of laws and regulations governs advertising. Under US law, advertisers must not make false claims, such as stating that a product cures something when it does not. They must avoid false demonstrations, such as using sand-covered Plexiglas instead of sandpaper to demonstrate that a razor blade can shave sandpaper. It is illegal in the United States to create ads that have the capacity to deceive, even though no one may actually be deceived. The challenge is telling the difference between deception and "puffery" — simple exaggerations that are not meant to be believed and that are permitted by law. Sellers in the United States are legally obligated to avoid bait-and-switch advertising that attracts buyers under false pretenses. Advertising can play a more positive broader social role. The Ad Council is a nonprofit organization that uses top-notch industry talent to produce and distribute public service announcements for nonprofits and government agencies. From its early origins with "Buy War Bonds" posters, the Ad Council has tackled innumerable pressing social issues through the years. One of its recent efforts featured beloved Sesame Street stars Elmo and Gordon exhorting children to wash their hands in the face of the H1N1 flu virus.

Proponents of holistic marketing consider internal marketing to be as important as marketing to consumers.

True

132) The annual plan control process begins with measuring performance.

FALSE

149) At the interest stage of the consumer-adoption process, the consumer becomes aware of the innovation but lacks information about it.

FALSE

136) If a prospective client does not want to buy from you because he has a preference for an established supply source, you are facing an objection due to ________. A) psychological resistance B) logical resistance C) price sensitivity D) relationship inertia E) reactance

A

145) When a public relations department of a company advises management about public issues, and company positions and image during good times and bad, it is performing the function of ________. A) counseling B) corporate communications C) product publicity D) lobbying E) press relations

A

35) A ________ process recognizes the value of returning to an earlier stage to make improvements before moving forward. A) spiral development B) reactive development C) market testing D) proactive development E) concept testing

A

82) Which of the following types of power is objectively observable? A) coercive power B) legitimate power C) group power D) expert power E) referent power

A

107) Qualities such as candor, humor, and naturalness make a spokesperson ________, which is an important component of spokesperson credibility. A) likable B) an expert C) trustworthy D) transformational E) informational

A

15) Which of the following strategies for new-product development incorporates buyers' preferences in the final design of the product? A) quality function deployment B) market leadership C) cost leadership D) incremental innovation E) disruptive technology

A

153) Which of the following is NOT a predicted direction for marketing in the coming years? A) the demise of precision marketing and rise of mass marketing B) the demise of the marketing department and the rise of holistic marketing C) the demise of marketing intuition and the rise of marketing science D) the demise of manual marketing and the rise of both automated and creative marketing E) the demise of free-spending marketing and the rise of ROI marketing

A

17) A product-management organization makes sense if ________. A) the company's products are quite varied B) there are very few products in the company's portfolio C) the company is pursuing a low cost strategy D) the company's products satisfy similar customer needs E) the company is vertically integrated

A

18) Which of the following is an example of a personal selling communication platform? A) sales presentations B) company blogs C) telemarketing D) TV shopping E) press kits

A

2) A merchant is a(n) ________ in the marketing channel. A) wholesaler B) broker C) sales agent D) warehouse E) advertising agency

A

2) Mountain Dew's Dewmocracy promotional campaign — including advertising, events, a Web site and social media efforts designed to engage consumers in brand-related activities — is an example of ________. A) paid media B) earned media C) individualization D) word-of-mouth E) mobile marketing

A

30) A team formed at Intercom Inc. to generate ideas for new products conducts frequent meetings and engages in activities such as mind mapping and brainstorming. Most of the meetings are conducted at informal locations away from office. These workplaces are called ________. A) skunkworks B) idea funnels C) research centers D) stage-gate systems E) contextual bases

A

55) Cause marketing has a particularly interested audience in civic-minded ________. A) Millennial consumers B) baby boomers C) Gen Xers D) Gen Yers E) shadow boomers

A

56) Electro Locomotors (EL) Inc. engages in the manufacture, distribution, and marketing of custom vehicles in Brazil. Bono, a hybrid car brand that the company produces, is a market leader in the hybrid vehicles segment. With the increased global focus on nature-friendly vehicles and governmental subsidies for companies that manufacture hybrid vehicles, competition has increased for flex-fuel cars like Bono. The heads of the R&D team at EL are in a creative session to generate ideas for improvements to Bono. They consider each part of the car and discuss the possibilities of improvements in each of them. Identify the creativity technique used here. A) attribute listing B) forced relationship analysis C) morphological analysis D) reverse assumption analysis E) mind mapping

A

56) Which of the following channels is associated with the lowest cost per transaction? A) Internet B) telemarketing C) retail stores D) distributor E) sales force

A

57) Which of the following is most likely to use database marketing? A) an airline B) a candy bar manufacturer C) a fast-food chain D) a toothpaste manufacturer E) a hairstylist

A

58) The ________ creativity technique begins with a thought that is written down, then proceeds to develop other thoughts that are linked to the first thought, and finally a new idea materializes by associating all of the thoughts. A) mind mapping B) contextual analysis C) attribute listing D) reverse assumption analysis E) morphological analysis

A

6) Most established companies focus on ________ innovation when they aim to enter new markets by tweaking existing products, or they want to stay one step ahead in the market by using variations on a core product. A) incremental B) continuous C) spontaneous D) radical E) competitive

A

60) For which of the following product categories are consumers least likely to engage with on social networks? A) Purex laundry detergent B) USA Today C) Red Cross D) Salvation Army E) NBC News

A

63) Which of the following media timing factors expresses the rate at which new customers enter the market? A) buyer turnover B) purchase frequency C) media reach D) weighted number of exposures E) advertising impressions

A

65) A salesperson performing over-the-counter sales in a medical store can be referred to as a(n) ________. A) order taker B) demand creator C) solution vendor D) phisher E) missionary

A

77) ________ is a form of online word of mouth, or "word of mouse," that encourages consumers to pass along company-developed products and services or audio, video or written information to others online. A) Viral marketing B) Guerrilla marketing C) Microsite marketing D) Interstitial marketing E) Public relations

A

81) Hewlett-Packard is a highly respected brand. Many retailers want to be associated with the brand because of this reputation. What kind of power does Hewlett-Packard obtain due to this reputation? A) referent B) functional C) legitimate D) coercive E) reward

A

92) ________ contribution lists the changes in income to other company products caused by the introduction of a new product. A) Supplementary B) Dragalong C) Gross D) Cumulative E) Net

A

93) Identify the first step in the workload approach to establish sales force size. A) grouping customers into size classes according to annual sales volume B) establishing desirable call frequencies for each customer class C) determining the total workload for the country in terms of sales calls per year D) determining the average number of calls a sales representative can make per year E) calculating the total number of sales reps needed

A

94) The job of translating target customer requirements into a working prototype is helped by a set of methods referred to as ________. A) quality function deployment B) quality control processes C) rapid prototyping D) marketing control E) control system formation

A

94) ________ is the process that turns marketing plans into action assignments and ensures that such assignments are executed in a manner that accomplishes the plan's stated objectives. A) Marketing implementation B) Marketing research C) Marketing analysis D) Brand management E) Product management

A

95) ________ is the process by which firms assess the effects of their marketing activities and programs and make necessary changes and adjustments. A) Marketing control B) Marketing implementation C) Test marketing D) Market watch E) Market analysis

A

98) Top and middle management are primarily responsible for ________ control. A) annual-plan B) efficiency C) profitability D) technological E) innovation

A

99) Which of the following is a sales promotion tool that typically does NOT build brand image? A) consumer refund offers B) free samples C) premiums related to the product D) frequency awards E) coupons that include a selling message

A

96) Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile phones, and media devices. It also sells software, services, and third-party digital content. Apple is a highly respected brand across the globe. What kind of channel power does this respect give Apple?

Apple is so highly respected that intermediaries are proud to be associated with it. This gives Apple referent power.

26) Which of the following is true regarding a matrix-management organization? A) It proves to be cost-effective in the long run. B) It often creates conflicts regarding authority and responsibility for marketing activities. C) It hampers the flow of information among marketing personnel. D) It fosters a strong sense of accountability for performance among product and market managers. E) It is best suited to companies that offer a small range of products to niche markets.

B

4) Total Beverages, a maker of fruit juices and health drinks, recently launched a new brand of packaged drinking water called AquaPure. In order to induce distributors to carry the product, Total offers all its intermediaries a free refrigerator to store bottles of AquaPure. This is an example of a ________. A) consumer promotion B) push strategy C) backward flow D) reverse flow E) pull strategy

B

44) ________ is a measure of communications effectiveness that describes the percentage of target market exposed to a communication. A) Frequency B) Reach C) Width D) Depth E) Range

B

132) JBJ Sports is a leading sporting goods manufacturer from Atlanta. It has recently initiated a program in association with the Food4Kids Foundation, which raises funds to promote nutritional awareness of young children. The company plans to donate $1 for every item it sells in the North American market. Also, JBJ has roped in professional sports teams associated with it to wear the Food4Kids logo on their team gear. Which of the following best describes the motivation for JBJ's involvement in the program? A) entertaining key clients or rewarding key employees B) expressing commitment to the community or on social issues C) permitting merchandising or promotional opportunities D) stimulating quicker or greater purchase of particular brands E) identifying with a particular target market or lifestyle

B

38) The number of times within a specified time period that an average person or household is exposed to an advertising message is known as ________. A) impact B) frequency C) amplitude D) reach E) depth

B

42) As a service output produced by marketing channels, product variety refers to the ________. A) units the channel permits a customer to purchase at once B) assortment provided by the marketing channel C) add-on services provided by the channel D) ability of a product to provide incremental value E) degree to which the channel makes it easy for customers to purchase a product

B

55) Electrobar, a European manufacturer of industrial kitchenware, sells to industrial canteens, restaurants, hotels, and so forth. The company provides a one-year warranty on all products and also allows customers to pay in installments — they pay 50 percent on delivery and the rest as equal installments. This refers to which element in the "trade-relations mix"? A) price policy B) conditions of sale C) distributors' territorial rights D) exclusive dealings E) mutual services and responsibilities

B

56) Which of the following factors found in the macromodel of the communications process refers to random and competing messages that may interfere with the intended communication? A) negative feedback B) noise C) attenuation D) phase lag E) selective distortion

B

59) The social network which focuses on career-minded professionals is ________. A) Facebook B) LinkedIn C) MySpace D) Twitter E) Gawker

B

62) Which of the following is a blog network? A) Facebook B) Sugar C) MySpace D) Groupon E) YouTube

B

83) One of the possible objectives of marketing communications is helping consumers evaluate a brand's perceived ability to meet a currently relevant need. Which of the following relevant brand needs is most likely emphasized by an advertisement for a luxury car? A) problem removal B) sensory gratification C) normal depletion D) intellectual stimulation E) problem avoidance

B

85) A(n) ________ appeal is a creative strategy that elaborates on product or service attributes or benefits. A) aesthetic B) informational C) bandwagon D) emotional E) transformational

B

86) A(n) ________ appeal is a creative strategy that elaborates on a nonproduct-related benefit or image. A) logical B) transformational C) reasonable D) informational E) rational

B

86) According to media researcher Duncan Watts, the key to setting a song on the path to popularity is a phenomenon called ________. A) sampling B) cumulative advantage C) influence farming D) entertainment trendspotting E) buzz firing

B

86) With ________, respondents see different hypothetical offers formed by combining varying levels of the attributes, then rank the various offers. A) gap level analysis B) conjoint analysis C) perceptual mapping D) concept testing E) morphological analysis

B

100) Which of the following is NOT true about the two-step process by which mass communications affect personal attitudes? A) The influence of mass media is mediated by opinion leaders, people whose opinions others seek or who carry their opinions to others. B) The influence of mass media on public opinion is not as direct, powerful, and automatic as marketers have supposed. C) The two-step flow supports the notion that consumption styles are primarily influenced by a trickle-up or trickle-down effect from mass media. D) People interact primarily within their own social groups and acquire ideas from opinion leaders in their groups. E) Two-step communication suggests that mass communicators should direct messages specifically to opinion leaders and let them carry the message to others.

C

121) In which of the following stages of personal selling does a salesperson tell the product story to the buyer? A) preapproach B) prospecting C) presentation D) closing E) objection handling

C

3) A manufacturer uses the company's sales force and trade promotions to carry, promote, and sell products to end users. Which of the following strategies is this manufacturer using? A) personalization strategy B) tailoring strategy C) push strategy D) pull strategy E) consumer promotion strategy

C

35) Which of the following circumstances are best suited for personal selling? A) when the products used are simple and easy-to-use B) when there is minimal risk involved in buying or using the products C) when the market has fewer and larger sellers D) when the products being marketed are inexpensive and easily available E) when prospective customers are spread across a wide geographic area

C

94) To monitor the Gatorade brand on social networks around the clock, ________ created a Mission Control Center — set up like a broadcast television control room — in the middle of the marketing department in its Chicago headquarters. A) Coca-Cola B) Cadbury Schweppes C) PepsiCo D) P&G E) Nestlé

C

55) In an attempt to improve the product, a company that manufactures screwdrivers discusses the modification of each attribute, such as replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. This creativity technique is called ________. A) attribute listing B) mind mapping C) morphological analysis D) lateral analysis E) reverse analysis

C

55) In which of the following cases is building a database worthwhile for the company? A) Clare's creates personalized sculptures for special occasions. B) Sales of Clarity soap have fallen over the past few months in all regions. C) 2Wheels sells its most profitable products to repeat customers. D) Uncle Jim's sells its range of snacks in stores throughout the country. E) Ready-to-wear clothes brand Zeep targets the teen and tween market throughout the United States.

C

65) Which of the following should be done to increase the likelihood that social marketing programs will be successful? A) Choose target markets that are the least ready to respond. B) Promote multiple, doable behaviors in clear, simple terms. C) Make it easy to adopt the behavior. D) Adopt a soft sell approach, as opposed to attention grabbing messages. E) Explain the benefits in an exaggerated manner.

C

66) Which of the following types of advertising timing patterns calls for spending all advertising dollars in a single period? A) frequency capping B) flighting C) concentration D) pulsing E) continuity

C

68) Advertisements for which of the following product categories would merit a continuous advertising timing pattern the most? A) air conditioners B) life insurance C) breakfast cereal D) automobiles E) holiday package tours

C

80) Which of the following extrinsic factors is most likely to sway a consumer's decision about whether to contribute to social media? A) whether they are having fun B) whether they are learning C) whether it affects their self-image D) whether the brand is novel E) whether their family is having fun

C

85) Which of the following refers to the process of deciding which customers will get scarce products during product shortages? A) delegating B) prospecting C) allocating D) dispersing E) targeting

C

87) Your company has customer-service representatives who provide you with leads, write up proposals, fulfill orders, and provide post-sales support. Your responsibilities are to concentrate on the larger accounts with more complex and customized needs. Your company most likely has a ________ salesforce. A) distributive B) territory based C) leveraged D) decentralized E) parallel

C

103) The purpose of strategic control is to ________. A) examine whether the planned results are being achieved B) examine where the company is making and losing money C) evaluate and improve the spending efficiency and impact of marketing expenditures D) examine whether the company is pursuing its best opportunities with respect to markets, products, and channels E) understand the efficiency of the sales force, advertising, sales promotion, and distribution

D

103) Which of the following is a disadvantage of using a percentage-of-sales method to determine the marketing communications budget? A) It discourages stability when competing firms spend approximately the same percentage of their sales on communications. B) By using a percentage-of-sales method, communication expenditures tend to be extremely high irrespective of what a company can afford. C) It discourages management from thinking of the relationship among communication cost, selling price, and profit per unit. D) Dependence of the percentage-of-sales method on year-to-year sales fluctuations interferes with long-range planning. E) The percentage-of-sales method views sales as the result in itself rather than the determiner of communications.

D

115) Marcel downloaded an episode of his daughter's favorite program to his cell phone to ward off a tantrum while they were shopping. Which of the four distinctive characteristics was most critical to enable this action? A) It is tied to one user. B) It allows marketers to personalize messages. C) It is virtually always "on." D) It allows for immediate consumption as it is a distribution channel with a payment system. E) It is highly interactive given it allows for geotracking and picture and video taking.

D

122) Some firms might delay the launch of their products until after the competitor has borne the cost of educating the market. Such an entry is called ________ entry. A) strategic payoff B) parallel C) balancing D) late E) compensating

D

10) ________ is an element of the marketing communications mix that involves online activities and programs designed to engage customers or prospects and directly or indirectly raise awareness, improve image, or elicit sales of products and services. A) Personal selling B) Direct marketing C) Sales promotion D) Interactive marketing E) Public relations

D

101) Which of the following consumer promotion tools offers a free amount of a product or service delivered door-to-door, sent in the mail, picked up in a store, attached to another product, or featured in an advertising offer? A) coupons B) rebates C) premiums D) samples E) price packs

D

103) Rotter Garder Inc. is a large-scale paint manufacturer and is known for its wide range of decorative paint products and industrial coatings. In addition to making paints, the company also owns and operates the retail stores that sell its products. This is an example of a(n) ________ vertical marketing system. A) administered B) contractual C) referent D) corporate E) regulated

D

106) Marketing communications budgets tend to be higher when there ________. A) is high channel support B) exists hardly any change in the marketing program over time C) are infrequent product purchases in large quantities D) are differentiated products and nonhomogeneous customer needs E) are many easily reachable customers spread over small geographic territories

D

11) Individual Web pages or clusters of pages that function as supplements to a primary site are ________. A) search engine optimization B) pay-per-click ads C) delighters D) microsites E) touch points

D

122) ________ "Face Retirement" app used 3D "virtual makeover" imaging technology to show people what they might look like as they approached retirement age as part of a campaign to encourage young people to save for retirement. A) Charles Schwab's B) Ameritrade's C) Prudential's D) Bank of America's E) Fidelity Investments's

D

124) When Shen asks his client, "How much would you save if our company could help you reduce errors by 80 percent?" he is asking a ________ question. A) situation B) speculation C) problem D) need-payoff E) implication

D

127) JSE Securities Exchange is the largest stock exchange in Africa. The JSE provides a market where securities can be traded freely under a regulated procedure. The company acts as an intermediary between the traders. JSE is an example of a(n) ________. A) internal broker B) infomediary C) customer community D) market maker E) third party arbitrator

D

24) Producers often shift some functions to intermediaries. Which of the following is the most significant benefit of doing this? A) It increases customer loyalty. B) It provides the producer with greater control over operations. C) It reduces the amount of direct customer interaction. D) It lowers the producer's costs and prices. E) It ensures greater information security.

D

25) Companies that produce many products for many markets may adopt a ________ marketing organization. A) flat B) brand C) product D) matrix E) top-down

D

3) ________ involves studying "best practice companies" to improve performance. A) Empowering B) Globalizing C) Flattening D) Benchmarking E) Focusing

D

33) Which of the following questions is answered during the business analysis of ideas? A) Will this product meet our profit goals? B) Have we got a technically and commercially sound product? C) Can we find a cost-effective, affordable marketing strategy? D) Can this product meet sales expectations? E) Can we find a good concept consumers say they would try?

D

5) Of the time US consumers spend with all media, almost ________ is spent online. A) one-quarter B) one-third C) two-thirds D) one-half E) three-quarters

D

53) The darker side of direct marketing, from a consumer perspective, includes all of the following EXCEPT ________. A) irritation B) unfairness C) deception and fraud D) federal regulation E) invasion of privacy

D

57) Which of the following is true regarding cause-related marketing? A) The positive impact of cause-related marketing can be increased through sporadic involvement with numerous causes. B) Many companies focus on multiple causes to simplify execution and maximize impact. C) Limiting support to a single cause increases the pool of stakeholders who can transfer positive feelings from the cause to the firm. D) Most firms choose causes that fit their corporate or brand image and matter to their employees and shareholders. E) In order to avoid public backlash, firms are advised to adopt a hard-sell approach to their cause efforts.

D

61) When planning communications for a detergent brand, which of the following sequences of buyer responses should the marketer choose on which to base the communications model? A) feel-do-learn B) do-feel-learn C) feel-learn-do D) learn-do-feel E) learn-feel-do

D

62) Which of the following represents the objective of a social marketing campaign aimed at changing people's actions? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity to implement lifestyle changes.

D

66) Alduro Chemicals, a manufacturer of detergents, delivers chemicals used for commercial washing to various hoteliers in the United States. Most of the company's revenue comes from routine orders from its existing customers. The company uses unskilled salespeople to collect requirements from its customers. These unskilled customers are known as ________. A) demand creators B) deliverers C) missionaries D) order takers E) solution vendors

D

9) The predominant response function for advertising is often concave, but when it is S-shaped, ________. A) sales are flat, and advertising does not generate any sales impact B) any increase in advertising spending results in a proportionally positive increase in sales C) any increase in advertising spending results in a proportionally negative decrease in sales D) some positive amount of advertising is necessary to generate any sales impact, but sales increases eventually flatten out E) advertising is not necessary to generate any sales impact

D

90) Maria is flagged as a special customer at your firm because she is a satisfied customer, returns to your company to buy, puts her reputation on the line to tell others about you, and convinces others to purchase from you, which suggests she is on the ________ rung of the loyalty ladder. A) word of mouth/buzz B) repeat purchase C) satisfaction D) evangelism E) ownership

D

96) According to consumer-packaged goods companies, which of the following effects is attributed to the heavy use of sales promotion? A) increased brand loyalty B) focus on long-run marketing planning C) improved brand-quality image D) increased price sensitivity E) greater coupon redemption rates

D

96) As long as finance focuses on short-term profit, it will oppose major investments designed to build satisfied, loyal customers. Which of the following steps that a marketing CEO can take to create a market- and customer-focused company can help a CEO overcome this challenge? A) Empower the employees. B) Get outside help and guidance. C) Install a modern marketing planning system. D) Change the company's reward measurement and system. E) Develop strong in-house marketing training programs.

D

99) Which of the following is a characteristic of the affordable method of establishing a marketing communications budget? A) fixed annual budget B) suitable for long-range planning C) priority given to role of promotion as an investment D) calculated to reflect what the company can spare for marketing communications E) based on the immediate impact of promotion on sales volume

D

41) Why is direct mail popular among marketers? What are its weaknesses?

Direct mail is a popular medium because it permits target market selectivity, can be personalized, is flexible, and allows early testing and response measurement. Although the cost per thousand is higher than for mass media, the people reached are much better prospects. Direct mail can produce prospect leads, strengthen customer relationships, inform and educate customers, remind customers of offers, and reinforce recent customer purchase decisions. The success of direct mail, however, has also become its liability — so many marketers are sending out direct-mail pieces that mailboxes are becoming stuffed, leading some consumers to disregard the blizzard of solicitations they receive.

39) How have sellers benefited from market demassification?

