PMK FINALS

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"62) A quantity discount is a price reduction for buyers who ." A) buy merchandise out of season B) buy merchandise in bulk C) pay their bills on time D) buy discontinued products E) return old items while buying new ones

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

91) For few companies the package itself has become an important promotional medium.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Moderate

166) Why is predatory pricing considered illegal?

Answer: Predatory pricing works against the principles of a free-enterprise system

83) How can a firm benefit from participating in a horizontal marketing system?

Answer: Two or more companies at one level join together to follow a new marketing opportunity

"148) Ravenshaw Corp. assigns its sales and marketing people to specific countries regions and districts. Ravenshaw Corp. is most likely an example of a ." A) geographic organization B) product organization C) functional organization D) niche marketer E) mass marketer

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

"48) The single most important demographic trend in the United States is the . A) changing age structure of the population" B) mobility of families C) changing family structure of the population D) increasing number of professional jobs E) increasing birth rate

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

25) Government markets consist of government agencies that buy goods and services . A) to produce public services B) to resell at a profit C) for further processing D) for personal consumption E) that are generally of poor quality

Answer: A AACSB: Application of knowledge

"28) Bon Vivant offers an assortment of exclusive French wines at incredibly low prices. These prices are neither limited-time offers nor special discounts but represent the daily prices of products sold by Bon Vivant. This reflects Bon Vivant's pricing strategy." A) everyday low B) markup C) penetration D) break-even E) cost-based

Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Moderate

134) Suppose Amazon.com has offered you free shipping on your next purchase of more than "$35. This offer is an example of . A) sales promotion" B) personal selling C) a public relations strategy D) horizontal diversification E) a pull strategy

Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

"155) Price discrimination may be used to match competition as long as the strategy is temporary localized and ." A) defensive B) offensive C) publicized D) private E) uniform across channels

Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

"10) Mission statements should be defined in terms of . A) the advantages a company's products provide" B) satisfying basic customer needs C) the value a company's products provide D) the profitability of a company's products E) the variety they offer to a customer

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

"55) When customers don't know what they want or don't even know what's possible the most effective marketing strategy is marketing." A) customer-driven B) customer-driving C) societal D) ambush E) affinity

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

"115) In the context of a company's marketing mix includes company activities that make the product available to target consumers." A) position B) place C) price D) promotion E) branding

Answer: B Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"67) People tend to interpret new information in a way that will support what they already believe. This is called ." A) selective retention B) selective distortion C) cognitive dissonance D) selective attention E) cognitive bias

Answer: B Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

customer value. A) Mass customization B) Differentiation C) Market segmentation D) Diversifying E) Targeting

Answer: B Skill: Concept Objective: LO 7.1: Define the major steps in designing a customer value-driven marketing strategy: market segmentation targeting differentiation and positioning. Difficulty: Easy

"149) The winning value proposition would be to offer ." A) more for the same B) more for less C) more for more D) same for less E) same for more

Answer: B Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

27) A detailed version of a new idea stated in meaningful customer terms is called a product . A) solution B) concept C) image D) proposal E) lining

Answer: B Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

153) Discuss why business legislation is enacted. Provide examples.

Answer: Business legislation is enacted to protect companies from each other to protect consumers from unfair business practices and to protect the interests of society against unrestrained business behavior. Several laws are designed to prevent unfair competitive practices between businesses

79) List three variables that are used in segmenting business markets.

Answer: Business marketers use many variables to segment their markets such as customer operating characteristics purchasing approaches situational factors and personal characteristics. AACSB: Written and oral communication Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

19) Which of the following variables are the most popular for marketers to use in segmenting customer groups? A) ethical B) psychographic C) demographic D) behavioral E) geographic

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

141) All of the following are ways a company can differentiate itself or its product EXCEPT . A) services B) channels C) price D) people E) image

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

receives

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

its opportunities. A) Operating control B) Benchmarking C) Strategic control D) Regression analysis E) Portfolio analysis

Answer: C Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

feedback they expect

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

"54) In the communication process an actual HP printer/fax machine advertisement would be considered ." A) encoding B) decoding C) the product D) the message E) the medium

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

"138) If demand changes greatly with a small change in price the demand is . A) variable" B) inelastic C) derived D) elastic E) negative

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"38) Overhead costs as the number of units produced increases." A) decrease B) increase steadily C) fluctuate D) remain the same E) increase rapidly

Answer: D Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

"7) provide the resources needed by a company to produce its goods and services. A) Retailers" B) Marketing services agencies C) Resellers D) Suppliers E) Financial intermediaries

Answer: D Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

"58) According to Freud a person's buying decisions are primarily affected by ." A) family influences B) societal expectations C) brand images D) cultural norms E) subconscious motives

Answer: E Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"61) In the context of geographical shifts in population the migration toward areas has resulted in a rapid increase in the number of people who telecommute." A) urban B) remote C) rural D) metropolitan E) micropolitan

Answer: E Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

lifestyle or personality characteristics. A) Benefit B) Occasion C) Geographic D) Demographic E) Psychographic

Answer: E Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

164) Viviana wants to be the first to own the new fashion style of shoes. Viviana is an early mainstream adopter.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate

166) Kia Motors offers a new car model with the same features as other cars in the same segment. However Kia's model is priced higher than its two main competitors. Kia is following a more-for-less positioning strategy.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

44) Print-Fast Printers prices its printer cartridges at a premium since customers must buy Print-Fast cartridges to work with their Print-Fast printer. Print-Fast uses optional-product pricing.

Answer: FALSE AACSB: Application of knowledge

92) While an individual's beliefs are difficult to change an individual's attitudes are easy to change.

Answer: FALSE Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

69) When segmenting by user status markets are segmented into light medium and heavy product users.

Answer: FALSE Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

138) Profits drop during the growth stage of the PLC because per customer promotion costs are high.

Answer: FALSE Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

143) The distribution strategy during the decline stage of PLC involves building more intensive distribution networks.

Answer: FALSE Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

123) List four types of segmented pricing.

Answer: Four types of segmented pricing are customer-segment pricing product form pricing location-based pricing and time-based pricing. AACSB: Application of knowledge Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

113) Describe the types of products that are selectively distributed and provide examples.

Answer: In selective distribution more than one but fewer than all of the intermediaries who are willing to carry a company's products are used. Products include appliances and some branded clothing. Student answers will vary. AACSB: Application of knowledge Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

165) Compare the practices of price fixing and predatory pricing. Explain why each is prohibited by law.

Answer: Many federal state and local laws govern the rules of fair play in pricing. Two major areas of concern are price fixing and predatory pricing. Companies that engage in price fixing collude to set a common price for their comparable products

114) Why do marketers value opinion leaders?

Answer: Opinion leaders are people whose opinions are sought by others. Marketers rely on opinion leaders to positively influence the spread of product or service acceptance through a market. AACSB: Application of knowledge

162) In reacting to the marketing environment what strategies do firms adopt in order to shift from a reactive to a more proactive stance?

Answer: Rather than assuming that strategic options are bounded by the current environment firms keen on adopting a proactive stance toward the marketing environment develop strategies to change the environment. Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Moderate

112) Describe the three types of appeals that marketers use.

Answer: Rational appeals relate to the consumer's self-interest emotional appeals attempt to stir up either positive or negative emotions

165) Two of the characteristics that are especially important in influencing an innovation's rate of adoption are relative advantage and compatibility.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate

47) The augmented product is the actual product plus the various services and benefits offered with it such as a warranty free delivery installation and maintenance.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

128) Good service recovery can turn angry customers into loyal ones.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Easy

46) When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products the manufacturer is able to reduce the main product's price to make it more competitive.

Answer: TRUE AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

107) Advertisements for prescription drugs often feature potential benefits and negative side effects that consumers may experience with use of the medication. These ads present two-sided arguments.

Answer: TRUE AACSB: Application of knowledge Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

68) The production concept and the product concept are marketing management orientations that are more likely to lead to marketing myopia.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate

152) Large-scale advertising conveys a positive message about the seller's size popularity and success.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

107) Consumers who have no past experience with a product are more likely to judge it by its price.

Answer: TRUE AACSB: Reflective thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

6) Marketing is managing profitable customer relationships.

Answer: TRUE Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Easy

23) Mission statements should be market oriented.

Answer: TRUE Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

125) The four Cs concept adopts the buyer's view of the market.

Answer: TRUE Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

65) Gender segmentation has long been used in clothing cosmetics toiletries and magazines.

Answer: TRUE Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

8) A firm can obtain new products through acquisition or new product development efforts.

Answer: TRUE Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy

139) Although products that remain in the maturity stage of the PLC seem unchanged the most successful ones actually evolve to meet changing consumer needs.

Answer: TRUE Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

142) Harvesting the product involves reducing various costs such as maintenance R&D and advertising to increase profits.

Answer: TRUE Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

130) How can a marketer increase its "share of customer"?

Answer: The marketer can offer greater variety to customers

126) What are the major structural factors affecting long-run segment attractiveness?

Answer: The number and strength of competitors substitute products the relative power of buyers and the presence of powerful suppliers impact segment attractiveness. AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

162) What is the FTC three-day cooling off rule? What purpose does the rule serve?

Answer: The three-day cooling-off rule gives special protection to customers who are not seeking products. Under this rule customers who agree in their own homes to buy something costing more than $25 have 72 hours in which to cancel a contract or return merchandise and get their money back no questions asked. AACSB: Application of knowledge

95) Why do marketers find baby boomers attractive?

Answer: Today's baby boomers account for about 26 percent of the U.S. population but control an estimated 70 percent of the nation's disposable income. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

165) What is the difference between marketing planning and marketing implementation?

Answer: Whereas marketing planning addresses the what and why of marketing activities implementation addresses the who where when and how. AACSB: Written and oral communication Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate

"141) Business-to-consumer companies are more likely to emphasize a promotion strategy while business-to-business companies are more likely to emphasize a promotion strategy." A) pull push B) push pull C) Pulse pull D) blitz pull E) Push blitz

Answer: A

"139) Brand refers to how highly consumers regard and respect the brand." A) esteem B) conformance C) differentiation D) relevance E) knowledge

Answer: A Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"30) Lubricants coal paper and pencils are examples of ." A) operating supplies B) capital items C) raw materials D) specialty products E) installations

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

within its supply chain. A) RFID B) PRM C) VMS D) BCODE E) 3PL

Answer: A AACSB: Information technology Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

15) Which of the following groups influences the company's ability to obtain funds? A) financial publics B) local publics C) general publics D) citizen-action publics E) internal publics

Answer: A Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

"116) In the marketing mix place includes . A) logistics" B) discounts C) sales promotion D) advertising E) packaging

Answer: A Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"152) refers to measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved." A) Marketing control B) Marketing implementation C) Satisficing D) Prospecting E) Benchmarking

Answer: A Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

149) Which of the following is the first stage in the new product adoption process? A) awareness B) adoption C) evaluation D) interest E) trial

Answer: A Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

"25) segmentation divides buyers into segments based on their knowledge attitudes uses or responses concerning a product." A) Behavioral B) Psychographic C) Age and life cycle D) Gender E) Geographic

Answer: A Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"56) When the size purchasing power and profile of a market segment can be calculated the market is ." A) measurable B) profitable C) substantial D) actionable E) competitive

Answer: A Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

127) What does a company focus on when using an undifferentiated marketing strategy?

Answer: A company using an undifferentiated marketing strategy focuses on what is common in the needs of consumers rather than on what is different. It designs a product and a marketing program that will appeal to the largest number of buyers. AACSB: Written and oral communication Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

91) What elements may help to create a product image?

Answer: A product image is the way consumers perceive an actual or potential product. Any number of product attributes as well as packaging and intended use create product image

144) Josie's FarmFresh creates sustainable all-natural food products. These products are most likely to become popular with which group? A) SOHO B) environmentally conscious C) LGBT D) business E) Millennials'

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

"123) Kellogg's begins to sell its cereals in new markets after conducting extensive marketing research. After the cereal begins to appear in these new markets the company increases its promotion expenditure to counteract competitive responses. Kellogg's is in the stage of the product life cycle." A) introduction B) growth C) maturity D) decline E) adoption

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Challenging

"49) The learning curve is representative of the ." A) per unit cost of output in the long run B) drop in the average per-unit production cost that comes with accumulated production experience C) number of units the market will buy in a given time period at different prices that might be charged D) total market demand resulting from different prices E) per unit cost of output in the short run

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

"64) Style simply describes the of a product." A) quality B) appearance C) utility D) durability E) long-term benefits

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"48) In a new products and marketing tactics are tested online in a virtual shopping" environment. A) controlled test market B) simulated test market C) standard test market D) focus group E) survey

Answer: B AACSB: Information technology Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

direct

Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

"155) The purpose of is to ensure that the company achieves the sales profits and other goals set out in its annual marketing plan." A) benchmarking B) operating control C) strategic control D) SWOT analysis E) a marketing audit

Answer: B Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

"115) management calls for selecting managing and motivating individual channel members and evaluating their performance over time." A) Inventory B) Marketing channel C) Brand image D) Customer experience E) Brand content

Answer: B Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

"4) Companies can research many aspects of buying decisions. However the one that is the most difficult to identify is ." A) what consumers buy B) how and how much they buy C) why they buy D) when they buy E) where they buy

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Moderate

51) Which of the following terms refers to a specific mix of human traits that may be attributed to a particular brand? A) brand perception B) brand identity C) brand personality D) brand concept E) brand equity

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"153) In the context of product characteristics that influence the rate of adoption refers to the degree to which the innovation fits the values and experiences of potential consumers." A) communicability B) relative advantage C) compatibility D) complexity E) divisibility

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

"29) requires finding the major advantages people look for in a product class the kinds of people who look for each positive aspect of a product and the major brands that deliver it." A) Gender segmentation B) Psychographic segmentation C) Benefit segmentation D) Geographic segmentation E) Age and life-cycle segmentation

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

105) Which of the following marketing strategies is most suitable for smaller firms with limited resources? A) mass marketing B) undifferentiated marketing C) niche marketing D) differentiated marketing E) one-to-one marketing

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

3) Which of the following exemplifies a service? A) candy B) laptop C) hair salon D) car E) laundry detergent

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"60) is an approach in which all the company's people are involved in constantly improving the quality of products services and business processes." A) Business intelligence B) Quality function deployment C) Total quality management D) Brand equity management E) Product positioning

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"77) involves adding more items within the present range of the product line." A) Market diversification B) Brand extension C) Product line filling D) Upward product line stretching E) Downward product line stretching

"70) A product's identifies the product or brand describes several things about the product and promotes the brand." A) line extension B) portfolio C) label D) design E) feature

152) Which of the following is an advantage offered by co-branding? A) Manufacturers do not have to invest in creating their own brand names with co-branding. B) Co-branding allows retailers to sell exclusive products that cannot be purchased from competitors. C) Co-branding allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone. D) Co-branding dilutes brand equity and increases the appeal of store brands. E) Co-branding does not involve complex legal contracts and licenses.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

Principles of Marketing 17e (Kotler/Armstrong) Chapter 9 Developing New Products and Managing the Product Life Cycle 1) Which of the following is a significant challenge presented by the product life cycle? A) increased expenses B) increased competition C) new product development D) evaluation of results E) recognizing the stages as a product goes through them

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy

31) Which of the following groups do marketers involve for the process of concept testing new products? A) suppliers B) employees C) target consumers D) manufacturers E) competitors

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

38) Which stage of new product development requires management to estimate minimum and maximum sales to assess the range of risk in launching a new product? A) concept testing B) marketing strategy development C) business analysis D) product development E) test marketing

109) Which stage in the product life cycle is characterized by rapid market acceptance and increasing profits? A) introduction B) maturity C) growth D) decline E) product development

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

107) Which of the following best characterizes the decline stage of product development? A) rapid market acceptance B) slow sales growth C) sales and profits decline D) high investment costs E) increasing profits

"131) Ways to avoid accusations of price gouging include ." A) bundling products together B) matching competitors' pricing C) communications to customers explaining why prices are being increased D) passing along increased costs E) increase quality of the product

Answer: C AACSB: Application of knowledge

"60) Amor a successful brand of women's clothing recently introduced a line of fitness equipment. This is an example of ." A) mass customization B) niche marketing C) diversification D) prospecting E) product adaptation

Answer: C AACSB: Application of knowledge

"80) involves cultivating opinion leaders and getting them to spread information about a product or a service to others in their communities." A) Sales promotion B) Indirect marketing C) Buzz marketing D) Stealth marketing E) Public relations

Answer: C AACSB: Application of knowledge

"103) Big Mike's Health Food Store sells nutritional energy foods. The price of the products sold varies according to individual customer accounts and situations. For example long-time customers receive discounts. This strategy is an example of ." A) time-based pricing B) seasonal pricing C) dynamic pricing D) promotional pricing E) penetration pricing

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Challenging

"96) If Detroit DLX charges the same price for the delivery of its product to customers located in the states near the Great Lakes but a different price to customers elsewhere the company is using ." A) psychological pricing B) promotional pricing C) zone pricing D) reference pricing E) uniform-delivered pricing

72) The New Age Gallery has three admission prices for students adults and seniors even though all three groups are entitled to the same services. This form of pricing is called pricing. A) psychological B) product form C) customer-segment D) captive product E) by-product

"20) Plasticine Palace supplies its products exclusively to Arts & Crafts a chain of stationery stores across the country. The chain then makes the plasticine available to end consumers. This is an example of ." A) a direct marketing channel B) intensive distribution C) an indirect marketing channel D) disintermediation E) extensive distribution

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

21) Which of the following is an example of an indirect marketing channel? A) June Bride which sells bridal gowns via its click-to-order online catalogs B) Farmer Brown who delivers fresh milk from his dairy to customers every morning C) Wine & Dine which sells its picnic baskets to select novelty stores across the country D) Lifebelt Insurance which sells life insurance through its door-to-door salespeople E) Rhonda's Rental which rents cars to people for the day

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

61) Which of the following is most likely a manufacturer-sponsored retailer franchise system? A) international fast food chains like McDonald's and Pizza Hut B) Starbucks outlets operating within Target stores C) Toyota and its network of independent franchised dealers D) licensed bottlers that bottle and sell soft drinks to retailers E) hotel chains like the Ritz Carlton and Shangri-La

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

124) John has decided to buy a particular smartphone that he saw reviewed online. Which of the following sources of information has most likely influenced John's purchase decision? A) laggards B) commercial sources C) public sources D) personal sources E) market mavens

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Moderate

"54) A VMS consists of independent firms at different levels of production and distribution who join together through formal agreements to obtain more economies or sales impact than each could achieve alone." A) corporate B) contingency C) contractual D) communal E) conventional

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

"134) logistics refers to moving products and materials from the suppliers to the factory." A) Outbound B) Diverse C) Inbound D) Reverse E) Customer-centered

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"79) An appeal that attempts to stir up either negative or positive sentiments that can motivate purchase is called a(n) appeal." A) rational B) structural C) emotional D) moral E) standard

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

areas of food household products and clothing although this is changing as more work outside the home. A) A teenager B) The husband C) The wife D) The couple together E) The parent

Answer: C AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

118) The buyer decision process consists of five stages. Which of the following is NOT one of these stages? A) need recognition B) information search C) conspicuous consumption D) purchase decision E) postpurchase behavior

Answer: C Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Moderate

"151) occurs when two established brand names of different companies are used on the same product." A) Market diversification B) Niche marketing C) Co-branding D) Licensing E) Cannibalization

Answer: C Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"65) is a new product development approach in which one company department works to complete its stage of the process before passing the new product along to the next department and stage." A) Team-based product development B) Simultaneous product development C) Sequential product development D) Horizontal integration E) Vertical integration

Answer: C Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"31) In the case of services captive product pricing is called pricing." A) by-product B) optional product C) two-part D) bundle E) segmented

Answer: C Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Easy

56) A person's buying choices are influenced by four major psychological factors. Which of the following is NOT one of these factors? A) motivation B) perception C) association D) learning E) beliefs

Answer: C Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

103) Explain concept testing.

Answer: Concept testing calls for testing new product concepts with groups of target consumers. The concepts may be presented to consumers physically or symbolically. A more concrete and physical presentation however will increase the reliability of the concept test. After being exposed to the concept consumers are asked questions about it

124) Explain the psychology behind a price of $9.99 instead of $10.00.

Answer: Consumers typically see a product that is priced at $9.99 as in the $9 range instead of as $10. The price appears to be cheaper at a subconscious level. AACSB: Application of knowledge

158) Why has the cost of product liability insurance risen so dramatically?

Answer: Consumers who have been injured by a product with a defective design can sue manufacturers or dealers of the product

"53) Phoenix a popular coffee shop chain in North America recently opened 400 stores to cater to its rapidly increasing number of patrons. This exemplifies ." A) product differentiation B) product development C) diversification D) market penetration E) market segmentation

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

13) LandPort Transportation and Omega Warehousing help companies move and stock goods from their manufacturing plants to their destinations. These two businesses are examples of . A) resellers B) marketing services agencies C) financial intermediaries D) physical distribution firms E) wholesalers

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

63) Which of the following has lost population in the past two decades? A) California B) Florida C) the Western states D) the Northeast states E) the Southern states

Answer: D Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

"32) Selecting which segments of a population to serve is called ." A) market segmentation B) positioning C) customization D) target marketing E) differentiation

Answer: D Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

"73) Among the buyer-readiness stages the first stage is ." A) preference B) knowledge C) liking D) awareness E) insistence

Answer: D Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"44) Life-stage changes usually result from . A) birthdays" B) mentors C) friends D) life-changing events E) siblings

Answer: D Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"16) are industrial products." A) Major appliances B) Laundry detergents C) Life insurance policies D) Office supplies E) Legal services

Answer: D Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

10) Adapting marketing strategies is not a challenge faced in the product life cycle.

Answer: FALSE Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy

137) Most successful products are immediately accepted and quickly move to the growth stage of the PLC.

Answer: FALSE Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

74) Explain why electronics and pharmaceuticals manufacturers use customer-driving marketing.

Answer: In such industries consumers do not know exactly what new products are available

144) Why should marketers set up systems that encourage customers to complain about products?

Answer: Most customers never share their complaints with marketers

24) "At Joe's Diner we serve great burgers" is a product-oriented business definition.

Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

22) A clear mission statement acts as an "invisible hand" that guides people in the organization.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

Written and oral communication Skill: Concept Objective: LO 10.1:

Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Moderate

68) Ron and Gail plan to lower Fun-Spot's prices in an effort to encourage customers to stay longer visit more often and spend more money during each visit. What type of strategy are Ron and Gail planning? A) market penetration B) market development C) product development D) product adaptation E) diversification

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

152) Five characteristics are important in influencing an innovation's rate of adoption. Which of the following is NOT one of those characteristics? A) relative advantage B) compatibility C) consumability D) complexity E) communicability

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

Refer to the scenario below to

answer the following question(s). Carol Veldt owner of Seagull Terrace watched her investment grow from a small seaside motel to a thriving year-round resort in just a few years. Atop a cliff overlooking the Maine coast Seagull Terrace had attracted thousands of visitors during summer but then faced a tremendous downturn in business during winter. "But given the established industries in the nearby towns very little year-round competition and our close proximity to Portland" Carol added "I couldn't understand why seasonality had to hit Seagull Terrace so hard!" So Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan also involved a seasonal promotional gimmick-to be implemented from early winter to late spring-that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter Carol greeted numerous business travelers-both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals. "We still have a long way to go" Carol admitted. "Our delicatessen offers entrees that are a part of the local cuisine but we'd like to expand that. We provide health club privileges off-site but we'd like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project however included a renovation of our guest rooms and I'm quite proud of the results." Carol then added "Actually there are so many possibilities. With an indoor pool area I will eventually offer weekend getaways throughout winter." "114) Carol Veldt's plan also involves a seasonal promotional gimmick that she wants to promote aggressively. This is an example of the concept." A) selling B) marketing C) product D) production E) societal marketing ,Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

Refer to the scenario below to

answer the following question(s). Carol Veldt owner of Seagull Terrace watched her investment grow from a small seaside motel to a thriving year-round resort in just a few years. Atop a cliff overlooking the Maine coast Seagull Terrace had attracted thousands of visitors during summer but then faced a tremendous downturn in business during winter. "But given the established industries in the nearby towns very little year-round competition and our close proximity to Portland" Carol added "I couldn't understand why seasonality had to hit Seagull Terrace so hard!" So Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan also involved a seasonal promotional gimmick-to be implemented from early winter to late spring-that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter Carol greeted numerous business travelers-both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals. "We still have a long way to go" Carol admitted. "Our delicatessen offers entrees that are a part of the local cuisine but we'd like to expand that. We provide health club privileges off-site but we'd like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project however included a renovation of our guest rooms and I'm quite proud of the results." Carol then added "Actually there are so many possibilities. With an indoor pool area I will eventually offer weekend getaways throughout winter." "18) Seagull Terrace offers its customers good accommodations local delicacies and amazing seaside views. The overall experience provided at the motel is a part of its ." A) market offering B) target market C) market segment D) product positioning E) marketing mix ,Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Challenging

Refer to the scenario below to

answer the following question(s). Most people laughed when Evelyn Ringler explained her product idea: a solar-powered vacuum cleaner. But the concept was practical and the technology used in the vacuum was the same as that used in many electronic toys. After setting up a demonstration booth in a mall in a Chicago suburb Evelyn felt more assured than ever that her idea would be a hit. Consumers seemed receptive and offered helpful pieces of advice such as how much they would pay for the vacuum what colors they would prefer and why they would not buy the vacuum. The vacuum itself was shaped like a small saucer with a filter bag on top and sensory nodes along the edges. After being charged in the sunlight the vacuum could run for 7 hours covering a floor area of 600 square feet. As the apparatus lightly bumped into table legs chairs and so on the sensory nodes allowed the vacuum to move around the objects in various directions. This is the same type of technology used in the manufacture of children's racecars and walking dolls. Evelyn knew that the solar-powered vacuum would be especially helpful to both elderly consumers who may have a more difficult time with vacuuming and on-the-go consumers who lead busy lives. The price would be above average but would likely be reduced after Evelyn recouped some of her costs. After a 500-unit production run and a substantial financial investment Evelyn set up a multiple-city test market in a Chicago mall and in an appliance store in New Jersey and several other retail stores in Florida. "It's such a novel idea" Evelyn added. "People will notice it even if they don't buy it right away." "135) Evelyn's vacuum is at the stage of the product life cycle." A) product development B) introduction C) growth D) decline E) maturity ,Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Challenging

Refer to the scenario below to

answer the following question(s). Ruben Delgado built his enterprise on the faithful patronage of four specialty shops and a large contract from Elmore Distributors. But after two years the maker of novelty pens and pencils had to rethink his strategy when his contract with Elmore ended. Ruben built a company reputation on the manufacturing and distribution of a variety of wooden writing utensils with customized engravings. Specialty shops loved to display the products in their fancy lighted showcases but such specialty shops alone were not profitable. Ruben Delgado established a brand name known merely as Delgado and decided to expand on it. Ruben extended his writing utensil lines to include quills felt-tip pens and multiple-cartridge pens that write in different colors. He even added a line of various grades of personalized stationery and business cards. Perhaps Ruben's biggest added touch however was the addition of two salespeople who would work to explain the diverse array of products offered by Delgado as well as nurture existing accounts. "We make an excellent product" Ruben Delgado stated "and we honor a good guarantee on everything we sell. But let's face it-we face hundreds of competitors! We need Delgado representatives out there to help prospects understand what they should demand in something as simple as a writing tool." The Delgado brand was fast-becoming synonymous with top-notch customer service. Part of the purchase package brought personal visits from the Delgado representative before the purchase and long after. 42) An easier more comfortable more stylish transfer of thought onto paper refers to the of Ruben's offerings. A) tangible element B) core customer value C) actual product D) augmented product E) service variability ,Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Challenging

73) Market penetration involves offering modified or new products to current markets.

Answer: FALSE Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

38) A business's suppliers are the most important actors in the company's microenvironment.

Answer: FALSE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

146) Secondary beliefs and values are less open to change than core beliefs and values.

Answer: FALSE Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

10) Consumers can easily explain what influences their purchases.

Answer: FALSE Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

82) Social class is based on shared value systems and common life experiences and situations.

Answer: FALSE Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

141) Commercial sources of information typically legitimize and evaluate products for buyers.

Answer: FALSE Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

162) Early mainstream adopters accept new ideas after the average person.

Answer: FALSE Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

71) Marketers usually limit their segmentation analysis to only one major variable.

Answer: FALSE Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

165) Companies find it as easy to come up with a good positioning strategy as to execute it.

Answer: FALSE Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

123) As a part of intensive distribution dealers are expected to refrain from selling the products of the producers' competitors.

Answer: FALSE Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

124) When a producer uses exclusive dealing and the use of exclusive territorial agreements to keep a dealer from selling outside its territory it is completely legal.

Answer: FALSE Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

78) A product idea is an idea for a possible product that a company can offer the market.

Answer: TRUE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

Written and oral communications Skill: Concept Objective: LO 10.1:

Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Moderate

"87) Hearth & Home a store which sells household products has announced a one-week sale on its new carpet line. This is an example of ." A) promotional pricing B) seasonal pricing C) by-product pricing D) product bundle pricing E) time-based pricing

Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Challenging

16) What is usually the first step in cost-based pricing? A) testing the product concept with potential customers B) determining the marketing mix strategy C) setting a price that covers costs plus a target profit D) designing a good product E) adding up the costs of making the product

"141) Ways companies have avoided relying on price cuts in the new value-conscious era include all of the following EXCEPT ." A) by adding more affordable product lines for the cost-conscious consumer B) by redefining the "value" in their value propositions C) by adding premium product lines for the higher end consumer D) by offering deep discounts E) by creating price tiers

Answer: D Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

129) Which of the following is true with regard to monopolistic competition? A) Under monopolistic competition the market consists of many buyers and sellers who trade at a single market price. B) Under monopolistic competition the market consists of only a few large sellers. C) In a monopolistic market little time is spent on marketing strategy. D) Sellers can differentiate their products to buyers. E) In a monopolistic market price becomes a major competitive tool.

Answer: D Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

"116) To help recruit train organize manage motivate and evaluate relationships with channel partners companies are now installing integrated high-tech systems." A) advertiser funded programming B) customer segmentation network C) brand content management D) partnership relationship management E) closed loop marketing

Answer: D Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

10) Which of the following promotion categories is most likely to use the promotion tools of press releases sponsorships events and Web pages? A) sales promotion B) direct and digital marketing C) advertising D) public relations E) horizontal diversification

Answer: D Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

the net return on investments

Answer: D Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

"30) The collection of businesses and products that make up a company is called its . A) strategic business unit" B) supply chain C) strategic plan D) business portfolio E) internal value chain

Answer: D Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

36) Which of the following is NOT something a company must determine when analyzing its current business portfolio? A) which businesses should receive more investment B) which businesses should receive less investment C) which businesses should receive no investment D) which businesses should be sold or closed E) which businesses shape the future portfolio

Answer: D Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"85) Each department in a company that carries out value-creating activities can be thought of as a link in the company's ." A) channel of intermediaries B) external value stream C) demand chain D) internal value chain E) supplier chain

Answer: D Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy

"94) The marketing logic by which a company hopes to create customer value and achieve profitable customer relationships is referred to as the ." A) price B) marketing implementation C) value chain D) marketing strategy E) downsizing

Answer: D Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"142) A marketing plan begins with a(n) which presents a brief summary of the main goals and recommendations of the plan for management review." A) budget B) opportunity analysis C) threat analysis D) executive summary E) action program

Answer: D Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

"157) measures the profits generated by investments in marketing activities. A) A SWOT analysis" B) A marketing audit C) Regression analysis D) Return on marketing investment E) Marketing budget evaluation

"18) A company's marketing decisions may be questioned by consumer organizations environmental groups minority groups and others. These organizations and groups are also known as ." A) media publics B) marketing intermediaries C) customers D) citizen-action publics E) internal publics

Answer: D Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

3) Which of the following is a component of a firm's microenvironment? A) customer demographics B) economic recessions C) population shifts D) marketing intermediaries E) technological changes

Answer: D Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

"64) In the 1950s Americans made a massive exit . A) from the South to the Northeast" B) from the West to the Midwest C) to foreign countries D) from the cities to the suburbs E) from the coastal towns to the cities

Answer: D Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

"76) The economic environment consists of economic factors that affect . A) cultural patterns of communities" B) entrepreneurial orientation of a population C) the quality of technological innovation D) consumer purchasing power E) the natural environment

Answer: D Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

"124) Governments develop public policy to . A) encourage deregulation" B) identify demographic patterns C) identify cultural patterns D) guide commerce E) protect marketers

Answer: D Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"122) The limits the number of commercials aired during children's programs. A) Children's Online Privacy Protection Act" B) Child Protection Act C) Fair Packaging and Labeling Act D) Children's Television Act E) Consumer Product Safety Act

Answer: D Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

"50) refers to the unique psychological characteristics that distinguish an individual or group." A) Attitude B) Belief C) Perception D) Personality E) Self-awareness

Answer: D Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"66) People cannot focus on all of the stimuli that surround them each day. A person's tendency to screen out most of the information is called ." A) subliminal retention B) selective distortion C) cognitive dissonance D) selective attention E) cognitive inertia

Answer: D Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"110) When consumers are highly involved with an expensive infrequent or risky purchase but see little difference among brands they most likely will exhibit ." A) habitual buying behavior B) complex buying behavior C) impulse buying behavior D) dissonance-reducing buying behavior E) consumer capitalism

Answer: D Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

"117) When customers have low involvement in a purchase but perceive significant brand differences they will most likely engage in ." A) complex buying behavior B) dissonance-reducing buying behavior C) habitual buying behavior D) variety-seeking buying behavior E) consumer ethnocentrism

Answer: D Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

"122) If a consumer's drive is strong and a satisfying product is near at hand the consumer is likely to purchase the product at that time. If not the consumer may store the need in memory or undertake ." A) consumer ethnocentrism B) buyer's remorse C) a need recognition D) an information search E) cognitive dissonance

Answer: D Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

"136) When a customer feels uneasy about losing out on the benefits of a brand not purchased she is likely to experience ." A) selective retention B) selective attention C) selective distortion D) cognitive dissonance E) consumer ethnocentrism

Answer: D Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

"24) Marketers who use often segment their markets by consumer lifestyles and base their marketing strategies on lifestyle appeals." A) demographic segmentation B) geographic segmentation C) benefit segmentation D) psychographic segmentation E) occasion segmentation

Answer: D Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"91) refers to a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer." A) Individual marketing B) Local marketing C) Niche marketing D) Undifferentiated marketing E) Segmented marketing

Answer: D Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

"88) A segment is less attractive if it ." A) is difficult for new entrants to enter B) is substantial C) is actionable D) already contains many strong and aggressive competitors E) contains weak suppliers

Answer: D Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"134) refers to how a company will create differentiated value for targeted segments and what positions it wants to occupy in those segments." A) Targeted marketing B) Market segmentation C) Product positioning D) Value proposition E) Niche marketing

Answer: D Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

"135) A refers to the way a product is defined by consumers on important attributes- the place the product occupies in consumers' minds relative to competing products." A) core competency B) value stream C) value proposition D) product position E) product specification

Answer: D Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

"136) show(s) consumer perceptions of a company's brands versus competing products on important buying dimensions." A) Differentiation B) Positioning C) Market targeting D) Perceptual positioning maps E) Market segmentation

Answer: D Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

"15) Many companies have developed programs that encourage employees to develop new product ideas." A) management B) incentive C) entrepreneurial D) intrapreneurial E) crowdsourcing

Answer: D Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"32) For concept test companies will frequently present customers with of the concept for a reliable concept test." A) a verbal description B) a PowerPoint slide C) a picture D) a physical presentation E) a printed paragraph

Answer: D Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"51) In a(n) consumers interact with new products and marketing tactics in laboratory stores or virtual online shopping environments." A) standard test market B) focus group C) controlled test market D) simulated test market E) individual survey

Answer: D Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

24) Which of the following is NOT likely to be a question asked in the new product screening process? A) Is there a real need and desire for the product? B) Is there a clear product concept? C) Does the product offer a sustainable advantage? D) How many items will the company sell in the first two years? E) Does the product fit the company's overall growth strategy?

Answer: D Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

106) Which of the following refers to the course that a product's sales and profits take over its lifetime? A) total product process B) service life C) product mix D) product life cycle E) marketing mix

Answer: D Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

"9) Needs include all of the following EXCEPT ." A) food B) knowledge C) affection D) the newest iphone E) belonging

Answer: D Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

22) The Great Recession of 2008 to 2009 triggered a shift in consumer attitudes toward . A) variety and price B) perceptions of value C) locations of stores D) price and quality E) economic data

"104) Stores can combat the current consumer practice of in which consumers visit stores and then check online for price comparisons." A) discounting B) conferencing C) using Instagram to share purchases D) showrooming E) auctioning

Answer: D Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"50) A(n) marketing system consists of producers wholesalers and retailers acting as a unified system." A) horizontal B) communal C) multitiered D) vertical E) equilateral

Answer: D Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

"145) are a specialized means of shipping petroleum natural gas and chemicals from sources to markets." A) Air tunnels B) Rail flatcars C) Steam ships D) Pipelines E) Airlines

Answer: D Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

125) Which of the following is the most logical budget-setting method? A) percentage-of-sales method B) affordable method C) competitive-parity method D) objective-and-task method E) push method

Answer: D Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

124) Which of the following statements is most likely true regarding the competitive-parity method? A) This method involves starting with total revenues deducting operating expenses and capital outlays and then devoting some portion of the remaining funds to advertising. B) It is based on the availability of funds rather than on opportunities. C) It wrongly views sales as the cause of promotion rather than as the result. D) In this method promotion budgets are set to match competitors' outlays. E) This method involves setting the promotion budget at a certain percentage of current or forecasted sales.

Answer: D Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

"18) A company's broad mission leads to . A) increasing profits and more customers" B) increasing sales and decreasing costs C) a higher share price D) a hierarchy of objectives including business objective and marketing objectives E) increased market share and increasing profitability

Answer: D Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

"133) analysis is an overall evaluation of the company's strengths weaknesses opportunities and threats." A) Porter's five forces B) A breakeven C) A regression D) A SWOT E) A cluster

"57) A is a need that is sufficiently pressing to direct a person to seek satisfaction." A) stimulus B) perception C) culture D) motive E) tradition

Answer: D Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"62) Maslow's theory is that can be arranged in a hierarchy." A) marketing stimuli B) personal beliefs C) perceptions D) human needs E) decisions

Answer: D Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"76) A(n) is a person's relatively consistent evaluations feelings and tendencies toward an object or idea." A) lifestyle B) motive C) belief D) attitude E) perception

Answer: D Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"126) The information sources that are the most effective at influencing a consumer's purchase decision are . These sources legitimize or evaluate products for the buyer." A) commercial B) public C) experimental D) personal E) attitudinal

Answer: D Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Moderate

155) Which of the following best describes divisibility of an innovation that influences the rate of adoption? A) It is the degree to which the innovation is difficult to understand. B) It is the degree to which the results of using the innovation can be observed or described to others. C) It is the degree to which the innovation appears superior to existing products. D) It is the degree to which the innovation may be tried on a limited basis. E) It is the degree to which the innovation fits the values and experiences of potential consumers.

Answer: D Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

Principles of Marketing 17e (Kotler/Armstrong) Chapter 7 Customer Value-Driven Marketing Strategy: Creating Value for Target Customers "1) Companies know they cannot appeal to all buyers in the marketplace or at least not in the same way. Reasons for this include all of the following EXCEPT ." A) buyers are too numerous B) companies vary widely in their abilities to serve different market segments C) buyers are varied in their needs and buying practices D) companies need more information to offer the right products to the right customers E) buyers are widely scattered

Answer: D Skill: Concept Objective: LO 7.1: Define the major steps in designing a customer value-driven marketing strategy: market segmentation targeting differentiation and positioning. Difficulty: Easy

"58) When an effective program can be designed for attracting and serving a particular segment the segment is best described as ." A) accessible B) measurable C) competitive D) actionable E) differentiable

Answer: D Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

marketing mix elements and programs. A) Complex B) Measurable C) Competitive D) Differentiable E) Homogeneous

Answer: D Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"111) marketing is more suited for products that vary in design." A) Mass B) Local C) Direct D) Differentiated E) Individual

Answer: D Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

"98) marketing tailors brands and promotions to the needs and wants of regional customer groups such as cities neighborhoods and even specific stores." A) Undifferentiated B) Differentiated C) Niche D) Local E) Individual

Answer: D Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"138) Through differentiation brands can be differentiated on features performance or style and design." A) services B) channel C) people D) product E) price

Answer: D Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

21) Which of the following is NOT a category of consumer products? A) unsought B) specialty C) convenience D) luxury E) shopping

Answer: D Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"57) Introducing a new product into the market is called ." A) test marketing B) simulation C) co-marketing D) commercialization E) segmentation

Answer: D Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

120) Which of the following stages of the PLC is characterized with high promotional expenditures that result from an effort to create consumer awareness? A) growth B) product development C) maturity D) introduction E) decline

Answer: D Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

126) At which stage in the PLC do profits increase as promotion costs are spread over a large volume and as the firm enters new market segments? A) maturity B) introduction C) decline D) growth E) harvest

Answer: D Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

168) What is deceptive pricing?

Answer: Deceptive pricing occurs when a seller states prices or price savings that mislead consumers or are actually not available to consumers. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

101) What is demography? Why is the demographic environment of major interest to marketers? Discuss the changing age structure of the U.S. population.

Answer: Demography is the study of human populations in terms of size density location age gender race occupation and other statistics. The demographic environment is of major interest to marketers because it involves people and people make up markets. Marketers can learn much about human populations in terms of changing age and family structures geographic population shifts educational characteristics population diversity and other statistics. Based on age structure the U.S. population can be categorized into several generational groups

167) What are the desirable qualities for a brand name?

Answer: Desirable qualities for a brand name include the following: 1. It should suggest something about the product's benefits and qualities. 2. It should be easy to pronounce recognize and remember. 3. It should be distinctive. 4. It should be extendable. 5. The name should translate easily into foreign languages. 6. It should be capable of registration and legal protection. AACSB: Application of knowledge Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

83) Why do international markets need to be segmented?

Answer: Different countries even those that are close together can vary greatly in their economic cultural and political makeup. Thus just as they do within their domestic markets international firms need to group their world markets into segments with distinct buying needs and behaviors. AACSB: Application of knowledge

10) What is differentiation?

Answer: Differentiation refers to differentiating the market offering to create superior customer value. Skill: Concept Objective: LO 7.1: Define the major steps in designing a customer value-driven marketing strategy: market segmentation targeting differentiation and positioning. Difficulty: Easy

101) Explain how selective retention affects what consumers remember about marketing messages.

Answer: Due to selective retention consumers are more likely to remember positive messages about the brands they already favor and more likely to forget positive messages about the competing brands. AACSB: Application of knowledge

"100) At Gina's retail stores the posted policy reads ""Without our customers we don't exist."" Gina and her staff aim to delight each customer and they are quick to offer discounts or extra services whenever a customer is anything less than satisfied. Gina and her staff strive to make every customer a repeat customer. It is most accurate to say that instead of focusing on each individual transaction Gina and her staff put a priority on ." A) managing partner relationships B) selling new products C) attracting "butterflies" D) converting "barnacles" to "strangers" E) capturing customer lifetime value

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

"95) Kao Corp. a deodorant manufacturer invited teenage girls to make an ad that would encourage other girls to buy the product. This program is an example of ." A) societal marketing B) the production concept C) the selling concept D) partner relationship management E) consumer-generated marketing

72) Mansfield Pharmaceuticals markets Zipro an antibiotic. The firm has fixed costs of $1000000 and variable costs of $2 per bottle of 50 tablets priced at $10 per bottle. What is the break-even volume? A) 25000 B) 55000 C) 100000 D) 115000 E) 125000

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

67) John assured his venture capitalists an earning of 25-percent return on equity when he began his IT startup. In order to achieve this result he will most likely use which of the following pricing approaches? A) value-based pricing B) markup pricing C) EDLP D) customer-based pricing E) target return pricing

13) For a market penetration-price strategy to succeed which of the following is LEAST likely to be true? A) Production costs decrease as sales volume increases. B) A low price triggers market growth. C) Distribution costs decrease as sales volume increases. D) Low prices must inhibit competition from entering the market. E) The strategy can be changed quickly to a higher-priced position with no negative impact.

