BUS 346 Midterm 2

Jason rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20. His fixed costs are $100,000 and his target profit is $20,000. For Jason, to earn his target profit, he will need to rent out ________ rooms. a. 1,500 b. 20,000 c. It cannot be determined from the information provided. d. 100 e. 1,000

1500

The advertising message admonition, "People are not looking for quarter-inch drill bits; they are looking for quarter-inch holes," suggests that advertising messages need to a. focus on quality. b. focus on solving problems. c. engage in mild puffery. d. emphasize technology. e. inform consumers about opportunities.

Focus on solving problems

Advertisers can determine how effective their media mix has been in reaching their target audience by calculating __________ of the advertising schedule. a. the conversion rate b. the total GRP (gross rating point) c. the USP d. the media mix e. the click rate

The total GRP

Assume the demand for electricity, a necessity with few substitutes, is 0.2. If the electric company raised its rates by 10 percent, we would expect a. a 2 percent increase in quantity demanded b. a 2 percent decrease in quantity demanded c. a 10 percent increase in quantity demanded d. a 10 percent decrease in quantity demanded e. a 5 percent decrease in quantity demanded

a 2 percent decrease in quantity demanded

________ entails a sense of purpose for the firm that is higher than simply making a profit by selling products and services. a. Corporate social responsibility b. Marketing analytics c. The four Ps d. Conscious marketing e. Triple bottom line

conscious marketing

David is considering the question, "Did our actions have a negative impact on any stakeholder group?" David is addressing marketing ethical issues in the ________ phase of the strategic marketing planning process. a. control b. planning c. situation analysis d. brainstorming e. implementation

control

If a manufacturer had a full range of products, in a number of container sizes, which kind of store would the company be LEAST likely to choose as a retailing partner? a. convenience stores b. conventional supermarket c. supercenter d. warehouse club e. full-line discount stores

convenience stores

The pricing method that considers what consumers may be willing to pay for a particular product based on the value received over the product's entire lifetime is the ________ pricing method. a. reference-based b. cost of ownership c. market-based d. improvement value e. cost-based

cost of ownership

________ refers to the process by which the receiver interprets the sender's message. a. Encoding b. Decoding c. Precoding d. Tracking e. Feedback

decoding

The increased use of customer databases has enabled marketers to identify and track consumers over time and across purchase situations, and has contributed to the rapid growth in a. direct marketing b. publicity c. public relations d. sales promotions e. media advertising

direct marketing

Daniella is creating an advertising message designed to appeal to consumers' fears of having their home broken into. Daniella's message will focus on a(n) ________ appeal. a. niche marketing b. emotional c. institutional d. reminder e. informational

emotional

Carlos has identified four potential market segments for his Rent-A-Nurse service. He will now compare the segments to see whether they are distinct from each other. Carlos is evaluating whether each segment is a. responsive. b. substantial. c. identifiable. d. reachable. e. profitable.

identifiable

A local furniture store buys furniture from various manufacturers and resells the furniture to its customers. What type of marketing channel does this represent? a. indirect b. horizontal c. vertical d. direct e. simple

indirect

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a ________________ price elasticity demand. a. income effect b. substitution effect c. inelastic d. elastic e. cross-price

inelastic

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) _______ price elasticity demand. a. cross-price b. elastic c. inelastic d. substitution effect e. income effect

inelastic

Jamara knows that his spring-break travel packages are the best deal on campus. He also knows his competitor is sloppy, often waiting until the last minute to provide the needed tickets and documents to students buying his island packages. Jamara wants to develop an advertising message that emphasizes the key benefits he provides. He will develop a __________ appeal. a. niche marketing b. emotional c. institutional d. reminder e. informational

informational

When Talbots, an upscale women's clothing store, tries to portray an image of "traditional, conservative, and with good taste," it is appealing to its target market's a. lifestyle b. geodemographics c. demographics d. loyalty e. Tapestry segment

lifestyle

A _______ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen. a. target return pricing b. sales orientation c. target profit d. maximizing profits e. status quo

maximizing profits

Corporate pilot fish are former employees who start a new business based primarily on contacts and contracts with their old company. A corporate pilot fish would probably pursue a __________ targeting strategy. a. micromarketing b. macromarketing c. differentiated d. benefit-based e. undifferentiated

micromarketing

Sales promotions include all of the following except a. point-of-purchase displays b. free samples c. online ads d. coupons e. rebates

online ads

A ________ is often used to illustrate the position of a firm's products or brands in consumers' minds. a. perceptual map b. mass marketing analysis c. psychographic profile d. loyalty timeline e. Tapestry analysis

perceptual map

A __________ is often used to illustrate the position of a firm's products or brands in consumers' minds. a. loyalty timeline b. PRIZM analysis c. perceptual map d. psychographic profile e. mass marketing analysis

perceptual map

________ is the two-way flow of communication between buyer and a seller that is designed to influence the buyer's purchase decision. a. Public relations b. Direct marketing c. Advertising d. Sales promotion e. Personal selling

personal selling

Sharon knew that her established customers liked her product much better than her competitor's. She was planning to expand into new markets, and she was considering pricing. She was leaning toward charging a higher price than competitors to help demonstrate that hers was a high-quality product. Sharon was considering a. advantageous pricing. b. a top of market strategy. c. the value of quality. d. premium pricing. e. differential pricing.