Direct marketers can buy a list containing the names of almost any group: left-handed people, overweight people, or millionaires. They can customize and personalize messages and build a continuous relationship with each customer. New parents will receive periodic mailings describing new clothes, toys, and other goods as their child grows. Direct marketing can reach prospects at the moment they want a solicitation and therefore be noticed by more highly interested prospects. It lets marketers test alternate media and messages to find the most cost-effective approach. Direct marketing also makes the company's offer and strategy less visible to competitors. Finally, direct marketers can measure responses to their campaigns to decide which have been the most profitable.

101) Gabrielle is the chief marketing officer of Boyd Pharmaceuticals. She is meeting with Trent, the chief financial officer to decide on the company's marketing communications budget. After extensive discussions, they decide that the size of the budget will be calculated as a fraction of the overall turnover. What method did Gabrielle and Trent use to arrive at the marketing communications budget? A) affordable method B) objective-and-task method C) competitive-parity method D) activity-based method E) percentage-of-sales method

E

104) An administered VMS coordinates successive stages of production and distribution through ________. A) an automated central control unit B) single ownership C) the combined efforts of all its members D) the establishment of contractual obligations E) the size and power of one of the members

E

104) Compensation plans may need to vary depending on the type of salespersons. Which type of salesperson benefits from consistent quarterly bonuses and social pressure? A) stars B) core performers C) dogs D) cash cows E) laggards

E

113) Rolex calls itself the "Official Timekeeper" of the Wimbledon and Australian Open lawn tennis championships, by virtue of its sponsorships of the marquee events. What is the most likely objective for Rolex's sponsorship deal with these events? A) to permit merchandising or promotional opportunities B) to express commitment to the community or on social issues C) to create experiences and evoke feelings D) to identify with a particular target market or lifestyle E) to increase salience of company or product name

E

118) The sales gap due to reduced volume is ________ percent. A) 0.4 B) 2.5 C) 28.5 D) 63 E) 71.4

E

12) Which of the following elements of the marketing communications mix involves face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders? A) advertising B) sales promotion C) word-of-mouth marketing D) public relations E) personal selling

E

120) For a frequently purchased new product, the seller estimates repeat sales as well as first-time sales. A high rate of repeat purchasing means customers ________. A) value price more than differentiation B) do not support innovation on brands C) value differentiation more than price D) prefer personalized products rather than standard ones E) are satisfied with the product

E

125) A large retail chain in the United States decides to expand its operations by adding an online site for e-commerce. This is called a(n) ________ company. A) B2B B) brick-and-mortar C) m-commerce D) pure-click E) brick-and-click

E

126) Suppose the manufacturer pays a commission on every car sold. Then, the salesperson's commission is classified as a(n) ________. A) cost of labor B) traceable common cost C) nontraceable common cost D) advertising cost E) direct cost

E

130) Which company uses 150 different signals — including dozens of online data feeds — to rate customer leads? A) IBM B) Avon C) SAS D) FABV E) Infer

E

143) As Ben manages communications for his company's watch brand, which has reached the decline stage in the product life cycle, which of the following marketing communications mix tools is he most likely to continue? A) interactive marketing B) advertising C) personal selling D) direct marketing E) sales promotion

E

22) Which of the following is true about a brand-asset management team (BAMT)? A) A BAMT is part of the triangular and vertical product team structures. B) BAMTs often report directly to the organization's chief branding officer. C) BAMTs are a traditional, tried and tested means of managing brands. D) Companies with a product-management organization often have only one BAMT. E) The BAMT consists of key representatives from functions affecting the brand's performance.

E

32) Aisha is a marketing manager with Injoos, a company that manufactures packaged fruit juices. Knowing that several other companies exist in the market that offer similar products, Aisha decides to build a customer base from among those who prefer to avoid mass media and other targeted promotions. Which of the following marketing communications tools would be her best option to build a favorable impression among the prospective customers? A) advertising B) personal selling C) sales promotions D) direct marketing E) public relations

E

38) Advertising and publicity tools play the most important roles in influencing buying decisions at the ________ stage of buyer readiness. A) comprehension B) conviction C) ordering D) reordering E) awareness-building

E

40) Which of the following marketing communications tools has the highest cost-effectiveness in the introduction stage of the product life cycle? A) personal selling B) sales promotion C) interactive marketing D) direct marketing E) events and experiences

E

45) What is the weighted number of exposures of a media schedule that reaches 80 percent of the target audience, with an exposure frequency of 4 and impact value of 2? A) 10 B) 160 C) 240 D) 320 E) 640

E

46) Which of the following is an advantage of using newspapers as an advertising medium? A) long lifespan B) high reproduction quality C) huge "pass-along" audience D) high level of targeting E) good local market coverage

E

49) ________ means inviting the Internet community to help create content or software, often with prize money or a moment of glory involved. A) Stage-gating B) Cocreation C) Microstocking D) Buzzing E) Crowdsourcing

E

5) Which of the following is the best example of a new-to-the-world product? A) Walmart, the retail giant, opens new stores in an underdeveloped African country. B) Pestorica, a publishing company, decides to launch a new sports magazine. C) Tata Motors, an Indian automobile company, acquires Jaguar to extend its business. D) An Asian company licenses a US apparel brand name though the brand is not familiar in Asia. E) Kids-Med, a company that produces childcare products, launches a non-contact thermometer.

E

6) ________ advertising aims to stimulate repeat purchase of products and services. A) Reinforcement B) Comparative C) Persuasive D) Informational E) Reminder

E

64) According to the hierarchy-of-effects model, which of the following corresponds to the affective stage that a buyer passes through? A) attention B) exposure C) reception D) adoption E) conviction

E

68) Robert is hired as a sales representative for a company that manufactures fire extinguishers. His job description reads as follows: "The key duty of the sales representative is to unravel the customer's problems using the company's products." Which of the following positions would best describe Robert's profile? A) deliverer B) technical salesperson C) missionary salesperson D) order taker E) solution vendor

E

7) Jordan's firm enters new markets by tweaking products for new customers, uses variations on a core product to stay one step ahead of the market, and creates interim solutions for industry-wide products. In other words, it uses ________. A) disruptive technologies B) incremental innovation C) complex innovations D) discontinuous innovations E) radical innovations

E

7) What percentage of total digital ad spending is accounted for by search advertising? A) 1 percent B) 7 percent C) 17 percent D) 30 percent E) 43 percent

E

99) Which of the following is NOT one of the advantages of inside selling? A) Inside selling is less expensive than in-person selling. B) Inside salespeople spend more time checking inventory. C) Inside salespeople spend more time following up orders. D) Inside salespeople spend more time phoning smaller accounts. E) All of the above are advantages.

E

115) Customers of a proposed truck may want a certain acceleration rate, which is a desired customer attribute. Engineers can turn this into the required horsepower and other engineering attributes through a process known as alpha testing.

FALSE

66) Firms benefit when they democratize innovations and replace groundbreaking ideas with lowest-common-denominator solutions.

FALSE

84) The macroscheduling decision calls for allocating advertising expenditures within a short period to obtain maximum impact.

FALSE

107) A company that sells one product line to one end-using industry with customers in many locations would use product or market structure for its salesforce.

FALSE

121) Trustworthiness is that source of a spokesperson's credibility that describes his or her attractiveness.

FALSE

125) A price-off pack is an example of a consumer franchise building sales promotions.

FALSE

125) Survival-age distribution refers to the number of customers that the product has in year one, two, three, and so on.

FALSE

130) Profitability control is the prime responsibility of line and staff management.

FALSE

A belief is a person's enduring favorable or unfavorable evaluation, emotional feeling, and action toward some object or idea.

False

Because customers are not really concerned with timely delivery, customers are unlikely to differentiate between firms based on their order-to-payment cycles.

False

Coercive and referent power are subjective and depend on the ability and willingness of parties to recognize them.

False

Companies strive to maximize their current profits if they are plagued with overcapacity, intense competition, or changing consumer wants.

False

In order to estimate future demand, companies commonly prepare a company sales forecast first, followed by an industry forecast, and finally a macroeconomic forecast.

False

132) GameTech International Inc. engages in the design, development, and marketing of interactive electronic bingo systems primarily in the United States. The company has plans to enter developing markets such as Brazil and India. TechToys, GameTech's major competitor has already started operations in India. GameTech decides to delay its entry to India and to closely observe TechToys' operations in India. What is the possible rationale behind this delaying decision?

GameTech is using the late entry strategy. The firm will delay its launch until after the competitor has borne the cost of educating the market. It can also avoid the mistakes that TechToys make. The company can also learn the size of the market.

74) Why should firms avoid too much democratization of innovation?

Groundbreaking ideas can be replaced by lowest-common-denominator solutions.

150) What is integrated marketing communications? What is its significance in the current marketing environment?

Many companies still rely on only one or two communication tools. This practice persists in spite of the fragmenting of mass markets into a multitude of minimarkets, each requiring its own approach; the proliferation of new types of media; and the growing sophistication of consumers. The wide range of communication tools, messages, and audiences makes it imperative that companies move toward integrated marketing communications. Companies must adopt a "360-degree view" of consumers to fully understand all the different ways that communications can affect consumer behavior in their daily lives. The American Marketing Association defines integrated marketing communications (IMC) as "a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time." This planning process evaluates the strategic roles of a variety of communications disciplines — for example, general advertising, direct response, sales promotion, and public relations — and skillfully combines these disciplines to provide clarity, consistency, and maximum impact through the seamless integration of messages.

16) What are marketing channels? Briefly explain some of the different types of intermediaries.

Marketing channels are sets of interdependent organizations participating in the process of making a product or service available for use or consumption. They are the set of pathways a product or service follows after production, culminating in purchase and consumption by the final end user. Some intermediaries — such as wholesalers and retailers — buy, take title to, and resell the merchandise; they are called merchants. Others — brokers, manufacturers' representatives, sales agents — search for customers and may negotiate on the producer's behalf but do not take title to the goods; they are called agents. Still others — transportation companies, independent warehouses, banks, advertising agencies — assist in the distribution process but neither take title to goods nor negotiate purchases or sales; they are called facilitators.

119) GameTech International Inc. engages in the design, development, and marketing of interactive electronic bingo systems primarily in the United States. Some top managers want to collect sales-wave research, but others disagree, offering several disadvantages. List these disadvantages.

Sales-wave research can be implemented quickly, conducted with a fair amount of security, and carried out without final packaging and advertising. However, because customers are preselected, it does not indicate trial rates the product would achieve with different sales incentives, nor does it indicate the brand's power to gain distribution and favorable shelf position.

55) Briefly describe the process of measuring the results of marketing communications.

Senior managers want to know the outcomes and revenues resulting from their communications investments. Too often, however, their communications directors supply only inputs and expenses: press clipping counts, numbers of ads placed, media costs. In fairness, communications directors try to translate inputs into intermediate outputs such as reach and frequency (the percentage of target market exposed to a communication and the number of exposures), recall and recognition scores, persuasion changes, and cost-per-thousand calculations. Ultimately, behavior-change measures capture the real payoff. After implementing the communications plan, the communications director must measure its impact. Members of the target audience are asked whether they recognize or recall the message, how many times they saw it, what points they recall, how they felt about the message, and what their previous and current attitudes are toward the product and the company. The communicator should also collect behavioral measures of audience response, such as how many people bought the product, liked it, and talked to others about it.

90) Explain the concept of greenwashing along with an example.

Student answers will vary. Greenwashing gives products the appearance of being environmentally friendly without living up to that promise. An automobile manufacturer who promotes its cars as being environmentally friendly when the company is in fact a major polluter, would be an example of greenwashing.

55) Identify three ways marketers can maximize marketing effectiveness of e-mails.

Student answers will vary. Here are seven possible ways marketers can maximize marketing effectiveness of e-mails: • Give the customer a reason to respond (e.g., powerful incentives for reading e-mail pitches and online ads, such as trivia games, scavenger hunts, and instant-win sweepstakes). • Personalize the content of your e-mails and use an engaging subject line. • Offer something the customer can't get via direct mail like time-sensitive information. • Make it easy for customers to opt in as well as unsubscribe. • Run controlled split tests to explore how location, color, and other factors affect "Sign Up Now" messages. Controlled split tests assemble online matched samples of consumers with one sample given a test message that manipulates one factor and the other being a status quo control. • Combine e-mail with other communications such as social media. • Employ "heat mapping," which tracks eye movements with cameras to measure what people read on a computer screen.

135) When asked about their preferred brand of instant noodles outside a supermarket setting, customers could not remember Nissin's name, but relied on the distinct packaging to help them spot the noodles while shopping. Describe how this problem can be addressed through the objective of Nissin's marketing communications.

Student answers will vary. The objective for Nissin's marketing communications objective should be to build brand awareness, i.e. fostering the consumer's ability to recognize or recall the brand within the category, in sufficient detail to make a purchase. Recognition is easier to achieve than recall — consumers asked to think of a brand of frozen entrées are more likely to recognize Stouffer's distinctive orange packages than to recall the brand. Brand recall is important outside the store; brand recognition is important inside the store. Brand awareness provides a foundation for brand equity.

107) What is viral marketing? Please provide an example.

Student answers will vary. Viral marketing is a form of online word of mouth, or "word of mouse," that encourages consumers to pass along company-developed products and services or audio, video, or written information to others online. Student examples will vary, but an example from the text is Blendtec's Will It Blend? videos.

75) To manage costs, most companies are choosing a leveraged sales force that focuses reps on selling the company's more complex and customized products to large accounts and uses inside salespeople and online ordering for low-end selling.

TRUE

86) After a company has chosen a channel system, it must select, train, motivate, and evaluate individual intermediaries for each channel.

TRUE

92) In competitive markets with low entry barriers, the optimal channel structure will inevitably change over time.

TRUE

108) The first step in the workload approach for designing salesforce size is to establish desirable call frequencies for each customer class.

TRUE

111) Sales-wave research can be implemented quickly and carried out without final packaging and advertising.

TRUE

156) In the future, marketers should use the Internet more, improve the sales automation system, apply market automation to routine decisions, and develop formal marketing decision models and marketing dashboards.

TRUE

28) Briefly describe the current marketing communications environment.

Technology and other factors have profoundly changed the way consumers process communications, and even whether they choose to process them at all. The rapid diffusion of multipurpose smart phones, broadband and wireless Internet connections, and ad-skipping digital video recorders (DVRs) have eroded the effectiveness of the mass media. In 1960, a company could reach 80 percent of US women with one 30-second commercial aired simultaneously on three TV networks: ABC, CBS, and NBC. Today, the same ad would have to run on 100 channels or more to achieve this marketing feat. Consumers not only have more choices of media, they can also decide whether and how they want to receive commercial content.

137) Identify the 7Cs of design elements. Do you feel they are relevant in a mobile advertising context? Why or why not?

The 7Cs of design elements are context, content, community, customization, communication, connection, and commerce. Student opinions may vary regarding their relevance in a mobile advertising context, but they should recognize the advice for mobile advertising: Brands should limit their ads to a pair of phrases — the offer and the tagline. Brands should place their logo in the corner of the mobile ad frame. Finally, ads should use at least one bright color, but no more than two. Calls to action should be highlighted with a bright color.

118) Caribou Coffee Company Inc. operates coffeehouses primarily in the United States. The company wants to launch a new brand of specialty coffee and it has created a few hypothetical combinations. The company wants to select two of the combinations after obtaining a ranking by customers based on their preference. What concept testing method is suited here?

The company can use conjoint analysis, a method for deriving the utility values that consumers attach to varying levels of a product's attributes.

40) Eureka Forbes, an Asian consumer appliances company, sells its vacuum cleaners through door-to door sales. This allows the company to obtain a high conversion ratio. Comment on the length of the channel in the case of Eureka Forbes' vacuum cleaners.

The company is using a zero-level channel, i.e. the manufacturer sells directly to the final customer. This is the shortest channel.

19) The Norticon Group provides and manages computers and network systems for businesses and communities. Norticon sells its products through various means. It uses its sales force to sell to large customers and telemarketing to sell to smaller customers. The company also sells its products via the Internet. Briefly explain the marketing approach being used by the company.

The company is using hybrid channels or multichannel marketing which involves the use of two or more marketing channels to reach customer segments. In multichannel marketing, each channel targets a different segment of buyers, or different need states for one buyer, and delivers the right products in the right places in the right way at the least cost.

71) Explain three techniques for stimulating creativity to generate better ideas.

The following are some of the techniques. Students may explain any three of these techniques. • Attribute listing: List the attributes of an object, such as a screwdriver. Then modify each attribute, such as replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. • Forced relationships: List several ideas and consider each in relationship to each of the others. • Morphological analysis: Start with a problem, such as "getting something from one place to another via a powered vehicle." Now think of dimensions, such as the type of platform (cart, chair, sling, bed), the medium (air, water, oil, rails), and the power source (compressed air, electric motor, magnetic fields). By listing every possible combination, you can generate many new solutions. • Reverse assumption analysis: List all the normal assumptions about an entity and then reverse them. Instead of assuming that a restaurant has menus, charges for food, and serves food, reverse each assumption. • New contexts: Take familiar processes, such as people-helping services, and put them into a new context. • Mind mapping: Start with a thought, such as a car, write it on a piece of paper, then think of the next thought that comes up (say Mercedes), link it to the car, then think of the next association (Germany), and do this with all associations that come up with each new word. Perhaps a whole new idea will materialize.

111) What key indicators of sales performance do sales managers extract from call reports?

These reports provide raw data from which sales managers can extract key indicators of sales performance: • average number of sales calls per salesperson per day • average sales call time per contact • average revenue per sales call • average cost per sales call • entertainment cost per sales call • percentage of orders per hundred sales calls • number of new customers per period • number of lost customers per period • sales force cost as a percentage of total sales

121) Flash Designs is an apparel manufacturing company and has adopted a franchising model to distribute and sells its garments. The company recently received complaints from a particular franchisee that another competing franchisee was infringing on its territory. What type of conflict is this?

This is an example of horizontal channel conflict, between channel members at the same level.

Generally, consumers prefer small price increases on a regular basis to sudden, sharp increases.

True

Groups that have an indirect influence on a person's attitude or behavior can be a part of his or her reference groups.

True

If a company were pursing a policy of networking externally to gather marketing intelligence, it might collect competitors' ads or look up news stories about competitors.

True

24) Describe how advertising objectives are set to reflect the product class.

The advertising objective should emerge from a thorough analysis of the current marketing situation. If the product class is mature, the company is the market leader, and brand usage is low, the objective is to stimulate more usage. If the product class is new, the company is not the market leader, but the brand is superior to the leader, then the objective is to convince the market of the brand's superiority.

75) Cause-related marketing efforts are unlikely to backfire as customers generally view the company's motives as genuine.

FALSE

76) Brands in highly differentiated product classes require heavy advertising to establish a unique image.

FALSE

76) Demand creators are not permitted to take an order but expected rather to build goodwill or educate the actual or potential user.

FALSE

83) Endearment gives products the appearance of being environmentally friendly without living up to that promise.

FALSE

87) An advertiser makes "local buys" when it buys TV time in just a few markets or in regional editions of magazines.

FALSE

89) When a manufacturer requests a behavior that is warranted under the contract, the manufacturer is using coercive power.

FALSE

A marketer's only concern is how best to create demand for a new product produced by his/her company. Marketing has little value for society as a whole.

False

In reality, it is very easy for firms to estimate their demand and cost functions.

False

Lot size refers to the total number of units a channel can transmit from the manufacturer's place to the service outlet.

False

Loyalty is a person's feelings of pleasure or disappointment that result from comparing a product's perceived performance to expectations.

False

Marketers have little information about buyer wants, preferences, and behavior.

False

Marketing channel functions such as storage and movement and communications constitute a backward flow of activities.

False

Profitability control is the prime responsibility of line and staff management.

False

The customer triad consists of a combination of quality, durability, and price.

False

The desire to eat a Philly cheesesteak, whether or not you are in the position to buy one, is an example of demand.

False

The response rate is usually very high for mail questionnaires.

False

The selling concept holds that consumers will prefer products that are ethical, environmentally responsible, legal, and social in the context of marketing activities and programs.

False

Total customer cost consists of only the non-monetary costs in evaluating, obtaining, using, and disposing of the given market offering.

False

101) The purpose of profitability control is to ________. A) examine whether the planned results are being achieved B) examine where the company is making and losing money C) evaluate and improve the spending efficiency and impact of marketing expenditures D) examine whether the company is pursuing its best opportunities with respect to markets, products, and channels E) understand the efficiency of the sales force, advertising, sales promotion, and distribution

B

152) Creative public relations can affect public awareness at a fraction of the cost of advertising.

TRUE

Marketers have the major responsibility for identifying significant changes in the marketplace.

True

Most marketing plans conclude with a section that indicates how the plan will be implemented.

True

Products such as heating and cooling systems are usually sold and maintained by the company or by franchised dealers.

True

110) Variable compensation is common in jobs where the selling task is technically complex and requires teamwork.

FALSE

111) Problem removal and normal depletion are examples of positively oriented relevant brand needs.

FALSE

112) Communications effectiveness depends solely on the content of a message, irrespective of how it is expressed.

FALSE

114) Advanced supply-distributor arrangements for administered vertical marketing systems do not rely on distribution programming.

FALSE

114) Cannibalized income is additional income to a company as a result of a new product.

FALSE

114) Sales promotion consists of a collection of incentive tools designed to mainly stimulate long-term brand associations of products or services with consumers or the trade.

FALSE

116) Adding more marketing channels increases the channel cost of selling.

FALSE

117) Fear appeals work best when they are rather strong and reinforce what the audience already believes.

FALSE

119) Loyal brand buyers tend to change their buying patterns as a result of competitive promotions.

FALSE

121) Examples of manufacturer promotions include price cuts and feature advertising.

FALSE

127) Modular function deployment methodology takes the list of desired customer attributes generated by market research and turns them into a list of engineering attributes that engineers can use.

FALSE

128) Some firms might delay a new product launch until after the competitor has borne the cost of educating the market and its product may reveal flaws the late entrant can avoid. This can be classified as a parallel entry.

FALSE

140) In the context of overall market share, customer loyalty refers to the percentage of all customers who buy from the company.

FALSE

141) The first step in conducting a marketing profitability analysis involves assigning functional expenses to marketing entities.

FALSE

Accepting telephone and mail orders is an example of the ancillary services that a retailer offers.

False

According to the research conducted by Jennifer Aaker, one of the five traits of a product's brand personality is its physical structure.

False

Advanced supply-distributor arrangements for administered vertical marketing systems do not rely on distribution programming.

False

After developing a research plan, a marketing researcher should define the problem and research objectives.

False

All companies should practice one-to-one marketing.

False

Conformance quality and performance quality are identical in the marketing sense.

False

Consistent with the elaboration memory model, consumer brand knowledge in memory can be conceptualized as consisting of a brand node in memory with a variety of linked associations.

False

Consumers who experience money constraints are prone to multitasking.

False

Corporate chain stores such as Subway, Jiffy-Lube, Holiday Inn, Supercuts, and 7-Eleven account for $1 trillion of annual US sales and 40 percent of all retail transactions.

