Business Midterm #1

Levi Strauss developed a Naturals line of jeans that do not use any chemical dyes to colour the pants. Consumers liked the look of the pants, and Levi's use of all-natural dyes is good for the environment. What type of orientation would the production of the Naturals line be consistent with? a. societal marketing b. supplier c. sales d. production

ANS: A

Networkcar.com sells a plug-in device that connects to computer diagnostic ports that are standard on cars. The device beams signals to dealers who can remotely diagnose or spot trouble. The device allows car dealerships to maintain a closer bond with their customers by offering maintenance before a problem leaves customers with an inoperable or possibly dangerous car. With the device, what can dealers better engage in?

ANS: A

Which of the following statements about the societal orientation is true? a. Companies that protect the environment by using all-natural materials in their products are showing a societal marketing orientation. b. The societal marketing concept is very different from the market concept. c. Marketers try to deliver all benefits sought by customers even if that results in a negative effect on the environment. d. Organizations have either a social or economic justification for their existence.

ANS: A

Which orientation of people will buy more goods and services if aggressive marketing techniques are used? a. sales b. production c. customer d. marketing

ANS: A

Which orientation assumes that people are resistant to buying products that are not absolutely necessary? a. sales b. marketing c. customer d. production

ANS: A The sales orientation assumes that aggressive selling is what is needed to increase demand.

Frequent-flyer programs are an example of financial incentives to customers in exchange for their continuing patronage. After flying a certain number of miles or flying a specified number of times, the frequent-flyer program participant earns a free flight or some other award such as free lodging. What are airlines that use frequent-flyer programs practising? a. relationship marketing b. transformational marketing c. commitment selling d. marketing engineering

ANS: A The strategy that entails forging long-term partnerships with customers is called relationship marketing.

The statement "Marketing should be introduced at the beginning rather than the end of the production cycle and integrated into each phase of the business" is consistent with which orientation? a. market b. sales c. enterprise d. production

ANS: A Understanding the competitive arena and competitors' strengths and weaknesses is a critical component of market orientation.

According to the text, which of the following statements is true? a. A market orientation for a business indicates that what it produces for that market is of primary importance to its long-run success. b. A sales orientation is based on the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits. c. Market orientation refers to the fact that sales depend in large part on aggressive sales force efforts to capture large sectors of the market. d. Societal marketing states that an organization exists only to preserve society's best interests in the long run.

ANS: B

In a buyer's market where production exceeds demand, some businesses are most likely to adopt what type of orientation? a. market b. sales c. profit d. production

ANS: B

What is one-to-one marketing a form of? a. societal marketing b. a sales orientation c. relationship marketing d. a marketing network

ANS: C

Some marketing-oriented firms give employees expanded authority to solve customer problems on the spot. What is this known as? a. mediating b. deregulation c. training d. empowerment

ANS: D

Because organizations that sell unsought products, such as cemetery plots, are marketing products that most people do not want, which sort of orientation might the companies adopt? a. product b. customer c. marketing d. sales

ANS: D Aggressive selling is sometimes used by companies that sell products their customers do not want to buy.

What is the baseline (minimum) requirement for offering customer value? a. Give customers more than they expect. b. Offer products that perform. c. Give the buyer facts. d. Offer organization-wide commitment to service and after-sales support.

ANS: B

Which of the following statements about a typical sales-oriented business is true? a. The company directs its products to specific groups of people. b. The company is in business to satisfy customers' wants and needs and deliver superior value. c. The company invests the majority of its resources in promoting its products and services. d. The primary goal of the company is profit through customer satisfaction.

ANS: C

Which of the following strategies entails forging long-term partnerships with customers? a. commitment selling b. transactional marketing c. relationship marketing d. market engineering

ANS: C

Suppose an organization believes that it exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests. What type of orientation does it have? a. sales orientation b. marketing orientation c. focused target market strategy d. societal orientation

ANS: D

What is the primary tool used by a sales-oriented organization to achieve its corporate goals? a. price b. product design c. place (distribution) d. promotion

ANS: D A sales-oriented organization seeks to generate sales volume based upon intensive promotional activities.

