Marketing Management Chap 12-18

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24) A(n) ________ marketer discovers solutions customers did not ask for but to which they enthusiastically respond. A) laidback B) responsive C) inexperienced D) creative E) anticipative

116) An alternative to being a follower in a large market is to be a leader in a small market.

TRUE

54) Market diversification shifts the company's focus to unrelated industries.

TRUE

78) Market challengers are companies that attack the leader and other competitors in an aggressive bid for further market share.

TRUE

79) Attacking the market leader proves successful and beneficial only when the leader is not serving the market well.

TRUE

81) Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts.

TRUE

82) Guerrilla attacks consist of small, intermittent attacks, conventional and unconventional, including selective price cuts, intense promotional blitzes, and occasional legal action.

TRUE

147) When a company requires customers to pay today's price and all or part of any inflation increase that takes place before delivery, it is known as ________. A) special-customer pricing B) an escalator clause C) delayed quotation pricing D) unbundling E) time pricing

15) E&OE produces and markets its own brand of skincare products using herbal remedies and natural ingredients through standalone stores as well as an online portal. E&OE is a(n) ________ retailer. A) off-price B) specialty C) discount D) department E) extreme value

15) Products such as insurance, cemetery plots, and smoke detectors are examples of ________ goods that are products that the consumer does not know about or does not normally think of buying. A) specialty B) unsought C) heterogeneous shopping D) homogeneous shopping E) convenience

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

16) Aldi, Lidl, Dollar General, and Family Dollar are examples of ________, as they carry a more restricted merchandise mix than discount stores at even lower prices. A) off-price retailers B) extreme value stores C) superstores D) convenience stores E) specialty stores

19) Companies that sell products door-to-door or at home sales parties are engaging in ________. A) franchising B) network marketing C) direct-response marketing D) corporate selling E) direct marketing

2) Which of the following is an example of a pure tangible good? A) massage B) shampoo C) e-mail D) restaurant meal E) air travel

20) BRZ Shoes positions itself as a young, adventurous brand. Its logo and brand communication try to give consumers a feeling of excitement and bravery. These ads appeal to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social

21) Which of the following is an example of direct marketing? A) E&OE sells its herbal skincare products exclusively through its standalone stores. B) TCJ is a telemarketing firm that sells products from a number of different suppliers. C) Jayne's sells most of its products to customers through home sales parties. D) J3 is a storeless retailer that organizes the retail activity of the employees of four firms. E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.

22) The ________ marketing sales system works by recruiting independent businesspeople who act as distributors. A) catalog B) multilevel C) direct-response D) corporate E) direct

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

23) Which of the following is the first step in setting a pricing policy? A) selecting a pricing method B) selecting the pricing objective C) determining demand D) estimating cost E) analyzing competitors' costs, prices, and offers

25) Which of the following will help a service provider overcome the limits imposed by the inseparability of services? A) using differential pricing B) working with larger customer groups C) providing complementary services D) concentrating on physical evidence and presentation E) standardizing the service process

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

29) A market-penetration pricing strategy is most suitable when ________. A) a low price slows down market growth B) production and distribution costs fall with accumulated production experience C) a high price dissuades potential competitors from entering the market D) the market is characterized by inelastic demand E) a low price encourages actual competition

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

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

6) Marketers must see themselves as benefit providers. For example, when a shopper purchases new shoes, he or she expects the shoes to cover his or her feet and allow him or her to walk unobstructed. This is an example of what level in the consumer-value hierarchy? A) pure tangible good B) basic product C) augmented product D) potential product E) generic product

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

62) Which of the following auctions is characterized by one seller and many buyers? A) Walrasian auctions B) ascending bid auctions C) closed auctions D) sealed-bid auctions E) reverse auctions

65) ________ auctions let would-be suppliers submit only one bid; they cannot know the other bids. A) Descending bid B) Sealed-bid C) English D) Dutch E) Reverse

67) Epic Inc., a firm that produces chairs for offices, uses comparative advertising to inform consumers that its products offer the same features and quality as the competitor's. This is an example of a(n) ________ attack. A) guerilla B) frontal C) encirclement D) bypass E) flank

68) Often, a service problem arises from a customer's lack of understanding or ineptitude. Which of the following can help to minimize customer failures? A) giving customers exclusive primary service packages B) redesigning processes to simplify service encounters C) using differential pricing and shared services D) minimizing service intangibility E) working with more customers at the same time

69) Pepsodent launched a new product that could whiten teeth, fight decay, and maintain fresh breath. Observing that Pepsodent did not focus on the dental sensitivity aspect, Colgate introduced a toothpaste which did all of the above and also protected sensitive teeth. This is an example of a(n) ________ attack. A) frontal B) flank C) guerrilla D) encirclement E) bypass

7) Which of the following is an example of a pure service? A) air travel B) psychotherapy C) baby oil D) a laptop E) a restaurant meal

75) Which of the following is NOT one of the guidelines for managing luxury brands? A) Besides brand names, other brand elements — logos, symbols, packaging, signage — can be important drivers of brand equity for luxury products. B) Secondary associations from linked personalities, events, countries, and other entities should be avoided. C) Luxury brands must employ a premium pricing strategy, with strong quality cues and few discounts and markdowns. D) All aspects of the marketing program for luxury brands must be aligned to ensure high-quality products and services and pleasurable purchase and consumption experiences. E) Luxury brands must carefully control distribution via a selective channel strategy.

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

8) In the ________ type of retailing, customers usually find their own goods, although they can ask salespeople for assistance. A) self-service B) self-selection C) full-service D) limited service E) limited-selection

8) Which of the following is true for services? A) All services are people-based, while goods are equipment-based. B) Service providers can be both for-profit or nonprofit. C) All service companies follow the same process to deliver their services. D) The client's presence is a hindrance during the service delivery process. E) Service providers develop similar marketing programs for personal services and business services.

82) Stores are using ________ to measure a product's handling costs from the time it reaches the warehouse until a customer buys it in the retail store. A) electronic data interchange (EDI) B) direct product profitability (DPP) C) radio-frequency identification (RFID) D) global positioning systems (GPS) E) compounded annual grown rate (CAGR)

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

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

83) Susanna wanted to check out a new salon in her locality, so she decided to go for a hair styling session. She was very happy with the way her stylist connected and related with her concerns. She is judging the service based on its ________. A) promotional marketing B) functional quality C) technical quality D) search qualities E) external marketing

85) A ________ is the set of all products and items a particular seller offers for sale. A) product line B) product mix C) product extension D) product system E) product class

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

109) Madame Tussaud's wax museum is a popular tourist attraction in London. The museum charges higher entry rates for tourists compared to locals. This form of price discrimination is known as ________ pricing. A) customer-segment B) image C) location D) special customer E) special event

120) ________ refers to buying large carload lots and dividing them into smaller units before shipping them out to consumers. A) Bulk breaking B) Containerization C) Wholesaling D) Warehousing E) Broking

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.

126) A(n) ________ interface refers to any place at which a company seeks to manage a relationship with a customer, whether through people, technology, or some combination of the two. A) customer-service B) product-customer C) tangible user D) attentive user E) crossing-based

133) One of the ways to change the course of a brand is to modify the product. Under product modification, ________ improvement adds size, weight, materials, supplements, and accessories that expand the product's performance, versatility, safety, or convenience. A) feature B) quality C) style D) size E) technological

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

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

106) Although Brenda previously used the US Postal Service because it offered better prices on package shipping, she now uses only FedEx, because it gives her the facility of shipping from any FedEx location 24 hours a day. Which of the following factors led to Brenda's customer switching behavior? A) inconvenience B) pricing C) response to service failure D) ethical problems E) involuntary switching

108) Purchasers of theatre tickets receive a 20 percent discount if they purchase and pay for the full season at one time. This is an example of what type of product-mix pricing? A) mixed bundling B) pure bundling C) cross-promotion D) captive pricing E) two-part pricing

11) Because ________ are purchased frequently, marketers should make them available in many locations, charge only a small markup, and advertise heavily to induce trial and build preference. A) nondurable goods B) durable goods C) services D) unsought goods E) specialty goods

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

11) Services high in ________ qualities have characteristics that the buyers can evaluate before purchase. A) search B) experience C) credence D) privacy E) storing

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.

116) When Aaron went to his doctor for his annual checkup, he was asked to undergo a number of tests. Although the doctor assured Aaron that the tests were routine, Aaron thinks that the doctor is hiding a grave problem from him. What kind of a gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception

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

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

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

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

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

17) A factory outlet is an example of a(n) ________ retailer. A) off-price B) specialty C) discount D) department E) catalog

17) Which of the following will most help service providers overcome the limitation of intangibility of services when positioning itself? A) using brand symbols B) sharing services C) working with larger groups D) cultivating nonpeak demand E) creating a service blueprint

19) BRZ Shoes targets the youth market with vibrant, visually appealing ads in modern styles. BRZ ads appeal to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social

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

2) ________ price refers to what the consumers feel the product should cost. A) Fair B) Typical C) Usual discounted D) List E) Maximum retail

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.

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

26) Which of the following steps will help service firms to increase their quality control? A) standardizing the service-performance process B) providing complementary services to customers C) giving personnel authority in handling situations D) adopting differential pricing E) cultivating nonpeak demand

27) Companies who believe that higher sales volume leads to lower unit costs and higher long-run profits are attempting to ________. A) maximize their market share B) skim the market C) become a product-quality leader D) merely survive in the market E) maximize their current profits

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

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

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

31) In which of the following cases is a service provider trying to increase nonpeak demand? A) A fine dining restaurant is promoting a breakfast service in addition to its popular lunch and dinner options. B) An upscale restaurant has a cocktail lounge where customers can wait until a table is ready. C) AXA Bank set up automated teller machines so that its customers could avoid standing in line. D) Chesterton College hired part-time teachers as enrollment increased significantly. E) Big department stores usually hire extra staff to handle the rush during the holiday season.

32) If Microsoft announces plans for a new-product development, smaller firms may choose to concentrate their development efforts in other directions to avoid head-to-head competition. In this example, Microsoft is employing a ________ defense strategy. A) preemptive B) counteroffensive C) mobile D) flank E) contraction

32) Which of the following is a benefit of franchising for franchisees? A) The franchisee finds it easier to borrow money from financial institutions. B) The franchisee receives ownership of the franchisor's trademark. C) The franchisee must change its operations to suit those of the franchisor. D) The franchisee collects royalty payments from the franchisor. E) The franchisee is paid by the franchisor for being part of the system.

35) Walmart has decided to hire extra clerks during the holiday season. It is said to be ________. A) matching its supply with the existing demand B) generating nonpeak demand C) increasing its customer participation D) sharing its services E) facilitating for its future expansion

37) Consumers are less price sensitive when ________. A) price is only a small part of the total cost spent on the product over its lifetime B) they perceive the higher prices to be unjustified C) they change their buying habits regularly D) there are many substitutes and competitors in the market E) they are buying high-cost items

38) Many products can be differentiated in terms of their ________, which is its size, shape, or physical structure. A) form B) prototype C) architecture D) model E) blueprint

43) Costs that do not vary with production levels or sales revenue are known as ________ costs. A) overhead B) variable C) average D) opportunity E) total

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

45) When ConAgra foods decided to cut $250 million in costs to return to a $1 price point (after sales dropped as a result of raising prices $0.25 to cover higher commodity costs), it was using ________. A) target costing B) experience-curve pricing C) ceiling pricing D) the learning curve E) promotional price elasticities

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

48) Experience-curve pricing ________. A) assumes competitors are weak followers B) allows products to project a high quality image C) is applicable only to manufacturing costs D) focuses on reducing fixed costs E) is generally risk-free

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.

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

5) The way the user performs the tasks of getting and using products and related services is the user's total ________. A) consumption system B) consumable system C) consistent use system D) augmented system E) potential system

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

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

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

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

57) ________ pricing is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality. A) Value B) Going-rate C) Auction-type D) Markup E) Perceived-value

58) A retailer who utilizes a(n) ________ policy charges a constant low price with little or no price promotions and special sales. A) everyday low pricing B) high-low pricing C) low cost D) going-rate pricing E) auction-type pricing

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

58) Which of the following is true for the retail industry? A) Discount stores and catalog showrooms are competing for the same customers. B) Upscale retailers see a decline in sales as middle-market retailers thrive. C) Small, specialized retailers are crowding out larger, more diverse retailers. D) Store retailing sees no competition from nonstore retailing. E) Discount stores are not doing as well as middle-market retailers.