False

Customer-perceived value is the perceived monetary value of all the purchases a customer makes on an annual basis.

False

Every consumer must pass through all five stages of the buying process when in a buying situation.

False

Focusing disproportionate effort on high-profit customers will lead to lower customer profitability for those customers.

False

Gap and Pottery Barn are examples of franchise organizations, where two or more retail outlets are owned and controlled by a corporation that employs central buying and merchandising and sells similar lines of merchandise.

False

If setup costs are high, the manufacturer can produce the item often, and the average cost per item is stable and equal to the running costs.

False

In a compensation deal, the seller sells a plant, equipment, or technology to another country and agrees to accept as partial payment products manufactured with the supplied equipment.

False

In order to clearly differentiate themselves from competitors, retailers must keep merchandise and prices consistent.

False

In target-return pricing, the firm adds a standard markup to the product's cost.

False

Mass merchandisers are usually high-markup, lower-volume stores.

False

Price discrimination in all forms is illegal in the United States.

False

Price is one of the two elements of the marketing mix that produces revenue.

False

Pricing cues such as sale signs and prices that end in 9 are more influential when consumers are experienced in the category.

False

Profit rate tends to decrease over the life of the retained customer due to increased purchases, referrals, price premiums, and increased operating costs to service.

False

Psychogenic needs arise from the physiological states of tension such as hunger or discomfort.

False

STIHL, which manufactures handheld outdoor power equipment sold to six independent US distributors and six STIHL-owned marketing and distribution centers who sell to a nationwide network of more than 8,000 servicing retail detailers, is a good example of intensive distribution.

False

Self-audits tend to provide more objective information than audits conducted by external consultants.

False

The marketing strategy section of the marketing plan spells out goals and budgets for each month or quarter so the management can review each period's results and take corrective action as needed.

False

The value proposition is also known as the core positioning of the offering.

False

Today, consumers are price takers and accept prices at face value or as given.

False

Wants are a basic human requirement, such as food and shelter.

False

When Sony introduced the first high-definition television to the Japanese market in 1990, it was priced at $43,000, which is an example of partial-cost recovery pricing.

False

When consumers evaluate the risks associated with a purchase, only real risks with high likelihood of occurrence should be considered.

False

Wholesalers exclude manufacturers and farmers because they are engaged primarily in production, but include retailers, as they are selling to the end consumer.

False

With noncompensatory models of consumer choice, positive and negative attribute considerations usually net out.

False

25) What practices guide innovation at W. L. Gore?

First, it works with potential customers. Second, Gore has a distinctly egalitarian culture; it lets employees choose projects and appoints few product leaders and teams. The company likes to nurture "passionate champions" who convince others a project is worth their time and commitment, and leaders have positions of authority because they have followers. Third, all research associates spend 10 percent of their work hours on "dabble time," developing their own ideas. Promising ideas are judged according to a "Real, Win, Worth" exercise: Is the opportunity real? Can we win? Can we make money? Fourth, Gore knows when to let go.

The traditional view of marketing is that the firm makes something and then sells it.

True

The value delivery system includes all the experiences the customer will have on the way to obtaining and using the offering.

True

Two products with very different performance qualities can have the same conformance quality if both products deliver their respective promised quality.

True

Villy Custom Bicycles come in a variety of mix and match colors and styles so consumers can design their own. This is an example of personalizing the product.

True

Wholesaling includes all the activities in selling goods or services to those who buy for resale or business use.

True

120) True Value is a retailer-owned cooperative with over 4,000 independent retail locations worldwide. Members of True Value own their individual stores and operate independently. True Value helps its members procure materials at a low cost. What kind of marketing system is True Value? Explain briefly.

True Value is a type of contractual VMS. It is a retail cooperative wherein retailers take the initiative and organize a new business entity to carry on wholesaling and possibly some production.

49) A Web site's ease of use and physical attractiveness are important to marketers because consumers use them to judge a site's performance. Please explain three things marketers should do to ensure high ratings on each.

Two criteria consumers use to judge a site's performance are ease of use and physical attractiveness. • Ease of use means: The site downloads quickly, the first page is easy to understand, and it is easy to navigate to other pages that open quickly. • Physical attractiveness is ensured when: Individual pages are clean and not crammed with content, typefaces and font sizes are very readable, and the site makes good use of color (and sound).

143) Situation questions focus on the problems, difficulties, and dissatisfaction a buyer might be experiencing with the existing situation.

FALSE

112) Identify and describe the rungs on the customer loyalty ladder in ascending order.

1. Satisfaction — Sticks with your organization as long as expectations are met. 2. Repeat purchase — Returns to your company to buy again. 3. Word of mouth/buzz — Puts his or her reputation on the line to tell others about you. 4. Evangelism — Convinces others to purchase/join. 5. Ownership — Feels responsible for the continued success of your organization.

10) Which of the following is the most accurate description of a value network? A) a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings B) a system of organizations and resources involved in moving a product from supplier to customer C) an arrangement whereby an organization transforms inputs into finished goods D) a network that allows an organization take the finished products to the end-users E) a communication network that allows an organization to transfer information to end-customers

A

124) Which of the following is the most complete and accurate description of a pure-click company? A) These are companies that launch a Web site without any previous existence as a firm. B) These firms' business models are based on advertising revenue. C) These are established companies that have an online site for selling products. D) These companies get paid every time a user visits their Web site. E) These companies sell online space to other Web sites and are paid for the service.

A

31) Which of the following statements correctly reflects a characteristic of public relations as a marketing communications tool? A) Public relations can reach prospects who prefer to avoid mass media and targeted promotions. B) They incorporate some concession, inducement, or contribution that gives value to the consumer. C) Given their live, real-time quality, public relations tools are more actively engaging for consumers. D) Public relations communications can be prepared to appeal to the addressed individual. E) Public relations tools create an immediate and interactive episode between two or more persons.

A

50) Exclusive dealing arrangements are mainly used by companies looking for an edge in markets increasingly driven by ________. A) price B) efficiency C) product variety D) add-on services E) spatial convenience

A

63) The stage in the new product process that occurs first and has a pass ratio of 1:4 is the ________ stage. A) idea screening B) product development C) test marketing D) product soft launch E) concept testing

A

84) Creative strategies refer to the ________. A) way marketers translate their messages into a specific communication B) amount of creative content in a communications message C) degree of innovation involved in the marketing of a product D) novelty of a marketing communication E) type of medium used to deliver a marketing communication

A

88) The trade-off approach may be easier to use when there ________. A) are many variables B) are only a few alternatives C) are observers that are biased D) are possible offers that are limited E) is only one highly desirable solution

A

88) Which of the following ads depict an informational appeal? A) Thompson Water Seal can withstand intense rain, snow, and heat. B) The California Milk Processor Board ran the successful "Got Milk?" ad to boost declining sales. C) VW advertised to active, youthful people with its famed "Drivers Wanted" campaign. D) Pringles advertised "Once You Pop, the Fun Don't Stop" for years. E) KFC has marketed its fast-food products under the slogan, "Finger Lickin' Good."

A

129) Consumer surveys suggest that one of the most significant inhibitors of online shopping is the absence of ________. A) pleasurable experiences B) competitive prices C) adequate technical information D) after-sales service E) facilities to compare offerings

A

97) IBM lets frontline employees spend up to $5,000 to solve a customer problem on the spot, which is an example of which of the following steps that a marketing CEO can take to create a market- and customer-focused company? A) Empower the employees. B) Hire strong marketing talent. C) Get outside help and guidance. D) Install a modern marketing planning system. E) Develop strong in-house marketing training programs.

A

99) What is the major difference between a conventional marketing channel and a vertical marketing system (VMS)? A) Elements in a conventional marketing channel act as separate businesses whereas the elements in a VMS act as a unified system. B) A VMS has many intermediaries whereas a conventional marketing channel has a limited number of intermediaries. C) A VMS is characterized by an independent producer whereas a conventional marketing channel is characterized by multiple producers. D) A conventional marketing channel has elements such as retailers and wholesalers whereas these elements are not present in a VMS. E) Producers have complete control over the other members in a conventional marketing channel whereas this control is minimal in a VMS.

A

1) ________ are sets of interdependent organizations participating in the process of making a product or service available for use or consumption. A) Marketing channels B) Interstitials C) Communication channels D) Sales territories E) Marketing terrains

A

101) A(n) ________ vertical marketing system combines successive stages of production and distribution under single ownership. A) corporate B) administered C) contractual D) regulatory E) controlled

A

102) Randi is most motivated when there is no ceiling or caps on her commissions, she can earn overachievement commissions for exceeding quotas, and benefits from prize structures that allow multiple winners. She is probably a ________. A) star B) core performer C) dog D) cash cow E) laggard

A

102) Which of the following is an advantage of using the percentage-of-sales method to determine the marketing communications budget? A) The percentage-of-sales method encourages stability when competing firms spend approximately the same portion of their sales on communications. B) The percentage-of-sales method views sales as the determiner of communications rather than as the result. C) The percentage-of-sales method leads to a budget set by market opportunities rather than the availability of funds. D) The percentage-of-sales method encourages experimentation with countercyclical communication or aggressive spending. E) The percentage-of-sales method encourages building the communication budget by determining what each product and territory deserves.

A

107) Which of the following consumer promotion tools refers to explicit or implicit promises by sellers that the product will perform as specified or that the seller will fix it or refund the customer's money during a specified period? A) product warranties B) coupons C) free trials D) rebates E) patronage awards

A

107) Your firm has experienced a decline in sales over the last three quarters. You have traced the problems to distribution inefficiencies. Which of the following should you track to ensure that the firm's distribution efficiency is maximized? A) average sales per point of sale B) sales from new products C) trial rate D) repurchase rate E) new customer gains

A

11) Companies should first think about the target market and then design the supply chain backward from that point. This strategy is called ________ planning. A) demand chain B) resource C) external channel D) materials E) strategic business

A

11) The role of marketing in the organization is changing. Traditionally marketers have played the roles of ________, charged with understanding customers' needs and transmitting their voice to various functional areas. A) middlemen B) opinion leaders C) clients D) influencers E) end consumers

A

111) Which of the following is a major advantage of adding more channels for selling? A) It helps the company increase its market coverage. B) It helps the company reduce its fixed costs. C) It reduces the likelihood of channel conflict. D) It is the best strategy for selling low-involvement consumer products. E) It results in economies of scale.

A

113) Today's customers expect a salesperson to have extensive product knowledge, to be efficient and reliable, and to provide ideas to improve the customer's operations. These demands are forcing companies to make higher investments in ________. A) sales training B) internal selling C) management controls D) advertising E) sales promotions

A

114) ________ analysis looks at specific products, territories, and so forth that failed to produce expected sales. A) Microsales B) Sales variance C) Expense-to-sales D) Full costing E) Financial

A

115) Jackson, the sales representative of a European manufacturer of commercial heavy duty washing machines, calls on the hotels in California. During a sales call, he asks the housekeeping manager of a hotel "How many bed sheets do you wash in a day, on average?" This question can be classified as a(n) ________ question. A) situation B) problem C) implication D) need-payoff E) consequence

A

116) ________ is market share in comparison to the largest competitor. A) Relative market share B) Served market share C) Overall market share D) Market value E) Target market share

A

117) Which of the following is the "third screen"? A) mobile phones B) in-vehicle entertainment systems C) televisions D) computers E) elevator screens

A

118) Which of the following is the first step in the process of personal selling? A) prospecting and qualifying B) sales preapproach C) sales presentation D) unearthing objections E) demonstrating advantages

A

120) ________ are bite-sized software programs that can be downloaded to smart phones. A) Mobile apps B) Mini-billboards C) Loyalty programs D) Virtual maps E) Cookies

A

128) Exxon Consulting works as an agent on behalf of business consumers to collect information on various industrial products. When faced with buying decisions, businesses can approach Exxon to obtain detailed information on the various options available to them. The company earns revenue by selling such information to various customers. Exxon Consulting can be called a(n) ________. A) infomediary B) market maker C) customer community D) third party arbitrator E) informant

A

13) ________ requires that everyone in the organization accept the concepts and goals of marketing and engage in choosing, providing, and communicating customer value. A) Internal marketing B) Corporate communications C) Integrated marketing communications D) Supply chain management E) Employee engagement

A

130) Which of the following is an example of a brick-and-click company? A) IFB Industries, a company that sells products using various channels such as Internet, retailers, direct outlets, and franchisees. B) Opera, a Web browser and Internet suite developed by Opera Software, performs common tasks such as displaying Web sites and sending and receiving e-mail messages. C) Atrutron, a company that offers its customers access to the Internet using data transmission technology. D) eBay Inc., an American company, facilitates online auctions and shopping to people and businesses across the globe to buy and sell a broad variety of goods and services. E) Yahoo! Inc., an American corporation, provides services via the Internet such as directories, e-mail, news, advertising, online mapping, and so on.

A

134) Adopters of new products move through five stages. These stages begin with ________ and follow with interest, evaluation, trial, and adoption. A) awareness B) investigation C) trial D) innovation E) diffusion

A

134) M-commerce refers to ________. A) conducting business using mobile channels B) the use of mass media communications to attract customers C) providing mobile and on-site services to customers D) the use of a specific medium to communicate with prospects E) using the Internet as a medium for doing business

A

135) ________ includes resistance to interference and a neurotic attitude toward money. A) Psychological resistance B) Logical resistance C) Price sensitivity D) Relationship inertia E) Reactance

A

136) Robert has heard about the latest cell phone from LG Electronics that features Wi-Fi hotspot technology. Wi-Fi hotspot is a technology that allows users to share mobile internet with other Wi-Fi enabled devices. Robert visits the company's Web site to read more about the phone. Robert is in the ________ stage of consumer-adoption process. A) interest B) awareness C) evaluation D) trial E) adoption

A

143) A manufacturer wants to achieve rapid market penetration through a low-price policy. However, the manufacturer's dealers prefer to work with high margins and pursue short-run profitability. The major reason for this conflict is ________. A) goal incompatibility B) unclear roles C) ambiguous rights D) differences in perception E) dependence on the manufacturer

A

145) Which of the following is NOT one of the four important contributions an effectively trained company sales force can make to consumer marketing? A) remind end-consumers about the product B) increase stock position C) build enthusiasm D) conduct missionary selling E) manage key accounts

A

146) RX Corp. is a large manufacturer of electronic goods and sells its products through distributors and retailers. In order to keep pace with the growing use of the Internet, the company decides to start selling online. The company faces stiff opposition from its retailers as they believe that this will significantly reduce their profits. The company attempts to eliminate this resistance by offering its retailers commissions for processing and delivering orders received via the Web. This is an example of which of the following conflict resolution strategies? A) dual compensation B) joint membership C) arbitration D) co-optation E) strategic pricing

A

149) Which of the following channel conflict resolution techniques is used only if everything else proves ineffective? A) legal recourse B) mediation C) arbitration D) co-optation E) superordinate goals

A

15) Which of the following is an example of a public relations and publicity communication platform? A) lobbying B) company museums C) street activities D) company blogs E) incentive programs

A

17) Which of the following is an example of a word-of-mouth marketing communication platform? A) chat rooms B) billboards C) factory tours D) incentive programs E) trade shows

A

17) ________ tracks eye movements with cameras to measure what people read on a computer screen. A) Heat mapping B) An interstitial C) A pay-per-click ad D) A click-through rate E) Animation

A

21) There are three types of product-team structures. These are ________. A) vertical, triangular, and horizontal product teams B) vertical, horizontal, and circular product teams C) horizontal, vertical, and rectangular product teams D) horizontal, vertical, and flattened product teams E) vertical, rectangular, and circular product teams

A

24) When customers fall into different user groups with distinct buying preferences and practices, a ________ organization is desirable. A) market-management B) product-management C) brand-management D) geographic E) functional

A

29) Door-to-door sales, home parties, mail order, telemarketing, TV selling, Internet selling, and manufacturer-owned stores are examples of ________. A) zero-level channels B) jobbers C) wholesalers D) manufacturer's representatives E) consumers

A

3) Market demassification has resulted in ________. A) niche market creation B) product standardization C) mass production practices D) intrinsic marketing channels E) just-in-time production

A

3) Tracy works for a cellular phone company that offers trade-in allowances toward the upgrade of new phones, which is an example of ________. A) a sales promotion B) interactive marketing C) word-of-mouth marketing D) personal selling E) events and experiences

A

31) Which of the following is generally acknowledged as the most powerful advertising medium and reaches a broad spectrum of consumers at low cost per exposure? A) television B) radio C) newspapers D) magazines E) billboards

A

33) According to researchers, which of the following is the correct order in which content of print advertisements matter? A) picture-headline-copy B) copy-picture-headline C) headline-copy-picture D) picture-copy-headline E) copy-headline-picture

A

33) Which of the following marketing communications tools is most effective at the later stages of the buying process? A) personal selling B) public relations C) advertising D) sales promotions E) direct marketing

A

48) Which of the following is a major disadvantage of using the Internet as a marketing channel? A) It is less effective for complex products. B) It lacks convenience and practicality. C) It cannot be used to reach a wide audience. D) It is considered expensive. E) It causes the company to lose direct contact with customers.

A

48) Which of the following is an advantage of using television as an advertising medium? A) high attention and reach B) low absolute cost C) absence of clutter D) long duration of ad exposure E) high audience selectivity

A

49) Armon Apparels designs, manufactures, and distributes athletic apparel and accessories for men and women. The company has only nine distributors across the United States. These distributors control a nationwide network of 600 retailers. The company does not sell its products through other channels. This is an example of ________ distribution. A) selective B) intensive C) exclusive D) internal E) passive

A

49) Which of the following is a disadvantage of using television as an advertising medium? A) high absolute cost B) low audience attention C) lack of reach among audience D) high audience selectivity E) absence of clutter

A

5) Which of the following business practices involves reducing the number of organizational levels to get closer to the customer? A) flattening B) globalizing C) decentralization D) merging E) justifying

A

5) Which of the following is NOT one of the advantages of direct mail? A) The cost per thousand is lower than for mass media. B) It permits target market selectivity. C) It can be personalized. D) It allows early testing and response measurement. E) It is flexible.

A

52) Which of the following products is most likely to be sold using an exclusive distribution strategy? A) designer luggage B) cigarettes C) alcoholic beverages D) car fuel E) medicine

A

57) Dollar Shave Club's irreverent online video on YouTube is an example of ________. A) social media B) an interstitial C) a microsite D) a pay-per-click ad E) a mobile ad

A

57) Which of the following is the correct order of stages that a buyer is assumed to pass through, by the four classic response hierarchy models? A) cognitive stage — affective stage — behavioral stage B) affective stage — cognitive stage — behavioral stage C) behavioral stage — affective stage — cognitive stage D) cognitive stage — behavioral stage — affective stage E) affective stage — behavioral stage — cognitive stage

A

58) Which of the following problems is most likely when a company chooses to use a sales agency instead of company salespeople? A) The company will find it difficult to control the sales process. B) They do not take title to goods or negotiate purchases or sales. C) The value-added per sale is the lowest for sales agencies. D) Agencies will pay less attention to customers who buy the most or in large volumes. E) Sales agencies are often difficult to access due to strict contractual obligations.

A

60) Moonburst is a newly launched brand of energy drinks, one among many other recently introduced competing brands. The advertising agency handling Moonburst's account decides that to better promote Moonburst, it has to zero in on an advertising medium that would offer immunity from the clutter of other brands, flexibility to alter its advertising message, and the ability to fit in with the modest advertising budget. Also, the medium has to provide a high repeat exposure of the advertising message to the target audience. The advertising agency would be happy to trade-off audience selectivity and creative possibilities if the medium satisfies the above criteria. Which of the following would be the best option for Moonburst? A) outdoor media B) radio C) magazines D) television E) Yellow Pages

A

64) Which of the following represents the objective of a social marketing campaign aimed at changing people's behavior? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Attract people with obesity to sign up for a one-time free medical check up.

A

73) ________ seeks to determine whether an ad is communicating effectively. A) Copy testing B) Flighting C) Pulsing D) Frequency capping E) Square inch analysis

A

76) Because of the acceptance that the other Broomer products have in the market, retailers are willing to stock items from the new "Inducer" line of clothing. This is an example of ________ power. A) referent B) passive C) legitimate D) coercive E) reward

A

77) Marketing communication strategy can be decided by conducting an image analysis by profiling the target audience in terms of ________. A) brand knowledge B) purchase patterns C) demographic characteristics D) income levels E) psychographic characteristics

A

8) A firm uses its sales force to sell to large accounts and outbound telemarketing to sell to medium-sized accounts. The firm is using ________ marketing. A) hybrid B) pull C) personalized D) vertical E) internal

A

84) The process of deciding how to allocate company's time among prospects and customers is called ________. A) targeting B) prospecting C) allocating D) dispersing E) delegating

A

85) Which of the following is NOT a limitation of online reviews? A) People trust and value positive reviews more than negative reviews. B) Online reviews can be biased. C) Raters are influenced by previous, positive ratings. D) Social influence can lead to disproportionally positive online ratings. E) Online reviews can be fake.

A

87) Which of the following is NOT one of the steps that can improve the likelihood of starting positive buzz? A) Identify underserved, inactive individuals and devote extra effort to them. B) Supply key people with product samples. C) Work through community influentials. D) Develop word-of-mouth referral channels to build business. E) Provide compelling information that customers want to pass along.

A

96) ________ helps sales representatives understand how they spend their time and how they might increase their productivity. A) Time-and-duty analysis B) A sales quota C) A feed-forward approach D) An expense allowance E) A norm for prospect calls

A

97) Kate is coaching members of her field sales team to help them understand how they spend their time and how they might increase their productivity. She is using ________ to provide them with feedback. A) time-and-duty analysis B) a sales quota C) a feed-forward approach D) an expense allowance E) a norm for prospect calls

A

17) Explain the concept of a value network.

A company can be seen as being at the center of a value network, a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings. A value network includes a firm's suppliers and its suppliers' suppliers, and its immediate customers and their end customers. The value network includes valued relationships with others such as university researchers and government approval agencies. A company needs to orchestrate these parties in order to deliver superior value to the target market. Managing a value network means making increasing investments in information technology (IT) and software. Firms have introduced supply chain management (SCM) software and invited such software firms as SAP and Oracle to design comprehensive enterprise resource planning (ERP) systems to manage cash flow, manufacturing, human resources, purchasing, and other major functions within a unified framework.

144) What is a marketing audit? Explain the four characteristics of a marketing audit.

A marketing audit is a comprehensive, systematic, independent, and periodic examination of a company's or business unit's marketing environment, objectives, strategies, and activities, with a view to determining problem areas and opportunities and recommending a plan of action to improve the company's marketing performance. A marketing audit should be: • comprehensive — it covers all the major marketing activities of a business • systematic — it is an orderly examination of the organization's macro- and micromarketing environments, marketing objectives and strategies, marketing systems, and specific activities • independent — outside consultants bring the necessary objectivity, broad experience in a number of industries, familiarity with the industry being audited, and undivided time and attention • periodic — firms typically initiate marketing audits only after failing to review their marketing operations during good times, with resulting problems. A periodic marketing audit can benefit companies in good health as well as those in trouble

87) What are some of the forces that are driving companies to practice corporate social responsibility?