What does empowerment refer to? a. the company's delegation of authority to its employees to solve customer problems on the spot b. the company's profit picture improvement as a result of employing a market-oriented philosophy through all of its activities c. the power gathered by a company as a result of combining relationship marketing and personal selling d. the marketing department of a large corporation

ANS: A

What does one-to-one marketing entail? a. utilizing customer information to build long-term, personalized, and profitable relationships with customers b. having the company spend vast sums of money to enable every customer to direct what kind of goods and services she would like the company to build for her c. having the company hire a marketing consultant to perform one-to-one interviews with all of the company's customers in order to build high-quality products and services d. utilizing company resources to ensure that each customer is put into direct contact with another company customer in order to build favourable word-of-mouth endorsements

ANS: A

When a homeowner visited The Home Depot to buy what he thought he needed to fix a leaking toilet, he gathered up materials totalling almost $70. One his way to checkout, an employee asked him what was he trying to fix. After some discussion, the employee convinced the homeowner that a $5.99 replacement part would fix the problem better than the materials he thought he needed and with less trouble. This sort of discussion between employees and customers is commonplace at The Home Depot. What sort of orientation does the retail store have? a. market b. sales c. production d. product

ANS: A

For a market-oriented organization, what is the primary tool used to achieve its goals? a. a blend of product, place, promotion, and pricing decisions b. price c. promotion d. place (distribution)

ANS: A A market-oriented organization seeks to generate sales volume based on serving customer needs and wants, utilizing all of the elements of the marketing mix to do so.

The manufacturer of MaMa Haman's peach salsa knows marketing can make her company a success. She wants to rely solely on promotion as the technique for attracting customers. She advertises extensively in cooking magazines, offers coupons, and provides retailers who carry her product with attractive displays. From this information, what type of orientation does the business have? a. sales b. production c. product d. market

ANS: A A sales-oriented organization views promotions as the primary tool used to achieve its goals.

What does a company do if it has a market orientation and adheres to the marketing concept? a. integrate all the activities of the firm to satisfy customer wants b. differentiate a firm's current products from its past products c. focus on consumer complaints d. fuel sales growth through the application of aggressive sales techniques

ANS: A Integrating all the firm's activities around the marketing concept is essential to its success.

Wilson is an agriculture and dairy science major at a university. After graduation, he hopes to modernize and expand his family's dairy farm in a scientific and efficient manner. His adviser at school has suggested that he take a marketing course in the school of business as an elective. Wilson thinks this is an absurd idea. You are his friend and a marketing major. What do you advise? a. Marketing knowledge will help Wilson to understand that he must satisfy wholesalers, retailers, and consumers. b. More biology and agriculture classes will be most useful for Wilson. c. The main reason to take marketing is to teach Wilson how to advertise milk. d. Marketing is not relevant for a business such as a family dairy farm.

ANS: A Marketing is an important conceptual base that will help Wilson to assess the needs and wants of his various business contacts and customers. Marketing is a key component of every business.

What is the main focus of a marketing-oriented firm? a. outward upon the wants and needs of customers b. inward upon the abilities to deliver goods and services c. outward upon societal responsibilities d. inward upon the organization's needs

ANS: A Marketing-oriented firms are focused outward toward their customers.

The marketing concept stresses that the social and economic justification for an organization's existence is the satisfaction of customer needs and wants while doing which of the following? a. simultaneously meeting organization objectives b. applying scientific management techniques to improve efficiency c. producing a good or service at the lowest possible cost d. constantly increasing sales volumes

ANS: A The marketing concept holds that the needs and wants of both the customer and the firm must be served.

For years, the slogan used in all the advertising done by British Airways was "Putting people first." In this short phase, what did British Airways capture the idea of? a. the marketing concept b. the societal concept c. Maslow's hierarchy of needs d. the sales orientation philosophy

ANS: A The marketing concept justifies a company's existence by its ability to satisfy customers.

Canada Post argues that its express service is comparable to that offered by FedEx and that its prices are much lower. Yet FedEx dominates with more than a 45 percent share of the express- delivery market. Which of the following statements most accurately describes this situation? a. Canada Post should lower its prices even further to increase market share. b. FedEx is perceived as offering greater customer value. c. Customer value is not an issue in deciding which express-delivery service to use. d. Canada Post is perceived as offering greater customer value.

