BUAD479 Exam 2: Quizes

Break Even

Fixed costs / contribution per unit

Net impact on own margins

expansion take away sales from in line product

Stage Gate Model

idea generation -> scoping -> building business case -> development -> test -> launch

Customer Lifetime Value (time period)

Sum(m*s(t))-AC

The three interrelated elements in the marketing strategy formation process include all of the following EXCEPT: a. decisions. b. objectives. c. analysis. d. outcomes.

b. objectives.

All of the following are inputs to any value-pricing decision EXCEPT: a. cost of goods sold. b. product price. c. true economic value. d. perceived value.

b. product price.

All of the following metrics are typically included in a concept test EXCEPT: a. perceived likeability. b. product price. c. likelihood to purchase the product. d. perceived uniqueness.

b. product price.

After seeing increased competition, and in an effort to increase sales and profitability, Wonder Bread wants to extend its product mix breadth. The firm should consider all of the following EXCEPT: a. tapping into complementary-in-use products and thus enabling the firm to be a "total solution" supplier. b. tapping into scarce resources that could benefit the overall product mix. c. leveraging a key asset of the company that underlies the current product offerings. d. undertaking a business whose profit stream will probably correlate negatively with the profit streams of existing businesses, thereby reducing the overall risk of the enterprise.

b. tapping into scarce resources that could benefit the overall product mix.

Marketers often assess the true economic value (TEV) by using all of the following EXCEPT: a. the relative advantage or disadvantage offered by the focal product. b. the costs of competitors' products. c. a cost structure study to understand the customer's underlying economics. d. the performance of competitors' products

b. the costs of competitors' products.

The Stage-Gate model includes all of the following steps EXCEPT: a. development. b. training. c. launch. d. test.

b. training.

The demand curve suggests that an auto manufacturer will sell 20,000 Mercedes-Benz M-Class vehicles when they are priced at $50,800, but when the price is reduced to $45,000, that quantity will increase to 27,000 units. What is the resulting elasticity? a. 1.24 b. -4.38 c. -3.07 d. 6.73

c. -3.07

Native Advertising

A form of online advertising that matches the form and function of the platform on which it appears

Customer Lifetime Value (Infinite)

(m (contribution margin)/ Churn Rate) - customer acquisition

Profit Impact

(unit contribution * units sold) - fixed costs

New product Profitability

1. Superior to competitors 2. solve a problem 3. value for money 4. quality 5. features are useful 6. visible benefits

Lifetime

1/ Churn Rate

Good-Better-Best pricing strategy

3 levels of price straight forward WTP

marketing strategy process

Analysis, Decisions, Outcomes

Value Pricing

Cogs, Product Price, PV, TEV

Ben & Jerry's Ice Cream buys keywords for a search marketing campaign such as "Ben & Jerry's Chunky Monkey" and "Ben & Jerry's Cherry Garcia." What type of keywords is the firm buying? a. Native keywords b. Organic keywords c. Branded keywords d. Generic keywords

Branded Keywords

Market Share to Break Even

Break Even point/ units in market

Sosphictcated, dillerbirate, bearing cost, availability to switch, Not motivated by presteigq

Buyer Sensitivity

Outcome

Customer: acquisition, retention, buy rate Sales, Profits, Franchise

As a marketer, your goal is to use one type of digital marketing tool to both spur consumers to immediate action and to increase brand awareness. Which of the following digital marketing tools would you use? a. Display ads b. Search ads c. Social media d. Web pages

Display ads

Generic, Expected, Arguemented, Potential

Generic: requirements to participate Expected: minimum from Product category Arguemented: includes unexpected value changing Potential: everything to attract and hold customers

Six M's

Intent: Market Mission Execution: Media Message Impact: Money Measurement

Low different alternative easy Comparability Will perform as expected Not Missing Critical

Product senstivity

Maturity (PLC)

This stage sees growth in sales slow significantly, along with increased competition and similar product offerings leading the firm to need competencies that allow it to defend its market share while maximizing profit.