A number of forces are driving companies to practice a higher level of corporate social responsibility, such as rising customer expectations, evolving employee goals and ambitions, tighter government legislation and pressure, investor interest in social criteria, media scrutiny, and changing business procurement practices.

81) Jack is the sales representative of a company that designs and installs modular kitchens. The company's salesforce is trained to customize their offerings as per customer requirements. After analyzing factors such as the space available and the budget, Jack provides personalized designs to individual customers. What kind of a salesperson is Jack? Briefly explain your answer.

A salesperson whose expertise is solving a customer's problem, often with a system of the company's products and services is called a solution vendor. Here, Jack is providing different solutions to different customers after analyzing their problems. Jack can be called a solution vendor.

85) Identify some of the brand benefits that can accrue to a company that engages in cause marketing.

A successful cause-marketing program can improve social welfare, create differentiated brand positioning, build strong consumer bonds, enhance the company's public image, create a reservoir of goodwill, boost internal morale and galvanize employees, drive sales, and increase the firm's market value. Consumers may develop a strong, unique bond with the firm running the cause-marketing that transcends normal marketplace transactions. Specifically, cause marketing can build brand awareness, enhance brand image, establish brand credibility, evoke brand feelings, create a sense of brand community, and elicit brand engagement.

121) VW chose to launch its GTI in the United States with a(n) ________, which was downloaded 2 million times in three weeks. A) interstitial B) app C) mini-billboard D) Facebook page E) LinkedIn ad

B

125) The cost of land where a plant that manufactures common parts is set up falls under ________ costs. A) traceable common B) nontraceable common C) variable D) manufacturing E) material

B

153) Conflicts between various franchisees of a company are an example of vertical channel conflict.

FALSE

117) What is a vertical marketing system (VMS)? What are the various types of VMSs?

A vertical marketing system includes the producer, wholesaler(s), and retailer(s) acting as a unified system. One channel member, the channel captain, owns or franchises the others or has so much power that they all cooperate. There are three types of VMSs: corporate, administered, and contractual. • A corporate VMS combines successive stages of production and distribution under single ownership. • An administered VMS coordinates successive stages of production and distribution through the size and power of one of the members. Manufacturers of dominant brands can secure strong trade cooperation and support from resellers. • A contractual VMS consists of independent firms at different levels of production and distribution, integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone.

47) What are the advantages and disadvantages of online marketing communications?

Advantages — companies can offer or send tailored information or messages that engage consumers by reflecting their special interests and behavior; marketers can easily trace their effects by noting how many unique visitors or "UVs" click on a page or ad, how long they spend with it, what they do on it, and where they go afterward; the Internet offers contextual placement, which means marketers can buy ads on sites related to their own offerings; marketers can place advertising based on keywords customers type into search engines to reach people when they've actually started the buying process. Disadvantages — consumers can screen out messages; software-powered Web sites generate bogus clicks, which can throw off metrics; marketers can lose control of online messages, which can be hacked or vandalized.

74) Alan is an executive with an ad agency that has been entrusted with accounts for a used-car showroom, a home appliances maker, and a soap company. With reference to response hierarchy models, how does Alan plan communication strategies for the three accounts effectively?

All of the four classic response hierarchy models assume that the buyer passes through cognitive (learn), affective (feel), and behavioral stages (do), in that order. Since buying a car, used or new, represents a significant investment for the buyer, it can be said that the buyer has involvement in the purchase decision and perceives high differentiation with the product category. Hence a "learn-feel-do" sequence is considered appropriate for the used-car showroom account. Similarly, a buyer intending to purchase home appliances, such as a dishwasher or a refrigerator, has high involvement in the purchase decision, even though he perceives little differentiation within the product category. Hence, a "do-feel-learn" approach may be appropriate when planning communications for the home appliances account. Finally, a buyer has low involvement in purchasing soap that has very little differentiation within its category. For the soap company account, Alan should consider a "learn-do-feel" sequence for planning communications.

51) What is the role of advertising as a communications tool in marketing for business markets?

Although marketers rely more on sales calls in business markets, advertising still plays a significant role: • Advertising can provide an introduction to the company and its products. • If the product has new features, advertising can explain them. • Reminder advertising is more economical than sales calls. • Advertisements offering brochures and carrying the company's phone number or Web address are an effective way to generate leads for sales representatives. • Sales representatives can use copies of the company's ads to legitimize their company and products. • Advertising can remind customers how to use the product and reassure them about their purchase.

143) Briefly explain the concept of annual-plan control.

Annual-plan control ensures the company achieves the sales, profits, and other goals established in its annual plan. At its heart is management by objectives. First, management sets monthly or quarterly goals. Second, it monitors performance in the marketplace. Third, management determines the causes of serious performance deviations. Fourth, it takes corrective action to close gaps between goals and performance. This control model applies to all levels of the organization. Top management sets annual sales and profit goals; each product manager, regional district manager, sales manager, and sales rep is committed to attaining specified levels of sales and costs. Each period, top management reviews and interprets the results. Marketers today have better marketing metrics for measuring the performance of marketing plans. Four tools for the purpose are sales analysis, market share analysis, marketing expense-to-sales analysis, and financial analysis.

109) Which of the following is true regarding a marketing audit? A) It focuses primarily on a firm's macromarketing environment. B) It identifies the most-needed improvements and incorporates them into a corrective-action plan with short- and long-run steps. C) It is less effective at locating the real source of a problem than a functional audit. D) It analyzes only those marketing activities that have failed to produce adequate results. E) It relies solely on company managers for data and opinions.

B

12) The average click-through in terms of the percentage of consumers who click on a link for ________ is about 2 percent. A) search engine optimization B) pay-per-click ads C) standard banner ads D) microsites E) rich media banner ads

B

154) MPR can build credibility by placing stories in the media to bring attention to a product, service, person, organization, or idea.

FALSE

131) A pioneer in China, ________ created a national campaign asking Beijing residents to send text messages guessing the high temperature in the city every day for just over a month for a chance to win a one-year supply of its products. A) PepsiCo B) Coca-Cola C) Red Bull D) Poland Spring E) Unilever

B

144) Five characteristics influence the rate of adoption of an innovation. One of these is ________. A) marketing expertise B) relative advantage C) packaging attractiveness D) government regulations E) place of value exchange

B

7) The "Got Milk" campaign was intended to boost sagging milk consumption among Californians in the 1990s. The campaign ads highlighted the inconvenience of running out of milk when intended to be used with certain foods, such as cookies or muffins, advising consumers to stock up on milk to avoid such inconveniences. The "Got Milk?" campaign is an example of ________ advertising. A) informational B) reminder C) institutional D) comparative E) reinforcement

B

7) Using the push strategy is most appropriate when ________. A) consumers are able to perceive differences between brands B) the product being sold is an impulse item C) there is high brand loyalty for the product D) the product is a high involvement purchase E) consumers choose the brand before they go to the store

B

93) When Gerard and his team seek to evaluate blogs according to three dimensions — relevance, sentiment, and authority — they are focused on characterizing the ________ of word of mouth. A) speed B) source C) scale D) share E) space

B

96) One of the measures of online word of mouth at DuPont was the effort's ________, or how fast it spread. A) authority B) speed C) relevance D) scale E) sustainability

B

1) The catalog you receive from a large apparel store, displaying their new summer collection, is an example of ________ marketing. A) buzz B) direct C) virtual D) word-of-mouth E) interactive

B

1) ________ refers to the means by which firms attempt to inform, persuade, and remind consumers — directly or indirectly — about the products and brands they sell. A) Human resource development B) Marketing communications C) Financial management D) Operations management E) Planning

B

10) Which of the following is one of the elements of a site's ease of use? A) Individual pages are clean and not crammed with content. B) The first page is easy to understand. C) Typefaces and font sizes are very readable. D) The site makes good use of color. E) The site has user-centric privacy controls.

B

100) A(n) ________ includes the producer, wholesaler(s), and retailer(s) acting as a unified system. A) parallel marketing channel B) vertical marketing system C) extensive marketing channel D) internal marketing system E) conventional marketing channel

B

102) The ________ is primarily responsible for strategic control. A) line and staff management B) marketing auditor C) marketing controller D) middle management E) BAMT

B

102) Which of the following products is most likely to undergo alpha and beta testing? A) food products B) industrial goods C) consumer products D) commodities E) FMCG products

B

104) Gabrielle is the chief marketing officer of Boyd Pharmaceuticals. She is meeting with Trent, the chief financial officer to decide on the company's marketing communications budget. They pore over the sales reports and other financial records and determine the amount of resources they can spare for marketing communications, after resources have been allocated to other functions, such as R&D, logistics, etc. What method did Gabrielle and Trent use to arrive at the marketing communications budget? A) objective-and-task method B) affordable method C) competitive-parity method D) activity-based method E) percentage-of-sales method

B

105) Which of the following is true regarding annual-plan control? A) This control process begins by identifying the causes of serious performance deviations. B) The tools used for this purpose are sales analysis, market share analysis, marketing expense-to-sales analysis, and financial analysis. C) The marketing controller has the primary responsibility for annual-plan control. D) Its purpose is to evaluate and improve the spending efficiency and impact of marketing expenditures. E) It measures profitability by product, territory, customer, segment, trade channel, and order size.

B

114) Which of the following is NOT one of the four distinctive characteristics of a mobile device? A) It is tied to one user. B) It allows marketers to personalize messages. C) It is virtually always "on." D) It allows for immediate consumption as it is a distribution channel with a payment system. E) It is highly interactive given it allows for geotracking and picture and video taking.

B

119) A salesperson who is contacting possible buyers by mail or phone to assess their level of interest and financial capacity is in the ________ step of the selling process. A) preapproach B) prospecting C) qualifying D) following up E) objection handling

B

122) Representatives who are taught the SPIN method to build long-term relationships may ask each of the following types of questions EXCEPT ________. A) situation B) speculation C) problem D) need-payoff E) implication

B

127) The cost of operating the common manufacturing facility is a(n) ________ cost. A) opportunity B) traceable C) nontraceable D) sunk E) differential

B

13) In 2010, the three top B-to-C ________ were Dell ($52 billion), Staples ($9.8 billion), and CDW ($8.8 billion). A) inbound telemarketers B) catalog sellers C) outbound telemarketers D) infomercial marketers E) mobile marketers

B

133) A(n) ________ is any good, service, or idea that is perceived as new, no matter how long its history. A) commodity B) innovation C) adoption D) invention E) novel product

B

137) ________ includes objections due to proposed contract completion time, quality of goods and services offered, purchase volume, product safety, and responsibility for financing, risk taking, promotion, and title. A) Psychological resistance B) Logical resistance C) Price sensitivity D) Relationship inertia E) Reactance

B

106) Social influence can lead to disproportionally positive online ratings, and subsequent raters are more likely to be influenced by previous negative ratings than positive ones.

FALSE

18) Devin, an online marketing manager for the Gilt Groupe, sends more than 3,000 variations of its daily e-mail for its flash-sale site based on recipients' past ________, browsing history, and purchase history. A) complaints B) click-throughs C) comments D) ratings E) interstitials

B

19) The starting point in planning marketing communications is a ________ that profiles all interactions customers in the target market may have with the company and all its products and services. A) marketing budget B) communications audit C) market research program D) publicity campaign E) product launch

B

29) Intercom Inc., together with its subsidiaries, primarily engages in the generation, transmission, and distribution of electric power in the United States. The company observes that its growth has stagnated over a period of two years. In an attempt to promote growth, it considers adding new features to the existing products and introducing a few new products. The company forms a committee consisting of three top executives, one of the production mangers, a few operational managers, and a representative of the HR department to generate ideas. This team is called a(n) ________ team. A) virtual B) venture C) fundamental D) elemental E) transitory

B

3) Which of the following is NOT one of the four main categories of online marketing communications? A) Web sites B) guerrilla marketing C) search ads D) display ads E) e-mail

B

30) Place advertising, or out-of-home advertising, is a broad category that includes many creative and unexpected forms to grab consumers' attention, including all of the following EXCEPT ________. A) billboards B) yellow pages C) public spaces D) product placement E) point of purchase

B

30) Which of the following activities is a reverse-flow channel of marketing? A) raw materials movement B) product recycling C) materials ordering D) finished goods storage E) customer order placement

B

32) ________ are informal workplaces, sometimes garages, where intrapreneurial teams attempt to develop new products. A) Stage-gate systems B) Skunkworks C) Funnels D) Opportunity spaces E) Research centers

B

52) The offer strategy has five elements: the product, the offer, the medium, the distribution method, and the ________. A) outside envelope B) creative strategy C) sales letter D) circular E) reply form

B

62) The popular music talent show American Idol has been generally acknowledged as the most profitable TV series in US history, in terms of advertising and merchandising revenue. Major sponsors of the show include Coca-Cola, AT&T Wireless, and iTunes, among others. Cups bearing the Coca-Cola logo were a prominent prop found on the show's judges' tables. The show also urged viewers to vote for contestants using AT&T's sms service. Contestants were routinely shown rehearsing for their performances with the help of Apple iPods. Which of the following advertising practices is apparent in this example? A) ambush advertising B) product placement C) angel dusting D) co-branding E) subliminal advertising

B

8) As a business practice, broadening involves ________. A) acquiring or merging with firms in the same or complementary industries to gain economies of scale and scope B) factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise C) buying more goods and services from outside domestic or foreign vendors D) appointing teams to manage customer-value-building processes and break down walls between departments E) becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions

B

8) Which of the following elements of the marketing communications mix includes a variety of programs directed internally to employees of the company or externally to consumers, other firms, the government, and media to promote or protect a company's image or its individual product communications? A) direct marketing B) public relations and publicity C) personal selling D) advertising E) sales promotion

B

87) Universal Services Inc. provides communication services to residential and business customers in rural and small urban communities primarily in northern England. The company offers services such as local and long distance voice, data, and Internet and broadband product offerings. The company, in an attempt to increase the attractiveness of its offerings, decides to provide special voice and data packages to its customers. The company designs eight different packs that offer varying voice and data benefits to customers. The company then asks a few of its customers to rank the packs in order to choose two best packs. Which of the following testing methods is being used in this scenario? A) virtual reality testing B) conjoint analysis C) perceptual mapping D) product fabrication E) rapid prototyping

B

95) Which of the following is NOT a main part of managing the sales force? A) recruiting and selecting sales representatives B) identifying prospects for sales representatives C) training sales representatives D) motivating sales representatives E) evaluating sales representatives

B

95) Which of the following methodologies takes the list of desired customer attributes (CAs) generated by market research and turns them into a list of engineering attributes (EAs) that engineers can use? A) quality control processes B) quality function deployment C) rapid prototyping D) marketing control E) control system formation

B

97) ________ social media ground control and command center in Round Rock, Texas, has 70 employees and processes 25,000 daily social media events in 11 different languages, responding to most queries and complaints within 24 hours. A) DuPont's B) Dell's C) Gatorade's D) Wells Fargo's E) Nestlé's

B

A) Direct-cost B) Full-cost C) Traceable-cost D) Activity-based costing E) Fixed cost

B

105) Gabrielle is the chief marketing officer of Boyd Pharmaceuticals. She is meeting with Trent, the chief financial officer to decide on the company's marketing communications budget. They decide to trust in the prevailing collective wisdom of the industry as a whole, and not wanting to instigate a communications war, settle on spending only as much as their nearest market rival does on marketing communications. What method did Gabrielle and Trent use to arrive at the marketing communications budget? A) objective-and-task method B) affordable method C) competitive-parity method D) activity-based method E) percentage-of-sales method

C

11) ________ is an element of the marketing communications mix that involves people-to-people oral, written, or electronic communications that relate to the merits or experiences of purchasing or using products or services. A) Personal selling B) Sales promotion C) Word-of-mouth marketing D) Public relations E) Advertising

C

128) The manufacturer launches a brand building advertising campaign. The campaign does not promote any one specific car but is aimed at promoting the company as a whole. Which type of cost does this fall under? A) direct costs B) material costs C) nontraceable costs D) traceable costs E) labor costs

C

135) Identify the stage in the consumer adoption process in which the customer is stimulated to seek information about the innovation. A) awareness B) adoption C) interest D) evaluation E) trial

C

141) Alcart Solutions is a large distributor of Aldor phones in Canada. The company distributes products to various retailers in the New Brunswick province. Recently Aldor received several complaints from its retailers that their orders are not delivered on time. They also complain that Alcart offers preferential treatment to some of the other retailers in the region. This is an example of ________ conflict. A) multichannel B) horizontal C) vertical D) intermediate E) parallel

C

144) When Estee Lauder set up a Web site to sell its Clinique and Bobbi Brown brands, Dayton Hudson reduced space for Estee Lauder products in its department stores in response to the ________ conflict. A) horizontal channel B) multichannel C) vertical channel D) grid channel E) end-customer

C

23) One of the options in a product-management organization is to eliminate product manager positions for minor products and assign two or more products to each remaining manager. Under what conditions is this alternative feasible? A) when the product mix is highly diverse B) when there are very few products in the company's portfolio C) when two or more products serve a similar set of needs D) when customers fall into different user groups E) when the company produces many products for many markets

C

4) Which of the following is an example of a company that serves a niche market? A) a large apparel manufacturing company that produces a wide range of products for different segments B) a software company that creates standardized supply chain applications for manufacturers C) a manufacturer who creates tools such as bolts, latches, door handles etc. for left-handed individuals D) a large multinational manufacturer of consumer products, FMCG products, and consumer electronics E) a company that manufactures denim pants for men and women of all ages

C

56) Cadbury's "Sports for Schools" promotion offered sports and fitness equipment for schools in exchange for vouchers. The problem was that the public and media saw a perverse incentive for children to eat more chocolate, a product associated with obesity. Which of the following best summarizes Cadbury's problem? A) Customers felt that the cause was not in sync with the company's brand image. B) Consumers did not value the cause Cadbury was promoting. C) Customers questioned the link between the product and the cause and saw the firm as self-serving and exploitive. D) Consumers resented being sold an inferior product on the back of a cause-marketing program. E) Consumers felt that the campaign did not make a sufficient attempt to change the target audience's behavior.

C

59) Pepe Homes manufactures a range of bathroom accessories and fittings that include bathtubs, shower stalls, etc. While deciding on an effective advertising media vehicle for its planned advertising campaign, the marketing department decides that its advertising objectives would be best achieved if they used a medium that would portray their brand as prestigious and a symbol of luxury. To this effect, the medium should offer marketers a high degree of audience selectivity and high-quality reproduction. Which of the following advertising media would best serve the advertising purposes of Pepe Homes? A) outdoor media B) radio C) magazines D) television E) newspapers

C

108) A ________ is a comprehensive, systematic, independent, and periodic examination of a company's or business unit's marketing environment, objectives, strategies, and activities, with a view to determining problem areas and opportunities and recommending a plan of action to improve the company's marketing performance. A) marketing plan B) test market C) marketing audit D) market-based scorecard analysis E) marketing metric

C

109) A franchise organization is an example of a(n) ________ vertical marketing system. A) corporate B) administered C) contractual D) regulatory E) controlled

C

11) Which of the following statements is true of the factors that affect an advertising budget? A) High-market-share brands usually require proportionately high advertising expenditure as a percentage of sales to maintain share. B) Brands in less-differentiated or commodity-like product classes require less advertising to establish a unique image. C) New products typically merit large advertising budgets to build awareness and to gain consumer trial. D) In a market with few competitors and moderate advertising spending, a brand must advertise more heavily to be heard. E) Established brands usually are supported with high advertising budgets, measured as a ratio to sales.

C

116) Which of the following is an example of a problem question? A) What system are you using to invoice your customers? B) How does this problem affect your people's productivity? C) What parts of the system create errors? D) How much would you save if our company could help reduce errors by 80 percent? E) Which operating system have you installed in your personal computer?

C

116) ________ out of every 10 US consumers owned a smart phone in 2014. A) Two B) Four C) Six D) Eight E) Ten

C

120) Which of the following is true about market share? A) Outside forces affect all companies in the same way. B) A company's performance should be judged against the average performance of all companies. C) A decline in market share does not necessarily mean the company is performing worse than are other companies. D) A decline in market share cannot be deliberately engineered. E) All shifts in market share have marketing significance.

C

121) Poga International, a multinational beverage corporation identifies that one of its competitors is launching an apple flavored drink. The company decides to launch an apple flavor brand along with its competitor. What timing strategy is used here? A) first entry B) blunt entry C) parallel entry D) late entry E) exchange entry

C

123) Which of the following is NOT one of the ways companies can utilize cell phones to market to or track consumers? A) utilize GPS data to provide location-based offers B) utilize digital in-store signs that dispense coupons to smart phones C) utilize cookies to track mobile activity D) track behavior across tablets and mobile devices using screen identities E) track loyalty program participation

C

131) Audi models featured prominently in the 2010 blockbuster Iron Man 2, including main character Tony Stark's personal R8 Spyder. Which of the following is the most rational explanation for Audi's decision to associate itself with the movie? A) to express commitment to the community or on social issues B) to identify with a particular target market or lifestyle C) to create experiences and evoke feelings D) to become part of a personally relevant moment in consumers' lives E) to entertain key clients or reward key employees

C

132) In the FABV approach, ________ describe the economic, technical, service, and social pluses delivered. A) features B) advantages C) benefits D) value E) macroenvironment

C

137) Armordo is a famous vacuum cleaner brand in Africa. Clara has heard of Armordo and she knows that the product is a success. She has started considering whether or not to buy the vacuum cleaner. What stage of the consumer-adoption process is Clara in? A) awareness B) adoption C) evaluation D) trial E) interest

C

148) The easiest measure of marketing public relations effectiveness is the ________. A) resultant effect on the company's sales figures B) effect it has on its market capitalization C) number of exposures carried by the media D) changes observed in consumers' brand knowledge E) impact it has on the company's market share

C

15) When Johnson & Johnson's Tylenol headache reliever would pop up on brokers' Web sites whenever the stock market fell by 100 points or more, they were using a(n) ________. A) microsite B) pay-per-click ad C) interstitial D) search ad E) banner ad

C

2) ________ involves buying more goods and services from external domestic or foreign vendors. A) Merging B) Broadening C) Outsourcing D) Globalizing E) Accelerating

C

31) A ________ divides the innovation process into stages with a checkpoint at the end of each stage. A) reverse assumption analysis technique B) skunkworks system C) stage-gate system D) spiral development process E) new-product department technique

C

42) Under which of the following conditions is the reach of media the most important factor in media selection? A) when introducing frequently purchased brands B) when going into a defined target market C) when launching extensions of well-known brands D) when there are strong competitors to a brand E) when there is high consumer resistance to the product

C

47) Which of the following is a disadvantage of using newspapers as an advertising medium? A) lack of flexibility B) high costs of advertisement space C) poor reproduction quality D) low believability E) absence of local market coverage

C

52) Many people believe that customer focus does not help to create better, or new, products. This belief rests on which of the following ideas? A) Such new product developments decrease the chances of success. B) Customers do not consider the cost of design when making suggestions. C) Customers are at times unaware of what they really want. D) It increases the cost of testing a product or service. E) Having too much customer focus leads to a negative brand image.