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate

104) Which of the following is NOT a criterion a company will use to evaluate the major channel alternatives? A) adaptability B) control C) commitment D) sales and costs E) likability

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

11) In addition to the specific promotion tools marketing communication requires for greatest impact. A) the engineering and manufacturing departments work together B) the sales force lead the communication process C) the advertising be developed with the manufacturers' representatives D) the pubic relations staff work closely with the sales force E) the promotion product price and place be coordinated

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Challenging

87) Which of the following advertising slogans most likely represents a two-sided argument? A) Breakfast of champions B) Good to the last drop C) A diamond is forever D) The ultimate driving machine E) The next big thing is already here

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

"11) Orion Inc. operates in many industries including pharmaceuticals and food products. The company's goal is to create ""abundant and affordable food for all and a healthy environment."" This represents Orion's ." A) marketing plan B) product mix C) business portfolio D) marketing mix E) mission statement

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

17) Companies can succeed against their competitors by all of the following EXCEPT . A) providing greater customer value and satisfaction B) better meeting the needs of target customers C) positioning their offerings strongly against competitors' offerings in the minds of consumers D) considering their own size and position compared to the competition E) providing the same product as the competition

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

"134) Leona bought two different brands of wine from vineyards in Australia. When asked for her opinion about the wines she said that one brand of wine tasted like alcoholic grape juice but the other had a crisp taste that she really enjoyed. These statements were most likely made during the stage of the buyer decision process." A) information search B) need recognition C) alternative evaluation D) purchase decision E) postpurchase behavior

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Challenging

129) Sara is about to purchase a new television. She is using several attributes to evaluate her choices. Which of the following is least likely to be a criterion Sara is using? A) price B) size of screen C) color of body D) network connectivity E) availability

133) A particular automobile company works to keep its customers happy after each sale aiming to delight each one of them in order to increase their customer lifetime value. Which of the following steps of the buyer decision process does the company exemplify? A) need recognition B) information search C) evaluation of alternatives D) purchase decision E) postpurchase behavior

"20) can be a poor predictor of a person's health work or family status needs or buying power." A) Occupation B) Education C) Ethnicity D) Religion E) Age

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"40) Business marketers use geographic demographic benefit user status usage rate and loyalty status to segment their markets. They also use customer operating characteristics purchasing approaches and situational factors." A) weather patterns B) psychographics C) ethical traits D) budgets and financial status E) personal characteristics

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"48) Orion Inc. markets luxury watches. It targets the wealthy global elite segment regardless of their geographic location. Orion most likely uses segmentation." A) income B) age-group C) occasion D) benefit E) cross-market

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"50) An American cola-manufacturing company that primarily targets rebellious and adventurous people most likely uses segmentation." A) occasion B) geographic C) income D) benefit E) psychographic

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"37) Tourism Australia's global marketing campaign ""There's nothing like Australia"" is an example of marketing." A) corporate image B) person C) organization D) internal E) place

Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

39) Which of the following marketing management concepts is most likely to lead to marketing myopia? A) customer-driven marketing concept B) customer-driving marketing concept C) societal marketing concept D) marketing concept E) product concept

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

82) Which of the following marketing strategies should marketing managers focus on to manage detailed information about individual customers and carefully manage customer touchpoints to maximize customer loyalty? A) customer divestment B) customer-managed relationships C) the societal marketing concept D) partner relationship management E) customer relationship management

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

86) The primary key to delivering customer satisfaction is to match product performance with . A) the performance of competitive products B) competitive prices C) aggressive advertising D) limited customer services E) customer expectations

39) Which of the following is most likely a fixed cost? A) sales representative commissions B) product distribution costs C) manufacturing input costs D) temporary worker salaries E) facility rental payments

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

69) Which of the following statements about break-even analysis is true? A) It is used to determine how much production experience a company must have in order to achieve desired efficiencies. B) It is a technique used to calculate fixed costs. C) It determines the amount of retained earnings a company will have during a given accounting period. D) It is a technique marketers use to determine the relationship between supply and demand. E) It is calculated by using variable costs the unit price and fixed costs.

"132) Under oligopolistic competition ." A) the market consists of a single dominant seller B) the market consists of numerous small sellers C) the market consists of many buyers and sellers who trade over a range of prices rather than a single market price D) sellers are typically unresponsive to competitors' pricing strategies and marketing moves E) the market consists of only a few large sellers

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"112) Companies using target costing ." A) first design a new product and then determine its cost B) tailor their products to be in line with the marketing mix C) routinely neglect customer value considerations D) avoid determining an ideal selling price until analyzing test market results E) start with an ideal selling price and then target costs that will ensure that the price is met

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

124) Which of the following exemplifies a pure competitive market? A) a market where many buyers and sellers trade over a range of prices rather than a single market price B) a market where a single firm controls the larger fraction of the market share C) a market where a few powerful firms control the larger fraction of the market share D) a market characterized by only a few large sellers E) a market where many buyers and sellers trade in a uniform commodity

125) Which of the following is true of a pure competitive market? A) A single seller has a major effect on the current and future market price. B) Companies spend significantly on marketing research and product development. C) The advertising budget of companies is usually huge. D) Sellers try to develop differentiated offers for different customer segments. E) Sellers spend little time on marketing strategy.

134) Which of the following is true about the demand curve? A) A demand curve indicates the drop in the average per-unit production cost that comes with accumulated production experience. B) A demand curve indicates the cost per unit of output in the long run. C) A demand curve indicates the cost per unit of output in the short run. D) In a monopoly the demand curve does not indicate the total market demand resulting from different prices. E) A demand curve shows the number of units the market will buy in a given time period at different prices that might be charged.

22) Which of the following product mix pricing strategies involves setting prices across an entire product range based on cost differences between the products customer evaluations of different features and competitors' prices? A) by-product pricing B) product bundle pricing C) optional product pricing D) captive product pricing E) product line pricing

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Easy

26) Which of the following product mix pricing strategies involves pricing additional or accessory products sold along with the main product? A) inclusive product pricing B) exclusive product pricing C) by-product pricing D) product bundle pricing E) optional-product pricing

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Easy

"78) A movie theater offers a reduced price for an afternoon showing of a film. This type of pricing is pricing." A) location-based B) customer-segmented C) cost-based D) product form E) time-based

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

57) Which of the following price adjustment strategies involves reducing prices to reward customer responses such as volume purchases paying early or participating in sales-support programs? A) product bundle pricing B) captive product pricing C) product line pricing D) dynamic pricing E) discount and allowance pricing

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

93) Under which type of geographic pricing strategy does each customer take responsibility for the freight charges for the product from the factory to its destination? A) zone pricing B) basing-point pricing C) uniform-delivered pricing D) dynamic pricing E) FOB-origin pricing

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"134) Questions a company should consider if a competitor initiates a price change include all of the following EXCEPT ." A) "Are other competitors going to respond?" B) "What will happen to the company's market share if it does not respond?" C) "Is the price change temporary or permanent?" D) "Why did the competitor change the price?" E) "How can we improve our product?"

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Easy

19) A marketing channel that consists of one or more intermediaries is known as a(n) marketing channel. A) cyclic B) upstream C) looped D) direct E) indirect

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

"6) A view of the market that specifies that planning starts by identifying the needs of target customers to which the company responds by organizing a chain of resources and activities with the goal of creating customer value is a(n) view." A) make-and-sell B) identify-and-target C) purchase-produce-and-consume D) market-and-profit E) sense-and-respond

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

"59) VMS is a vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties." A) Contingent B) Aligned C) Corporate D) Contractual E) Administered

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

"90) In designing the marketing channel a company must balance customer needs and wants with ." A) the need to make a profit B) the requirement to find channel members to fill all the steps C) the firm's position in the customers' minds D) the desire to be "the best" in all service areas E) the firm's resources and skills to provide all the desired services

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Challenging

2) Which of the following is one of the five major promotion tools? A) market penetration B) strategic positioning C) product line filling D) market diversification E) direct and digital marketing

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

"30) Integrated marketing communications require a company's mass-market advertisements Web site e-mail and personal selling communications to all ." A) have equal portions of the advertising budget B) use independent communications directors C) develop separate marketing objectives D) engage the same target audience E) deliver a clear consistent and compelling message

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

19) Which of the following statements is true regarding today's marketing communications? A) More marketers are shifting away from narrowly defined micromarkets and moving toward mass marketing. B) More customers have started relying on marketer-supplied information rather than finding out information on their own. C) Network television magazines newspapers and other traditional mass media continue to increase their dominance. D) Focused marketing programs which are designed to build closer relationships with customers in more narrowly defined micromarkets are no longer used by marketers. E) Today's consumers are better informed about products and services.

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

4) Which of the following is NOT a step in the strategic planning process? A) defining the company mission B) setting company objectives and goals C) designing the business portfolio D) planning marketing and other functional strategies E) evaluating members of the company's value chain

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

134) In a SWOT analysis which of the following would be considered a strength? A) industry trends B) technological shifts C) environmental demands D) performance challenges E) internal capabilities

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

149) Which of the following is true with regard to geographic organization? A) It is the most common form of marketing organization. B) Different marketing activities are headed by a functional specialist. C) It requires salespeople to have international experience. D) It reduces the overall efficiency of salespeople. E) It allows salespeople to work with a minimum of travel time and cost.

"8) Buyer responses are influenced by marketing stimuli. The responses to the stimuli include all of the following EXCEPT ." A) brand engagement B) buying attitudes C) purchasing behavior D) buying preferences E) the "why" regarding the responses

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Moderate

"30) Word-of-mouth influence comes to consumers from family colleagues and ." A) investors B) athletes C) neighbors D) entertainment celebrities E) friends

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"6) consists of arranging for a market offering to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers." A) Mass customization B) Targeting C) Segmentation D) Differentiation E) Positioning

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 7.1: Define the major steps in designing a customer value-driven marketing strategy: market segmentation targeting differentiation and positioning. Difficulty: Easy

customers will be able to see and appreciate the difference

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

7) Which of the following is an example of a pure tangible good? A) a laptop with a comprehensive warranty for three years B) an online shoe retailer that provides free home delivery C) an agency that offers free legal advice D) a credit card E) a bag of potato chips

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

8) Which of the following product offerings is intangible? A) a package of laundry detergent B) an ink cartridge for a printer C) a wool jacket D) a gold ring E) a taxi ride

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"72) A label can identify promote and the product." A) sell B) assemble C) package D) brand E) describe

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"146) A good brand name should most likely be ." A) trendy B) complex C) long D) conventional E) distinctive

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"150) Some companies obtain the rights to use the names or symbols previously created by other manufacturers for a fee. This process is known as ." A) multibranding B) positioning C) segmenting D) co-branding E) licensing

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

137) Which of the following is one of the four consumer perception dimensions used by ad agency Young & Rubicam to measure brand strength? A) brand conformance B) brand consistency C) brand convenience D) brand extension E) brand relevance

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"73) New product success requires all of the following EXCEPT ." A) a whole-company commitment B) a holistic approach for finding new ways to create valued customer experiences C) thinking up a few good ideas D) introducing products that will satisfy a want or need for customers E) efficient engineering and manufacturing

Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

54) Which of the following is the most likely circumstance for a company to decide to do little or no test marketing? A) when the new product requires a major investment B) when management lacks confidence in the new product C) when management lacks confidence in the marketing strategy D) when the product has no substitutes and is new in its category E) when the costs of developing and introducing the product are low

55) Which of the following statements is true of test marketing? A) The amount of test marketing needed remains constant for each new product. B) When the costs of developing and introducing the product are low the company will have to do significant test marketing. C) Test marketing is seldom done on products that are risky. D) Test marketing is seldom done when management is not sure of the product or its marketing program. E) Test marketing costs can be high and it takes time that may allow competitors to gain advantages.

"52) The decision to use an NBA star player to communicate the desirability of Nike basketball shoes represents the process of the communication model." A) sourcing B) messaging C) acknowledging D) decoding E) encoding

Answer: E AACSB: Application of knowledge

39) Which of the following companies uses product bundle pricing? A) Photo Genie which sells inexpensive cameras that run only on their own expensive batteries B) Go Zone which launched a range of tablet models each priced according to its features C) Penguin's Parlor which offers customers a 20 percent discount on their birthdays D) Green Thumb which gives away free watering cans with the purchase of certain potted plants E) Panizza whose combo meals are priced lower than its individual components sold together

Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

"44) Managers at the Imperial Hotel-Chicago complained that the chain's overall image was hurt because Imperial Hotel-Dallas was overcharging guests and providing poor service. The Imperial Hotel was experiencing conflict." A) equilateral B) vertical C) multitiered D) communal E) horizontal

Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

"46) When KFC came into conflict with its franchisees over the brand's Unthink KFC repositioning which emphasized grilled chicken over its traditional Kentucky fried chicken KFC experienced conflict." A) equilateral B) horizontal C) multitiered D) communal E) vertical

Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

"65) Movie Giants offers DVD rentals through its Web site. It also offers DVD rentals via Star City stores. This is an example of a(n) distribution system." A) conventional B) inclusive C) intensive D) extensive E) multichannel

Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

"140) Glasis is a type of paint made specifically for use on cars. An ad in Motor Trend magazine advising consumers to request their auto body shops to use Glasis paint is an example of how a company uses ." A) word-of-mouth influence B) public relations C) buzz marketing D) a push strategy E) a pull strategy

Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Challenging

52) Shoez Inc. a manufacturer of shoes has recently launched a brand of sturdy shoes ideal for hiking and other outdoor activities. Which of the following brand personalities could be best associated with the new brand? A) sincerity B) excitement C) sophistication D) competence E) ruggedness

Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

145) Gainville Inc. manufactures Android phones. Each new Gainville phone launch advances the cause of democratizing technology. Gainville an expert in fostering customer community engages customers at a deep emotional level and has been ranked one of the Breakaway Brands by the brand consultancy Kendell Associates. Gainville is most likely positioned on . A) basic product attributes B) short-term benefits C) service variability D) self-image enhancement E) strong beliefs and values

Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

55) Which of the following is most likely a risk associated with experience-curve pricing? A) High-volume production facilities are unable to meet demand. B) New technology often leads to productivity problems. C) Demand for the product fluctuates unpredictably. D) Consumers tend to prefer new brands over established ones. E) Aggressive pricing often gives a product a cheap image.

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

75) Which of the following involves setting prices based on a rival firm's strategies costs prices and market offerings? A) target return pricing B) good-value pricing C) competitor value-added pricing D) market-based pricing E) competition-based pricing

"33) When amusement parks charge customers for admission and later for food and beverages they are following a pricing strategy." A) by-product B) product line C) penetration D) skimming E) two-part

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

"130) Reasons for a price increase include all of the following EXCEPT ." A) a desire to improve profits B) cost inflation C) when the alternative is rationing of the product D) decreasing gross margins E) increasing supply of product

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Moderate

25) Which of the following is an indirect business marketing channel? A) producer to retailer to business distributor B) producer to wholesaler to retailer to end consumer C) producer to end-consumer to business distributor D) producer to retailer E) producer to business distributor to business customer

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

"62) When McDonald's offers its products inside of a Walmart store it is using a(n) ." A) conventional marketing system B) corporate VMS C) contractual VMS D) administered VMS E) horizontal marketing system

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

"131) Marketing logistics includes all of the following EXCEPT . A) reverse logistics" B) inbound logistics C) outbound logistics D) customer-centered logistics E) producer-centered logistics

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

144) Which of the following is true of shipping goods via water transportation? A) Water transportation is an efficient way to ship perishable merchandise over long distances. B) Water carriers are highly flexible in their routing and time schedules. C) Water transportation provides in-transit services such as the processing of goods en route. D) Water transportation is ideal when time is short and speed is needed. E) Water transportation is the slowest mode of transportation and the most affected by the weather.

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

"91) Personal communications about a product between target buyers and neighbors friends family members associates and other consumers are known as ." A) personal selling B) direct marketing C) public relations D) buzz marketing E) word-of-mouth influence

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"84) Display media includes ." A) newspapers B) magazines C) television D) company Web sites E) billboards

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

"88) A marketer making decisions about the headline copy illustration and colors for a print ad is determining the message ." A) structure B) content C) medium D) channel E) format

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

37) Which of the following is true about multivariable segmentation systems? A) Marketers using multiple segmentation bases tend to ignore smaller markets. B) Marketers often use multiple segmentation bases to control inflation. C) Multiple segmentation rarely involves the use of demographic data. D) Multiple segmentation is ineffective in large markets. E) Multiple segmentation bases help identify smaller better-defined target groups.

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

13) If a consumer purchases a new flat-screen "smart" television what is the augmented product involved? A) connection to the world of entertainment B) state-of the art technology C) slick and attractive packaging D) brand name E) tech support and warranty

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"66) A good design begins with ." A) brainstorming new product ideas B) making prototypes of the planned product C) identifying the most suitable and aesthetic packaging D) brainstorming technical product specifications E) observing and understanding customers and shaping their product-use experience

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Moderate

"119) Service companies can differentiate their service delivery by . A) using symbols and logos" B) instituting a hierarchical organizational structure C) offering innovative product features D) de-emphasizing branding E) having more able and reliable customer-contact people

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Moderate

25) Which of the following statements best explains why idea screening may be the most important step of new product development? A) It increases the number of ideas generated. B) It provides an opportunity for the marketer to test the prototype in a simulated market. C) It helps forecast the products' sales and profits accurately for a specific period. D) It gives research and development team members an opportunity to gather consumer feedback. E) It saves the company money in product development costs by going ahead with only the product ideas that are likely to be profitable.

Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

"20) consumers are the most brand conscious of all the ethnic groups are extremely brand loyal and shop frequently." A) African American B) Native American C) Hispanic American D) Italian American E) Asian American

Answer: E AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

"15) segmentation divides the market into segments based on variables such as age life-cycle stage gender income occupation education religion ethnicity and generation." A) Geographic B) Benefit C) Occasion D) Psychographic E) Demographic

Answer: E AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"47) Using segmentation marketers form segments of consumers who have similar needs and buying behaviors even though they are located in different countries." A) psychographic B) demographic C) occasion D) benefit E) intermarket

Answer: E AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

46) Which of the following refers to a cultural factor in the context of segmenting international markets? A) receptivity of foreign firms B) economic development of the country C) population income levels D) stability of the government E) values and attitudes

Answer: E AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"151) Savings for You a discount retail chain is highly competitive. When entering a new market Savings for You often cuts prices so deeply that it sells below costs effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most likely guilty of ." A) market skimming B) price fixing C) deceptive pricing D) price collusion E) predatory pricing

Answer: E AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Challenging

148) A number of top fashion-modeling agencies would most likely be charged with for jointly determining what commissions they charge for models. A) prestige pricing B) competitive pricing C) price bundling D) dynamic pricing E) price fixing

Answer: E AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Challenging

"106) A firm dumping chemical wastes in the local lake is . A) actively resisting social change" B) contributing to organizational anarchy C) engaging in a "do well by doing good" mission D) adopting a proactive stance toward the marketing environment E) contributing to increased pollution

Answer: E AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

"160) Reasons sellers go beyond what is required by pricing regulations include all of the following EXCEPT that ." A) it is good business to treat customers fairly B) customers that fully understand prices and pricing terms are happy customers C) word-of-mouth from dissatisfied customers spreads rapidly D) building strong and lasting relationships is key to business success E) it improves profitability to earn additional revenue due to customer confusion

Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

110) Digital technology allows companies to reach out to customers in numerous ways. Which of the following is NOT the purpose of a company reaching out using digital and social media? A) solving consumer problems B) building customer relationships C) helping customers shop D) providing product information E) working with suppliers

Answer: E AACSB: Information technology Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

21) Which of the following is a specialized and highly targeted media selection that an advertiser might use to reach smaller customer segments with personalized content? A) radio B) magazines C) newspapers D) network television E) online social networks

Answer: E AACSB: Information technology Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

"107) New technologies most likely lead to . A) economic imbalance in society" B) reduced exports C) trade deficits D) an increased demand for unskilled labor E) new markets and opportunities

Answer: E AACSB: Information technology Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Easy

109) Many companies use RFID product labels on their goods which exemplifies the environment in business. A) natural B) political C) economic D) demographic E) technological

Answer: E AACSB: Information technology Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Easy

37) Which of the following is characteristic of online social networks? A) use of one-way communication techniques B) negligible adoption rates C) guaranteed positive results D) easy methods to measure results E) interactive media content

Answer: E AACSB: Information technology Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

"113) A marketer wants to increase its ""share of customer."" It can do this by offering a greater variety to customers or by ." A) decreasing prices B) increasing discounts and coupons C) sending samples directly to customers D) introducing customers to "brand evangelists" E) creating programs to cross-sell and up-sell to market more products and service to existing customers

Answer: E AACSB: Reflective thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

"18) At its most basic form a marketing channel consists of the producer and the ." A) retailer B) sales agent C) competitor D) processor E) consumer

Answer: E AACSB: Reflective thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

the plant becomes inefficient

Answer: E AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

4) According to the five-step model of the marketing process which of the following is the final step in creating value for customers? A) designing a customer-driven marketing strategy B) understanding the marketplace and customer needs C) constructing an integrated marketing program that delivers superior value D) building profitable relationships and creating customer delight E) capturing value from customers to create profit and customer equity

Answer: E Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate

40) Which of the following statements is true of the production concept? A) It considers customer focus and value to be the paths to sales and profits. B) It follows the customer-centered sense-and-respond philosophy. C) It takes an outside-in perspective. D) It calls for sustainable marketing. E) It leads to companies focusing too narrowly on their own operations.

Answer: E Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate

"121) In industries in which pricing is a key factor often set the best prices or help others in setting them." A) sales departments B) salespeople C) production managers D) line managers E) pricing departments

Answer: E Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

56) Which of the following is a price adjustment strategy? A) product bundle pricing B) by-product pricing C) product line pricing D) optional product pricing E) discount and allowance pricing

Answer: E Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"63) A(n) system involves a single firm setting up two or more marketing channels to reach one or more customer segments." A) conventional distribution B) corporate vertical marketing C) horizontal marketing D) administered vertical marketing E) multichannel distribution

Answer: E Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

"107) The process of arranging for a product to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers is known as ." A) market segmentation B) differentiation C) target marketing D) market targeting E) positioning

Answer: E Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"23) segmentation divides buyers into different segments based on lifestyle or personality characteristics." A) Benefit B) Occasion C) Geographic D) Demographic E) Psychographic

Answer: E Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"97) is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations." A) Mass marketing B) Trigger-based marketing C) Differentiated marketing D) Concentrated marketing E) Micromarketing

Answer: E Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"143) positioning involves providing the most upscale product or service and charging a higher price to cover the higher costs." A) More for the same B) More for less C) Same for less D) Less for much less E) More for more

Answer: E Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

"21) In the new product development process the first idea-reducing stage is ." A) business analysis B) idea generation C) concept development D) crowdsourcing E) idea screening

Answer: E Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

18) Who can pass along information about new concepts or techniques to use in new products? A) competitors B) salespeople C) customers D) suppliers E) distribution channels

Answer: E Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

34) What is included in the first part of a marketing strategy statement? A) distribution strategy B) product longevity C) long-run sales goals D) promotional mixes E) target market description

Answer: E Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

36) Which of the following is included in the third part of the marketing strategy statement? A) the planned value proposition B) distribution strategy C) the product's planned price D) marketing budget E) the planned long-run sales

Answer: E Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

42) Which figures does the company use to analyze the new product's financial attractiveness? A) size of population B) expected market share C) number of competitors D) anticipated number of options E) sales and costs

Answer: E Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"114) A style is best defined as a . A) currently popular trend in retail goods B) popular consumer taste at a given time C) temporary period of unusually high sales" D) short-term component of the marketing mix E) basic and distinctive mode of expression

Answer: E Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

75) Which buyer-readiness stage are consumers in when they are feeling favorable about the product? A) preference B) conviction C) knowledge D) purchasing E) liking

Answer: E Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"119) While using the method for setting an advertising budget a company starts with total revenues deducts operating expenses and capital outlays and then devotes some portion of the remaining funds to advertising." A) integrated B) moving-average C) competitive-parity D) percentage-of-sales E) affordable

Answer: E Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

6) Which is NOT part of the company environment that influences marketing decisions? A) accounting B) engineering C) manufacturing D) sales E) retailers

Answer: E Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

159) Which of the following is most likely influenced by marketers? A) population shifts B) core cultural values C) income distribution D) ethnic diversity E) media

Answer: E Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Moderate

"45) Life-stage segmentation allows marketers to create targeted actionable and campaigns based on how people consume and interact with brands." A) inexpensive B) professional C) multimedia D) social media E) personalized

Answer: E Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"125) Marketers realize that their commercial sources the buyer. A) legitimize products" B) attract C) evaluate products D) personalize products to E) inform

Answer: E Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

"90) A consists of a set of buyers who share common needs or characteristics that the company decides to serve." A) marketing channel B) citizen-action group C) distribution channel D) customer franchise E) target market

Answer: E Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

"138) Brand refers to how consumers feel if a brand meets their needs." A) differentiation B) equity C) dilution D) esteem E) relevance

Answer: E Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

17) Which of the following is an external source for ideas? A) project managers B) engineers C) salespeople D) manufacturing staff E) suppliers

Answer: E Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

161) Briefly describe how economic conditions impact a firm's pricing strategies.

Answer: Economic conditions can have a strong impact on a firm's pricing strategies. Economic factors such as a boom or recession inflation and interest rates affect pricing decisions because they affect consumer spending consumer perceptions of the product's price and value and the company's costs of producing and selling a product. In the aftermath of the recent Great Recession of 2008 to 2009 many consumers have rethought the price-value equation. They have tightened their belts and become more value conscious. Consumers will likely continue their thriftier ways well beyond any economic recovery. As a result many marketers have increased their emphasis on value-for-the-money pricing strategies. The most obvious response to the new economic realities is to cut prices and offer discounts. Thousands of companies have done just that. Lower prices make products more affordable and help spur short-term sales. However such price cuts can have undesirable long-term consequences. Lower prices mean lower margins. Deep discounts may cheapen a brand in consumers' eyes. And once a company cuts prices it is difficult to raise them again when the economy recovers. AACSB: Application of knowledge

149) How do socially responsible firms positively impact consumers and the environment?

Answer: Enlightened companies encourage their managers to look beyond what the regulatory system allows and simply "do the right thing." These socially responsible firms actively seek out ways to protect the long-run interests of their consumers and the environment. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

35) Provide an example of a company that has used an imaginative distribution system to gain a competitive advantage.

Answer: Enterprise Rent-A-Car revolutionized the car-rental business by setting up off-airport rental offices. Apple turned the retail music business on its head by selling music for the iPod via the Internet on iTunes. And Amazon.com forever changed the face of retailing and became the Walmart of the Internet by selling anything and everything without using physical stores. Student ,answers will vary. AACSB: Application of knowledge Skill: Application Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Challenging

49) Give examples of pure tangible goods.

Answer: Examples will vary. A company's market offering often includes both tangible goods and services. Examples of pure tangible goods include soap toothpaste or salt

112) Describe the types of products that are exclusively distributed and provide examples.

Answer: Exclusive distribution is often used for luxury brands such as expensive automobiles and prestige clothing. Student answers will vary. AACSB: Application of knowledge Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

70) Fast Food Inc. views marketing as the process of finding and retaining profitable customers by providing them with the food they want. Fast Food Inc. practices societal marketing.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging

149) Companies that do not target individual consumers do not benefit from using social media tools to appeal to their business customers.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

17) When The Candy Store sets a low initial price in order to get its "foot in the door" and to quickly attract a large number of buyers the company is using market-skimming pricing.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate

18) After entering a market by using market-penetration pricing a company can easily raise its price and maintain its market share.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate

105) The "Stop. Think. Tylenol." ad slogan is an example of a moral appeal.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

25) "At Trader Joe's our mission is to provide all our customers the best food and beverage values to be found anywhere and the information to make informed buying decisions." This is a product-oriented business definition.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

75) An American airline company started a grocery chain in Australia. This is an example of product development.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

139) Jim is planning on buying an expensive HDTV and he realizes that there are few differences between brands. Jim is displaying complex buying behavior.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Challenging

157) Abel is considering whether or not to get an e-reader. He has read online reviews of three different kinds of readers and has talked with two friends who own e-readers. Abel is at the awareness stage of the new product adoption process.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Challenging

125) At a hotel renowned for its superior service one registration-desk employee may be cheerful and efficient whereas another may be irritable and slow. This exemplifies service consistency.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Moderate

79) Blair Housewares wants to add new products to its existing line of products. Managers are correct in believing that the purpose of idea generation is to create a few ideas and the purpose of succeeding stages is to increase that number.

Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

82) GreenTree Lawn and Garden Products is engaged in marketing strategy development. The first part of the marketing strategy statement created by management should outline the product's planned price distribution and marketing budget for the first year.

80) Product costs set the ceiling for prices.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

147) In a pure monopoly the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

150) If demand changes greatly with price the demand is inelastic.

151) The more elastic the demand the more it pays for the seller to raise the price.

108) A seasonal discount is a price reduction to buyers who buy merchandise while the products are in season.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

110) If used infrequently price promotions create "deal-prone" customers who wait until brands go on sale before buying them.

76) In a vertical marketing system two or more companies at one level join together to take advantage of a new marketing opportunity.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

108) Producers of convenience products and common raw materials typically seek exclusive distribution a strategy in which they stock their products in as many outlets as possible.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

12) Advertising involves a personal presentation by the firm's sales force for the purpose of making sales and building customer relationships.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

13) Sales promotion involves building up a good corporate image and handling or heading off unfavorable rumors stories and events.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

21) A mission statement is a document embodying an organization's short-term goals.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

26) A company's mission could appropriately be stated as "making more sales or profits."

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

20) A company's mission statement provides the depth needed for all segments of the company to reach their goals.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

124) One valid criticism of the four Ps concept of the marketing mix is that services are not considered.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

116) The technological environment is predominantly static.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Easy

85) Children exert little influence on family buying decisions.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

86) A person's occupation has no effect on the goods and services that she buys.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

63) Through market targeting companies divide large diverse markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

64) Geographic segmentation divides the market into segments based on variables such as age life-cycle stage gender income occupation education religion ethnicity and generation.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

160) Product differentiation refers to the way a product is defined by consumers on important attributes-the place the product occupies in consumers' minds relative to competing products.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

46) Convenience products are less frequently purchased consumer products and services that customers compare carefully on suitability quality price and style.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

48) Specialty products are consumer products and services that customers evaluate on suitability quality price and style by gathering information and making comparisons.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

45) Unsought products are products that the customer usually buys frequently immediately and with a minimum of comparison and buying effort.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

90) Branding decisions include determining a product price.

95) A company cannot stretch its product line downward.

97) Companies stretch downward to add prestige to their current products.

88) Companies frequently try to offer the highest possible performance quality level.

89) Style is a larger concept than design. Design simply describes the appearance of a product.

122) Services are growing more slowly in the world economy as a percentage of gross world product than in the U.S. economy as a percentage of gross domestic product.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Moderate

123) Service inseparability means that the quality of services depends on who provides them as well as when where and how they are provided.

160) Attributes are the most desirable level for brand positioning because competitors can easily copy attributes.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

80) In the concept development stage a firm will create a single product concept to test.

Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

81) Concept testing works best with people who are familiar with the new idea and the new product's purpose. This generally includes top management the sales force and research and development.

43) Thinking Cap Corp. prices its various cap designs at different price levels ranging from $2.05 to $5.95. This is an example of optional product pricing.

Answer: FALSE AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

45) In addition to its customary services On the Spot a moving company also sells the boxes and padding that are used when moving household furniture. This is an example of customer- segmented pricing.

6) Price is the most inflexible of the marketing mix elements.

Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 10.1: ,Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Easy

95) Markup pricing is used when a firm tries to determine the price at which it will break even or make the target return it is seeking.

Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

84) Good-value pricing usually is used by premium brands and rarely by less-expensive brands.

86) Department stores that practice everyday low pricing typically provide frequent sale days early-bird savings and bonus earnings for store credit-card holders.

30) The role of marketing intermediaries is to transform the assortments of products made by retailers into the assortments wanted by producers.

Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

33) The number of products supplied indicates the length of a channel.

Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

34) In a direct marketing channel the producer sells directly to the intermediaries who in turn sell directly to the customers.

Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

32) It is more efficient for a company to keep the marketing channel functions-such as information gathering promotion contacting customers and matching their needs negotiation and physical distribution-in-house as they are most skilled at those functions.

Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

154) Using a push strategy the producer directs its marketing activities (primarily advertising and consumer promotion) toward final consumers to induce them to buy the product.

Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

84) GreenTree Lawn and Garden Products is engaged in a review of the sales costs and profit projections for some new products to find out whether they satisfy the company's objectives. This activity is called business product development.

Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

84) The single most important demographic trend in the United States that marketers should understand is the changing family structure of the population.

Answer: FALSE AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

86) Millennials comprise the most financially affluent group in America today.

89) Marketers must increasingly consider the special needs of traditional households because this segment of the population is growing more rapidly than nontraditional households.

90) The American workforce today is less white-collar than in the late twentieth century.

80) Subcultures consist only of religious groups.

Answer: FALSE AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

81) Asian-American consumers are the least brand conscious of all ethnic groups.

Answer: FALSE AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

83) In the United States the lines between social classes are not fixed and rigid but people can only drop to a lower social class and not move up into a higher one.

Answer: FALSE AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

157) The international growth of many professional and business services such as accounting consulting and advertising led to the globalization of the client companies they served.

Answer: FALSE AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 9.4: Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Difficulty: Moderate

162) The widespread use of scanner-based computer checkouts has eradicated complaints of retailers overcharging their customers.

Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

163) While regulations exist to prohibit deceptive pricing practices in reality most reputable sellers do the minimum required to meet the regulations.

Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

104) Rational appeals are often used to urge people to support social causes such as a cleaner environment or helping the disadvantaged.

Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

115) Environmental sustainability concerns have declined steadily over the past three decades.

Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

145) The popularity of cause-related marketing as a form of corporate giving is rapidly declining.

Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

156) As long as a product is not identical to a competitor's product offering a company can introduce market and sell it without penalty.

Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 9.4: Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Difficulty: Easy

117) Dynamic pricing is least prevalent online.

Answer: FALSE AACSB: Information technology Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

117) The introduction of new technologies is equally beneficial to all industries.

Answer: FALSE AACSB: Information technology Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

161) The strongest brands do not engage customers on a deep emotional level.

Answer: FALSE AACSB: Reflective thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

162) A company should strive to build a brand name that becomes identified with the product category as Scotch Tape did.

Answer: FALSE AACSB: Reflective thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

40) The shift toward digital communication allows companies to keep control of message exposure.

Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

37) Mass marketers can expect consumers to distinguish between commercial message sources to maintain a clear image of a company and its brands.

100) Encoding is the process by which the receiver assigns meaning to symbols.

Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

101) Decoding is the process by which a sender puts his or her thoughts into a symbolic form.

102) A good marketing message will try to move consumers through several steps of the buyer- readiness stages in a single message.

99) The four major communication functions are encoding decoding response and noise.

106) All personal communication channels are controlled directly by the company.

98) The communications process should start with mass media advertising in order to reach a large number of consumers.

155) Integrating the promotion mix starts with suppliers.

Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

156) Because personal selling involves developing relationships it is acceptable for salespeople to stretch claims they make about a product's advantages.

19) Human needs are shaped by culture and individual personality.

Answer: FALSE Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

21) When backed by buying power needs become wants.

Answer: FALSE Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

22) Market offerings are limited to physical products.

Answer: FALSE Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

119) The meaning of value is perceived identically by all consumers.

Answer: FALSE Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

146) The Internet of Things is a new product created by multiple companies working together.

Answer: FALSE Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy

79) Customer perceptions of the product's value set the floor for prices.

Answer: FALSE Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

82) Value-based pricing uses the sellers' perception of value as the key to pricing.

89) Cost-based pricing involves setting prices based on consumer perception of value.

91) Average cost tends to increase with accumulated production experience.

112) In segmented pricing the difference in prices is based on differences in costs.

Answer: FALSE Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

118) Marketing a product internationally rarely requires a product to be priced differently depending on the country.

Answer: FALSE Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

138) Excess capacity leads to companies initiating an increase in price.

Answer: FALSE Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Easy

72) Horizontal conflicts are conflicts between different levels of the same channel.

Answer: FALSE Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

73) Vertical conflict occurs among firms at the same level of the channel.

Answer: FALSE Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

151) The affordable method involves setting promotion budgets to match competitors' outlays.

Answer: FALSE Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

72) On the BCG matrix "question marks" are high-growth high-share businesses or products.

Answer: FALSE Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

118) To succeed in today's competitive marketplace companies must be product-centered.

Answer: FALSE Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

122) The marketing mix consists of people property planning and position.

Answer: FALSE Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

88) Personality is a person's pattern of living as expressed in his or her psychographics.

Answer: FALSE Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

93) A product line consists of unrelated products that are sold to diverse customer groups.

Answer: FALSE Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

127) Product quality is harder to define and judge than service quality.

Answer: FALSE Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Easy

163) Co-branding occurs when retailers and wholesalers create their own store brands.

Answer: FALSE Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

164) Line extension refers to extending an existing brand name to new product categories.

Answer: FALSE Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

86) A company introducing a product that is similar to its competitors' product will do a complete test market to gain maximum information before product introduction.

Answer: FALSE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

147) Organizations choose to use only a few of the available online and social media. Using multiple social media results in confused fans.

Answer: FALSE Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Challenging

24) When sellers focus on existing needs and lose sight of underlying customer wants they suffer from marketing myopia.

Answer: FALSE Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate

65) Market segmentation is the process of seeking fewer customers and reduced demand for profit maximization only.

Answer: FALSE Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

67) An organization's department follows a customer-centered sense-and-respond philosophy. The department is most likely practicing the product concept.

117) For most marketers customer relationship management is exclusively a matter of customer data management.

123) To increase its "share of customer" a firm concentrates on retaining as many customers as possible over its lifetime.

122) In consumer-generated marketing marketers play a bigger role in shaping consumers' brand experiences and those of others.

124) A company can create customer delight by meeting customer expectations through offering good products that do what is promised.

therefore they are of no significance to marketers.

90) A company will be at an advantage even if it costs more than its competitors to make and sell a similar product.

92) A downward-sloping experience curve is indicative of a company's rapidly increasing production costs.

47) Some industries commonly use two-part pricing breaking the price down into a fixed fee and a fixed usage rate.

Answer: FALSE Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

48) When using product bundle pricing sellers combine several of their products and offer the bundle at an increased price for increased profit.

Answer: FALSE Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

115) Customers located close to a firm are less likely to benefit from FOB-origin pricing than customers located farther away.

Answer: FALSE Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

116) The uniform-delivered pricing strategy means that goods sold are placed free on board a carrier with the customer paying the freight from the factory to the destination.

Answer: FALSE Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

114) Sellers cannot influence or use consumers' reference prices when setting their product prices.

Answer: FALSE Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

75) A non-corporate VMS integrates successive stages of production and distribution under single ownership.

Answer: FALSE Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

109) Under the strategy of intensive distribution the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories.

Answer: FALSE Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

110) The producer informs each channel member what its responsibilities are and what the terms of business are.

Answer: FALSE Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

160) Reverse logistics refers to the moving of products and materials from suppliers to the factory.

Answer: FALSE Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

162) In contrast to distribution centers storage warehouses are designed to move goods rather than just house them.

Answer: FALSE Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

163) Air carriers transport digital products from producer to customer via satellite cable phone wire or wireless signal.

Answer: FALSE Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

147) The affordable method of setting advertising budgets takes into consideration the effects of promotion on sales.

Answer: FALSE Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

148) The affordable method of setting advertising budgets more frequently results in overspending rather than in underspending.

Answer: FALSE Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

71) The major activity in strategic planning is product innovation.

Answer: FALSE Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

76) Company growth through diversification involves offering modified or new products to the company's current markets.

Answer: FALSE Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

90) Since companies want to work together to attract customers marketers do not need to practice partner relationship management.

Answer: FALSE Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy

119) Dividing a market into distinct groups of buyers who have different needs characteristics or behaviors and who might require separate products or marketing programs is known as market diversification.

Answer: FALSE Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

120) A market segment consists of consumers who respond in different ways to a given set of marketing efforts.

Answer: FALSE Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

160) Benchmarking refers to the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives.

Answer: FALSE Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate

29) The microenvironment consists of larger societal forces that affect a company such as demographic economic political and cultural forces.

Answer: FALSE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

30) The macroenvironment consists of the factors close to the company that affect its ability to serve its customers such as suppliers customer markets competitors and publics.

Answer: FALSE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

32) A company's marketing environment excludes the forces outside the marketing department that affect marketing management's ability to build and maintain successful relationships with target customers.

Answer: FALSE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

34) Local publics include consumer organizations environmental groups minority groups and others.

Answer: FALSE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

39) Companies that watch variables such as income cost of living and interest rates are more likely to be negatively affected by an economic change such as a recession or boom.

Answer: FALSE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

42) Marketing management can control environmental forces. A reactive approach is therefore the most beneficial approach to the marketing environment.

Answer: FALSE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

92) Prior to the Great Recession of 2008/2009 American consumer spending was careful and restrained.

Answer: FALSE Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

161) When a company hires lobbyists to influence legislation affecting its industry it is taking a defensive stance toward the marketing environment.

Answer: FALSE Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Easy

87) People's tastes in food clothes recreation and even furniture remain unchanged as they age.

Answer: FALSE Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

91) Alternative evaluation is the process by which people select organize and interpret information to form a meaningful picture of the world.

Answer: FALSE Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

137) Store salespeople and a consumer's friends rarely impact someone's final purchase decision.

Answer: FALSE Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Moderate

140) Habitual buying behavior involves consumers searching extensively for information about brands and evaluating brand characteristics.

Answer: FALSE Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Moderate

159) Being able to try a new product is an unimportant stage in the adoption process as the consumer already has a good idea of the product's value.

Answer: FALSE Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

160) People differ greatly in their readiness to try new products. In each product area there are "consumption pioneers" also referred to as lagging adopters.

Answer: FALSE Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate

7) Mass marketing involves identifying market segments selecting one or more of them and developing products and marketing programs tailored to each.

Answer: FALSE Skill: Concept Objective: LO 7.1: Define the major steps in designing a customer value-driven marketing strategy: market segmentation targeting differentiation and positioning. Difficulty: Easy

9) With technology advances making it simple to contact many customers at once companies have moved toward mass marketing over target marketing.

67) Demographic segmentation divides buyers into segments based on their knowledge attitudes uses or responses concerning a product.

Answer: FALSE Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

70) When segmenting by usage rate markets can be segmented into nonusers ex-users potential users first-time users and regular users of a product.

Answer: FALSE Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

72) Intermarket segmentation refers to forming segments of consumers who have different needs and buying behaviors in a given geographical region.

Answer: FALSE Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

117) A company will always choose the largest and fastest-growing segments as the most attractive for it to enter.

Answer: FALSE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

120) Using an undifferentiated marketing strategy a firm might decide to target several market segments and designs separate offers for each.

Answer: FALSE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

121) Using a segmented marketing strategy a firm might decide to ignore market segment differences and target the whole market with one offer.

Answer: FALSE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

123) Niche marketing involves tailoring brands and promotions to the needs and wants of local customer groups-cities neighborhoods and even specific stores.

Answer: FALSE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

125) When competitors use differentiated marketing to focus on the customer's needs a firm should use undifferentiated marketing to compete with them.

Answer: FALSE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

163) Firms that practice product differentiation gain competitive advantage through the way they design their channel's coverage expertise and performance.

Answer: FALSE Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

96) Product mix width refers to the total number of items a company carries within its product lines.

Answer: FALSE Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

77) Companies seldom solicit ideas from customers during the idea generation stage of product development.

Answer: FALSE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

87) A company launching a new product into the market must first decide where to launch the product.

Answer: FALSE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

83) The business analysis stage represents the first large jump in financial investment in the new product development process.

Answer: FALSE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

89) Sequential product development has the advantage of not only being a team-oriented approach but also of being faster in bringing products to market.

Answer: FALSE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

140) When sales of a product drop during the decline stage of the PLC a company typically modifies the marketing mix the product or the market.

Answer: FALSE Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

168) How do firms practicing channel differentiation gain competitive advantage?

Answer: Firms that practice channel differentiation gain competitive advantage through the way they design their channel's coverage expertise and performance. AACSB: Written and oral communication Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

128) Evaluate how public policy affects distribution decisions.

Answer: For the most part companies are legally free to develop whatever channel arrangement suits them as long as they do not substantially lessen competition or tend to create a monopoly and as long as both parties enter into the agreement voluntarily. Exclusive territorial agreements in which a producer attempts to keep a dealer from selling outside of a designated territory have become a major legal issue. Producers are free to select their dealers but they must have legitimate cause to terminate a relationship with a dealer. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Moderate

122) List four types of discounts.

Answer: Four types of discounts are cash discount quantity discount functional or trade discount and seasonal discount. AACSB: Application of knowledge Skill: Application Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

73) Briefly describe geographic segmentation.

Answer: Geographic segmentation calls for dividing the market into different geographical units such as nations regions states counties cities or even neighborhoods. A company may decide to operate in one or a few geographical areas or operate in all areas but pay attention to geographical differences in needs and wants. AACSB: Written and oral communication Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

101) What is good-value pricing?

Answer: Good-value pricing refers to offering just the right combination of quality and good service at a fair price. AACSB: Written and oral communication Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

148) Why is government regulation necessary to protect consumers from unfair business practices?

Answer: Government regulation is necessary to protect consumers from unfair business practices because some firms if left alone would make shoddy products invade consumer privacy mislead consumers in their advertising and deceive consumers through their packaging and pricing. Rules defining and regulating unfair business practices are enforced by various agencies. AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

102) What is high-low pricing?

Answer: High-low pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items. AACSB: Written and oral communication Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

103) Many subcultures make up important market segments. Examples of three such important subculture groups include Hispanic Americans African Americans and Asian Americans. Describe the general shopping-related characteristics of each of these groups.

Answer: Hispanic American consumers tend to be deeply family-oriented and make shopping a family affair. The older first-generation consumers tend to be very brand loyal and favor companies who show special interest in them. African American consumers are more price- conscious than other segments

94) Why might the Hispanic American market be a viable targeted group for a new marketer of products?

Answer: Hispanic Americans are a large fast-growing U.S. subculture and they tend to favor companies who show special interest in them. A new marketer of products can capitalize on these attributes. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

43) How do integrated marketing communications build brand identity?

Answer: IMC builds brand identity and strong customer relationships by tying together all of the company's messages and images. AACSB: Application of knowledge Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

45) Explain the concept of integrated marketing communications (IMC).

Answer: IMC calls for recognizing all touch points where the customer may encounter the company and its brands. While implementing IMC the company's goal should be to deliver a consistent and positive message at each contact. Integrated marketing communications ties together all of the company's messages and images. Its television and print ads have the same brand message look and feel as its e-mail and personal selling communications. And its PR materials project the same image as its Web site online social networks or mobile marketing efforts. AACSB: Application of knowledge

104) Explain the significance of a downward-sloping experience curve.

Answer: If a downward-sloping experience curve exists this is highly significant for the company. Not only will the company's unit production cost fall but it will fall faster if the company makes and sells more during a given time period. AACSB: Written and oral communication Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Moderate

105) A marketer's fixed costs are $400000. The variable cost is $16 per unit and the price of the product is $24 per unit. If the company wants to make a profit how many units must it sell and at what price?