ANS: B

Walmart has become the leading discount retailer in Canada and the world by focusing on the customer's needs and wants. This philosophy is at the heart of which orientation? a. production b. market c. sales d. retail

ANS: B

What does achieving a market orientation involve? a. implementing actions to provide satisfaction for employees b. determining how to deliver superior customer value c. doing research on suppliers and competitors d. establishing and maintaining mutually satisfying relationships with suppliers

ANS: B

What gives customers the feeling that their concerns are being addressed and gives employees the feeling that their expertise matters? a. empowerment b. management-employee synergy c. a hierarchically responsive organization d. delegation

ANS: B

What is the objective of one-to-one marketing? a. to reduce customer satisfaction b. to build and maintain customer loyalty c. to decrease revenue d. to increase costs

ANS: B

Which of the following is NOT a good reason to study marketing? a. Marketing plays an important role in society, coordinating the huge numbers of transactions needed to provide goods and services. b. Marketing teaches businesses how to sell products that people do not need. c. Marketing is the key function in business. d. Marketing affects part of your life as a consumer.

ANS: B

The management at Canadian Pacific (CP) Hotels has authorized its hotels' staffs to provide whatever amenity—such as a special magazine or a hypoallergenic pillow—their frequent stayers request as quickly as possible. What is this an example of? a. commissioning b. empowerment c. training d. deregulation

ANS: B CP management gave employees expanded authority to solve customer problems on the spot.

Many companies are jazzing up plant tours and making store visits more exciting to increase customer loyalty. For example, at the Crayola Factory, kids watch how crayons are made and then play with their favourite colours in a 20,000 square-foot discovery centre. Which of the following would be necessary for a visit to the Crayola Factory to increase customer loyalty? a. customer empowerment b. customer-oriented personnel c. reciprocal exchange d. a societal marketing orientation

ANS: B Customer-oriented personnel strengthen the positive image of an organization.

You are in charge of the marketing program at Cedarstream, a manufacturer of recreational vehicles, and have been asked to create a company that acts in compliance with the marketing concept and has a market orientation. What will you most likely do as your first action? a. hire new salespeople to find new customers for Cedarstream vehicles b. create cross-functional entrepreneurial teams to overcome the difficulty of getting people from different functional areas to work together in developing new products. c. reorganize the company and make marketing the most important department d. expand the advertising budget so that potential customers will be more aware of Cedarstream's products

ANS: B Market-oriented companies are successful in getting all business functions working together to deliver customer value.

Greenberg Smoked Turkey, Inc., is a nationwide mail-order business that operates without any advertising. It does not accept credit cards and has no toll-free number. The hopelessly old- fashioned company is also a very profitable with thousands of devoutly loyal customers—some of whom have ordered Greenberg smoked turkeys every year for the last 50 years. Greenberg more than likely uses which of the following to maintain these long-term ties to its customers? a. reactive marketing b. relationship marketing c. management empowerment d. a sales orientation

ANS: B Relationship management is a strategy that entails forging long-term partnerships with customers.

Most companies become sensitized to community issues after they've done enough damage to draw the locals' anger. Dofasco, Inc., a highly successful steel company in Ontario, tries to get ahead of business and community issues by annually bringing together representatives from the local area and deciding what projects to improve the local environment will be implemented. What type of orientation does Dofasco have as indicated by this annual community-wide meeting? a. sales b. societal marketing c. production d. product

ANS: B Societal marketing orientation is the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve individuals' and society's long-term best interest.

The marketing concept includes a goal orientation to remind managers of which of the following? a. The only reason for any business to exist is to make a profit. b. Achieving long-term organizational goals is as important as satisfying customers. c. The objective is to find a target market that differs from that of the competition. d. Customers must be satisfied no matter what the organizational costs.

ANS: B The goal orientation refers to the company's goals, such as profit, growth, service, and survival.

Which of the following is a viable method a company can use to become more marketing oriented? a. Implement employee-only meetings. b. Make sure all employees are customer oriented. c. Train employees to focus on profit maximization. d. Train employees in the latest aggressive selling techniques.

ANS: B The marketing orientation relies on customer satisfaction rather than the latest sales techniques.