C

54) Which of the following is a disadvantage of using outdoor media for advertising? A) low flexibility B) low repeat exposure C) limited audience selectivity D) high costs E) greater competition

C

56) In which of the following cases is building a database worthwhile for the company? A) where the product is a once-in-a-lifetime purchase B) where customers show little loyalty to a brand C) where the company has a long relationship with its customers D) where the unit sale is very small E) where the cost of gathering the information is high

C

58) LCH is a leading electronics company that produces and markets its own brand of desktop and laptop computers for both individual consumers and businesses. Which of the following sequences of consumer responses is relevant as a marketing communications model for LCH's products? A) learn-do-feel B) feel-learn-do C) do-feel-learn D) feel-do-learn E) do-learn-feel

C

6) Which of the following is an example of a business and sales force promotion? A) advertising allowance B) free samples C) contests for sales reps D) display allowance E) discount coupons

C

61) Which of the following represents the objective of a cognitive social marketing campaign? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity to implement lifestyle changes.

C

65) Which of the following sequences accurately represents the hierarchy-of-effects model of marketing communications? A) attention-interest-desire-action B) awareness-interest-evaluation-trial-adoption C) awareness-knowledge-liking-preference-conviction-purchase D) exposure-reception-cognitive response-attitude-intention-behavior E) knowledge-persuasion-decision-implementation-confirmation

C

74) Share of ________ represents the proportion of company advertising of a product to all advertising of that product. A) wallet B) mind C) voice D) market E) cost

C

9) As a marketing practice, monitoring involves ________. A) designing the organization and setting up processes to respond quickly to changes in the environment B) becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions C) tracking what is said online and elsewhere and studying customers, competitors, and others to improve business practices D) determining the most profitable businesses and customers and expending greater organizational resources to capitalize on them E) factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise

C

9) Which of the following elements of the marketing communication mix involves use of mail, telephone, fax, e-mail, or Internet to communicate with or solicit response or dialogue from specific customers and prospects? A) advertising B) personal selling C) direct marketing D) public relations E) sales promotion

C

91) Which of the following sources of a spokesperson's credibility describes his or her attractiveness? A) expertise B) trustworthiness C) likability D) integrity E) experience

C

92) Which of the following elements of the marketing communications mix consists of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers, or the trade? A) advertising B) public relations C) sales promotion D) events and experiences E) personal selling

C

93) The highest loss a project can create is called ________. A) rapid prototyping income B) payback income C) maximum investment exposure D) incremental yearly exposure E) cannibalized income

C

93) Which of the following personal communication channels consist of company salespeople contacting buyers in the target market? A) expert channels B) social channels C) advocate channels D) independent channels E) informal channels

C

94) Which of the following personal communications channels consist of family members, neighbors, friends, and associates talking to target buyers? A) expert channels B) advocate channels C) social channels D) formal channels E) sponsored channels

C

95) Sales promotion expenditures increased as a percentage of budget expenditure for a number of years. Growth has, however, recently slowed. Which of the following is a factor that has contributed to the growth of sales promotion expenditures? A) Many brands have come to be seen as dissimilar. B) The efficiency of advertising as a promotion has improved. C) The trade demands more deals from manufacturers. D) Consumers have become less price-oriented. E) The number of brands in the market has decreased.

C

109) The trade-off approach may be easier to use when there are only a few variables and alternatives.

FALSE

110) Beta testing tests the product within the firm to see how it performs in different applications.

FALSE

96) Personal influence in marketing communications carries great weight when the ________. A) product being marketed is a convenience item B) purchase of the product is considered to be safe and risk-free C) product suggests something about the user's status or taste D) product being marketed is purchased on a frequent basis E) product or service in questions is used without being recommended by others

C

97) In consumer-goods market testing, the company seeks to estimate four variables. These four variables are: trial, first repeat, adoption, and ________. A) guaranteed response B) price sensitivity C) purchase frequency D) usage convenience E) preferential treatment

C

97) Which of the following is a form of mass communications channel? A) interactive marketing B) personal selling C) public relations D) word-of-mouth marketing E) sales presentations

C

98) Key indicators of sales performance include all of the following EXCEPT ________. A) average number of sales calls per salesperson per day B) average revenue per sales call C) advanced marketing cost per sales call D) average cost per sales call E) entertainment cost per sales call

C

Airfare (Scenario) The airfare for an economy class, one-way ticket from Los Angeles to New York is $500. Due to the recession, the airline manages to fill only 100 out of the 150 seats at $400 per seat. 117) How much of the sales performance gap is due to price decline? A) 0.4 percent B) 2.5 percent C) 28.5 percent D) 37 percent E) 71.4 percent

C

91) Define cause-related marketing. What is the difference between cause-related marketing and social marketing?

Cause-related marketing links the firm's contributions to a designated cause to customers' engaging directly or indirectly in revenue-producing transactions with the firm. Cause-related marketing supports a cause whereas social marketing by nonprofit or government organizations furthers a cause.

94) What is channel power? Explain the various types of channel power.

Channel power is the ability to alter channel members' behavior so they take actions they would not have taken otherwise. • Coercive power: A manufacturer threatens to withdraw a resource or terminate a relationship if intermediaries fail to cooperate. This power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power. • Reward power: The manufacturer offers intermediaries an extra benefit for performing specific acts or functions. Reward power typically produces better results than coercive power, but intermediaries may come to expect a reward every time the manufacturer wants a certain behavior to occur. • Legitimate power: The manufacturer requests a behavior that is warranted under the contract. As long as the intermediaries view the manufacturer as a legitimate leader, legitimate power works. • Expert power: The manufacturer has special knowledge of the intermediaries' value. Once the intermediaries acquire this expertise, however, expert power weakens. The manufacturer must continue to develop new expertise so intermediaries will want to continue cooperating. • Referent power: The manufacturer is so highly respected that intermediaries are proud to be associated with it. Companies such as IBM, Caterpillar, and Hewlett-Packard have high referent power. Coercive and reward power are objectively observable; legitimate, expert, and referent power are more subjective and depend on the ability and willingness of parties to recognize them.

70) Briefly explain the various service outputs that marketing channels produce.

Channels produce five service outputs: 1. Lot size: The number of units the channel permits a typical customer to purchase on one occasion. 2. Waiting and delivery time: The average time customers wait for receipt of goods. Customers increasingly prefer faster delivery channels. 3. Spatial convenience: The degree to which the marketing channel makes it easy for customers to purchase the product. 4. Product variety: The assortment provided by the marketing channel. Normally, customers prefer a greater assortment because more choices increase the chance of finding what they need, although too many choices can sometimes create a negative effect. 5. Service backup: Add-on services (credit, delivery, installation, repairs) provided by the channel. The greater the service backup, the greater the work provided by the channel.

50) What are the major characteristics of sales promotions as an element of the marketing communications mix?

Companies use sales promotion tools — coupons, contests, premiums, and the like — to draw a stronger and quicker buyer response, including short-run effects such as highlighting product offers and boosting sagging sales. Sales promotion tools offer three distinctive benefits: 1. Ability to be attention-getting — They draw attention and may lead the consumer to the product. 2. Incentive — They incorporate some concession, inducement, or contribution that gives value to the consumer. 3. Invitation — They include a distinct invitation to engage in the transaction now.

92) Give an example of a cognitive social marketing campaign.

Cognitive campaigns try to educate and inform people. A cognitive campaign might explain the nutritional value of different foods or demonstrate the importance of conservation.

52) How do the stages of buyer readiness affect the composition of a product's marketing communications mix?

Communication tools vary in cost-effectiveness at different stages of buyer readiness. Advertising and publicity play the most important roles in the awareness-building stage. Customer comprehension is primarily affected by advertising and personal selling. Customer conviction is influenced mostly by personal selling. Closing the sale is influenced mostly by personal selling and sales promotion. Reordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising.

90) Describe the communication-effect research method of evaluating advertising effectiveness.

Communication-effect research, called copy testing, seeks to determine whether an ad is communicating effectively. Marketers should perform this test both before an ad is put into media and after it is printed or broadcast. Pretest critics maintain that agencies can design ads that test well but may not necessarily perform well in the marketplace. Proponents maintain that useful diagnostic information can emerge and that pretests should not be used as the sole decision criterion anyway. Many advertisers use posttests to assess the overall impact of a completed campaign. If a company hoped to increase brand awareness from 20 percent to 50 percent and succeeded in increasing it to only 30 percent, then the company is not spending enough, its ads are poor, or it has overlooked some other factor.

137) Compare and contrast the use of negative and positive appeals in advertising messages.

Communicators use negative appeals such as fear, guilt, and shame to get people to do things (brush their teeth, have an annual health checkup) or stop doing things (smoking, abusing alcohol, overeating). Fear appeals work best when they are not too strong, when source credibility is high, and when the communication promises, in a believable and efficient way, to relieve the fear it arouses. Messages are most persuasive when moderately discrepant with audience beliefs. Stating only what the audience already believes at best just reinforces beliefs, and if the messages are too discrepant, audiences will counterargue and disbelieve them. Communicators also use positive emotional appeals such as humor, love, pride, and joy. Motivational or "borrowed interest" devices — such as the presence of cute babies, frisky puppies, popular music, or provocative sex appeals — are often employed to attract attention and raise involvement with an ad. These techniques are thought necessary in the tough new media environment characterized by low-involvement consumer processing and competing ad and programming clutter. Attention-getting tactics are often too effective. They may also detract from comprehension, wear out their welcome fast, and overshadow the product.

129) Briefly explain the three choices available to companies when deciding the timing of market entry.

Companies face three choices when deciding the timing. 1. First entry: The first firm entering a market usually enjoys the "first mover advantages" of locking up key distributors and customers and gaining leadership. But if rushed to market before it has been thoroughly debugged, the first entry can backfire. 2. Parallel entry: The firm might time its entry to coincide with the competitor's entry. The market may pay more attention when two companies are advertising the new product. 3. Late entry: The firm might delay its launch until after the competitor has borne the cost of educating the market, and its product may reveal flaws the late entrant can avoid. The late entrant can also learn the size of the market.

43) How do companies organize new product development?

Companies handle the organizational aspect of new-product development in several ways. Many assign responsibility to product managers. Some employ new-product managers who report to category managers. A few companies have growth leaders, a full-time job for its most creative and successful managers. Some companies have a high-level management committee charged with reviewing and approving proposals. Large companies often establish a new-product department headed by a manager with substantial authority and access to top management whose responsibilities include generating and screening new ideas, working with the R&D department, and carrying out field testing and commercialization.

88) How can firms promote ethical behavior among their employees?

Companies must adopt and disseminate a written code of ethics, build a company tradition of ethical behavior, and hold their people fully responsible for observing ethical and legal guidelines. Organizations must also ensure that every employee knows and observes relevant laws.

43) Explain the product- or brand-management organization and list its advantages and disadvantages.

Companies producing a variety of products and brands often establish a product- (or brand-) management organization. The product- or brand-management organization does not replace the functional organization, but serves as another layer of management. A product-management organization makes sense if the company's products are quite different, or if the sheer number of products is beyond the ability of a functional organization to handle. Product and brand management is sometimes characterized as a hub-and-spoke system. The product-management organization has several advantages. The product manager can concentrate on developing a cost-effective marketing mix for the product and can react more quickly to new products in the marketplace; the company's smaller brands have a product advocate. The disadvantages are that product managers are not given enough authority, they become experts in their product area but rarely achieve functional expertise. The product-management system is costly and brand managers normally manage a brand only for a short time. The fragmentation of markets makes it harder to develop a national strategy. In addition to this, product and brand managers focus on market share and not in building customer relationships.

116) What is concept testing? What is its importance? Explain two modern techniques used for concept testing.

Concept testing means presenting the product concept to target consumers, physically or symbolically, and getting their reactions. The more the tested concepts resemble the final product or experience, the more dependable concept testing is. Concept testing of prototypes can help avoid costly mistakes, but it may be especially challenging with radically different, new-to-the-world products. Rapid prototyping can be used to design products on a computer and then produce rough models to show potential consumers for their reactions. Companies are also using virtual reality to test product concepts. Virtual reality programs use computers and sensory devices (such as gloves or goggles) to simulate reality.

18) Sweet Treats is a startup confectionery manufacturer that sells chocolates, toffees, marshmallows, jelly candies, and so on. Should the firm adopt a push or a pull strategy? Explain your answer.

Considering that Sweet Treats is a startup, its products are likely to have low brand loyalty. Moreover, its products are likely to be impulse items. Thus, a push strategy would be more suitable.

106) Which of the following is an example of a distribution metric used for measuring the performance of marketing plans? A) effective reach B) customer acquisition costs C) market share D) stocks cover in days E) response rate

D

124) Why is the Web experience different for mobile phone users than for people who are surfing from a computer? A) smaller screen sizes B) longer download times C) lack of software D) all of the above E) none of the above

D

138) Which of the following is the mental step in the consumer-adoption process where the customer starts considering whether to try an innovation? A) adoption B) trial C) awareness D) evaluation E) interest

D

150) What is the trade-off in return for the benefits associated with an integrated multichannel marketing system? A) increased market coverage B) customers who buy in one channel are more profitable than customers who buy across different channels C) lower channel costs D) two or more channels may end up competing for the same customer E) customized selling

D

34) Which of the following statements is true of the role of advertising in business markets? A) Advertising is unsuitable for explaining any new features that a product might have. B) Sales calls are more economical than reminder advertisements. C) Sales calls are more effective than advertisements at reminding customers how to use a product and reassure them about their purchase. D) Sales representatives can use copies of the company's ads to legitimize their company and products. E) Advertisements are the least preferred tools when intended to generate leads for sales representatives.

D

49) Rising customer expectations, evolving employee goals and ambitions, and tighter government legislation and pressure are driving companies to ________. A) operate leaner manufacturing facilities B) manage shorter supply chains C) operate flatter organizations D) practice a higher level of corporate social responsibility E) vertically integrate

D

51) Which of the following is a disadvantage of using direct mail as an advertising medium? A) low audience selectivity B) lack of flexibility C) high competition within same medium D) relatively high cost E) lack of personalization of advertising message

D

54) ________ call(s) for the producer to establish a schedule of discounts and allowances that intermediaries see as equitable and sufficient. A) Exclusive dealings B) Mutual services C) Territorial rights D) Price policy E) Tying agreements

D

65) In which of the following types of advertising timing patterns do exposures appear evenly throughout a given period? A) concentration B) pulsing C) flighting D) continuity E) frequency capping

D

76) AT&T found that one of the most effective drivers of its sales, along with unaided advertising awareness was ________. A) a blog B) an online forum C) social networks D) WOM E) pay-per-click ads

D

85) Consumer preferences for alternative product concepts can be measured through ________, a method for deriving the utility values that consumers attach to varying levels of a product's attributes. A) concept testing B) perceptual mapping C) gap level analysis D) conjoint analysis E) morphological analysis

D

90) ________ sales force consists of manufacturers' reps, sales agents, and brokers who earn a commission based on sales. A) Virtual B) Domestic C) Contingent D) Contractual E) Decentralized

D

98) Which of the following statements is true of the two-step approach to mass communications? A) The influence of mass media on public opinion is more direct, powerful, and automatic than marketers have supposed. B) Communications through mass media bypasses opinion leaders and reaches the individual buyers. C) The two-step flow supports the notion that consumption styles are primarily influenced by a "trickle-down" or "trickle-up" effect from mass media. D) According to the two-step flow, people interact primarily within their own social groups and acquire ideas from opinion leaders in their groups. E) Two-step communication suggests that mass communicators should direct messages to groups of buyers who interpret the message and act accordingly.

D

99) Which of the following is an advantage of sales-wave research? A) It gives surprisingly accurate results on advertising effectiveness. B) It allows the brand to gain favorable shelf position. C) It guarantees immediate brand recognition and high sales volume. D) It can be implemented quickly with a fair amount of security. E) It easily creates a buzz in the minds of customers.

D

1) Which of the following is an example of paid media? A) word-of-mouth about the brand B) news stories about the brand C) social network conversations about the brand D) a trade show booth about the brand E) consumers' Instagram photos that include the brand

D

104) Marketing effectiveness rating instruments and marketing audits are approaches to ________ control. A) annual-plan B) profitability C) efficiency D) strategic E) statistical

D

104) Premiums, as a consumer promotion tool, are defined as ________. A) offers to consumers of savings off the regular price of a product, flagged on the label or package B) certificates entitling the bearer to a stated saving on the purchase of a specific product C) programs providing rewards related to the consumer's frequency and intensity in purchasing the company's products or services D) merchandise offered at a relatively low cost or free as an incentive to purchase a particular product E) values in cash or in other forms that are proportional to patronage of a certain vendor or group of vendors

D

106) Which of the following consumer promotion tools involves using one brand to advertise another noncompeting brand? A) tie-in promotion B) frequency programs C) specialty advertising D) cross-promotion E) patronage awards

D

111) Which of the following is likely to be an important trend in marketing in the future? A) marketing intuition B) free-spending marketing C) manual marketing D) marketing science E) mass marketing

D

121) A(n) ________ market share of exactly 100 percent means that a company is tied for the market lead. A rise in relative market share means the company is gaining on its leading competitor. A) overall B) served C) potential D) relative E) actual

D

126) Nadya is designing a mobile ad to promote her company's widgets. Where should the company's logo appear in the mobile ad? A) in the middle of the ad B) centered at the bottom C) centered at the top D) in the corner E) it should not appear

D

129) Why should mobile ad developers avoid complex viewing experiences? A) They take a toll on consumers' battery. B) Consumers may have limited data availability. C) Consumers may have limited time. D) All of the above E) None of the above

D

134) In the FABV approach, if the salesperson is discussing the monetary terms associated with the offering, s/he is talking about ________. A) features B) advantages C) benefits D) value E) macroenvironment

D

36) What is direct marketing? What are the various channels that direct marketers use?

Direct marketing is the use of consumer-direct (CD) channels to reach and deliver goods and services to customers without using marketing middlemen. Direct marketers can use a number of channels to reach individual prospects and customers: direct mail, catalog marketing, telemarketing, interactive TV, kiosks, Web sites, and mobile devices. They often seek a measurable response, typically a customer order, through direct-order marketing.

140) Troma Inc. is a famous manufacturer of cookware that follows a traditional distributor-retailer system to distribute its products. The company abstains from the use of automated supply chain management (SCM) systems mainly due to the fear of unknown. However, rapidly escalating operational costs and inefficiencies have made it necessary for the company to implement an SCM system. The company goes for a big-bang installation of SCM system to become more competitive and cost effective. Identify the adopter group to which Troma belongs. A) innovator B) early adopter C) early majority D) laggard E) late majority

D

143) Which of the following describes the public relations function of lobbying? A) sponsoring efforts to publicize specific products B) advising management about public issues, and company positions and image during good times and bad C) presenting news and information about the organization in the most positive light D) dealing with legislators and government officials to promote or defeat legislation and regulation E) promoting understanding of the organization through internal and external communications

D

146) Relative advantage of an innovation refers to the degree to which ________. A) it matches the values and experiences of the individuals B) it is difficult to understand or use C) it can be tried on a limited basis D) it appears superior to existing products E) the benefits of use are observable or describable to others

D

146) ________ refers to the task of securing editorial space — as opposed to paid space — in print and broadcast media to promote or "hype" a product, service, idea, place, person, or organization. A) Advertising B) Media planning C) Communication design D) Publicity E) Copy testing

D

148) Winstar is a large-scale manufacturer with more than a hundred partners across the globe. When making decisions concerning distribution and channel optimization, the company invites members from its channel partners to be part of its advisory committee. This helps the company maintain harmony with its partners. Which of the following conflict resolution techniques is Winstar using? A) diplomatic counselling B) mediation C) arbitration D) co-optation E) joint membership

D

15) In outbound telemarketing, the call center employees ________. A) sell high-involvement products B) initiate calls from a location closer to prospects C) offer huge discounts to customers D) initiate calls to prospects and customers E) answer the queries of consumers who call for information

D

16) Which of the following is an example of an interactive marketing communication platform? A) product demonstrations B) factory tours C) company museums D) TV shopping E) community relations

D

2) New-to-the-world products are ________. A) low-cost products designed to obtain an edge in highly competitive markets B) new product enhancements that supplement established products C) new versions of an existing product that has been less successful D) new products that create an entirely new market E) existing products that are targeted to new geographical markets

D

20) Along which of the following parameters should marketers evaluate communication options when building brand equity? A) popularity B) innovativeness C) technological sophistication D) efficiency E) novelty

D

3) Which of the following firms is most likely to seek radical innovation? A) a traditional publishing company B) a small scale FMCG company C) a firm that procures and markets wheat D) a high-tech firm in telecommunications E) a firm that sells mineral water

D

51) Surgeons and ER nurses would be considered ________ for surgical equipment. A) venture agents B) internal customers C) buzz agents D) lead users E) connectors

D

87) Which of the following ads depict a transformational appeal? A) Thompson Water Seal can withstand intense rain, snow, and heat. B) DIRECTV offers better HD options than cable or other satellite operators. C) NBA phenomenon LeBron James pitching Nike, Sprite, and McDonald's. D) Pringles advertised "Once You Pop, the Fun Don't Stop" for years. E) Excedrin stops the toughest headache pain.

D

89) Consulting on problems, rendering technical assistance, arranging financing, and expediting delivery are examples of the ________ task in the selling context. A) information gathering B) targeting C) communicating D) servicing E) allocating

D

93) ________ software provides a set of Web-based applications that automate and integrate project management, campaign management, budget management, asset management, brand management, customer relationship management, and knowledge management. A) Marketing dashboard B) Enterprise resource planning C) Supply chain management D) Marketing resource management E) Enterprise campaign management

D

A) impact on market share of sponsor B) amount of time a brand is clearly visible on a television screen C) amount of relevant newsprint mentioning the sponsor D) influence on consumers' brand knowledge of the sponsor E) net impact on the sponsor's bottom line

D

112) Which of the following is a best practice in business and marketing? A) end-product orientation B) reacting to competitors C) vertical integration D) stockholder driven E) teamwork

E

117) Which of the following types of questions directly enquires about the value or usefulness of a proposed solution? A) situation questions B) problem questions C) implication questions D) consequence questions E) need-payoff questions

E

127) When it comes to ad design and copy, mobile ads should use which of the following guidelines? A) Use lots of bright colors but limit ad copy to a pair of phrases. B) Do not use color and limit ad copy to one phrase. C) Use no more than three bright colors and use as much copy as you want. D) Use four bright colors and limit ad copy to one phrase. E) Use at least one bright color, but no more than two, and limit ads to a pair of phrases.