premium pricing

Sherry knew that her established customers liked her product much better than her competitor's. She was planning to expand into new markets, and she was considering pricing. She was leaning toward charging a higher price than competitors to help demonstrate that hers was a high-quality product. Sherry was considering a. a top of market strategy b. premium pricing c. differential pricing d. advantageous pricing e. the value of quality

premium pricing

For which of the following is demand likely to be least sensitive to price increases? a. spring break vacations b. restaurant meals c. a specific brand of cereal d. theater tickets e. prescription drugs

prescription drugs

French luxury goods manufacturer and retailer Hermès is known for making expensive leather goods. But paying $300,168 for a handbag at auction, which is over the standard retail price of $280,000, is extraordinary, and not for the casual shopper. The handbag is considered a a. product in demand b. custom product c. inelastic product d. prestige product e. elastic product

prestige product

Integrated marketing communications represents the ________ element in the six Ps of a firm's marketing mix. a.product b. pricing c. partnering d. place e. promotion

promotion

Baby Boomers represent a huge demographic segment for travel marketers. Baby Boomers are also heavily motivated by self-fulfillment, which creates the possibility of ________ segmentation. a. psychographic b. geographic c. self-concept d. benefit e. behavioral

psychographic

A firm that places an emphasis on developing and maintaining positive relationships with the media is focusing on a(n) ________ strategy. a. personal selling b. mobile marketing c. advertising d. direct marketing e. public relations

public relations

Florida Heat Pump Manufacturing Company is offering a free, all-expenses-paid trip to Las Vegas for HVAC dealers that sell at least twenty units this year. Florida Heat Pump is using a __________ promotional strategy. a. pull b. publicity c. push d. posttesting e. puffery

push

With access to the Internet nearly universal in the United States, many potential market segments have become more a. reachable b. substantial c. perceptive d. identifiable e. quantifiable

reachable

Brad always buys and uses Nike brand golf balls. If he finds a Titleist or Callaway ball in the rough, he gives it away. Brand loyal golfers like Brad allow Nike to charge a higher price and not lose many sales. By building a strong brand, Nike has effectively a. reduced the price elasticity of demand for its products. b. increased the income effect for its products. c. shifted the golf ball market from a monopoly to pure competition. d. focused on the competitive parity point for its products. e. increased the cross-price elasticity for its products.

reduced the price elasticity of demand for its products

Each year in December, Anheuser-Busch runs television ads featuring the Clydesdale horses pulling a stagecoach with an Anheuser-Busch logo. The message is low-key, wishing everyone well during the holiday season. This is an example of _________ advertising. a. reminder b. discussive c. persuasive d. institutional e. informative

reminder

When Walmart promises to purchase larger quantities if a manufacturer will lower its wholesale price, it is exhibiting ________ power. a. coercive b. knowledge c.reward d. referent e. legitimate

reward

Cary is the marketing manager for an automobile dealership. His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent. His firm is using a ________ orientation a. product development b. customer satisfaction c. competitive d. sales e. profit

sales

Many years ago Honda's Accord and Ford's Taurus were the top two selling cars in the United States. As the year was coming to an end, Ford cut the price of the Taurus, hoping to outsell the Accord and allow Ford to claim that "Taurus is the best-selling car in America." Ford was using a ___________________ pricing strategy. a. status quo b. sales orientation c. target profit d. maximizing profits e. target return

sales orientation

Red Bull sends out student brand managers to distribute free samples to their peers. Which form of marketing communication is this? a. mobile marketing b. direct marketing c. public relations d. sales promotion e. advertising

sales promotion

Which of the following would not be used in calculating the profitability of a segment? a. segment perceptions b. segment size c. segment adoption percentage d. profit margin percentage e. fixed costs

segment perceptions

When Victoria's Secret offers different product lines, such as its Pink line, it is trying to capture the market by a. focusing exclusively on its Pink brand. b. segmenting, targeting, and positioning. c. offering everything to everyone. d. trying lots of options to find out which one works.e. continual test marketing.