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

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

89) The ________ of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. A) consistency B) depth C) width D) length E) composition

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

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

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

98) Armac Ltd. is a sluice-box manufacturer based in China. A sluice-box is used for gold prospecting. Armac is interested in selling a few of its machines to an American mining company, but it wants 95 percent of the machines' price in gold and the rest in ores recovered by using the machines. This is an example of a ________. A) buyback arrangement B) functional discount C) barter deal D) compensation deal E) sealed bid

98) Companies may wish to implement a(n) ________ to achieve more growth, to realize higher margins, or simply to position themselves as full-line manufacturers. A) up-market stretch B) rebranding plan C) outsourcing strategy D) disintermediation policy E) vertical integration strategy

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

103) ________ reward dealers for participating in advertising and sales support programs. A) Functional discounts B) Trade discounts C) Promotional allowances D) Rebates E) Quantity discounts

108) Dean recently had a BRZ broadband connection installed. However, the connection was poor and he didn't get the quality he required. He contacted BRZ about the problem, but the company did not solve his problem. Dean switched to Blue Broadband. Which of the following was the cause of Dean's switching behavior? A) involuntary switching B) competition C) response to service failure D) service encounter failures E) inconvenience

109) When Mercedes successfully introduced its C-Class cars at $30,000 without injuring its ability to sell other Mercedes cars for $100,000, it was an example of a successful ________. A) two-way stretch B) line pruning C) down-market stretch D) up-market stretch E) choice reduction

127) A dance school in the Bronx teaches professional hip-hop and salsa classes. It is experiencing an increase in student admissions, which is leading to substantial improvement in profits. The school is going through the ________ phase of its life cycle. A) decline B) stagnancy C) growth D) introduction E) maturity

130) During the ________ stage of a product's life cycle, sales show a downward drift and profits erode. A) introduction B) growth C) decline D) obsolescence E) maturity

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

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

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

148) When a company maintains its price but removes or prices separately one or more elements that were part of the former offer, such as free delivery or installation, it is known as ________. A) escalating B) differentiation C) unbundling D) reverse discounting E) delayed quotation pricing

26) A(n) ________ is a storeless retailer serving a specific clientele — usually employees of large organizations — who are authorized to buy from a list of retailers that have agreed to give discounts in return for inclusion on the list. A) direct-selling vendor B) direct marketing vendor C) buying service D) automatic vendor E) corporate retailer

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

33) Jake wants to open a Subway franchise in his small town. To do this, he must pay the company a ________ fee. A) slotting B) title C) royalty D) merchandising E) residual

4) The reservation price, the maximum that most consumers will pay for a given product, is known as the ________ price. A) expected future B) usual discounted C) upper-bound D) typical E) historical competitor

4) When companies search for new ways to satisfy customers and distinguish their offering from others, they look at the ________ product, which encompasses all the possible augmentations and transformations of the product. A) consumption B) expected C) potential D) augmented E) basic

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

68) The ________ attack can be used when the challenger spots areas where the opponent is underperforming. A) encirclement B) frontal C) flank-geographic D) backwards-flank E) guerilla

7) In ________ retailing, salespeople are ready to assist in every phase of the "locate-compare-select" process. A) self-service B) self-selection C) full-service D) limited service E) limited-selection

96) A company positioned in the "middle" market introduces a lower-priced product line. What type of line-stretching is this? A) home stretch B) up-market stretch C) down-market stretch D) maintenance stretch E) two-way stretch

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

18) A brand that is action-oriented and causes consumers to engage in physical actions appeals to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social

18) Avon, Tupperware, and Southwestern Company of Nashville are among companies in the multibillion-dollar ________ industry, which involves selling door-to-door or at home sales parties. A) direct marketing B) catalog showroom C) direct selling D) automatic vending E) buying services

20) Which of the following is an example of direct selling? A) E&OE sells its herbal skincare products exclusively through its standalone stores. B) TCJ is a telemarketing firm that sells products from a number of different suppliers. C) Jayne's sells most of its products to customers through home sales parties. D) J3 is an online shopping portal where customers can buy directly from manufacturers. E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.

21) ________ refer(s) to logos, symbols, characters, and slogans that service providers use in order to make the service and its key benefits more tangible. A) Brand engagement B) Brand orientation C) Brand elements D) Brand loyalty E) Brand equity

24) Service quality depends on who provides them, when and where they are provided, and to whom they are provided. Thus, services are highly ________. A) inseparable B) tangible C) variable D) perishable E) intangible

25) A firm that is plagued with overcapacity, intense competition, or changing consumer desires would do better if it pursues ________ as its major objective. A) market skimming B) product-quality leadership C) survival D) profit maximization E) market penetration

27) An independent retailer using a central buying organization and joint promotion efforts with other retailers is part of a ________. A) corporate chain store B) voluntary chain C) retailer cooperative D) merchandising conglomerate E) franchise organization

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.

28) A ________ is a retail firm owned by its customers. Members contribute money to open their own store, vote on its policies, elect a group to manage it, and receive dividends. A) retailer cooperative B) voluntary chain C) consumer cooperative D) merchandising conglomerate E) franchise organization

28) Jake had an appointment at the doctor's office, but couldn't make it on time due to traffic. By the time he arrived, the doctor had already begun with the next patient. This illustrates the ________ of services. A) variability B) heterogeneity C) perishability D) intangibility E) homogeneity

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

3) The five product levels constitute a ________. At each level more customer value is added. A) product line B) business model C) customer value-hierarchy D) value grid E) demand chain

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

31) When Apple introduced its iPhone, it was priced at $599. This allowed Apple to earn the maximum amount of revenue from the various segments of the market. Two months after the introduction, the price had come down to $399. What kind of a pricing did Apple adopt? A) loss-leader pricing B) market-penetration pricing C) market-skimming pricing D) target-return pricing E) value pricing

31) Which of the following is true for franchisees? A) The franchisee is paid by the franchisor to be part of the franchise system. B) The franchisee licenses a trademark to the franchisor. C) The franchisee must change its operations to suit those of the franchisor. D) The franchisee collects royalty payments from the franchisor. E) The franchisee owns the trade or service mark.

33) Cocktail lounges in restaurants are examples of ________. A) differential pricing B) cultivating nonpeak demand C) complementary services D) reservation systems E) shared services

35) The first step in estimating demand is to ________. A) analyze competitors' cost B) select a pricing method C) understand what affects price sensitivity D) calculate fixed costs E) decipher the experience curve

36) Kaya, a chain of skin clinics, requests each new visitor to fill in their own details on a printed form. This is a step in ________. A) increasing its peak-time efficiency B) creating nonpeak demand C) increasing consumer participation D) sharing its services E) facilitating its future expansions

38) If demand hardly changes with a small change in price, the demand is said to be ________. A) strained B) marginal C) inelastic D) flexible E) unit elastic

40) Buyers expect products to have high ________, which is the degree to which all produced units are identical and meet promised specifications. A) durability B) compatibility C) conformance quality D) form E) performance quality

47) The decline in the average cost of production with accumulated production experience is called the ________. A) demand curve B) supply chain C) learning curve D) value chain E) indifference curve

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

92) The ________ of a product mix refers to how many variants are offered of each product in the line. A) width B) length C) depth D) consistency E) height

93) Aron, a company manufacturing snack food and soft drinks, replicates its product taste and packaging from Lay's, a market leader in snack food industry. Later, it sells these imitated products on the black market. This is an example of ________. A) cloning B) imitating C) counterfeiting D) adapting E) innovating

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

93) Which of the following is a benefit of product mapping? A) studying market matrices B) integrating target markets C) identifying market segments D) educating consumers E) integrating target matrices

96) In which of the following forms of countertrade do buyers and sellers directly exchange goods, with no money and no third party is involved? A) buyback arrangements B) offsets C) barter D) sealed bids E) compensation deals

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

erentiating on ________ is important for companies with complex products and becomes an especially good selling point when targeting technology novices. A) delivery B) ordering ease C) ease of installation D) customer consulting E) reparability

1) WD40 offers a Smart Straw version of its popular multipurpose lubricant with a built-in straw that pops up for use. This is an example of which of the following main strategies for growing the core of the business? A) Make the core of the brand as distinctive as possible. B) Drive distribution through both existing and new channels. C) Offer the core product in new formats or versions. D) Increase costs and revenue. E) Expand to another geographic region.

10) Some services require that the client be present to conduct the service. Which of the following is an example of such a service? A) pest control B) furniture polishing C) surgery D) car repairing E) tax services

101) A product line can also be lengthened by adding more items within the present range. There are several motives for line filling. Which of the following is one of them? A) responding to senior management wishes B) responding to consumer wishes C) reaching for incremental profits D) reaching for incremental capacity E) responding to sales-force demands

103) Price-setting logic must be modified when the product is part of a product mix. In that case, the firm searches for a set of prices that ________ profits on the total mix. A) is ineffective on total B) has no effect on total C) maximizes D) minimizes E) capitalizes upon

104) Companies normally develop ________ rather than single products and require sellers to establish perceived quality differences between price steps within it. A) product mix B) captive products C) product lines D) optional products E) average products

104) ________ are unbranded, plainly packaged, less expensive versions of common products such as spaghetti, paper towels, and canned peaches. A) Common carriers B) Shills C) Generics D) Private labels E) Marques

105) In addition to its store brands and nationally well-known brands of detergents, Reynold's also carries much cheaper varieties of detergents that are not advertised and have little-known names. They are often manufactured from lower-quality ingredients and save on packaging and advertising costs. These are known as ________. A) common carriers B) shills C) generics D) private labels E) marques

108) When museums charge a lower admission fee to students and senior citizens, this form of price discrimination is known as ________ pricing. A) location B) channel C) customer-segment D) special-customer E) loss-leader

109) A franchise organization is an example of a(n) ________ vertical marketing system. A) corporate B) administered C) contractual D) regulatory E) controlled

109) Which of the following represents an aspect of the Empathy dimension of SERVQUAL? A) providing service as promised B) readiness to respond to customers' requests C) giving customers individual attention D) making customers feel safe in their transactions E) visually appealing facilities

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

113) The customer service representatives at a call center have been asked to handle each call within five minutes. At the same time, they have been asked to answer all customer queries in detail and provide appropriate solutions. What kind of service gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception

114) ________ are independently owned businesses that take title to the merchandise they handle. They are full-service and limited-service jobbers, distributors, and mill supply houses. A) Brokers B) Agents C) Merchant wholesalers D) Specialized wholesalers E) Retailers' branches

114) ________ refers to selling below cost with the intention of destroying competition. A) Bid rigging B) Loss-leader pricing C) Predatory pricing D) Price discrimination E) Price penetration

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

16) A market leader on the look out for more usage from existing customers should focus on increasing the frequency of consumption and ________. A) decreasing the product price B) the product line C) the amount of consumption D) decreasing production turnover time E) diversifying into unrelated markets

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

88) The ________ rates the various elements of the service bundle and identifies required actions. A) company performance analysis B) voice of customer measurement C) customer factor measurement D) importance-performance analysis E) customer importance analysis

9) Marketers have traditionally classified products on the basis of three characteristics: ________, tangibility, and use. A) availability B) affordability C) aesthetics D) durability E) necessity

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

97) Moving ________ carries risks. The new brand can cannibalize core brand sales and lower the core brand's quality image. A) up-market B) two ways C) one way D) down-market E) out-market

10) Pricing cues such as sale signs and prices that end in 9 are more influential when ________. A) customers have substantial knowledge about prices B) customers purchase the particular item regularly C) product quality is standardized D) product designs vary over time E) prices do not vary from time to time

103) Which of the following is true for distributor brands? A) They sell at higher volumes than national brands and are also known as generics. B) They are usually sold at higher prices than national brands because production costs are higher. C) They are always of better quality than national brands as production is strictly monitored. D) Distributor brands can be sold at lower prices yet generate a higher profit margin because of their lower cost structure. E) Advertising and sales promotion costs for distributor brands are much higher than those for national brands.

111) Which of the following is an example of a gap between management perception and the service-quality specifications? A) The college brochure showed state-of-the-art classrooms, but when the visitors walked in, they saw peeling walls and dull lighting. B) A nurse visits a patient to show care, but the patient interprets this as an indication that something is very wrong. C) The hotel administrators think that guests want better food, but guests are more concerned with the courtesy of the waiters. D) A service center manager has asked his subordinates to provide fast service, but has not specified a time for the service to be performed. E) Customer service representatives are asked to give ample time to each customer, but must serve a minimum of 50 customers a day.

112) When hotels drop their rates on the weekends, this form of price discrimination is known as ________ pricing. A) channel B) image C) product-form D) time E) location

115) For price discrimination to work ________. A) the market must be segmentable and the segments must show similar intensities of demand B) members in the lower-price segment must be able to resell the product to the higher-price segment C) competitors must be able to undersell the firm in the higher-price segment D) the practice must not breed customer resentment and ill will E) the extra revenue derived from price discrimination must not exceed the cost of segmenting and policing the market

117) The most important determinant of service quality is ________ which refers to the ability to perform the promised service dependably and accurately. A) empathy B) assurance C) responsiveness D) reliability E) tangibles

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

133) ________ was originally pioneered by Japanese firms such as Toyota to produce goods with minimal waste of time, materials, and money. A) Electronic funds transfer (EFT) B) Market logistics C) Electronic data interchange (EDI) D) Lean manufacturing E) Supply chain management

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

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

149) Expensive equipment manufacturers not only install the equipment but also train the staff and undertake the maintenance and repair activities of the equipment. By doing so, they are providing ________. A) payment equity B) value-augmenting services C) differential pricing D) facilitating services E) a primary service package

149) Which of the following strategies should be adopted by marketers during a recession? A) increase investment on marketing existing products B) focus on expanding the customer base and not on the retention of existing customers C) focus primarily on price reductions and discounts D) concentrate on communicating the brand value and product quality to consumers E) stick to the budget allocations adopted during the preceding years

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

23) The fact that services are typically produced and consumed simultaneously is known as the ________ aspect of services. A) perishability B) intangibility C) heterogeneity D) inseparability E) variability

16) Capital items are long-lasting goods that facilitate developing or managing the finished product. They include two groups: installations and ________. A) natural products B) component materials C) operating supplies D) equipment E) processed materials

2) A customer judges a product offering by three basic elements: product features and quality, services mix and quality, and ________. A) performance B) utility C) tangibility D) price E) availability

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

23) In ________, a salesperson goes to the home of a host who has invited friends, demonstrates the products, and takes orders. A) catalog marketing B) franchising C) direct-response selling D) network marketing E) direct marketing

24) After determining its pricing objectives, what is the next logical step a firm should take in setting its pricing policy? A) It should analyze its competitors' costs, prices, and offers. B) It should select its pricing method. C) It should select its final price. D) It should determine the demand for its product. E) It should estimate the cost of its product.

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.

29) When a theater sells matinee movie tickets at low prices, it aims to shift some demand from the peak to the off-peak period. What is the strategy that the theater is said to be adopting? A) It is providing complementary services. B) It is increasing peak-time efficiency. C) It is using linear pricing. D) It is using differential pricing. E) It is sharing services.

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

3) Which of the following is an example of retailing? A) Dylan's sends catalogs to retail, industrial, and institutional customers. B) SEZ U Inc. sells a limited line of fast-moving goods to small retailers for cash. C) BEL Inc. sells FMCG goods to merchant wholesalers and distributors. D) Praxis International sells products to consumers directly through the Internet. E) Hub Styles procures its raw materials directly from farmers in the region.