E

4) Merging involves ________. A) reducing the number of organizational levels to get closer to the customer B) removing barriers that separate organizational departments C) partnering with fewer but better value-adding suppliers D) working more closely with customers to add value to their operations E) acquiring firms in the same or complementary industries

E

50) Companies such as Edison Nation and the Big Idea Group have sprung up to tap into ________ possibilities, often combining its own design, branding, engineering, and sales teams with online participants, forming a community for devising new products. A) stage-gating B) cocreation C) microstocking D) buzzing E) crowdsourcing

E

77) A(n) ________ is an elaborated version of a product idea expressed in consumer terms. A) test brand B) alpha product C) beta product D) business schedule E) product concept

E

78) Which of the following is the marketing communications objective for a new-to-the-world product, such as electric cars? A) enhancing brand awareness B) developing brand attitude C) increasing brand purchase intention D) encouraging repeat purchases E) establishing category need

E

98) Which of the following is a sales promotion tool that is consumer franchise building in nature? A) price-off packs B) contests and sweepstakes C) consumer refund offers D) trade allowances E) frequency awards

E

100) Which of the following statements about technology support for salespeople is NOT true? A) Computer-based decision support systems have been created for sales manager and sales representatives. B) A Web site can help define a firm's relationships with individual accounts and identify those whose business warrants a personal sales call. C) Social media is useful in front-end prospecting and lead qualification. D) Social media is useful in back-end relationship building and management. E) All of the above are true.

E

112) ________ time begins with the promotional launch and ends when approximately 95 percent of the deal merchandise is in the hands of consumers. A) Lead B) Hold C) Setup D) Link E) Sell-in

E

12) Marketers often cut the cost of advertising dramatically by using consumers as their creative team. This strategy is known as ________. A) disintermediation B) public relations C) vertical integration D) reintermediation E) crowdsourcing

E

59) Which of the following is a positive factor when considering the development of a customer database? A) The product is a once-in-a-lifetime purchase. B) There is no contact between the buyer and seller. C) There is a lot of customer churn. D) The unit sale is very small. E) Customer lifetime value is high.

E

61) Which of the following is NOT a benefit of a social media presence for a brand? A) Social media allows marketers to establish a public voice and presence online. B) Social media can cost-effectively reinforce other communication activities. C) Social media can encourage companies to stay innovative and relevant. D) Social media can be used to build or tap into online communities. E) Social media allows companies to have a short-term focus.

E

71) Which of the following tasks of the salesforce refers to conducting market research and doing intelligence work? A) servicing B) communicating C) targeting D) prospecting E) information gathering

E

90) ________ exhibit replacement cycles dictated by physical wear or obsolescence associated with changing style, features, and performance. A) Frequently purchased products B) High-moving goods C) Inexpensive products D) Commodity products E) Infrequently purchased products

E

92) Fixed compensation receives more emphasis in sales rep jobs with ________. A) a high ratio of selling to nonselling duties B) a high requirement for individual initiatives C) an intensive focus on selling activities D) very little need for teamwork E) technical complexities

E

92) The top rung of the loyalty ladder is the ________ rung. A) word of mouth/buzz B) repeat purchase C) satisfaction D) evangelism E) ownership

E

100) Consumers are more likely to transmit negative WOM and pass on information about their own negative consumption experiences.

FALSE

106) Perceived value refers to the gap between actual needs and satisfied needs of a customer.

FALSE

98) A large FMCG company decides to test market Kora, a new brand of face cleanser, to be launched soon. The company initially distributes a few free samples to some prospective consumers. Later it offers the product to the customers at a discounted price and observes that not only more than seventy percent of the customers are purchasing it but the same number are also satisfied using it. The company keeps using this process 3-4 times to obtain a correct count of the number of people purchasing the product repeatedly. Which of the following testing methods is being used here? A) simulated testing B) controlled testing C) full test marketing D) parallel testing E) sales-wave research

E

99) ________ software provides a set of Web-based applications that automate and integrate project management, campaign management, budget management, asset management, brand management, customer relationship management, and knowledge management. A) Annual plan control B) Profitability control C) Efficiency control D) Strategic control E) Marketing resource management (MRM)

E

A) breakfast cereal B) detergents C) beer D) electric bulbs E) refrigerator

E

147) How can a firm periodically reassess its strategic approach to the marketplace?

Each company should periodically reassess its strategic approach to the marketplace with a good marketing audit. Companies can also perform marketing excellence reviews and ethical/social responsibility reviews.

118) DMM Industries, a manufacturer of composite metal products, sells its products using a conventional marketing channel. The company decides to adopt a vertical marketing system to improve its performance. What advantages could this provide?

Each entity in a conventional channel is a separate business seeking to maximize its own profits, even if this goal reduces profit for the system as a whole. A vertical marketing system, by contrast, acts as a unified system. This would make the company more profitable. VMSs achieve economies through size, bargaining power, and elimination of duplicated services.

153) A customer survey at a mall revealed that Zoe is considered to be an early adopter. What does this mean?

Early adopters are opinion leaders who carefully search for new technologies that might give them a dramatic competitive advantage. They are less price sensitive and willing to adopt the product if given personalized solutions and good service support.

157) Identify when exclusive distribution deals are legal and when they break the law.

Exclusive arrangements are legal as long as they do not substantially lessen competition or tend to create a monopoly and as long as both parties enter into them voluntarily. Exclusive dealing often includes exclusive territorial agreements. The producer may agree not to sell to other dealers in a given area, or the buyer may agree to sell only in its own territory. The first practice increases dealer enthusiasm and commitment. It is also perfectly legal — a seller has no legal obligation to sell through more outlets than it wishes. The second practice, whereby the producer tries to keep a dealer from selling outside its territory, has become a major legal issue. Producers of a strong brand sometimes sell it to dealers only if they will take some or all of the rest of the line. This practice is called full-line forcing. Such tying agreements are not necessarily illegal, but they do violate US law if they tend to lessen competition substantially.

122) The most highly credible source would score high on at least two of the three dimensions — expertise, trustworthiness, and likability.

FALSE

128) The two-step flow supports the notion that consumption styles are primarily influenced by a "trickle-down" or "trickle-up" effect from mass media.

FALSE

133) Repurchase rate is a sales metric that is used to evaluate the performance of marketing plans.

FALSE

154) The coming years will see the rise of the marketing department and the demise of holistic marketing.

FALSE

63) STIHL, which manufactures handheld outdoor power equipment sold to six independent US distributors and six STIHL-owned marketing and distribution centers who sell to a nationwide network of more than 8,000 servicing retail detailers, is a good example of intensive distribution.

FALSE

155) If a company has too many products and many are losing money; the company is giving away too many services; and the company is poor at cross-selling products and services, it is a sign that the company's brand-building and communication skills are weak.

FALSE

156) MPR's contribution to a company's bottom line is the easiest to measure among all the available promotion tools.

FALSE

18) Catalog marketing and telemarketing are examples of indirect marketing.

FALSE

20) Direct marketing has not been growing as fast as US retail sales.

FALSE

21) Kraft utilized customers to name its new flavor of its iconic Vegemite product, and their selection, iSnack 2.0, increased sales dramatically.

FALSE

21) Non-digital media provide marketers and consumers with opportunities for much greater interaction and individualization than digital media.

FALSE

27) Beauty pioneer Estée Lauder does not utilize Internet marketing because the multimillion-dollar cosmetics business uses three means of communication: "telephone, telegraph, and tell a woman."

FALSE

28) Although it varies with product category, price, and the nature of the offering, in general, average response rates for e-mails is higher than order-response rates for letter-sized direct mail.

FALSE

30) Marketing has sole ownership of customer interaction.

FALSE

30) The amount spent on search ads in 2013 was $12.8 billion.

FALSE

34) An advantage of the product- and brand-management system is that product and brand managers focus the company on building market share rather than customer relationships.

FALSE

37) Almost all companies use the conventional percentage-of-sales figure while budgeting for new product development.

FALSE

41) Transforming into a true market-driven company involves organizing around products.

FALSE

42) Angell Healthcare, the world's largest manufacturer of protective gloves and clothing, adopted a spiral development process, which divided the innovation process into stages with checkpoints at the end of each stage, to develop products that increased overall sales from 4.6 percent to 13 percent in a little over two years.

FALSE

45) Clickable graphic icons and buttons that link to more details of a marketing offer have lower click-through rates than links that simply utilize an Internet address.

FALSE

48) Advertising and publicity play the most important roles in the conviction stage of buyer readiness.

FALSE

59) Lot size refers to the total number of units a channel can transmit from the manufacturer's place to the service outlet.

FALSE

60) Database marketing is ideal when a company does not have direct contact with its customers.

FALSE

62) When economic conditions are depressed, producers want to move goods to market using longer channels.

FALSE

64) Intensive distribution relies on only some of the intermediaries willing to carry a particular product.

FALSE

66) The less the sender's field of experience overlaps that of the receiver, the more effective the message is likely to be.

FALSE

67) All the response hierarchy models assume that a buyer passes through affective, cognitive, and behavioral stages, in that order.

FALSE

67) At the PopSugar blog site, a team of bloggers tracks green consumer products for 5 million unique visitors per month.

FALSE

67) Attribute listing lists several ideas and considers each in relationship to the others.

FALSE

67) Selective distribution severely limits the number of intermediaries and is appropriate when the producer wants to maintain control over the service level and outputs offered by the resellers.

FALSE

69) Although salespeople are legally prohibited from saying things about their products that are not true, they may legally suggest things about competitors' products that are not true.

FALSE

69) Facebook is an early warning system for firms that permits rapid response, whereas Twitter allows deeper dives to engage consumers in more meaningful ways.

FALSE

70) A DROP-error occurs when the company accepts a bad idea.

FALSE

73) In 2012, more than 20 percent of the total workforce worked full time in sales occupations, both nonprofit and for profit.

FALSE

79) Social marketing programs designed to motivate people to donate blood or attract people for mass immunization are examples of cognitive campaigns.

FALSE

A marketing audit only benefits a company that is in trouble; companies in good health do not need to conduct them.

False

A person's personality portrays the "whole person" interacting with his or her environment.

False

A seller who is at a disadvantage has two alternatives: decrease total customer benefit or increase total customer cost.

False

A superstore is a storeless retailer serving a specific clientele who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership.

False

A written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives is called a vision statement.

False

81) What are some of the ways a firm can draw new ideas from its customers?

Forming a brand community; using Web sites for new ideas, including feedback forms and specialized search engines like Technorati and Daypop to find blogs and postings relevant to their businesses; using a customer advisory board; observing how customers are using its products and asking customers about their dream products are all ways to get new ideas from customers.

134) What are four distinctive characteristics of a mobile device?

Four distinctive characteristics of a mobile device include: 1. it is uniquely tied to one user 2. it is virtually always "on" given it is typically carried everywhere 3. it allows for immediate consumption because it is in effect a channel of distribution with a payment system 4. it is highly interactive given it allows for geotracking and picture and video taking

131) Mobile phone company HCF delayed the introduction of a new cell phone model with innovative features so that the launch could coincide with that of its competitor, LCM, which was introducing a phone with similar features. What kind of entry did HCF use? How can this benefit the company?

HCF used a parallel entry strategy. The market may pay more attention when two companies are advertising the new product.

48) What are the benefits of brainstorming? How would one run an effective brainstorming session?

If done correctly, group brainstorming sessions can create insights, ideas, and solutions that would have been impossible without everyone's participation. If done incorrectly, they are a painful waste of time that can frustrate and antagonize participants. To ensure success, experts recommend the following: • A trained facilitator should guide the session, and the right physical environment must be used. • The right participants must be chosen. Sometimes it is useful to have a real mixture with many different points of view. • Participants must see themselves as collaborators working toward a common goal. • Rules need to be set up and followed so conversations don't get off track. Some structure is needed, though flexibility is desired too. • Participants must be given proper background preparation and materials so they can get into the task quickly. • Individual sessions before and after the brainstorming can be useful for thinking and learning about the topic ahead of time and for reflecting afterward on what happened. • During the session, each participant must be encouraged to participate and think freely and constructively. It may be useful to give participants time to think and gather their thoughts based on what they have heard. • To help stimulate thinking, participants may be told to identify and challenge existing assumptions, role-play some aspect of the situation they are analyzing, or consider borrowing ideas from other firms, even outside the industry. • Brainstorming sessions must lead to a clear plan of action and implementation so the ideas that materialize can provide tangible value. • Brainstorming can do more than just generate ideas — it should help build teams and leave participants better informed and energized.

145) Most companies set annual quotas. Quotas can be on dollar sales, unit volume, margin, selling effort, or activity and product type. Compensation is often tied to the degree of quota attainment. What problems does the setting of quotas present to both the company and to the sales representative?

If the company underestimates and the sales reps easily achieve their quotas, the company has overpaid its reps. If the company overestimates sales potential, the salespeople will find it very hard to reach their quotas and be frustrated or quit. Another downside is that quotas can drive reps to get as much business as possible — often resulting in their ignoring the service side of the business.

72) What are the characteristics of an ideal ad campaign?

In an ideal ad campaign, the right consumer is exposed to the right message at the right place and at the right time. The consumer is not distracted from the intended message. The ad properly reflects the consumer's level of understanding of and behaviors with the product and the brand. The ad correctly positions the brand in terms of desirable and deliverable points-of-difference and points-of-parity. The ad motivates consumers to consider purchase of the brand.

138) What can US marketers learn about mobile marketing by looking overseas?

In developed Asian markets such as Hong Kong, Japan, Singapore, and South Korea, mobile marketing is fast becoming a central component of customer experiences. In developing markets, high smart-phone penetration also makes mobile marketing attractive. For example, Coca-Cola created a national campaign asking Beijing residents to send text messages guessing the high temperature in the city every day for just over a month for a chance to win a one-year supply of Coke products. The campaign attracted more than 4 million messages over the course of 35 days.

62) In general, what are the five ways companies use database marketing?

In general, companies can use their databases in five ways: 1. To identify prospects — Many companies generate sales leads by advertising their product or service and including a response feature, such as a link to a home page, a business reply card, or a toll-free phone number, and building a database from customer responses. The company sorts through the database to identify the best prospects, then contacts them by mail, e-mail, or phone to try to convert them into customers. 2. To decide which customers should receive a particular offer — Companies interested in selling, up-selling, and cross-selling set up criteria describing the ideal target customer for a particular offer. Then they search their customer databases for those who most closely resemble the ideal. By noting response rates, a company can improve its targeting precision. Following a sale, it can set up an automatic sequence of activities: One week later e-mail a thank-you note; five weeks later e-mail a new offer; 10 weeks later (if the customer has not responded) e-mail an offer of a special discount. 3. To deepen customer loyalty — Companies can build interest and enthusiasm by remembering customer preferences and sending appropriate gifts, discount coupons, and interesting reading material. 4. To reactivate customer purchases — Automatic mailing programs (automatic marketing) can send out birthday or anniversary cards, holiday shopping reminders, or off-season promotions. The database can help the company make attractive or timely offers. 5. To avoid serious customer mistakes — A major bank confessed to a number of mistakes it had made by not using its customer database well. In one case, the bank charged a customer a penalty for late payment on his mortgage, failing to note he headed a company that was a major depositor in this bank. The customer quit the bank. In a second case, two different staff members of the bank phoned the same mortgage customer offering a home equity loan at different prices. Neither knew the other had made the call. In a third case, the bank gave a premium customer only standard service in another country.

29) What are the four types of advertising timing patterns available to marketers when launching a new product?

In launching a new product, the advertiser must choose among continuity, concentration, flighting, and pulsing. • Continuity means exposures appear evenly throughout a given period. Generally, advertisers use continuous advertising in expanding market situations, with frequently purchased items, and in tightly defined buyer categories. • Concentration calls for spending all the advertising dollars in a single period. This makes sense for products with one selling season or related holiday. • Flighting calls for advertising during a period, followed by a period with no advertising, followed by a second period of advertising activity. It is useful when funding is limited, the purchase cycle is relatively infrequent, or items are seasonal. • Pulsing is continuous advertising at low-weight levels, reinforced periodically by waves of heavier activity. It draws on the strength of continuous advertising and flights to create a compromise scheduling strategy. Those who favor pulsing believe the audience will learn the message more thoroughly, and at a lower cost to the firm.

54) Compare and contrast paid search ads, banner ads, and interstitials. In your response, please identify the advantages and disadvantages of each advertising format.

In paid search ads, a marketer's ad is shown based on keywords the consumer is searching, and the ads may appear above or next to the results, depending on the amount the company bids and an algorithm the search engines use to determine an ad's relevance to a particular search. Marketers pay only if the consumer clicks through on the ad. Marketers believe that consumers who click the ads are pre-screened prospects. Search ads have a 2 percent click-through rate, which is higher than banner ads or interstitials. However, Internet users only spend about 5 percent of their time online searching for information. Further, the increased popularity of search ads means popular keywords are more expensive. Marketers must be creative with their ad placements and keyword bids. Banner ads are small, rectangular boxes containing text and perhaps a picture that companies pay to place on relevant Web sites. The larger the audience, the higher the cost. In the early days of the Internet, viewers clicked on 2 percent to 3 percent of the banner ads they saw, but that percentage has quickly plummeted, and advertisers have explored other forms of communication. They are important because of the amount of time consumers spend online when they are not searching, but they have to be more attention-getting and influential, better targeted, and more closely tracked than they used to be. Interstitials are advertisements, often with video or animation, that pop up between page changes within a Web site or across Web sites. They can be targeted based on a consumer's needs or anticipated needs, as opposed to what the consumer is looking for. Because consumers find such pop-up ads intrusive and distracting, many use software to block them.

117) Explain the concepts of sales-wave research and simulated test marketing.

In sales-wave research, consumers who initially try the product at no cost are reoffered it, or a competitor's product, at slightly reduced prices. The offer may be made as many as five times (sales waves), while the company notes how many customers select it again and their reported level of satisfaction. During simulated test marketing, 30-40 qualified shoppers are asked about brand familiarity and preferences in a specific product category and attend a brief screening of both well-known and new TV commercials and print ads. One ad advertises the new product but is not singled out for attention. Consumers receive a small amount of money and are invited into a store where they may buy items.

53) How do the stages in a product's life cycle influence the marketing communications mix?

In the introduction stage of the product life cycle, advertising, events and experiences, and publicity have the highest cost-effectiveness, followed by personal selling to gain distribution coverage and sales promotion and direct marketing to induce trial. In the growth stage, demand has its own momentum through word of mouth and interactive marketing. Advertising, events and experiences, and personal selling all become more important in the maturity stage. In the decline stage, sales promotion continues strong, other communication tools are reduced, and salespeople give the product only minimal attention.

138) How does American Express utilize m-commerce?

It runs a "Link-Like-Love" social commerce program, which sends cardmembers couponless personalized offers from merchants based on their Facebook "likes" and Facebook Places check-ins that are automatically redeemed through card use. Via a partnership with Foursquare, cardmembers could also automatically receive and redeem promotional offers from merchants based on their Foursquare activity.

91) Describe the methods used to measure sponsorship activities.

It's a challenge to measure the success of events. The supply-side measurement method focuses on potential exposure to the brand by assessing the extent of media coverage, and the demand-side method focuses on exposure reported by consumers. Supply-side methods approximate the amount of time or space devoted to media coverage of an event, for example, the number of seconds the brand is clearly visible on a television screen or the column inches of press clippings that mention it. These potential "impressions" translate into a value equivalent to the dollar cost of actually advertising in the particular media vehicle. Although supply-side exposure methods provide quantifiable measures, equating media coverage with advertising exposure ignores the content of the respective communications. The advertiser uses media space and time to communicate a strategically designed message. Media coverage and telecasts only expose the brand and don't necessarily embellish its meaning in any direct way. Although some public relations professionals maintain that positive editorial coverage can be worth 5 to 10 times the equivalent advertising value, sponsorship rarely provides such favorable treatment. The demand-side method identifies the effect sponsorship has on consumers' brand knowledge. Marketers can survey event spectators to measure recall of the event as well as resulting attitudes and intentions toward the sponsor.

46) Interno Computers Inc., together with subsidiaries, designs, manufactures, and markets personal computers and mobile communication and media devices, as well as sells related software, services, peripherals, networking solutions, and applications worldwide. The company is planning to launch a high-end portable digital music player worldwide. What is the best way to organize this product launch?

Large companies, like Interno, often establish a new-product department headed by a manager with substantial authority and access to top management whose responsibilities include generating and screening new ideas, working with the R&D department, and carrying out field testing and commercialization. This model is necessary here as the product is going to be launched worldwide.

75) A group of young students run an Internet center. In an attempt to increase their profitability they start a cafe alongside the existing business. Explain the type of marketing used here.

Lateral marketing is used here. It combines two product concepts or ideas to create a new offering.

157) What are the major functions performed by marketing public relations? Illustrate with examples.

MPR goes beyond simple publicity and plays an important role in the following tasks: • Launching new products: The amazing commercial success of toys such as LeapFrog, Beanie Babies, and even the latest kids' craze, Silly Bandz, owes a great deal to strong publicity. • Repositioning a mature product: In a classic PR case study, New York City had extremely bad press in the 1970s until the "I Love New York" campaign. • Building interest in a product category: Companies and trade associations have used MPR to rebuild interest in declining commodities such as eggs, milk, beef, and potatoes and to expand consumption of such products as tea, pork, and orange juice. • Influencing specific target groups: McDonald's sponsors special neighborhood events in Latino and African American communities to build goodwill. • Defending products that have encountered public problems: PR professionals must be adept at managing crises, such as those weathered by such well-established brands as Tylenol, Toyota, and BP in 2010. • Building the corporate image in a way that reflects favorably on its products: Steve Jobs's heavily anticipated Macworld keynote speeches have helped to create an innovative, iconoclastic image for Apple Corporation.

44) What is a market-management organization?

Many companies sell their products to differing markets. When customers fall into different user groups with distinct buying preferences and practices, a market-management organization is desirable. Market managers supervise several market-development managers, market specialists, or industry specialists and draw on functional services as needed. Market managers of important markets might even have functional specialists reporting to them. Market managers are staff (not line) people, with duties like those of product managers. They develop long-range and annual plans for their markets and are judged by their market's growth and profitability. Because this system organizes marketing activity to meet the needs of distinct customer groups, it shares many advantages and disadvantages of product-management systems.

50) Roler Telecom, a leading mobile telephone operator in Asia, engages in aggressive marketing promotions. The company sends promotional messages to customers and makes promotional calls on a regular basis. However, these aggressive promotion efforts often irritate its customers. What could be the likely outcome of this?