Answer: If the company wants to make a profit it must sell more than 50000 units at $24 each. AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

113) What role does message format play in print advertisements?

Answer: In a print ad for example the headline copy illustrations and color are critical. To attract attention the advertiser may use novelty contrasts or eye-catching headlines. AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

155) What is a pure monopoly?

Answer: In a pure monopoly the market is dominated by one seller. The seller may be a government monopoly a private regulated monopoly or a private unregulated monopoly. Pricing is handled differently in each case. AACSB: Written and oral communication Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

98) Differentiate between controlled test markets and simulated test markets.

Answer: In controlled test markets new products and tactics are tested among controlled panels of shoppers and stores. Using simulated test markets researchers measure consumer responses to new products and marketing tactics in laboratory stores or virtual online shopping environments. Both controlled test markets and simulated test markets reduce the costs of test marketing and speed up the process. AACSB: Application of knowledge

117) Outline the steps in developing effective marketing communications.

Answer: In preparing marketing communications the marketer's first task is to identify the target audience and its characteristics. Next the marketer has to determine the communication objectives and define the response sought whether it is awareness knowledge liking preference conviction or purchase. Then a message should be constructed with an effective content and structure. Media must be selected both for personal and nonpersonal communication. The marketer should find highly credible sources to deliver messages. Finally the communicator must collect feedback by watching how much of the market becomes aware tries the product and is satisfied in the process. AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

154) Who typically sets prices in large and small companies?

Answer: In small companies prices are often set by top management rather than by the marketing or sales departments. In large companies pricing is typically handled by divisional or product managers. AACSB: Written and oral communication Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

121) Explain the factors involved in setting international pricing.

Answer: In some cases a company can set a uniform worldwide price. However most companies adjust their prices to reflect local market conditions and cost considerations. A firm must consider economic conditions competitive situations laws and regulations and development of the wholesale and retail system. Consumer perceptions and preferences also may vary from country to country calling for different prices. The company may have different marketing objectives in various world markets. Costs play an important role in setting international prices. Management must prepare for price escalation that may result from the differences in selling strategies or market conditions. The additional costs of operations product modifications shipping and insurance import tariffs and taxes exchange-rate fluctuations and physical distribution must all be factored into the "price." AACSB: Diverse and multicultural work environments

105) Explain the change in buying roles of husbands and wives due to an evolving consumer lifestyle in the United States. Additionally describe the effect of this change on marketers.

Answer: In the United States the wife traditionally has been considered the main purchasing agent for the family in the areas of food household products and clothing. However with more women working outside the home and the willingness of husbands to do more of the family's purchasing all this is changing. A recent survey of men ages 18 to 64 found that 41 percent identify themselves as primary grocery shoppers in their households and about 39 percent handle most of their household's laundry. At the same time today women account for 60 percent of all technology purchases and influence 80 percent of all new car purchases. Such shifting roles signal a new marketing reality. Marketers in industries that have traditionally sold their products to only women or only men-from groceries and personal care products to cars and consumer electronics-are now carefully targeting the opposite sex. AACSB: Analytical thinking

168) Identify and describe the stages in the adoption process.

Answer: In the awareness stage consumers become aware of the new product but lack information about it. Then consumers seek information about the new product in the interest stage. In the evaluation stage consumers consider whether trying the new product makes sense. Consumers try the product on a limited basis in the trial stage. Finally consumers decide to make full use of the product in the adoption stage. AACSB: Written and oral communication Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

9) Define price. Discuss its importance.

Answer: In the narrowest sense price is the amount of money charged for a product or a service. More broadly price is the sum of all the values that customers give up to gain the benefits of having or using a product or service. Historically price has been the major factor affecting buyer choice. In recent decades however nonprice factors have gained increasing importance. Even so price remains one of the most important elements that determines a firm's market share and profitability. Price is the only element in the marketing mix that produces revenue

147) Listing them in the proper order what are the stages in the buyer decision process? Describe each.

Answer: In the need recognition stage consumers become aware of a new problem or need. Then consumers seek information about products to meet that need in the information search stage. In the alternative evaluation stage consumers use the gathered information to compare and contrast the choices. Consumers do not use the same evaluation process in all buying situations

44) Why are profound changes in marketing communications creating both exciting and scary times for marketing communicators?

Answer: In the past marketers relied heavily on mass marketing. Today however mass markets have fragmented consumers are better informed and sweeping changes in technology have changed how companies and consumers communicate with each other. These three factors have led to a new marketing communications model that is specialized to reach smaller customer segments with messages that are more personalized. Mass marketing can no longer be solely relied upon to deliver a marketer's message. Although these changes may frighten marketing communicators these changes afford tremendous opportunities to reach new customers and strengthen relationships with existing customers. AACSB: Analytical thinking Skill: Application Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Challenging

102) Name and describe the principal decisions companies make regarding their individual products and services.

Answer: Individual product decisions involve: 1) product attributes 2) branding 3) packaging 4) labeling and 5) product support services. Product attribute decisions involve product quality features and style and design. Branding decisions include selecting a brand name and developing a brand strategy. Package decisions often include designing labels which identify describe and possibly promote the product. Labeling identifies the product and may describe and promote the product and brand. Companies also develop product support services that enhance customer service and satisfaction and safeguard against competitors. AACSB: Application of knowledge

167) What are the differences between innovators early adopters and early mainstream adopters?

Answer: Innovators are more willing to take on risk

130) Define interactive marketing. Why is it considered an important skill for service marketers?

Answer: Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. In product marketing product quality often depends little on how the product is obtained. But in services marketing service quality depends on both the service deliverer and the quality of delivery. Service marketers therefore have to master interactive marketing skills. AACSB: Application of knowledge

37) How do intermediaries add value to a marketing system?

Answer: Intermediaries reduce the amount of work that must be done by both producers and consumers. They transform the assortment of products made by producers into the assortment wanted by consumers. They buy large quantities from many producers and break them down into the smaller quantities and broader assortments wanted by consumers. Intermediaries help to match supply and demand. Intermediaries add value by bridging the major time place and possession gaps that separate goods and services from those who would use them. AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

104) Define commercialization. Explain two important decisions the company must make during this stage.

Answer: Introducing a new product into the market is called commercialization. The company launching a new product must first decide on introduction timing. Next the company must decide where to launch the new product-in a single location a region the national market or the international market. Confidence capital and capacity are required to launch new products on a large-scale basis. Hence many firms plan a market rollout over time. AACSB: Written and oral communication Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

84) Give an example of a multichannel distribution system.

Answer: John Deere sells its familiar green and yellow lawn and garden tractors mowers and outdoor power products to consumers and commercial users through several channels including John Deere retailers Lowe's home improvement stores and online. Student answers will vary. AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

56) Products and services fall into two broad classes based on the types of consumers that use them. Name these two broad classes and describe how they are different from each other.

Answer: The two broad classes are consumer products and industrial products. Consumer products and services-those bought by final consumers-are usually classified according to consumer shopping habits. Consumer products include convenience products shopping products specialty products and unsought products. Industrial products on the other hand are those that are purchased for further processing or for use in conducting a business. These products include the three broad categories of materials and parts capital items and supplies and services. AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

92) What are the various components of the value delivery network of a company?

Answer: The value delivery network is made up of the company its suppliers its distributors and ultimately its customers who partner with each other to improve the performance of the entire system. Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy

133) Briefly explain local and individual marketing.

Answer: Local marketing involves tailoring brands and promotions to the needs and wants of local customer groups-cities neighborhoods and even specific stores. Advances in communications technology have given rise to new high-tech versions of location-based marketing. Increasingly location-based marketing is going mobile reaching on-the-go consumers as they come and go in key local market areas. In the extreme micromarketing becomes individual marketing-tailoring products and marketing programs to the needs and preferences of individual customers. Individual marketing has also been labeled one-to-one marketing mass customization and markets-of-one marketing. More detailed databases robotic production and flexible manufacturing and interactive media such as mobile phones and the Internet have combined to foster mass customization. AACSB: Application of knowledge

128) Explain how storing customer information in a database might better prepare carmaker Kia in customer relationship management.

Answer: Managing detailed information about customers may allow Kia to design new models based on customer demographics and desires for specific features. These "touch points" can be the key to long-term customer loyalty. AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

92) How might a firm benefit from implementing an "intrapreneurial" program?

Answer: Many companies have developed successful internal social networks and intrapreneurial programs that encourage employees to develop new product ideas. For example Twitter hosts periodic "hackathons" which actively promotes internal innovation through experimentation around the company. AACSB: Written and oral communication Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

80) Define market penetration.

Answer: Market penetration refers to company growth by increasing sales of current products to current market segments without changing the product. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

128) What does market targeting involve?

Answer: Market targeting involves evaluating each market segment's attractiveness and selecting one or more segments to enter. Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

19) Differentiate between market-skimming and market-penetration pricing strategies. Explain the conditions within which they are effective.

Answer: Market-skimming is used to skim revenues layer by layer from the market by entering the market with high initial prices. The product's quality and image must support its higher price and enough buyers must want the product at that price. The costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. Competitors should not be able to enter the market easily and undercut the high price. Market penetration is used to penetrate the market quickly and deeply to attract a large number of buyers quickly and win a large market share by setting a low price initially when it enters the market. The market must be highly price sensitive so that a low price produces more market growth. Production and distribution costs must fall as sales volume increases. Also the low price must help keep out competition and be maintained over time. AACSB: Application of knowledge

20) For what types of products might marketers use market-skimming pricing?

Answer: Market-skimming pricing works when the product's quality and image support the higher price. For example companies selling high-tech electronics may use market-skimming pricing successfully. AACSB: Application of knowledge Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate

147) Marketers can prolong the lives of many products in the maturity or decline stages of the PLC sometimes even moving these products back into the growth stage. How is this undertaken?

Answer: Marketers can change any element of the marketing mix find new users and new market segments for its brands change characteristics such as quality features style packaging or technology platforms and so on. AACSB: Application of knowledge

93) Why are competitors considered a good external idea source?

Answer: Marketers can pay particular attention to competitors' ads to get clues about their new products. They buy competing new products take them apart to see how they work analyze their sales and decide whether they should bring out a new product of their own. AACSB: Analytical thinking Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

96) How does marketing through online social networks differ from more traditional marketing?

Answer: Marketers hope to use social networks to interact with consumers and become a part of their everyday lives instead of relying on one-way commercial messages that play a significant role in traditional marketing. AACSB: Information technology Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

146) Describe some important strategies for a marketer of a high-involvement product.

Answer: Marketers must understand the information-gathering and evaluation behavior of their high-involvement customers. This involves helping customers learn about the product attributes and their relative importance as well as clearly differentiating the brand's features. Marketers might use long copy in print media to satisfy the customer's need for information. Marketers must also motivate salespeople to influence the customer's choice. To discourage customers' postpurchase dissonance after-sale communications from the marketer should help customers feel good about their purchase decision. AACSB: Application of knowledge

81) Describe how marketers use multiple segmentation bases to their advantage.

Answer: Marketers rarely limit their segmenting analysis to only one or a few variables. Instead they use multiple segmentation bases in an effort to identify smaller better-defined target groups of consumers who share likes dislikes lifestyles and purchase behaviors. Companies often begin by segmenting their markets using a single base and then expand using other bases. AACSB: Application of knowledge Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

21) Why might marketers use market-penetration pricing?

Answer: Marketers use such pricing when attempting to attract a large number of buyers quickly and win a large market share

152) Why is it important for marketers to understand cultural swings?

Answer: Marketers want to predict cultural shifts to spot new opportunities or threats. The major cultural values of a society are expressed in people's views of themselves and others as well as in their views of organizations society nature and the universe. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

118) How can marketers benefit from developing solutions to environmental problems such as pollution and raw material shortages?

Answer: Marketers who help develop solutions to problems facing the natural environment can gain the advantage of becoming market leaders as increasingly strict environmental regulations can be expected in the United States and elsewhere. Environmentally responsible actions will help a company's public image

169) How do marketers measure return on marketing investment? Why is this figure difficult to assess?

Answer: Marketing ROI (return on investment) is the net return from a marketing investment divided by the costs of the marketing investment. It measures the profits generated by investments in marketing activities. Marketing ROI can be difficult to measure. In measuring financial ROI both the "R" and the "I" are uniformly measured in dollars. As of yet however there is no consistent definition of marketing ROI. For instance returns like advertising and brand-building impact aren't easily put into dollar returns. customer lifetime value and customer equity. These measures capture not only current marketing performance but also future performance resulting from stronger customer relationships. AACSB: Application of knowledge

168) What does marketing ROI measure?

Answer: Marketing ROI measures the profits generated by investments in marketing activities. AACSB: Written and oral communication Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

45) What are marketing intermediaries and what are the various types?

Answer: Marketing intermediaries help the company promote sell and distribute its products to final buyers. They include resellers physical distribution firms marketing services agencies and financial intermediaries. Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers who buy and resell merchandise. Physical distribution firms help the company to stock and move goods from their points of origin to their destinations. Marketing services agencies are the marketing research firms advertising agencies media firms and marketing consulting firms that help the company target and promote its products to the right markets. Financial intermediaries include banks credit companies insurance companies and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods. AACSB: Written and oral communication Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

166) What strategy should a marketer use upon learning that consumers are not buying a product because they do not perceive a need for it?

Answer: Marketing might launch an advertising campaign that shows customers how the product can solve their existing problems and meet their existing needs. AACSB: Analytical thinking Skill: Application Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate

166) Define marketing planning. What are the contents of a marketing plan?

Answer: Marketing planning involves choosing marketing strategies that will help the company attain its overall strategic objectives. A detailed marketing plan is needed for each business product or brand. The major contents of a marketing plan are: 1. Executive summary 2. Current marketing situation 3. Threats and opportunities analysis 4. Objectives and issues 5. Marketing strategy 6. Action programs 7. Budgets 8. Controls AACSB: Written and oral communication Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate

129) What is a marketing strategy? How do marketing strategies help firms?

Answer: Marketing strategy refers to the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships. A company decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning). It identifies the total market and then divides it into smaller segments selects the most promising segments and focuses on serving and satisfying the customers in these segments. Guided by marketing strategy a company designs an integrated marketing mix made up of factors under its control-product price place and promotion (the four Ps). To find the best marketing strategy and mix the company engages in marketing analysis planning implementation and control. Through these activities the company watches and adapts to the actors and forces in the marketing environment. AACSB: Application of knowledge

44) Who are the major players in a company's microenvironment? Explain the role that each actor plays.

Answer: Marketing success requires building relationships with other company departments suppliers marketing intermediaries competitors various publics and customers which combine to make up the company's value delivery network. The company: In designing marketing plans marketing management takes other company groups into account-groups such as top management finance research and development (R&D) purchasing operations and accounting. All of these interrelated groups form the internal environment. Top management sets the company's mission objectives broad strategies and policies. Marketing managers make decisions within the broader strategies and plans made by top management. Suppliers: Suppliers form an important link in the company's overall customer value delivery network. They provide the resources needed by the company to produce its goods and services. Marketing intermediaries: Marketing intermediaries help the company promote sell and distribute its products to final buyers. They include resellers physical distribution firms marketing services agencies and financial intermediaries. Competitors: The marketing concept states that to be successful a company must provide greater customer value and satisfaction than its competitors do. Thus marketers must do more than simply adapt to the needs of target consumers. Publics: The company's marketing environment also includes various publics. A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. Customers: Customers are the most important actors in the company's microenvironment. The aim of the entire value delivery network is to serve target customers and create strong relationships with them. AACSB: Written and oral communication Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

107) Explain Maslow's hierarchy of needs.

Answer: Maslow suggested that an individual's unfulfilled needs motivate them and that their needs are arranged in a hierarchy. The hierarchy of needs includes physiological safety social self-esteem and self-actualization needs. Maslow suggested that individuals meet the bottom- level basic needs first before moving up the hierarchy. Until more basic needs such as safety are fulfilled an individual has little interest in higher-level needs such as esteem and self- actualization. AACSB: Written and oral communication Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

129) Briefly explain mass customization.

Answer: Mass customization is the process by which firms interact one-to-one with masses of customers to design products and services tailor-made to individual needs. AACSB: Written and oral communication Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

38) What are the key functions that members of the marketing channel perform?

Answer: Members of the marketing channel help to complete transactions by gathering and distributing information developing and spreading promotions contacting prospective buyers matching and shaping the offer to the buyer's needs and negotiating price and other terms. Others help to fulfill the completed transactions through physical distribution financing and risk taking. AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

96) How can marketers reach the Millennials effectively?

Answer: Millenials engage with brands in an entirely new way such as with mobile or social media. More than sales pitches from marketers Millennials seek opportunities to shape their own brand experiences and share them with others. Many brands are now fielding specific products and marketing campaigns aimed at Millennial needs and lifestyles. AACSB: Information technology

28) Why should mission statements be market oriented instead of product or technology oriented?

Answer: Mission statements should be market oriented and defined in terms of satisfying basic customer needs. Products and technologies eventually become outdated but basic market needs may last forever. AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

82) What is a growth-share matrix? Discuss the BCG growth-share matrix.

Answer: The growth-share matrix is a portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share. Using the now-classic Boston attractiveness. On the horizontal axis relative market share serves as a measure of company strength in the market. The growth-share matrix defines four types of SBUs: 1. Stars are high-growth high-share businesses or products. They often need heavy investments to finance their rapid growth. Eventually their growth will slow down and they will turn into cash cows. 2. Cash cows are low-growth high-share businesses or products. These established and successful SBUs need less investment to hold their market share. Thus they produce a lot of the cash that the company uses to pay its bills and support other SBUs that need investment. 3. Question marks are low-share business units in high-growth markets. They require a lot of cash to hold their share let alone increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased out. 4. Dogs are low-growth low-share businesses and products. They may generate enough cash to maintain themselves but do not promise to be large sources of cash. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

151) What are the different ways in which the major cultural values of a society are expressed?

Answer: The major cultural values of a society are expressed in people's views of themselves and others as well as in their views of organizations society nature and the universe. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

101) Identify the major sources of external new product ideas and explain why these sources offer advantages over internal sources.

Answer: The major external sources of new product ideas include customers suppliers and distributors competitors and research firms. These sources are close to the market and tend to reflect current tastes and preferences. Firms can better match their product offerings to customer needs and wants. AACSB: Written and oral communication Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

97) A marketer has chosen a multiple-city test market. What can be concluded from this choice of a multiple-city test market?

Answer: The marketer likely understands that the product being tested will be perceived differently in different geographic regions. AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Challenging

96) A marketer has selected a single city in which to conduct a test market. What can be concluded from this choice of a single-city test market?

Answer: The marketer may be confident that consumers in that city are representative of the overall market. AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Challenging

116) The background for the QuickRelief allergy medication ad appearing in the magazine Better Homes and Gardens shows green grass and lovely flowers. The headline states "QuickRelief is 54% more effective than the leading prescription." At the bottom of the ad in small print is an explanation of how the effectiveness of QuickRelief was determined. The ad also shows a package of QuickRelief so consumers can easily recognize it at the store. Identify the different components of the communication model for this advertisement.

Answer: The marketers of QuickRelief are the sender. These marketers encoded their ideas into the actual message which includes the images and text of the advertisement. The medium for this communication is the page in Better Homes and Gardens. The receiver is anyone reading the magazine who sees this page of advertising the receiver may or may not decode the message in the way the marketers intended. Noise could pop up at any stage of the communication process. AACSB: Analytical thinking Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

110) Why is the consumer's field of experience important to a marketer?

Answer: The marketing communicator must understand the consumer's field of experience in order to create promotional messages that will be decoded as the sender intends them to be understood. AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

115) Explain how the message source affects consumers' perceptions of the message.

Answer: The message source will affect how the consumer perceives the message. For example highly credible sources-such as certain newspapers or professionals such as doctors and dentists-will be more persuasive. In some cases the use of celebrity testimonials works well to persuade consumers to make the purchase. AACSB: Application of knowledge

164) In what way does the government regulate pricing?

Answer: The most important pieces of federal legislation affecting prices are the Sherman Clayton and Robinson-Patman acts initially adopted to curb the formation of monopolies and to regulate business practices that might unfairly restrain trade. Because these statutes can be applied only to interstate commerce many states have adopted similar provisions for companies that operate locally. Examples include pricing within channel levels and pricing across channel levels. AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Challenging

119) What are the major trends in today's natural environment? How do these trends affect companies?

Answer: The natural environment shows three major trends: shortages of certain raw materials higher pollution levels and more government intervention in natural resource management. Environmental concerns create marketing opportunities for alert companies. As concern about global warming and other environmental issues continues to grow more and more consumers are demanding environmentally responsible products. Companies who pay heed to these demands will benefit as environmentally responsible actions are linked with good business. AACSB: Application of knowledge

167) What does the concept of integrated logistics management advocate?

Answer: This concept recognizes that providing better customer service and trimming distribution costs require teamwork both inside the company and among all the marketing channel organizations. Inside the company's various departments must work closely together to maximize its own logistics performance. Outside the company must integrate its logistics system with those of its suppliers and customers to maximize the performance of the entire distribution network. AACSB: Interpersonal relations and teamwork Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

75) Why must marketers guard against stereotypes when using age and life-cycle segmentation?

Answer: This is primarily because age is often a poor predictor of a person's life cycle health work or family status needs and buying power. AACSB: Application of knowledge

99) Why might individual departments prefer sequential product development?

Answer: This process allows each individual department to work with a new idea completing its stage of development before passing the product on to the next department and stage

146) Why do ad expenditures remain high in the growth stage of the PLC?

Answer: Though sales are increasing for such products competition becomes fierce as competitors attempt to enter the market

163) Discuss the percentage-of-sales method used for setting the total budget for advertising.

Answer: The percentage-of-sales method involves setting the promotion budget at a certain percentage of current or forecasted sales. The percentage-of-sales method is simple to use and helps management think about the relationships between promotion spending selling price and profit per unit. It wrongly views sales as the cause of promotion rather than as the result. Thus the percentage-of-sales budget is based on the availability of funds rather than on opportunities. It may prevent the increased spending sometimes needed to turn around falling sales. Finally the method does not provide any basis for choosing a specific percentage except what has been done in the past or what competitors are doing. AACSB: Application of knowledge

51) What should the price steps of product line pricing take into account?

Answer: The price steps should take into account cost differences between products in the line. More importantly they should account for differences in customer perceptions of the value of different features. AACSB: Application of knowledge

29) Define strategic planning. Discuss the steps involved.

Answer: The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its marketing opportunities is called strategic planning. At the corporate level the company starts the strategic planning process by defining its overall purpose and mission. This mission is then turned into detailed supporting objectives that guide the entire company. Next headquarters decides what portfolio of businesses and products is best for the company and how much support to give each one. In turn each business and product develops detailed marketing and other departmental plans that support the company- wide plan. Thus marketing planning occurs at the business-unit product and market levels. It supports company strategic planning with more detailed plans for specific marketing opportunities. AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

130) Distinguish between market segmentation and market targeting.

Answer: The process of dividing a market into distinct groups of buyers who have different needs characteristics or behaviors and who might require separate products or marketing programs is called market segmentation. On the other hand market targeting involves evaluating each market segment's attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time. AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

94) The potential sales costs and profit projections are being determined for a new product idea at Art for Kids. Which of the following stages of the new product development process does this illustrate?

Answer: The projections for potential sales costs and profits occur in the business analysis stage of the new product development process. AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

143) Explain the role of marketers in the information search step of the buyer decision process. Give an example of how the marketer might execute this role.

Answer: The role of marketers in the information search step of the buyer decision process is to make the required information about their product easily accessible to the consumer. Students' examples will vary. AACSB: Application of knowledge Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Moderate

73) Company X a manufacturer of office supplies follows the selling concept. Explain how the firm may lose sight of customer relationships with this marketing orientation.

Answer: The selling concept of Company X focuses on selling its office supplies rather than making what the market wants

75) Compare the selling and marketing concepts listing the key components of each philosophy.

Answer: The selling concept reflects an inside-out perspective while the marketing concept takes an outside-in perspective. The selling concept is typically practiced when an organization is marketing products or services that buyers do not normally think of purchasing such as insurance or blood donation. Aggressive selling focuses on creating sales transactions rather than building long-term relationships with customers with the aim of selling what the company makes rather than making what the customer wants. The marketing concept on the other hand is based upon identifying the needs and wants of target markets and then satisfying those needs and wants better than competitors do. In contrast to the selling concept marketing focuses on the customer not the product as the path to profits. AACSB: Written and oral communication Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate

132) Distinguish between the service profit chain and internal marketing.

Answer: The service profit chain links service firm profits with employee and customer satisfaction. This chain consists of five links: internal service quality satisfied and productive service employees greater service value satisfied and loyal customers and healthy service profits and growth. On the other hand internal marketing means that the service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction. Marketers must get everyone in the organization to be customer centered. In fact internal marketing must precede external marketing. AACSB: Application of knowledge Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Challenging

167) Describe the most common forms of marketing organizations.

Answer: Modern marketing departments can be arranged in several ways. 1. The most common form of marketing organization is the functional organization. Under this organization different marketing activities are headed by a functional specialist-a sales manager an advertising manager a marketing research manager a customer service manager or a new product manager. 2. A company that sells across the country or internationally often uses a geographic organization. Its sales and marketing people are assigned to specific countries regions and districts. Geographic organization allows salespeople to settle into a territory get to know their customers and work with a minimum of travel time and cost. 3. Companies with many very different products or brands often create a product management organization. Using this approach a product manager develops and implements a complete strategy and marketing program for a specific product or brand. 4. For companies that sell one product line to many different types of markets and customers who have different needs and preferences a market or customer management organization might be best. A market management organization is similar to the product management organization. Large companies that produce many different products flowing into many different geographic and customer markets usually employ some combination of the functional geographic product and market organization forms. AACSB: Written and oral communication Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate

86) What are the advantages of multichannel distribution systems?

Answer: Multichannel distribution systems exist when a single firm sets up two or more marketing channels to reach one or more customer segments. Such a system offers advantages to firms facing large and complex markets. It allows the firms to expand sales and market coverage. It allows firms to tailor their products and services to the specific needs of diverse customer segments. Larger bottom-line profits may result. AACSB: Application of knowledge

118) Describe the six buyer-readiness stages along with the marketing strategies used at each stage.

Answer: The six buyer-readiness stages are awareness knowledge liking preference conviction and purchase. A marketer might use teaser ads to create interest anticipation and curiosity at the awareness stage. Next marketers want to inform potential buyers of the product's high quality and its many features. Beyond knowledge marketers want to move consumers to have stronger feelings about the product going from liking to preference to conviction or believing that a product is the best for them. A combination of promotion tools can be used to create positive feelings and a customer connection with the brand. The final stage is purchase which marketers may influence through the use of premiums upgrades or rebates. AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

97) How can marketers reach the Generation Zers effectively?

Answer: The social media will play a crucial marketing role as the kids and tweens grow into teens. Today's kids are notoriously hard to pin down. The key is to engage these young consumers and let them help to define their brand experiences. Says one expert "They love sensory overload- bright colors music videos a variety of merchandise the tumult of all that." AACSB: Information technology Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

100) Briefly describe the steps in the new product development process.

Answer: New product development starts with idea generation from internal and/or external sources. Next the ideas must be reduced through idea screening. Once the new ideas are decided upon the product concept must be developed and tested. A marketing strategy must be developed to introduce the product to the market. Once the product concept and marketing strategy are chosen a business analysis is conducted to review the sales costs and profit projections to see if they will satisfy the company's objectives. Next a prototype will be created in the product development stage. Test marketing will follow introducing the new product and its marketing program into more realistic market settings. The last step is to launch or not launch the new product. If the company decides to launch the product it will go ahead with the commercialization stage and later test its sales and profit results. AACSB: Written and oral communication Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

111) In the communication process what is noise and what is its significance?

Answer: Noise is the unplanned static or distortion during the communication process which results in the receiver getting a different message than the one the sender sent. Due to the noise the consumer can get distracted and might miss the key point. AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

77) Briefly describe occasion segmentation.

Answer: Occasion segmentation refers to dividing the market into segments according to occasions when buyers get the idea to buy actually make their purchase or use the purchased item. AACSB: Written and oral communication Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

74) Why are demographic factors the most popular bases for segmenting customer groups?

Answer: One reason is that consumer needs wants and usage rates often vary closely with demographic variables. Another is that demographic variables are easier to measure than most other types of variables. Even when marketers first define segments using other bases such as benefits sought or behavior they must know a segment's demographic characteristics to assess the size of the target market and reach it efficiently. AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

95) In what way might a marketer rely on opinion leaders?

Answer: Opinion leaders can influence other larger groups of consumers to be attracted to a marketer's products. Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

103) Describe the principal functions of packaging.

Answer: Packaging involves designing and producing the container or wrapper for a product. Traditionally the primary function of the package was to hold and protect the product. In recent times however packaging has become an important marketing tool as well. Increased competition and clutter on retail store shelves means that packages must now perform many sales tasks-from attracting buyers to communicating brand positioning to closing the sale. AACSB: Application of knowledge

155) How do people's views of nature affect marketers?

Answer: People vary in their attitudes toward the natural world-some feel ruled by it others feel in harmony with it and still others seek to master it. A long-term trend has been people's growing mastery over nature through technology and the belief that nature is bountiful. More recently however people have recognized that nature is finite and fragile

106) People's distinct individual personalities influence their buying behavior. Personality is usually described in terms of traits. What are these traits and how do they affect the way people purchase items? Give at least one example.

Answer: Personality is described in terms of traits such as self-confidence dominance sociability autonomy defensiveness adaptability and aggressiveness. Personality can be useful in analyzing consumer behavior for certain products. Consumers are likely to choose brands with personalities that match their own. For example someone with a sophisticated personality might be attracted to a more sophisticated product such as a BMW while someone with a more rugged personality might be attracted to a more rugged product such as a Jeep. AACSB: Application of knowledge

99) Why do population shifts interest marketers?

Answer: Population shifts interest marketers because people in different regions buy differently. For example in the United States people in the Midwest buy more winter clothing than people in the Southeast. AACSB: Application of knowledge Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

99) Explain the concept of the price ceiling.

Answer: Price ceiling represents the price above which there is no demand. AACSB: Written and oral communication Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

143) How might a consumer view a price cut?

Answer: Price cuts have both advantages and disadvantages. A consumer might believe that he or she is getting a good deal on a quality product or a consumer might believe that the quality of the product has been reduced. AACSB: Application of knowledge Skill: Application Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Challenging

141) Discuss the conditions under which a company might consider using price cuts or price increases.

Answer: Price cuts may be necessary when there is excess capacity. Another time to cut prices is when market share is falling in the face of strong price competition. A company may also cut prices in a drive to dominate the market through lower costs. A major factor in price increases is cost inflation. Rising costs squeeze profit margins and lead companies to pass cost increases along to customers. Another factor leading to price increases is over-demand. When a company cannot supply all its customers' needs it can raise its prices ration products to customers or both. AACSB: Application of knowledge

160) Explain price elasticity. What determines the elasticity of demand?

Answer: Price elasticity refers to a measure of the sensitivity of demand to changes in price. If demand hardly changes with a small change in price the demand is inelastic. If demand changes greatly it is elastic. If demand is elastic rather than inelastic sellers will consider lowering their prices. A lower price will produce more total revenue. This practice makes sense as long as the extra costs of producing and selling more do not exceed the extra revenue. At the same time most firms want to avoid pricing that turns their products into commodities. In recent years forces such as deregulation and the instant price comparisons afforded by the Internet and other technologies have increased consumer price sensitivity turning products ranging from telephones and computers to new automobiles into commodities in some consumers' eyes. AACSB: Analytical thinking

98) Explain the concept of the price floor.

Answer: Price floor represents the price below which there is no profit. AACSB: Written and oral communication Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

7) List some important characteristics of price.

Answer: Price is the only element in the marketing mix that produces revenue

144) Explain how the PLC applies differently to a product class than to a product form.

Answer: Product classes have longer life cycles while product forms tend to have the standard PLC shape. AACSB: Written and oral communication Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

100) When does product line stretching occur?

Answer: Product line stretching occurs when a company lengthens its product line beyond its current range. AACSB: Analytical thinking Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Moderate

76) Define psychographic segmentation.

Answer: Psychographic segmentation divides buyers into different segments based on social class lifestyle or personality characteristics. People in the same demographic group can have very different psychographic characteristics. AACSB: Written and oral communication Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

158) Describe the significance of public relations as a promotion tool.

Answer: Public relations is very believable-news stories features sponsorships and events seem more real and believable to readers than ads do. PR can also reach many prospects who avoid salespeople and advertisements-the message gets to buyers as "news" rather than as a sales-directed communication. And as with advertising public relations can dramatize a company or product. Marketers tend to underuse public relations or use it as an afterthought. Yet a well-thought-out public relations campaign used with other promotion mix elements can be very effective and economical. AACSB: Written and oral communication Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

163) What is SWOT analysis?

Answer: SWOT analysis is an overall evaluation of the company's strengths (S) weaknesses (W) opportunities (O) and threats (T). Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

157) Discuss sales promotion.

Answer: Sales promotion includes a wide assortment of tools-coupons contests discounts premiums and others-all of which have many unique qualities. They attract consumer attention offer strong incentives to purchase and can be used to dramatize product offers and boost sagging sales. Sales promotions invite and reward quick response. Whereas advertising says "Buy our product" sales promotion says "Buy it now." Sales promotion effects are often short-lived however and often are not as effective as advertising or personal selling in building long-run brand preference and customer relationships. AACSB: Written and oral communication Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

160) When is it advisable to predominantly use sales promotions in a promotion mix?

Answer: Sales promotions are used to invite and reward quick response. Sales promotions are short-lived therefore sales promotions are used when the marketer intends to make a quick dramatic impact on an intended audience with the use of coupons samples contest etc. AACSB: Application of knowledge

43) How have large retailers such as Walmart changed the dynamics of partnering with resellers?

Answer: Selecting and partnering with resellers is not easy. No longer do manufacturers have many small independent resellers from which to choose. They now face large and growing reseller organizations such as Walmart Target Home Depot Costco and Best Buy. These organizations frequently have enough power to dictate terms or even shut smaller manufacturers out of large markets. AACSB: Application of knowledge Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

100) Explain how selective distortion is somewhat controllable by a marketer.

Answer: Selective distortion describes the tendency of people to interpret information in a way that will support what they already believe. People also will forget much of what they learn. They tend to retain information that supports their attitudes and beliefs. Marketers can attempt to understand consumers' mindsets and how these will affect perceptions of advertisements. AACSB: Application of knowledge

30) Explain how and why marketers go beyond selling a product or service to create brand experiences.

Answer: Sellers are most effective when they focus more on the benefits and experiences produced by their products and services than on the specific products and services themselves. Smart marketers focus on creating a brand experience incorporating several products and services for their customers. By doing so marketers hope to increase customer satisfaction. Satisfied customers buy again and tell others about their good experiences. AACSB: Written and oral communication Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate

27) What should sellers consider if they wish to avoid marketing myopia?

Answer: Sellers should consider the particular benefits and experiences desired by their customers and not just pay attention to the specific products they offer. AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

167) Why is identifying predatory pricing difficult?

Answer: Selling below cost to unload excess inventory is not considered predatory

79) What type of strategy should a company use to manage its cash cows?

Answer: Since cash cows are low-growth high-share businesses or products and require less investment a company should finance other SBUs with the help of cash cows. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

104) A consumer's behavior is influenced by social factors such as the consumer's small groups family and social roles and status. Explain the differences among these social factors.

Answer: Small groups to which a person belongs have a direct influence on what a person buys. Reference groups serve as direct or indirect points of comparison or reference in forming a person's attitudes or behaviors. An aspirational group is one to which the individual wishes to belong. Reference groups expose a person to new behaviors and lifestyles influence a person's attitudes and self-concept and create pressures to conform that may affect the person's product and brand choices. Opinion leaders are people within a reference group who because of special skills knowledge personality or other characteristics exert social influence on others. The group closest to consumers is the family the most important consumer buying organization in society. Marketers are interested in the changing roles and influence of each family member on the purchase of different products and services. Within groups including families the position of an individual is defined by role and status. A role consists of the activities people are expected to perform according to the persons around them while status is the general esteem given to that role. People tend to choose products that fit with their roles and status. AACSB: Application of knowledge

93) What are two potential drawbacks of creating separate products and marketing programs for each generation?

Answer: Some experts warn that marketers need to be careful about turning off one generation each time they craft a product or message that appeals effectively to another. Others caution that each generation spans decades of time and many socioeconomic levels. AACSB: Application of knowledge

54) How are specialty products distributed?

Answer: Specialty products are distributed through only one or a few exclusive outlets per market area. Special effort is required to purchase these products. AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

78) What are stars according to the BCG growth-share matrix?

Answer: Stars are high-growth high-share businesses or products. They often need heavy investments to finance their rapid growth. Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

27) How does strategic planning benefit companies?

Answer: Strategic planning sets the stage for all other planning in the firm. The strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment. AACSB: Analytical thinking

54) Give two examples of by-product pricing.

Answer: Student answers will vary. Examples include selling scrap metal after producing metal clamps selling wood chips after milling lumber or selling donut holes after producing donuts. AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

55) Give two examples of product bundle pricing.

Answer: Student answers will vary. Examples include vacation packages that include airfare hotel charges and tourist charges or value meals in the fast-food industry. AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

53) Give two examples of products for which captive product pricing might be used.

Answer: Student answers will vary. Examples of captive products are razor blade cartridges video games printer cartridges and e-books. AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

114) Compare the three distribution strategies that producers use providing examples of products for each type of distribution.

Answer: Student answers will vary. Producers of convenience products and common raw materials typically seek intensive distribution as a strategy to stock their products in as many outlets as possible. The goods are available where and when consumers want them. Toothpaste detergents and soft drinks are examples of this kind of distribution. Selective distribution is used when selling to more than one but fewer than all of the intermediaries who are willing to carry a company's products in a given market. Examples are name-brand blue jeans and computers. Exclusive distribution is used when the producer wants to stock its products with only one or a few dealers in an area. Examples are expensive cars. AACSB: Application of knowledge

52) Give two examples of products for which marketers might use optional-product pricing.

Answer: Student answers will vary. Such products may include refrigerators with icemakers and cars with options such as stereos GPS and cruise control. AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

52) Name some common convenience products.

Answer: Student examples may vary. Convenience products include laundry detergent candy magazines and fast food. AACSB: Written and oral communication Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

53) Give three examples of shopping products.

Answer: Student examples may vary. Shopping products include clothing used cars and furniture. AACSB: Written and oral communication Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

93) Give an example of a cultural shift that may impact the marketing of products or services.

Answer: Students' answers will vary. Currently the shift toward greater concern about health and fitness has generated an increase in marketing of gym equipment and gear. AACSB: Application of knowledge Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

119) Why do businesses use cash discounts when they are in essence losing some money on the sale?

Answer: Such discounts are customary in many industries in order to reward a customer who pays bills promptly. The practice encourages customers to pay early giving the firm quicker and more reliable access to cash. A cash discount can also help to build customer loyalty to the firm. AACSB: Application of knowledge

29) You are a manufacturer of tents sleeping bags and outdoor cooking equipment. How might you go about creating brand experiences for your customers?

Answer: Such manufacturers should focus on the benefits enjoyed through the use of their products such as arrangements to visit great outdoor locations chances for customers to enjoy time with their families and relive their memories of camping trips. AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Challenging

85) Marketers often involve actual customers in product testing.

Answer: TRUE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

71) Healthy Veggies LLC believes that marketing is a tool to use in finding customers and keeping them by providing vegetables that are grown using chemical-free farming techniques and selling through small family-owned stores. Healthy Veggies LLC practices societal marketing.

Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging

148) Social media sites with small audiences such as Birdpost.com can be as effective in creating customer engagement as sites with large audiences such as Pinterest.

Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

83) Using value-based pricing a marketer would not design a product and marketing program before setting the price.

Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Moderate

36) Business markets buy goods and services for further processing or for use in their production processes.

Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

37) Trudie Jones works for a distribution channel firm that helps several electronics companies find customers or make sales to them. Trudie works for a reseller.

Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

163) Ed purchased electronic devices such as a smartphone and tablet after many people he knew already owned the devices. Ed belongs to the adopter group called lagging adopters.

Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate

88) JumBo Games is in the commercialization stage. The first decision that the firm should make while introducing the product in the market is introduction timing.

Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

81) In customer value-based pricing price is considered along with all other marketing mix variables before the marketing program is set.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Moderate

146) Price decisions must be coordinated with product design distribution and promotion decisions to form a consistent and effective integrated marketing mix program.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

148) A demand curve shows the number of units the market will buy in a given time period at different prices that could be charged.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

149) If a company faces competition its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

152) If demand is elastic rather than inelastic sellers will consider lowering their prices.

153) While lower prices may attract additional customers it is possible for pricing strategies to result in the product becoming a commodity in the customers' eyes.

16) For market skimming to be successful the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Easy

41) Pricing across a product mix is difficult because various products have related demand and costs and products face different degrees of competition.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Easy

111) Constantly reduced prices can erode a brand's value in the eyes of customers.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

27) Downstream marketing channel partners such as wholesalers and retailers form a vital link between the firm and its customers.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

28) A company's channel decisions directly affect the prices of its products.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

each seeking to maximize its own profits perhaps even at the expense of the system as a whole.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

14) Direct and digital marketing involves engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

19) The purpose of strategic planning is to find ways in which your company can best use its strengths to take advantage of attractive opportunities in the environment.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

90) According to Maslow's hierarchy of needs theory when the most important need is satisfied it will cease to be a motivator and the person will then try to satisfy the next most important need.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

44) A service refers to an activity benefit or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

159) The total financial value of a brand is brand value.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

165) Multibranding offers a way to establish different features that appeal to different customer segments lock up more reseller shelf space and capture a larger market share.

Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

118) Customer-perceived value is defined as the customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

5) Prices have a direct impact on a firm's bottom line.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 10.1: ,Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Easy

94) Markup pricing is popular because when all firms in the industry use this pricing method prices tend to be similar so price competition is minimized.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

29) Producers use intermediaries because they create greater efficiency in making goods available to target markets.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

31) Each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer is a channel level.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

108) Buzz marketing involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

98) A company's product mix has four important dimensions: width length depth and consistency.

Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

85) As baby boomers reach their peak earning and spending years they become lucrative markets for financial services travel and entertainment.

Answer: TRUE AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

91) Companies in several industries have recognized the buying power of the LGBT segment of the U.S. population and have begun explicitly targeting these consumers with gay-specific ads and marketing efforts.

87) The Gen Xers are increasingly displacing the lifestyles culture and values of the baby boomers.

88) Millennials represent a larger demographic segment than the baby boomers or Gen Xers.

69) The societal marketing concept calls on marketers to balance consumer wants and desires company profits and society's interests.

Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate

161) Price discrimination is permissible if the seller manufactures different qualities of the same product for different retailers and can prove that the price difference is proportional.

Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

155) The federal government may prevent a company from adding products through acquisitions if acquisition threatens to lessen competition.

Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 9.4: Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Difficulty: Moderate

125) Many companies now use customer profitability analysis to identify and weed out unprofitable customers.

Answer: TRUE AACSB: Information technology Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

121) Large-scale marketing approaches that foster two-way customer relationships are made possible by new communication technologies.

145) Many company and brand Web sites also serve as online brand communities where customers can congregate and exchange brand-related interests and information.

Answer: TRUE AACSB: Information technology Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

109) Online flash sales are used to create buying urgency and make buyers feel lucky to have gotten in on the deal.

Answer: TRUE AACSB: Information technology Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

165) Electronic data interchange is the digital exchange of data between organizations which primarily is transmitted via the Internet.

Answer: TRUE AACSB: Information technology Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

36) Communications technologies such as cell phones and the Internet give companies new media for interacting with targeted consumers but these technologies also give consumers more control over the advertising messages they receive.

Answer: TRUE AACSB: Information technology Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

84) Online social networks represent an important avenue to create buzz for marketers.

Answer: TRUE AACSB: Information technology Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

15) Direct and digital marketing includes catalogs e-mail direct mail social media and mobile marketing.

Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Moderate

35) As mass markets have fragmented marketers have shifted away from mass marketing.

Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

38) The integrated marketing concept ties together all of the company's messages and images.

41) A marketing communications director has overall responsibility for the company's communications efforts.

34) Direct marketing includes catalogs direct-response TV kiosks the Internet and mobile marketing.

39) Integrated marketing communications calls for recognizing all communications channels where the customer may encounter the company and its brands.

23) An experience such as a vacation can be defined as a market offering.

Answer: TRUE Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

25) A market is the set of actual and potential buyers of a product or service.

Answer: TRUE Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

20) The difference between human needs and wants is that needs are not created by marketers.

Answer: TRUE Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate

85) Cost-based pricing is often product driven.

Answer: TRUE Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

87) Overhead costs are costs that do not vary with production or sales level.

88) Variable costs change directly with the level of production.

140) Launching a fighter brand is an effective way to deal with a situation in which the market segment being lost is price sensitive and will not respond to arguments of higher quality.

Answer: TRUE Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Moderate

103) Good marketing communications can speed the demise of a poor product.

Answer: TRUE Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

68) Benefit segmentation requires finding the major benefits people look for in a product class the kinds of people who look for each benefit and the major brands that deliver each benefit.

Answer: TRUE Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

116) In evaluating different market segments a firm should look at three factors: segment size and growth segment structural attractiveness and company objectives and resources.

Answer: TRUE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

118) The relative power of buyers affects segment attractiveness.

Answer: TRUE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

161) A product position is the way a product is defined by consumers on important attributes.