What do the marketing concept and market orientation recognize? a. Sales depend predominantly on an aggressive sales force. b. What the customer thinks he is buying is what is important. c. Price is the most important variable for customers. d. Selling and marketing are essentially the same thing.

ANS: B The perceived product and perceived value are what the customer is buying, and the marketing concept and market orientation have attempted to understand those perceptions.

In which of the following situations is a firm with a production orientation most likely to survive? a. when supply for the product it produces exceeds demand b. when demand for the product it produces exceeds supply c. when there are many small competitors in the marketplace d. when needs of the marketplace are shifting

ANS: B The production orientation can survive in the short term under a variety of conditions; however, if market needs change, long-term survival is difficult.

Which of the following orientations to marketing fails to consider whether what the firm produces most efficiently also meets the needs of the marketplace? a. customer b. production c. market d. product

ANS: B The production orientation forces a company to build whatever it builds best, that is, whatever it has the experience and expertise in doing.

For many years, Procter & Gamble (P&G) viewed its Ivory soap as just plain old soap—and not as a cleansing product that could provide other benefits as well. When it came to Ivory soap, P&G focused on how well it made the soap and not on what customers wanted from a bar of soap. What sort of orientation did P&G have? a. customer b. product c. sales d. market

ANS: C

What does the marketing concept involve? a. selling as much product as possible under the assumption that people will buy more goods and services if aggressive selling techniques are used b. satisfying management's needs and wants with the idea of maximizing profits in the short run c. focusing on customers' wants so that the organization can distinguish its product (or products) from the competitors' products d. selling as much as possible under the assumption that consumers will buy more at lower prices

ANS: C

What is the collaborative effort of people to achieve common objectives? a. empowerment b. effort training c. teamwork d. mediation

ANS: C

What type of management sees marketing as the vehicle to move products out of a company's warehouse to avoid excessive inventory charges? a. production orientation b. societal marketing orientation c. sales orientation d. market orientation

ANS: C

Which of the following describes a market-oriented organization? a. It recognizes the benefits inherent in listening to customer feedback and then carefully calculating the average customer need and building a good or service to satisfy that average need. b. It always achieves profitability through sales volume of its goods and services sold in the market. c. It recognizes that different customer groups want different features or benefits; therefore, it may be necessary to develop different goods, services, and promotional appeals. d. It carefully analyzes the marketplace and divides it into groupings of people who buy the company's goods and services and groupings of people who do not buy the company's goods and services.

ANS: C

One of the reasons given for the decline of the passenger rail industry in Canada is the fact the industry defined its mission as trains and not as transportation sources. What did the railroad industry fail to do? a. empower the consumer b. ignore the marketing concept of serving customer needs and wants c. define its mission in terms of the benefits its customers seek d. have a sales orientation

ANS: C A market-oriented firm defines its business in terms of the benefits its customers seek. Because of the limited way the railroad industry defined its business, it missed an opportunity to define itself in terms of the benefits customers were seeking.

As part of instituting an empowerment program, what should a marketing director do? a. create a customer-service department and place a key staff person in charge of the department b. train the company's staff to judge of the quality of the products the firm produces c. allow all non-management employees to resolve problems on their own without prior approval from their immediate supervisors d. hire 30 new university graduates who have the latest training in marketing management techniques

ANS: C Empowerment refers to firms that give employees expanded authority to solve customer problems on the spot without having to get management's permission first.

Taxi companies in many large metropolitan areas are requiring newly licensed taxi drivers to undergo a two-day training seminar during which they learn basic etiquette and acquire a familiarity with common landmarks and street names. What is the purpose of this training? a. to increase employment levels b. to promote company image by increasing public awareness c. to improve customer service d. to reduce the need of empowerment

ANS: C Leading marketers recognize the role of employee training in customer service.

Mimi Couturier is a design company that specializes in formalwear for women. The company's fashion innovators use computer-assisted design software to create what they think women should wear. The company regularly hires industry experts to examine construction work areas to find waste and inefficiencies that can be eliminated. However, for the last two years Mimi Couturier has lost money, and it has had to lay off some of its work force. What should the company do to avoid this occurrence in future? a. increase its sales force to find more potential customers for the firm b. hire more retail efficiency experts to trace down any production problems c. have someone to study its target market to see what needs and wants should be met by Mimi Couturier d. cut prices so that its prices are at least 10 percent below those of its competitors

ANS: C Mimi Couturier has been production oriented. It should develop a marketing orientation, which means the firm will produce only those items needed by its target market.