Many people don't like hard-sell, direct marketing solicitations from marketers. The given scenario is one example of this. This issue, if left unattended, will lead to increasingly negative consumer attitudes, lower response rates, and calls for greater state and government regulation.

88) What are the adjustments that marketers need to apply to the cost-per thousand measure when selecting specific media vehicles?

Marketers need to apply several adjustments to the cost-per-thousand measure. First, they should adjust for audience quality. For a baby lotion ad, a magazine read by 1 million young mothers has an exposure value of 1 million; if read by 1 million teenagers, it has an exposure value of almost zero. Second, adjust the exposure value for the audience-attention probability. Readers of Vogue may pay more attention to ads than do readers of Newsweek. Third, adjust for the medium's editorial quality (prestige and believability). People are more likely to believe a TV or radio ad and to become more positively disposed toward the brand when the ad is placed within a program they like. Fourth, consider ad placement policies and extra services (such as regional or occupational editions and lead-time requirements for magazines).

145) What is marketing control? List the four types of marketing control.

Marketing control is the process by which firms assess the effects of their marketing activities and programs and make necessary changes and adjustments. The four types of needed marketing control are: annual-plan control, profitability control, efficiency control, and strategic control.

158) What skills and competencies will marketers need to succeed in the future?

Marketing must become more holistic and less departmental. Marketers must achieve wider influence in the company, continuously create new ideas, and strive for customer insight by treating customers differently but appropriately. They must build their brands more through performance than promotion. They must go electronic and win through building superior information and communication systems. To accomplish these changes and become truly holistic, marketers need a new set of skills and competencies in: • Customer relationship management (CRM) • Partner relationship management (PRM) • Database marketing and data mining • Contact center management and telemarketing • Digital marketing and social media • Public relations marketing (including event and sponsorship marketing) • Brand-building and brand-asset management • Experiential marketing • Integrated marketing communications • Profitability analysis by segment, customer, and channel

151) How is coordination of media achieved through integrated marketing communications?

Media coordination can occur across and within media types, but marketers should combine personal and nonpersonal communications channels through multiple-vehicle, multiple-stage campaigns to achieve maximum impact and increase message reach and impact. Promotions can be more effective when combined with advertising, for example. The awareness and attitudes created by advertising campaigns can increase the success of more direct sales pitches. Advertising can convey the positioning of a brand and benefit from online display advertising or search engine marketing that offers a stronger call to action. Many companies are coordinating their online and offline communications activities. Web addresses in ads (especially print ads) and on packages allow people to more fully explore a company's products, find store locations, and get more product or service information. Even if consumers don't order online, marketers can use Web sites in ways that drive them into stores to buy.

75) Provide a general description of the four classic response hierarchy models.

Micromodels of marketing communications concentrate on consumers' specific responses to communications. All the response hierarchy models assume the buyer passes through cognitive, affective, and behavioral stages, in that order. This "learn-feel-do" sequence is appropriate when the audience has high involvement with a product category perceived to have high differentiation, such as an automobile or house. An alternative sequence, "do-feel-learn," is relevant when the audience has high involvement but perceives little or no differentiation within the product category, such as an airline ticket or personal computer. A third sequence, "learn-do-feel," is relevant when the audience has low involvement and perceives little differentiation, such as with salt or batteries. By choosing the right sequence, the marketer can do a better job of planning communications.

51) What is a microsite? Provide an example of a firm that is likely to benefit from the use of a microsite.

Microsites are individual Web pages or clusters of pages that function as supplements to a primary site. They're particularly relevant for companies selling low-interest products. People rarely visit an insurance company's Web site, for example, but the company can create a microsite on used-car sites that offers advice for buyers of used cars and a good insurance deal at the same time.

54) Karl Lipton is the marketing communications coordinator for a major electronics manufacturer. He is assigned with charting out a communications strategy for a new range of mobile phones developed by his company. How will Karl's communications strategy look over the course of the mobile phones' life cycle?

Mobile phones have relatively short life cycles. In the introduction stage of the phones' life cycle, advertising, events and experiences, and publicity have the highest cost-effectiveness. In-store personal selling helps improve distribution coverage, while sales promotions such as discounted accessories, freebies etc., help induce trial. In the growth stage, demand has its own momentum through word of mouth and interactive marketing. Web sites are effective tools during the growth stage. As the phones reach the maturity stage, advertising, promotional events and experiences, and personal selling again become more important. As the phones enter the decline stage of their life cycle, sales promotion takes over as the most important tool in the marketing communications mix, even as other communication tools are reduced, and salespeople give the phones only minimal attention.

44) Most direct marketers apply the RFM formula to select customers. Explain this formula and how it is used to select customers.

Most direct marketers apply the RFM (recency, frequency, monetary amount) formula to select customers according to how much time has passed since their last purchase, how many times they have purchased, and how much they have spent since becoming a customer. Suppose a company is offering leather jackets. It might make this offer to the most attractive customers, those who made their last purchase between 30 and 60 days ago, who make three to six purchases a year, and who have spent at least $100 since becoming customers. Points are established for varying RFM levels; the more points, the more attractive the customer.

40) How do successful direct marketers view customer interactions?

Successful direct marketers view a customer interaction as an opportunity to up-sell, cross-sell, or just deepen a relationship. They make sure they know enough about each customer to customize and personalize offers and messages and develop a plan for lifetime marketing to each valuable customer, based on their knowledge of life events and transitions. They also carefully orchestrate each element of their campaigns.

46) Social media play a key role in earned media. Distinguish between earned media and paid media.

Paid media includes company-generated advertising, publicity, and other promotional efforts. Earned media is all the PR and word-of-mouth benefits a firm receives without having directly paid for anything — all the news stories, blogs, and social network conversations that deal with a brand.

39) Dell computers is a manufacturer of computers. Dell accepts orders for computers online and ships the products to the customer. Explain the likely physical flow of materials in this case.

Suppliers to Transporters to Warehouses to Dell to Transporters to Customers

15) Companies should first think of the target market and then design the supply chain backward from that point. This strategy is called demand chain planning.

TRUE

153) MPR can hold down promotion cost because it costs less than direct-mail and media advertising.

TRUE

133) Differentiate between pure-click companies and brick-and-click companies.

Pure-click companies are those that have launched a Web site without any previous existence as a firm, while brick-and-click companies are existing companies that have added an online site for information or e-commerce. There are several kinds of pure-click companies: search engines, Internet service providers (ISPs), commerce sites, transaction sites, content sites, and enabler sites. Brick-and-click companies are formed by adding an e-commerce channel to an existing business.

109) What are the two most trusted sources of brand information?

Recommendations from friends and family and online customer reviews.

133) Marco is working on promoting his company's Glazer brand of electronic razors. Market research suggests that the target audience possesses an intent to use Glazers, but is dithering over actually making the purchase. How can he modify the communications program to get customers to purchase Glazer razors?

Student answers will vary. Marco's task, once the intent to make a purchase has been fostered in consumers, is to lead them to the actual buying action. This can be achieved by offering the razors at a low introductory purchase to encourage initial use among customers, offering a discount on the price, or holding a promotional event where they can actually try out the product firsthand.

126) Compare and contrast advertising and sales promotion as marketing communication tools.

Sales promotion expenditures increased as a percentage of budget expenditure for a number of years, although its growth has recently slowed. Several factors contributed to this growth, particularly in consumer markets. Promotion became more accepted by top management as an effective sales tool, the number of brands increased, competitors used promotions frequently, many brands were seen as similar, consumers became more price-oriented, the trade demanded more deals from manufacturers, and advertising efficiency declined. But the rapid growth of sales promotion created clutter. Loyal brand buyers tend not to change their buying patterns as a result of competitive promotions. Advertising appears to be more effective at deepening brand loyalty, although we can distinguish added-value promotions from price promotions. Price promotions may not build permanent total-category volume. Small-share competitors may find it advantageous to use sales promotion because they cannot afford to match the market leaders' large advertising budgets, nor can they obtain shelf space without offering trade allowances or stimulate consumer trial without offering incentives. Dominant brands offer deals less frequently, because most deals subsidize only current users.

13) What is incremental innovation? Give an example of incremental innovation.

Student answers will vary. Incremental innovation refers to entering new markets by tweaking products for new customers, using variations on a core product to stay one step ahead of the market, and creating interim solutions for industry-wide problems. When Scott Paper couldn't compete with Fort Howard Paper Co. on price for the lucrative institutional toilet tissue market, it borrowed a solution from European companies: a dispenser that held bigger rolls. Scott made the larger rolls of paper and provided institutional customers with free dispensers, later doing the same thing with paper towels. Scott not only won over customers in a new market; it became less vulnerable to competitors, such as Fort Howard, which could lower prices but weren't offering the larger rolls or tailor-made dispensers.

72) Why are social media important to marketers?

Social media provide a means for consumers/companies to share text, images, audio, and video information with each other and with companies/consumers. Social media allow marketers to establish a public voice and presence online. They can cost-effectively reinforce other communication activities. Because of their day-to-day immediacy, they can also encourage companies to stay innovative and relevant. Marketers can build or tap into online communities, inviting participation from consumers and creating a long-term marketing asset in the process.

36) What are the various functions performed by members of a marketing channel? Provide examples.

Some of the functions that the members of a marketing channel perform (storage and movement, title, and communications) constitute a forward flow of activity from the company to the customer; other functions (ordering and payment) constitute a backward flow from customers to the company. Still others (information, negotiation, finance, and risk taking) occur in both directions.

154) Identify the five main characteristics that affect the diffusion of innovations. Describe each and provide an example.

Student answers will vary. Five characteristics influence an innovation's rate of adoption. We consider them for digital video recorders (DVRs) for home use, as exemplified by TiVo. 1. Relative advantage — the degree to which the innovation appears superior to existing products. The greater the perceived relative advantage of using a DVR, say, for easily recording favorite shows, pausing live TV, or skipping commercials, the more quickly it was adopted. 2. Compatibility — the degree to which the innovation matches consumers' values and experiences. DVRs are highly compatible with the preferences of avid television watchers. 3. Complexity — the degree to which the innovation is difficult to understand or use. DVRs are somewhat complex and therefore took slightly longer to penetrate into home use. 4. Divisibility — the degree to which the innovation can be tried on a limited basis. This provided a sizable challenge for DVRs — sampling could occur only in a retail store or perhaps a friend's house. 5. Communicability — the degree to which the benefits of use are observable or describable to others. The fact that DVRs have some clear advantages helped create interest and curiosity. Other characteristics that influence the rate of adoption are cost, risk and uncertainty, scientific credibility, and social approval.

75) Identify three reasons social media are rarely the only source of communications for a brand.

Student answers will vary. Here are five possible reasons social media are rarely the only source of communications for a brand: • Social media may not be as effective in attracting new users and driving brand penetration. • Research by DDB suggests that brands and products vary widely in how social they are online. Consumers are most likely to engage with media, charities, and fashion and least likely to engage with consumer goods. • Although consumers may use social media to get useful information or deals and promotions or to enjoy interesting or entertaining brand-created content, a much smaller percentage want to use social media to engage in two-way "conversations" with brands. • Technology limitations may affect the ability to execute a high quality experience. The Facebook app for contest submissions crashed the first day due to high traffic. • The Internet permits scrutiny, criticism, and even "cheap shots" from consumers and organizations.

53) Identify two general guidelines for Search Engine Optimization and paid search ads.

Student answers will vary. Here are four general guidelines: • Broader search terms ("MP3 player" or "iPod") are useful for general brand building; more specific ones identifying a particular product model or service ("Apple iPod classic 160GB") are useful for generating and converting sales leads. • Search terms need to be spotlighted on the appropriate pages of the marketer's Web site so search engines can easily identify them. • Any one product can usually be identified by means of multiple keywords, but marketers must bid on each keyword according to its likely return on revenue. It also helps to have popular sites link back to the marketer's Web site. • Data can be collected to track the effects of paid search.

113) Provide five examples of things a marketer might track to measure buzz.

Student answers will vary. Marketers might track scale (how far the campaign reached), speed (how fast it spread), share of voice in that space, share of voice in that speed, whether it achieved positive lift in sentiment, whether the message was understood, whether it was relevant, whether it had sustainability (and was not a one-shot deal), and how far it moved from its source. Other marketers might characterize the source of the word of mouth. One example evaluates blogs by their relevance, sentiment, and authority. Another group measures the types of investments customers make in engaging with brands (e.g., efforts on blogs, microblogs, cocreation, forums and discussion boards, product reviews, social networks, photo and video sharing.

138) An ad agency has landed an account for Savola, a brand of healthy cooking oil. Describe how the ad can effectively incorporate negative appeals in its messages.

Student answers will vary. Negative appeals such as fear, guilt, and shame are used by communicators to get people to do things (brush their teeth) or stop doing things (smoking). The cooking oil ad can use fear appeals to get consumers to start using its product. This can be achieved by depicting health risks associated with using cooking oils other than Savola, such as hypertension, heart attacks, etc. Guilt appeal can be used to depict a family grieving the death of someone who did not use Savola. Shame appeal could illustrate the case of a parent who cannot play catch with his kids because his fitness is compromised by not using Savola. However, the ad agency should take care to ensure that the negative appeals do not come across as too strong to the audiences, the credibility of the source in the ads is high, and the ad promises to relieve fears of health risks in a believable and efficient way. The ad is most persuasive when moderately discrepant with audience beliefs. If the ad merely says that using unhealthy oil leads to health risks, it only serves to reinforce the belief, and if the message exaggerates the health risks of not using Savola, audiences will only counterargue and disbelieve the ad.

26) Tosho Electronics, a leading Japanese, electronic manufacturer believes shorter product life cycles of new products reduce the scope for R&D and innovation. Offer a possible reason for shorter life cycles.

Student answers will vary. Rivals are quick to copy success of an innovation. An innovative product is copied even before the company recovers the cost of R&D. This leads to shorter life cycles for products.

132) Marco is working on promoting his company's Glazer brand of electronic razors. Preliminary surveys have revealed that even though a sizable portion of the target market has developed a liking for the product due to innovative advertising, few customers would actually consider replacing their current razors with Glazers. How can Marco modify the communications program to get customers to favor Glazers over other brands?

Student answers will vary. Since customers are comfortable with their present electronic razors, Marco's communications strategy should aim to build preference for Glazers. Customers have already developed a liking for Glazers. So, Marco should focus on comparing the quality of Glazers with that of competing brands. This can be done by illustrating the improved features of Glazers that provide clean and hassle-free use. Marco could do well to compare the Glazers with other brands in terms of value, utility, and performance factors as well.

10) List and define some of the important shifts that have taken place in business and marketing practices.

Student answers will vary. Some possible answers include: • Reengineering is the appointment of teams to manage customer-value-building processes and break down walls between departments. • Outsourcing involves buying more goods and services from outside domestic or foreign vendors. • Benchmarking is the study of "best practice companies" to improve performance. • Supplier partnering focuses on partnering with fewer but better value-adding suppliers. • Customer partnering entails working more closely with customers to add value to their operations. • Merging involves acquiring or merging with firms in the same or complementary industries to gain economies of scale and scope. • Globalizing focuses on increasing the effort to "think global" and "act local." • Flattening refers to reducing the number of organizational levels to get closer to the customer. • Focusing involves determining the most profitable businesses and customers and focusing on them. • Accelerating involves designing the organization and setting up processes to respond more quickly to changes in the environment. • Empowering means encouraging and empowering personnel to produce more ideas and take more initiative. • Justifying means becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions. • Broadening involves factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise. • Monitoring involves tracking what is said online and elsewhere and studying customers, competitors, and others to improve business practices.

89) Describe the adjustments that an advertiser of high-end laptops has to make to the cost-per-thousand measure.

Student answers will vary. The advertiser needs to apply several adjustments to the cost-per-thousand measure. First, they should adjust for audience quality. The product being high-end laptops, it is better advertised in a magazine read by 1 million college-going kids rather than 2 million housewives, in which case it would have an exposure value of almost zero. Second, the exposure value for the audience-attention probability must be accounted for. Readers of Chip or Digit may pay more attention to gadget ads than do readers of Newsweek. Third, the medium's editorial quality (prestige and believability) should be considered. People are more likely to believe a TV or radio ad and to become more positively disposed toward the brand when the ad is placed within a program they like. To this effect, the ads can be placed within a program like The Big Bang Theory. The fourth adjustment should be made in relation to ad placement policies and extra services (such as regional or occupational editions and lead-time requirements for magazines). Laptop ads would be better received and responded to in magazines that have greater circulation in urban areas with an office-going population or university towns with sizable student populations.

86) Identify three key success factors in developing and implementing a social marketing program.

Students may choose three of the following key success factors presented in the text: • choose target markets that are most ready to respond • promote a single, doable behavior in clear, simple terms • explain the benefits in compelling terms • make it easy to adopt the behavior • develop attention-grabbing messages and media • consider an education-entertainment approach

16) When Staples introduced a new $69.99 paper-shredding device called the MailMate in 2006 by striking a two-episode deal with NBC's popular television program, The Office, it was using product placement.

TRUE

84) What is sustainability? How is it related to the concept of greenwashing?

Sustainability is the ability to meet humanity's needs without harming future generations. It now tops many corporate agendas. Major corporations outline in great detail how they are trying to improve the long-term impact of their actions on communities and the environment. Heightened interest in sustainability has also unfortunately resulted in greenwashing, which gives products the appearance of being environmentally friendly without living up to that promise. Because of insincere firms jumping on the green bandwagon, consumers bring a healthy skepticism to environmental claims, but they are also unwilling to sacrifice product performance and quality. Many firms are rising to the challenge and are using the need for sustainability to fuel innovation.

31) A marketing channel overcomes the time, place, and possession gaps that separate goods and services from those who need or want them.

TRUE

73) Because of insincere firms jumping on the "green" bandwagon, consumers bring a healthy skepticism to environmental claims, but they are also unwilling to sacrifice product performance and quality.

TRUE

113) In response to a short-term oversupply of wine in the marketplace, the makers of Kendall-Jackson developed two new brands by using rapid prototyping — designing products on a computer and producing rough models to show potential consumers for their reactions — to quickly bring its ideas to life.

TRUE

113) Volkswagen's famed "Drivers Wanted" advertising campaign aimed at attracting active, youthful people uses a transformational appeal as its creative strategy.

TRUE

115) Sales promotions often attract brand switchers, who are primarily looking for low price, good value, or premiums.

TRUE

115) Two-sided messages are more effective with more educated audiences and those who are initially opposed.

TRUE

116) Sales promotions in markets of high brand similarity can produce a high sales response in the short run but little permanent gain in brand preference over the longer term.

TRUE

117) Incessant price reductions, coupons, deals, and premiums can devalue a product in buyers' minds.

TRUE

120) Celebrities are likely to be effective when they are credible or personify a key product attribute.

TRUE

122) Sales promotion tools that typically are not brand building include price-off packs, contests and sweepstakes, consumer refund offers, and trade allowances.

TRUE

124) The beginning communications objective associated with a new-to-the world product — like an electric car — is always establishing category need.

TRUE

125) Personal communications channels derive their effectiveness from individualized presentation and feedback and include direct and interactive marketing, word-of-mouth marketing, and personal selling.

TRUE

13) An advertising objective is a specific communications task and achievement level to be accomplished with a specific audience in a specific period of time.

TRUE

131) Annual-plan control involves the use of financial analysis to evaluate the performance of marketing plans.

TRUE

131) Marketing communications budgets tend to be higher when there is much change in the marketing program over time and more complex customer decision making.

TRUE

132) Mobile ad copy should occupy only 50 percent of the screen, avoiding complex viewing experiences that may take a toll on consumers' battery and data availability as well as their time.

TRUE

134) The ratio of promoters to detractors is a customer metric that is used to evaluate the performance of marketing plans.

TRUE

135) An ideal event is unique but not encumbered with many sponsors, lends itself to ancillary marketing activities, and reflects or enhances the sponsor's brand or corporate image.

TRUE

136) Consumers are more engaged and attentive with their smart phones than when they are online.

TRUE

139) The supply-side measurement method focuses on potential exposure to a brand by assessing the extent of media coverage, and the demand-side method focuses on exposure reported by consumers.

TRUE

140) An employee who provides clerical backup for outside salespersons, runs credit checks, follows up on deliveries, and answers customers' business-related questions is called a sales assistant.

TRUE

141) A manager is using feed-forward sales supervision when he communicates what the sales reps should be doing and motivates them to do it.

TRUE

142) Implication questions ask about the consequences of a buyer's problems, difficulties, or dissatisfactions.

TRUE

142) Operating management is most effective in controlling direct costs and traceable common costs.

TRUE

149) By using full-service marketing communications agencies, integrated and more effective marketing communications at a much lower total communications cost can be achieved.

TRUE

38) Search engine optimization (SEO) describes activities designed to improve the likelihood that a link for a brand is as high as possible in the rank order of all nonpaid links when consumers search for relevant terms.

TRUE

39) A customer-management organization deals with individual customers rather than the mass market or market segments.

TRUE

43) Williams-Sonoma reported a tenfold increase in response rates when it adopted personalized e-mail offerings based on individuals' on-site and catalog shopping behavior.

TRUE

44) To increase the effectiveness of e-mails, some researchers are employing "heat mapping," which tracks eye movements with cameras to measure what people read on the computer screen.

TRUE

45) Advertising allows the buyer to receive and compare the messages of various competitors.

TRUE

47) In general, personal selling is used more with complex, expensive, and risky goods and in markets with fewer and larger sellers.

TRUE

49) In the growth stage of a product's life cycle, demand has its own momentum through word of mouth and interactive marketing.

TRUE

60) Add-on services such as credit, delivery, installation, and repairs provided by the marketing channel are referred to as service backup.

TRUE

61) Products such as heating and cooling systems are usually sold and maintained by the company or by franchised dealers.

TRUE

64) Crowdsourcing means inviting an Internet community to help create content or software, often with prize money or a moment of glory as an incentive.

TRUE

65) Social media allow marketers to build or tap into online communities, inviting participation from consumers and creating a long-term marketing asset in the process.

TRUE

66) An intensive distribution strategy serves well for products such as snack foods and soft drinks.

TRUE

67) Firms that are viewed as being socially responsible have the added benefit of being able to attract employees.

TRUE

68) Companies must adopt and disseminate a written code of ethics, build a company tradition of ethical behavior, and hold their people fully responsible for observing ethics and legal guidelines if they wish to demonstrate ethical behavior.

TRUE

68) Distributors' territorial rights define the terms under which the producer will enfranchise other distributors.

TRUE

70) If the Coolest Cooler introduced its cooler to the general market and developed communications around the idea that it was going to develop awareness, interest, evaluation, trial, and then adoption, it would be using the innovation-adoption model of consumer responses.

TRUE

71) When it comes to social media, only some consumers want to engage with some brands, and, even then, only some of the time.

TRUE

72) Sustainability ratings exist, but there is no consistent agreement about what metrics are appropriate.