Answer: TRUE Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

94) Product line filling is overdone if it results in cannibalization and customer confusion.

Answer: TRUE Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

66) The selling concept holds that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort.

Answer: TRUE Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

72) The marketing mix refers to the set of marketing tools the firm uses to implement its marketing strategy.

93) The simplest pricing method is cost-plus pricing which involves adding a standard markup to the cost of the product.

96) A break-even chart shows the total cost and total revenue expected at various sales volume levels.

97) Break-even volume is the number of unit sales required for total revenue to cover total cost.

145) Internal factors affecting pricing include the company's overall marketing strategy objectives and marketing mix.

Answer: TRUE Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

15) Pricing strategies tend to change and evolve as the average product passes through its life cycle.

Answer: TRUE Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Easy

42) In product line pricing price steps should account for differences in customer perceptions of the value of different features.

Answer: TRUE Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Easy

113) For segmented pricing to be an effective strategy prices should reflect real differences in customers' perceived value.

Answer: TRUE Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

139) Companies need to respond to a competitor's price change if its own market share and profits will decrease because of the change.

Answer: TRUE Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Easy

71) A marketing channel works most effectively when each channel member performs the tasks it does best.

Answer: TRUE Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

77) Disintermediation occurs when radically new types of channel intermediaries displace traditional ones.

Answer: TRUE Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

106) Multichannel marketing occurs when a single firm sets up two or more marketing channels to reach one or more customer segments.

Answer: TRUE Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

107) Marketing channel design calls for analyzing consumer needs setting channel objectives identifying major channel alternatives and evaluating those alternatives.

Answer: TRUE Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

122) Marketing channel management calls for selecting managing and motivating individual channel members and evaluating their performance over time.

Answer: TRUE Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

159) Marketing logistics involves planning implementing and controlling the physical flow of goods services and related information from points of origin to points of consumption to meet customer requirements at a profit.

Answer: TRUE Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

161) Environmental sustainability is an important factor in supplier selection and performance evaluation as designing sustainable supply chains has become the right thing to do.

Answer: TRUE Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

164) Intermodal transportation refers to the combination of two or more modes of transportation.

Answer: TRUE Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

153) If the pull strategy is effective then consumers will demand the product from channel members who will in turn demand it from producers.

Answer: TRUE Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Challenging

150) The percentage-of-sales budget is based on the availability of funds rather than on opportunities.

Answer: TRUE Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

149) The percentage-of-sales method wrongly views sales as the cause of promotion rather than as the result.

Answer: TRUE Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

70) The major activity in strategic planning is business portfolio analysis whereby management evaluates the products and businesses that make up the company.

Answer: TRUE Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

74) Market development involves company growth by identifying and developing new market segments for current company products.

Answer: TRUE Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

88) Customer engagement and value are the key ingredients in the marketer's formula for success.

Answer: TRUE Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy

89) Each department in a company can be thought of as a link in the company's internal value chain.

Answer: TRUE Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy

121) A product's position is the place it occupies relative to competitors' products in consumers' minds.

Answer: TRUE Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

123) Product refers to the goods-and-services combination that a company offers to its target market.

Answer: TRUE Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

158) A SWOT analysis allows a marketer to evaluate the company's overall strengths weaknesses opportunities and threats.

Answer: TRUE Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

159) The four marketing management functions are analysis planning implementation and control.

161) Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary.

162) Return on marketing investment refers to the net return from a marketing investment divided by the costs of the marketing investment.

33) Marketing services agencies are the marketing research firms advertising agencies media firms and marketing consulting firms that help the company target and promote its products to the right markets.

Answer: TRUE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

40) Government agencies such as the Food and Drug Administration and the Consumer Product Safety Commission investigate and ban potentially unsafe products. Regulations created by these and other agencies result in higher research costs and longer times between new product ideas and their introduction.

Answer: TRUE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

41) A trend has been people's growing mastery over nature through technology and the belief that nature is bountiful but also the realization that it is finite and fragile.

Answer: TRUE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

31) Marketing success requires building relationships with other company departments suppliers marketing intermediaries competitors various publics and customers which combine to make up the company's value delivery network.

Answer: TRUE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

35) The aim of the entire value delivery network is to serve target customers and create strong relationships with them.

Answer: TRUE Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

83) The demographic environment is of major interest to marketers because it involves people and people make up markets.

Answer: TRUE Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

9) The starting point of understanding how consumers respond to various marketing efforts is called the stimulus-response model of buyer behavior.

Answer: TRUE Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

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

Answer: TRUE Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

138) Dissonance-reducing buying behavior typically occurs when a buyer sees little difference among brands but is highly involved with the purchase.

Answer: TRUE Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

142) Postpurchase behavior is the stage of the buyer decision process in which consumers take further action after purchase based on their satisfaction or dissatisfaction.

Answer: TRUE Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

158) The adoption process for new products refers to the mental process through which an individual passes from first learning about an innovation to final adoption.

Answer: TRUE Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

161) Early adopters are opinion leaders in their communities. They adopt new ideas early but carefully.

Answer: TRUE Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

8) The customer-driven marketing strategy involves four steps: market segmentation market targeting positioning and differentiation.

Answer: TRUE Skill: Concept Objective: LO 7.1: Define the major steps in designing a customer value-driven marketing strategy: market segmentation targeting differentiation and positioning. Difficulty: Easy

66) Psychographic segmentation divides buyers into different segments based on lifestyle or personality characteristics.

Answer: TRUE Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

119) A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.

Answer: TRUE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

122) When using a niche marketing strategy a firm goes after a large share of one or a few smaller segments.

Answer: TRUE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

124) Individual marketing is also known as one-to-one marketing mass customization and markets-of-one marketing.

Answer: TRUE Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

162) To the extent that a company can differentiate and position itself as providing superior customer value it gains competitive advantage.

Answer: TRUE Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

164) Less-for-much-less positioning involves meeting consumers' lower performance or quality requirements at a much lower price.

Answer: TRUE Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

92) Labels range from simple tags attached to products to complex graphics that are part of the packaging.

Answer: TRUE Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Moderate

126) Service companies can differentiate their service delivery by having more able and reliable customer-contact people.

Answer: TRUE Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Easy

9) Acquisition involves the purchase of a whole company a patent or a license to produce someone else's product.

Answer: TRUE Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy

76) New product development begins with a systematic search for new product ideas through idea generation.

Answer: TRUE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

90) To avoid too few new product ideas and the failure of many good ideas management should implement an innovation management system that collects reviews evaluates and manages new product ideas.

Answer: TRUE Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

141) Sales of products decline because of technological advances shifts in consumer tastes and increased competition.

Answer: TRUE Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

136) Using the PLC concept to develop marketing strategy can be problematic because strategy is both a cause and a result of the product's life cycle.

Answer: TRUE Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

95) What factors are assessed in test marketing?

Answer: Test marketing lets a company assess customer response to its product and the effectiveness of its positioning strategy advertising distribution pricing branding and packaging. AACSB: Written and oral communication Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

83) What are some of the problems associated with matrix approaches?

Answer: The BCG and other formal methods revolutionized strategic planning. However such centralized approaches have limitations: They can be difficult time-consuming and costly to implement. Management may find it difficult to define SBUs and measure market share and growth. In addition these approaches focus on classifying current businesses but provide little advice for future planning. AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

104) Briefly describe the history of legal concerns about packaging and labels.

Answer: The Federal Trade Commission Act of 1914 held that false misleading or deceptive labels or packages constitute unfair competition. Labels can mislead consumers fail to describe important ingredients or fail to include needed safety warnings. As a result several federal and state laws regulate labeling. The most prominent is the Fair Packaging and Labeling Act of 1966 which set mandatory labeling requirements encouraged voluntary industry packaging standards and allowed federal agencies to set packaging regulations in specific industries. The Nutritional Labeling and Educational Act of 1990 requires sellers to provide detailed nutritional information on food products and recent sweeping actions by the Food and Drug Administration (FDA) regulate the use of health-related terms such as low fat light high fiber and organic. AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Moderate

149) Explain why the PLC can be applied to more than just brands.

Answer: The PLC can be applied to new products and services. It can also be applied to product class a product form or a brand. The PLC concept lends itself to styles fashions and fads. The concept can be used as a useful framework for describing how products and markets work as well as developing marketing strategy for each stage of the product life cycle. Managers may have difficulties using the PLC concept to forecast product performance or develop general marketing strategies. AACSB: Analytical thinking Skill: Application Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

100) In terms of ethnic and racial makeup why is the United States today more accurately characterized as a "salad bowl" than a "melting pot"?

Answer: The United States has often been called a melting pot where diverse groups from many nations and cultures have melted into a single more homogeneous whole. Instead the United States seems to have become more of a "salad bowl" in which various groups have mixed together but have maintained their diversity by retaining and valuing important ethnic and cultural differences. AACSB: Analytical thinking

130) List some important factors that companies need to consider when choosing a market- targeting strategy.

Answer: The availability of resources the degree of product variability market variability and competitors' marketing strategies are some important factors that companies need to consider when choosing a market-targeting strategy. AACSB: Written and oral communication Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

106) A marketer's fixed costs are $400000 the variable cost is $16 per unit and the price of the product is $24 per unit. What is the company's break-even point in dollar sales?

Answer: The break-even point in dollar sales is $1200000. AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

170) A company has four choices when it comes to developing brands. Describe them.

Answer: The company can introduce line extensions brand extensions multibrands or entirely new brands. A line extension involves extending a current brand name to new forms colors sizes flavors etc. in one of the company's existing product categories. In contrast a brand extension extends a current brand name to a new or modified product in a new product category. Multibranding involves introducing several brands within the same category. Finally a company may decide that a new brand name is needed particularly if the power of an existing brand name is declining or the company is entering a new product category. AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

100) Briefly describe the process of value-based pricing.

Answer: The company first assesses customer needs and value perceptions. It then sets its target price based on customer perceptions of value. The targeted value and price drive decisions about what costs can be incurred and the resulting product design. As a result pricing begins with analyzing consumer needs and value perceptions and the price is set to match perceived value. AACSB: Written and oral communication Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Moderate

101) Define consistency of the product mix.

Answer: The consistency 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. AACSB: Written and oral communication Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Moderate

125) Casual Comfort sells its catalog items using FOB-origin pricing. Who pays the freight charges?

Answer: The customer pays for the freight. AACSB: Application of knowledge Skill: Application Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Challenging

55) Explain the difference between a consumer product and an industrial product. Include an example.

Answer: The distinction between a consumer product and an industrial product is based on the purpose for which the product is purchased. If a consumer buys a lawn mower for use around home the lawn mower is a consumer product. If the same consumer buys the same lawn mower for use in a landscaping business the lawn mower is an industrial product. AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

164) What is the main purpose of the executive summary in a marketing plan?

Answer: The executive summary presents a brief summary of the main goals and recommendations of the plan for management review helping top management find the plan's major points quickly. AACSB: Written and oral communication Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate

120) Why is the technological environment such a dramatic force in today's market?

Answer: The technological environment is perhaps the most dramatic force now shaping our destiny. Technology has released such wonders as antibiotics robotic surgery miniaturized electronics smartphones and the Internet. It also has released such horrors as nuclear missiles chemical weapons and assault rifles. It has released such mixed blessings as the automobile television and credit cards. Our attitude toward technology depends on whether we are more impressed with its wonders or its blunders. New technologies create new markets and opportunities. However every new technology replaces an older technology. Transistors hurt the vacuum-tube industry digital photography hurt the film business and MP3 players and digital downloads are hurting the CD business. When old industries fought or ignored new technologies their businesses declined. Thus marketers should watch the technological environment closely. Companies that do not keep up will soon find their products outdated. If that happens they will miss new product and market opportunities. AACSB: Information technology

105) What are the two advantages of an innovation management system for developing new products? Provide four strategies for a company to use to establish a successful system.

Answer: The first advantage of an innovation management system is that it helps create an innovation-oriented company culture. It shows that top management supports encourages and rewards innovation. The second advantage is that it will yield a larger number of new product ideas among which will be found some especially good ones. As the system matures ideas will flow more freely. To establish a successful system a company can do the following: 1. Appoint a respected senior person to be the company's innovation manager. 2. Create a cross-functional innovation management committee with people from each department. 3. Set up a Web site for anyone who wants to become involved in finding and developing new products. 4. Encourage all company stakeholders to send their ideas to the idea manager. 5. Set up formal recognition programs to reward those who contribute the best new ideas. AACSB: Analytical thinking Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

11) Explain the four major steps in designing a customer-driven marketing strategy.

Answer: The first step is market segmentation: dividing a market into smaller groups of buyers with distinct needs characteristics or behaviors who might require separate products or marketing mixes. The company identifies different ways to segment the market and develops profiles of the resulting market segments. The second step is market targeting: evaluating each market segment's attractiveness and selecting one or more of the market segments to enter. The third step is differentiation: actually differentiating the firm's market offering to create a superior customer value. Finally the last step is market positioning: arranging for a market offering to occupy a clear distinctive and desirable place relative to competing products in the minds of consumers. AACSB: Application of knowledge

169) Identify product characteristics that influence the rate of adoption. Explain how each characteristic affects the rate of adoption.

Answer: The five most important product characteristics that influence the rate of a product's adoption are relative advantage compatibility complexity divisibility and communicability. Relative advantage is the degree to which an innovation appears superior to existing products

11) What role do the four Ps play in consumer behavior?

Answer: The four Ps are the marketing stimuli that affect buyer behavior: marketers use product price place and promotion to attract the targeted consumers. Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

109) What are the four major communication functions?

Answer: The four major communication functions are encoding decoding response and feedback. Encoding is the process of putting thought into symbolic form. Decoding is the process by which the receiver assigns meaning to the symbols encoded by the sender. In addition response refers to the reactions of the receiver after being exposed to the message. Feedback is the part of the receiver's response communicated back to the sender. AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

127) Describe and compare the four types of customers classified by their potential profitability to an organization. Explain how an organization should manage each type of customer.

Answer: The four types of customers are strangers butterflies true friends and barnacles. "Strangers" have low potential profitability and loyalty. A company's offerings do not fit well with a stranger's wants and demands. Companies should not invest in building a relationship with this type of customer. Another type of customer in which a company should not invest is the "barnacle." Barnacles are highly loyal but not very profitable because there is a limited fit between their needs and the company's offerings. The company might be able to improve barnacles' profitability by selling them more raising their fees or reducing service to them. However if they cannot be made profitable they should be "fired." Like strangers "butterflies" are not loyal. However they are potentially profitable because there is a good fit between the company's offerings and their needs. Like real butterflies this type of customer will come and go without becoming a permanent loyal consumer of a company's products. Companies should use promotional blitzes to attract these customers create satisfying and profitable transactions with them and then cease investing in them until the next time around. The final type of customers is "true friends"

159) Describe three public policy issues or regulations that marketers should carefully consider as they make decisions about adding or dropping products.

Answer: The government may prevent companies from adding products through acquisitions if the effect threatens to lessen competition. On the other hand companies dropping products must be aware that they have legal obligations to their suppliers dealers and customers who have a stake in the dropped product. Companies must also obey U.S. patent laws when developing new products meaning that a company cannot make its product illegally similar to another company's established product. Manufacturers must also comply with specific laws regarding product quality and safety. The Federal Food Drug and Cosmetic Act and the Consumer Product Safety Act are just two of many laws that protect consumers from potentially harmful products. If consumers have been injured by a product that has a defective design they can sue manufacturers or dealers. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 9.4: Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Difficulty: Moderate

148) Each product will have a life cycle although its exact shape and length is not known in advance. Briefly explain each phase of the product life cycle.

Answer: -Product development begins when the company finds and develops a new product idea. Sales are zero and the company's investment costs mount. -Introduction is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction. -Growth is a period of rapid market acceptance and increasing profits. -Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition. -Decline is the period when sales fall off and profits drop. A company may seek to reinvigorate a product in decline or maintain it hoping competition will diminish or harvest it or drop it. AACSB: Written and oral communication Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

80) Explain the different segmentation variables used in segmenting consumer markets.

Answer: 1. Geographic segmentation calls for dividing the market into different geographical units such as nations regions states counties cities or even neighborhoods. A company may decide to operate in one or a few geographical areas or operate in all areas but pay attention to geographical differences in needs and wants. 2. Demographic segmentation divides the market into segments based on variables such as age life-cycle stage gender income occupation education religion ethnicity and generation. Demographic factors are the most popular bases for segmenting customer groups. 3. Psychographic segmentation divides buyers into different segments based on social class lifestyle or personality characteristics. People in the same demographic group can have very different psychographic characteristics. 4. Behavioral segmentation divides buyers into segments based on their knowledge attitudes uses or responses concerning a product. Many marketers believe that behavior variables are the best starting point for building market segments. AACSB: Application of knowledge Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

126) Explain what marketers can expect from individuals in the customer relationship group classified as "butterflies."

Answer: "Butterflies" are profitable but not loyal. Marketers should enjoy this type of customer "for the moment" because they soon flutter off. Marketers should create profitable and satisfying transactions with "butterflies" then cease investing in them until the next time around. Marketers can expect transactions with butterflies when conditions are optimal but they should not expect butterflies to become loyal customers. AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

113) Developing an effective integrated marketing mix program involves coordinating price decisions with product design promotion and A) distribution B) production C) assembly D) warranty E) competition

Answer: A AACSB: Analytical thinking Skill: Application decisions. Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

"44) Railroads were once operated based on the thinking that users wanted trains that would offer the most in quality performance and innovative features. The railroad managing companies overlooked the fact that there could be other modes of transportation. This reflects the concept." A) product B) production C) selling D) marketing E) societal marketing

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging

"96) Elisandra a marketing manager at a regional chain restaurant has decided to organize a contest calling for customers to create commercials for the restaurant. Winning entries will be posted on the organization's home page. Elisandra's plan is an example of ." A) consumer-generated marketing B) partner relationship management C) customer lifetime value D) community development around a brand E) customer divestment

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

FALSE . A) pure competition B) monopolistic competition C) oligopolistic competition D) pure monopoly E) the dominant firm model

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Challenging

97) For which product would a company use an exclusive distribution strategy? A) luxury cars B) newspapers C) chewing gum D) dairy products E) soft drinks

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

"12) A company's broad mission leads it to develop all of the following EXCEPT . A) budget objectives" B) business objectives C) sales objectives D) marketing objectives E) customer engagement objectives

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

"63) Cleats Unlimited developed a new style of soccer shoe. This is an example of . A) product development" B) market development C) market penetration D) diversification E) product differentiation

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"67) Fun-Spot Fun Park represents a high-growth high-share business. According to the BCG matrix it can be classified as a ." A) star B) question mark C) bear D) cat E) dog

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"58) The managers of Alfredo's Pizza a popular pizzeria in New York City have been increasingly encouraging senior citizens to visit the pizzeria's numerous outlets spread across the city. Anticipating a rise in the population of senior citizens in the area the management of Alfredo's Pizza is seeking to tap into this promising segment that consists of retired affluent consumers. In this instance the managers of Alfredo's Pizza are anticipating company growth through ." A) market development B) product development C) mass customization D) niche marketing E) product differentiation

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"86) RedFin manufactures diving equipment that is highly regarded by customers worldwide. Each department in RedFin contributes to its success and can be thought of as a(n) . A) link in the company's internal value chain" B) separate organization C) independent subsidiary of the company D) separate market segment E) SBU

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Moderate

136) Harris Brown the marketing manager at a small retail chain wants to assess his firm's strengths opportunities weaknesses and threats. Which of the following would be best suited for his purpose? A) SWOT analysis B) cluster analysis C) portfolio analysis D) regression analysis E) Porter's five forces analysis

"14) Boxes Inc. sells products to end users or to other companies that will sell to end users. Boxes Inc. is a ." A) reseller B) marketing services agencies C) financial intermediaries D) physical distribution firms E) wholesalers

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

"27) Sparks Inc. has a growing market in the United States consisting of individuals and households that buy Sparks' products for personal use." A) consumer B) government C) business D) international E) financial

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

"4) Sam has been directed to study the demographic economic political and cultural forces that affect an organization. In this instance Sam has been directed to study the of the organization." A) macroenvironment B) microenvironment C) internal environment D) marketing mix E) marketing intermediaries

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

skiing and fast speedboats became the rage. Through it all The Landing continued to attract flocks of patrons. In the 1980s however Casey started to realize that the grocery area in The Landing could not compete with larger local retailers. He eventually enlarged the sandwich counter transforming the bait shop and grocery into a restaurant with a full menu typical of any diner. "Getting rid of the bait shop was hard to do" Casey admitted. "I still had a summer crowd that relied on us for their fishing needs but we couldn't survive a whole year on four months of profit." In the early 2000s the atmosphere of Witmer Lake and the neighboring lakes became upscale. "I could see that people were spending more on their speed boats than what they had originally paid for their cottages!" Casey exclaimed. Many of the cottages were inherited by children and grandchildren of the original owners. Once again the scene started to change as many of the lake houses were used only as weekend lake homes. Unlike the previous generation a vast number of the current owners could afford to live closer to their jobs while maintaining lake homes. "At this point business wasn't growing" Casey said. As local competition continued to increase Casey converted the diner of The Landing into a bar with a lounge area. "The change might have been too drastic" Casey said "but it was the only way we could maintain a strong year-round business in spite of the population shifts and competitive forces." 28) Which of the following microenvironment actors has had the most influence on The Landing? A) competitors B) suppliers C) marketing intermediaries D) resellers E) citizen-action publics

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

53) Mary Adams is helping her company develop a marketing program for a new product line. The program is designed to appeal most to less materialistic consumer groups who are likely to prize experience not acquisition. The marketing program is most likely designed to appeal to which of the following demographic groups? A) Generation X B) Millennials C) Echo Boomers D) Silent Generation E) Lost Generation

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging

skiing and fast speedboats became the rage. Through it all The Landing continued to attract flocks of patrons. In the 1980s however Casey started to realize that the grocery area in The Landing could not compete with larger local retailers. He eventually enlarged the sandwich counter transforming the bait shop and grocery into a restaurant with a full menu typical of any diner. "Getting rid of the bait shop was hard to do" Casey admitted. "I still had a summer crowd that relied on us for their fishing needs but we couldn't survive a whole year on four months of profit." In the early 2000s the atmosphere of Witmer Lake and the neighboring lakes became upscale. "I could see that people were spending more on their speed boats than what they had originally paid for their cottages!" Casey exclaimed. Many of the cottages were inherited by children and grandchildren of the original owners. Once again the scene started to change as many of the lake houses were used only as weekend lake homes. Unlike the previous generation a vast number of the current owners could afford to live closer to their jobs while maintaining lake homes. "At this point business wasn't growing" Casey said. As local competition continued to increase Casey converted the diner of The Landing into a bar with a lounge area. "The change might have been too drastic" Casey said "but it was the only way we could maintain a strong year-round business in spite of the population shifts and competitive forces." 81) Which of the following is the macroenvironmental force that has had the greatest effect on The Landing? A) the demographic environment B) the technological environment C) marketing intermediaries D) the political environment E) citizen-action publics

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

112) Which of the following is a true statement about the benefits of RFID technology? A) It allows firms to track products and customers at various points in the distribution channel. B) The chips are used to track shipments but not individual items. C) The chips do not risk invading people's privacy. D) Sharing of data decreases the buying experience for consumers. E) The technology will be available for the foreseeable future allowing companies to fully invest in its capabilities.

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Challenging

113) Regulations force companies to be responsible. However most companies want to be responsible. Impacts of government regulations include all of the following EXCEPT . A) informing the public that products are safe B) higher research costs C) increased sales because they have been found to be safe D) penalties to companies that fail to meet the regulations E) longer times between new product ideas and their introduction

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

"132) A regional supermarket chain runs print radio and television advertisements announcing that 1 percent of its sales is donated to local after-school programs for underprivileged youth. This is an example of ." A) cause-related marketing B) generational marketing C) sustainable marketing D) market segmentation E) product differentiation

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Challenging

"17) Hispanic Americans tend to be deeply family oriented and make shopping a family affair. Older consumers are brand loyal while younger Hispanics have shown increasing price sensitivity and willingness to choose store brands. Hispanic Americans make up a ." A) subculture B) social class C) social network D) life-cycle stage E) lifestyle

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

"69) Mark has long supported a particular brand of footwear and has always bought that brand. Recently the footwear manufacturer was embroiled in a controversy for using child labor at its manufacturing plants. Mark doubts the news reports and continues to purchase the same brand of footwear. It is most accurate to say that Mark displays ." A) selective distortion B) cognitive dissonance C) selective retention D) selective attention E) consumer ethnocentrism

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

71) Stephanie and John wanted to purchase a high-end sports car. They viewed a commercial for a particular sports car that highlighted the cost design and power of the car. After viewing the ad Stephanie felt that the car's price was acceptable considering the superior and unique design. John thought that the car was expensive owing to the high power engine installed in it. They used the information in different ways focusing on issues that each considered important. Which of the following concepts does this scenario demonstrate? A) selective distortion B) consumer ethnocentrism C) selective retention D) selective attention E) cognitive dissonance

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

"151) Cameron loves to own and be up-to-date on the latest technological gadgets available in the market. Among his friends he is always the first to own the latest electronic gadgets. He loves trying out new products before others. Cameron most likely belongs to the adopter group." A) innovator B) surrogate consumer C) late mainstream D) early mainstream E) lagging

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Challenging

"28) Tropicana promotes drinking orange juice at any time of day as a cool refreshing drink. The market segmentation approach Tropicana is using is ." A) occasion segmentation B) benefit segmentation C) age and life-cycle segmentation D) gender segmentation E) behavioral segmentation

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"52) Venus Inc. a company designing and marketing branded diamond jewelry targets wealthy consumers with similar needs and buying behaviors even though the consumers are located in different countries. This is an example of segmentation." A) intermarket B) loyalty C) life-cycle D) income E) psychographic

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

100) Andrew Levitt runs a retail store in Norristown. Andrew's store stocks cold weather products as Norristown mostly has sub-zero temperatures. Which of the following is evident here? A) local marketing B) concentrated marketing C) segmented marketing D) mass marketing E) direct marketing

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

112) A catalog retailer in the United States has identified African American professionals between the ages of 35 and 45 as a group of potential customers for its products. The retailer plans to direct its marketing efforts toward this group of consumers. Which of the following market segmentation variables did the catalog retailer most likely use? A) demographic B) psychographic C) user status D) loyalty status E) usage rate

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"39) Elmo Inc. a Michigan-based manufacturer of athletic shoes uses professional athletes in its ad campaigns to help sell its products. This is an example of marketing." A) person B) place C) social D) organization E) internal

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

78) Titan Inc. an automobile manufacturer based in Utah recently added two new models to its existing line of sedans in order to increase profits and satisfy dealers. This is an example of . A) line filling B) social marketing C) market diversification D) negative brand equity E) person marketing

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Moderate

108) Tristan and Juliet a newly married couple who intend to go to Egypt for their honeymoon bought a Europe travel package on Jizo Inc. an online travel site. As they have never seen Europe or used the services of Jizo before they were largely dependent on other customers' feedback and signals for service quality. Which of the following characteristics of service is highlighted in this instance? A) service intangibility B) service inseparability C) service variability D) service perishability E) service distinction

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Challenging

"46) A group of business entrepreneurs who worried about their teenage children drinking and driving decided there must be some way to approach this problem proactively. They came up with an idea for a pair of blurry goggles. They believed looking through the goggles would simulate what the world looks like when someone is seriously intoxicated. They developed a crude pair of blurry goggles to show prospective customers. This crude pair of goggles is known as a ." A) prototype B) concept test C) product concept D) product image E) product idea

Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Challenging

"58) P&G introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When General Mills became aware of the product it rushed to market its own Betty Crocker ready-to-spread frosting which eclipsed the Duncan Hines product introduction. General Foods was able to enter the stage of the new product development process before P&G could." A) commercialization B) co-marketing C) idea generation D) idea screening E) simulation

"62) Steelz Inc. has designed a process that manufactures an improved version of steel more efficiently which will save the firm both money and resources. In considering the launch of this new steel in the market the firm must first decide on ." A) timing B) location C) organizational structure D) test marketing E) product mix

75) Which of the following stages of new product development was Evelyn involved in when she set up a demonstration booth to learn about consumers' feelings toward her vacuum cleaner? A) concept testing B) marketing strategy development C) idea screening D) commercializing E) crowdsourcing

"11) A is some combination of products services information or experiences provided to consumers to satisfy a need or want." A) market offering B) value proposition C) brand positioning D) market segment E) market mix

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

38) Which of the following marketing management orientations focuses primarily on improving efficiencies along the supply chain? A) production concept B) product concept C) selling concept D) marketing concept E) societal marketing concept

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

91) A room upgrade offered by a hotel to a guest who often stays in the hotel is an example of . A) a frequency marketing program B) a basic relationship C) a club marketing program D) partner relationship management E) sustainable marketing

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

"21) Underpriced products ." A) produce less revenue than they would if they were priced at the level of perceived value B) sell poorly in the global marketplace C) produce more revenue than they would if they were priced at the level of perceived value D) mostly offer higher value than those with a high markup price E) are characterized by rapidly declining demand

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

51) With accumulated production experience and a higher volume of production companies not "only become more efficient but also ." A) gain economies of scale B) incur higher overhead costs C) create derived demand in the market D) spend more per unit of produced output E) tend to routinely spend less on inputs

"56) Experience-curve pricing assumes that ." A) competitors are weak and not willing to match price cuts B) competitors are strong and invincible C) aggressive pricing adversely affects product image D) volume-based production slows down organizational learning E) lower-cost technologies are almost always inferior

"68) The break-even volume is the point at which ." A) the total revenue and total cost curves intersect B) demand equals supply C) the production of one more unit will not lead to increase in demand D) the company can pay off all its long-term debt E) a firm exceeds the sales forecast

"76) Companies can legitimately charge a higher price if ." A) consumers perceive that the company's product offers greater value B) the demand for products manufactured by a firm is highly elastic C) the cost of advertising is minimal D) derived demand remains constant E) consumers de-emphasize quality

15) Which of the following is true of value-based pricing? A) The targeted value and price drive decisions about what costs can be incurred and the resulting product design. B) Value-based pricing is mostly product driven. C) Value-based pricing involves setting prices based on the costs of producing distributing and selling the product plus a fair rate of return for its effort and risk. D) The marketer usually designs a product and marketing program and then sets the price. E) A company using value-based pricing designs what it considers to be a good product adds up the costs of making the product and sets a price that covers costs plus a target profit.

131) In which situation is the market dominated by one seller? A) pure monopoly B) monopolistic competition C) oligopolistic competition D) pure competition E) free market

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

133) Which of the following shows the number of units the market will buy in a given time period at different prices that might be charged? A) demand curve B) supply curve C) learning curve D) break-even pricing E) target costing

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

117) A decision to position the product on high-performance quality will mean that the . A) seller must charge a higher price to cover higher costs B) seller must charge a lower price to attract more customers C) producer must step down production D) marketer must boost derived demand in the market E) break-even volume will be fairly low

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

128) Which of the following is true with regard to pure competition? A) Under pure competition no single buyer or seller has much effect on the going market price. B) In a purely competitive market marketing research is of utmost importance. C) In a purely competitive market product development is the focus of most firms. D) Under pure competition the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. E) Under pure competition the market consists of only a few large sellers.

23) Go Zone plans to introduce four tablet models over the next year. These models range from basic readers at $99 per unit to more sophisticated tablets at $399 per unit. The more features a model has the more expensive it is. What pricing strategy is Tone Zone using for its range of tablets? A) product line pricing B) product bundle pricing C) captive product pricing D) by-product pricing E) optional product pricing

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

24) Which of the following is true of product line pricing? A) The price steps take cost differences between products in the line into account. B) The pricing strategy cannot be used by companies in developed countries. C) The price steps do not account for the prices of similar products from competitors. D) The pricing strategy involves overpricing products so that they appeal to the elite. E) The customer's perception of the value of different features is considered irrelevant.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

38) Which of the following is true of product bundle pricing? A) It promotes the sale of products that consumers might not otherwise buy. B) It is used to set prices across an entire product range based on customer evaluations. C) It forces customers to buy product parts that are only compatible with the main product. D) It results in companies making fewer-though more profitable-sales. E) It involves pricing the main product low and setting high markups on the supplies.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

"65) A(n) refers to promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way." A) allowance B) sample C) discount D) tax credit E) tax exemption

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"71) By definition pricing is used when a firm sells a product or service at two or more prices even though the difference in price is not based on differences in cost." A) segmented B) variable C) flexible D) cost-plus E) reference

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

60) Which of the following price adjustment strategies offers a price reduction to buyers who pay their bills promptly? A) cash discount B) season discount C) quantity discount D) trade discount E) functional discount

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

88) Which of the following is true of promotional pricing? A) It leads to 'deal-prone' customers who buy products only during sales. B) It fortifies the brand's image in the eyes of customers if relied upon extensively. C) It simplifies shopping for customers if used simultaneously by multiple stores. D) It makes balancing short-term sales incentives against long-term brand building unnecessary. E) It is extremely beneficial for the brand's profitability if practiced repeatedly.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

92) Which of the following is a geographical pricing strategy? A) basing-point pricing B) segmented pricing C) dynamic pricing D) Internet pricing E) location-based pricing

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

95) Which form of geographic pricing is a company using when it charges the same rate to ship a product anywhere in the United States? A) uniform-delivered pricing B) psychological pricing C) zone pricing D) FOB-origin pricing E) basing-point pricing

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

90) Which of the following is an adverse effect of using promotional pricing? A) It makes shopping stressful if used by multiple stores simultaneously. B) It erodes the value of competing brands in the eyes of customers. C) It gives pricing secrets away to competitors. D) It creates "deal-immune" customers if used often. E) It delays the company's focus on short-term strategies.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

to improve the performance of the entire system. A) value delivery network B) horizontal channel C) consumer base D) product delivery network E) product line

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

51) Which of the following is true of vertical marketing systems? A) Producers wholesalers and retailers act as a unified system. B) Channel members have no control over each other. C) Channel conflict is governed by informal mechanisms. D) The system is dominated by the consumer. E) Channel members work independently with no cooperation from other members.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

92) Which of the following is an environmental factor that affects channel objectives and design? A) economic conditions B) factory staffing C) organizational objectives D) interpersonal influences E) individual motives

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Challenging

96) With which of the following strategies would a company give only a limited number of dealers the right to distribute its products in their territories? A) exclusive distribution B) extensive distribution C) moderate distribution D) primary distribution E) intensive distribution

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

"117) Producers motivate channel members using all of the following EXCEPT ." A) using strict rules to force compliance with contract terms B) partner relationship management C) working to sell through the intermediaries D) persuading the intermediaries that they are first-line customers E) convincing channel members that each will enjoy greater success working together with a common goal

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Moderate

148) In intermodal transportation which of the following describes the use of both water and trucks for transportation? A) fishyback B) drawbar C) trainship D) piggyback E) airtruck

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

138) Logistics has grown in importance for all of the following reasons EXCEPT that . A) companies that become channel members want to continue to grow and expand. B) companies can gain a powerful competitive advantage by using improved logistics to give customers better service or lower prices. C) improved logistics can yield tremendous cost savings to both a company and its customers. D) more than almost any other marketing function logistics affects the environment and a firm's environmental sustainability efforts. E) the explosion in product variety has created a need for improved logistics management.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

"20) Shifting away from mass marketing marketers are developing which are designed to build relationships with customers in more narrowly defined micromarkets." A) focused marketing programs B) horizontal diversification programs C) backward integration strategies D) new pull strategies E) new push strategies

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

"29) Today most companies are adopting the concept of which carefully combines and coordinates the company's many communication channels to deliver a clear consistent and compelling message about the organization and its brands." A) integrated marketing communications B) pull strategy C) vertical diversification D) nonpersonal communication channels E) buzz marketing

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

"28) Consumers today receive commercial messages from a broad range of sources. However consumers the way marketers do." A) don't distinguish between message sources B) never pay attention to sales promotions C) don't care about buzz marketing D) are not able to block out messages E) block out all media messages

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

"17) Mission statements should be . A) meaningful and specific yet motivating B) technology oriented" C) written solely for public relations purposes D) focused on increasing sales or profits E) strictly product oriented

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

16) Which of the following is a market-oriented mission statement? A) "We empower customers to achieve their dreams." B) "We sell jumbo burgers." C) "We are an online library." D) "We are a low-cost airline." E) "We make porcelain figurines."

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

"48) By harvesting its SBU a company would most likely be ." A) milking the SBU's short-term cash flow regardless of the long-term effect B) selling the SBU or phasing it out and using the resources elsewhere C) investing just enough to hold the SBU's current market share D) investing more in the business unit to build its share E) diversifying the company's product line

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"49) A company can an SBU by selling it or phasing it out and using the resources elsewhere." A) divest B) promote C) expand D) harvest E) hold

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

150) Which of the following is a major advantage of the market organization? A) The company is organized around the needs of specific customer segments. B) The company exploits bleeding-edge technologies to keep ahead in the market. C) The company has a flat organizational structure. D) The company allows its salespeople to settle into a specific territory. E) The company caters to a single small market segment.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

2) Which of the following terms is used to describe the actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers? A) marketing environment B) marketing orientation C) strategic planning D) target markets E) marketing mix

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

66) Which of the following demographic trends is the most likely cause for a rapid increase in telecommuting? A) the migration toward micropolitan and suburban areas B) the migration from rural to metropolitan areas C) the increasing number of traditional households D) the growing percentage of married couples who do not have children E) the declining number of manufacturing workers in today's workforce

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging

54) Which of the following is true of the Millennials? A) They are the children of baby boomers and were born between 1977 and 2000. B) They control an estimated 70 percent of the disposable income in the United States. C) They have reached their peak earning and spending years. D) They were the first to grow up in the Internet era. E) They are less immersed in technology than Gen Xers.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

"135) Babita Singh a 51-year-old schoolteacher from Los Angeles believes that people should choose a profession they like which is an example of Babita's ." A) secondary belief B) core belief C) core value D) work ethic E) moral code

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Challenging

"157) Companies that take a proactive stance toward the marketing environment are most likely to ." A) develop strategies to change the environment in their favor B) passively accept the marketing environment C) resist organizational change D) discourage innovation E) consider technological advances more disruptive than beneficial

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Moderate

"42) A buyer's decisions are influenced by such as the buyer's age and life-cycle stage occupation economic situation lifestyle personality and self-concept." A) personal characteristics B) stereotypes C) perceptions D) attitudes E) psychographics

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

39) What is the most important consumer buying organization in society? A) family B) social class C) membership group D) subculture E) reference group

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

39) Which of the following is NOT a common variable used by both consumer and business marketers while segmenting markets? A) operating characteristics B) loyalty status C) usage rate D) geographic location E) benefits sought

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

32) In the context of behavioral segmentation who among the following is a potential user? A) Anita who recently had a baby B) Peter who recently changed his job C) Mary who enrolled as a graduate student in a university last year D) Gina who opened a dental clinic in Orange County E) Raj who is planning a trip to Hawaii with friends

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

96) Which of the following is true about the concentrated marketing strategy? A) Companies that rely on a few segments for all of their business will suffer if a segment turns sour. B) Concentrated marketing is not profitable for most firms. C) Niche marketing involves few risks for most firms. D) Concentrated marketing involves going after a small share of a large market. E) The Internet has limited the use and benefits of niche marketing.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

99) Which of the following is a drawback of local marketing? A) Local marketing increases manufacturing costs by reducing the economies of scale. B) Local marketing requires specialization that is difficult to identify. C) Local marketing is not profitable for most small firms. D) Local marketing cannot accommodate the needs of modern buyers who are technology savvy. E) Local marketing almost always results in brand dilution.

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

19) Which of the following is an example of a convenience product? A) fast food B) diamond ring C) furniture D) life insurance E) refrigerator

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"75) A is a group of products that are closely related because they function in a similar manner are sold to the same customer groups are marketed through the same type of outlets or fall within given price ranges." A) product line B) line extension C) private brand D) multibrand E) new brand

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

61) What are the two dimensions of product quality? A) consistency and level B) performance and conformance C) design and innovation D) conformance and style E) feature and design

"117) means that service quality depends on the quality of buyer-seller interaction during the service encounter." A) Interactive marketing B) Service differentiation C) Service productivity D) Corporate image marketing E) Traditional external marketing

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Moderate

"121) Service productivity can be increased by hiring new employees who will work harder by giving up some quality or by ." A) using technology more effectively B) outsourcing portions of the process to other firms C) creating more self-serve opportunities for customers D) reducing the number of products offered E) increasing the price on some of the product line

"153) occurs when a company introduces additional items in a given product category under the same brand name such as new flavors forms colors ingredients or package sizes." A) Line extension B) Megabranding C) Interactive marketing D) Internal marketing E) Co-branding

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"2) Acquisition refers to ." A) the buying of a whole company a patent or a license to produce someone else's product B) an agreement between two or more commercial companies to produce a common product C) a partnership between two companies to produce a product in different countries by sharing risks D) investments made in a country's businesses by foreign citizens often in the form of stocks E) the development of original products product improvements product modifications and new brands through the firm's own product development strategies

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy

23) Which of the following would most likely be included in an executive's write up of a new product idea to be presented to a new product committee? A) the proposed customer value proposition B) the product image C) the marketing strategy D) the business analysis E) the pricing strategy

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"47) Once the prototype of Wainwright Industries' new riding lawnmower made especially for women passes product tests the next step is ." A) test marketing B) focus group surveys C) commercialization D) concept testing E) business analysis

59) Which of the following involves costs that most likely occur during the commercialization stage of new product development? A) building or renting a manufacturing facility B) paying target customers for product feedback C) determining the product's planned distribution D) developing a prototype of the product E) identifying target markets

"112) Some products that have entered the decline stage have been cycled back to the growth stage through ." A) repositioning B) harvesting C) maintaining D) pruning E) expanding

Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

"59) A consumer is reading a magazine with an advertisement but due to a loud sound he is distracted from reading the advertisement and is not able to grasp its key points. In the context of the communication process this unplanned static or distortion is called ." A) noise B) encoding C) feedback D) response E) decoding

Answer: A AACSB: Application of knowledge

32) Which of the following companies uses captive product pricing? A) Photo Genie which sells inexpensive cameras that run only on their own expensive batteries B) Go Zone which launched a range of tablet models each priced according to its features C) Penguin's Parlor which offers customers a 20-percent discount on their birthdays D) Sportsprint which prices sports equipment according to customer evaluations E) Burger Den whose combo meals are priced lower than its individual components sold together

Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

"74) Sparkling Valley a luxury resort prices cottages facing the lake higher than cottages that do not even though the cottages and services offered are identical in every other aspect. This form of pricing is called pricing." A) location-based B) time-based C) by-product D) seasonal E) captive product

"56) Ford and its network of independent franchised dealers is an example of a ." A) manufacturer-sponsored retailer franchise system B) manufacturer-sponsored wholesaler franchise system C) service-firm-sponsored retailer franchise system D) service-firm-sponsored equity strategic alliance E) manufacturer-and-service-sponsored joint venture

Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

98) Ocean Spray sells its air fresheners only through Ray's Drugs. This is an example of distribution. A) exclusive B) selective C) intensive D) indirect E) corporate

Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

"31) The art and science of choosing target markets and building profitable relationships with them is called ." A) marketing management B) positioning C) marketing mix D) market offering E) differentiation

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

"41) The concept is aligned with the philosophy of continuous product improvement and the belief that customers will choose products that offer the most in quality performance and innovative features." A) product B) production C) societal marketing D) marketing E) selling

"52) The marketing concept takes a(n) . It starts with a well-defined market focuses on customer needs and integrates all the marketing activities that affect customers." A) outside-in perspective B) product-centered make-and-sell philosophy C) inside-out perspective D) consumer-generated marketing approach E) telling-and-selling approach

"83) is determined by a customer's evaluation of the benefits and costs of a market offering relative to those of competing offers." A) Customer-perceived value B) Customer lifetime value C) Share of customer D) Customer-managed relationship E) Brand value proposition

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

"97) Through companies today are strengthening their connections with all partners from providers of raw materials and components to those involved in the delivery of final goods and services." A) supply chain management B) direct marketing C) customer relationship marketing D) customized marketing E) inventory management

108) A company should not always target all possible customers. Which kind of customer is not the most valuable to a company but can over time contribute to the firm's success? A) butterflies B) shooting stars C) barnacles D) true friends E) strangers

78) Which of the following statements is true about creating customer loyalty and retention? A) Losing a customer means losing the entire stream of purchases that the customer would make over a lifetime of patronage. B) Customer delight creates a rational preference and not an emotional relationship with the brand. C) The aim of customer relationship management is to focus solely on customer delight. D) Losing a customer hardly makes a difference to a company's sales. E) The aim of customer relationship management is to focus solely on customer satisfaction.

"136) refers to a measure of the sensitivity of demand to changes in price. A) Price elasticity" B) A demand curve C) Price-value equation D) Marginal utility E) Income elasticity of demand

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"4) When a company sets a high price for a new product with the intention of reducing the price in the future it is using the pricing strategy." A) market-skimming B) cost-plus C) market-segmentation D) market-penetration E) competitive

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Easy

"73) Under pricing different versions of the product are priced differently but not according to differences in their costs." A) product form B) optional product C) captive product D) by-product E) seasonal

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

99) In which of the following geographic pricing strategies would customers located close to the company pay the same amount as customers in distant locations? A) uniform-delivered pricing B) zone pricing C) FOB-origin pricing D) location-based pricing E) reference pricing

11) Which of the following is most likely true of marketing channel decisions? A) They often involve long-term commitments to other firms. B) They have minimal influence on the prices of products offered to customers. C) They increase the amount of time a company spends connecting with customers. D) They increase the amount of effort a company puts in to distribute goods. E) They are easily altered replaced or discarded.