segmenting, targeting, and positioning

Regina just bought a gourmet bagel store. She is working with a freelance graphic artist who is designing her logo and print advertisements. Regina is spending days looking over the various designs and color options. She needs to remember that the creative aspect of advertising design a. should not overshadow the message. b. should always include coupons. c. will determine pretesting and posttesting options. d. is everything. e. dictates tracking alternatives.

should not overshadow the message

Regardless of the objective of an advertising campaign, each campaign's objectives must be a. designed for use in both a pull and a push strategy. b. sincere and emotional. c. consistent with those of the available media. d. either informative or persuasive but not both. e. specific and measurable.

specific and measurable

When Delta increases its average fares, American Airlines and United often follow with similar increases. This is an example of a. customer orientation b. status quo pricing c. competitor orientation d. customer orientation e. adding value

status quo pricing

Sarah goes through the newspaper looking for coupons to help reduce her living expenses. Her roommate Paige doesn't read newspapers, let alone look through them for coupons. But Paige filled out a form from inside a cereal box entering her in a drawing for free exercise equipment. What kind of sales promotion reached Paige? a. sweepstakes b. premium c. deal d. loyalty program e. contest

sweepstakes

Whenever the president of the local public university promotes the institution, he emphasizes the university's price (much lower than neighboring private colleges) and high quality. He is positioning the institution based primarily on a. the value proposition b. product attributes c. symbols d. competitive comparisons e. profitability

the value proposition

Generally, the larger and more sophisticated the channel member, the less likely that it will a. use intensive distribution. b. rely on marketing research. c. use multichannel marketing. d. be concerned about competitive actions. e. use supply chain intermediaries.

use supply chain intermediaries

Franchising is the most common type of contractual ________ marketing system. a. corporate b. vertical c. conventional d. administered e. cooperative

vertical

All of the following are questions posed in the ethical decision-making metric except a. Can I give a clear explanation for my action? b. Would I want to see this action described on the front page of the local paper? c. Will this action help advance my career? d. Would the person I admire most engage in this activity? e. Will I be able to look at myself in the mirror and respect what I see?

will this action help advance my career

Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue. For Raymond, the total cost of opening the new branch and remaining open for one year will be: a. $605,000. b. $650,000. c. $500,000. d. $450,000. e. $550,000.

550,000

Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all customers see the same value in a product. To analyze how many units will be sold at any given price point, marketers draw on a. the law of averages b. target return strategies c. a sales orientation d. multiple regression analyses e. a demand curve

a demand curve

Toothpastes sold in supermarkets and pharmacies promise various results, such as whiter teeth, protection against gum disease, tartar control, or fresh breath. Toothpaste marketers are using ________ segmentation. a. benefit b. geodemographic c. psychographic d. loyalty e. demographic

benefit

After a firm has identified the various stakeholders and their issues and gathered available data related to an ethical decision-making situation, all parties relevant to the decision should a. engage in legal discourse b. choose a course of action c. re-identify the issues d. brainstorm for alternatives e. vote, with the majority deciding the best course of action

brainstorm for alternatives

In a(n) ________ marketing channel, none of the participants have any control over the others. a. corporate b. contractual c. administered d. conventional e. cooperative

conventional

The key to a successful emotional advertising appeal is to use the emotion to a. make consumers cry. b. get consumers to think about the benefits of the product. c. deliver a logical message. d. create a bond between the consumer and the brand. e. balance social marketing with product-focused advertising.

create a bond between the consumer and the brand

________ means converting the sender's ideas into a message, which could be verbal, visual, or both. a. Encoding b. Integrated marketing communications c. Decoding d. Precoding e. Tracking

encoding

Karen has identified four potential market segments for her Rent-A-Chef home meal catering service. The next step is to a. develop a positioning strategy. b. evaluate the attractiveness of each segment. c. establish her overall objectives. d. categorize each market segment by consumer demographics. e. decide on a targeting strategy

evaluate the attractiveness of each segment

Internet buyers are sometimes surprised to see online retailers using information about their past purchases to customize promotions targeted to them the next time they visit the retailer's website. The retailer is using the information to a. shift from a general merchandise retailer to a private-label retailer. b. increase the share of wallet from its best customers. c. create traffic in its brick-and-mortar stores. d. comply with Homeland Security requirements. e. reward customer loyalty.

increase the share of wallet from its best customers

Retailers focusing on increasing sales to their best customers are attempting to a. slay the category killers. b. drive their supply chain. c. increase their share of wallet. d. compete with off-price retailers. e. combat the inroads made by big-box specialty retailers.