Young and Rubicams Power Grid

Y axis: Strength, differention and Relevance X axis: Brand Stature, esteem and Knowledge Upper left: Niche Upper Right: Leader/Mass Lower Right: eroded dying brand Lower Left: New

survival probability

Y1 = 1, 1-CR, Y2 = Y1(answer)*(1-CR)

Introduction (PLC)

a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction

Cannibalization

a situation that occurs when sales of a new product cut into sales of a firm's existing products

Concept Test

a test to evaluate a new-product idea, usually before any prototype has been created, given description and see reactions: purchase intent likability value uniqueness

After a few years of work in the marketing department of a small firm, you are placed in charge of the firm's inbound marketing. What are you most likely to be in charge of? a. Ensuring that consumers can find the firm when they search for information on products and services b. Efforts of the firm to capture consumers no matter where they are c. The firm's efforts in creating and placing television and print advertising d. Creating content for and monitoring consumer actions on the firm's social media platforms, such as Facebook and Twitter

a. Ensuring that consumers can find the firm when they search for information on products and services

What type of marketing strategy best exemplifies a straightforward mapping of a product to a customer's willingness to pay? a. Good-better-best vertical differentiation b. Segmentation by income c. Sustainable differentiation d. Perceived value

a. Good-better-best vertical differentiation

Managers are trying to decide on which variables to use in segmenting and selecting a target audience for marketing communications about 5-Hour Energy—a potent energy drink. Which of the following variables are classified INCORRECTLY as demographic or psychographic bases of market segmentation? a. Senior citizens (65 years and older) = psychographic b. Consumers living on the West Coast with high household incomes = demographic c. Individuals with an active lifestyle = psychographic d. Long-haul truck drivers and college students = demographic

a. Senior citizens (65 years and older) = psychographic

he makers of Red Bull Energy Drink want to generate earned media and create associations between the brand and popular culture. Which of the following types of media vehicle may be particularly useful in this strategy? a. Sponsorship of the Cliff Diving World Series b. Student brand ambassadors c. Giving away free samples of Red Bull d. Advertising in the prime-time television show The Voice

a. Sponsorship of the Cliff Diving World Series

Saucony is considering adding a new item to its Hurricane line of running shoes to increase its product line depth. All options would be acceptable EXCEPT: a. adding a new private-label product. b. inserting an item of a price and performance level that fills a gap between two existing items. c. adding a lower-priced item that is still capable of satisfying the needs of some customers. f. adding a higher-priced shoe with a higher performance level.

a. adding a new private-label product.

All of the following are typical marketing research techniques utilized in the new-product development process EXCEPT: a. awareness and usage study. b. surveys. c. focus groups. d. concept testing.

a. awareness and usage study.

Nestlé introduced Butterfinger Peanut Butter Cups, and sales in the peanut butter chocolate candy category increased. This is an example of: a. category size impact. b. legitimization of competitors' offerings. c. net impact on own margins. d. competitive impact.

a. category size impact.

Norwegian Cruise Lines controls the availability of prices by offering deals to specific groups of buyers based on all of the following EXCEPT: a. competition. b. coupon usage. c. information gathered via e-commerce. d. location.

a. competition.

You've been tasked with creating native advertising for your employer. Your job will most likely entail: a. finding or creating editorial pieces that can be turned into sponsored content on web pages, blending in with the normal editorial content on the page. b. creating advertising that can be placed with search engine firms that will enhance your firm's chances of being chosen by consumers when they search for products or services on the web. c. finding publishers willing to write positive editorial articles about your firm without any type of payment. d. creating advertising that promotes the overall company image at the expense of the firm's brands.

a. finding or creating editorial pieces that can be turned into sponsored content on web pages, blending in with the normal editorial content on the page.

In the six Ms model of marketing communications, strategic intent refers to: a. mission and market. b. market and media. c. mission and money. d. message and market.

a. mission and market.

ll of the following are price indicators of customer price sensitivity EXCEPT: a. performance as expected. b. the existence of reference prices. c. high in a relative sense. d. easy comparability.

a. performance as expected.