Lawler Landscaping Company sells all kinds of ornamental plants. Lawler's management believes that its customers will buy more plants if its salespeople use aggressive marketing techniques because ornamental plants are nonessential items for most homeowners. What type of orientation does Lawler have? a. production b. marketing c. sales d. customer

ANS: C Only the sales orientation assumes that aggressive sales techniques will sell more product, regardless of customer desires and needs.

Due to consumer concerns about skin cancer and other negative outcomes associated with sun exposure, the trend in sun-care products throughout most of the 1990s was in favour of higher-SPF sunscreens. This seems to be changing now, at least for some target segments. In response to the latest trends of teenagers using baby oil, Crisco, and even motor oil to enhance tanning effects, Coppertone and Hawaiian Tropic have introduced new low-UV-protection products. While giving customers want they want indicates a market orientation, creating a potential problem (an increase in skin cancer fatalities) shows a potential absence of which type of orientation? a. sales b. production c. societal marketing d. market

ANS: C Other sun-product companies may be concerned with other market segments and society's long- term interests (societal orientation).

Kinko's copy shops use the equivalent of 10.5 square miles of forest to produce all of the paper needed by the corporation annually. While the company is committed to making a profit, it is also committed to preserving the environment. In 1997, Kinko's wrote an environmental vision in which it committed the company to conserving natural resources. With this 1997 environmental vision, what sort of orientation did Kinko's adopt? a. sales b. product c. societal marketing d. production

ANS: C Societal marketing orientation is the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve individuals' and society's long-term best interest.

What is the effect of redefining the business mission of a mattress manufacturer as "a good night's sleep," rather than stating the mission as "the manufacture of high-quality mattresses"? a. It stifles creativity in discovering opportunities to serve customers. b. It is too broad a statement to be of any real use in serving customers. c. It helps ensure that the firm retains its focus on consumers and does not become preoccupied with its products and internal needs. d. It ensures that the core products will be retained.

ANS: C The broader business mission of "a good night sleep" will stimulate innovation and creativity because not all sleep aids are mattresses. It will lead the company to further growth.

Jewellery stores want to provide their customers with the highest quality of diamonds available at the lowest possible prices. Unfortunately, the lowest-priced diamonds these days are sold by African rebels who use the profits to engage in genocide. Human rights organization have asked jewellers to buy diamonds that are "conflict-free," that is from South Africa, Australia, or Canada. LeeBrant is one retail jewellery store that sells only diamonds that are certified to be from these countries. One could say that LeeBrant has a societal marketing orientation. Which type of orientation do jewellers that are willing to sell the higher priced non-conflict diamonds have? a. production b. product c. market d. sales

ANS: C The other jewellers that continue to sell diamonds purchased from the rebels are more interested in satisfying their customers' desire for lower prices than in serving society.

What does Xerox emphasize by replacing at its own expense any dissatisfied customer's equipment? a. direct selling b. transactional marketing c. management-customer synergy d. customer satisfaction

ANS: D

What does delivering customer value mean? a. promising to deliver customers everything they want at a price that even they cannot believe b. offering customers the lowest price imaginable c. beating the competition's price and delivery time d. paying attention to customer feedback

ANS: D

What does the marketing concept include? a. focusing on competitors' offerings to the marketplace and developing items of equal quality but at a lower price for its customers b. focusing on competitors' offerings to the marketplace and developing higher quality offerings for customers c. achieving short-run profit goals for the organization in order to keep prices as low as possible for its customers d. integrating all of the organization's activities, including production, to satisfy customer wants

ANS: D

What is customer satisfaction? a. a service best handled by the company's customer service department staffed with qualified customer complaint handlers b. your customers' evaluation of your goods and services in terms of whether those goods and services are of the highest quality possible c. your customers' evaluation of your goods and services in terms of whether they have met the customers' expectations of the best price possible d. your customers' evaluation of your goods and services in terms of whether they have met the customers' needs and expectations

ANS: D

Which of the following is the ratio of benefits to the sacrifice necessary to obtain those benefits? a. marketing utility b. opportunity cost c. market quality d. customer value

ANS: D

Which of the following statements about a sales-oriented company is FALSE? a. "We are interested in innovative, unique ways of advertising our services to customers." b. "We usually hire aggressive, goal-oriented sales people." c. "We are interested in new coupon campaigns to promote our products to customers." d. "We are constantly asking customers for ways to improve our products."