30) Which of the following is true for franchisors? A) The franchisor has to pay the franchisee to be part of the franchise system. B) The franchisor licenses the trademark from the franchisee. C) The franchisor must change its operations to suit those of the franchisee. D) The franchisor collects royalty payments from the franchisee. E) The franchisor pays startup costs for the franchisee.

32) Market skimming pricing makes sense under all the following conditions, EXCEPT if ________. A) a sufficient number of buyers have a high current demand B) the unit costs of producing a small volume are high enough to cancel the advantage of charging what the traffic will bear C) the high initial price does not attract more competitors to the market D) consumers are likely to delay buying the product until its price drops E) the high price communicates the image of a superior product

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?

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

37) Most products are established at one of four performance levels: low, average, high, or superior. For example, mountain bikes come in a variety of sizes and physical attributes. When a consumer purchases a mountain bike costing $1,000, he or she expects the bike to perform to specifications and to have a high ________, meeting the promised specifications. A) features B) conformance quality C) durability D) performance quality E) reliability

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

44) For ________ to be valued for products like vehicles and kitchen appliances, it should not be associated with an excessive price premium and the product must not be subject to rapid technological obsolescence. A) conformance quality B) performance quality C) reparability D) durability E) style

45) When the physical product cannot be easily differentiated, the key to competitive success may lie in adding valued services and improving their quality. The main service differentiators are ordering ease, delivery, installation, ________, customer consulting, maintenance, and repair. A) technology intensity B) responsiveness C) ease of use D) customer training E) adaptability

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

49) ________ describes the service program for helping customers keep purchased products in good working order. A) Returns B) Ordering ease C) Installation D) Maintenance and repair E) Delivery

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

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

6) A company decided to conduct a market survey for its new MP3 player that the company had priced at $150. In the survey, 95 percent of participants said that the maximum they would pay for the MP3 player is $100. This is an example of which of the following possible consumer reference prices? A) historical competitor price B) expected future price C) usual discounted price D) upper-bound price E) last price paid

6) A large staff, along with a higher proportion of specialty goods and slower-moving items and many services, are usually features of ________ retailing. A) self-service B) self-selection C) limited service D) full-service E) limited-selection

60) Everyday low pricing is most suitable if ________. A) consumers are willing to perform activities such as clip coupons to avail of discounts B) consumers tend to associate price with quality C) customers are insensitive to changes in price D) the cost of conducting frequent sales and promotions is high E) consumers have sufficient time to find the best prices

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

67) Customers today want separate prices for each service element, and they also want the right to select the elements they want. Customers are said to be pressing for ________ services. A) complementary B) perishable C) variable D) unbundled E) shared

75) Mass merchandisers and discount stores typically fall into the ________ group with respect to margins and volume. A) mixed markup, high-volume B) low-volume, mixed markup C) low-volume, low-markup D) high-volume, low-markup E) high-markup, low-volume

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

78) American businessman King Gillette pioneered the sales model in which razor handles were given away for free or sold at a loss, but sales of disposable razor blades were very profitable. This is known as the ________ model. A) two-tiered pricing B) predatory pricing C) cross selling D) loss leading E) product churning

8) The sellers of ________ goods carry a wide assortment to satisfy individual tastes. They must have well-trained salespeople to inform and advise customers. A) unsought B) specialty C) convenience D) heterogeneous shopping E) generic

81) Which of the following is an ancillary service offered by retailers? A) accepting orders over the telephone B) advertising and window displays C) delivery to the customer's doorstep D) general information E) alterations and tailoring

81) ________ marketing refers to training and motivating employees to serve customers well. A) External B) Promotional C) Direct D) Internal E) Interactive

102) Though it is sold only in Walmart stores, Walmart's Ol'Roy dog food has surpassed Nestlé's Purina brand as the top-selling dog food. Ol'Roy is an example of a ________. A) generic product B) national brand C) franchise D) copy-cat brand E) private label

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

105) In ________, the seller charges a separate price to each customer depending on the intensity of his or her demand. A) second-degree price discrimination B) third-degree price discrimination C) psychological discounting D) special-customer pricing E) first-degree price discrimination

106) Some service firms often engage in ________, consisting of a fixed fee plus a variable usage fee. A) pure bundling B) pure pricing C) mixed pricing D) captive pricing E) two-part pricing

107) In ________, the seller offers goods both individually and in bundles and often charges less for the "bundle" than for the individual products. A) pirating pricing B) captive pricing C) two-part pricing D) pure bundling E) mixed bundling

110) Gillette uses ________ pricing when it offers razor handles at a low cost, but places a high markup on the replacement razor blades that fit in the handles. A) optional feature B) two-part C) by-product D) product line E) captive-product

110) MGC Inc. organizes a company-wide picnic once a year. The organizers arranged for the best possible menu thinking that food would be a priority, but the staff were disappointed because the activities were very poorly planned. What kind of a gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception

111) The prices of tickets to the opera vary depending on where the person would like to be seated — in the gallery or in the stalls. This is an example of ________ pricing. A) channel B) time C) image D) product-form E) location

12) What types of goods are purchased frequently, immediately, and with minimum effort by the consumers? A) specialty goods B) shopping goods C) unsought goods D) durable goods E) convenience goods

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

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

126) ________ is a period of rapid market acceptance and substantial profit improvement. A) Stagnancy B) Introduction C) Maturity D) Decline E) Growth

128) ________ is a slowdown in sales growth because the product has achieved acceptance by most potential buyers. A) Obsolescence B) Introduction C) Growth D) Decline E) Maturity

13) Services high in ________ qualities are those services that have characteristics the buyer normally finds hard to evaluate even after consumption. A) trial B) search C) experience D) privacy E) credence

131) After a couple of years of successful business, an experimental theatre company based in Aurora is unable to sell tickets for its theatre shows. They have been using profits from previous shows to run the business. The company is in the ________ phase of its life cycle. A) maturity B) obsolescence C) introduction D) growth E) decline

131) The elapsed time between an order's receipt, delivery, and payment is called the ________ cycle. A) variable-costs-to-payment B) product-to-payment C) inventory-to-sale D) order-to-inventory E) order-to-payment

135) A low price buys market share but not market loyalty. The same customers will shift to any lower-priced product that may come along. This is called the ________ trap. A) low-price B) relative-market-share C) shallow-pockets D) target-market-share E) fragile-market-share

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

136) When higher-priced competitors match lower prices of their competitors but have longer staying power because of deeper cash reserves, it leads to a(n) ________ trap. A) low-quality B) fragile-market-share C) price war D) escalator E) shallow-pockets

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.

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

142) Which of the following is an example of a private carrier? A) MET is a transporter that operates only in the Chicago area and charges fixed prices. B) BCL is a family firm that owns only three trucks, but takes small orders for transport. C) VTV owns a fleet of trucks and transports goods for any client for a fee. D) COM is a shipping firm that transports goods by road and rail across the United States. E) BEL Inc. manufactures parts for automobiles and transports its products to customers itself.

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

143) The trucking firm hired by your transportation manager provides a trucking service between the city of Sacramento and the surrounding towns on a regular schedule and at fixed prices. The trucking firm saves transportation costs by transporting the goods using trains as well as trucks, instead of trucks alone. Your transportation manager has hired a(n) ________ carrier. A) airship B) airtruck C) trainship D) fishyback E) piggyback

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

147) Guarantees are most effective in two situations. The first is when the company or products are not well known. The second is when the product's quality is ________ to competition. A) not known B) different C) inferior D) equivalent E) superior

149) In markets that are characterized by products that are highly homogeneous, how should a firm react to a competitor's reduction in price? A) shrink the amount of the product available B) substitute expensive materials or ingredients C) reduce product features D) reduce product services E) augment the product

15) Which one of the following is highest in search qualities? A) a play at a theater B) a meal at a restaurant C) a haircut D) psychotherapy E) a computer

151) When sellers agree to provide free maintenance and repair services for a specified period of time at a specified contract price, they are offering ________. A) a complementary service B) payment equity C) a service blueprint D) differential pricing E) an extended warranty

2) Which of the following is true for retailing? A) Manufacturers are not considered to be retailers as they are engaged in producing the product. B) Vending machines are considered to be retailing only if they are located within stores. C) Retailing deals only with goods; it does not include services. D) Selling from a consumer's home is direct selling, but not retailing. E) Wholesalers are only considered to be retailers if they are selling to final consumers.

22) Which of the following is true regarding services? A) Services are typically produced, stored, and then consumed. B) Services are generally low in experience and credence qualities. C) Service providers develop similar marketing programs for personal services and business services. D) There is less risk associated with the purchase of services than with the purchase of goods. E) Provider-client interaction is a special feature of services marketing.

23) A(n) ________ marketer looks ahead to needs customers may have in the near future. A) laidback B) creative C) inexperienced D) responsive E) anticipative

24) Telemarketing is a type of ________. A) direct selling B) network marketing C) multilevel selling D) close-range marketing E) direct marketing

25) Electronic shopping is a type of ________. A) direct selling B) network marketing C) multilevel selling D) corporate selling E) direct marketing

26) After estimating the demand and costs associated with alternative prices, a company has chosen to price its product in such a way that it gains the highest rate of return on its investment. The company is looking to ________. A) maximize market share B) skim the market C) become a product-quality leader D) survive in the market E) maximize current profit

27) In order to map out the service process, the points of customer contact, and the evidence of service from the customer's point of view, service firms should develop a ________. A) marketing plan B) service floor plan C) Gantt chart D) business plan E) service blueprint

3) To which of the following categories of services does a cell phone belong? A) major service with accompanying minor services B) major service with accompanying minor goods C) pure service D) pure tangible good E) tangible good with accompanying services

33) Companies that aim to ________ strive to be affordable luxuries. A) survive in the market B) partially recover their costs C) maximize their market share D) pursue value pricing E) be product-quality leaders

34) Starbucks, Aveda, and BMW have been able to position themselves within their categories by combining quality, luxury, and premium prices with an intensely loyal customer base. These companies are employing a ________ strategy. A) market-skimming B) market-penetration C) survival D) market share maximization E) product-quality leadership

36) Consumers are less price sensitive ________. A) to high cost items B) when they frequently change their buying habits C) when there are more substitutes D) when there are more competitors E) when they do not readily notice higher prices

36) Market broadening and market diversification are likely tactics employed in ________ defense strategies. A) position B) flank C) preemptive D) counteroffensive E) mobile

39) In 2006, Sara Lee spun off products that accounted for a large percentage of the company's revenues, including its strong Hanes hosiery brand, so it could concentrate on its well-known food brands. In this example, Sara Lee is employing a ________ defense strategy. A) preemptive B) counteroffensive C) mobile D) flank E) contraction

41) JJ pays overhead each month, including his company's bills for rent, heat, interest, and salaries, which are examples of ________ costs. A) total B) average C) activity-based D) variable E) fixed

43) Ideal ________ would exist if users could fix the product themselves with little cost in money or time. A) durability B) reliability C) style D) design E) reparability

44) Costs that differ directly with the level of production are known as ________ costs. A) fixed B) overhead C) opportunity D) target E) variable

47) ________ refers to data, information systems, and advice services that the seller offers to their buyers. A) Sales force relationships B) Customer relationships C) Open source technology D) Customer training E) Customer consulting

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

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.

50) Which of the following actions would result in the elimination of uncontrollable returns of products in the short run? A) improved handling B) better packaging C) improved transportation D) proper storage E) cannot be eliminated

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

51) Smith & Adams Poultry has recently upgraded its transactional model such that its customers (restaurants and hotels) can communicate with its central supply system to indicate purchase volumes, dates, and receive confirmation, through their computer terminals. This is an example of a company differentiating itself versus competition in terms of ________. A) customer relationships B) customer training C) installation D) delivery ease E) ordering ease

54) An umbrella manufacturing company's fixed costs are $275,000. The variable cost per unit is $5 and each umbrella is sold at $10. How many units should the firm sell in order to break even? A) 1,819 B) 5,500 C) 18,000 D) 27,500 E) 55,000

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

59) Electronic shelf labeling allows retailers to ________. A) check inventory levels instantaneously B) order electronically from suppliers C) run continual promotional messages D) advertise sales and special offers E) change price levels instantaneously

63) In which of the following auctions does the auctioneer first announce a high price for a product and then slowly decreases the price until a bidder accepts? A) a Dutch auction with one buyer and many sellers B) an English auction with one seller and many buyers C) an ascending bid auction D) a sealed-bid auction E) a Dutch auction with one seller and many buyers

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

72) A winning formula for many ________ brands is craftsmanship, heritage, authenticity, and history, often critical to justifying a sometimes extravagant price. A) design B) nondurable C) durable D) ingredient E) luxury

117) 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

117) Line filling, if overdone, may result in self-cannibalization and increased customer loyalty.

FALSE

12) Traditionally, price was never a major determinant of buyer choice.

FALSE

120) In first-degree price discrimination, the seller charges less to buyers who purchase in larger volumes.

FALSE

121) When firms charge different prices to different customer groups for the same product or service, it is a case of second-degree price discrimination.

FALSE

122) A pricing system in which there is a "fixed" fee and then a variable "usage" fee is called bundling.

FALSE

122) Wholesalers exclude manufacturers and farmers because they are engaged primarily in production, but include retailers, as they are selling to the end consumer.

FALSE

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

FALSE

123) Price discrimination in all forms is illegal in the United States.

FALSE

123) Pure bundling occurs when a firm offers goods both individually and in bundles.

FALSE

124) A buyer of the 2013 Subaru Outback 2.5i could pay extra for four-way passenger seats, an All-Weather package, and a power moon roof because Subaru was using captive-product pricing.

FALSE

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

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

127) Pricing has no negative effect on customer loyalty.

FALSE

128) If expected service falls below perceived service, customers are disappointed.

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

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

FALSE

13) Today, consumers are price takers and accept prices at face value or as given.

FALSE

130) Reliability refers to the company's willingness to help customers and provide them with prompt service.

FALSE

133) Aida decided to switch doctors after she had to wait two and a half hours at her scheduled appointment to see her doctor. She experienced the ethical problem factor that leads to customer switching behavior.