A customer is shopping for spices in a US supermarket. She pauses as she compares the Goya brand of cinnamon to the McCormick brand. She opts for the McCormick cinnamon, judging it to be of better quality. This instinctual bias is known as: a. the provenance paradox. b. the corona effect. c. brand resonance. d. brand loyalty.

a. the provenance paradox.

cost plus pricing

adding a standard markup to the cost of the product

Decision

aspirations: STP Action: 4 P's, capture value

Mr. Smith at Acme Production, Inc. is trying to determine the true economic value (TEV) for a new computerized machine. This machine costs $20 per hour to operate and can be used for a year before it needs to be replaced. A system crash costs $500,000, and the probability that the machine will crash is 5%. The next-best alternative has a price of $150,000. It can also be used for a year and costs $15 per hour to operate. The cost of a system crash for this alternative is also $500,000, and the probability that it will crash is 15%. Acme plans to operate this machine 8 hours per day, 365 days, over the next year. The true economic value (TEV) of the machine is: a. $210,400. b. $185,400. c. $154,000. d. $175,000.

b. $185,400.

The basketball season is about to start, and the owners of the Red Lions team want to advertise that fact in their home metropolitan area. They plan to run a full-page newspaper ad in Metro News. The readership of Metro News is 850,000 and the cost of the ad is $82,000. What is the cost per thousand (CPM) of this campaign? a. $56.22 b. $96.47 c. $30.00 d. $102.08

b. $96.47

Apprentice Mousetraps has developed the Magic Mouse Trapper. The company's fixed costs are $30,000 per week. The product sells for $20. Initially, the company estimated that it would cost $5 per unit to make each mousetrap. After one week in production, however, the company realized that its actual cost to make each unit was $7.25. What are the weekly volumes that a) Apprentice originally thought it needed to produce to break even, and b) Apprentice actually needs to produce to break even? a. 2,000 and 3,000 mousetraps b. 2,000 and 2,353 mousetraps c. 1,000 and 2,000 mousetraps d. 2,353 and 4,000 mousetraps

b. 2,000 and 2,353 mousetraps

You are working with Starbucks to increase consumer landings on the company's web pages, which promote and sell Starbucks' at-home coffee-brewing systems. One way to increase such landings is to work for better organic search engine results through search engine optimization (SEO). Which of the following tactics should you follow in your SEO program for Starbucks? a. Decrease the use of meta tags, thus improving the search to hit ratios through organic searches b. Build the site's authority by determining ways to garner more mentions on other, nonaffiliated websites c. Be sure that content on Starbucks' landing pages discusses the company's in-store drinks and promotions d. Include fewer keywords on Starbucks' website so that the remaining keywords garner more attention from the search engines

b. Build the site's authority by determining ways to garner more mentions on other, nonaffiliated websites

Subaru car owners are renowned for their repeat buying and brand loyalty. What type of connection would Keller conclude that the customer has achieved with the brand? a. Performance b. Resonance c. Enlightenment d. Salience

b. Resonance

You are considering websites on which to place your online display advertising. Which of the following factors will NOT affect the price that the websites charge for advertising space? a. The prestige of the website b. The website's social media tie-ins c. The website's traffic d. The website's speed

b. The website's social media tie-ins

All the following indicators heighten consumer sensitivity to price EXCEPT: a. price is high in a relative sense. b. difficult comparability. c. the fact that reference prices exist. d. price is not needed as quality cue.

b. difficult comparability.

A firm might NOT want to engage in social media because (i) its product is unlikely to generate online conversation, (ii) the firm wants to act transparently, (iii) the reputational risk from hostile conversations about the product is fairly high. a . i, ii, and iii b. i and iii only c. ii only d. i and ii only

b. i and iii only

Corporations can benefit from personal branding through: (i) celebrity endorsements, (ii) customers who relate to the brand personality, (iii) development of employee leadership potential. a. i only b. i and iii only c. ii only d. i and ii only

b. i and iii only

All of the following are characteristics exhibited by winning products EXCEPT: a. features easily perceived as useful by the customer. b. benefits that are highly visible to the customer. c. Answer good product quality, according to the customer's definition of quality. d. solving a problem that the customer has with a competitive product.

c. Answer good product quality, according to the customer's definition of quality.

Which of the following accurately matches the stages of the hierarchy of effects model to the intended outcomes of marketing communications? a. Knowledge and satisfaction = believe b. Conviction and purchase = feel c. Awareness and knowledge = think d. Liking and purchase = do

c. Awareness and knowledge = think

All of the following are examples of expansion of the existing product line of Coca-Cola EXCEPT: a. Coke Zero. b. Caffeine Free Diet Coke. c. Coca-Cola Freestyle vending machine. d. Diet Coke.

c. Coca-Cola Freestyle vending machine.