ANS: D

Why is a production-oriented company deficient? a. It may not have sufficient production facilities to keep up with heavy market demand for its goods and services. b. It has spent too much time and effort developing low-quality and low-priced products to satisfy a subset of the marketplace. c. It has not invested wisely in the widest variety of products to cover the marketplace. d. It does not consider whether the goods and services it produces most efficiently meet the

ANS: D

Why should firms answer the question, "What is our business?" a. to maximize profits while keeping the employees happy b. to ensure that the firm stays on track and focused on its highest quality goods and services offered to the marketplace c. to ensure that the firm keeps focusing on its goods and services and on the organization's internal needs while avoiding becoming preoccupied with customers d. to encourage innovation and creativity by reminding people that there are many ways to satisfy customer wants

ANS: D

World Wrestling Entertainment (formerly the World Wrestling Federation) is very focused on what its fans want in terms of product licensing and, more importantly, in terms of plot lines and character development. All of the company's activities are integrated so that no employee ever loses sight of the company's desire to satisfy its fans. What sort of orientation does World Wrestling Entertainment have? a. sales b. production c. product d. market

ANS: D

The manufacturer of Rossignol brand skis has a market orientation and adheres to the marketing concept. What would the company most likely do first when reacting to consumer dissatisfaction? a. hire more salespeople b. increase the number of sporting goods stores that carry Rossignol skis c. increase its advertising to underserved markets d. conduct research to determine if its customers' needs have changed

ANS: D A marketing concept and market-oriented philosophy is based on the consumer's wants and needs, and the organization will focus its activities on satisfying these customers by listening to them and revising strategies as necessary.

When light bulbs were first introduced, manufacturers offered one size for all light fixtures. Today you can buy light bulbs in different shapes, different wattages, and different colours. They also differ as to how much electricity they use and their duration. Which of the following BEST describes light bulb manufacturers? a. They are aiming at a goal of profit through maximum sales volume. b. They are sales-oriented companies. c. They miss sales by not concentrating on the average customer. d. They recognize that different customer groups have different needs and wants.

ANS: D One way to implement the marketing concept is to concentrate on a specific group of customers' needs.

Which of the following measures would be the best indicator of whether your organization's personnel have a customer orientation? a. Test employees on their knowledge of customer service techniques. b. Assess each employee's impact on the profitability of the firm. c. Ask each employee's boss if that person is customer oriented. d. Survey customers on how oriented the organization's personnel are to customer needs and desire.

ANS: D The key to assessing how customer-oriented a firm's personnel are is to ask the customer. Only the customer can provide this type of information.

Jamie owns a small moving company in Winnipeg. She has decided to take a few night school business courses because her company is growing quickly and there are many things she does not understand. Should Jamie enroll in a marketing course? a. No, because Jamie can hire an ad agency and will not need firsthand marketing knowledge. b. Yes, because marketing is synonymous with selling, and Jamie will want to learn aggressive sales techniques to continue the growth of the company. c. Yes, because marketing helps businesses sell products that people don't need. d. Yes, because the concept of marketing will help Jamie to better satisfy her customers.

ANS: D The marketing concept stresses the commitment to satisfying customer needs and wants with an entire range of marketing tools, not just selling or advertising.

If a company uses a sales orientation, what will consumer complaints most likely result in? a. attempts to cut production costs b. product reinvention c. continuous market research d. a modification of the sales presentation

ANS: D The sales orientation relies on aggressive sales techniques to fuel business.

One way to identify the orientation of a firm is to examine its primary goal. If a firm sells to achieve profitability through sales volume, what would it probably be? a. sales oriented b. retail oriented c. production oriented d. price oriented

ANS:A