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

22) Which of the following is a type of flow that connects all institutions in a marketing channel? A) payment flow B) ownership flow C) physical flow D) promotion flow E) information flow

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

102) When the seller allows only certain outlets to carry its products this strategy is called . A) exclusive distribution B) subjective dealing C) selective distribution D) exclusive pricing E) disintermediation

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

105) Why do firms have difficulty accessing potential market areas in developing countries such as China and India? A) inadequate distribution systems B) anti-globalization efforts C) highly centralized rural markets D) limited manpower E) high operating costs

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

81) Which of the following appeals is based on the idea that consumers often feel before they think? A) emotional appeal B) rational appeal C) structural appeal D) standardized appeal E) integrated appeal

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"85) One of the message structure issues that a marketer must handle is whether to ." A) present the strongest arguments first or last B) make a moral appeal or not C) use the pull strategy or push strategy D) diversify vertically or horizontally E) use mass marketing or niche marketing

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

"39) According to the Boston Consulting Group approach serves as a measure of company strength in the market." A) relative market share B) product development C) market diversification D) product attribute E) market segmentation

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"111) Arranging for a product to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers is known as ." A) positioning B) segmenting C) diversifying D) prospecting E) satisficing

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

114) In the marketing mix design packaging services and variety can be categorized under . A) product B) price C) promotion D) place E) position

47) The marketing team of 7 Star Inc. a company manufacturing smartphones is currently studying the size density location age and occupation of its target market. Which of the following environments is being studied in this scenario? A) demographic environment B) political environment C) economic environment D) technological environment E) cultural environment

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

"53) Many marketers use the self-concept premise that people's possessions contribute to and reflect their identities-that is ""we are what we consume."" According to this premise consumers ." A) buy products to support their self-image B) rarely identify with brand personalities C) are affected by opinion leaders D) compare product brands E) conduct primary research

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

31) Which of the following refers to a behavioral segmentation variable that involves segmenting markets into nonusers ex-users potential users first-time users and regular users of a product? A) user status B) usage rates C) gender status D) income status E) loyalty status

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

14) Many companies today are localizing their products advertising promotion and sales efforts to fit the needs of individual regions cities and neighborhoods. This is an example of . A) geographic segmentation B) product diversification C) branding D) psychographic segmentation E) demographic segmentation

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

151) "To busy multitaskers who need help remembering things Evernote is a digital content management application that makes it easy to capture and remember moments and ideas from your everyday life using your computer phone tablet and the Web." This is an example of a(n) . A) positioning statement B) statement of purpose C) order-routine specification D) vision statement E) product specification

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

"4) Marketing mix planning begins with ." A) building an offering that brings value to target customers B) finding a suitable promotion strategy for the product C) setting a reasonable price for the product D) selecting the right channel for distribution of the product E) calculating the total costs involved in manufacturing the product

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

12) If a consumer purchases a new flat-screen "smart" television which can connect to services like Netflix and Pandora what is the core customer value involved? A) connection to entertainment and information B) state-of the art technology C) slick and attractive packaging D) brand name E) tech support and warranty

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

157) Which of the following strategies involves weeding out weaker brands and focusing marketing dollars only on brands that can achieve the number one or number two market share positions with good growth prospects in their categories? A) megabrand strategies B) niche marketing strategies C) social marketing strategies D) co-branding E) licensing

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

5) Which of the following is a common reason for new product failure? A) incorrect estimation of the market size B) low product development costs C) ineffective social marketing campaigns D) low selling prices of products E) patent ownership exclusively held by the company

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Moderate

"61) According to the commercialization stage of the new product development process following the decision to introduce the new product at a particular time a company must next decide ." A) where to launch the new product B) how to launch the new product C) why to launch the new product D) what pricing strategies to implement E) what marketing mix elements to use

Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"56) The major purpose of test marketing is to provide management with the information needed to make a final decision about ." A) the entire marketing program B) which market to compete in C) whether to launch the new product D) how to compete in the market E) how long to compete in the market

"49) Among the generational groups in U.S population the are still the wealthiest generation in U.S. history." A) baby boomers B) Generation Xers C) Millennials D) echo boomers E) Silent Generation

Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

"71) By 2060 will be an estimated 14 percent of the U.S. population. A) African Americans" B) Asians C) Hispanics D) Native Americans E) Native Hawaiians

75) Which of the following is true with regard to the diversity segment of U.S. adults with disabilities? A) Most individuals with disabilities are active consumers. B) The market represented by U.S. adults with disabilities is smaller than that represented by African Americans or Hispanics. C) The diversity segment U.S. adults with disabilities is a rather unattractive segment for the tourism industry. D) The annual spending power of U.S. adults with disabilities is less than $100 billion. E) Most companies are reluctant to reach out to consumers with disabilities.

142) Consumers in the "lifestyles of health and sustainability" market are more likely to seek . A) alternative medicine B) perfumes made from animal products C) clothing made of fur D) leather goods E) foods high in saturated fat

Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

"22) are society's relatively permanent and ordered divisions whose members share similar values interests and behaviors." A) Social classes B) Societal norms C) Reference groups D) Universal cultures E) Social networks

Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

15) Which consumer group tends to show more brand loyalty and makes shopping a family event with children having a big say in the purchase decision? A) Hispanic Americans B) African Americans C) Arab Americans D) working class consumers E) middle class consumers

Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"21) Many companies use ethnically specific themes in their mainstream marketing strategy because marketers have realized that insights gleaned from ethnic consumers can influence their broader markets. This type of marketing is known as ." A) total market strategy B) buzz marketing C) social networking D) word-of-mouth marketing E) life-style marketing

Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

154) Which of the following is a consequence of standardizing an international product? A) image consistency B) regional design flexibility C) decreased product demand D) increased manufacturing costs E) higher marketing costs

Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 9.4: Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Difficulty: Moderate

143) Which of the following would be classified as bait-and-switch advertising? A) advertising a cheaper brand but making only a more expensive one available to customers B) advertising the advantages of a product by comparing it to its competitors C) providing free samples of a product D) providing discount coupons with a product E) favoring certain customers over others through trade promotions

Answer: A AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Challenging

"146) The Sherman Clayton and Robinson-Patman Acts are all federal laws that were enacted to curb the formation of ." A) monopolies B) global partnerships C) competitive markets D) internal markets E) intrastate partnerships

Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

145) Which of the following is NOT true of public policies and pricing? A) Companies are free to charge whatever prices they wish. B) Federal state and local laws govern the rules of fair play in pricing. C) Deceptive pricing is not permitted. D) Companies must consider broader societal pricing concerns. E) Regulations exist to control predatory pricing.

Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

social responsibility issues. A) code of ethics B) marketing plan C) non-disclosure policy D) privacy policy E) non-compete clause

Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"134) Marketers should understand that people's core beliefs and values tend to be . A) fixed" B) highly flexible C) similar around the world D) constantly and rapidly changing E) easily influenced by secondary beliefs

Answer: A AACSB: Reflective thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

"54) To take advantage of a downward-sloping experience curve a company must do all of the following EXCEPT ." A) increase the product's price B) be able to sell the higher volume of product C) price its product lower D) increase its production output E) decrease its costs through experience gained

Answer: A AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

6) Which of the following promotion categories is most likely to include the use of displays discounts coupons and demonstrations? A) sales promotion B) direct and digital marketing C) horizontal diversification D) public relations E) advertising

Answer: A AACSB: Written and oral communication Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

"57) In the communication process the reaction of the receiver after being exposed to a message is called the ." A) response B) disturbance C) noise D) code E) distortion

Answer: A AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"128) Using a(n) strategy the producer directs its marketing activities toward final consumers to induce them to buy the product." A) pull B) blitz C) push D) buzz E) pulse

Answer: A AACSB: Written and oral communication Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

"98) The final step in the marketing process is . A) capturing value from customers" B) creating customer delight C) creating customer lifetime value D) understanding the marketplace E) designing a customer-driven marketing strategy

Answer: A Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

"40) Fixed costs ." A) are costs that do not vary with production or sales level B) vary directly with the level of production C) decrease with accumulated production experience D) are the sum of the overhead and variable costs for any given level of production E) represent the annual costs of inputs incurred by a company

Answer: A Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

"118) Price setting is usually determined by in small companies." A) the top managers B) the marketing department C) the sales department D) divisional managers E) product managers

Answer: A Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"123) Under the market consists of many buyers and sellers trading in a uniform commodity." A) pure competition B) monopolistic competition C) oligopolistic competition D) a pure monopoly E) the dominant firm model

Answer: A Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"140) In the aftermath of the Great Recession of 2008 to 2009 consumers . A) have become more value conscious" B) have become less value conscious C) exhibit great interest in prestige pricing D) show no interest in price cutting E) rarely endorse value-for-money deals

Answer: A Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

"63) A seller offers a to trade-channel members who perform certain functions such as selling storing and record keeping." A) functional discount B) storage allowance C) cash discount D) promotional allowance E) quantity discount

Answer: A Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"126) The ""bottom of the pyramid"" refers to ." A) the world's poorest consumers B) the middle classes of Brazil Russia India and China C) a market with little or no purchasing power D) people with easy access to luxury goods E) the middle class of high-income countries

Answer: A Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Easy

"55) The organization is the most common type of contractual relationship." A) franchise B) horizontal C) conventional D) multi-national E) entrepreneurial

Answer: A Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

127) Which of the following statements is most likely true regarding the objective-and-task method of budget setting? A) It forces management to spell out its assumptions about the relationship between the money spent and promotion results. B) It is the simplest and least time consuming method to use. C) It is the least logical budget-setting method. D) It involves setting the promotion budget to match competitors' outlays. E) It wrongly views sales as the cause of promotion rather than as the result.

Answer: A Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

101) Each company must divide up the total market choose the best segments and design strategies for profitably serving chosen segments. This process involves market segmentation differentiation and positioning. A) market targeting B) marketing implementation C) supply-chain analysis D) price discrimination E) market diversification

Answer: A Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

95) Which of the following is an element of the marketing mix? A) place B) education C) needs D) wants E) esteem

Answer: A Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"138) provides a complete analysis of the company's situation. A) A SWOT analysis" B) A marketing audit C) Regression analysis D) Return on marketing investment E) Marketing budget evaluation

20) Which group includes neighborhood residents and community organizations? A) local publics B) government publics C) internal publics D) citizen-action publics E) media publics

Answer: A Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

"121) The prohibits monopolies and activities (price-fixing predatory pricing) that restrain trade or competition in interstate commerce." A) Sherman Antitrust Act B) Lanham Trademark Act C) Fair Packaging and Labeling Act D) CAN-SPAM Act E) Magnuson-Moss Warranty Act

Answer: A Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

"126) Business legislation is enacted to protect ." A) consumers from unfair business practices B) businesses from unfair attacks by consumers C) consumers from competition by businesses D) businesses from achieving unfairly high profits E) society from profitable business activity

Answer: A Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

"32) are people within a reference group who because of special skills knowledge personality or other characteristics exert influence on others." A) Opinion leaders B) Innovators C) Surrogate consumers D) Stealth marketers E) Lagging adopters

Answer: A Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"33) Opinion leaders are also referred to as . A) leading adopters" B) lower uppers C) innovators D) lagging adopters E) surrogate consumers

Answer: A Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"119) The buying decision process starts with in which the buyer spots a problem. A) need recognition" B) information search C) impulse purchases D) buyer's remorse E) alternative evaluation

Answer: A Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

"127) Marketers describe the way a consumer processes information to arrive at brand choices as ." A) alternative evaluation B) information search C) impulse buying D) consumer capitalism E) cognitive dissonance

Answer: A Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

"132) The relationship between the consumer's expectations and the product's determines whether the buyer is satisfied or dissatisfied with a purchase." A) perceived performance B) brand personality C) market reach D) consumer market E) market share

Answer: A Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

87) Which of the following is the reason a company may choose not to focus on the largest fastest-growing segments? A) The smaller segments may be more profitable to the firm. B) It may lack the skills to serve larger segments. C) The right size and growth characteristics don't match its goals. D) The segments may be too competitive. E) It may lack the physical and financial resources to serve larger segments.

Answer: A Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

"137) To the extent that a company can differentiate and position itself as providing superior customer value it gains ." A) competitive advantage B) complementary assets C) service life D) core competencies E) contingent liability

Answer: A Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

"20) are less frequently purchased consumer products and services that customers compare carefully on suitability quality price and style." A) Shopping products B) Convenience products C) Unsought products D) Capital items E) Supplies and repair services

Answer: A Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"44) The product development stage requires ." A) a huge jump in investment B) salespeople to contact potential customers C) financial analysis D) a few hours E) management approval

Answer: A Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"52) In a(n) new products and marketing tactics are tested among specifically identified groups of customers and stores." A) controlled test market B) simulated test market C) standard test market D) systematic sample E) accidental sample

Answer: A Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

127) Which of the following would lead to greater competition in the maturity stage of the PLC? A) overcapacity B) market pioneers C) poor management D) inadequate promotion E) diminishing budgets

Answer: A Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

"15) A(n) is the set of actual and potential buyers of a product or service. A) market" B) control group C) subsidiary D) focus group E) audience

Answer: A Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

33) Dividing the market into various groups of customers that a company may serve is called . A) market segmentation B) positioning C) customization D) target marketing E) differentiation

Answer: A Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

"2) is the only element in the marketing mix that produces revenue." A) Price B) Product C) Place D) Fixed costs E) Variable costs

Answer: A Skill: Concept Objective: LO 10.1: ,Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Easy

"13) pricing uses buyers' perceptions of value as the key to pricing." A) Customer value-based B) Cost-based C) Time-based D) Markup E) Target return

"29) pricing involves charging higher prices on an everyday basis but running" frequent promotions to lower prices temporarily on selected items. A) High-low B) Everyday low C) Cost-plus D) Break-even E) Penetration

"47) The long-run average cost (LRAC) curve indicates the ." A) per unit cost of output in the long run B) projected total production costs of competitors C) variable costs incurred by a firm over time D) fixed costs incurred by a firm over the long term E) number of units the market will buy in a given time period at different prices that might be charged

"37) A company must pay each month's bills for rent heat interest and executive salaries regardless of the company's level of output. This exemplifies its costs." A) overhead B) variable C) target D) total E) unit

affecting pricing decisions. A) external B) internal C) economic D) cultural E) organizational

Answer: A Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"69) allowances are payments or price reductions that reward dealers for participating in advertising and sales support programs." A) Promotional B) Trade-in C) Segmented D) Functional E) Dynamic

Answer: A Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

52) Which of the following is a major type of vertical marketing system? A) corporate B) conventional C) multilevel D) intrinsic E) extrinsic

Answer: A Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

"121) Though the method of setting an advertising budget is simple to use and helps management think about the relationships among promotion spending selling price and profit per unit it wrongly views sales as the cause of promotion rather than the result." A) percentage-of-sales B) integrated C) competitive-parity D) objective-and-task E) regression

Answer: A Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

"11) include banks credit companies insurance companies and other businesses that help insure against the risks associated with the buying and selling of goods." A) Financial intermediaries B) Physical distribution firms C) Resellers D) Marketing services agencies E) Wholesalers

Answer: A Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

"24) markets buy goods and services for further processing. A) Business" B) Reseller C) Wholesale D) Consumer E) Retail

Answer: A Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

"1) Individuals and households that buy or acquire goods and services for personal consumption make up the ." A) consumer market B) market offering C) market mix D) subculture E) social class

Answer: A Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

"12) is the most basic determinant of a person's wants and behavior." A) Culture B) Brand personality C) Cognitive dissonance D) Motive E) Attitude

Answer: A Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"74) are minor stimuli that determine where when and how a person responds to an idea." A) Cues B) Drives C) Reinforcers D) Cognitions E) Impulses

Answer: A Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

48) In the context of the AIO dimensions for measuring consumers' lifestyles "A" stands for . A) activities B) achievements C) admirations D) attitudes E) associations

Answer: A Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"41) segmentation assumes that nations close to one another will have many common traits and behaviors." A) Geographic B) Occasion C) Psychographic D) Benefit E) Demographic

Answer: A Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"61) Different soft drinks target different personalities. This is an example of segmentation." A) psychographic B) demographic C) occasion D) life-cycle E) benefits

Answer: A Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"142) The full mix of benefits on which a brand is differentiated and positioned is known as the brand's ." A) value proposition B) service life C) value stream D) supply chain E) demand chain

Answer: A Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

139) Even when competing offers look the same buyers may perceive a difference based on differentiation. A) image B) people C) price D) channel E) services

Answer: A Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

"31) Industrial products and services include raw materials buildings fixed equipment supplies services and ." A) computers and desks B) electricity C) groceries D) insurance E) employees

Answer: A Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"69) involves designing and producing the container or wrapper for a product." A) Packaging B) Patenting C) Servicing D) Co-branding E) Labeling

Answer: A Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"81) A consists of all the product lines and items that a particular seller offers for sale." A) product mix B) store brand C) supply chain D) value chain E) line extension

Answer: A Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"83) Product mix refers to the total number of items a company carries within its product lines." A) length B) depth C) height D) width E) consistency

Answer: A Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

122) Which of the following stages of the PLC is characterized with the same level or slightly higher level of promotional expenditures in an attempt to respond to increasing competition? A) growth B) decline C) maturity D) product development E) adoption

Answer: A Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

168) What is a private brand?

Answer: A brand created and owned by a reseller of a product or service is known as a private brand or store brand. AACSB: Written and oral communication Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

98) Define brand personality.

Answer: A brand personality is the specific mix of human traits that may be attributed to a particular brand. Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

81) What is a business portfolio? What are the steps involved in business portfolio planning?

Answer: A business portfolio is the collection of businesses and products that make up a company. Business portfolio planning involves two steps. First the company must analyze its current business portfolio and determine which businesses should receive more less or no investment. Second it must shape the future portfolio by developing strategies for growth and downsizing. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

78) How does loyalty status enhance a company's understanding of its consumers?

Answer: A company can learn a lot by analyzing loyalty patterns in its market. It should start by studying its own loyal customers. In contrast by studying its less-loyal buyers a company can detect which brands are most competitive with its own. By looking at customers who are shifting away from its brand the company can learn about its marketing weaknesses and take actions to correct them. AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

126) What are the components of a company's marketing mix?

Answer: A company designs an integrated marketing mix made up of factors under its control -product price place and promotion (the four Ps). Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

125) What factors should a firm consider when selecting intermediaries?

Answer: A company may want to evaluate each intermediary's years in business other lines carried growth and profit records cooperativeness and reputation. AACSB: Application of knowledge Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

131) What are the key service characteristics a company must consider when designing marketing programs? Briefly describe each characteristic.

Answer: A company must consider four special service characteristics when designing marketing programs: intangibility inseparability variability and perishability. Service intangibility means that services cannot be seen tasted felt heard or smelled before they are bought. Service inseparability means that services cannot be separated from their providers whether the providers are people or machines. Service variability means that the quality of services depends on who provides them as well as when where and how they are provided. Service perishability means that services cannot be stored for later sale or use. AACSB: Analytical thinking

105) What are the different dimensions of a company's product mix? Briefly describe each dimension.

Answer: A company's product mix has four important dimensions: width length depth and consistency. Product mix width refers to the number of different product lines the company carries. Product mix length refers to the total number of items a company carries within its product lines. Product mix depth refers to the number of versions offered for each product in the line. Finally the consistency 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. AACSB: Application of knowledge

91) What factors determine the success of a company's value chain?

Answer: A company's value chain is only as strong as its weakest link. Success depends on how well each department performs its work of adding customer value and on how the company coordinates the activities of various departments. AACSB: Application of knowledge Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Moderate

82) How can a firm benefit from involvement in a contractual VMS?

Answer: A contractual VMS consists of independent firms at different levels of production and distribution that join together through contracts to obtain more economies or sales impact than each could achieve alone. AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

85) Compare a conventional distribution channel with a vertical marketing system (VMS).

Answer: A conventional distribution channel consists of one or more independent producers wholesalers and retailers. Each is a separate business seeking to maximize its own profits even at the expense of the system as a whole. No channel member has much control over the other members and no formal means exists for assigning roles and resolving channel conflict. On the other hand a vertical marketing system is a unified system made up of producers wholesalers and retailers. While members of a conventional distribution channel seek to maximize their own profits members of a vertical marketing system all cooperate because either one member owns the others one has contracts with the others or one wields more power than the others. AACSB: Application of knowledge

80) What is a conventional distribution channel?

Answer: A conventional distribution channel consists of one or more independent producers wholesalers and retailers. Each is a separate business seeking to maximize its own profits perhaps even at the expense of the system as a whole. AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

159) What is a demand curve? Explain its importance in the context of pricing decisions.

Answer: A demand curve shows the number of units the market will buy in a given time period at different prices that might be charged. Each price the company might charge will lead to a different level of demand. The relationship between the price charged and the resulting demand level is shown in the demand curve. In the normal case demand and price are inversely related-that is the higher the price the lower the demand. Thus the company would sell less if it raised its price from P1 to P2. In short consumers with limited budgets probably will buy less of something if its price is too high. Understanding a brand's price-demand curve is crucial to good pricing decisions. Most companies try to measure their demand curves by estimating demand at different prices. The type of market makes a difference. In a monopoly the demand curve shows the total market demand resulting from different prices. If the company faces competition its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices. AACSB: Application of knowledge

151) How are local retailers affected by global competition?

Answer: A local retailer might have global suppliers and customers. The retailer's goods may come from abroad or components of those goods may be produced or assembled abroad. In addition a local retailer may also sell goods over the Internet to international customers. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

169) What are the different brand sponsorship options available to manufacturers?

Answer: A manufacturer has four sponsorship options. The product may be launched as a national brand (or manufacturer's brand) as when Samsung and Kellogg sell their output under their own brand names (the Samsung Galaxy tablet or Kellogg's Frosted Flakes). Or the manufacturer may sell to resellers who give the product a private brand (also called a store brand or distributor brand). Although most manufacturers create their own brand names others market licensed brands. Finally two companies can join forces and co-brand a product. AACSB: Written and oral communication Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

127) What does a market segment consist of?

Answer: A market segment consists of consumers who respond in a similar way to a given set of marketing efforts. Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

99) Explain why selective attention is not controllable by a marketer.

Answer: A marketer cannot guarantee that a consumer will pay attention to or remember a specific ad. Selective attention plays a significant role because it is impossible for individuals to pay attention to the thousands of marketing stimuli they experience each day. AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

102) Differentiate between a product idea a product concept and a product image.

Answer: A product idea is an idea for a product that a company can imagine itself offering to the market. A product concept takes the idea several steps further with a detailed version of the idea stated in meaningful consumer terms. Finally a product image is the way consumers perceive an actual or potential product. AACSB: Written and oral communication Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

169) What is product position? What functions do perceptual positioning maps serve?

Answer: A product position is the way a product is defined by consumers on important attributes-the place the product occupies in consumers' minds relative to competing products. Products are made in factories but brands happen in the minds of consumers. Consumers position products with or without the help of marketers. But marketers do not want to leave their products' positions to chance. They must plan positions that will give their products the greatest advantage in selected target markets and they must design marketing mixes to create these planned positions. In planning their differentiation and positioning strategies marketers often prepare perceptual positioning maps that show consumer perceptions of their brands versus competing products on important buying dimensions. AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

46) What is a "public" in terms of the marketing environment? In a short essay briefly describe the different types of publics that marketers must consider and explain how marketing might communicate with these publics.

Answer: A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. There are seven types of publics. Financial publics: This group influences the company's ability to obtain funds. Media publics: This group carries news features and editorial opinions. Government publics: Management must take government developments into account. Marketers must often consult the company's lawyers on issues of product safety truth in advertising and other matters. Citizen-action publics: A company's marketing decisions may be questioned by consumer organizations environmental groups minority groups and others. Its public relations department can help it stay in touch with consumer and citizen groups. Local publics: This group includes neighborhood residents and community organizations. Large companies usually create departments and programs that deal with local community issues and provide community support. General public: A company needs to be concerned about the general public's attitude toward its products and activities. The public's image of the company affects its buying. Internal publics: This group includes workers managers volunteers and the board of directors. Large companies use newsletters and other means to inform and motivate their internal publics. A company can prepare marketing plans for these major publics as well as for its customer markets. AACSB: Written and oral communication Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

133) How can service providers use a differentiated offer delivery and image to avoid competing solely on price?

Answer: A service offer can include innovative features that set a company's offers apart from competitors' offers. Service companies can differentiate their service delivery by having more able and reliable customer-contact people developing a superior physical environment in which the service product is delivered or designing a superior delivery process. Services can also be differentiated through symbols and branding by creating an image that sets a company's services apart from that of its competitors. AACSB: Analytical thinking Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Moderate

168) Why are companies increasingly turning to third-party logistics providers (3PLs)?

Answer: A third-party logistics provider is an independent company that performs any or all of the functions required to get a producer's product to market helping clients to tighten up sluggish overstuffed supply chains slash inventories and get products to customers more quickly and reliably. Companies use third-party logistics providers because getting the product to market is the main focus of 3PLs so they can often do it more efficiently and at a lower cost. Second outsourcing logistics frees a company to focus more intensely on its core business. Finally integrated logistics companies understand increasingly complex logistics environments. For example third-party logistics partners can be especially helpful to companies attempting to expand their global market coverage. AACSB: Application of knowledge

93) What is a value delivery network?

Answer: A value delivery network refers to the network of a company its suppliers its distributors and ultimately its customers who partner with each other to improve the performance of the entire system. More companies today are partnering with other members of the supply chain-suppliers distributors and ultimately customers-to improve the performance of the customer value delivery network. Competition no longer takes place only between individual competitors. Rather it takes place between the entire value delivery networks created by these competitors. AACSB: Application of knowledge Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy

81) Explain power in a vertical marketing system.

Answer: A vertical marketing system (VMS) consists of producers wholesalers and retailers acting as a unified system. One channel member owns the others has contracts with them or wields so much power that they must all cooperate. AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

36) Why is the term value delivery network a more relevant expression to use than the terms supply chain or demand chain?

Answer: The term supply chain may be too limited because it takes a make-and-sell view of the business. It suggests that raw materials productive inputs and factory capacity should serve as the starting point for market planning. The term demand chain is better because it suggests a sense-and-respond view of the market. Under this view planning starts by identifying the needs of target customers to which the company responds by organizing a chain of resources and activities with the goal of creating customer value. However even a demand chain view of a business may be too limited because it takes a step-by-step linear view of purchase-production- consumption activities. Most large companies today are engaged in building and managing a complex continuously evolving value delivery network. A value delivery network is made up of the company suppliers distributors and ultimately customers who partner with each other to improve the performance of the entire system. AACSB: Application of knowledge

76) Briefly explain the societal marketing concept. Give an example of an organization that has effectively used the societal marketing concept.

Answer: According to this concept firms will succeed if they take underlying consumer needs and society's well-being into account over the long term. A pure marketing concept can damage consumers' long-run welfare by focusing exclusively on satisfying consumers' short-run wants. Over a long period of time this too-narrow focus can be damaging to the company. In setting their marketing strategies marketers today need to balance company profits consumer wants and society's interests. The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being. It calls for sustainable marketing socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. UPS has a mission that stresses economic prosperity social responsibility and environmental stewardship. The company proactively seeks opportunities to act responsibly and efficiently. For example UPS works to make its operations "green" and supports employees volunteering in their communities. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate

16) A company's marketing communications mix-also called its promotion mix-blends five different components. List and define these components.

Answer: Advertising is any paid-for or nonpersonal presentation and promotion of ideas goods or services by an identified sponsor. Sales promotion includes short-term incentives to encourage the purchase or sale of a product or service. Public relations includes building good relations with the company's various publics by obtaining favorable publicity building up a good corporate image and handling or heading off unfavorable rumors stories or events. Personal selling includes a personal presentation by the firm's sales force for the purpose of making sales and building customer relationships. Direct marketing includes direct connections with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. AACSB: Application of knowledge

129) Alex works in the marketing department of an international company. How can Alex use modern technologies to conduct market research and better serve his company's customers?

Answer: Alex could use the company's Web site and social media sites to monitor online discussions of the company's products and services. He could track customer-generated review systems or online data services to learn more about the needs and wants of his customers. Alex could create a customer database for the company to target individual customers with tailored offers. AACSB: Information technology Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

11) Explain common reasons for the failure of new products. What must be the goals for a company to create successful new products?

Answer: Although an idea may be good the market size may have been overestimated. Other possible reasons for failure include the following: the actual product was not designed as well as it should have been

159) Discuss direct marketing.

Answer: Although there are many forms of direct marketing-direct mail and catalogs online marketing mobile marketing social media and others-they all share four distinctive characteristics. Direct marketing is less public: The message is normally directed to a specific person. Direct marketing is immediate and customized: Messages can be prepared very quickly and can be tailored to appeal to specific consumers. Finally direct marketing is interactive: It allows a dialogue between the marketing team and the consumer and messages can be altered depending on the consumer's response. Thus direct marketing is well suited to highly targeted marketing efforts and building one-to-one customer relationships. AACSB: Written and oral communication Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

94) Briefly explain why until 2008 Americans amassed record amounts of debt and why the free-spending trend has ended.

Answer: Americans spent freely fueled by income growth a boom in the stock market and rapid increases in home values. Americans bought and bought seemingly without caution amassing record levels of debt. However the free spending and high expectations of those days were dashed by the Great Recession of 2008/2009. AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

77) What is a strategic business unit (SBU)?

Answer: An SBU can be a company division a product line within a division or sometimes a single product or brand. Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

126) When would an exclusive dealing contract be legally problematic?

Answer: An exclusive dealing contract may become a legal issue if one party has not voluntarily agreed to the contract or if the arrangement substantially lessens competition or tends to create a monopoly. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

50) What is a product?

Answer: Anything that can be offered to a market for attention acquisition use or consumption that might satisfy a want or need is known as a product. AACSB: Written and oral communication Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

150) Explain how the growth of digital technology has transformed the way in which companies conduct business today.

Answer: At the most basic level marketers set up company and brand Web sites that provide information and promote the company's products. Many of these sites also serve as online brand communities where customers can congregate and exchange brand-related interests and information. Beyond brand Web sites most companies are also integrating social and mobile media into their marketing mixes. AACSB: Information technology Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

"137) Mercury Inc. an American multinational corporation is currently planning to enter the promising consumer goods market in India. The firm will most likely discover that beliefs and values are more open to change in India." A) inherited B) secondary C) primary D) core E) traditional

Answer: B AACSB: Analytical thinking

"43) Henry Ford's philosophy was to perfect the Model T so that its cost could be reduced further for increased consumer affordability. This reflects the concept." A) product B) production C) selling D) marketing E) societal marketing

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging

35) An organic farmer has identified three distinct groups that might be interested in his products: vegetarians health-conscious individuals and people identified as trendsetters who try out new products in the market before others. These three groups are examples of . A) marketing mixes B) market segments C) value propositions D) market offerings E) marketing intermediaries

64) At a local farmers' market Molly Malone sells mussels while shouting to passersby "Fresh seafood get your fresh seafood here!" What kind of perspective is Molly taking? A) customer-driving B) inside-out C) customer-driven D) outside-in E) niche marketing

"88) Sally recently purchased Brand X lotion. In comparing her perception of how the lotion made her skin feel and look to her expectations about Brand X lotion Sally was measuring her level of ." A) share of customer B) customer satisfaction C) customer equity D) customer-perceived value E) customer lifetime value

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

104) Keith a clothing store owner offers product suggestions to customers based on their current purchases. Which of the following is Keith trying to increase? A) shared value B) share of customer C) social responsibility D) customer-generated marketing E) customer loyalty

90) Hank is an assistant marketing director for a firm in a market with many low-margin customers. What type of relationship with these customers would be the most profitable for him? A) full partnerships B) basic relationships C) causal relationships D) club marketing programs E) inverse relationships

"140) Iceco Inc. an ice cream manufacturing company encourages all stakeholders including the top management and all employees to consider individual and community welfare in their day-to-day decisions. This action undertaken by Iceco reflects ." A) environmentalism B) social responsibility C) the selling concept D) partner relationship management E) marketing myopia

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Challenging

144) Many organizations use multiple social media such as Facebook Twitter Instagram and YouTube. What is the primary reason a company would use multiple social media? A) entice customers to one of the social media sites B) present a carefully integrated message to fans and customers C) improve its "hit" count D) appeal to new customers E) increase its prices because it is more well-known

142) A church targeting different demographic groups to increase attendance is an example of . A) affinity marketing B) not-for-profit marketing C) societal marketing D) evangelism marketing E) affiliate marketing

98) What structure can an American family have now as the traditional family has changed?

Answer: The traditional household consists of a husband wife and children (and sometimes grandparents). Yet couples without children single parents and nonfamily households are groups growing more quickly than traditional households. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

143) Your state's department of education has budgeted a significant amount of money for a radio print television and online advertising campaign emphasizing the long-term benefits both educationally and professionally of reading every day. This is an example of a(n) campaign. A) ambush marketing B) social marketing C) inbound marketing D) consumer-generated marketing E) affiliate marketing

70) A company faces fixed costs of $100000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even? A) 20000 B) 25000 C) 30000 D) 35000 E) 40000

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

73) A manufacturer has fixed costs of $100000 a variable cost of $10 per unit of output and break-even volume of 50000 units. What should the manufacturer's unit cost be in order to break even? A) $10 B) $12 C) $14 D) $16 E) $20

43) The total production costs at Kellner Machine Works are $87000 out of which $45000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company? A) $35000 B) $42000 C) $45000 D) $87000 E) $132000

78) Which of these is NOT a way in which pricing can accomplish company objectives? A) set prices to attract new customers and retain existing customers B) raise prices to create excitement for a brand C) set prices low to hinder competition from entering the market D) price one product to help sales of other products in the company's line E) set price to keep the loyalty of resellers

25) Which of the following companies uses product line pricing? A) Photo Genie which sells inexpensive cameras that run only on their own expensive batteries B) Mobile Point which launched a range of cell phone models each priced according to its features C) Penguin's Parlor which offers customers a 20-percent discount on their birthdays and certain holidays D) Green Thumb which gives away free watering cans with the purchase of certain potted plants E) Panizza whose combo meals are priced lower than the individual components sold together

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

150) Heart of Midnight sells blue orchids to major florists around the world. Their key requirement is speed. Which of the following modes of transport will help them? A) rail transport B) air carriers C) trucks D) piggybacks E) water transport

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

"8) Extel Inc. a home appliance manufacturer uses sales representatives to sell its products to wholesalers and individual customers. This is an example of ." A) sales promotion B) personal selling C) public relations D) direct and digital marketing E) advertising

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Moderate

"61) An ad for Maybelline age-minimizing makeup in Ladies' Home Journal magazine featured actress Gigi Hadid and offered readers a $2-off coupon when they tried the new makeup. In terms of the communication model the medium of this ad is ." A) Gigi Hadid B) Ladies' Home Journal C) readers who redeem the $2-off coupon D) Maybelline E) the target market to which Gigi Hadid appeals

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

123) Sam the owner of a small company learned that a competitor was planning to spend $150000 on promotion in the next financial year. As soon as he learned this Sam called his finance manager and said "I want to spend $150000 on promotion next year." In this case which method of promotional budgeting does Sam use? A) the objective-and-task method B) the competitive-parity method C) the percentage-of-sales method D) the affordable method E) the pull-push method

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Challenging

"42) The key businesses of Kimberley and Price consist of a division that produces and sells breakfast cereals and another that manufactures gardening tools. Each of these businesses is called a ." A) market segment B) strategic business unit C) question mark D) prospect E) product portfolio

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"56) Lark Inc. an American electronics company is currently reviewing new geographical markets to sell its highly popular televisions. By 2020 it plans to open new stores across all the major South Asian cities. Lark is most likely following a strategy." A) local marketing B) market development C) diversification D) product adaptation E) product development

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"59) FencePro a local company has developed an entirely new mounting system for chain link fences. After acquiring a distributor FencePro now has the ability to market its products nationwide. FencePro is most likely following a strategy." A) market penetration B) market development C) downsizing D) product adaptation E) product development

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"84) Marketing plays a key role in the company's strategic planning in all of these ways EXCEPT ." A) providing input to identify attractive market opportunities B) designing new products from scratch C) creating customer value and building profitable relationships with customer groups D) designing strategies for reaching a unit's objective E) providing a guiding philosophy

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy

"105) Paul Robinson has identified a group of potential customers who seem to respond in a similar way to a series of magazine and radio advertisements for his company's product. Paul has identified a ." A) target market B) market segment C) niche market D) product attribute E) product design

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"110) Alpha Motors offers ""Green automobiles for a greener world."" This refers to the of Alpha automobiles." A) brand resonance B) position C) brand equity D) pleasure value E) added value

"1) Dan has been directed to study the forces close to a company that affect its ability to serve its customers such as the company suppliers marketing intermediaries customer markets competitors and publics. In this instance Dan has been directed to study the of the company." A) macroenvironment B) microenvironment C) technological environment D) demographic environment E) political environment

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

"8) Sparex Inc. is a manufacturer of metal bolts that are used by Boilex Inc. to manufacture heavy machineries. In this instance Sparex acts as a ." A) financial intermediary B) supplier C) retailer D) customer E) local public

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

skiing and fast speedboats became the rage. Through it all The Landing continued to attract flocks of patrons. In the 1980s however Casey started to realize that the grocery area in The Landing could not compete with larger local retailers. He eventually enlarged the sandwich counter transforming the bait shop and grocery into a restaurant with a full menu typical of any diner. "Getting rid of the bait shop was hard to do" Casey admitted. "I still had a summer crowd that relied on us for their fishing needs but we couldn't survive a whole year on four months of profit." In the early 2000s the atmosphere of Witmer Lake and the neighboring lakes became upscale. "I could see that people were spending more on their speed boats than what they had originally paid for their cottages!" Casey exclaimed. Many of the cottages were inherited by children and grandchildren of the original owners. Once again the scene started to change as many of the lake houses were used only as weekend lake homes. Unlike the previous generation a vast number of the current owners could afford to live closer to their jobs while maintaining lake homes. "At this point business wasn't growing" Casey said. As local competition continued to increase Casey converted the diner of The Landing into a bar with a lounge area. "The change might have been too drastic" Casey said "but it was the only way we could maintain a strong year-round business in spite of the population shifts and competitive forces." 114) Which of the following is the macroenvironmental force that benefitted The Landing the most? A) the legal environment B) the natural environment C) the economic environment D) the political environment E) the technological environment

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

"158) Katrina Mendoza is a senior manager in a manufacturing firm that hires lobbyists to influence legislation that affects the manufacturing industry. Katrina's firm takes a(n) stance toward the marketing environment." A) reactive B) proactive C) adversarial D) passive E) altruistic

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Challenging

"29) A shoe manufacturing company uses ads featuring the members of a country music band with the hope that the band's fans will see them wearing the company's shoes and hence purchase the same brand of shoes. The shoe company believes that the band portrays the image of a to the band's fans." A) membership group B) reference group C) status symbol D) subculture E) lifestyle

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

"109) George is buying his first house. He has spent a month looking at houses and comparing attributes such as price and location. He has contacted several real estate agents to look at different types of houses. George is most likely exhibiting ." A) variety-seeking buying behavior B) complex buying behavior C) consumer capitalism D) dissonance-reducing buying behavior E) marketing myopia

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Challenging

"128) Robert has taken up cycling as a hobby and as a way to maintain his physical fitness. He wants to buy a hydration system since he will need a lot of water as he cycles. Having gathered a great deal of information he has finally narrowed down his choices to three systems: Waterbags for Roadies Supertanker Hydropacks and Fast Water. Robert is in the stage of the buyer decision process." A) need recognition B) evaluation of alternatives C) product trial D) postpurchase evaluation E) information search

45) Anchor Tractors focuses on selling its farm equipment in North America and Europe. It has not yet considered expanding into the Middle East. Which factor is likely most important in this decision regarding expansion? A) geographic B) political C) demographic D) personality E) cultural

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Challenging

"18) A company selling child-care products ran a television ad depicting women as being primarily responsible for childcare. Many women viewers considered this regressive alleging that the ad failed to recognize the much more diversified role of women in today's world. This is an example of ." A) cause marketing B) stereotyping C) niche marketing D) scapegoating E) positioning

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"53) Papillon a popular retailer of chic women's clothing segments its market according to consumer lifestyles. Papillon most likely uses segmentation for segmenting its market." A) geographic B) psychographic C) benefit D) age and life-cycle E) occasion

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"54) Bailey's Burgers promotes the Bailey's Jumbo Burger as a fun snack for teens and young adults. In this instance Bailey's Burgers is practicing segmentation." A) benefit B) age and life-cycle C) psychographic D) geographic E) gender

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"109) Shine Enterprises mass produces an all-purpose floor cleaner that is aimed at the whole market. This firm uses a(n) marketing strategy." A) segmented B) undifferentiated C) individual D) niche E) one-to-one

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

106) Rex Steelworks makes steel sheets which the firm markets and sells to companies all over the world. Which of the following marketing strategies is most suitable for Rex Steelworks? A) one-to-one marketing B) undifferentiated marketing C) individual marketing D) local marketing E) trigger-based marketing

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

107) GamaPix makes point-and-shoot cameras and handycams for amateur photographers and hobbyists. It also has a separate line of cameras dedicated to professional photographers. Additionally it designs separate offers for each segment. Which of the following marketing strategies does GamaPix most likely use in this instance? A) mass marketing B) differentiated marketing C) individual marketing D) local marketing E) direct marketing

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

108) Jean Malone a market researcher recently found that most people in Bradburg County purchase automobiles with predominantly functional designs and prefer darker colors. Which of the following marketing strategies should Jean most likely recommend to an automobile dealer interested in opening a dealership in Bradburg County? A) one-to-one marketing B) undifferentiated marketing C) segmented marketing D) individual marketing E) direct marketing

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"155) Symbols such as the McDonald's golden arches the colorful Google logo the Nike swoosh or Apple's ""bite mark"" logo provide strong company or brand recognition and are indicative of differentiation." A) people B) image C) channel D) services E) product

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

148) When it first opened stores across the United States Bateman's an office supply chain store had the best product selection the best service and the lowest prices compared to other office supply chain stores. As a result Bateman's captured a significant chunk of the market in the short run. Which of the following positioning strategies did Bateman's most likely use? A) more for the same B) more for less C) same for less D) less for much less E) more for more

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

154) The Jay Group hires better employees than its competition by conducting effective searches and multi-tiered interviews. The company also provides high quality training to its employees an aspect often neglected by competitors. The Jay Group is most likely to gain a strong competitive advantage through which type of differentiation? A) image differentiation B) people differentiation C) services differentiation D) product differentiation E) channel differentiation

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

157) Ferrari sports cars claim superior quality performance and style. Ferrari provides "perfection" at a premium price to keep its brand image intact. Which type of value proposition does Ferrari most likely position its products with? A) more for the same B) more for more C) less for much less D) the same for less E) more for less

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

"33) The advertising slogan ""We bring good things to life"" used by General Electric to market itself is an example of marketing." A) person B) corporate image C) internal D) place E) niche

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"120) Apollo Couriers a company providing international express mail services has a proactive customer communications team. The primary job of this team is to identify situations that led to customer dissatisfaction and then provide quick remedies to fix the problems. To a great extent this has helped Apollo in winning customer loyalty. In this instance Apollo has benefitted from ." A) product differentiation B) good service recovery C) multibranding D) place marketing E) co-branding

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Challenging

113) Alex Smith rents storage space to college students who go home for the summer but do not want to haul all of their property home and back. The business is profitable during the summer months but when the storage space is unoccupied in the off-season Alex loses money. Which of the following characteristics of service is most likely the source of Alex's problem? A) intangibility B) perishability C) inconsistency D) variability E) inseparability

"155) Symmonds Inc. a company manufacturing breakfast cereals has extended its special Crispo cereal brand into a full line of breakfast cereals plus protein shakes fruit and sandwich spreads butter and doughnuts. This is an example of ." A) line extension B) brand extension C) licensing D) co-branding E) cannibalization

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Challenging

"136) BlueFin canned tuna has higher sales than its unbranded rival even though the unbranded tuna costs $0.45 less per can than BlueFin tuna. BlueFin most likely has ." A) an aggressive brand personality B) high brand equity C) no brand commitment D) negative brand equity E) low brand relevance

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

7) The product life cycle presents challenges. Which of the following is LEAST likely to require a company to adapt its marketing strategies? A) developments in technology B) decreased manufacturing costs C) competition D) changing tastes of consumers E) aging of products

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Challenging

"49) Starbucks introduced a less-than-perfect mobile payments app then worked out the flaws after the launch. The company chose speed to market over a perfect app at introduction. This illustrates ." A) why many companies engage in crowdsourcing B) the influence of fast-changing market developments C) why prototypes are so important D) how idea screening can make a product a commercial success E) the importance of different sources for idea generation

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Challenging

13) John's fascination for his grandmother's sherbet recipes inspired him to come up with a recipe for SherBetter a gourmet sherbet for the American market. Which of the following stages of the new product development process does this exemplify? A) idea screening B) idea generation C) concept testing D) product development E) product manufacturing

64) Skyrim Corp. lacks the capital and capacity to launch its new helicopter for full national and international distribution. If the test market results look promising what should be management's next step? A) retest the product in additional markets B) develop a planned market rollout over time C) liquidate its assets to gain capital and capacity D) seek the help of a nationally known consultant E) develop a prototype

"124) Big Moose Toys is a market pioneer introducing a modern version of Bubble the Moose a character from an animated television series originally broadcast in the '50s and '60s. The company's version of Sandy the Flying Squirrel a character from the show targeted to baby boomers was a strong success. Since the firm is a market pioneer it needs to make the new launch strategy for Bubble the Moose consistent with the intended ." A) pricing B) product positioning C) brand extension D) prototype E) fad

"54) marketing is practiced by an organization that understands and anticipates customer needs even better than customers themselves do and creates products and services to meet current and future needs." A) Customer-driven B) Customer-driving C) Affinity D) Societal E) Ambush

"80) Customer satisfaction is a goal that companies strive to earn. Companies can achieve customer delight by ." A) regularly putting products on sale B) promising only what they can deliver and then delivering more than they promise C) offering promotional deals such as "buy one and get one free" D) creating contests with exciting prizes E) using celebrities to advertise the products

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

smoking excessive drinking and drug use. A) club marketing programs B) social marketing campaigns C) consumer-generated marketing campaigns D) ambush marketing campaigns E) frequency marketing programs

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy

"4) Price is important to managers ." A) because prices cannot be changed quickly so must be correctly determined B) because a small percentage improvement in price can generate a large percentage increase in profitability C) but other marketing mix elements create customer value and build relationships D) but product features can be changed more quickly E) but has little impact on a firm's market share

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.1: ,Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Challenging

"50) As production workers become better organized and more familiar with equipment the average cost per unit tends to decrease with the ." A) increase in the diseconomies of scale B) accumulated production experience C) decrease in the economies of scale D) increase in derived demand E) increase in primary demand

11) What sets the floor for product prices? A) consumer perceptions of the product's value B) product costs C) competitors' strategies D) advertising budgets E) market competition

"36) Companies with higher costs ." A) can drive out competitors through their pricing strategy B) intentionally pay higher costs so that they can add value through higher quality and claim higher prices and margins C) can set lower prices that result in increased sales though with lower margins D) specialize in selling products without value-added features E) are more financially successful

"52) The experience curve reveals that ." A) repetition in production has no visible impact on production costs B) repetition in production enhances efficiency C) the average cost of production remains the same with accumulated production experience D) repetition in production adds to the costs and thereby increases the prices of outputs E) the average cost of production increases with accumulated production experience

32) Which of the following is true with regard to value-added pricing? A) Companies that practice value-added pricing typically match the competition by cutting prices. B) Companies practicing value-added pricing differentiate their offers by attaching value-added features to offerings that in turn justify higher prices. C) The intrinsic value of products sold by companies practicing value-added pricing is far less than their actual selling price. D) Companies practicing value-added pricing primarily rely on cost differentiation. E) Value-added pricing is the most suitable pricing strategy in pure monopolies.