FALSE

134) The payment equity for a service is a range from the minimum level of service consumers are willing to accept to the level they believe can and should be delivered.

FALSE

136) An inventor is the first to develop a working model while a product pioneer is the first to develop patents in a new-product category.

FALSE

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

FALSE

139) In a price-war trap, higher-priced competitors match the firm's lower prices but have longer staying power because of deeper cash reserves.

FALSE

139) The product strategy during the maturity stage of the product life cycle should be to build more intensive distribution.

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) Pricing cues such as sale signs and prices that end in 9 are more influential when consumers are experienced in the category.

FALSE

140) If the variants within the Tide product under P&G's detergent line included Tide with Acti-Lift, Tide Plus Febreze Freshness Sport, Tide Plus Febreze, Tide Free, Tide Plus Downy, Tide Coldwater, Tide TOTALCARE, and Tide Free for Coldwater, and all were available in Pods, Liquids, Liquids for HE machines, and Powder formats, the width of the product mix would be 32 because there would be 32 distinct variants.

FALSE

142) During the development stage of the product life cycle, the marketing objective is to maximize profit while defending market share.

FALSE

143) Bic's Wite-out phased out unprofitable outlets and reduced communications to the minimal level needed to retain hard-core loyals because it was in the maturity stage of the product life cycle.

FALSE

145) Most companies today are trying to increase the order-to-payment cycle.

FALSE

146) More stocking locations mean goods can be delivered to customers more quickly, and warehousing and inventory costs are lower.

FALSE

148) 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

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

FALSE

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

FALSE

151) 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

151) The order-processing cost per unit increases with the number of units ordered because the order costs are spread over more units.

FALSE

152) Guarantees are most effective when the product is well known and/or similar in performance to other brands in the market.

FALSE

152) Heavy focus on price reductions and discounts during a recession allows firms to improve long-term brand equity and price integrity.

FALSE

152) If the length of downtime increases, the cost incurred decreases.

FALSE

153) Conflicts between various franchisees of a company are an example of vertical channel conflict.

FALSE

153) The Robinson-Patman Act, passed by Congress in 1967, set mandatory labeling requirements, encouraged voluntary industry packaging standards, and allowed federal agencies to set packaging regulations in specific industries.

FALSE

155) Value-augmenting services include installation, staff training, maintenance and repair services, and financing.

FALSE

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

FALSE

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

FALSE

20) In planning its market offering, the marketer needs to address five product levels, each of which reduces customer value.

FALSE

21) The customer-value hierarchy consists of the basic product, core benefit, expected product, augmented product, and the consumption system.

FALSE

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

FALSE

24) Because they are intangible, durable goods normally require more quality control, supplier credibility, and adaptability than either services or nondurable goods.

FALSE

25) Carlos always buys bread and milk when he goes grocery shopping. In this case, bread and milk are examples of impulse goods.

FALSE

26) A Maserati sports car is considered a convenience good because interested buyers will travel far to buy one.

FALSE

29) Supplies can be classified as two kinds: heterogeneous supplies and homogeneous supplies.

FALSE

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

FALSE

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

FALSE

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

FALSE

37) Almost all companies use the conventional percentage-of-sales figure while budgeting for new product development.

FALSE

38) Discount stores usually stock leftover goods, overruns, and irregular merchandise, sold at less than retail.

FALSE

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

FALSE

39) A service results in ownership on the part of the client.

FALSE

40) The production of a service is never tied to a physical product.

FALSE

41) 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

42) A retailer cooperative is a retail firm that is owned by its customers.

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

42) Salt is an example of a hybrid.

FALSE

43) A hybrid consists of unequal parts of goods and services, with services being in the majority.

FALSE

44) A pure service requires a capital-intensive good, but the primary item is a service.

FALSE

45) All services require the client to be present.

FALSE

46) 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

46) One way to increase the frequency of consumption of a product by consumers is by introducing it in larger package sizes.

FALSE

47) Credence qualities of a service are difficult to evaluate before purchase, but easy to evaluate after consumption.

FALSE

49) Furniture is high in credence qualities.

FALSE

5) Growth strategies are "either/or" propositions; a focus on core businesses means foregoing new market opportunities.

FALSE

50) While goods meet personal needs, services meet business needs.

FALSE

51) Services have five distinctive characteristics, one of these being "pure service."

FALSE

52) Intangibility with regards to a service means that the service cannot be duplicated across providers.

FALSE

52) To be branded, physical products need not be differentiated.

FALSE

53) In contraction defense, the leader stretches its domain over new territories through market broadening and market diversification.

FALSE

54) Firms should design the highest performance level possible for their products.

FALSE

55) As a selling point, durability commands a particularly high pricing premium, especially for products that are subject to rapid technological obsolescence, as are personal computers and video cameras.

FALSE

56) If the physical product cannot be easily differentiated, the key to competitive advantage lies in the pricing of the related "services" provided by the manufacturer.

FALSE

56) The quality of services is independent of who provides them.

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

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

FALSE

63) Department stores only face competition from other department stores as other retailing forms are not a threat to their sales and profitability.

FALSE

64) Intensive distribution relies on only some of the intermediaries willing to carry a particular product.

FALSE

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

FALSE

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

FALSE

66) Growth in the retail market is centered firmly in the middle market, leaving luxury retailers and discounting specialists struggling.

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

68) Apple has a clear design philosophy it calls "Design 3.0" and an internal design slogan, "Make it Meaningful," that reflects its relentless focus on making beautiful and intuitive products that will be integrated into customers' lifestyles.

FALSE

68) Electronic shelf labeling allows retailers to check inventory levels instantaneously.

FALSE

68) 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

69) If firms wish to maximize their market share, they should opt for market-skimming pricing.

FALSE

70) A DROP-error occurs when the company accepts a bad idea.

FALSE

73) A person who has a bad customer experience is more likely to talk about it, but someone who has a good experience will talk to more people.

FALSE

73) Caterpillar uses target-return pricing to set prices on its construction equipment, and justifies a higher price by showing lower lifetime operating costs.

FALSE

76) Competition for luxury brands must be defined narrowly.

FALSE

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

FALSE

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

FALSE

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

FALSE

80) Price elasticity magnitudes are lower for durable goods than for other goods.

FALSE

82) Colleges all over the country — from Western Washington University to Brown University, the University of Vermont, and the University of California at Berkeley — are encouraging the sale of plain bottled water.

FALSE

82) The US government often uses Dutch auctions to procure supplies.

FALSE

83) If a calculator company produces 100,000 hand calculators at a cost of $10, but the cost drops to $9 when it produces 200,000 and $8 when it produces 400,000 hand calculators, the decline in average cost with accumulated product experience is called the price elasticity of demand.

FALSE

83) Pepsi used flank attacks when it launched Aquafina nationally (before Coca-Cola's launch of Dasani); purchased orange juice giant Tropicana in 1998; and purchased the owner of Gatorade sports drink in 2000.

FALSE

85) Retailers can target their customers more effectively by using only a single channel to reach them.

FALSE

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

FALSE

88) The gross margin on a product bears a direct relation to the direct product profit.

FALSE

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

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

92) External marketing describes the training and motivation required by employees in order to properly serve the customers.

FALSE

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

FALSE

94) In the hotel industry, primary service features include merchandise for sale, free breakfast buffets, and loyalty programs.

FALSE

120) Companies normally develop product lines rather than a single product and introduce price steps such as a low-, average-, and high-priced computer system.

TRUE

121) Wholesaling includes all the activities in selling goods or services to those who buy for resale or business use.

TRUE

122) 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

123) Merchant wholesalers are independently owned businesses that take title to the merchandise they handle.

TRUE

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

TRUE

124) When PepsiCo sold its cola syrup to Russia for rubles and agreed to buy Russian vodka at a certain rate for sale in the United States, it was engaged in the form of countertrade known as an offset.

TRUE

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

TRUE

129) Responsiveness is a company's willingness to help customers and provide prompt service.

TRUE

131) The appearance of physical facilities, equipment, personnel, and communication materials are the tangibles that convey service quality to consumers.

TRUE

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

TRUE

135) A customer-service interface is defined as any place at which a company seeks to manage a relationship with a customer.

TRUE

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

TRUE

138) Co-branding is when two or more well-known existing brands are combined into a joint product and/or marketed together in some fashion.

TRUE

139) Ingredient branding can take on a form called "self-branding" in which the company advertises its own branded ingredients.

TRUE

140) Escalator clauses are found in contracts for major industrial projects, such as aircraft construction and bridge building.

TRUE

140) Sales of nylon have shown a scalloped PLC pattern because of the many new uses — parachutes, hosiery, shirts, carpeting, boat sails, automobile tires — discovered over time.

TRUE

141) During the introduction stage of the product life cycle, firms are likely to use cost-plus pricing.

TRUE

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

TRUE

141) Product line analysis provides information for two key decision areas — product line length and product mix pricing.

TRUE

142) Shrinking the amount of product instead of raising the price is a good way to counteract consumer resistance to price increases.

TRUE

147) Inventory cost increases at an accelerating rate as the customer-service level approaches 100 percent.

TRUE

148) Packaging includes the activities of designing and producing a container for a product.

TRUE

149) Order-processing costs must be compared with inventory-carrying costs because the larger the average stock carried, the higher the inventory-carrying costs.

TRUE

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

15) Customers usually have a lower price threshold below which prices signal inferior or unacceptable quality, as well as an upper price threshold above which prices are prohibitive and the product appears not worth the money.

TRUE

150) A company must consider the product's stage in the life cycle and its importance in the company's portfolio before responding to a competitor's price cut.

TRUE

150) Warranties are formal statements of expected product performance by the manufacturer.

TRUE

151) A guarantee's greatest contribution to a product's success is that it decreases the buyer's perceived risk in the purchase of the product.

TRUE

151) During an economic downturn, the potential value and profitability of some target consumers may change.

TRUE

152) Companies who want to carry near-zero inventory should build for order, not for stock.

TRUE

154) Out-of-pocket costs are what the customer spends on regular maintenance and repair costs.

TRUE

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

TRUE

17) When examining products, consumers compare an observed price to an internal reference price they remember or an external frame of reference.

TRUE

18) Many consumers use price as an indicator of quality and value.

TRUE

18) Marketing planning begins with formulating an offering to meet target customers' needs or wants.

TRUE

19) A product is anything that can be offered to a market to satisfy a want or need.

TRUE

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

TRUE

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

TRUE

22) Marketers have traditionally classified products on the basis of characteristics such as durability, tangibility, and use.

TRUE

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

TRUE

27) The homogeneity of natural materials limits the amount of demand-creation activity that producers undertake.

TRUE

28) Capital items are long-lasting goods that facilitate developing or managing the finished products.

TRUE

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

TRUE

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

TRUE

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

TRUE

37) The private nonprofit sector is a provider of services.

TRUE

39) The network marketing sales system works by recruiting independent businesspeople who act as distributors.

TRUE

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

TRUE

40) Electronic shopping is a form of direct marketing.

TRUE

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

TRUE

41) Soap is an example of a pure tangible good.

TRUE

43) A franchise organization is a corporate retail organization.

TRUE

43) When the total market expands, the dominant firm usually gains the most.

TRUE

44) The market leader should look for new customers or more usage from existing customers.

TRUE

45) The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments.

TRUE

46) The search qualities of a service are the characteristics the buyer can evaluate before purchase.

TRUE

47) The most constructive response to protecting market share is continuous innovation.

TRUE

48) The experience qualities of a good or service can be evaluated after purchase.

TRUE

50) A creative marketer discovers solutions customers did not ask for but to which they enthusiastically respond.

TRUE

51) Position defense means occupying the most desirable market space in consumers' minds, making the brand almost impregnable.

TRUE

53) To avoid "feature fatigue," companies must be careful to prioritize those features that are included and find unobtrusive ways to provide information about how consumers can use and benefit from the feature.

TRUE

54) Inseparability in the context of a service means that there is a provider-client interaction involved as the provider is part of the service.

TRUE

55) A service provider can work with larger groups to get around the limitations of inseparability.

TRUE

57) A demand side strategy that can produce a better match between service demand and supply is differential pricing.

TRUE

57) Customer training and customer consulting are two areas for service differentiation that manufacturers can use with their products.

TRUE

58) The cost of processing a return can be significantly greater than that of an outbound shipment.

TRUE

59) The ability to design custom jeans through Levi's and create merchandise with your own images through Zazzle are examples of mass customization.

TRUE

6) Vancouver, Canada's Fortuna Silver Mines has focused on its two fully owned, fully integrated silver mines in Peru and Mexico to spur organic growth while looking for a third mine to drive further growth because the existing mines are not expandable.

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

62) "Pop-up" stores let retailers promote brands to seasonal shoppers for a limited time.

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

TRUE

65) Supercenters retail grocery items as well as a huge selection of nonfood merchandise.

TRUE

66) An intensive distribution strategy serves well for products such as snack foods and soft drinks.

TRUE

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

TRUE

67) As discount retailers improve their quality and image, consumers have been willing to trade down.

TRUE

67) Design can shift consumer perceptions to make brand experiences more rewarding.

TRUE

68) Distributors' territorial rights define the terms under which the producer will enfranchise other distributors.

TRUE

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

TRUE

69) Customers want unbundled services, with separate prices for each service element and the right to select the elements they want.

TRUE

69) Design thinking requires intensive ethnographic studies of consumers, creative brainstorming sessions, and collaborative teamwork to decide how to bring the design idea to reality.

TRUE

69) Firms are increasingly recognizing the importance of influencing consumers at the point of purchase.

TRUE

70) In the case of prestige goods, the demand curve sometimes slopes upward.

TRUE

71) Companies prefer customers who are less price sensitive.

TRUE

71) When golf courses provide rules for playing and behaving appropriately, and customers encourage other customers to follow the same rules, they are encouraging customer citizenship via customer coproduction.

TRUE

72) 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

72) Customers cause many service failures, and the number of customer-caused failures is increasing.

TRUE

75) When a product is more distinctive, it leads to less price sensitivity.