In which of the following stages of the product life cycle are promotion efforts minimal? a. Growth b. Maturity c. Decline d. Introduction

c. Decline

During which stage of the product life cycle would Dannon Greek Yogurt most typically add new flavors and sizes to its new organic product line? a. Introduction b. Maturity c. Growth d. Decline

c. Growth

Which of the following choices is NOT one of the reasons cost-plus pricing is so popular? a. It is easy to measure or estimate. b. It is easy to justify to various stakeholders. c. It captures the full price that customers might be willing to pay for a product. d. It simplifies an otherwise complex pricing process.

c. It captures the full price that customers might be willing to pay for a product.

Your manager has asked you to increase the effectiveness of your company's digital display advertising for the wallets that your firm sells with built-in RFID (radio-frequency identification) protection. She asks you to avoid sites that already cater to men's fashion because those sites are currently your primary website choice for advertising. She also warns you not to come up with any ideas that may irritate your customers or potential customers. What type of ads would you recommend to your boss? a. Auto-play video ads b. Pop-up ads c. Morphing ads d. Contextual ads

c. Morphing ads

HubSpot CEO Brian Halligan discusses inbound marketing in Video 4: Interview with HubSpot CEO Brian Halligan about Inbound Marketing 2.0 in the Core Reading. According to Halligan, digital marketers are making bad inbound marketing choices. Which of the following choices is NOT among them? a. Not measuring effectiveness well b. Not realizing that the role of the sales rep has changed c. Spending more time creating content and less money on placement d. Dabbling in inbound marketing and not going full in

c. Spending more time creating content and less money on placement

Leonard M. Lodish and Carl F. Mela suggest that all of following contribute to marketers' too frequent, shortsighted strategic vision EXCEPT: a. the abundance of real-time sales data. b. the dearth of data to measure long-term investment return. c. an increase in competitive barriers to entry. d. the short tenure of brand managers.

c. an increase in competitive barriers to entry

In 2016, having wifi at Starbucks is an example of a(n): a. augmented product. b. potential product. c. expected product. d. generic product.

c. expected product.

Outbound

communication b/w a firm and consumer that is initiated by the firm

Analysis

company, competitors, customers, collab, context

True Economic Value

cost of the next best alternative + value of performance differential (top)

Assume that the variable cost of Marie's blue cheese salad dressing is $1.00 per 12 oz. bottle, that Marie's sells it to the broker for $2.00, and that the broker sells it to the retailer for $2.99. The price at retail is $3.99. What are the margins for the manufacturer, broker and retailer? Please round to the nearest percent. a. 33%, 25%, and 50% b. 100%, 40%, and 33% c. 30%, 50%, and 33% d. 50%, 33%, and 25%

d. 50%, 33%, and 25%

Research indicates that which of the following plays the greatest role in the product purchase decision process? a. Discounts b. Point-of-purchase displays c. Banner advertising d. Customer reviews/recommendations

d. Customer reviews/recommendations

According to Young and Rubicam's Power Grid, what are the key characteristics of an aspiring brand? a. Low differentiation and relevance, low esteem and knowledge b. High differentiation and relevance, high esteem and knowledge c. Low differentiation and relevance, high esteem and knowledge d. High differentiation and relevance, low esteem and knowledge

d. High differentiation and relevance, low esteem and knowledge

You work for Amazon.com and you are charged with building consumer awareness for the latest version of the firm's Kindle reader. What type of digital advertising campaign should you run? a. Ad exchange display campaign b. Click-based display ad campaign c. Search ad campaign d. Impression-based display ad campaign

d. Impression-based display ad campaign

Sue has been shopping for a new computer, and she has diligently researched the various available brands. After evaluating the alternatives, she is considering purchasing a Dell computer. Which of the following is an example of marketing communications that Dell might use to prompt Sue in the next stage of her decision making—the purchase decision? a. Dell's website offering a comparison chart that identifies differences in features among models b. Send her a direct mail outlining the customer service options that Dell provides c. Television advertising that announces Dell's newest computer model d. In-store signage announcing a $500 rebate with the purchase of a Dell computer

d. In-store signage announcing a $500 rebate with the purchase of a Dell computer