110) Which of the following is an external factor that affects pricing decisions in a company? A) the company's overall marketing strategy B) the nature of the market C) the organizational objectives of the company D) elements of the company's marketing mix E) the annual advertising budget of rival firms

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

Principles of Marketing 17e (Kotler/Armstrong) Chapter 11 Pricing Strategies: Additional Considerations "1) Companies set not a single price but a pricing that covers different items in its line and changes over time as products move through their life cycles." A) by-product B) structure C) loop D) cycle E) bundle

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Easy

6) Which of the following is true of price skimming? A) It is effective in situations in which competitors are able to undercut prices easily. B) It can be profitably used when the product's quality and image support its price. C) It involves underpricing products so that companies make larger sales. D) It is ineffective in situations in which competitors are unable to enter the market easily. E) It leads to a situation in which the company completes more though less profitable sales.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate

37) Which of the following product mix pricing strategies involves pricing multiple products to be sold together? A) product line pricing B) product bundle pricing C) optional product pricing D) by-product pricing E) captive product pricing

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Easy

27) Which of the following is true of optional-product pricing? A) It involves capitalizing on low value by-products. B) It involves pricing products that can be added to the base product. C) It is used to price a company's main product. D) It involves setting geographically specific prices. E) It is used to price products that must be used with the company's main product.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

81) Which term refers to prices that buyers carry in their minds and check with when they look at a given product? A) product line prices B) reference prices C) location-based prices D) product form prices E) time-based prices

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

91) Which of the following involves adjusting prices to account for the physical location of customers? A) location-based pricing B) geographical pricing C) domestic pricing D) interior pricing E) captive pricing

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"77) Segmented pricing is only effective when ." A) the segments show similar degrees of demand B) the cost of segmenting does not exceed the revenue obtained from the price difference C) the segmented prices do not reflect real differences in customers' perceived value D) the customers of different socio-economic classes are treated according to their rank E) companies make their services and products accessible exclusively to wealthy patrons

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

105) Which of the following likely does NOT play into products being offered for different prices in different countries? A) additional costs of operations B) product commonality C) physical distribution D) shipping and insurance E) exchange-rate fluctuations

79) Which of the following is a price adjustment strategy that considers how a customer's perception of a product is influenced by its price? A) captive product pricing B) psychological pricing C) by-product pricing D) promotional pricing E) international pricing

"133) Competitors are most likely to react to a price change when ." A) a large number of competitors are involved B) the product is uniform C) the buyers are not well informed about product features D) buyers are not well informed about price differences E) the products are not uniform

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Moderate

"15) A is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer." A) product platform B) channel level C) resource bank D) contact center E) customer franchise

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

"16) In a(n) channel the same member both produces and distributes a product or service to consumers." A) tiered B) direct C) platform D) vertical E) exclusive

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

2) The sets of firms that supply companies with the raw materials components parts information finances and expertise needed to create products or services are known as . A) retailers B) upstream partners C) distributors D) downstream partners E) distribution channels

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

3) Which of the following terms refers to the wholesalers and retailers that form a vital link between the firm and its customers? A) factory-supply networks B) downstream partners C) resource banks D) upstream partners E) supply channels

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

9) Which of the following questions is NOT of major concern regarding marketing channels? A) What role do physical distribution and supply chain management plan in attracting and satisfying customers? B) What impact do marketing channels have on the profitability of the firm and its partners? C) How do channel firms interact and organize to do the work of the channel? D) What problems do companies face in designing and managing their channels? E) What is the nature of marketing channels and why are they important?

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

"39) are complex behavioral systems in which people and companies interact to accomplish individual company and channel goals." A) Customer relationship management systems B) Distribution channels C) Partner relationship systems D) Consumer bases E) Buying centers

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

"58) In a(n) leadership is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members." A) horizontal marketing system B) administered VMS C) corporate VMS D) contractual VMS E) conventional VMS

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

"60) In a(n) two or more companies at one level join together to follow a new marketing opportunity." A) administered vertical marketing system B) horizontal marketing system C) corporate vertical marketing system D) hybrid distribution system E) conventional marketing system

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

42) Conflict that occurs among firms at the same level of the marketing channel is known as conflict. A) multitiered B) horizontal C) vertical D) prolonged E) financial

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

43) Conflict that occurs between different levels of the same marketing channel is known as conflict. A) horizontal B) vertical C) multitiered D) equilateral E) communal

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

49) Which of the following is true of conventional distribution channels? A) Channel members have complete control over each other. B) Channel members seek to maximize their own profits. C) Channel conflict is governed by formal mechanisms. D) Channel members are assigned roles according to a clearly defined framework. E) Channel members work exclusively for the good of the organization.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

"93) distribution is a strategy in which producers of convenience products and common raw materials stock their products in as many outlets as possible." A) Direct B) Intensive C) Inclusive D) Exclusive E) Selective

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

"99) distribution involves the use of more than one but fewer than all of the intermediaries who are willing to carry a company's products." A) Exclusive B) Selective C) Intensive D) Indirect E) Corporate

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

137) Which of the following is NOT a major logistics function? A) inventory management B) product designing C) warehousing D) transportation E) packaging

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"3) Any paid form of nonpersonal presentation and promotion of ideas goods or services by an identified sponsor is called and includes broadcast mobile print and online forms. A) sales promotion" B) advertising C) direct and digital marketing D) personal selling E) public relations

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

"4) The use of short-term incentives to encourage the purchase or sale of a product or service is called ." A) direct and digital marketing B) sales promotion C) personal selling D) public relations E) publicity

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

"33) To carefully integrate and coordinate the company's many communications channels and produce greater sales impact some companies appoint a(n) ." A) idea champion B) marketing communications director C) sales representative D) business analyst E) media planner

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

"70) Based on the target audience the communicator makes decisions regarding what will be said who will say it when it will be said where it will be said and ." A) whether it will be said B) how it will be said C) what noise to anticipate D) how much it will cost to prepare the message E) how frequently it will be said

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

68) Which of the following is the first step in developing an effective integrated communications and promotion program? A) designing a message B) identifying the target audience C) determining the communication objectives D) collecting feedback E) choosing the media through which to send a message

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

131) In most cases what is the most expensive promotion tool? A) advertising B) personal selling C) mass media D) public relations E) publicity

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

8) Which of the following is NOT a market-oriented business definition? A) "We empower customers to realize their dreams." B) "We make high-quality consumer food products." C) "We sell success and status." D) "We create the Hilton experience." E) "We bring innovation to every home."

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

"51) The BCG matrix approach is problematic in that it ." A) focuses on planning for the future at the cost of ignoring the present B) focuses solely on current businesses and provides little scope for future planning C) tends to undermine the importance of market growth rate as a measure of market attractiveness D) tends to undermine the importance of relative market share as a measure of company strength in the market E) fails to classify SBUs

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

45) Which of the following is true with regard to cash cows? A) They are high-growth high-share businesses or products. B) They can be used to help finance the company's question marks and stars. C) They require significant cash to maintain market share. D) They are low-share businesses and products. E) They do not promise to be large sources of cash.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

54) Which of the following is true with regard to the product/expansion grid? A) It classifies SBUs into four distinct categories. B) It is a useful device for identifying growth opportunities. C) It helps companies analyze their internal strengths and weaknesses. D) It functions on the premise that firms should downsize to regain market share. E) It is a useful device for segregating customers into distinct categories.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

102) Which of the following refers to the process of dividing a market into distinct groups of buyers with different needs characteristics or behaviors? A) market diversification B) market segmentation C) downsizing D) customer relationship management E) prospecting

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

106) Which of the following is true with regard to a market segment? A) A market segment consists of consumers with dissimilar needs and preferences. B) A market segment consists of consumers who respond in a similar way to a given set of marketing efforts. C) Very few markets have segments. D) Dividing the market into segments decreases the efficiency of the selling process. E) Dividing the market into segments reduces composite demand.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"99) Market segmentation can be best described as the process of . A) assigning specific human attributes to a given brand" B) dividing a market into distinct groups of buyers who have different needs characteristics or behaviors and who might require separate marketing programs C) evaluating each market segment's attractiveness and selecting one or more segments to enter D) turning marketing plans into marketing actions to accomplish strategic marketing objectives E) maintaining a strategic fit between organizational goals and changing marketing opportunities

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

destinations. A) Retailers B) Physical distribution firms C) Marketing services agencies D) Resellers E) Suppliers

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

16) Which of the following is true with regard to media publics? A) The primary function of this group is to protect the interests of minority groups. B) This group carries news features and editorial opinion. C) The primary function of this group is to critique the marketing decisions of companies. D) This group includes neighborhood residents and community organizations. E) This group directly influences the company's ability to obtain funds.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

80) Which of the following statements about income distribution in the United States is NOT true? A) Over the past several decades the rich have grown richer. B) Over the past several decades the middle class has grown faster than other classes. C) Over the past several decades the poor have remained poor. D) The top 20 percent of earners capture over 50 percent of all income. E) The top five percent of American earners get nearly 22 percent of the country's adjusted gross income.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging

51) Which of the following is true of Gen Xers? A) They are considerably larger than the boomer generation. B) They were the first to grow up in the Internet era. C) They are less educated than the baby boomers. D) They are more materialistic than the Millennials. E) They rarely research a product before purchasing it.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

60) Which of the following is a trend that depicts the increasingly nontraditional nature of today's American families? A) the low percentage of working women in the workforce B) the low percentage of married couples with children C) the sharply declining number of dual-income families D) the sharply declining number of stay-at-home dads E) the decreasing reliance on convenience foods and services

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

"133) The environment consists of institutions and other forces that affect a society's basic values perceptions preferences and behaviors." A) social B) cultural C) political D) physical E) natural

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"127) Laws are passed to define and prevent unfair competition primarily because . A) business executives tend to favor pure monopolies" B) businesses sometimes try to neutralize threatening firms C) governments in free market economies tend to nationalize ailing firms D) private lobbying hurts the interests of national and state governments E) most multinational entities in advanced economies are averse to invest in emerging markets

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

"156) Rather than assuming that strategic options are bounded by the current environment firms adopting a(n) to the marketing environment develop strategies to change the environment." A) environmental stance B) proactive stance C) reactive stance D) relativist approach E) no-compromise approach

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Moderate

2) Marketing stimuli include which of the following? A) economic stimuli B) price stimuli C) technological stimuli D) social stimuli E) cultural stimuli

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

3) Which of the following is one of the other stimuli present in a buyer's environment apart from marketing stimuli? A) product stimuli B) cultural stimuli C) price stimuli D) place stimuli E) promotion stimuli

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

"34) are ambassadors who enthusiastically share their passion for a company's products with large circles of friends and acquaintances." A) Leading adopters B) Brand evangelists C) Surrogate consumers D) Market mavens E) Innovators

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"61) A marketing research company asked members of a focus group to describe several brands as animals. The purpose of the request is to measure the prestige of the various brands. This is an example of ." A) brand strength analysis B) interpretive consumer research C) quantitative research D) buzz marketing E) brand extension

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"108) When consumers are highly involved with the purchase of an expensive product and they perceive significant differences among brands they most likely will exhibit ." A) consumer capitalism B) complex buying behavior C) consumer ethnocentrism D) dissonance-reducing buying behavior E) variety-seeking buying behavior

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

130) Generally the consumer's purchase decision will be to buy the most preferred brand but two factors can come between the purchase intention and the purchase decision. Which of the following is one of these factors? A) economic risks B) attitudes of others C) cognitive dissonance D) alternative evaluation E) buyer's remorse

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

36) Which of the following is true about behavioral segmentation on the basis of the loyalty variable? A) Consumers tend to pay more for products that are targeted at their respective age group or generation. B) By looking at customers who are shifting away from its brand a company can learn about its marketing weaknesses and take actions to correct them. C) Highly loyal customers of a brand are less likely to engage in word-of-mouth publicity than those who are not. D) Completely loyal customers of a brand are typically loyal to two or three brands of a given product. E) Only consumers who seek premium or luxury services are subjected to behavioral segmentation based on the loyalty variable.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"145) positioning involves meeting consumers' lower performance or quality requirements at a much lower price." A) More for less B) Less for much less C) Same for less D) More for more E) More for the same

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

"17) Consumer products refer to ." A) products purchased by consumers for further processing or for use in conducting a business B) products and services bought by final consumers for personal consumption C) primarily intangible offerings from marketers D) raw materials as well as manufactured materials and parts E) products that aid in the consumer's production or operations including installations and accessory equipment

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"2) are a form of product that consists of activities benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything." A) Liabilities B) Services C) Brands D) Consumer products E) Specialty products

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"34) marketing consists of activities undertaken to create maintain or change attitudes toward particular people. People ranging from presidents entertainers and sports figures to professionals such as doctors lawyers and architects use it to build their reputations." A) Corporate image B) Person C) Social D) Organization E) Place

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

6) Which of the following is true with regard to services? A) Services refer to purely tangible products. B) Services are a form of product that consists of activities benefits or satisfactions offered for sale. C) Services can be stored for later use. D) Services can be easily separated from their providers. E) Services are tangible product offerings whose quality can be easily measured.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"59) refers to the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs." A) Brand equity B) Product quality C) Product labeling D) Brand image E) Brand personality

"65) contributes to a product's usefulness as well as to its looks." A) Sensational style B) Good design C) Quality D) Consistency E) Packaging

"68) A is a name term sign symbol design or a combination of these that identifies the maker or seller of a product or service." A) feature B) brand C) line extension D) package E) value chain

"79) occurs when a company lengthens its product line beyond its current range." A) Product line filling B) Product line stretching C) Co-branding D) Niche marketing E) Market diversification

"142) The fundamental asset underlying brand equity is the value of customer relationships that the brand creates." A) the customer mix B) customer equity C) the product experience D) service variability E) the service encounter

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

141) Which of the following is true with regard to brand equity? A) Brand equity refers to how much consumers know about the brand. B) High brand equity provides a company with many competitive advantages. C) A brand has positive brand equity if consumers react less favorably to it than to an unbranded version. D) Positive brand equity derives from low brand esteem. E) The total financial value of a brand can be easily measured.

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"147) An increasing number of retailers and wholesalers have created their own also called store brands." A) national brand B) support brand C) private brand D) generic brand E) manufacturer's brand

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

4) Product improvements product modifications and original products can all be classified as . A) blueprints B) new products C) prototypes D) product extensions E) test products

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy

14) Which of the following is an internal source for new product ideas? A) competitors B) company employees C) marketing research firms D) trade magazines E) government agencies

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

33) Which of the following stages in the new product development would a firm engage in immediately after the completion of concept testing? A) idea screening B) marketing strategy development C) business analysis D) product development E) idea generation

43) Which of the following stages of the new product development process occurs immediately after the completion of the business analysis for the product or service? A) idea screening B) product development C) product activation D) marketing strategy development E) product design

68) Which of the following is the goal of the team-based new product development approach when it uses cross-functional teams that overlap the steps in the process? A) gain a big competitive edge by getting the right new products to market B) save time and increase effectiveness C) increase production efficiency and customer satisfaction D) speed product distribution to market and reduce costs E) reduce organizational tension and confusion

"121) A(n) chooses a strategy consistent with the intended product positioning. To gain market leadership requires correct decisions from the beginning." A) brand evangelist B) market pioneer C) early adopter D) laggard E) harvester

Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

has achieved acceptance. Profits level off because marketing costs increase in the face of competition. A) Decline B) Maturity C) Product development D) Introduction E) Growth

108) Which of the following statements characterizes the introduction stage of the PLC? A) There are increased marketing outlays. B) Profits are nonexistent. C) The company incurs minimal expenses. D) The product achieves acceptance by most potential buyers. E) Promotional expenditures are zero.

"26) Rachel works for a furniture company in Ireland. She is responsible for buying and selling goods at a profit to small retailers. Rachel most likely operates in a market." A) business B) reseller C) wholesale D) consumer E) retail

Answer: B AACSB: Application of knowledge

"74) Boson Corp. is introducing consumers to its new car with the help of an advertisement campaign. This introductory campaign most likely aims to affect the stage of buyer- readiness." A) liking B) awareness C) preference D) insistence E) conviction

Answer: B AACSB: Application of knowledge

26) Azure Air an airline company offers attractive prices to customers with tighter budgets. A no-frills airline it charges for all other additional services such as baggage handling and in- flight refreshments. Which of the following best describes Azure Air's pricing method? A) target profit pricing B) good-value pricing C) cost-based pricing D) break-even pricing E) penetration pricing

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Moderate

10) In a bid to attract more customers in a market that has several competitors Barrymore's Bakery slashed the prices of all its products by 50 percent. Managers at the firm reasoned that lower prices would draw in even more customers making up for the reduction in price several times over. Which of the following pricing strategies are they using? A) market-skimming pricing B) market-penetration pricing C) captive-product pricing D) cash discount pricing E) by-product pricing

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Challenging

11) Whizz Corp. wishes to introduce a new hybrid car into mature markets in developed countries with the goal of gaining mass-market share quickly. Which of the following pricing strategies would help the firm meet its goal? A) market-skimming pricing B) market-penetration pricing C) market-segmentation pricing D) cost-plus pricing E) captive-product pricing

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Challenging

5) Midnight Magic a perfume manufacturing company plans to release a new fragrance during the holiday season at $99 per bottle. The company intends to bring the price down to $49 within six months of its release to attract buyers who couldn't afford the initial price. Which of the following pricing strategies is Midnight Magic using? A) market-penetration pricing B) market-skimming pricing C) competitive pricing D) cost-plus pricing E) product-line pricing

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate

29) Multiprint a printer manufacturing firm sells ink cartridges for each of its specific models. Only Multiprint cartridges are compatible with Multiprint printers and no two models share the same specifications. What type of pricing does Multiprint use? A) product line pricing B) captive product pricing C) optional product pricing D) by-product pricing E) product bundle pricing

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

"64) The discount offered by Glamor Gifts to customers who bought Valentine-themed merchandise the week following Valentine's Day is an example of a ." A) functional discount B) seasonal discount C) trade discount D) cash discount E) time-based discount

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Challenging

"75) When theaters vary seat prices due to audience preferences for seats in coveted rows they use pricing." A) customer-segment B) location-based C) time-based D) product line E) captive product

"97) Motorzone offers replacement parts for old Volkswagen Beetles. The company calculates shipping charges based on shipping parts from Boston even though some parts actually ship from St. Louis. Motorzone most likely practices pricing." A) FOB-origin B) basing-point C) zone D) uniform-delivered E) freight-absorption

57) Fire Up makes fireproof clothing material and it licenses select stores around the world to use its material to make finished products with the Fire Up logo. Which of the following types of franchising is evident here? A) manufacturer-sponsored retailer franchise system B) manufacturer-sponsored wholesaler franchise system C) service-firm-sponsored retailer franchise system D) service-firm-sponsored equity strategic alliance E) manufacturer-and-service-sponsored joint venture

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Challenging

"69) The Bookworm began delivering books directly to customers through mail instead of selling through brick-and-mortar companies. This is an example of ." A) indirect marketing B) disintermediation C) franchising D) exclusive distribution E) intensive distribution

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

"103) Rob has been asked by his manager to identify a group of potential customers who would respond in a similar way to a given set of marketing efforts. In this instance Rob has been asked to identify a ." A) new product B) market segment C) marketing intermediary D) brand E) product line

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

"111) For the past ten years Bill and Margaret have saved money to go to the Super Bowl should their team the Chicago Bears reach the finals of the NFC championship. This is the year and several tour companies offer attractive but very similar packages to the game. Since all packages are pretty much the same they have chosen one that fits their budget. Bill and Margaret are most likely exhibiting ." A) complex buying behavior B) dissonance-reducing buying behavior C) habitual buying behavior D) consumer capitalism E) consumer ethnocentrism

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Challenging

"3) Electron Corp. purchased Proton Corp. by buying all of its assets and ownership equity. This is an example of a(n) ." A) new product development B) acquisition C) joint venture D) licensing contract E) divestment

Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Moderate

"101) The portion of the customer's purchasing that a company gets in its product categories is known as ." A) customer-perceived value B) share of customer C) customer insight D) consumption function E) induced consumption

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

"106) In the context of customer relationship groups a potentially profitable and short-term customer is referred to as a ." A) true friend B) butterfly C) stranger D) barnacle E) market maven

87) Which of the following terms refers to customers who make repeat purchases and tell others about their positive experiences with a product or service? A) barnacles B) customer evangelists C) butterflies D) surrogate customers E) market mavens

102) Apart from retaining good customers most marketers want to constantly increase their "share of customer." What does this mean in marketing terms? A) Marketers want to increase their market share. B) Marketers want to increase the share they get of the customer's purchasing in their product categories. C) Marketers want to diversify their operations and customize their products to cater to the entire market. D) Marketers want to continuously increase their customers' levels of satisfaction. E) Marketers want to turn satisfied customers into delighted customers.

"27) Retailers such as Costco and Walmart charge a constant daily low price with few or no temporary price discounts. This is an example of pricing." A) competition-based B) everyday low C) cost-plus D) break-even E) penetration

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

"71) As a manufacturer increases the price ." A) efficiency drops B) the break-even volume drops C) competition is minimized D) the total costs increase E) the profit margin shrinks

23) Which of the following involves introducing less-expensive versions of established brand name products? A) markup pricing B) good-value pricing C) time-based pricing D) cost-based pricing E) target profit pricing

"137) If demand hardly changes with a small change in price the demand is . A) variable" B) inelastic C) highly elastic D) derived E) negative

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"7) Companies that set a low price for a new product in order to attract a large number of buyers and a large market share are using the strategy." A) market-skimming pricing B) market-penetration pricing C) cost-plus pricing D) inclusive pricing E) exclusive pricing

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Easy

"34) Beach Heaven uses two-part pricing for its holiday resort charges. Because this is a service the price is broken into a fixed fee for the room plus a(n) usage rate for activities including kite-sailing and child care." A) fixed B) variable C) standard D) market E) optional

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

100) With which pricing strategy does the seller take responsibility for part or all of the actual freight charges in order to acquire the desired business? A) FOB origin pricing B) freight-absorption pricing C) basing-point pricing D) location-based pricing E) uniform-delivered pricing

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"98) is a pricing strategy in which the company sets up two or more clearly identified geographic regions within which all customers pay the same total price." A) Freight-absorption pricing B) Zone pricing C) Uniform-delivered pricing D) FOB-origin pricing E) Basing-point pricing

127) Which of the following factors would most likely lead to a company initiating a price cut? A) over-demand B) weakened economy C) poor competition D) cost inflation E) weak price competition

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Easy

"13) play an important role in efficiently making products available to target markets in the needed varieties and quantities." A) Virtual banks B) Intermediaries C) Price consultants D) Uniform-delivery networks E) Upstream partners

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Challenging

"8) play an important role in matching supply and demand by providing consumers with a broad assortment of products in small quantities." A) Virtual banks B) Intermediaries C) Price consultants D) Uniform-delivery networks E) Upstream partners

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Challenging

"14) From the economic system's point of view the role of is to transform the assortments of products made by producers into the assortments wanted by consumers." A) upstream partners B) marketing intermediaries C) third-party logistics D) price consultants E) factory supervisors

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

"23) The greater the number of channel levels in a marketing channel the ." A) less distance between producer and end-consumer B) greater the channel complexity C) less time it takes for products to reach end-consumers D) greater the control producers have over the distribution of their products E) greater the control producers have over the demand of their products

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

24) Which of the following is a conventional consumer marketing channel? A) producer to business distributor to end consumer B) producer to wholesaler to retailer to end consumer C) producer to end consumer to business customer D) producer to retailer E) producer to business distributor to business customer

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

"4) The term supply chain is considered limited because it ." A) ignores the make-and-sell aspect of the market B) suggests that planning begins with raw materials and factory capacity C) takes a step-by-step linear view of purchase-production-consumption activities D) takes a sense-and-respond view of the market E) suggests that planning starts with identifying the needs of target customers

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

67) Which of the following is a disadvantage of adding new channels in a multichannel distribution system? A) decreasing complexity of markets B) decreasing control over the system C) reducing opportunities for franchising D) lowering sales and market coverage E) minimizing publicity needs

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

41) Which of the following is true of channel members? A) They act independent of each other. B) They play specialized roles in the channel. C) They are not accountable to other channel members. D) They play generalized and interchangeable roles in the distribution process. E) Their competence and cooperation don't affect the company's image or profits.

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

"118) When a seller requires its dealers to abstain from handling competitors' products it is called ." A) subjective distribution B) exclusive dealing C) selective distribution D) exclusive pricing E) disintermediation

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

"135) Reusing recycling refurbishing or disposing of broken unwanted or excess products returned by consumers or resellers is known as ." A) cross merchandising B) reverse logistics C) disintermediation D) diverse logistics E) inbound logistics

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

to sources of supply. A) Outbound B) Customer-centered C) Upstream D) Reverse E) Inbound

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"78) A message showing a product's quality economy value or performance is an example of a(n) appeal." A) structural B) rational C) emotional D) moral E) standard

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"86) A(n) argument is most likely to be effective when the audience is highly educated or likely to hear opposing claims." A) one-sided B) two-sided C) moral D) emotional E) structured

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

"95) To a marketer would most likely ask target audience members whether they remember the message how many times they saw it and what points they remember." A) select a message source B) collect feedback C) select a message channel D) plan a media purchase E) design a marketing appeal

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

"135) is very believable because news stories features sponsorships and events seem more real and believable to readers than ads do." A) Differentiated marketing B) Public relations C) Direct marketing D) Sales promotion E) Personal selling

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

130) Which of the following is a strength of advertising? A) It is the most inexpensive promotion tool. B) It reaches masses of geographically dispersed buyers at low cost per exposure C) It is impersonal and lacks the direct persuasiveness of company salespeople. D) It cannot trigger quick sales. E) It cannot be used to build up a long-term image for a product.

"50) Modern strategic planning ." A) exclusively consists of a company's short-term goals B) is decentralized C) does not involve cross-functional teams D) does not take the overall mission of the company into consideration E) is highly centralized

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

31) Which of the following is the first step of business portfolio planning? A) shaping the future portfolio by developing strategies for growth and downsizing B) determining which businesses should receive more less or no investment C) identifying internal strengths and weaknesses D) identifying future opportunities E) determining short-term goals

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

make up the company. A) formulates a short-term marketing plan B) assesses the attractiveness of its various SBUs C) assesses its strengths and weaknesses D) performs a SWOT analysis E) assesses the effectiveness of its various channel intermediaries

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"68) means that consumers are likely to remember good points made about a brand they favor and forget good points made about competing brands." A) Selective attention B) Selective retention C) Cognitive dissonance D) Selective distortion E) Cognitive bias

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"14) Product planners need to consider products and services on three levels. At the third level product planners must build ." A) an actual product B) an augmented product C) core customer value D) a brand personality E) a basic product

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"27) are the major marketing factors in the sale of most manufactured materials and parts." A) Branding and advertising B) Price and service C) Sales promotion and advertising D) Branding and packaging E) Public relations and brand management

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"32) marketing consists of activities undertaken to create maintain or change the attitudes and behaviors of target consumers toward an organization." A) Social network B) Organization C) Niche D) Location E) Concentrated

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"36) marketing involves activities undertaken to create maintain or change attitudes toward particular cities states or regions." A) Idea B) Place C) Organization D) Social E) Interactive

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

9) Which of the following is a goods-and-services combination? A) a bicycle B) a milk shake at an ice cream store C) chocolate chips D) a train ride E) a music lesson

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

16) Why are customers often considered the most important sources of new product ideas? A) Customers are close to the market and can pass along information about problems and new product possibilities. B) The company can analyze customer questions and complaints to find new products that better solve consumer problems. C) Customers buy competing new products take them apart to see how they work analyze sales and then decide to purchase. D) Customers review the sales costs and profit projections for a new product to find out whether the product satisfies the company's objectives. E) Customers estimate the minimum and maximum sales to assess the range of risk.

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

40) Which of the following statements is true of the new product development process? A) The purpose of the idea screening stage is to create a large number of ideas. B) Under the business analysis stage if the new product satisfies the company's objectives the product then moves to the product development stage. C) A product concept is the way consumers perceive an actual or potential product. D) The concept testing stage is the stage at which the product and its proposed marketing program are introduced into realistic market settings. E) Commercialization is the process of inviting broad communities of people such as customers employees and scientists into the new product innovation process.

130) When a product is in the maturity stage the company should most likely consider . A) harvesting the product or market B) modifying the product market or marketing mix C) divesting the product line D) liquidating the firm's assets E) dropping the product from its market offerings

Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

"115) The more formal ""business attire"" look of corporate dress of the 1980s and 1990s gave way to the ""business casual"" look of the 2000s and 2010s. This is an example of a . A) style" B) fashion C) fad D) subculture E) norm

"139) As part of the rapid globalization of today's economy companies are selling more domestically produced goods in international markets and ." A) taking a local view of their industry B) purchasing more supplies abroad C) reducing competition within their industry D) downplaying concerns for social responsibility E) competing solely in traditional marketplaces

Answer: B AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

"77) Consumers' spending patterns since the Great Recession include . A) spending freely without caution" B) buying less and looking for greater value in what they buy C) amassing record levels of debt D) experiencing rapid increases in housing values E) participating in a booming stock market

Answer: B AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging

72) Which of the following situations is expected to enhance the use of targeted advertising messages by marketers? A) increase in derived demand in the market B) increase in ethnic populations C) rising global inflation rates D) inadequate quality control E) low advertising budgets

"73) With an expected increase in ethnic diversity within the American population marketers are most likely to place a greater emphasis on ." A) geographic segmentation B) targeted advertising messages C) mass marketing D) "do well by doing good" missions E) corporate giving

55) Which of the following generational groups is most comfortable with digital technology and embraces that technology? A) Generation X B) Millennials C) Baby Boomers D) Silent Generation E) Lost Generation

78) Which of the following is an accurate statement about the income distribution of the American population? A) The top 20 percent of earners achieves 68 percent of the country's adjusted gross income. B) The bottom 40 percent of earners captures just 11 percent of total income. C) The top 5 percent of American earners captures 18 percent of all income. D) The distribution of income allows most companies to target earners of all income levels. E) Changes in income and interest rates minimally impact spending patterns.

organizations society nature and the universe. A) social codes B) cultural values C) demographics D) public policies E) norms

Answer: B AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"16) consumers are one of the fastest-growing U.S. population subsegments and are expected to surge to nearly one third of the total U.S. population by 2030." A) African American B) Hispanic American C) Asian American D) Baby boomer E) Millennial

Answer: B AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"18) Although more price-conscious than other population segments consumers tend to be strongly motivated by quality and selection and give importance to brands." A) lower upper B) African American C) Asian American D) Filipino E) working class

Answer: B AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"28) are groups to which an individual wishes to belong as when a young basketball player hopes to play someday in the NBA or WNBA." A) Membership groups B) Aspirational groups C) Leading adopters D) Subcultures E) Reference groups

Answer: B AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

24) Which of the following statements is true of cultural factors that influence consumer behavior? A) Cultural influences on buying behavior are identical across countries. B) Social classes show distinct product and brand preferences in areas such as clothing and travel. C) Subcultures include nationalities and racial groups but exclude religions. D) Subcultures are groups within which each individual has a unique and distinct value system. E) Hispanic Americans and African Americans are examples of racially segregated groups and not subcultures.

Answer: B AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

"129) Smart Shoppers an online store that delivers its products to homes in and around California recently switched its entire fleet to biodiesel trucks that run on used cooking oil rather than gas. Smart Shoppers has most likely developed a(n) ." A) vertical marketing channel B) green supply chain C) multitiered marketing channel D) intermodal transportation system E) hybrid distribution system

Answer: B AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

152) CellTones a new company selling several types of cellular phones has closely modeled its products after successful products that are already in the marketplace. As it prepares to enter the market with its new products and services which of the following should concern CellTones the most? A) legal obligations to suppliers and dealers B) patent laws C) distribution requirements D) product liability suits E) limited warranties

Answer: B AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 9.4: Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Difficulty: Challenging

159) Failure to enter the current price into a retailer's system may result in charges of . A) predatory pricing B) scanner fraud C) retail maintenance pricing D) discriminatory pricing E) price fixing

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

"149) Federal legislation on price fixing requires that sellers set their prices ." A) based on their fixed and variable costs B) without communication from competitors C) to achieve a specific profit margin D) without the intention of cutting into competitors' profits E) consistently throughout a region

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

"153) The seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given price level." A) FTC's "Guides against Deceptive Pricing" B) Robinson-Patman Act C) Sherman Act D) Clayton Act E) Automobile Information Disclosure Act

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

"156) Mark's Markers a manufacturer of white board markers has required its dealers to charge a specified retail price for its markers. Mark's is most likely guilty of ." A) captive pricing B) retail price maintenance C) price discrimination D) competitive pricing E) unfair price skimming

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

144) Which of the following is true of public policies and pricing? A) The government imposes no limits on intrastate pricing issues. B) The Robinson-Patman Act governs interstate commerce. C) Companies have free rein when it comes to setting prices. D) The Sherman Act governs intrastate commerce. E) The Clayton Act encourages the formation of monopolies.

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

152) Which of the following would be considered predatory pricing? A) a company that prices its products below cost to get rid of a surplus B) a company that prices below cost to drive out competitors C) a company that offers a volume discount D) a company that offers the suggested retail price on the manufacturer's package E) a company that offers real-time pricing online

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

"105) As a consequence of the concern for the natural environment many companies are developing strategies and practices that support ." A) government intervention B) environmental sustainability C) deregulation D) mass marketing E) rapid exploitation of natural resources

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Challenging

"40) Public health campaigns designed to reduce alcoholism drug abuse smoking and obesity are all examples of marketing." A) internal B) social C) organization D) person E) place

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"150) Manufacturers must comply with specific laws regarding ." A) profit margins B) product quality and safety C) product harvesting D) distribution channel length E) product life cycles

Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 9.4: Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Difficulty: Easy

"151) Because of a company cannot make its product illegally similar to a competitor's already established product." A) anti-monopoly laws B) patent laws C) the Consumer Product Safety Act D) product warranties E) product liability

134) Marketers use mobile channels for several purposes. Which of the following is LEAST likely to be one of those purposes? A) Enrich the brand experience. B) Send billing statement. C) Stimulate immediate buying. D) Make shopping easier. E) Boost sampling.

Answer: B AACSB: Information technology Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy

"139) Dips in the economy and the instant price comparisons made possible by the Internet have contributed to ." A) decreased consumer price sensitivity B) increased consumer price sensitivity C) a less direct relationship between supply and demand D) low brand equity for luxury goods E) decreased brand loyalty

Answer: B AACSB: Information technology Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

"102) The Internet offers where the price can easily be adjusted to meet changes in demand." A) captive pricing B) dynamic pricing C) basing-point pricing D) price bundling E) cost-plus pricing

Answer: B AACSB: Information technology Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"151) Using retailers can share real-time data on sales and current inventory levels with suppliers." A) automated storage and retrieval systems (ASRS) B) vendor-managed inventory (VMI) systems C) transportation management systems (TMS) D) warehouse management systems (WMS) E) distribution center management systems (DCMS)

Answer: B AACSB: Information technology Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"25) The key is to traditional mass media with online mobile and social media to best engage customers communicate the brand message and enhance the customer's brand experiences." A) prioritize B) integrate C) utilize D) design E) spend on

Answer: B AACSB: Information technology Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

"65) An increasing number of American workers currently work from their homes or remote offices and conduct their business by phone or the Internet. This trend has created a . A) booming real estate market in the big cities" B) booming SOHO market C) decline in the demand for convenience foods D) decline in the demand for financial services E) steady increase in global enterprises

Answer: B AACSB: Information technology Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

43) Consumer information provider Nielsen uses a life-stage segmentation system that places U.S. households into one of 66 different life-stage groups. According to Nielsen's groups which of the following refers to the group consisting of hip single twenty-somethings who are politically liberal listen to alternative music and enjoy lively nightlife? A) Striving Singles B) Young Achievers C) Bohemian Mix D) Young Influentials E) Young Digerati

Answer: B AACSB: Information technology Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"71) A company can install a(n) management system to collect review evaluate and manage new product ideas." A) quality B) innovation C) content D) supply chain E) customer relationship

72) The innovation management system approach yields two favorable outcomes: it helps "create an innovation-oriented company culture and it ." A) clearly assigns responsibility for the process to a single department B) yields a larger number of new product ideas C) guarantees successful products D) frees up senior management time E) requires less budget support

"152) management is the logistics concept that emphasizes teamwork-both inside the company and among all the marketing channel organizations-to maximize the performance of the entire distribution system." A) Logistics inventory B) Integrated logistics C) Logistics information D) Independent logistics E) Group logistics

Answer: B AACSB: Interpersonal relations and teamwork Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

60) Herbie Inc. a firm manufacturing sandwich makers has fixed costs of $250000 variable costs of $20 per unit of output and expected unit sales of 50000 units. What is the unit cost of a sandwich maker manufactured by Herbie? A) $15 B) $25 C) $30 D) $50 E) $75

Answer: B AACSB: Reflective thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

"85) It is most accurate to say that when customers purchase products they act on as they judge values and costs." A) objective value B) perceived value C) customer lifetime value D) company image E) society's interests

Answer: B AACSB: Reflective thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

"94) Greater consumer control means that companies can no longer rely on ." A) promoting brand-consumer interaction B) marketing by intrusion C) creating market offerings and messages that involve consumers D) developing marketing concepts with an outside-in perspective E) marketing by attraction

"136) Following the change in consumer values and consumption patterns after the Great Recession marketers have changed their marketing strategies to emphasize the of their products." A) image B) value C) durability D) safety E) uniqueness

Answer: B AACSB: Reflective thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy

"67) Trade-in allowances are most commonly used in the industry." A) real estate B) automobile C) dairy products D) financial services E) health care

Answer: B AACSB: Reflective thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"89) Low-interest financing and longer warranties are both examples of pricing." A) segmented B) promotional C) product bundling D) captive product E) product form

Answer: B AACSB: Reflective thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"135) Almost all major purchases result in or discomfort caused by postpurchase conflict." A) need recognition B) cognitive dissonance C) consumer ethnocentrism D) conspicuous consumption E) consumer capitalism

Answer: B AACSB: Reflective thinking Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

78) Many families with children are now attracted to the shopping district in Forest Ridge. What characteristics about families as consumer groups might the owners of The Attic Trunk want to keep in mind? A) Though more women hold jobs outside the home today than when The Attic Trunk first opened husband-wife involvement in the buying process has remained relatively unchanged. B) Children have considerable amounts of disposable income and have a strong influence on family buying decisions. C) Women seldom account for any technology-related purchases. D) Women typically account for most habitual purchases. E) Men make all the major purchasing decisions in most families.

Answer: B AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

107) Which of the following actions is a restaurant owner most likely to take in order to reduce problems associated with service intangibility? A) increase entree prices after 6:00 p.m. B) provide clean tablecloths and fresh napkins for each new customer C) empower employees to handle customer complaints D) offer discounted prices for appetizers ordered during happy hour E) hold regular employee workshops focusing on customer service

Answer: B AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Challenging

9) Which major promotion category uses catalogs direct mail e-mail mobile marketing and social media? A) sales promotion B) direct and digital marketing C) horizontal diversification D) public relations E) advertising

Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

"50) refers to the process of putting thought into symbolic form. A) Sending" B) Encoding C) Decoding D) Receiving E) Feedback

Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"93) Nonpersonal communication channels include major media and events." A) sales calls B) atmospheres C) buzz marketing D) word-of-mouth influence E) phone calls

Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

55) Which of the following terms best represents the communication channel that a company uses to move its advertising messages from sender to receiver? A) decoder B) media C) encoder D) communicator E) feedback loop

Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"21) segmentation has long been used in clothing cosmetics toiletries and magazines." A) Behavioral B) Gender C) Benefit D) Occasion E) Geographic

Answer: B Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"41) Costs that change with the level of production are referred to as ." A) fixed costs B) variable costs C) target costs D) total costs E) overhead costs

Answer: B Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

"59) Lawyers accountants and other professionals typically price by adding a standard markup for profit. This exemplifies ." A) target pricing B) cost-plus pricing C) value-based pricing D) break-even pricing E) penetration pricing

"66) Target return pricing uses the concept of a(n) which shows the total cost and total revenue expected at different sales volume levels." A) BCG matrix B) break-even chart C) SWOT analysis D) demand curve E) experience curve

65) Target return pricing is a variation of which of the following cost-oriented pricing approaches? A) cost-plus pricing B) break-even pricing C) markup pricing D) value-based pricing E) fixed cost pricing

"127) Under the market consists of many buyers and sellers who trade over a range of prices rather than a single market price." A) pure competition B) monopolistic competition C) oligopolistic competition D) a pure monopoly E) the dominant firm model

Answer: B Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"48) A(n) consists of one or more independent producers wholesalers and retailers each seeking to maximize its own profits sometimes even at the expense of the system as a whole." A) multitiered supply chain B) conventional distribution channel C) intrinsic market matrix D) resource bank E) product platform

Answer: B Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

88) Which of the following should be a manufacturer's first step when designing an effective marketing channel? A) set channel objectives B) analyze consumer needs C) identify channel alternatives D) evaluate channel alternatives E) establish strategic alliances

Answer: B Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

"72) The six stages consumers normally pass through on their way to making a purchase are known as the stages." A) personal-readiness B) buyer-readiness C) objective-readiness D) market-readiness E) supplier-readiness

Answer: B Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

126) Which budgeting method entails defining specific promotion goals determining the necessary tasks and estimating the costs to determine a promotion budget? A) percentage-of-sales method B) objective-and-task method C) affordable method D) exponential task method E) competitive-parity method

Answer: B Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

120) Which of the following statements is true regarding the affordable method for setting a promotion budget? A) It is mostly used by large businesses. B) It completely ignores the effects of promotion on sales. C) It tends to place promotion first among spending priorities. D) It leads to a certain annual promotion budget. E) It almost always results in overspending.