TRUE

76) Total costs consist of the sum of the fixed and the variable costs for any given level of production.

TRUE

78) 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

79) Value pricing requires a company to reengineer its operations to become a low-cost producer.

TRUE

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

TRUE

81) Environmental concerns matter to consumers, and they expect companies to make changes to address their concerns.

TRUE

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

TRUE

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

TRUE

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

TRUE

89) Some high-volume products may have such high handling costs that they are less profitable and deserve less shelf space than low-volume products.

TRUE

91) Low prices on some items serve as traffic builders or loss leaders for retailers.

TRUE

92) EDLP can lead to lower advertising costs and higher retail profits.

TRUE

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

TRUE

93) Interactive marketing describes the employees' skill in serving the client.

TRUE

94) Postpurchase services include shipping and delivery, gift wrapping, adjustments, and returns.

TRUE

96) Importance-performance analysis rates the various elements of the service bundle and identifies required actions.

TRUE

97) The answer to the question "was the surgery successful?" represents the technical quality aspect of interactive marketing, one of the three broad areas of service excellence.

TRUE

98) Customers who view a service as fairly homogeneous care less about the provider than about the price.

TRUE

99) What the customer expects from a service is called the primary service package.

TRUE

recession, the lower priced, younger, street savvy third tier, Armani Exchange, picks up the selling slack for the upper tiers, which is in line with the recommendation to fine-tune brand and product offerings during an economic downturn.

TRUE

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

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

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

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

106) In second-degree price discrimination, the seller charges ________. A) less to buyers of larger volumes B) different prices depending on the season, day, or hour C) a separate price to each customer depending on the intensity of his or her demand D) different prices for different versions of the same product E) different prices for the same product depending on the channel through which it is sold

110) Beta testing tests the product within the firm to see how it performs in different applications.

FALSE

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

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

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

39) ________ is the ability of a company to prepare on a large-scale basis individually designed products, services, programs, and communications. A) Mass customization B) Reverse engineering C) Interoperability D) Backward compatibility E) Benchmarking

40) If consumers were largely indifferent to a $0.05 increase in the price of a gallon of milk, the price rise is said to fall within customers' ________. A) price indifference band B) experience curve C) arm's-length price D) learning curve E) net price index

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

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

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

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

55) ________ pricing takes into account a host of inputs, such as the buyer's image of the product performance, the channel deliverables, the warranty quality, customer support, and attributes such as the supplier's reputation, trustworthiness, and esteem. A) Perceived-value B) Value C) Going-rate D) Auction-type E) Markup

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

77) Most retailers will put low prices on some items in order to increase traffic to the store. These low-priced products are known as ________. A) loss leaders B) price ceilings C) price skimmers D) price floors E) cold calls

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

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

84) A(n) ________ is defined as a distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute. A) stock-keeping unit B) inventory turn C) individual brand D) product type E) brand line

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

99) A manufacturer of hiking boots looks at data that indicate that their subsegment of the market called "serious hiker" is declining and is predicted to decline into the future. The firm decides to enter the "low-price" segment with its new items. This is an example of a firm's ________ to reach a new market. A) down-market stretch B) up-market stretch C) two-way stretch D) marketing research E) disintermediation

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.

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

10) Which of the following types of retailing generally entails the highest costs? A) full-service B) self-service C) limited-selection D) limited service E) self-selection

116) Companies in the "middle market" should never attempt to stretch their line in both directions.

FALSE

12) Bill and Josh are considering opening a retail store. They have identified their target market and location and are finalizing the details of the merchandise they will carry. Since the neighborhood is rundown and the customers in the area are very price-conscious, Bill and Josh want to offer goods from well-known brands, but at lower rates than the full retail prices of the products. They choose to stock excess production from manufacturers or goods that have remained unsold at other retailers. This is a description of a(n) ________ retailer. A) off-price B) specialty C) discount D) department E) catalog

124) According to the dynamic process model, two different types of expectations have opposite effects on perceptions of service quality. One of these is that ________ overall service quality. A) increasing customer expectations of what the firm will deliver improve the perceptions of B) increasing customer expectations of what the firm will deliver decrease the perceptions of C) decreasing customer expectations of what the firm should deliver decrease the perceptions of D) decreasing customer expectations of what the firm will deliver improve the perceptions of E) increasing customer expectations of what the firm should deliver improve the perceptions of

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

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

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

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.

130) ________ encompass sales forecasting, production planning, and inbound materials transportation. A) Market logistics B) Containerization C) Transportation D) Nonstore retailing E) Wholesaling

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

134) As inventory draws down, management must know at what stock level to request additional stock. This stock level is called the ________. A) reorder point B) least fixed point C) point of divergence D) inflection point E) critical point

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

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

136) The potential disadvantages of ________ are the risks and lack of control from becoming aligned with another brand in the consumers mind. Consumer expectations about the level of involvement and commitment are likely to be high, so unsatisfactory performance could be very negative for the brands involved. A) co-branding B) cannibalization C) vertical integration D) disintermediation E) brand stretching

137) A company does not set a final price until the product is finished or delivered. This is known as ________. A) delayed quotation pricing B) an escalator clause C) special-event pricing D) time pricing E) the shallow-pockets trap

139) Beyond the optimal order quantity, total cost per unit increases because ________. A) inventory-carrying cost per unit increases B) inventory-carrying cost per unit decreases C) order-processing cost per unit increases D) order-processing cost per unit increases though inventory cost decreases E) inventory-processing cost per unit falls slowly

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

140) An item described as low-risk and low-opportunity is a ________. A) nuisance item B) bottleneck item C) variable item D) critical item E) commodity

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

141) ________ consists of putting goods in boxes or trailers that are easy to transfer between two transportation modes. A) Containerization B) Haulage C) Inventory carrying D) Order processing E) Warehousing

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.

6) A flight with complementary drinks is an example of a ________. A) major service with accompanying minor goods and services B) pure service C) pure tangible good D) tangible good with accompanying services E) hybrid

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

61) In ________ pricing, the firm bases its price largely on competitor's prices. A) going-rate B) auction-type C) markup D) target-return E) perceived-value

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

61) Which of the following is an example of a category killer? A) PETCO B) Walmart C) Kohl's D) The Limited E) Tesco

64) In a(n) ________, the buyer announces something he or she wants to buy, and potential sellers compete to offer the lowest price. A) Dutch auction with one buyer and many sellers B) English auction with one buyer and many sellers C) English auction with one seller and many buyers D) sealed-bid auction E) ascending auction

65) Realizing that although household products is a huge category — taking up an entire supermarket aisle or more — it is an incredibly boring one, the founders of Method Products designed a sleek, uncluttered dish soap container that also carried functional advantages, such as ease of dispensing soap and cleaning. Method is competing in the crowded market for household products on the basis of superior ________. A) design B) durability C) conformance D) reliability E) performance quality

71) The common denominators of luxury brands are quality and ________. A) uniqueness B) practicality C) global appeal D) contemporary E) goodwill

74) ________ has overtaken the United States as the world's largest luxury market; it's forecast that one-third of all high-end goods will be sold there in the coming years. A) China B) India C) South Africa D) Brazil E) South Korea

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

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

79) Which company launched Eco-Fina packaging for its water? A) PepsiCo B) Coca-Cola C) SodaStream D) PURE E) Sigg Switzerland

79) Which of the following is a prepurchase service offered by retailers? A) accepting orders over the telephone B) shipping the product C) delivery to the customer's doorstep D) general information E) interior decoration of the retail outlet

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

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

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

83) In your neighborhood there is a small men's store that has a limited selection of clothing, but the selection that is carried is of very high quality and price. Services include free alterations and tailoring, personalized recordkeeping, and free dry cleaning. Inside the store are deep leather chairs and couches and thick pile carpet. Upon entering the store, a customer feels "special and rich." In terms of differentiation, what is this retailer trying to communicate by its decorations and service level? A) differentiation based on services mix and atmosphere B) differentiation based on prepurchase services C) differentiation based on postpurchase services and atmosphere D) differentiation based on ancillary services and atmosphere E) differentiation based on prepurchase and postpurchase services

84) In which of the following does a customer respond to the technical quality of a service? A) Sara's preferred hair stylist is some miles away, but Sara goes to him because his styles suit her looks. B) Kathy tries out a new restaurant every week because she likes to experience the variety. C) Bill has gone to the same chiropractor for the past fifteen years because he is friendly and takes the time to listen to Bill. D) Ray avoids going to the bank as far as possible because the manager is rude and unhelpful. E) Alex has no interest in theater, but goes often because her best friend loves plays.

112) A product system is a group of diverse and unrelated items that does not function in a compatible manner and includes the product mix and product assortment.

FALSE

118) In the rapidly changing market of today's world, product lines must be continuously updated or modernized.

TRUE

113) As a market-follower strategy, a counterfeiter emulates the leader's products, name, and packaging, with slight variations.

FALSE

125) Campbells is a newly established company that specializes in preparing healthy but tasty food for children under the age of 5. It is incurring huge production costs, nonexistent profits, and slow sales growth. The company is in the ________ phase of its life cycle. A) stagnancy B) introduction C) maturity D) decline E) growth

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

135) A stock order point of 10 means ordering the product ________. A) every 10 days B) when stock falls to 10 units C) every 10 units D) when stock falls to 9 units E) in batches of 10 items

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

FALSE

84) Which of the following is the strongest differentiator for brick-and-mortar stores who want to emphasize their superiority over online retailers? A) product quality B) the shopping experience C) product range D) pricing E) the retailer's reputation

144) Which of the following factors is one of the contributors to the growing use of packaging as a marketing tool? A) consumption aid B) consumer affluence C) consumer influence D) conformance qualities E) brand identification

146) Many sellers offer either general or specific guarantees. Guarantees reduce the buyer's ________ risk. A) actual B) perceived C) real D) implied E) stated

102) An alternative to being a market follower in a large market is to be a leader in a small market. This type of competitor is called a ________. A) marketing king B) market nicher C) segment king D) guerilla marketer E) strategic clone

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

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

106) Because shelf space is scarce, many supermarkets now charge a ________ for accepting a new brand, to cover the cost of listing and stocking it. A) retainer B) slotting fee C) residual fee D) contingent fee E) royalty

86) Firms have decided to raise fees and lower service for those customers who barely pay their way and to coddle big spenders to retain their patronage as long as possible. This is an example of organizing customers by ________. A) retailer convenience B) profit tiers C) psychographic characteristics D) social influence E) customer preference

147) Regular maintenance and repair costs are known as ________ costs. A) service contract B) out-of-pocket C) fixed D) facilitating services E) value-augmentation

114) Which of the following is an example of a gap between service delivery and external communications? A) The employees at GBL have been asked to take time to listen to customers, but they must serve them fast as well. B) Amanda chose to shop at Alison's Fashions because the store's Web site offered on-the-spot alterations. However, when she did buy a dress, she had to wait a week to get it altered. C) Customers at LUX appreciate the personalized services the salespeople offer, but do not like the store design. D) Clearwater Spa attendants are well-trained in massage therapy and the services they offer, but customers rarely return because they don't like the attendants' impersonal service. E) When sales dropped, Styx modernized its stores in order to retain customers, but didn't realize that the product quality was the main problem.

12) Services high in ________ qualities have characteristics that the buyer can evaluate after purchase. A) privacy B) experience C) credence D) search E) stock

120) The ________ determinant of service quality refers to the knowledge and courtesy of employees and their ability to convey trust and confidence in the service they provide. A) conscientious B) assurance C) empathy D) reliability E) responsiveness

123) The zone of ________ is a range where a service dimension is deemed satisfactory, anchored by the minimum level consumers are willing to accept and the level they believe can and should be delivered. A) immunity B) tolerance C) reliability D) assurance E) flexibility

134) Betty Crocker cake mixes using Hershey syrup in its mixes and "Lunchables" lunch combinations with Taco Bell tacos are examples of what special type of branding? A) family branding B) ingredient co-branding C) co-branding D) generic branding E) individual branding

137) ________ branding is a special case of co-branding involving creating brand equity for materials, components, or parts that are necessarily contained within other branded products. A) Cross B) Ingredient C) Equity D) Family E) Generic

14) What goods are similar in quality but different enough in price to justify shopping comparisons? A) emergency goods B) homogeneous shopping goods C) heterogeneous shopping goods D) specialty goods E) convenience goods

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

144) If the shipper owns its own truck or air fleet, it becomes a ________ carrier. A) containerized B) private C) contract D) common E) diversified

145) ________ are formal statements of expected product performance by the manufacturer. A) Insurance B) Warranties C) Bonds D) Invoices E) Balance sheets

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

16) Unlike physical products, services cannot be seen, tasted, felt, heard, or smelled before they are bought. This is known as the ________ aspect of services. A) inseparability B) intangibility C) variability D) perishability E) heterogeneity

28) A company that is looking to maximize its market share would do well to follow ________ pricing. A) markup B) market-penetration C) market-skimming D) survival E) target-return

29) A ________ is a wholesaler-sponsored group of independent retailers engaged in bulk buying and common merchandising. A) retailer cooperative B) voluntary chain C) consumer cooperative D) merchandising conglomerate E) franchise organization

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

66) In increasingly fast-paced markets, price and technology are not enough. ________ is the factor that will often give a company its competitive edge and is defined as the totality of features that affect how a product looks, feels, and functions in terms of customer requirements. A) Conformance B) Design C) Performance D) Reliability E) Style

7) How a consumer shops for organic foods and how he or she uses and disposes of the product is part of the consumers' ________ that is important for marketers to consider. A) value proposition B) consumption system C) value system D) quality perception E) value chain

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

73) The brand promise for ________ is "the product you buy is of highest esteem, based on its timeliness, elegant design and the high quality, which is derived from the excellence of our craftsmen." A) Hermés B) Montblanc C) Patrón D) Sub-zero Refrigerators E) Armani

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

1) A ________ is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. A) function B) product C) benefit D) process E) structure

1) When consumers examine products, they often compare an observed price to an internal price they remember. This is known as a(n) ________ price. A) markup B) reference C) market-skimming D) accumulated E) target

1) Which of the following is a characteristic of a service? A) The service is essentially tangible. B) The service does not result in the ownership of anything. C) The service's production is majorly tied to a physical product. D) Services are typically produced and consumed at different times. E) A client's presence is not required for rendering a service.