TRUE

72) US firms spend more on sales forces and sales force materials than on any other promotional method.

TRUE

74) A salesperson calling on supermarkets to take repeat orders is called an order taker.

TRUE

74) Corporate philanthropy as a whole is on the rise.

TRUE

78) Information gathering refers to the act of conducting market research and doing intelligence work.

TRUE

79) Researchers studying print advertisements report that the picture, headline, and copy matter in that order.

TRUE

80) Reach of an advertising message is most important when launching new products, flanker brands, extensions of well-known brands, or infrequently purchased brands.

TRUE

82) Raising the level of socially responsible marketing calls for a three-pronged attack that relies on proper legal, ethical, and social responsibility behavior.

TRUE

82) The rationale behind place advertising is that marketers are better off reaching people where they work, play, and shop.

TRUE

26) Briefly describe the role of television as an advertising medium.

Television is generally acknowledged as the most powerful advertising medium and reaches a broad spectrum of consumers at low cost per exposure. TV advertising has two particularly important strengths. First, it can vividly demonstrate product attributes and persuasively explain their corresponding consumer benefits. Second, it can dramatically portray user and usage imagery, brand personality, and other intangibles. Because of the fleeting nature of the ad, however, and the distracting creative elements often found in it, product-related messages and the brand itself can be overlooked. Moreover, the high volume of nonprogramming material on television creates clutter that makes it easy for consumers to ignore or forget ads.

23) Explain the classification of advertising objectives.

The classification of advertising objectives includes: • Informative advertising aims to create brand awareness and knowledge of new products or new features of existing products. • Persuasive advertising aims to create liking, preference, conviction, and purchase of a product or service. Some persuasive advertising uses comparative advertising, which makes an explicit comparison of the attributes of two or more brands. Comparative advertising works best when it elicits cognitive and affective motivations simultaneously, and when consumers are processing advertising in a detailed, analytical mode. • Reminder advertising aims to stimulate repeat purchase of products and services. • Reinforcement advertising aims to convince current purchasers that they made the right choice.

157) List some of the marketing trends that are likely to emerge in the near future.

The coming years will see: • The demise of the marketing department and the rise of holistic marketing • The demise of free-spending marketing and the rise of ROI marketing • The demise of marketing intuition and the rise of marketing science • The demise of manual marketing and the rise of both automated and creative marketing • The demise of mass marketing and the rise of precision marketing

74) National Beverage Corp. produces and distributes a wide range of beverages. It offers a selection of flavored soft drinks, juices, sparkling waters, energy drinks, nutritionally enhanced waters, and other specialty beverages. What distribution strategy will be most suitable for the company's products?

The company has to use intensive distribution, which places the goods or services in as many outlets as possible. This strategy serves well for products consumers buy frequently or in a variety of locations.

119) Altrudex Inc. is involved in the manufacture, distribution, and sale of consumer electronics. The company sources over half the products it sells from companies it partly or wholly owns. It also owns a large retail chain and sells its products through them. What marketing system is Altrudex using?

The company is using a corporate VMS. A corporate VMS combines successive stages of production and distribution under single ownership.

73) Horon Furniture is a manufacturer of office furniture. The company is known for its innovative multipurpose furniture. When designing a new product, the designers list several ideas and consider each in relationship to others. For example, the company considers various options such as an office table, foldable chairs, and filing cabinet, etc. Finally, the company may come up with a foldable office table with chairs attached and with a filing cabinet. Describe the creativity technique used at Horon Furniture.

The company uses forced relationship techniques. This method lists several ideas and considers each in relationship to each of the others.

152) What is the consumer-adoption process? What are the various steps in the process?

The consumer-adoption process is the mental steps through which an individual passes from first hearing about an innovation to final adoption. The steps are the following: 1. Awareness: The consumer becomes aware of the innovation but lacks information about it. 2. Interest: The consumer is stimulated to seek information about the innovation. 3. Evaluation: The consumer considers whether to try the innovation. 4. Trial: The consumer tries the innovation to improve his or her estimate of its value. 5. Adoption: The consumer decides to make full and regular use of the innovation.

38) Members of a marketing channel perform three types of functions. Provide examples of these three functions in the context of a publishing company that publishes books and magazines.

The storage and movement of books from the company to the customer constitutes a forward flow. Ordering books and paying for them constitute a backward flow from customers to the company. Sharing information and risk taking are activities that occur in both directions.

61) What are the five main challenges associated with database marketing?

The five main challenges associated with database marketing include: 1. Some situations are just not conducive to database marketing. Building a customer database may not be worthwhile when: (1) the product is a once-in-a-lifetime purchase (a grand piano); (2) customers show little loyalty to a brand (there is a lot of customer churn); (3) the unit sale is very small (a candy bar) so customer lifetime value is low; (4) the cost of gathering information is too high; and (5) there is no direct contact between the seller and ultimate buyer. 2. Building and maintaining a customer database require a large investment. Computer hardware, database software, analytical programs, communication links, and skilled staff can be costly. It's difficult to collect the right data, especially to capture all the occasions of company interaction with individual customers. Sometimes companies mistakenly concentrate on customer contact processes without making corresponding changes in internal structures and systems. 3. Employees may resist becoming customer-oriented and using the available information. Employees find it far easier to carry on traditional transaction marketing than to practice CRM. Effective database marketing requires managing and training employees as well as dealers and suppliers. 4. Not all customers want a relationship with the company. Some may resent knowing the company has collected that much personal information about them. Online companies should explain their privacy policies and give consumers the right not to have their information stored. European countries do not look favorably on database marketing and are protective of consumers' private information. The European Union passed a law handicapping the growth of database marketing in its 27 member countries. 5. The assumptions behind CRM may not always hold true. High-volume customers often know their value to a company and can leverage it to extract premium service and/or price discounts, so it may not cost the firm less to serve them. Loyal customers may also be jealous of attention lavished on other customers. Loyal customers also may not necessarily be the best ambassadors for the brand. One study found those who scored high on behavioral loyalty and bought a lot of a company's products were less active word-of-mouth marketers than customers who scored high on attitudinal loyalty and expressed greater commitment to the firm.

82) You are appointed as the B-to-B sales representative of a manufacturing company. What are the various tasks that you will have to perform as a B-to-B salesperson?

The following activities have to be performed by a salesperson: • prospecting • targeting • communicating • selling • servicing • information gathering • allocating

24) Identify the major reasons why new product failures occur.

The following are some of the possible reasons for the failure of new products: • shortage of important ideas in certain areas • fragmented markets • social, economic, and governmental constraints • high cost of development • capital shortages • shorter required development time • poor launch timing, shorter product life cycles • organizational support

127) What challenges do marketers face in managing trade promotions?

The growing power of large retailers has increased their ability to demand trade promotion at the expense of consumer promotion and advertising. The company's sales force and its brand managers are often at odds over trade promotion. The sales force says local retailers will not keep the company's products on the shelf unless they receive more trade promotion money, whereas brand managers want to spend their limited funds on consumer promotion and advertising. Manufacturers face several challenges in managing trade promotions. First, they often find it difficult to police retailers to make sure they are doing what they agreed to do. Manufacturers increasingly insist on proof of performance before paying any allowances. Second, some retailers are doing forward buying — that is, buying a greater quantity during the deal period than they can immediately sell. Retailers might respond to a 10 percent-off-case allowance by buying a 12-week or longer supply. The manufacturer must then schedule more production than planned and bear the costs of extra work shifts and overtime. Third, some retailers are diverting, buying more cases than needed in a region where the manufacturer offers a deal and shipping the surplus to their stores in non-deal regions. Manufacturers handle forward buying and diverting by limiting the amount they will sell at a discount, or by producing and delivering less than the full order in an effort to smooth production. Ultimately, many manufacturers feel trade promotion has become a nightmare. It contains layers of deals, is complex to administer, and often leads to lost revenues.

71) Briefly describe the macromodel of the marketing communications process.

The macromodel of the communications process has nine key factors in effective communication. Two represent the major parties — sender and receiver. Two represent the major tools — message and media. Four represent major communication functions — encoding, decoding, response, and feedback. The last element in the system is noise, random and competing messages that may interfere with the intended communication. Senders must know what audiences they want to reach and what responses they want to get. They must encode their messages so the target audience can decode them. They must transmit the message through media that reach the target audience and develop feedback channels to monitor the responses. The more the sender's field of experience overlaps that of the receiver, the more effective the message is likely to be.

140) List the major objectives of events and experiences as promotion tools.

The major objectives of events and experiences as promotion tools are: 1. To identify with a particular target market or lifestyle 2. To increase salience of company or product name 3. To create or reinforce perceptions of key brand image associations 4. To enhance corporate image 5. To create experiences and evoke feelings 6. To express commitment to the community or on social issues 7. To entertain key clients or reward key employees 8. To permit merchandising or promotional opportunities

50) Identify three ways a marketer might transform online marketing touch points related to privacy on the Web site into a positive customer experience.

The three ways include: 1. develop user-centric privacy controls to give customer control 2. avoid multiple intrusions 3. prevent human intrusion by using automation whenever possible

29) What are the elements of the marketing communications mix?

The marketing communications mix consists of eight major modes of communication: 1. Advertising — Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor via print, broadcast, network, electronic, and display media. 2. Sales promotion — A variety of short-term incentives to encourage trial or purchase of a product or service including consumer promotions, trade promotions, and business and sales force promotions. 3. Events and experiences — Company-sponsored activities and programs designed to create daily or special brand-related interactions with consumers, including sports, arts, entertainment, and cause events as well as less formal activities. 4. Public relations and publicity — A variety of programs directed internally to employees of the company or externally to consumers, other firms, the government, and media to promote or protect a company's image or its individual product communications. 5. Direct marketing — Use of mail, telephone, fax, e-mail, or Internet to communicate directly with or solicit response or dialogue from specific customers and prospects. 6. Interactive marketing — Online activities and programs designed to engage customers or prospects and directly or indirectly raise awareness, improve image, or elicit sales of products and services. 7. Word-of-mouth marketing — People-to-people oral, written, or electronic communications that relate to the merits or experiences of purchasing or using products or services. 8. Personal selling — Face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders.

128) What are some of the reasons sales promotion expenditures might increase as a percentage of budget expenditure?

The promotion becomes more accepted by top management as an effective sales tool; competitors used promotions frequently; consumers became more price-oriented, and trade demanded more deals from manufacturers.

112) What can you learn from John Smith from the sales report reflected in the table? 

The sales manager can learn many things about rep John Smith from this table. Total sales increased every year (line 3). This does not necessarily mean Smith is doing a better job. The product breakdown shows he has been able to push the sales of product B further than the sales of product A (lines 1 and 2), though A is more profitable for the company. Given his quotas for the two products (lines 4 and 5), Smith could be increasing product B sales at the expense of product A sales. Although he increased total sales by $1,100 between 2013 and 2014 (line 3), gross profits on total sales actually decreased by $580 (line 8). Sales expense (line 9) shows a steady increase, though total expense as a percentage of total sales seems to be under control (line 10). The upward trend in total dollar expense does not seem to be explained by any increase in the number of calls (line 11), though it might be related to success in acquiring new customers (line 14). Perhaps in prospecting for new customers, this rep is neglecting present customers, as indicated by an upward trend in the annual number of lost accounts (line 15). The last two lines show the level and trend in sales and gross profits per customer. These figures become more meaningful when compared with overall company averages. If Smith's average gross profit per customer is lower than the company's average, he could be concentrating on the wrong customers or not spending enough time with each customer. A review of annual number of calls (line 11) shows he might be making fewer annual calls than the average salesperson. If distances in the territory are similar to those in other territories, he might not be putting in a full workday, might be poor at sales planning and routing, or might be spending too much time with certain accounts.

83) You are the sales manager of a company that manufactures and markets server computers. The company's products require high-involvement from the sellers and require salespeople to provide complex and technical information. What kind of a compensation structure do you select for your sales representatives?

The salespeople in the given scenario should have a pay structure that gives prominence to fixed pay. Fixed compensation is common in jobs with a high ratio of nonselling to selling duties, and jobs where the selling task is technically complex and requires teamwork.

149) What are the steps involved in marketing profitability analysis?

The steps involved in marketing profitability analysis are as follows: Step 1: Identifying functional expenses Step 2: Assigning functional expenses to marketing entities Step 3: Preparing a profit-and-loss statement for each marketing entity

111) According to researchers, what steps can improve the likelihood of starting a buzz?

The steps that can improve the likelihood of starting a buzz include: • Identify influential individuals and companies and devote extra effort to them. • S Supply key people with product samples. • Work through community influentials. • Develop word-of-mouth referral channels to build business. • Provide compelling information that customers want to pass along.

25) Give a brief description of the various factors that affect advertising budget decisions.

The various factors that affect advertising budget decisions include: • Stage in the product life cycle — New products typically merit large advertising budgets to build awareness and to gain consumer trial. Established brands usually are supported with lower advertising budgets, measured as a ratio to sales. • Market share and consumer base — High-market-share brands usually require less advertising expenditure as a percentage of sales to maintain share. To build share by increasing market size requires larger expenditures. • Competition and clutter — In a market with a large number of competitors and high advertising spending, a brand must advertise more heavily to be heard. Even simple clutter from advertisements not directly competitive to the brand creates a need for heavier advertising. • Advertising frequency — The number of repetitions needed to put the brand's message across to consumers has an obvious impact on the advertising budget. • Product substitutability — Brands in less-differentiated or commodity-like product classes (beer, soft drinks, banks, and airlines) require heavy advertising to establish a unique image.

52) What is paid search advertising and why is it increasing in popularity?

Thirty-five percent of all searches are reportedly for products or services. Marketers bid in a continuous auction on search terms that serve as a proxy for the consumer's product or consumption interests. When a consumer searches for any of the words with Google, Yahoo!, or Bing, the marketer's ad may appear above or next to the results, depending on the amount the company bids and an algorithm the search engines use to determine an ad's relevance to a particular search. Advertisers pay only if people click on the links, but marketers believe consumers who have already expressed interest by engaging in search are prime prospects. Average click-through in terms of the percentage of consumers who click on a link is about 2 percent, much more than for comparable online display ads, which range from 0.08 for standard banner ads with graphics and images to 0.14 for rich media (expandable banners) ads that incorporate audio and/or video.

122) Crafted Jewels is a jewelry manufacturer that sells its designs to various jewelry retailers. The retailers often complain that the company's online store acts as a competitor and reduces their profitability. What type of conflict is this? Briefly explain.

This is a case of multichannel conflict. It exists when the manufacturer has established two or more channels that sell to the same market.

123) UltraMotion Pictures produces and distributes music and television entertainment in the United States. The company distributes music in partnership with a large music retailer, Fromen Tunes. Fromen executives often work for a short time with UltraMotion and some of the UltraMotion executives work at the retail outlets to study Fromen's operations. This strategy minimizes the conflicts between partners. What strategy is being used here? Briefly explain.

This strategy of managing channel conflict is called an employee exchange which involves the exchange of persons between two or more channel levels. Thus participants can grow to appreciate each other's point of view.

45) Many companies are beginning to realize that they are not really market and customer driven, they are product and sales driven. In the attempt to transform themselves into true market-driven companies, many firms must change. Describe and explain what changes are necessary.

To be truly market-driven, companies need to develop a company-wide passion for customers, organize around customer segments instead of around products, and develop a deep understanding of customers through qualitative and quantitative research. Additionally, the organization must be creative; the firm must build capability in strategic innovation and imagination. This capability comes from assembling tools, processes, skills, and measures that let the firm generate more and better new ideas than its competitors.

Some brands have tapped into the hip-hop culture to market a brand in a modern multicultural way, as Apple did with its iPod.

True

The lower price of generics is made possible by lower-cost labeling and packaging and minimal advertising, and sometimes lower-quality ingredients.

True

76) What are the features of an ideal advertising campaign?

To increase the odds for a successful marketing communications campaign, marketers must attempt to increase the likelihood that each step occurs. For example, the ideal ad campaign would ensure that: • The right consumer is exposed to the right message at the right place and at the right time. • The ad causes the consumer to pay attention but does not distract from the intended message. • The ad properly reflects the consumer's level of understanding of and behaviors with the product and the brand. • The ad correctly positions the brand in terms of desirable and deliverable points-of-difference and points-of-parity. • The ad motivates consumers to consider purchase of the brand. • The ad creates strong brand associations with all these stored communications effects so they can have an impact when consumers are considering making a purchase.

46) What is a brand-asset management team (BAMT)?

Triangular and horizontal product-team approaches let each major brand be run by a brand-asset management team (BAMT) consisting of key representatives from functions that affect the brand's performance. The company consists of several BAMTs that periodically report to a BAMT directors committee, which itself reports to a chief branding officer.

A good example of collecting behavioral data would be when a store uses scanners to read bar codes on products selected by consumers.

True

A marketer who has unit costs of $16 and wants to earn a 20 percent markup on sales would charge a markup price of $20.

True

A marketer who is using a reliable marketing information system to monitor the marketing environment so s/he can assess market potential and demand is focused on capturing marketing insights.

True

A marketing channel overcomes the time, place, and possession gaps that separate goods and services from those who need or want them.

True

A principle of the value chain is that every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product.

True

A profitable customer is a person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the company;s cost stream of attracting, selling, and servicing the customer.

True

A short definition of marketing is "meeting needs profitability."

True

A strategy is a game plan for achieving what the business unit wants to achieve.

True

A tachistoscope flashes an ad to a subject with an exposure interval that may range from less than one hundredth of a second to several seconds and asks the respondent to describe what s/he recalls.

True

According to Herzberg's two-factor theory, satisfiers will make the major difference as to which brand the customer buys.

True

Because of selective retention, we are likely to forget about the good points of competing products.

True

Definitions of a firm's mission as well as its marketing and financial objectives are included in the marketing strategy section of the marketing plan.

True

EDLP can lead to lower advertising costs and higher retail profits.

True

Few consumers actually delete cookies frequently. When customers do not delete cookies, they expect customized marketing appeals and deals.

True

For a magazine, subscription renewal rate is a good measure of retention.

True

For an MBO (management by objectives) system to work, one of the four criteria that the unit's objectives must meet is that objectives must be stated quantitatively whenever possible.

True

If a company were pursuing a policy of networking externally to gather marketing intelligence, it might collect competitors' ads or look up news stories about competitors.

True

In competitive markets with low entry barriers, the optimal channel structure will inevitably change over time.

True

James collected primary data when he distributed a survey to dorm residents to discover their attitudes and opinions on campus life.

True

Memory is a very constructive process. This means people do not remember information and events completely and accurately and often remember only bits and pieces that they fill in based on whatever else they know.

True

One of the weaknesses of using surveys to estimate the demand curve is that consumers exaggerate their willingness to pay for new products and services.

True

People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli.

True

142) Marco is working on promoting his company's Glazer brand of electronic razors. The company estimates 50 million potential users and sets a target of attracting 8 percent of the market. He hopes to reach 80 percent of the potential customers with an advertising message. He would be pleased if 25 percent of the prospects that were aware, tried the Glazer. According to further estimates, 40 percent of all triers will become loyal users. If the cost of exposing 1 percent of the target population to one impression is $4500 on an average, determine the necessary advertising budget, according to the objective-and-task method.

Using the objective-and-task method, Marco can arrive at the marketing communications budget by following these steps: 1. The company estimates 50 million potential users and sets a target of attracting 8 percent of the market — that is, 4 million users. 2. The percentage of the market that should be reached by advertising is determined. Marco hopes to reach 80 percent (40 million prospects) with his advertising message. 3. The percentage of aware prospects that should be persuaded to try the brand is then calculated. Marco would be pleased if 25 percent of aware prospects (10 million) tried Glazers. He estimates that 40 percent of all triers, or 4 million people, will become loyal users. This is the market goal. 4. Next, the number of advertising impressions per 1 percent trial rate is estimated. Marco estimates that 40 advertising impressions (exposures) for every 1 percent of the population will bring about a 25 percent trial rate. 5. The number of gross rating points that would have to be purchased is now calculated. A gross rating point is one exposure to 1 percent of the target population. Because Marco wants to achieve 40 exposures to 80 percent of the population, he will want to buy 3,200 gross rating points. 6. Finally, the necessary advertising budget on the basis of the average cost of buying a gross rating point is estimated. To expose 1 percent of the target population to one impression costs an average of $4,500. Therefore, 3,200 gross rating points will cost $14,400,000 (= $4,500 × 3,200) in the introductory year.

151) What is the full-cost approach of evaluating a marketing entity's performance?

When evaluating a marketing entity's performance, the major controversy is about whether to allocate the nontraceable common costs to the marketing entity. Such allocation is called the full-cost approach, and its advocates argue that all costs must ultimately be imputed in order to determine true profitability. However, this argument confuses the use of accounting for financial reporting with its use for managerial decision making.

71) Explain the three distribution strategies based on the number of intermediaries.

• Exclusive distribution: This strategy focuses on severely limiting the number of intermediaries. It's appropriate when the producer wants to maintain control over the service level and outputs offered by the resellers, and it often includes exclusive dealing arrangements. By granting exclusive distribution, the producer hopes to obtain more dedicated and knowledgeable selling. It requires a closer partnership between seller and reseller and is used in the distribution of new automobiles, some major appliances, and some women's apparel brands. • Selective distribution: This distribution strategy relies on only some of the intermediaries willing to carry a particular product. Whether established or new, the company does not need to worry about having too many outlets; it can gain adequate market coverage with more control and less cost than intensive distribution. • Intensive distribution: This strategy places the goods or services in as many outlets as possible. This strategy serves well for snack foods, soft drinks, newspapers, candies, and gum — products consumers buy frequently or in a variety of locations.

46) Describe the darker side of direct marketing solicitations.

• Irritation. Many people don't like hard-sell direct marketing solicitations. Firms have been popping up to help block unwanted junk mail. • Unfairness. Some direct marketers take advantage of impulsive or less sophisticated buyers or prey on the vulnerable, especially the elderly. • Deception and fraud. Some direct marketers design mailers and write copy intended to mislead or exaggerate product size, performance claims, or the "retail price." The Federal Trade Commission receives thousands of complaints each year about fraudulent investment scams and phony charities. • Invasion of privacy. It seems that almost every time consumers order products by mail or telephone, apply for a credit card, or take out a magazine subscription, their names, addresses, and purchasing behavior may be added to several company databases.

provided by marketing channels with reference to Orion.

• Lot size — Customers may be allowed to book as many tickets as they want, subject to availability. • Waiting and delivery time — This would refer to the average time customers take to book their tickets. • Spatial convenience — This refers to the ease of booking tickets. The location of Orion's retail ticketing outlets and whether the company offers online ticket booking services would be classified under spatial convenience. • Product variety — This refers to the assortment provided by the marketing channel in terms of travel destinations, holiday packages, hotel bookings, car rental services, and the like. • Service backup — This refers to the add-on services provided by the channel such as credit, discounts, delivery, refunds, and so on.