Answer: B Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

"5) A documents an organization's purpose-what it wants to accomplish in the larger environment." A) vision statement B) mission statement C) business portfolio D) value proposition E) product strategy

Answer: B Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

"33) The best business portfolio is the one that . A) provides the greatest opportunity for increasing profits" B) best fits the company's strengths and weaknesses to opportunities in the environment C) ensures that the company will realize increased share of market D) allows the company to decrease its overall costs E) entices customers to purchase even more products from the company

Answer: B Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"68) In the United States job growth currently is the weakest for . A) white collar workers" B) manufacturing workers C) salespeople D) telecommuters E) professional workers

Answer: B Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

"103) The physical environment affecting marketing activities is referred to as the environment." A) economic B) natural C) cultural D) political E) social

Answer: B Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Easy

"140) People vary in their attitudes toward their society-while defend it malcontents want to leave it." A) reformers B) patriots C) activists D) environmentalists E) historical revisionists

Answer: B Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

5) According to the model of buyer behavior which of the following is one of the two primary parts of a "buyer's black box"? A) technological stimuli B) buyer's decision process C) buyer's spending habits D) social stimuli E) promotion stimuli

Answer: B Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

"65) is the process by which people select organize and interpret information to form a meaningful picture of the world." A) Motivation B) Perception C) Dissonance D) Learning E) Self-actualization

Answer: B Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"72) Some consumers worry that they will be affected by marketing messages without even knowing it. They are concerned about ." A) alternative evaluation B) subliminal advertising C) selective retention D) cognitive dissonance E) selective communication

Answer: B Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"73) describes changes in an individual's behavior arising from experience." A) Lifestyle B) Learning C) Perception D) Cognitive dissonance E) Selective attention

Answer: B Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"148) Consumers learn about new products for the first time and make the decision to buy those products during the ." A) need recognition stage B) adoption process C) evaluation process D) trial process E) quality assessment stage

Answer: B Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

"13) calls for dividing the market into regions states counties cities or even neighborhoods." A) Benefit segmentation B) Geographic segmentation C) Demographic segmentation D) Psychographic segmentation E) Occasion segmentation

Answer: B Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"35) Consumers who show their allegiance to brands stores or companies help marketers to segment consumers by their ." A) user status B) degree of loyalty C) income D) geographic location E) benefit-seeking attitudes

Answer: B Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"93) A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each is known as ." A) mass marketing B) differentiated marketing C) concentrated marketing D) individual marketing E) cross-marketing

Answer: B Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

"89) Several structural factors affect long-run segment attractiveness. These include all of the following EXCEPT ." A) easy entry by new competitors B) the segment does not match the company's long-run objectives C) strong and aggressive competitors D) many substitute products E) power of buyers

Answer: B Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"73) The requires sellers to provide detailed nutritional information on food products." A) Fair Packaging and Labeling Act of 1966 B) Nutritional Labeling and Educational Act of 1990 C) Glass-Steagall Act D) Commodity Futures Modernization Act of 2000 E) Federal Trade Commission Act of 1914

Answer: B Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"28) An attractive product idea must be developed into a ." A) concept alternative B) product concept C) brand personality D) brand placement E) product strategy

Answer: B Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"119) According to the PLC the stage is reached when sales plunge to zero or when they drop to a low level where they continue for many years." A) laggard B) decline C) maturity D) growth E) incubation

Answer: B Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

"14) is the act of obtaining a desired object from someone by offering something in return." A) Valuation B) Exchange C) Market offering D) Confiscation E) Donation

Answer: B Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

"16) Consumer research product development communication distribution pricing and service are all core activities." A) positioning B) marketing C) outsourcing D) production E) logistics

Answer: B Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

"7) are human needs that are shaped by culture and individual personality." A) Necessities B) Wants C) Demands D) Values E) Exchanges

Answer: B Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

"8) When backed by buying power wants become ." A) social needs B) demands C) physical needs D) self-esteem needs E) exchanges

Answer: B Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

"24) pricing refers to offering just the right combination of quality and gratifying service at a fair price." A) Markup B) Good-value C) Cost-plus D) Target profit E) Break-even

"120) In industrial markets typically has the final say in setting the pricing objectives and policies of a company." A) the sales manager B) top management C) the production manager D) the HR department E) the sales staff

Answer: B Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"66) allowances are price reductions given for turning in an old item when buying a new one." A) Promotional B) Trade-in C) Depreciation D) Segmented E) Functional

Answer: B Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"44) are low-growth high-share businesses/products that need less investment to hold their market share." A) Stars B) Cash cows C) Question marks D) Dogs E) Bears

Answer: B Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

55) Making more sales to current customers without changing a firm's products is known as . A) market segmentation B) market penetration C) product diversification D) product development E) prospecting

Answer: B Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

97) Which of the following is NOT an element of the marketing mix? A) place B) purchase C) product D) price E) promotion

Answer: B Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

target customers to buy it. A) Position B) Promotion C) Pricing D) Segmentation E) Prospecting

Answer: B Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

planning

"22) Workers managers and members of the board are examples of publics. A) general" B) internal C) local D) citizen-action E) media

Answer: B Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

6) Marketing stimuli consist of the four Ps. Which of the following is NOT one of these? A) product B) packaging C) price D) promotion E) place

Answer: B Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

"27) Family is one of the factors that influence consumer behavior." A) regional B) social C) personal D) psychological E) business

Answer: B Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"41) A consists of the activities an individual is expected to perform according to the people around him/her." A) motive B) role C) lifestyle D) life cycle E) perception

Answer: B Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"46) Since a person's economic situation will affect her store and product choices marketers watch trends in spending personal income interest rates and ." A) employment B) savings C) home purchases D) rents E) fuel prices

Answer: B Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"59) Many marketers now use research to dig deeply into consumer psyches and develop better marketing strategies." A) analytical B) interpretive C) causal D) descriptive E) experiential

Answer: B Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"60) Market segments that can be effectively reached and served are . A) measurable" B) accessible C) substantial D) actionable E) profitable

Answer: B Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"110) marketing is more suited for uniform products such as grapefruit or steel." A) Niche B) Undifferentiated C) One-to-one D) Trigger-based E) Local

Answer: B Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"57) Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by ." A) product labels B) product attributes C) support services D) product packaging E) branding

Answer: B Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"84) Product mix refers to the number of versions offered for each product in the line." A) length B) depth C) height D) width E) consistency

Answer: B Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"109) If a service employee provides the service then the employee becomes a part of the service. This is an example of service ." A) intangibility B) inseparability C) variability D) perishability E) heterogeneity

Answer: B Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Easy

"112) Service means that services cannot be stored for later sale or use." A) consistency B) perishability C) variability D) intangibility E) inseparability

Answer: B Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Easy

"70) According to the text the search for new product ideas should most likely be ." A) intermittent B) holistic C) segmented D) compartmentalized E) flexible

Answer: B Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

156) What are the different internal factors that affect a firm's pricing decisions?

Answer: Beyond customer value perceptions costs and competitor strategies the company must consider several additional internal and external factors. Internal factors affecting pricing include the company's overall marketing strategy objectives and marketing mix as well as other organizational considerations. Price is only one element of the company's broader marketing strategy. If the company has selected its target market and positioning carefully then its marketing mix strategy including price will be fairly straightforward. Some companies position their products on price and then tailor other marketing mix decisions to the prices they want to charge. Other companies deemphasize price and use other marketing mix tools to create nonprice positions. AACSB: Written and oral communication Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

162) "Beyond the market and the economy the company must consider several other factors in its external environment when setting prices." Explain this statement.

Answer: Beyond the market and the economy the company must consider several other factors in its external environment when setting prices. It must know what impact its prices will have on other parties in its environment. How will resellers react to various prices? The company should set prices that give resellers a fair profit encourage their support and help them to sell the product effectively. The government is another important external influence on pricing decisions. Finally social concerns may need to be taken into account. In setting prices a company's short-term sales market share and profit goals may need to be tempered by broader societal considerations. AACSB: Application of knowledge

166) Briefly explain the concept of brand equity.

Answer: Brand equity is the differential effect that knowing the brand name has on customer response to the product and its marketing. It's a measure of the brand's ability to capture consumer preference and loyalty. A brand has positive brand equity when consumers react more favorably to it than to a generic or unbranded version of the same product. It has negative brand equity if consumers react less favorably than to an unbranded version. AACSB: Written and oral communication Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

99) How does branding help buyers?

Answer: Branding helps buyers in many ways. Brand names help consumers identify products that might benefit them. Brands also say something about product quality and consistency- buyers who always buy the same brand know that they will get the same features benefits and quality each time they buy. AACSB: Application of knowledge

109) Explain break-even pricing.

Answer: Break-even pricing (target return pricing) refers to setting price to break even on the costs of making and marketing a product or setting price to make a target return. Target return pricing uses the concept of a break-even chart which shows the total cost and total revenue expected at different sales volume levels. AACSB: Application of knowledge

82) Why do companies opt for market segmentation?

Answer: Buyers in any market differ in their wants resources locations buying attitudes and buying practices. Through market segmentation companies divide large heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

97) Explain why typical husband-dominant or wife-dominant products of the 1970s may no longer be regarded as typical.

Answer: Buying roles change with evolving consumer lifestyles. Changes in the traditional family structure such as more women holding jobs outside the home and more single-parent households have changed the traditional buying roles over time. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"43) Pacific Fisheries divides its customers into different regional units such as Asia Australia and the Americas. This is an example of segmentation." A) demographic B) psychographic C) geographic D) occasion E) benefit

Answer: C AACSB: Analytical thinking

17) When are sellers most effective? A) when they focus more on their specific products and services B) when they focus more on the price of their products and services C) when they focus more on the benefits and experiences produced by their products and services D) when they focus more on where their products and services can be purchased E) when they focus more on cost to produce the product or service

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

"10) Greg Williams now has the buying power to purchase the desktop computer that he has wanted for the last six months. Greg's want now has become a(n) ." A) need B) necessity C) demand D) exchange E) transaction

47) Jolene's firm markets preplanning services for a mortician. She finds that most of her target market avoids discussing future funeral needs. She convinces people to invest in the firm's services through her large-scale promotional efforts. Jolene's firm most likely practices the . A) production concept B) marketing concept C) selling concept D) product concept E) societal marketing concept

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging

"115) Renovations of the guest rooms at the Seagull Terrace and plans to add an indoor pool area are examples of the concept." A) selling B) marketing C) product D) production E) societal marketing

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

"79) FedEx offers its customers fast and reliable package delivery. When FedEx customers weigh these benefits against the monetary cost of using FedEx along with other costs of using the service they are acting upon ." A) brand loyalty B) customer equity C) customer-perceived value D) customer lifetime value E) a societal marketing campaign

"92) A gym equipment manufacturer encourages customers to become members of the firm's Web site. Membership provides customers with exercise tips as well as discounts on gym equipment and workout apparel. This is an example of ." A) a frequency marketing program B) a basic customer relationship C) a club marketing program D) the selling concept E) consumer-generated marketing

77) In which of the following situations has a company most actively embraced customer- managed relationships? A) American Airlines awards frequent flyer points to returning customers. B) Paige Premium Denim jeans provide superior quality and perfect fit. C) iRobot invites enthusiastic Roomba owners to develop and share their own uses for the company's robotic vacuum cleaner. D) Best Buy distinguishes between its best customers and its less profitable customers stocking merchandise to appeal to each group. E) Toyota develops a marketing presence on social networks and other online communities.

"74) When performing a break-even analysis the manufacturer should consider all of the following EXCEPT ." A) probable demand B) likely profits C) competitors' pricing D) estimated break-even volumes E) different prices

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

"44) The fixed cost in manufacturing a single LED monitor is $40 and the variable cost is $12. If the company expects to manufacture 5000 monitors the total costs would be ." A) $60000 B) $200000 C) $260000 D) $420000 E) $500000

42) In 2011 the fixed costs of a company were $500000 and its variable costs equaled "$150000. In 2010 the company made an annual profit of $200000. It has been predicted that despite a steady growth the company's variable costs will likely equal $300000 by 2013. The total costs of the company in 2011 were ." A) $350000 B) $450000 C) $650000 D) $800000 E) $950000

"114) Elmo Inc. a global conglomerate designed the ElBrush an electric toothbrush. Sensing market demand for the electric toothbrush Elmo started with an ideal selling price of $13 based on customer value considerations and then targeted costs to ensure that the price was met. This exemplifies ." A) competition-based pricing B) cost-plus pricing C) target costing D) everyday low pricing E) high-low pricing

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Challenging

"130) The movie industry in a country is controlled by six large studios that receive 90 percent of the annual revenues from movies. This is an example of a(n) ." A) pure competition B) monopolistic competition C) oligopolistic competition D) pure monopoly E) government monopoly

"116) DivetheBlue a company marketing deep-sea diving equipment charges very high prices for its products. Despite the availability of many low-priced products in the market customers seem to prefer DivetheBlue which has earned a reputation for selling high-quality products. This exemplifies ." A) a pure monopoly B) an oligopoly C) a nonprice position D) break-even pricing E) target costing

"135) Bruno Servers has decided to decrease its prices on its popular higher-range servers. The company can reasonably expect to increase." A) fixed costs B) variable costs C) demand D) additional value E) overhead costs

"47) Conflict in the channel can be healthy because ." A) it can disrupt channel effectiveness B) normal give-and-take simply is normal C) the channel could become passive and non-innovative D) it can cause harm to channel relationships E) the respective rights of the channel partners take priority

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Challenging

"31) Delia's is a clothing retailer that targets teenage girls. The company runs coordinated promotions for its catalogs Web site and retail outlets. It uses the same models in its catalog print ads and Web site. Delia's works to make sure its public relations activities as well as its sales promotions harmonize with its advertising in all aspects. From this information we can infer that Delia's is using ." A) buzz marketing B) experiential marketing C) integrated marketing communication D) word-of-mouth marketing E) database marketing

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Challenging

62) An ad for Maybelline age-minimizing makeup in Ladies' Home Journal magazine featured actress Gigi Hadid and offered readers a $2-off coupon when they tried the new makeup. In the context of the communication model measuring which of the following would be the best way for the source to measure feedback? A) the number of subscribers to Ladies' Home Journal B) the number of people who make up the target market C) the number of people who redeem the coupon D) the number of people who have purchased Maybelline products in the past E) the number of people to whom Gigi Hadid is an appealing spokesperson

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

136) A newspaper article announced that Connect Wireless the sixth-largest wireless carrier in a country was changing its name to M-Mobile and that to begin the makeover process it had replaced spokesperson Robert Garmon with Catherine Naylor. Which of the following elements of a promotion mix is represented in this example? A) sales promotion B) advertising C) public relations D) personal selling E) direct marketing

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Challenging

"47) The pharmaceuticals division of Omni Healthcare holds low market share in a high-growth market. According to the BCG matrix the pharmaceuticals division of Omni can be classified as a ." A) star B) bear C) question mark D) cash cow E) dog

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Challenging

64) Companies may want to downsize their business portfolios for all but which of the following reasons? A) The firm may have grown too fast. B) The firm may have entered areas where it lacks experience. C) The customers may have purchased all they need. D) The market environment might change. E) The products might simply age.

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"65) Elmo Corp. a manufacturer of personal computers and printers recently established an office furniture exporting business. This is an example of ." A) niche marketing B) local marketing C) diversification D) product adaptation E) downsizing

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"69) Ron and Gail owners of Fun-Spot strive to provide new offerings and entertainment options for their visitors. This type of strategy can be best described as ." A) market penetration B) market development C) product development D) niche marketing E) diversification

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"100) Teenagers are expected to respond in a similar way to a set of marketing efforts. In other words this group represents a ." A) channel intermediary B) line extension C) market segment D) product attribute E) brand personality

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

the RoadPro is ""like nothing else."" Statements such as these reflect a firm's ." A) portfolio B) marketing segment C) positioning D) marketing mix E) mission statement

"147) Emerson Studios has designed its marketing organization along the lines of a organization in which operational specialists head different marketing activities." A) geographic B) product C) functional D) customer E) market

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate

"12) Maria works for Sigma Inc. a firm that helps companies target and promote their products to the right markets. Sigma is most likely a ." A) financial intermediary B) physical distribution firm C) marketing services agency D) reseller E) wholesaler

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

"9) Jonathan works for a firm that assists companies in promoting distributing and selling their products to end consumers. The firm Jonathan works for is a ." A) licensor B) supplier C) marketing intermediary D) local public E) general public

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

74) Soon-Yi Park's chain of travel agencies has identified the lesbian gay bisexual and transgender community as a growing market that spends an increasing percentage of its income on travel. Which of the following would be the LEAST effective component of a marketing plan for Soon-Yi to take advantage of this opportunity? A) develop a presence on LGBT-oriented social networking sites B) position his agency as focused on specialized experiences C) implement a mass marketing campaign D) place specially targeted ads in gay-themed publications E) advertise on LOGO the cable television network aimed at gays and lesbians and their friends and family

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging

82) Which of the following generational groups is most likely to represent the present owners of cottages surrounding Witmer Lake? A) Baby Boomers B) Echo Boomers C) Gen Xers D) Lost Generation E) Millennials

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

128) Funco Inc. a toy manufacturer sold plastic racing cars that were manufactured with toxic materials which threatened the health of several children. Which purpose of government regulation to protect consumers is involved? A) misleading customers in their advertising B) deceiving consumers through their packaging C) making shoddy products D) deceiving consumers through their pricing E) invading consumer privacy

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

"31) Rachel loves fashion and is always seen wearing the trendiest fashion outfits. She actively shares her knowledge with a wide group of friends and colleagues about where to shop for the latest fashion at great deals. Most of her friends and colleagues follow her fashion tips. Rachel portrays the image of a(n) ." A) surrogate consumer B) lagging adopter C) opinion leader D) brand personality E) social networker

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

"49) A current trend in the United States involves rediscovering the benefits of home-cooked food and the use of organic ingredients. People are choosing to spend hours in the kitchen using only the freshest ingredients to cook healthy and nutritious meals. This change in is one of the reasons for the increasing demand for organic ingredients." A) self-concept B) subculture C) lifestyle D) personality E) life-cycle

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

"55) A marketer of women's hair care products targeting Chinese customers created an advertising message that told women their hair could be worn any way they wanted as opposed to wearing it straight. The message suggested the women did not need to conform to the mainstream media definition of beauty. It is most accurate to say that this ad was based on an understanding of customers' ." A) social class B) life-cycle stage C) self-concept D) status E) role

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

70) Juana looked at the September issue of her favorite fashion magazine and did not find anything particularly interesting despite the fact that the magazine had several advertisements that were targeted at Juana's demographic. The only thing that interested her was an article about an upcoming fashion show. Which consumer behavior is being illustrated in this instance? A) subliminal advertising B) groupthink C) selective attention D) social loafing E) consumer ethnocentrism

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

79) Which of the following would each consumer segment attracted to The Attic Trunk have in common with the other consumer segments? A) habitual buying behaviors B) self-concepts C) AIO dimensions D) life-cycle stages E) aspirational groups

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

"113) Pat thought he had received the best deal on his new car. Shortly after buying the car Pat started to notice certain disadvantages of his new car as he learned more about other cars available in the market. Pat is experiencing ." A) dissonance-reducing buying behavior B) need recognition C) postpurchase dissonance D) marketing myopia E) complex buying behavior

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Challenging

"115) Eduardo usually purchases the same breakfast cereal the kind he grew up eating. Eduardo exhibits ." A) dissonance-reducing buying behavior B) complex buying behavior C) habitual buying behavior D) variety-seeking buying behavior E) conspicuous consumption behavior

120) An invitation to go skiing over the weekend forced Donna to look at her current wardrobe. She realized that she required a warmer coat. Which of the following stages of the buyer decision process does Donna exemplify? A) product evaluation B) situational analysis C) need recognition D) problem screening E) information search

123) James has decided to buy a new vehicle. His brother John has recently purchased a new truck and recommends the same model to James. James finally decides to buy the same truck. Which of the following sources of information has most likely influenced James' purchase decision? A) experiential sources B) public sources C) personal sources D) commercial sources E) market mavens

"34) A recent study conducted by Estelle Cosmetics Company showed that heavy users of Estelle's products comprise a small percentage of the market. The study indicated that less than 7 percent of all shoppers buy nearly 71 percent of Estelle's products in the United States. This is an example of ." A) benefit segmentation B) segmentation by loyalty status C) segmentation by usage rate D) psychographic segmentation E) occasion segmentation

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Challenging

27) Malcolm Sanders a graduate student from Boston makes customized snowboards for local snowboarding enthusiasts. The demand for snowboards peaks during the winter months a busy time for Malcolm. He advertises more aggressively and sells most of his snowboards around this time. Which market segmentation approach does Malcolm most likely use? A) gender segmentation B) psychographic segmentation C) occasion segmentation D) geographic segmentation E) age and life-cycle segmentation

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

38) Which of the following is NOT a benefit of using multivariable segmentation systems? A) help companies identify key customer segments B) help companies reach key customer segments more efficiently C) help companies more accurately price their products to appeal to key customer segments D) help companies better understand key customer segments E) help companies tailor market offering to the needs of the key customer segments

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"113) Market targeting can bring up concerns about privacy and abuse in all of the following ways EXCEPT ." A) when marketing toward children B) when entertainment and commercial content blend C) when customers opt in to receive focused content D) when deceptive messaging is used E) when e-mails are personalized based on Internet searches by the customer

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

104) When order requests come in the designers of Titus Furniture often go to a client's location to note their requirements budget and expected date of delivery. In this way Titus Furniture is successful in tailor-making products for its customers. This is an example of . A) market diversification B) undifferentiated marketing C) mass customization D) differentiated marketing E) trigger-based marketing

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

152) Chronos Inc. designs and markets different brands of cycling watches. Each brand has a single unique feature: the Chronos Cosmos has a heart rate monitor the Chronos Acumen is designed for older cyclists who prefer a large display and the Chronos Aegis has a GPS function. Which of the following is evident here? A) channel differentiation B) service differentiation C) product differentiation D) people differentiation E) image differentiation

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Challenging

"153) Apex describes its clothing line as ""Elegance and attitude now as one. For the daily office-goer who takes pride in what he or she wears everyday Apex makes sure you get noticed."" This exemplifies a ." A) statement of purpose B) vision statement C) positioning statement D) general need description E) product specification

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

144) Stores such as Walmart Best Buy PetSmart David's Bridal and DSW Shoes use positioning. A) more for the same B) more for less C) same for less D) less for much less E) more for more

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

159) While Jenkins Stationeries was selling branded stationery at premium prices Pembroke Stationeries a store across the street was selling the same branded stationery at discount prices. Which of the following value propositions best describes Pembroke's product positioning? A) more for less B) more for the same C) same for less D) less for much less E) more for more

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

43) Which type of product does Delgado manufacture? A) industrial B) convenience C) specialty D) shopping E) unsought

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Challenging

"41) Rhodia invites tourists from all over the world to experience its pristine nature clear skies and beautiful summertime climate. This exemplifies ." A) corporate image marketing B) social marketing C) place marketing D) social engineering E) negative brand equity

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"80) Proton Corp. is an automobile manufacturer known for producing efficient durable and low-priced cars. Recently the company launched a new range of luxury cars to broaden its market appeal and to add prestige to its existing line of cars. This is an example of ." A) social marketing B) product line filling C) product line stretching D) internal marketing E) cannibalization

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Challenging

"86) A well-known cosmetic company in New York City added new product lines in order to increase its business. In other words it ." A) lengthened its existing product line B) decreased its product line consistency C) widened its product mix D) engaged in market diversification E) engaged in social marketing

"140) After a brief stay at a luxury hotel in Paris Benjamin Sanders noted that the hotel had kept every promise it made when he booked the room meeting all his needs. He added that it was a ""thoroughly comfortable and opulent experience."" According to Young & Rubicam's Brand Asset Valuator this reflects brand ." A) valuation B) esteem C) relevance D) differentiation E) knowledge

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Challenging

"30) JoAnn Fabrics Inc. has created a new combination of colors and fabric types. The firm wants to know how consumers will perceive the new product. The firm is concerned with the product ." A) idea B) displacement C) image D) activation E) placement

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Challenging

"67) At Fantastic Flavors a large regional chain of candy stores employees from marketing design production and finance work in cross-functional groups to save time and money in the new product development process. Fantastic Flavors uses a approach." A) customer-centered new product development B) sequential product development C) team-based new product development D) heuristic E) functional

50) Yummy Peanut Butter created a new coconut-flavored peanut butter that it tested in a small number of representative cities. The company plans to use the results to forecast national sales and profits. Which of the following did the firm use? A) controlled test markets B) simulated test markets C) standard test markets D) ambush marketing E) affinity marketing

"129) Over the past few years Binney and Smith's Crayola crayons has expanded to more than 80 countries around the world. Crayola crayons are in the stage of the PLC." A) introduction B) laggard C) maturity D) decline E) incubation

Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Challenging

116) Apple's iPod has been called "one of the greatest consumer electronics hits of all time." iPods have been sold in huge numbers and Apple captures a large share of the music player market. This success has attracted many large resourceful competitors. The iPod is in the stage of the product life cycle. A) introduction B) growth C) maturity D) decline E) adoption

"117) Flurrbies a brand of unique winter accessories that quickly fell in and out of favor with customers is an example of a ." A) style B) fashion C) fad D) norm E) subculture

Principles of Marketing 17e Global Edition (Kotler/Armstrong) Chapter 1 Marketing: Creating Customer Value and Engagement 1) Which of the following is NOT an accurate description of modern marketing? A) Marketing is the creation of value for customers. B) Marketing involves managing profitable customer relationships. C) Marketing emphasizes selling and advertising exclusively. D) Marketing involves satisfying customers' needs. E) Marketing is building value-laden exchange relationships with customers.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate

63) When demand for athletic shoes produced by Nike and endorsed by Michael Jordan is high Nike limits how many pairs of shoes are manufactured. This action maintains strong demand by limiting supply. This decision contradicts the philosophy of which marketing concept? A) marketing concept B) product concept C) production concept D) societal marketing concept E) selling concept

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate

111) A seller pursues a basic relationship with what kind of customers? A) many customers regardless of profitability B) many high-margin customers C) many low-margin customers D) a few high-margin customers E) a few low-margin customers

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

135) Marketers set up company and brand Web sites that provide information and promote the company's products. Social media is a significant part of today's marketing strategy. Which of these tools is NOT part of the growth in digital technology? A) blogs B) e-mail C) telemarketing calls D) mobile apps E) videos

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy

137) Which of the following actions should a marketer take in response to the new economy? A) Offer selected discounts. B) Cut marketing budgets. C) Hold the line on prices. D) Cut costs. E) Discontinue products.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy

141) Marketing in the non-profit sector is applied in all but which of these ways? A) to enhance their images B) to attract memberships C) to publicize the organization's supporters D) to design social marketing campaigns for specific causes E) to encourage donor support

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

"20) The perceived value of different product offers can be reasonably assessed by ." A) conducting a SWOT analysis B) preparing demand curves C) conducting surveys and experiments D) collecting data about competitors' offers E) setting a benchmark for product quality

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

"31) Companies that adopt value-added pricing ." A) consider value-added features as a fitting substitute for aggressive cost cutting B) set incredibly low prices to meet competition C) attach value-added features and services to differentiate their offers and support their higher prices D) overprice their products without any apparent justification E) underprice their products and lower quality to boost demand in the short-run

10) What sets the ceiling for product prices? A) product manufacturing costs B) sellers' perceptions of the product's value C) customer perceptions of the product's value D) variable costs E) break-even volume

17) Which of the following processes does value-based pricing reverse? A) high-low pricing B) everyday low pricing C) cost-based pricing D) good-value pricing E) value-added pricing

"35) Companies with lower costs ." A) specialize in selling products with value-added features B) usually market products with inferior quality thereby justifying the low selling price C) can set lower prices that result in smaller margins but greater sales and profits D) tend to overprice products owing to their monopolistic advantage E) usually set higher prices that result in higher margins

"45) As production moves up the average cost per unit decreases because ." A) variable costs decrease B) of increasing diseconomies of scale C) fixed costs are spread over more units D) overhead costs decrease E) revenue increases

"53) A downward-sloping experience curve is indicative of ." A) the negative customer perception about a company's products B) the falling demand for a company's products C) the falling unit production cost of a company D) the low quality of a company's products E) slow and inadequate organizational learning

111) Which of the following is an internal factor that affects pricing decisions in a company? A) the nature of the market B) the degree of inflation in the economy C) the overall marketing strategy of the company D) the forces of demand and supply in the market E) consumers' perception of value

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

"2) Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and pricing." A) comparative B) competitive C) market-skimming D) market-segmentation E) cost-plus

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Easy

28) Which of the following product mix pricing strategies involves pricing products that can only be used with the main product? A) by-product pricing B) product bundle pricing C) captive product pricing D) product line pricing E) optional product pricing

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Easy

80) Consumers are less likely to use price to judge the quality of a product when they . A) have never tried the product before B) have little knowledge of the brand C) have experience with the product D) are shopping for luxury items E) cannot physically examine the product

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

"10) A is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user." A) product line B) product delivery network C) marketing channel D) consumer base E) resource bank

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

"68) occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones." A) Extensive distribution B) Multichannelization C) Disintermediation D) Inclusive distribution E) Cross merchandising

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

91) The company's channel objectives are influenced by all of the following EXCEPT . A) the company's marketing intermediaries B) the company's competitors C) the age of the company D) the nature of the company E) the company's products

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

Principles of Marketing 17e (Kotler/Armstrong) Chapter 14 Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy 1) A company's total marketing communications mix consists of a specific blend of advertising sales promotion public relations personal selling and direct-marketing tools that the company uses to communicate customer value and build customer relationships. Which of the following terms best describes this set of communications tools? A) the product mix B) product line filling C) the promotion mix D) the price mix E) horizontal diversification

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

"27) Companies often fail to integrate their various messages to consumers because ." A) historically consumers have been able to distinguish between message sources B) advertising departments are reluctant to work with public relations professionals C) communications often come from different parts of the company D) personal selling and sales promotion are in direct conflict E) firms have overemphasized the concept of brand contact

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

23) Which of the following statements is true regarding the old mass-media communications model? A) Mass-media costs are decreasing. B) Mass-media audiences are increasing. C) Many viewers are gaining control of message exposure through DVRs and video streaming. D) Ad clutter is decreasing. E) Internet ad spending has stagnated and more marketers are shifting toward TV advertising.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

94) Many firms hire celebrities to appear in their advertisements. Which step of the communication process is represented? A) collecting feedback B) designing a message C) selecting the message source D) determining the communication objectives E) choosing the media

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

3) Which of the following is the first step in strategic planning? A) setting short-term goals B) developing the business portfolio C) defining the organizational mission D) formulating the key marketing strategies E) identifying the organization's weaknesses and the threats it faces

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

2) Which of the following is true with regard to strategic planning? A) At the corporate level the company starts the strategic planning process by determining what portfolio of businesses and products is best for the company. B) A strategic plan deals with a company's short-term goals. C) The focus of strategic planning is to define a game plan for long-run survival and growth. D) The strategic plan is a statement of an organization's purpose. E) Strategic planning involves identifying segments of consumers with identical preferences.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

"32) The major activity in strategic planning is whereby management evaluates the products and businesses that make up the company." A) SWOT analysis B) benchmarking C) business portfolio analysis D) breakeven analysis E) prospecting

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"37) Most standard portfolio analysis methods evaluate SBUs on the . A) potential for niche or global marketing" B) degree of product differentiation C) strength of the market or industry position D) accessibility to rural markets E) number of successful business acquisitions

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

34) Which of the following best describes a strategic business unit? A) the internal value chain of a company B) the supply chain of a company C) the key businesses that make up a company D) the key channel intermediaries of a service company E) the key competitors of a company

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

40) Which of the following is true of the BCG matrix approach? A) It is inexpensive to implement. B) It does not have any limitations. C) It considers market growth rate to be a measure of market attractiveness. D) It describes consumer motivations and needs. E) It does not consider relative market share to be a measure of company strength in the market.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

52) Which of the following is a portfolio-planning tool for identifying company growth opportunities through market penetration market development product development or diversification? A) BCG matrix B) analysis of variance C) product/market expansion grid D) Harris matrix E) SWOT analysis

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"112) Effective positioning begins with . A) pricing" B) diversification C) differentiation D) promotion E) segmentation

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

132) Which of the following is true with regard to a SWOT analysis? A) It classifies SBUs into four distinct categories. B) It measures customer response to a new product. C) It evaluates the company's overall strengths. D) It evaluates the growth potential of a market segment. E) It ignores the threats faced by a company while assessing its situation in the market.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

"67) Micropolitan areas are ." A) likely to have a higher crime rate than metropolitan areas B) less likely to attract telecommuters C) likely to offer the same advantages as metropolitan areas D) less likely to offer market expansion opportunities E) generally unattractive to niche marketers

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging

139) Which of the following is most likely true with regard to people's views of organizations in contemporary America? A) In the American workplace there has been an overall increase in organizational loyalty. B) Most Americans are confident in their employers and are unlikely to switch jobs as frequently as in the past. C) The past two decades have seen a sharp decrease in confidence in and loyalty toward America's business organizations. D) Most U.S. workers view work as a source of personal satisfaction and organizational pride. E) In the last decade corporate scandals and layoffs had little impact on people's confidence in U.S. firms.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

141) Which of the following is a potential downside to using patriotic themes in marketing programs? A) Consumers rarely respond to patriotic marketing messages in a favorable manner. B) A consumer's societal orientation has no visible impact on product consumption. C) Patriotism could be viewed as an attempt to cash in on the nation's emotions. D) Patriotic Americans may have less disposable income than reformers. E) Mass marketing has limited appeal among patriotic Millennials.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

94) Which of the following is a disadvantage of using a differentiated marketing strategy? A) It generates far lower sales compared to an undifferentiated marketing strategy. B) Customer loyalty is negatively impacted and difficult to obtain. C) The costs of doing business increase. D) Quality control problems increase. E) Product safety decreases.

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"23) are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort." A) Shopping products B) Unsought products C) Specialty products D) Capital items E) Convenience products

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

38) Advertising campaigns involving issues ranging from health care education and environmental sustainability to human rights and personal safety can be classified under marketing. A) corporate image B) internal C) social D) place E) person

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

63) Features are a competitive tool for differentiating a company's product from competitors' products. Which question are companies LEAST likely to ask in a survey of buyers regarding product features? A) Which features could we add to improve the product? B) Which specific features of the product do you like most? C) How much would (a certain new feature) be worth to you? D) Which features of the product do you like the least? E) How do you like the product?

"134) represent(s) consumers' perceptions and feelings about a product and its performance." A) Product lines B) Labeling C) Brands D) Design E) Product attributes

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

143) Which of the following is the lowest level on which marketers can position their brands in target customers' minds? A) beliefs and values B) product benefits C) product attributes D) after-sale services E) brand equity

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"148) Costco's Kirkland Signature products are an example of a ." A) national brand B) support brand C) private brand D) generic brand E) manufacturer's brand

Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

"26) A product idea is ." A) the way consumers perceive an actual or potential product B) the knowledge and awareness of a product among consumers C) a possible product that the company can see itself offering to the market D) a detailed version of the new product idea stated in meaningful consumer terms E) the testing of new product concepts with groups of target consumers

19) Which of the following is the practice of inviting broad communities of customers employees independent researchers and members of the public into the new product innovation process? A) brainstorming B) idea screening C) crowdsourcing D) outsourcing E) concept testing

"66) Under a team-based new product development approach ." A) a single departmental team works to complete different stages of the process before passing the new product along to the next department and stage B) the organizational tension and confusion is less than under the sequential approach C) company departments work closely together in cross-functional teams D) a bottleneck at one phase can seriously delay an entire project E) the new product passes from one department to another before finalizing

61) Leicestershire Renovations has a history of problems with customers who do not pay their bills on time. Leicestershire Renovations wants to improve its cash situation reduce bad debts and reduce credit-collection costs. Which of the following forms of pricing would most likely help the firm achieve its goal? A) by-product pricing B) zone pricing C) cash discounts D) product bundling E) quantity discounts

64) Atlas Imports and Exports sells products directly to consumers via the Atlas Web site and through local retailers as well. Which of the following is evident here? A) corporate vertical marketing system B) horizontal marketing system C) multichannel distribution system D) administered vertical marketing system E) conventional distribution channel

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

"139) The manufacturer of Crest toothpaste provides free samples of its toothpaste to dentists and encourages them to distribute these samples to their patients and to inform the patients about advantages of using Crest. The manufacturer of Crest toothpaste is using ." A) sales promotion B) direct marketing C) a push strategy D) a pull strategy E) a vertical diversification strategy

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Challenging

30) Calypso Motors recently rolled out its Proteus hatchback. Proteus combines the attractiveness of a luxury car with the excellent agility of a sports car. Calypso Motors is confident that Proteus will appeal to both sports car enthusiasts as well as the luxury segment. Which of the following types of market segmentation is evident here? A) gender segmentation B) income segmentation C) benefit segmentation D) geographic segmentation E) age and life-cycle segmentation

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"39) Once managers of The Grecian Urn have decided on their product concept and marketing strategy they can evaluate the business attractiveness of the proposal in the stage of the new product development process." A) business transformation B) test marketing C) business analysis D) business process reengineering E) concept testing

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"132) P&G has sold off a number of lesser or declining brands such as Folgers coffee and Cover Girl cosmetics. In these examples management decided to the products." A) modify B) maintain C) drop D) harvest E) franchise

Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

"51) A firm that uses the selling concept takes a(n) approach." A) outside-in B) niche marketing C) inside-out D) societal marketing E) customer-driven

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

50) Which of the following uses a customer-centered "sense-and-respond" philosophy rather than a product-centered "make-and-sell" philosophy? A) market segmentation B) the production concept C) the marketing concept D) the inside-out perspective E) marketing myopia

59) The set of marketing tools a firm uses to implement its marketing strategy is called the . A) promotion mix B) product mix C) marketing mix D) market offering E) marketing effort

"103) is one of the best ways to increase share of customer." A) Targeting new customers B) Using bait and switch C) Cross-selling D) Divesting E) Partnership marketing

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

"81) Building and maintaining profitable customer relationships by delivering superior customer value and satisfaction is called ." A) customer lifetime value B) customer-perceived value C) customer relationship management D) partner relationship management E) customer equity

105) Which of the following refers to the total combined customer lifetime value of all of the company's current and potential customers? A) share of customer B) marketing mix C) customer equity D) target market E) customer-perceived value

89) Which of the following strategies would a company most likely use to increase customer satisfaction? A) decreasing the variety of offered services B) divesting C) lowering prices D) "firing" unprofitable customers E) limiting customer experiences with a brand

"25) When McDonald's and other fast food restaurants offer ""value menu"" items at surprisingly low prices they are most likely using pricing." A) break-even B) target profit C) good-value D) cost-plus E) target return

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

8) A market-penetration pricing policy should LEAST likely be used for a new product when . A) the market is highly price sensitive B) production and distribution costs fall as sales volume increases C) the product's quality and image support a high price D) a high price helps keep out the competition E) there are few or no competitors in the market

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate

9) Which of the following is true of market-penetration pricing? A) It should be used when the product's quality and image support a high price. B) It involves setting a high price for a new product to appeal to the elite in society. C) It results in drawing in large numbers of buyers quickly winning a large market share. D) It is best used in conjunction with a market-skimming pricing strategy. E) It results in the company making fewer and less profitable sales.

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate

"36) A lumber mill takes in logs turns them into 2 x 4's and other sizes needed for building construction. Wood chips created in the milling process are a(n) that can be sold." A) bundled product B) captive product C) by-product D) optional product E) primary product

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Moderate

128) Which of the following is used in an attempt to dominate the market through a pricing strategy? A) price increase B) match competitors' pricing C) price cuts D) quantity discounts E) custom prices

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Easy

"135) When a competitor cuts its price a company should if it believes it will not lose much market share or would lose too much profit by cutting its own prices." A) reduce its production costs B) reduce its marketing costs C) maintain its current prices and profit margin D) increase its marketing budget to raise the perceived value of the product E) increase its production costs to improve the quality of the product

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Moderate

136) When faced with a competitor who has cut its product's price which of the following is the most cost-effective way for a company to maintain its own price but raise the perceived value of its offer? A) by improving the quality of the product B) by introducing a higher-priced premium brand C) by altering the company's marketing communications D) by bundling the offer with add-ons E) by distributing the product through less costly channels

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Moderate

"12) Distribution channel decisions frequently require long-term commitments between firms. A primary reason is that ." A) advertising is not easy to change B) old products are difficult to discard and new products are difficult to introduce C) when they set up distribution through franchisees independent dealers or large retailers they cannot readily replace these channels with company-owned stores or Internet sites if conditions change D) changing the manufacturing requirements is expensive and takes significant time E) management does not want to be constantly changing the method of selling and distributing its products

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Challenging

"5) The term demand chain is considered limited because it ." A) advocates a make-and-sell view of the market that relies on a responsive supply network B) suggests that planning starts with raw materials productive inputs and factory capacity C) takes a step-by-step linear view of purchase-production-consumption activities D) ignores the evolution of the global marketplace E) overlooks the needs of target customers

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

66) Which of the following is an advantage of adding new channels in a multichannel distribution system? A) limiting market complexity B) reducing control over the system C) expanding sales and market coverage D) decreasing marketing needs and costs E) minimizing mass customization of products

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

101) Which of the following is true of the exclusive distribution strategy? A) It makes products available to everybody everywhere. B) It is used primarily for convenience items. C) It helps promote a brand's luxury image. D) It gives producers no control over their products. E) It enlists all of the intermediaries willing to carry a company's products.

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

120) Which of the following involves the producer agreeing not to sell to other dealers in a given area or the buyer agreeing to sell only in its own region? A) closed loop marketing B) uniform-delivery pricing C) exclusive territorial agreement D) cross merchandising E) nationalized marketing

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

"140) are large and highly automated warehouses designed to receive goods from various plants and suppliers take orders fill them efficiently and deliver goods to customers as quickly as possible." A) Loading docks B) Open warehouses C) Distribution centers D) Shipping platforms E) Product platforms

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"157) Kimberly decides to alter its distribution strategy so that its jewelry is accessible to the public only through one distributor. The strategy they're considering is known as distribution." A) elusive B) extensive C) exclusive D) selective E) elective

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

154) Which of the following modes of transport should Roland choose to transport the unprocessed vegetables from Riverdale's farms to the Giant Beanstalks' factory quickly and with minimum cost? A) air carrier B) pipeline C) truck D) oil tanks E) air tunnels

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

158) What mode of transport should Kimberly use to ship its goods over long distances as quickly as possible? A) flatcars B) water transport C) air transport D) trucks E) railroads

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"156) When one of the stores complains that the jewelry they're being given is inferior to the jewelry Kimberly sells to other stores Kimberly experiences conflict." A) horizontal B) multitiered C) vertical D) intensive E) subjective

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

143) Which of the following is true of transporting goods via railroads? A) Railroads are ideal for the transportation of digital technology. B) Railroads are a specialized means of shipping petroleum natural gas and chemicals from sources to markets. C) Railroads are a cost-effective way to ship large amounts of bulk products over long distances. D) Railroads are the most flexible mode of transportation in their routing and time schedules. E) Railroads are the slowest mode of transportation and are the most affected by the weather.

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

"58) When a customer lets a producer know something about its products or advertising the customer is providing ." A) decoding B) noise C) feedback D) encoding E) reverse marketing

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

89) Which of the following terms best describes the channels through which two or more people communicate directly with each other including face-to-face mail e-mail texting or an Internet chat? A) shared communication channel B) earned communication channel C) personal communication channel D) nonverbal communication channel E) owned communication channel

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"65) To communicate effectively a marketing communicator should most likely ." A) ensure that the encoding and decoding processes are different B) encode and decode the message personally and frequently C) understand the consumer's field of experience D) foresee unplanned static or distortion E) use familiar words and symbols

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

90) Communication through a telephone call is considered a part of a(n) communication channel. A) online B) nonverbal C) personal D) nonpersonal E) unidirectional

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

138) Under which promotional mix strategy does the producer direct its marketing activities toward channel members to induce them to carry the product and promote it to final consumers? A) pull strategy B) blitz strategy C) push strategy D) buzz strategy E) pulse strategy

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

129) Which of the following is most likely a shortcoming of advertising? A) It is the most expensive promotion tool. B) It cannot reach masses of geographically dispersed buyers. C) It is impersonal and lacks the direct persuasiveness of company salespeople. D) It cannot trigger quick sales. E) It cannot be used to build up a long-term image for a product.

142) John Deere does very little promoting of its lawn mowers and garden tractors to final consumers. Instead John Deere's sales force works with Lowe's Home Depot independent dealers and other channel members who in turn sell John Deere products to final consumers. According to this information which of the following promotion mix strategies is being used by John Deere? A) public relations strategy B) direct marketing strategy C) push strategy D) blitz strategy E) pull strategy

"10) Product planners need to consider products and services on three levels. Each level adds more customer value. The most basic level is which addresses the question ""What is the buyer really buying?""" A) an actual product B) an augmented product C) core customer value D) co-branding E) exchange value

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"25) are consumer products that the consumer either does not know about or knows about but does not normally think about buying." A) Specialty products B) Convenience products C) Unsought products D) Shopping products E) Capital items

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"28) are industrial products that aid in the buyer's production or operations including installations and accessory equipment." A) Unsought products B) Convenience products C) Capital items D) Specialty items E) Repair items

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"11) Product planners need to consider products and services on three levels. At the second level product planners must ." A) offer additional product support and after-sale services B) identify the core customer value that consumers seek from the product C) turn the core benefit into an actual product D) find out how they can create the most satisfying brand experience E) define the problem-solving benefits or services that consumers seek

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"29) Installations consist of ." A) highly priced luxury goods such as Rolex watches B) portable office equipment such as computers C) major purchases such as elevators D) portable factory equipment such as hand tools E) products such as insurance

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

5) Market offering includes everything from pure tangible goods to pure services as well as combinations of goods and services. Which of the following is NOT a product or service? A) breakfast cereal B) rental car C) free concert D) shoes E) haircut

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"74) The first step in designing support services is to ." A) add new services that will both delight customers and yield profits to the company B) closely observe the product and pricing strategies of consumers C) survey customers to assess the value of current services and obtain ideas for new ones D) prevent brand dilution E) encourage customers to try new products

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"115) The service profit chain includes internal service quality satisfied and productive service employees greater service value healthy service profits and growth and ." A) higher market share B) better paid employees C) satisfied and loyal customers D) increased manufacturing efficiency E) higher morale

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Moderate

158) While advertising campaigns can help create name recognition brand knowledge and perhaps even some brand preference brands are not maintained by advertising but by . A) brand differentiation B) line extensions C) brand experiences D) brand sponsorships E) brand awareness

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

149) Which of the following is true with regard to store brands? A) Store brands have been declining in popularity and strength for more than two decades. B) Store brands are also known as national brands. C) Store brands are created and owned by resellers of a product or service. D) Increasing consumer distrust toward store brands has led to a store-brand slump. E) Store brands are growing far slower than manufacturer's brands.