1) ________ includes all the activities in selling goods or services directly to final consumers for personal, non-business use. A) Wholesaling B) Retailing C) Procurement D) Promoting E) Warehousing

10) Which of the following are tangible goods that normally survive many uses? A) generic goods B) durable goods C) core benefits D) convenience goods E) unsought goods

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

100) Marriott Corporation now contains hotels and motels from the "budget" end of the consumer spectrum to the "premium" end with their JD Marriott flagship locations. This is an example of a firm that successfully performed a(n) ________ to reach more consumers and ventures that are more profitable. A) upstream integration B) two-way stretch C) up-market stretch D) down-market stretch E) downstream integration

102) A(n) ________ is an extra payment designed to gain reseller participation in special programs. A) seasonal discount B) allowance C) discount D) quantity discount E) functional discount

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

104) When supermarkets and department stores drop the price on well-known brands to stimulate store traffic, they are said to be following ________ pricing. A) value B) loss-leader C) special event D) high-low E) everyday low

105) When shopping for tires for your automobile, you notice that the manufacturer you have selected has tires for your car priced low, average, and high, based upon performance and features. This is an example of what type of product-mix pricing? A) two-part pricing B) product-line pricing C) captive product pricing D) market pricing skimming E) price discrimination

107) Angela switched to a new hair stylist after getting a bad haircut from her previous stylist. This is an example of which of the following factors leading to customer switching behavior? A) service encounter failure B) core service failure C) response to service failure D) involuntary switching E) competition

107) In ________, the seller charges different amounts to different classes of buyers. A) perceived value pricing B) third-degree price discrimination C) first-degree price discrimination D) second-degree price discrimination E) psychological discounting

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

113) The airline and hospitality industries use ________, by which they offer discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires. A) special-customer pricing B) yield pricing C) cash rebates D) location pricing E) customer-segment pricing

113) Which of the following is considered a wholesaler? A) retailers B) brokers C) producers D) manufacturers E) farmers

118) Agricultural assemblers, petroleum bulk plants and terminals, and auction companies are examples of ________. A) full-service wholesalers B) specialized wholesalers C) limited-service wholesalers D) merchant wholesalers E) brokers

118) The customer service representatives at G.K.'s customer service center must know as much about the products as possible, so that they can help customers solve their difficulties without sounding hesitant or unsure of themselves. Which of the following determinants of service quality are they being asked to demonstrate? A) responsiveness B) assurance C) empathy D) reliability E) tangibility

119) Josh gets his bike serviced at Dean's Garage even though there's another garage much closer to home. He prefers Dean's because the work is usually done quickly and the staff try to solve the issues with the bike as soon as possible. Dean's Garage excels at which of the following five determinants of service quality? A) reliability B) responsiveness C) assurance D) empathy E) tangibles

3) While shopping at the mall, Jane was asked by one of the sales representatives at the cosmetics counter to try out a new lipstick that her company was test marketing. The company representative asks her how much she would be willing to pay for the lipstick. After trying it out, Jane is of the opinion that $5 is just the right price for it. What type of a reference price is Jane using? A) usual discounted price B) fair price C) maximum retail price D) last price paid E) historical competitor price

30) A travel agency offers weekend discounts for car rentals. What can be deduced from this? A) It is increasing peak-time efficiency. B) It is using differential pricing. C) It is using linear pricing. D) It is cultivating peak demand. E) It is providing complementary services.

30) When a company introduces a product at a high price and then gradually drops the price over time, it is pursuing a ________ strategy. A) market-penetration pricing B) market-skimming pricing C) value-pricing D) switching cost E) loss-leader pricing

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

32) The Caesar Park Hotel generally caters to business customers during the week, but has now decided to promote mini-vacation weekends for non-business customers as well. What is the Caesar Park Hotel trying to do? A) It is implementing premium pricing. B) It is trying to cultivate nonpeak demand. C) It is promoting complementary services. D) It is putting reservation systems in place. E) It is implementing differential pricing.

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

34) Which of the following wholesaler functions reduces inventory costs and risks to suppliers and customers? A) selling and promoting B) warehousing C) transportation D) market information E) assortment building

35) ________ includes all the activities in selling goods or services to those who buy for resale or business use. A) Retailing B) Wholesaling C) Procurement D) Promoting E) Warehousing

39) If demand changes considerably, with a small change in price, the demand is said to be ________. A) unit elastic B) elastic C) inelastic D) marginal E) strained

4) A computer falls into the ________ category of service mix. A) pure tangible good B) tangible good with accompanying services C) hybrid D) major service with accompanying minor goods E) pure service

41) If the Ford GT is designed to accelerate to 50 miles per hour within 10 seconds, and every Ford GT coming off the assembly line does this, the model is said to have high ________. A) reliability B) conformance quality C) durability D) compatibility E) interoperability

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

42) Which of the following is true regarding price elasticity? A) The higher the elasticity, the lesser is the volume growth resulting from a 1 percent price reduction. B) Within the price indifference band, price changes have little or no effect on demand. C) If demand is elastic, sellers will consider increasing the price. D) Price elasticity does not depend on magnitude and direction of the contemplated price change. E) When demand is inelastic, sellers should lower prices in order to increase total revenue.

42) ________ describes the product's look and feel to the buyer; it has an advantage of creating distinctiveness that is difficult to copy. A) Design B) Style C) Durability D) Conformance E) Reliability

46) ________ cost is the cost per unit at that level of production; it equals total costs divided by production. A) Target B) Average C) Marginal D) Opportunity E) Fixed

49) Deducting the desired profit margin from the price at which a product will sell, given its appeal and competitors' prices, is known as ________. A) overhead costing B) target costing C) activity-based costing D) benefit analysis E) estimate costing

5) Which of the following is NOT one of the possible consumer reference prices? A) typical price B) actual future price C) last price paid D) expected future price E) upper-bound price

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

56) The key to perceived-value pricing is to ________. A) reengineer the company's operations B) deliver more unique value than competitors C) adopt subtle marketing tactics compared to competitors D) deliver more value but at a lower cost E) invest heavily in advertising in order to convey superior value

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

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

88) A consumer products firm manufactures and sells over 200 different sizes and varieties of jams and jellies. We can say that this manufacturer's product mix has high ________. A) consistency B) depth C) intensity D) range E) width

9) Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of pricing is the company depending on? A) going-rate pricing B) image pricing C) market-skimming pricing D) target pricing E) markup pricing

9) Which of the following is true for self-service retailing? A) They carry more shopping goods and services such as credit and merchandise-return privileges. B) This service model is favored by discount stores and customers who want to save money. C) It results in high staffing costs compared to other forms of retailing. D) Salespeople are ready to assist in every phase of the "locate-compare-select" process. E) Customers need more information and assistance than in other forms of retailing.

90) The ________ of the product mix refers to the total number of items in the mix. A) width B) length C) depth D) breadth E) range

91) In his article, "Innovative Imitation," Theodore Levitt argues that ________. A) imitation is wrong and should be punished B) product imitation might be as profitable as product innovation C) innovation is not possible without substantial imitation D) innovation cannot begin unless dissatisfaction with imitation occurs E) imitation should be against the law because of the intellectual property decision involved

91) When the recent recession hit, Zappos decided to stop offering complimentary overnight shipping to first-time buyers and offer it to repeat buyers only, which is an example of the ________ best practice of top service companies. A) strategic concept B) profit tiers C) top-management commitment D) high standards E) monitoring systems

94) As a market follower strategy, the ________ emulates the leader's products, name, and packaging, with slight variations. A) counterfeiter B) cloner C) imitator D) adapter E) innovator

94) Product-line analysis provides information for two key decision areas: product-line length and ________. A) product-class composition B) product-mix pricing C) product pricing D) popular pricing E) product-need family

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

96) Tasteeos, Fruit Rings, and Corn Flakes sell for nearly $1 a box less than leading cereal brands. Which market follower strategy is being employed by the cereal manufacturer? A) counterfeiter B) cloner C) imitator D) adapter E) reverse innovator

97) A Japanese firm is ready to sell its recent technological innovation to the US government. But it has asked for 80 percent in cash and the rest in mica. The Japanese firm is looking to enter into a(n) ________ with the US government. A) functional discount B) compensation deal C) buyback arrangement D) offset agreement E) barter deal

98) As a(n) ________, BurgerJacks, a fast food chain selling low-price burgers, has differentiated itself by setting up base in a market not yet exploited by McDonald's. A) cloner B) imitator C) counterfeiter D) adapter E) innovator

99) ROC Engineering, a Chinese shipbuilding company, agrees to build a fleet of submarines for the Sri Lankan navy, for which it will be paid in the local Sri Lankan currency. As per the agreement, ROC must also spend a substantial amount of the money it generates through this deal within the country. In accordance with the contract, ROC buys Sri Lankan tea at a reduced rate. This is an example of which of the following forms of countertrade? A) descending bid B) offset C) barter D) compensation deal E) buyback arrangement

102) If line filling is overdone, it could result in ________ and customer confusion. A) sales paralysis B) manufacturing inefficiencies C) cannibalization D) disintermediation E) ineffective management

100) ________ are offered by a manufacturer to trade-channel members if they will perform certain functions, such as selling, storing, and recordkeeping. A) Consumer promotions B) Quantity discounts C) Functional discounts D) Seasonal discounts E) Trade-in allowances

114) As a market-follower strategy, an imitator duplicates the leader's product and packages and sells it on the black market or through disreputable dealers.

FALSE

115) Ellen came across an ad for a new restaurant that promised authentic French cuisine. When she ate there, however, she was disappointed to find that the food was mediocre and not very authentic. Which of the following gaps of service performance does this demonstrate? A) gap between service-quality specifications and service delivery B) gap between perceived service and expected service C) gap between service delivery and external communications D) gap between consumer expectation and management perception E) gap between management perception and service-quality specification

116) When a movie theater charges a lower ticket fee for children and senior citizens, it is engaging in ________ pricing. A) product-form B) image C) customer-segment D) location E) time

116) ________ sell and deliver a limited line of semiperishable goods to supermarkets, grocery stores, hospitals, restaurants, and hotels. A) Producers' cooperatives B) Cash and carry wholesalers C) Truck wholesalers D) Drop shippers E) Rack jobbers

119) Which of the following is true of brokers? A) Brokers represent buyers or sellers on a semipermanent basis. B) Most brokers are small businesses with a few skilled salespeople. C) Brokers bring buyers and sellers together and assist in negotiation. D) Selling brokers have contractual authority to sell a manufacturer's entire output. E) Purchasing brokers make purchases for buyers and often receive, inspect, warehouse, and ship merchandise.

121) Leo's manager has asked him and his teammates to demonstrate caring towards customers. They are instructed to learn customers' names, and use names while interacting with them. Repeat customers should get special attention, and the team members should remember their preferences and habits. The manager is asking the team to be ________. A) assuring B) candid C) empathetic D) reliable E) responsive

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

125) When customers calculate the perceived economic benefits of a continuously provided service in relationship to the economic costs, they are gauging the ________ equity. A) private B) brand C) payment D) customer-service E) product-service

13) H&A is a retail chain that specializes in selling goods at very low prices. To achieve this, it stocks a very narrow assortment of basic necessities and offers customers a "no-frills" shopping experience. H&A is an example of a(n) ________ store. A) off-price B) specialty C) hard-discount D) superstore E) convenience

133) McDonald's restaurants inside Walmart stores and Starbucks inside Super Targets are examples of ________, whose main advantages are that the products can or may be convincingly positioned by virtue of the associated brands. A) cooperative marketing B) cross-promotion C) retail co-branding D) ingredient branding E) feature promotion

134) An alternate way to increase sales volume is to increase the usage rate among users. This can be done by ________. A) converting nonusers B) having consumers use less of the product on each occasion C) having consumers use the product on more occasions D) attracting competitors' customers E) entering new market segments

135) The main advantage of co-branding is that a product may be convincingly positioned by virtue of the ________ involved. A) branding synergy B) increased advertising dollars C) multiple brands D) bundled package E) pure bundling

136) Optimal order quantities exist when the curves for the order-processing cost per unit and inventory-carrying cost per unit ________. A) are collinear B) are diagonal to each other C) intersect D) are parallel to each other E) equal zero

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

137) E&OE is trying to minimize its inventory costs, which are extremely high. The company has realized that it can achieve this by maintaining a near-zero inventory and producing more products only once it is ordered. Which of the following is true for E&OE? A) Inventory costs are lower than order-processing costs. B) Running costs are higher than inventory-carrying costs. C) Setup costs for the products are low. D) Order-processing costs are high. E) Order-processing costs are lower than setup costs.

143) We define packaging as all the activities of designing and producing the container for a product. This includes up to three levels of material: primary package, secondary package, and ________ package. A) retailer B) design C) shipping D) consumer E) supplier

148) A product's purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value gives the ________ cost. A) service warranty B) out-of-pocket C) life-cycle D) facilitating services E) value-augmentation

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

150) When Johnson Controls reached beyond its climate control equipment and components business to manage integrated facilities by offering products and services that optimize energy use, it was said to be providing ________. A) facilitating services B) a primary service package C) value-augmenting services D) service contracts E) service warranties

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

FALSE

5) Reynold's is a grocery chain that has always catered to mid-market customers. However, the owner, Mal, has noticed that an influx of new residents are buying mostly the lower-cost and discounted products. To attract customers, Mal decides to make a gradual switch to the discount store format, but to do this, he will have to cut costs wherever possible. Which of the following types of services should Mal avoid in order to lower costs? A) limited service B) self-selection C) full-service D) self-service E) limited-selection

5) Which of the following is an example of a hybrid service? A) teaching B) car C) restaurant meal D) soap E) air travel

50) Competitors are most likely to react to a price change when ________. A) the firm has a weak value proposition B) the firm enjoys a monopoly C) there are few competing firms D) the product is heterogeneous E) buyers have limited information

51) Which of the following is the most elementary pricing method? A) value pricing B) going-rate pricing C) markup pricing D) target-return pricing E) perceived-value pricing

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.