Where on Young and Rubicam's Power Grid would a product with high brand recognition but with low differentiation and relevance likely reside? a. Upper right quadrant / Power brand b. Lower left quadrant/ New or fading brand c. Upper left quadrant / Aspiring brand d. Lower right quadrant / Eroding brand

d. Lower right quadrant / Eroding brand

Which promotional tool(s) or tactic(s) comprise a push strategy? a. Targeting opinion leaders and end users b. Advertising to draw the interest of consumers who then go to their retailers and request the advertised product c. Coupons, contests, sweepstakes, and rebates d. Retailer slotting allowances (promotion fees) for carrying a new product

d. Retailer slotting allowances (promotion fees) for carrying a new product

In marketing communications, which of the following message elements performs the function of a strong takeaway or moral lesson? a. Brand logo b. Jingle or musical signature c. Humorous appeal d. Tagline or headline

d. Tagline or headline

Which of the following best describes brand promise? a. The underlying value proposition conveyed and the marketing language used b. The differentiation of a product relative to its closest competitors c. The set of human characteristics associated with a brand d. What a company wants a consumer to do/gain/feel by using the product

d. What a company wants a consumer to do/gain/feel by using the product

All of the following are examples of commonly used market research procedures for assessing price sensitivity EXCEPT: a. price experimentation. b. analysis of historic pricing and sales data. c. customer surveys. d. focus groups.

d. focus groups.

Starbucks offers a variety of types of coffee to its customers at various price points based on the quality of the coffee beans and where the coffee is grown. This is an example of: a. pricing based on transaction b. characteristics. observable buyer characteristics. c. controlling the availability of prices. d. good/better/best strategy.

d. good/better/best strategy.

Most executives agree that brand strategies must be engineered across the entire marketing mix and throughout the life cycle of a product. Which of the following is NOT a component of that marketing mix? (i) Pricing (ii) Market research (iii) Production (iv) Innovation a. iii only b. i only c. ii and iv d. ii, iii, and iv

d. ii, iii, and iv

Interbrand, BrandZ, and Brand Finance all use qualitative and quantitative measurements to calculate brand value, but BrandZ model's greatest differentiating component is its: a. reliance on the financial performance of the brand. b. use of net present value (NPV) of the trademark and associated intellectual property. c. use of brand loyalty in its calculations. d. incorporation of proprietary global market research data.

d. incorporation of proprietary global market research data.

Merging and milking brands are examples of a. defending a brand. b. increasing brand loyalty. c. creating brand extensions. d. liquidating brands from a product portfolio.

d. liquidating brands from a product portfolio.

A consumer's incentive to purchase is equal to: a. true economic value minus product price. b. true economic value (TEV) minus cost of goods sold. c. product price minus cost of goods sold. d. perceived value (PV) minus price.

d. perceived value (PV) minus price.

Product indicators of sensitivity to price include all of the following EXCEPT: a. performance as expected. b. low differentiation of alternatives. c. easy comparability. d. the ability to switch easily

d. the ability to switch easily

The number 1 driver of new product profitability is: a. a product that provides a compelling value proposition to the customer. b. a differentiated product that delivers benefits to the customer. c. unique service. d. unique superior product.

d. unique superior product.

Inbound

firm sets out to make itself avaliable to consumer when they are ready to talk

Easy Compartibility, High Relative Sense Reference Price exists Price not needed as quality Que

heightend price sensitivity

Pull

increase demand

Product Life Cycle

introduction, growth, maturity, decline maturity has peak for both profit and sales, sales is higher than profits

legitimization of competitors offerings

leading to product type/niche

Growth (PLC)

period of rapid market acceptance and increasing profits Segments reached, distribution channels build up

Product Price

price at which the business plans to sell the product

Unit Contribution

revenue per unit - variable costs per unit

Push

sell product to customer

elasticity

the percentage change in quantity demanded / percentage change in price

Decline (PLC)

the period when sales fall off and profits drop focus on loyal customers, high prices unlimited distribution (way to keep profits)

Cost of goods Sold

the total cost of merchandise sold during the period

Perceived Value

the value a consumer expects to obtain from a purchase

Category Size Impact

will it increase overall demand