increase their share of wallet

Which of the following is NOT one of the broad factors manufacturers must consider when establishing a strategy for getting their products into the hands of the ultimate customer? a. developing retail strategy b. managing a multichannel strategy c. lowering production costs d. choosing retail partners e. identifying types of retailers

lowering production costs

Gretchen has just started as a fashion marketing intern for an up-and-coming design firm. She expected to begin right away implementing the four Ps she had learned about in class. Instead, she was asked to work on a project identifying important events where celebrities might wear the fashions. Gretchen soon realized that this activity was part of __________, directly related to marketing. a. a push-pull strategy b. press release development c. cause-related marketing d. sales promotions e. public relations

public relations

Marlie designs and manufactures specialty furniture. She has a number of unique products but can only produce in limited quantities. Marlie will probably NOT use a market penetration strategy because a. she could not meet a rapid rise in demand. b. there are few barriers to competitive entry in the market. c. she would have to determine zone pricing discounts. d. the experience curve effect would drop unit costs too rapidly. e. a low price would indicate low quality. B. Supply Chain

she could not meet a rapid rise in demand

One of the reasons marketers use loyalty segmentation is a. the high cost of obtaining new customers b. government tax incentives c. accounting difficulties associated with identifying new customers d. rapid population increases e. the failure of micromarketing as a workable strategy.

the high cost of obtaining new customers

A customer orientation toward pricing implicitly invokes the concept of a. profit. b. knowing the dimensions of the target market. c. the income effect. d. positioning. e. value. B. Sales Orientation

value

Bertone's Office Supplies has decided to branch out from its existing stores. It plans to start sending out a catalog and to sell its products online. Bertone's is adopting: a. selective distribution. b. an extreme value strategy. c. a multichannel strategy. d. a service retailing philosophy. e. exclusive distribution.

a multichannel strategy

P&G's Tide laundry detergent has been around since 1948 and is still a market leader. P&G has used __________ advertising to reposition Tide several times over the product's life, trying to motivate new consumer segments to use the product. a. persuasive b. institutional c. reminder d. discussive e. informative

persuasive

________ involves defining the firm's marketing mix variables so that target customers have a clear, distinctive, desirable understanding of the firm's offerings relative to competitors' offerings. a. Positioning b. Processing c. Perceptualizing d. Proportioning e. Prospecting

positioning

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products by a. shifting the market from a monopoly to pure competition. b. reducing the price elasticity of demand. c. increasing the income effect. d. making demand more oligopolistic and less monopolistic. e. reducing fixed costs and increasing the gray marketing effect.

reducing the price elasticity of demand

How might Starbucks ensure that it behaves in a socially responsible way toward members of its supply chain? a. Social responsibility isn't relevant where channel partners are concerned; it has to do with serving society as a whole. b. It can pay its employees minimum wage as required by law. c. It can purchase coffee beans from suppliers who pay coffee growers a fair price. d. It can offer healthy drinks and snacks in its stores. e. It can use cups made from recycled paper.

It can purchase coffee beans from suppliers who pay coffee growers a fair price.

If you're a manufacturer, and you want to showcase your product in a store that has a narrow but deep selection of merchandise and where sales associates can assist customers with their selections, you'd likely choose a. an extreme value retailer. b. a specialty store. c. a department store. d. a category specialist. e. a warehouse club.

a specialty store

Informative advertising is used to a. convince consumers to take action. b. create and build brand awareness. c. prompt repurchase of a product. d. trigger an emotional response. e. gather information about consumers

create and build brand awareness

Heartland Plantation produces organic food products like stone-ground grits and wild rice. The company has limited production capacity and wants to carefully control where its products are sold. Heartland will likely choose __________ distribution intensity. a. exclusive b. monopolistic c. luxury d. variable e. intensive

exclusive

A differentiated targeting strategy can allow a firm to obtain a bigger share of the overall market; this strategy a. requires the use of advanced advertising techniques. b. is ineffective without multiple brand names. c. rarely works. d. is likely more costly than an undifferentiated strategy. e. is the cheapest option.

is likely more costly than an undifferentiated strategy

Ron wants to develop an Internet auction-based business and is working through the STP process. After establishing his objectives, describing potential market segments, and evaluating the attractiveness of each segment, Ron now has to a. select a target market b. differentiate his product line c. consider future customer loyalty d. create a perceptual map e. divide geographic segments into lifestyle groups

select a target market

Walmart's customers have come to expect to find P&G products in stores, and P&G depends on Walmart to purchase a good portion of its output to sell to its own customers. This scenario represents the first phase of a a. quick-response system b. vertical marketing system c. reward marketing system d. virtual marketing system e. horizontal marketing system

vertical marketing system

One of the difficulties in measuring the effectiveness of IMC efforts is the ________, where consumers do not act immediately after receiving a marketing communication. a. decoding decomposition effect b. lagged effect c. click-through delay d. noncommittal effect e. viral effect

lagged effect