53) A manufacturer has invested $750,000 in a new product and wants to set a price to earn a 15 percent ROI. The cost per unit is $18 and the company expects to sell 50,000 units in the first year. Calculate the company's target-return price for this product. A) $18.10 B) $18.23 C) $20.25 D) $20.70 E) $25.50

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

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

59) Matt's retail store offers all products at $2 less than its competitors. The store never runs promotional campaigns or offers special discounts. Matt's retail store is following a(n) ________ pricing policy. A) auction-type B) target-plus C) everyday low D) high-low E) going-rate

72) In the corporate headquarters of a supermarket chain, ________ are responsible for developing brand assortments and listening to salespersons' presentations. A) central buyers B) brokers C) specialist buyers D) agents E) specialized wholesalers

74) Which of the following is true for direct product profitability? A) It is highly correlated with the gross margin on a product. B) It is negligible compared to the gross margin on a product. C) It bears little relation to the gross margin on a product. D) It is significantly lower than the gross margin on a product. E) It is exactly the same as the gross margin on a product.

8) A company has developed the prototype of a mobile phone that it plans to launch in the next few months. The phone comes equipped with the most advanced technological features. As part of its test marketing efforts, the company allows customers to examine and use the prototype and also gathers feedback regarding product features and price. The results of this test marketing effort show that customers are willing to pay at least $500, considering the phone's various features. As such, the company has discovered customers' ________. A) last paid price B) expected future price C) lower-bound price D) upper-bound price E) typical price

80) Which of the following is a postpurchase service offered by retailers? A) accepting orders over the telephone B) advertising and window displays C) delivery to the customer's doorstep D) general information E) interior decoration of the retail outlet

80) ________ marketing refers to the normal work of preparing, pricing, distributing, and promoting the service to customers. A) Interactive B) Internal C) External D) Promotional E) Direct

85) In which of the following does a customer respond to the functional quality of a service? A) Sara's preferred hair stylist is some miles away, but Sara goes to him because his styles suit her looks. B) Kathy tries out a new restaurant every week because she likes to experience the variety. C) Bill has gone to the same chiropractor for the past fifteen years because he is friendly and takes the time to listen to Bill. D) Ray's mechanic charges high prices for service, but his work is good and worth the price. E) Alex has no interest in theater, but goes often because her best friend loves plays.

87) Charles Schwab's best customers are instantly directed to customer service representatives, while other customers have to wait longer. Charles Schwab is trying to ________. A) monitor its service systems B) empower the customers C) retain the patronage of profitable customers D) increase consumer participation E) standardize the service-performance process

89) Customers who view a service as homogeneous ________. A) only patronize a preferred service provider B) judge services on the basis of the providers C) care less about the provider than about the price D) pick a service provider based on functional attributes E) opt for the service with the highest price, irrespective of quality

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

FALSE

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

FALSE

34) Which of the following is an example of a complementary service? A) Big department stores usually hire extra staff to handle the rush during the holiday season. B) The Caesar Park Hotel generally caters to business customers during the week, but has now decided to promote mini-vacation weekends for non-business customers as well. C) More paramedics are on hand to assist physicians during times when emergency admissions are highest. D) AXA Bank set up automated teller machines so that its customers could avoid standing in line. E) Chesterton College hires part-time teachers when enrollment goes up.

4) Discount stores that try to keep prices as low as possible are more likely to function using ________ operations. A) limited service B) self-selection C) full-service D) self-service E) limited-selection

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

60) Staples is a giant retailer that concentrates on selling office supplies. Staples is an example of a(n) ________. A) ambush marketer B) supercenter C) megamarketer D) category killer E) guerilla marketer

71) The ________ attack attempts to capture a significant share of the consumer market by launching a grand offensive on several fronts. A) frontal B) bypass C) flank D) encirclement E) guerrilla

80) ________ found a highly creative way to address the problem of proliferating plastic bottles with its "Waste<Less" line and helped farmers grow cotton with less water for its "Water<Less" line. A) Calvin Klein B) Ralph Lauren C) Ferragamo D) Levi-Strauss E) Roberto Cavalli

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

9) When banks try to make their positioning strategies tangible through the ________ dimension, they make sure the exterior and interior have clean lines, the layout of the desks and the traffic flow are planned carefully, and waiting lines are not overly long. A) people B) symbols C) equipment D) place E) communication material

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.

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

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

101) When hotels, motels, and airlines offer discounts in slow selling periods, they are said to be offering ________. A) trade discounts B) quantity discounts C) functional discounts D) seasonal discounts E) trade-in allowances

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

11) Which of the following is an example of a limited-service retailer? A) Customers at TAB pick out the products they want and pay at the checkout counter. B) Salespeople at Eli are always on hand to offer shoppers advice and assistance in choosing products. C) Mina's allows customers to checkout their own purchases in order to reduce the staff count. D) As CLO's offers a number of merchandise-return privileges, customers need information and assistance while shopping. E) Alison's stocks a number of specialty products and the store's salespeople generally help shoppers with all their needs.

110) When Coca-Cola carries a different price depending on whether the consumer purchases it in a fine restaurant, a fast-food restaurant, or a vending machine, then this form of price discrimination is known as ________ pricing. A) product-form B) loss-leader C) special event D) channel E) location

112) The customer service representatives at a call center have been asked to handle each call within five minutes. A recent customer survey by the company revealed that customers appreciate it when employees take the time to answer their questions fully and listen to their grievances. What kind of service gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception

115) ________ serve bulk industries such as coal, lumber, and heavy equipment, assuming title and risk from the time an order is accepted to its delivery. A) Producers' cooperatives B) Cash and carry wholesalers C) Truck wholesalers D) Drop shippers E) Rack jobbers

122) Gloria goes to the same bagel shop every morning because the workers there remember her name and remember her order. They always make her feel welcome. The employees of this bagel shop excel at which of the following determinants of service quality? A) reliability B) responsiveness C) assurance D) empathy E) tangibles

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

129) A music school in Boyles Height, LA, specializes in teaching the guitar and the violin. After a spurt in growth and a few successful years, the school is experiencing a slowdown in sales and stability in its profits due to an increase in competition. The school is in the ________ stage of its life cycle. A) introduction B) growth C) decline D) maturity E) obsolescence

13) It was sunny when Jenny went to class, but by the time class was over it was raining heavily, so Jenny stopped by the student store to buy an umbrella before she walked back to her dorm. In this case, the umbrella is an example of a(n) ________ good. A) impulse B) specialty C) homogeneous shopping D) emergency E) heterogeneous shopping

132) According to Peter Golder and Gerald Tellis, a(n) ________ is the first to develop a working model of the product. A) developer B) creative pioneer C) market pioneer D) product pioneer E) inventor

132) ________ costs for a manufacturer consist of setup costs and running costs. A) Inventory-carrying B) Containerization C) Wholesaling D) Order-processing E) Transportation

135) ________ is a distribution strategy that can be effectively used during the growth stage of the product life cycle. A) Building product awareness B) Phasing out unprofitable outlets C) Building selective distribution D) Building intensive distribution E) Stressing on brand differences

138) E&OE is trying to minimize its inventory costs, which are extremely high. The company has realized that it can achieve this by maintaining a near-zero inventory and producing more products only once it is ordered. Which of the following will be true for E&OE? A) Short production runs will be more expensive than longer ones. B) Setup and order-processing costs will be high. C) The order point will be high. D) Order-processing costs will be lower than the inventory-carrying costs. E) E&OE can reduce the average cost per unit by producing a long run.

14) Which one of the following would be considered high in credence qualities? A) an interior of a house B) a restaurant C) a haircut D) psychotherapy E) a computer

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

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

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

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

150) Benz & Frendz Corp., a manufacturer of high end consumer durables, experienced sluggish sales growth in most of its product categories during three consecutive quarters of 2009. However, market analysis revealed that its competitors' sales had also slackened during this period. Analysts pointed out that when all firms are losing sales, it is extremely important to adopt strategies that are aimed at retaining customers. This led the firm to reduce operation costs while maintaining product quality. They also revamped their marketing strategy to focus on the values created by their products. Which of the following can be inferred from the strategies adopted by the firm? A) The company was trying to protect its market share and continue to operate as a market leader. B) The company was focusing on geographical expansion. C) The company was aiming to capture a new market segment. D) The company was marketing its products amidst an economic downturn. E) The company was focusing on market penetration.

117) The owner of supermarket chain Reynold's has realized that customers want a wider variety of goods than is currently available. However, Reynold's cannot afford the costs of storing excess inventory. Additionally, the owner is not willing to take the risk that the new products will remain unsold. Which of the following types of wholesalers can help Reynold's meet customer demand while minimizing costs? A) producers' cooperatives B) cash and carry wholesalers C) truck wholesalers D) drop shippers E) rack jobbers

14) An example of a restaurant with a narrow and deep assortment is a ________. A) small lunch counter B) cafeteria C) large restaurant D) casual dining restaurant chain E) delicatessen

17) ________ are major purchases and are usually bought directly from the producer with the typical sale preceded by long negotiation periods. A) Raw materials B) Materials and parts C) Processed materials D) Capital goods E) Installations

46) Delivery refers to how well a product or service is brought to the customer. It includes speed, ________, and care throughout the delivery process. A) expedience B) intensity C) tangibility D) performance E) accuracy

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

52) Despite its weaknesses, markup pricing remains popular for which of the following reasons? A) Sellers can determine demand much more easily than they can estimate costs. B) By tying the price to cost, the pricing task becomes more sophisticated. C) When all firms in the industry use markup pricing, price competition flourishes. D) Sellers take advantage of buyers when the latter's demand becomes acute. E) Many people feel that cost-plus pricing is fairer to both buyers and sellers.

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

7) The minimum price that most consumers would pay for a given product is known as the ________ price. A) everyday low B) usual discounted C) fair D) typical E) lower-bound

73) In supermarkets and other retail outlets, RFID is used to ________. A) change prices instantaneously B) check for spoilage or damage to goods C) advertise special offers and discounts D) run continual promotional messages E) monitor inventory and track goods

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

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

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

101) A brand developed by a retailer and/or wholesaler that is available only in selected retail outlets is called a ________ brand. A) generic B) franchisee C) marque D) national E) private-label

76) A store selling expensive artwork and luxury goods typically falls into the ________ group with respect to margins and volume. A) mixed markup, high-volume B) low-volume, mixed markup C) low-volume, low-markup D) high-volume, low-markup E) high-markup, low-volume

82) ________ marketing describes the employees' skill in serving the client. A) External B) Internal C) Promotional D) Direct E) Interactive

83) A group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same outlets or channels, or fall within given price ranges is known as a ________. A) product type B) product class C) need family D) product variant E) product line

86) Happy Home Products produces detergents, toothpaste, bar soap, disposable diapers, and paper products. This company has a product ________ of five lines. A) type B) length C) class D) mix E) width

87) Using the ________ level of the product hierarchy to market its soups, Campbell Soups feature the company name first, then the soup variety on their packaging. A) product class B) product-type C) need-family D) product-family E) product-line

90) Belling Hotels provides a complimentary breakfast buffet to all guests. This is an example of a ________. A) primary service package B) service interface C) service support D) service frequency E) secondary service feature

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

91) In offering a product line, companies normally develop a ________ and modules that can be added to meet different customer requirements. A) convenience item B) flagship product C) staple item D) potential product E) basic platform

95) What occurs when any company lengthens its product line beyond its current range? A) market overreach B) brand dilution C) product adaptations D) cannibalization E) line stretching

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

100) Secondary service features are the features that the customer himself or herself adds to the service.

FALSE

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

FALSE

106) Perceived value refers to the gap between actual needs and satisfied needs of a customer.

FALSE

107) Private label or store brands are also known as generics.

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

109) The trade-off approach may be easier to use when there are only a few variables and alternatives.

FALSE

11) Price is one of the two elements of the marketing mix that produces revenue.

FALSE

114) The product-line length can be obtained by averaging the number of variants within the brand groups.

FALSE

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

121) Manufacturers of systems such as razors and ink jet printers use a system of pricing called "two-part pricing": one price for the disposable products and another for the "hardware."

FALSE

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

FALSE

132) The zone of tolerance for a service is the perceived economic benefit in relationship to the economic cost.

FALSE

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

FALSE

153) A product's purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value is known as the product's activity cost.

FALSE

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

23) Durable products normally require less personal selling and service and less seller guarantees than nondurable goods.

FALSE

37) Full-service retailers generally have the lowest costs of all retail types.

FALSE

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

FALSE

44) 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

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

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

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

81) In high-low pricing, retailers charge low prices on an everyday basis with occasional price increases.

FALSE

90) Mass merchandisers are usually high-markup, lower-volume stores.

FALSE

118) Psychological discounting involves setting an artificially high price and then offering the product at substantial savings.

TRUE

119) Price-setting logic must be modified when the product is part of a product mix.

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

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

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) The four product-mix dimensions (length, width, depth, consistency) permit the company to expand its business.

TRUE

115) Every company's product line covers a certain part of the total possible range of products and consumer levels.

TRUE

115) Firms with low shares of the total market can become highly profitable through smart niching.

TRUE

119) Loss leader pricing dilutes a company's brand image.

TRUE

137) An alternate way to increase sales volume is to expand the number of users by converting nonusers.

TRUE

138) Companies sometimes initiate price cuts in an attempt to dominate the market through lower costs.

TRUE

149) Labels can identify the product and must contain legal statements that under various Federal laws cannot be misleading, false, or deceptive.

TRUE

150) As inventory draws down, management must know at what stock level to place a new order. This stock level is called the order point.

TRUE

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

TRUE

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

TRUE

31) A marketing channel overcomes the time, place, and possession gaps that separate goods and services from those who need or want them.

TRUE

38) A service is essentially intangible.

TRUE

4) Growing the core can be a less risky alternative than expansion into new product categories.

TRUE

52) In counteroffensive marketing, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so that it is forced to pull back to defend itself.

TRUE

53) Service companies try to demonstrate their service qualities through physical evidence and presentation.

TRUE

64) 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

70) The highest-ranking companies in a 2013 Forrester study of services that meet customer needs and were easy and enjoyable to do business with included Marshalls, TJ Maxx, JCPenney, and Marriott Hotels & Resorts.

TRUE

74) Price elasticity depends upon the magnitude and direction of the contemplated price change.

TRUE

77) In the aftermath of a crippling recession, luxury for many has become more about style and substance, combining personal pleasure and self-expression.

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

95) Clients judge service not only by its technical quality but also by its functional quality.

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

108) The lower price of generics is made possible by lower-cost labeling and packaging and minimal advertising, and sometimes lower-quality ingredients.

TRUE

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

TRUE

111) The product hierarchy stretches from basic needs to particular items that satisfy those needs.

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

28) ________ defense involves occupying the most desirable market space in the minds of the consumers and making the brand almost impregnable. A) Position B) Flank C) Preemptive D) Mobile E) Contraction

104) The market leader strategy ensures high sales volume, whereas the market nicher strategy allows firms to achieve ________. A) high margin B) low margin C) high promotability D) medium pricing E) lower demand

12) As the marketing manager for a floor tile manufacturer, Evans Smith is given a target to achieve 500 new customers by the end of summer. He decides to search the market for probable customers who might use the product but currently do not. Which of the following strategies is Evans pursuing to increase the market demand for his product? A) market-penetration strategy B) new-market segment strategy C) geographical-expansion strategy D) needs-assessment strategy E) consolidation strategy

13) When firms look for new users in groups that have never used the product before, the firm is using the ________ strategy. A) new-market segment B) market-penetration C) geographical-expansion D) product development E) diversification

2) Galaxy chocolate has successfully competed with Cadbury by positioning itself as "your partner in chocolate indulgence" and featuring smoother product shapes, more refined taste, and sleeker packaging, which represents which of the following main strategies for growing the core of the business? A) Make the core of the brand as distinctive as possible. B) Drive distribution through both existing and new channels. C) Offer the core product in new formats or versions. D) Increase costs and revenue. E) Expand to another geographic region.

25) ________ marketers are not just market-driven, they are proactive market-driving firms. A) Creative B) Responsive C) Inexperienced D) Laidback E) Anticipative

38) When large companies can no longer defend their full territory, they can launch a ________ defense where they give up weaker markets and reassign resources to stronger ones. A) contraction B) preemptive C) flank D) mobile E) position

42) When Procter & Gamble used Gain and Cheer laundry detergents as outposts to protect a weak front or support a possible counterattack, they were using a ________ defense. A) flank B) position C) preemptive D) counteroffensive E) mobile

73) The ________ attack offers the firm an opportunity to diversify into unrelated products, into new geographical markets, and leapfrogging into new technologies. A) bypass B) flank C) frontal D) guerrilla E) encirclement

109) A job-shop specialist ________. A) sells only in a certain locality, region, or area of the world B) customizes its products for individual customers C) operates at the low- or high-quality ends of the market D) offers one or more services not available from other firms E) specializes in serving only one channel of distribution

11) When a firm looks for new users in groups that might use a product but do not already use the product, the firm is using the ________ strategy. A) new-market segment B) market-penetration C) geographical-expansion D) product development E) diversification

14) When Starbucks introduced its Tazo Tea line to bring in new customers who had never gone to Starbucks because they don't drink coffee, Starbucks was employing a ________ strategy. A) market-penetration B) new-market segment C) geographical-expansion D) niche identification E) blue-ocean

65) For a market challenger, attacking ________ is a high risk but potentially high payoff strategy, which also allows it to distance itself from other challengers. A) a firm of its own size B) the market leader C) a regional firm D) an underfinanced firm E) a poorly performing firm

74) Appy Juices, a company that manufactures bottled water, diversified into soft drinks before any of its opponents could launch a diversified product. This would be an example of a(n) ________ attack. A) flank B) bypass C) guerrilla D) encirclement E) frontal

10) When the total market expands, the market ________ usually gains the most. A) challenger B) leader C) follower D) nicher E) entrant

100) As a market follower, the ________ may choose to sell to different markets, but often it grows into a future challenger. A) imitator B) adapter C) cloner D) counterfeiter E) innovator

21) Which of the following is the most constructive response a market leader can make when defending its market share? A) maintain basic cost control B) innovate continuously C) provide desired benefits D) meet challengers with a swift response E) provide expected benefits

22) To satisfy customers, a(n) ________ marketer finds a stated need and fills it. A) creative B) responsive C) anticipative D) laidback E) inexperienced

26) Sony is an unusual market leader. It gives its customers new products that they have never asked for (e.g., Walkmans, VCRs, video cameras, CDs). This makes Sony a(n) ________ firm. A) market-driven B) market-driving C) operations-driven D) vision-driven E) virtually-driven

27) Which of the following is true about proactive marketing? A) A company needs creative anticipation to see the writing on the wall. B) Proactive companies create new offers to serve unmet and unknown consumer needs. C) Proactive companies refrain from practicing uncertainty management. D) A company needs responsive anticipation to devise innovative solutions. E) Companies are winners when they are extremely risk-averse.

29) A marketing manager has planned a strategy that will require the organization to erect outposts to protect its weak front-running brands. In this ________ defense, the outposts will be central to the organization's new competitive strategy. A) position B) flank C) preemptive D) counteroffensive E) mobile

3) Which of the following brands generates only 6 percent outside North America, with very little of that in fast-growing emerging markets like India, China, and Brazil, which may represent opportunities for its growth? A) UPS B) Under Armour C) FedEx D) Nike E) Adidas

33) In a ________ defense strategy, the market leader can meet the attacker frontally and hit its flank or launch a pincer movement so that the attacker is forced to pull back to defend itself. A) position B) counteroffensive C) preemptive D) contraction E) flank

41) When Starbucks extended its brand into coffee drinks and ice creams to reach customers who did not use its brand, it was using a(n) ________ strategy. A) geographical-expansion B) new-market segment C) market-penetration D) larger package size E) increased frequency

70) A(n) ________ strategy is another name for identifying shifts in market segments that are causing gaps to develop, then rushing in to fill the gaps and developing them into strong segments. A) frontal attack B) flanking C) encircling D) counteroffensive E) bypass

31) The defensive marketing strategy wherein a stream of new products are introduced by a firm and are announced in advance are referred to as ________ defense. A) mobile B) counteroffensive C) preemptive D) contraction E) flank

34) After Olay entered and took over the Indian market with its anti-aging lotion, Ponds invested heavily in a similar product which used only natural ingredients. This is an example of a ________ defense. A) position B) flank C) counteroffensive D) contraction E) mobile

37) When "petroleum" companies such as BP sought to recast themselves as "energy" companies, increasing their research into the oil, coal, nuclear, hydroelectric, and chemical industries, these companies were employing a ________ defense strategy. A) preemptive B) counteroffensive C) mobile D) flank E) contraction

77) When Canon grabbed a large chunk of Xerox's market by introducing desk copiers, it distanced itself from other challengers by ________. A) attacking a regional firm B) attacking a firm of its own size that was underfinanced C) attacking the market leader D) attacking a firm of its own size that was not doing the job well E) acquiring guppies

105) Which of the following is true about market nichers? A) They are market followers in small markets. B) They tend to have high manufacturing costs. C) Their return on investment exceeds that in larger markets. D) A nicher achieves high volume as against a mass marketer that achieves high margin. E) They usually experience long-term losses.

107) Newman Inc. is a company that manufactures saddles specifically for horses that race in derbies in the United States and the United Kingdom. Within this context the firm is exhibiting the role of a ________ specialist. A) vertical-level B) customer-size C) product-line D) job-shop E) service

15) Trendz Inc. is a leading brand of fashion clothing and accessories based in Houston. After gaining a strong foothold in the US, the company wants to foray into foreign markets. The management at Trendz knows that people residing in other countries are likely to have different tastes and preferences, so they may have to redesign some of their offerings. Which of the following strategies is Trendz using? A) market-penetration strategy B) outsourcing strategy C) geographic-expansion strategy D) product differentiation strategy E) ethnocentric strategy

19) Oliver, a company that produces different types of olive oil, launched a promotional campaign focusing on the alternative uses of olive oil. What strategy is the company implementing to expand its total market demand? A) using the new-market segment strategy to attract new customers B) improving the current level of product performance C) advertising new and different applications of the brand D) protecting its market share E) using the market-penetration strategy to attract new customers

64) A firm that is willing to maintain its market share, and not attack the leader and other competitors in an aggressive bid for further market share, is known as a market ________. A) challenger B) leader C) follower D) nicher E) entrant

75) A marketing manager has decided to "leapfrog" the competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as a(n) ________ attack. A) flank B) encirclement C) bypass D) guerrilla E) frontal

112) A niche specialist that specializes in one type of customer, like a value-added reseller that customizes computer hardware and software for a specific customer segment and earns a price premium in the process, is a(n) ________ specialist. A) geographic B) quality-price C) product-feature D) end-user E) channel

20) Clorox runs ads stressing the many benefits of its bleach, such as how it eliminates kitchen odors, in order to generate additional opportunities to use the brand in the same basic way. This is an attempt to ________ of consumption. A) increase the amount B) increase the level C) increase the perception D) increase the frequency E) increase the emotional implications

95) Amani, a company that manufactures cloth for suits, strives to be equal to Armani in product design, brand name, and product packaging. This is an example of ________. A) innovating B) adapting C) imitating D) cloning E) counterfeiting

101) Redo is a market follower in the wristwatch industry. After noticing a shortfall in the market leader's product, Redo improves its product to suit consumer needs and becomes a challenger for the market leader. This is an example of a(n) ________. A) counterfeiter B) cloner C) imitator D) adapter E) innovator

103) A firm that serves small market segments that are not being served by bigger firms is known as a market ________. A) challenger B) leader C) follower D) nicher E) entrant

106) The key idea in successful nichemanship is specialization. Which of the following specialists would most closely be identified with the characterization of being an organization that limits its selling to one customer? A) end-user specialist B) vertical-level specialist C) customer-size specialist D) specific-customer specialist E) quality-price specialist

110) A firm that is based in France designs jewelry and takes custom orders from around the world. They do not design more than 15 pieces of jewelry in a year and ensure that each design uses unique stones and is unique. Such nichemanship is an example of ________ specialist role. A) customer-size B) product C) product-feature D) job-shop E) quality-price

124) ________ is the period of slow sales growth and nonexistent profits. A) Growth B) Decline C) Maturity D) Introduction E) Stagnancy

18) When food product companies advertise recipes that use their branded products in entirely different ways, they are increasing the ________ consumption of the brand. A) amount of B) level of C) dedication to D) frequency of E) awareness of

30) ________ defense is an aggressive maneuver where the firm attacks first, perhaps with guerrilla action across the market and keeps everyone off balance. A) Position B) Flank C) Contraction D) Preemptive E) Lateral

35) In a ________ defense, the market leader stretches its domain over new territories that can serve as future centers for defense and offense. A) counteroffensive e B) flank C) contraction D) mobile E) position

66) In a pure ________ attack, the attacker matches its opponent's product, advertising, price, and distribution. A) guerilla B) bypass C) encirclement D) frontal E) flank

97) The ________ copies some things from the leader but differentiates on packaging, advertising, pricing, or location. A) innovate B) adapt C) cloner D) imitator E) counterfeiter

99) The TelePizza chain, which operates in Europe and Latin America, has copied Domino's service model but maintains differentiation in terms of location. TelePizza is an example of a(n) ________. A) counterfeiter B) adopter C) cloner D) imitator E) adapter

17) Which of the following marketing strategies requires either identifying additional opportunities to use the brand in the same basic way or identifying completely new and different ways to use the brand? A) increasing the amount of consumption B) decreasing the level of consumption C) increasing dedication to consumption D) increasing product innovation E) increasing frequency of consumption

40) Market ________ generally have a smaller market share than other players and they are willing to maintain their share and not rock the boat. A) challengers B) leaders C) nichers D) rivals E) followers

92) As a market follower strategy, the ________ duplicates the leader's product and packages and sells it on the black market or through disreputable dealers. A) innovator B) cloner C) imitator D) adapter E) counterfeiter

108) A market nicher is considered to be a(n) ________ specialist if the firm specializes in producing a certain type of product or product feature such as Rent-a-Wreck, that rents only "beat-up" cars. A) end-user B) vertical-level C) customer-size D) channel E) product-feature

111) When a bank takes loan requests over the phone and hand-delivers the money to the customer, it becomes a ________ specialist. A) geographic B) job-shop C) quality-price D) channel E) service

72) Sally Seabrook is an up-and-coming marketing manager for a large department store chain. Ms. Seabrook has distinguished herself with bold strategies such as launching attacks on her primary competitor from several fronts, including advertising, new store openings, and new distributor alliances. Which of the following market challenger attack strategies is Ms. Seabrook using to attack her competition? A) frontal attack B) bypass attack C) guerrilla attack D) flank attack E) encirclement attack

76) Selective price cuts, intense promotional blitzes, and occasional legal action are commonplace in the strategic design of a(n) ________ attack. A) frontal B) flank C) bypass D) encirclement E) guerilla

9) The market ________ has the largest market share and usually shows the way to other firms in price changes, new-product introductions, distribution coverage, and promotional intensity. A) challenger B) entrant C) follower D) nicher E) leader

117) The nicher achieves high sales volume, whereas the mass marketer achieves high margin.

FALSE

45) A market-penetration strategy is one where a company searches for new customers in a group that has never used a product before.

FALSE

49) An anticipative marketer finds a stated need and fills it.

FALSE

80) A frontal attacking strategy is another name for identifying shifts that are causing gaps to develop, then rushing to fill the gaps.

Marketing Management Chap 12-18

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