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

63) Which of the following focuses on finding new ways to solve customer problems and create more customer-satisfying experiences? A) concept testing process B) customer value proposition C) customer-centered new product development D) customer lifetime value E) team-based new product development

Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"41) Neutron Inc. is conducting a business analysis to determine which of the many newly developed apps should be released. To estimate sales the company must ." A) conduct surveys of competitors B) exclusively consider the government's opinions C) consider the sales history of similar products D) apply the PLC concept to industry sales E) opt for business process reengineering

"57) Marketers target Generation Z because they . A) listen to their parents and follow their examples" B) dislike technology C) spend an estimated $44 billion annually of their own money D) prefer shopping in brick-and-mortar stores with actual products E) have long attention spans and are easily targeted

Answer: C AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging

"59) Marketers can group people in a number of ways including by birth date. However the following combination of groups has proven to be more effective: ." A) income lifestyle life stage B) profession common values they seek in products they buy lifestyle C) lifestyle life stage common values they seek in products they buy D) place of residence life stage lifestyle E) race or nationality lifestyle common values they seek in products they buy

"19) consumers are the most affluent U.S. demographic segment and are expected to have an annual buying power approaching $1 trillion by 2017." A) Hispanic American B) African American C) Asian American D) Baby boomers E) Generation X

Answer: C AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

25) Which of the following statements is true of social classes? A) Social classes are society's temporary divisions. B) Members of a social class have unique and distinct values interests and behaviors. C) People within a social class tend to exhibit similar buying behavior. D) Income is the single factor that determines social class. E) Social classes universally exhibit identical product and brand preferences.

Answer: C AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

26) Which of the following statements is true regarding social classes in the United States? A) Social class is determined by income alone. B) Lines between social classes in the United States are fixed and rigid. C) Social classes show distinct product preferences in clothing and automobiles. D) Wealth is more critical than education level in measuring social class. E) People are relegated to a permanent social class in the United States.

Answer: C AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

"56) The societal marketing concept seeks to establish a balance between ." A) customer lifetime value and customer equity B) an inside-out perspective and an outside-in perspective C) consumer short-run wants and consumer long-run welfare D) marketing mixes and market offerings E) customer-driven marketing and customer-driving marketing

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

"57) refers to socially and environmentally responsible marketing that meets the needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs." A) Ambush marketing B) Evangelism marketing C) Sustainable marketing D) Database marketing E) Affinity marketing

"147) When sellers set prices after talking to competitors and engaging in collusion they are involved in ." A) interstate commerce B) comparative pricing C) price fixing D) skimming pricing E) price bundling

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

"157) occurs when a seller states price savings that are not actually available to consumers." A) Comparative pricing B) Scanner fraud C) Deceptive pricing D) Market skimming E) Price collusion

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Easy

"150) If a large retailer sold numerous items below cost with the intention of punishing small competitors and gaining higher long-run profits by putting those competitors out of business the retailer would be guilty of ." A) price collusion B) price fixing C) predatory pricing D) competitive pricing E) penetration pricing

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

"154) Price discrimination is legal when a ." A) manufacturer and reseller have agreed upon a specified retail price for a product B) manufacturer sells to retailers in different markets C) seller can prove its costs are different when selling to different retailers D) seller advertises prices that are not actually available to consumers E) seller has not communicated with competitors before announcing prices

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

"119) A strategy of exclusive dealing is most likely considered legal if ." A) the industry is newly developed B) both parties have large territories C) competition is not substantially lessened D) the dealer agrees to promote the competitor's products E) the dealer receives a steady source of supply and support

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Moderate

"144) The FTC has adopted a three-day cooling-off rule to give special protection to . A) customers who purchased because of deceptive advertising" B) customers who purchased because of bait-and-switch tactics C) customers who were not seeking a product D) resellers who do not receive proportionately equal treatment from manufacturers E) resellers who are not covered by the Robinson-Patnam Act

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

"104) The environmental sustainability movement encourages companies to . A) actively resist social change" B) operate freely in the black market C) go beyond government regulations D) institute deregulation E) curb organizational anarchy

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

"131) Cause-related marketing has become a primary form of . A) quality control" B) corporate fraud protection C) corporate giving D) legislative lobbying E) price discrimination

Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"93) The marketing world is most likely embracing because consumers wield greater power now with many platforms for airing and sharing their brand views with other consumers." A) partner relationship management B) supply chain management C) customer-managed relationships D) market segmentation E) consumer ethnocentrism

Answer: C AACSB: Information technology Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

70) Which of the following is true of changes in the organization of distribution channels? A) Developing new channels seldom causes conflict with a company's established channels. B) To remain competitive product and service producers must use fewer marketing channels. C) The growth of the Internet threatens many brick-and-mortar companies with disintermediation. D) Companies have fewer channel options today than they did in the past due to economic problems. E) Advances in technology have decreased the number of channels available to entrepreneurial firms.

Answer: C AACSB: Information technology Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

"18) Today's consumers do not need to rely on marketer-supplied information about products and services because they can use to seek out a wealth of information." A) push strategies B) direct and digital marketing C) the Internet D) personal selling E) public relations

Answer: C AACSB: Information technology Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

"130) The boom in Internet marketing has created a new set of social and ethical issues. Critics worry most about ." A) accessibility B) puffery in advertising C) online privacy issues D) sustainability E) issues pertaining to efficiency

Answer: C AACSB: Information technology Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"36) Facebook Snapchat and LinkedIn are all examples of . A) brand alliances" B) opinion leaders C) social networks D) early adopters E) market mavens

Answer: C AACSB: Information technology Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

12) Electrowhip a company that manufacturers blenders and electric whisks has decided to use a market penetration pricing strategy. Which of the following if true proves their decision to be a wise one? A) Electrowhip's competitors utilize social media for marketing their products. B) Electrowhip sells products whose image and quality support high prices. C) Electrowhip operates in a market with many competitors. D) Electrowhip does not operate in a price sensitive market. E) Electrowhip's products are intended to appeal to the elite in society.

Answer: C AACSB: Reflective thinking Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Challenging

"83) are formed by noting current prices remembering past prices or assessing the buying situation." A) Product line prices B) Seasonal prices C) Reference prices D) Time-based prices E) Product bundle prices

Answer: C AACSB: Reflective thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

46) A cell phone manufacturing firm produced 1000 cell phones a day but believed that it could reasonably step up production to 2000 cell phones a day. Consequently it built a larger plant and installed efficient machinery and work arrangements to realize the projected output. Which of the following can most likely be inferred from this information? A) The unit cost of producing 2000 cell phones per day would be twice that of the unit cost of producing 1000 units per day. B) A production plant with the capacity of producing 5000 cell phones a day would be most efficient. C) The unit cost of producing 2000 cell phones per day would be lower than the unit cost of producing 1000 units per day. D) A 2000-capacity production plant would be less efficient because of increasing diseconomies of scale. E) The fixed costs of the firm are more likely to increase with the increase in output.

Answer: C AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

"7) includes sales presentations trade shows and incentive programs." A) Direct and digital marketing B) Sales promotion C) Personal selling D) Public relations E) Advertising

Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

"53) A(n) is a set of symbols that the sender transmits. A) encoder" B) feedback loop C) message D) media E) decoder

Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"64) The AIDA model identifies the characteristics of an effective ." A) advertising budget B) channel of communication C) marketing message D) marketing mix E) marketing response

Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

137) Which promotional tool is the most immediate customized and interactive? A) segmented advertising B) sales promotion C) direct marketing D) horizontal diversification E) public relations

Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

"13) When marketers set low expectations for a market offering they run the risk of ." A) disappointing loyal customers B) having to use an outside-in rather than an inside-out perspective C) failing to attract enough customers D) failing to understand their customers' needs E) incorrectly identifying a target market

Answer: C Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

"34) involves setting prices based on the costs for producing distributing and selling the product plus a fair rate of return for effort and risk." A) Value-based pricing B) Competition-based pricing C) Cost-based pricing D) Penetration pricing E) Break-even pricing

Answer: C Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

"57) The simplest pricing method is pricing." A) value-based B) fixed cost C) cost-plus D) target return E) competition-based

"58) Cost-plus pricing ." A) is a complex pricing method B) involves pricing that accurately reflects production costs C) involves adding a standard markup for profit D) aims at breaking even on the costs of making and marketing a product E) is a value-based pricing method

"19) A restaurant wants to use value-based pricing. It knows the costs of the ingredients in the food. It must also factor in in determining customer satisfaction and value." A) wages of employees B) costs of utilities of the restaurant FALSE D) travel distance for customers E) percentage of bar patrons versus dining patrons

"119) Price setting is usually determined by in large companies." A) top managers B) external stakeholders C) product managers D) non-executive employees E) the sales department

Answer: C Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"101) Freight-absorption pricing is used for ." A) penetrating international markets B) generating customer buzz about new products C) holding on to increasingly competitive markets D) generating quick profits to offset input costs E) maintaining quality service records

Answer: C Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

71) In which step of the communication process does the marketing communicator need to know the buyer-readiness stage of the target audience? A) designing the message B) choosing the media through which to send the message C) determining communication objectives D) collecting feedback E) selecting the message source

Answer: C Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

122) Which of the following methods is used by companies to set their advertising budgets based on the industry average? A) percentage-of-sales method B) affordable method C) competitive-parity method D) objective-and-task method E) regression method

Answer: C Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

"7) A mission statement serves as a . A) statement of the organization's net profits B) plan for short-term sustainability" C) statement of the organization's purpose D) statement of the organization's current liabilities E) reward plan for the organization's highly skilled employees

Answer: C Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

"43) are a type of SBU that often require heavy investments to finance their rapid growth." A) Cash cows B) Question marks C) Stars D) Dogs E) Bears

Answer: C Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

137) Which of the following functions is NOT part of managing the marketing process? A) planning B) control C) budgeting D) implementation E) organization

"151) More and more companies are shifting their brand management focus from brand profitability toward ." A) technology management B) product management C) customer management D) functional management E) geographic management

"62) Over the past two decades the U.S. population has shifted toward the states. A) Northern" B) Northeast C) Sunbelt D) Midwest E) Corn belt

Answer: C Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

"69) Currently in the United States job growth is the strongest for . A) blue collar workers" B) manufacturing workers C) professional workers D) construction workers E) sanitation workers

Answer: C Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

110) Which of the following is most likely a result of regulations set up by the Food and Drug Administration and the Consumer Product Safety Commission? A) The time between new product ideas and their introduction to the market has decreased. B) Annual spending on research and development has decreased. C) Research costs for companies have risen. D) Product innovation has significantly declined. E) Marketers have grown increasingly apathetic toward meeting safety standards.

Answer: C Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

"125) Laws in the United States and many other countries have many business-oriented laws covering issues such as competition environmental protection pricing packaging and labeling product safety truth in advertising consumer privacy and ." A) land ownership B) taxation C) fair-trade practices D) education E) interdepartmental communication

Answer: C Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"160) Companies and their products often create ." A) new consumers B) new technologies C) new industries and their structures D) new advertising campaigns E) new manufacturing methods

Answer: C Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Moderate

"13) Each culture contains smaller or groups of people with shared value systems based on common life experiences and situations." A) cultural universals B) reference groups C) subcultures D) monocultures E) social networks

Answer: C Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"38) Independent bloggers are self-made influencers. Traits that make them relevant to marketers include ." A) creative writing skills B) professional Web site C) good fit with the brand D) a few vocal followers E) technological skills

Answer: C Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"60) refers to qualitative research designed to probe consumers' hidden subconscious motivations." A) Perception analysis B) Subliminal analysis C) Motivation research D) Need recognition E) Market segmentation

Answer: C Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"131) After the purchase of a product consumers will be either satisfied or dissatisfied and engage in ." A) consumer capitalism B) alternative evaluation C) postpurchase behavior D) consumer ethnocentrism E) information searches

Answer: C Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

112) Which of the following consumer buying behaviors is related to conditions of low- consumer involvement and little significant brand difference? A) complex buying behavior B) dissonance-reducing buying behavior C) habitual buying behavior D) variety-seeking buying behavior E) consumer capitalism

Answer: C Skill: Concept Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Easy

"156) Relative advantage compatibility complexity divisibility and communicability are all characteristics of ." A) alternative evaluations B) the degree of buyer involvement C) a product's rate of adoption D) unexpected situational factors E) postpurchase behaviors

Answer: C Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate

"2) consists of evaluating each market segment's attractiveness and selecting one or more segments to enter." A) Positioning B) Mass customization C) Market targeting D) Market segmentation E) Differentiation

Answer: C Skill: Concept Objective: LO 7.1: Define the major steps in designing a customer value-driven marketing strategy: market segmentation targeting differentiation and positioning. Difficulty: Easy

"103) is the process by which firms interact one-to-one with masses of customers to design products and services tailor-made to individual needs." A) Product diversification B) Micromarketing C) Mass customization D) Differentiated marketing E) Local marketing

Answer: C Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

"85) Market targeting is ." A) arranging for a market offering to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers B) dividing a market into distinct groups of buyers who have different needs and characteristics C) evaluating segment attractiveness and deciding how many and which segment(s) to serve D) marketing to buyers with separate marketing strategies or mixes E) differentiating the firm's market offering to create customer value

Answer: C Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

"154) involves the use of a successful brand name for new or modified products in a new category." A) A line extension B) A product line C) A brand extension D) Co-branding E) Cannibalization

Answer: C Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"37) A review of the sales costs and profit projections for a new product to find out whether they satisfy the company's objectives is called a ." A) business feasibility plan B) marketing strategy development C) business analysis D) product acceptance E) business proposal

Answer: C Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

35) Which of the following is included in the second part of the marketing strategy statement? A) advertising tagline B) promotional mix C) planned price D) customer segmentation E) operational excellence

Answer: C Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

118) The PLC concept can be applied by marketers as a useful framework for describing how . A) competitors' moves are predicted B) marketing strategies are developed C) products and markets work D) concept testing is conducted E) product ideas are developed

Answer: C Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

"2) According to management guru Peter Drucker ""The aim of marketing is to .""" A) maximize profits of the company B) emphasize customer wants and not customer needs C) make selling unnecessary D) fulfill unrealistic customer expectations E) sell products

Answer: C Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Easy

Principles of Marketing 17e (Kotler/Armstrong) Chapter 10 Pricing: Understanding and Capturing Customer Value "1) refers to the amount of money charged for a product or service." A) Value B) Cost C) Price D) Wage E) Salary

Answer: C Skill: Concept Objective: LO 10.1: ,Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Easy

64) Which of the following is a cost-based approach to pricing? A) value-based pricing B) high-low pricing C) target return pricing D) good value pricing E) EDLP

"122) Departments or managers that have an influence on pricing include sales managers finance managers accountants and ." A) engineering managers B) human resources managers C) production managers D) customers E) resellers

Answer: C Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Easy

"58) A(n) is a straight reduction in price on purchases during a stated period of time or of larger quantities." A) allowance B) free sample C) discount D) tax credit E) quota

Answer: C Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

"53) A VMS integrates successive stages of production and distribution under single ownership." A) contractual B) contingency C) corporate D) conventional E) communal

Answer: C Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Easy

resellers and final consumers. A) Cross B) Price C) Supply chain D) Product cycle E) Customer

Answer: C Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"46) are low-share business units in high-growth markets that require a lot of cash to hold their share." A) Stars B) Dogs C) Question marks D) Cash cows E) Bears

Answer: C Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"104) The process of evaluating each market segment's attractiveness and selecting one or more segments to enter is known as ." A) market segmentation B) diversification C) market targeting D) prospecting E) downsizing

Answer: C Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"98) Customers can be grouped and served in various ways based on several factors. These include all of the following EXCEPT factors." A) psychographic B) behavioral C) technological D) demographic E) geographic

Answer: C Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

113) Which of the following Ps in the marketing mix describes the goods-and-services combination the company offers to the target market? A) price B) promotion C) product D) place E) package

Answer: C Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

96) Which of the following is NOT part of a company's decision about which customers it will serve and how? A) differentiation B) targeting C) budgeting D) segmentation E) positioning

Answer: C Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Easy

"141) The main section of the marketing plan most likely presents a detailed analysis" of the current marketing situation. A) breakeven B) SBU C) SWOT D) regression E) cluster

this organization an operational specialist heads different marketing activities. A) geographic B) product management C) functional D) customer management E) market

5) The interrelated departments within a company that influence marketing decisions form the environment. A) cultural B) economic C) company D) political E) technological

Answer: C Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

"123) The environment consists of laws government agencies and pressure groups that influence or limit various organizations and individuals in a given society." A) socio-legal B) cultural C) political D) technological E) economic

Answer: C Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"35) Companies that use brand ambassadors are most likely involved in marketing. A) ambush" B) spam C) buzz D) viral E) database

Answer: C Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"47) is a person's pattern of living as expressed in his/her psychographics and it includes the individual's activities interests and opinions." A) Personality B) Culture C) Lifestyle D) Motive E) Social class

Answer: C Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"75) A(n) is a descriptive thought that a person has about something." A) lifestyle B) motive C) belief D) attitude E) cognition

Answer: C Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

63) Which of the following is NOT part of Maslow's hierarchy of needs? A) physiological needs B) safety needs C) spiritual needs D) esteem needs E) social needs

Answer: C Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

150) Which of the following is the adoption process stage at which the consumer considers whether trying the new product makes sense? A) awareness B) interest C) evaluation D) adoption E) trial

Answer: C Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

"3) involves dividing a market into smaller segments of buyers with distinct needs characteristics or behaviors that might require separate marketing strategies or mixes." A) Mass customization B) Market targeting C) Market segmentation D) Differentiation E) Positioning

"26) segmentation refers to dividing the market into segments according to occasions when buyers get the idea to buy actually make their purchase or use the purchased item." A) Gender B) Psychographic C) Occasion D) Geographic E) Income

Answer: C Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"33) In the context of behavioral segmentation markets segmented by can be categorized into light medium and heavy product users." A) benefits sought B) loyalty status C) usage rate D) user status E) occasion

Answer: C Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"57) A market segment that is large enough or profitable enough to serve is . A) measurable" B) accessible C) substantial D) profitable E) differentiable

Answer: C Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

12) Which of the following is NOT one of the major variables used in segmenting consumer markets? A) demographic B) behavioral C) ethical D) geographic E) psychographic

Answer: C Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"95) With a(n) marketing strategy a firm goes after a large share of one or a few smaller niches." A) individual B) mass C) concentrated D) differentiated E) local

Answer: C Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

"102) When a company customizes its merchandise store by store to meet shopper needs it is practicing marketing." A) niche B) mass C) local D) segmented E) trigger-based

Answer: C Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"58) Product attributes include all of the following EXCEPT ." A) style B) design C) price D) features E) quality

Answer: C Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"82) Product mix refers to the number of different product lines the company carries." A) length B) height C) width D) consistency E) depth

Answer: C Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"85) 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) length B) depth C) consistency D) width E) height

Answer: C Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"106) Service means that services cannot be seen tasted felt heard or smelled before they are bought." A) inseparability B) variability C) intangibility D) perishability E) heterogeneity

Answer: C Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Easy

"110) Service means that the quality of services depends on who provides them as well as when where and how they are provided." A) intangibility B) inseparability C) variability D) perishability E) heterogeneity

Answer: C Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Easy

"135) Brand is the differential effect that knowing the brand name has on customer response to the product and its marketing." A) differentiation B) knowledge C) equity D) personality E) relevance

Answer: C Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

"12) New product development starts with ." A) concept development B) idea screening C) idea generation D) concept testing E) test marketing

Answer: C Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"29) A is the way consumers perceive an actual or potential product." A) product idea B) product concept C) product image D) brand personality E) concept test

Answer: C Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

"128) Most products in the marketplace are in the stage of the product life cycle." A) growth B) decline C) maturity D) introduction E) development

Answer: C Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

125) Which stage in the PLC normally lasts longest and poses strong challenges to marketing managers? A) growth B) decline C) maturity D) introduction E) adoption

Answer: C Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

87) How have changes in technology and the growth of online marketing affected the design of marketing channels?

Answer: Changes in technology and the growth of online marketing have increased disintermediation which is the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional intermediaries with radically new types. In many industries traditional intermediaries are dropping by the wayside. For example many airlines now sell directly to final buyers cutting retailers and sales agents from their marketing channels. Online marketers take business from traditional brick-and-mortar retailers. AACSB: Information technology Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

107) What is competition-based pricing?

Answer: Competition-based pricing refers to setting prices based on competitors' strategies prices costs and market offerings. AACSB: Written and oral communication Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

167) Briefly describe competitive advantage.

Answer: Competitive advantage refers to an advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices. AACSB: Written and oral communication Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

142) When are competitors most likely to react to price changes? How can a firm anticipate the likely reactions of its competitors?

Answer: Competitors are most likely to react when the number of firms involved is small when the product is uniform and when the buyers are well informed. If the firm faces one large competitor and if the competitor tends to react in a set way to price changes that reaction can be easily anticipated. But if the competitor treats each price change as a fresh challenge and reacts according to its self-interest the company will have to figure out just what makes up the competitor's self-interest at the time. AACSB: Application of knowledge

145) Compare and contrast the four types of buying decision behavior exhibited by consumers.

Answer: Consumers exhibit complex buying behavior when they are highly involved in a purchase decision and perceive significant differences among the choices. Consumers will engage in a learning process as they gather and analyze information about their choices before making a purchase. When a consumer is highly involved with a purchase but does not perceive significant differences among her choices he/she will most likely engage in dissonance- reducing behavior. This behavior involves less time learning about each product's attributes and a consumer is more likely to make a choice based on a good price or convenience. Habitual buying behavior and variety-seeking behavior are exhibited when a consumer has a low involvement with the product. When the consumer sees little difference between brands he/she will most likely engage in habitual buying behavior buying the most familiar brands out of habit. When the consumer perceives some significant brand differences he/she is more likely to engage in variety-seeking buying behavior doing a lot of brand switching without a great deal of evaluation before purchase. AACSB: Application of knowledge

145) Why are ad expenditures high for products in the introduction stage of the PLC?

Answer: Consumers have very little awareness about such products

51) How do consumers perceive products?

Answer: Consumers see products as complex bundles of benefits that satisfy their needs. AACSB: Written and oral communication Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

111) Describe the types of products that are intensively distributed and provide examples.

Answer: Convenience products and common raw materials must be available where and when consumers want them

150) What is the difference between core beliefs and secondary beliefs? Give an example of each.

Answer: Core beliefs and values are passed on from parents to children and are reinforced by schools churches business and government. On the other hand secondary beliefs and values are more open to change. For example believing in marriage is a core belief

147) Explain the controversy surrounding cause-related marketing.

Answer: Critics worry that cause-related marketing is more a strategy for selling than a strategy for giving-that "cause-related" marketing is really "cause-exploitative" marketing. Companies may walk a fine line between increased sales and an improved image yet face charges of exploitation even though business and charity don't have to be mutually exclusive. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

102) Cultural factors exert a broad and deep influence on consumer behavior. The marketer needs to understand the role played by the buyer's culture subculture and social class. Distinguish between culture subculture and social class.

Answer: Culture is the most basic cause of a person's wants and behavior. Each culture contains smaller subcultures or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities religions racial groups and geographic regions. Many subcultures make up important markets. Social classes are society's relatively permanent and ordered divisions whose members share similar values interests and behaviors. Unlike nationality or ethnic subculture social class is determined by a combination of many variables such as occupation income education and wealth. AACSB: Written and oral communications

133) Define customer equity and explain how a company can increase it.

Answer: Customer equity is the sum of the lifetime values of all of the company's current and potential customers. It's a measure of the future value of the company's customer base. Clearly the more loyal the firm's profitable customers the higher its customer equity. Customer equity may be a better measure of a firm's performance than current sales or market share. To increase customer equity companies should work to delight their customers and establish full relationships with their most profitable customers. AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

131) Define customer relationship management and explain its associated tools and levels of relationships.

Answer: Customer relationship management is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. A company with mostly low-margin customers is likely to seek basic relationships using brand- building advertising public relations and so on. An organization with few customers and high margins on the other hand will work to create full partnerships with key customers. To create stronger bonds with customers some companies offer frequency marketing programs that reward customers who buy frequently or in large amounts. Other companies sponsor club marketing programs that offer members special benefits and create member communities. AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

132) Explain why the aim of customer relationship management is to create not just customer satisfaction but also customer delight.

Answer: Customer satisfaction cannot be taken for granted. Because brand loyalty is dependent upon strong customer satisfaction companies strive to retain satisfy and even delight current customers. Outstanding marketing companies go out of their way to keep important customers satisfied. Most studies show that higher levels of customer satisfaction lead to greater customer loyalty which in turn results in better company performance. Firms create customer delight by promising only what they can deliver and then delivering more than what they promised. They also create emotional relationships with key customers. Delighted customers make repeated purchases and become willing marketing partners and "customer evangelists" who tell other potential customers about their positive experiences with the product. AACSB: Written and oral communication Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

108) Distinguish between value-based pricing and cost-based pricing.

Answer: Customer value-based pricing uses buyers' perceptions of value as the key to pricing. Value-based pricing means that the marketer cannot design a product and marketing program and then set the price. Price is considered along with all other marketing mix variables before the marketing program is set. Although costs are an important consideration in setting prices cost-based pricing is often product driven. The company designs what it considers to be a good product adds up the costs of making the product and sets a price that covers costs plus a target profit. Marketing must then convince buyers that the product's value at that price justifies its purchase. AACSB: Application of knowledge

42) Why should a company be concerned about integrating communications from different sources within the company?

Answer: Customers won't separate conflicting or varying messages from different sources within a company so failing to integrate communications could lead to blurred consumer brand perceptions. AACSB: Application of knowledge Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

"143) Many managers think that ""doing things right"" or is as important as or even more important than ""doing the right things.""" A) strategy B) planning C) positioning D) implementation E) targeting

Answer: D AACSB: Analytical thinking

"5) When marketers at Fair & Leigh Inc. selected the Millennials a demographic group that includes many college students as an untapped group of potential customers for their new line of products they were engaging in ." A) occasion segmenting B) local marketing C) market diversification D) market targeting E) product positioning

Answer: D AACSB: Analytical thinking

"34) Cathy's Clothes is a small yet successful retail chain that sells women's clothing and accessories with a focus on buyers who have relatively modest means. For this specific purpose the firm has rolled out several marketing initiatives aimed at women of a specific demographic. This is an example of ." A) ambush marketing B) social marketing C) societal marketing D) target marketing E) cause marketing

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging

"58) Some fast-food restaurants offer tasty and convenient food at affordable prices but in doing so they contribute to a national obesity epidemic and environmental problems. These fast-food restaurants overlook the philosophy." A) marketing concept B) product concept C) production concept D) societal marketing concept E) selling concept

"116) Carol Veldt has decided to ask selected guests to participate in an extensive survey about their experience at Seagull Terrace and about their requirements in terms of amenities and cuisines. By implementing the suggestions she receives from guests Carol would be following the concept." A) production B) product C) selling D) marketing E) societal marketing

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

"33) In an effort to differentiate its offerings from its competitors Pegasus Computers decided to add an extra USB port in all its laptops besides providing a free pair of Delphi power bass headphones with every Pegasus laptop. Although the additional features increased the price of the laptops by $500 Pegasus was confident that the strategy would help boost demand for its laptops substantially. This is an example of ." A) good-value pricing B) markup pricing C) break-even pricing D) value-added pricing E) cost-based pricing

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

18) A pharmaceutical company in Utah recently released a new and expensive anti-ulcer drug in the market. The company justifies the high price of the drug by claiming that it is highly effective for treating all kinds of ulcers. The company also claims that the new drug will help bring down the need for invasive surgeries an additional benefit for patients. Which of the following pricing strategies is the pharmaceutical company most likely using in this instance? A) target pricing B) markup pricing C) cost-based pricing D) value-based pricing E) break-even pricing

"115) PoolPak produces climate-control systems for large swimming pools. The company's customers are more concerned about service support for maintaining their systems than the initial price of the product. PoolPak specializes in and differentiates itself through both cutting- edge technologies used to build its high-value climate control systems as well as seamless quality service. PoolPak's prices are very high but demand for its climate-control systems seems to be forever on the rise. This exemplifies ." A) target costing B) a pure monopoly C) cost-plus pricing D) a nonprice position E) break-even pricing

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Challenging

144) If Milt Alden focuses on overall costs of manufacturing plus profit in setting product prices which strategy would he employ? A) break-even pricing B) competition-based pricing C) value-added pricing D) cost-plus pricing E) good-value pricing

"95) Whitelight sells its toothpastes in many convenience stores across the country. This is an example of distribution." A) exclusive B) selective C) hybrid D) intensive E) normal

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

94) For which of the following products would the intensive distribution strategy most likely be used? A) high-end cameras B) luxury cars C) lawn mowers D) soft drinks E) furniture

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

"60) An ad for Maybelline age-minimizing makeup in Ladies' Home Journal magazine featured actress Gigi Hadid and offered readers a $2-off coupon when they tried the new makeup. In terms of the communication model the sender of this message is ." A) Gigi Hadid B) Ladies' Home Journal C) readers who redeem the $2-off coupon D) Maybelline E) the target market to which Gigi Hadid appeals

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

"51) HP's advertising agency assembles words and illustrations into an advertisement that conveys the company's intended brand message. In the context of the communication process HP is ." A) messaging B) decoding C) sending D) encoding E) responding

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

13) Which of the following companies has a product-oriented business definition? A) A luxury hotel whose business definition is: "We sell out-of-the-world experiences to our guests." B) A real estate company whose business definition is: "We sell dreams." C) A cosmetic company whose business definition is: "We offer hope and self-expression." E) A high-technology company whose business definition is: "We sell inspirations."

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

14) Which of the following companies has a market-oriented business definition? A) An electronics company whose business definition is: "We produce microchips." B) A hotel whose business definition is: "We rent rooms." C) An apparel company whose business definition is: "We make and sell women's clothing." D) A cosmetic company whose business definition is: "We sell hope and self-esteem." E) A pizzeria whose business definition is: "We sell the world's most delicious thin-crust pizzas."

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

"57) The managers of Arrow an American retail chain are currently reviewing new demographic markets to sell the firm's current products. This is an example of . A) market penetration" B) product development C) mass marketing D) market development E) product adaptation

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"62) A women's apparel manufacturer in California recently acquired a Houston-based company that manufactures office furniture. This is an example of ." A) product development B) market development C) market penetration D) diversification E) product differentiation

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"61) Sunny Brews is a coffeehouse chain based in Boston. It recently introduced Eva a mild roast which became immensely popular. This exemplifies ." A) benchmarking B) diversification C) mass customization D) product development E) downsizing

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"145) Berman Electronics a chain of appliance stores in North America caters to a wide range of customers. It has a marketing organization in which different operational specialists head different marketing activities. Berman Electronics is a(n) ." A) customer management organization B) niche marketer C) early adopter D) functional organization E) laggard

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Challenging

"140) Omega Inc. makes lightweight sunglasses with 100-percent UV protection for people who love to hunt hike and ride bikes. The company's long-term plans include the development of lenses that in addition to protecting users from UV rays would help reduce lens spotting through effective water-sheeting methods. This new feature would be valuable to people who fish. Given the rising popularity of recreational fishing in the United States Omega products clearly have a huge market potential. In terms of a SWOT analysis Omega has recognized a market ." A) weakness B) strength C) threat D) opportunity E) challenge

21) Cape Sky Inc. an international insurance and financial services company is the primary sponsor of the annual New York City Marathon which is attended by over one million fans and watched by approximately 300 million viewers worldwide. The Cape Sky logo and name are displayed throughout the racecourse. Cape Sky most likely sponsors this event in order to appeal to which of the following types of publics? A) financial publics B) citizen-action publics C) government publics D) general publics E) internal publics

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Challenging

23) Price & Malone Corp. a company based in Houston caters to a market of individuals and households that buy goods and services for personal consumption. Price & Malone caters to a market. A) business B) reseller C) government D) consumer E) wholesale

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate

56) Wholesome Soups a maker of organic soups is starting a new marketing campaign emphasizing the ease of preparing and eating Wholesome Soups. Print television and Internet ads feature college students enjoying Wholesome Soups in between classes and during study breaks. Wholesome Soups' new marketing campaign is most likely aimed at which of the following? A) Baby Boomers B) Gen Zers C) Gen Xers D) Millennials E) the SOHO market

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging

"111) Trends in the natural environment include all of the following EXCEPT . A) increased government intervention" B) the development of an environmental sustainability movement C) increased pollution D) decreased costs of product development E) shortages of raw materials

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

"54) Harley-Davidson promotes its motorcycles with images of independence freedom and power. Harley-Davidson has created a ." A) motive B) life-cycle stage C) self-concept D) brand personality E) self-actualization need

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

114) Which of the following would a marketer LEAST likely do to encourage habitual buying behavior? A) dominate shelf space B) run frequent reminder ads C) keep shelves fully stocked D) stress unique features in ads E) offer lower prices and coupons

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Challenging

instead she does a lot of brand switching. Carrie exhibits ." A) dissonance-reducing buying behavior B) complex buying behavior C) habitual buying behavior D) variety-seeking buying behavior E) conspicuous consumption behavior

"42) Double Drill Inc. segments its foreign markets by per capita income. This firm segments the international markets based on ." A) political factors B) legal factors C) geographic location D) economic factors E) cultural factors

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

"51) An Irish company that manufactures umbrellas and ponchos primarily targeting consumers during the winter months is using segmentation." A) psychographic B) income C) geographic D) occasion E) benefit

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"55) Business information services such as Experian Marketing Services and Nielsen help marketers to ." A) save significant amounts of money on shipping products B) spend more time identifying potential customers C) learn more specific details from consumers about their products D) segment people and locations into marketable groups of like-minded consumers E) expand their product offerings to interested clients and provide high-quality service to them

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

49) Teen Mania Inc. a company marketing adventure sports merchandise for teenagers targets the world's teenagers who have similar needs and buying behavior even though they are located in different countries. Which market segmentation is evident here? A) income segmentation B) psychographic segmentation C) gender segmentation D) intermarket segmentation E) occasion segmentation

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"101) A public relations firm tailors its advertising and promotional services according to the needs and preferences of specific customers. This exemplifies ." A) trigger-based marketing B) mass marketing C) segmented marketing D) individual marketing E) concentrated marketing

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"115) If Ruben interacted one-to-one with his customers to design his products and services according to individual needs he would be practicing ." A) concentrated marketing B) trigger-based marketing C) undifferentiated marketing D) mass customization E) segmented marketing

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

92) Sanguine Services is a small company that uses a marketing strategy in which its limited resources are employed to target a large share of two small market segments. Sanguine most likely uses which of the following marketing strategies? A) individual marketing B) one-to-one marketing C) mass marketing D) concentrated marketing E) trigger-based marketing

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

"140) Harvey's Bookstore is a popular online bookstore that has differentiated itself through smooth-functioning delivery networks. This is an example of differentiation." A) product B) image C) price D) channel E) people

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

"147) Pierre's Mart a grocery store in New Orleans Louisiana offers less merchandise selection and fairly low levels of service. Despite the lackluster service and limited selection of merchandise customers still flock to Pierre's because it charges rock-bottom prices. Pierre's Mart most likely uses the positioning." A) more for the same B) more for less C) same for less D) less for much less E) more for more

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

156) Kinger Auto specializes in selling low-quality used vehicles that are priced a good deal lower than other used cars. Which of the following value propositions is evident here? A) more for the same B) more for less C) same for less D) less for much less E) more for more

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

158) Which of the following is true with regard to the same for less value proposition? A) Discount stores and "category killers" rarely use the same-for-less value proposition. B) The same-for-less value proposition is mostly offered by marketers who sell higher quality upscale products or services. C) The same-for-less value proposition cannot generate profits. D) Offering the same for less can be a powerful value proposition because everyone likes a good deal. E) The same-for-less positioning involves meeting consumers' lower performance or quality requirements at a much lower price.

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Moderate

111) The customers of Parry's Hair Salon have noticed that the quality of a haircut depends on who provides it as well as when where and how the service is provided. Which of the following characteristics of service is evident in this instance? A) service intangibility B) service inseparability C) service perishability D) service variability E) service distinction

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Challenging

6) A particular firm added three new products earlier this year to increase variety for customers. Two of the products failed to reach the minimal sales quota. Which of the following is LEAST likely to have been the cause of their failure? A) The products were priced too high. B) The products were advertised incorrectly. C) Competitors fought back harder than expected. D) Product research was too extensive. E) The product development costs were high.

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Challenging

22) Executives at an automobile manufacturing company conducted a brainstorming session for selected employees. This session resulted in a large number of ideas for developing new cars after extensive R&D. The executives then planned to filter out the best ideas during the stage. A) business analysis B) idea generation C) concept testing D) idea screening E) concept development

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

"131) When Heinz introduced EZ Squirt packaging and new colors such as Blastin' Green and Awesome Orange to revitalize consumer buying the company was modifying the ." A) market B) pricing strategy C) distribution D) product E) competition

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Challenging

12) Which of the following terms refers to sellers being preoccupied with their own products and losing sight of underlying consumer needs? A) vendor lock-in B) social loafing C) value proposition D) marketing myopia E) conspicuous consumption

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate

36) Which of the following refers to a set of benefits that a company promises to deliver to customers to satisfy their needs? A) customer lock-in B) a cartel C) marketing mix D) value proposition E) market segmentation

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

46) Which of the following marketing orientations calls for aggressive promotional efforts and focuses on creating transactions rather than long-term customer relationships? A) the marketing concept B) the production concept C) the product concept D) the selling concept E) the societal marketing concept

62) Bead Beautiful is a jewelry brand targeted at preteen girls. What needs do NOT fit with this audience as the marketing team develops a value proposition for Bead Beautiful? A) variety of colors in products B) price C) quality of materials D) mature designs E) ease of availability

53) Which of the following is a characteristic of customer-driven marketing? A) Companies understand customer needs even better than customers themselves do. B) Customers are unaware of their needs. C) Products are created that meet both existing and latent needs now and in the future. D) Customers know what they want. E) Customers don't know what is possible.

60) Which of the following is the most likely result of a marketing strategy that attempts to serve all potential customers? A) All customers will be delighted. B) Customer-perceived value will increase. C) All customers will directly turn into customer evangelists. D) Not all customers will be satisfied. E) Customers will not show interest in any other company's products.

112) A seller pursues a full partnership with what kind of customers? A) many customers regardless of profitability B) many high-margin customers C) many low-margin customers D) a few high-margin customers E) a few low-margin customers

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

"99) ""Losing a customer once means losing the entire stream of possible purchases that the customer would make over an extended period of patronage."" This statement specifically indicates loss in terms of ." A) customer-perceived value B) marketing offerings C) partner relationship management D) customer lifetime value E) value proposition

3) Which of the following is true with regard to price? A) Historically price has had the least perceptible impact on buyer choice. B) Price is the least flexible element in the marketing mix. C) Unlike product features and channel commitments prices cannot be changed quickly. D) Price is the sum of all the values that customers give up to gain the benefits of having a product. E) Prices only have an indirect impact on a firm's bottom line.

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 10.1: ,Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Moderate

"12) Effective pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value." A) competition-oriented B) cost-based C) time-based D) customer-oriented E) marketer-oriented

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

"30) Department stores such as Kohl's and JCPenney's practice high-low pricing by ." A) charging a constant everyday low price B) providing few or no temporary price discounts C) increasing prices temporarily on select products D) having frequent sale days for store credit-card holders E) underpricing most consumer items

62) Why is markup pricing most likely impractical? A) Calculating costs is complicated due to fluctuations. B) By tying the price to cost sellers oversimplify pricing. C) When all firms in the industry use this pricing method prices tend to be similar. D) The method ignores demand and competitor prices. E) With a standard markup consumers know when they are being overcharged.

63) Why is markup pricing most likely popular? A) Sellers are more certain about demand than about costs. B) Markup pricing tends to maximize market competition. C) Markup pricing affords buyers greater bargaining power. D) Sellers do not need to make frequent adjustments as demand changes. E) Markup pricing is designed to set prices to break even on the costs of making and marketing a product.

94) Which of the following is true of FOB-origin pricing? A) It is a strategy in which the company charges the same price plus freight to all customers. B) It is a costly option for customers who are located near the company. C) It charges all customers the freight cost from a base city to the customer location. D) It is an expensive alternative for customers in distant locations. E) It is a strategy in which the seller absorbs all or part of the freight charges.

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Easy

106) Which of the following is true of the bottom of the pyramid? A) It is a market segment that has been tapped into and depleted. B) It consists of people who have easy access to luxury goods. C) It comprises people who have easy access to the basic amenities of life. D) It is considered a source of fresh growth opportunities. E) It is a market segment that has insignificant purchasing power.

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

82) Which of the following is NOT a cue to consumers about whether a price is high or low? A) price-matching guarantees B) prices of surrounding similar products C) signs such as "Clearance" D) "Coming Soon!" signs E) location in the store especially at the entry

132) Which of the following is true of price changes? A) Over-demand leads to companies initiating price cuts. B) Changes in price do not affect a brand's image. C) Customer reaction to price changes is not as important as competitor reaction. D) A drop in price can adversely affect how consumers view the brand. E) Excess capacity is a factor that causes increases in price.

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Moderate

Principles of Marketing 17e (Kotler/Armstrong) Chapter 12 Marketing Channels: Delivering Customer Value 1) Producing a product or service and making it available to buyers requires building relationships not only with customers but also with key suppliers and resellers in the company's . A) upstream partnerships B) marketing channels C) inventory providers D) supply chain E) downstream partnerships

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Easy

"100) Craftsman Furniture Company offers its bedroom and living room furniture through independent and smaller chain furniture stores not through every store that sells furniture. It uses distribution." A) intensive B) direct C) corporate D) selective E) exclusive

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy

89) Which of the following is NOT a step in designing an effective marketing channel? A) evaluating the channel alternatives B) identifying major channel alternatives C) analyzing consumer needs D) determining pricing policy for channel members E) setting channel objectives

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

147) In intermodal transportation which of the following describes the use of both rail and trucks for transportation? A) fishyback B) drawbar C) trainship D) piggyback E) airtruck

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

A) pipelines B) air transport C) trucks D) water carriers E) piggyback

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

5) Which of the following promotion tools involves building up a good corporate image and handling unfavorable stories and events? A) sales promotion B) personal selling C) direct and digital marketing D) public relations E) advertising

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Easy

"69) While developing an effective integrated communication once the target audience has been defined marketers must do all these steps EXCEPT ." A) determine the desired response B) collect feedback C) choose the media through which to send a message D) identify potential distractions E) design a message

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

76) Using the AIDA model an effective marketing message should get attention hold interest and obtain action. A) create differences B) enhance doubts C) double interest levels D) arouse desire E) minimize dismay

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

Principles of Marketing 17e (Kotler/Armstrong) Chapter 2 Company and Marketing Strategy: Partnering to Build Customer Engagement Value and Relationships "1) is the process of developing and maintaining a crucial fit between the organization's goals and capabilities and its changing marketing opportunities." A) Benchmarking B) SWOT analysis C) Market segmentation D) Strategic planning E) Diversification

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy

"9) Companies that define their missions in terms of products or technologies are considered myopic primarily because ." A) products and technologies result in low returns on investment B) consumer preferences with regard to products and technology are difficult to predict C) consumer preferences for different product categories vary from time to time D) products and technologies eventually become outdated E) most consumers are not comfortable using sophisticated technology during the buying process

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

15) Which of the following is NOT an example of product-oriented mission statements? A) "We are an online library." B) "We run theme parks." C) "We sell athletic shoes." D) "We sell memorable experiences." E) "We rent hotel rooms."

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

41) Within a company who is most likely to perform strategic planning? A) the president and vice presidents B) the accounting and finance departments C) the marketing and sales departments D) cross-functional teams of divisional managers close to their markets E) the manufacturing and production departments

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

"87) The network made up of the company its suppliers its distributors and ultimately its customers who partner with each other to improve the performance of the entire system is known as the ." A) business portfolio B) supply chain C) marketing mix D) value delivery network E) internal value chain

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy

"135) In a SWOT analysis include favorable trends in the external environment. A) strengths" B) challenges C) weaknesses D) opportunities E) threats

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

"146) refer(s) to meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance." A) Field automation systems B) Market segments C) Market share D) Marketing dashboards E) Line extensions

"153) Marketing control involves four steps including all the following EXCEPT . A) setting specific marketing goals" B) measuring the marketing plan's performance in the marketplace C) evaluating the causes of any differences between expected and actual performance D) increasing the staffing in the planning department E) taking corrective action to close the gaps between goals and performance

"154) All of the following steps pertain to the marketing control process EXCEPT . A) setting goals" B) measuring performance C) taking corrective action D) defining the company's mission E) evaluating the causes of gaps between expected and actual performance

19) A consumer organization in Ohio has challenged the marketing decision of a local firm alleging it to be against the larger social interest. In this instance the firm is challenged by a(n) public. A) internal B) general C) government D) citizen-action E) media

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

"79) A value marketer is most likely to ." A) offer consumers superior quality of goods and services at a very high price B) offer consumers only those products that are associated with status and prestige C) offer consumers low quality goods and services at very low prices D) offer consumers a balanced combination of product quality at a fair price E) deny discounts to consumers to increase profits

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

50) Which of the following is true of the baby boomers? A) They tend to see themselves as far older than they actually are. B) They represent a rapidly shrinking market for new housing and home remodeling. C) They are long past their peak earning and spending years. D) They control an estimated 70 percent of the United States' disposable income. E) They have utter fluency and comfort with digital technology.

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

136) A pastor from Kansas believes that adultery is immoral. This refers to the pastor's . A) secondary belief B) acquired belief C) social identity D) core belief E) cultural orientation

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

7) In the model of buyer behavior which of the following is NOT a major type of force or event in the buyer's environment? A) economic B) technological C) social D) political E) cultural

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

"14) Subcultures include nationalities religions geographic regions and ." A) genders B) ages C) professions D) racial groups E) income levels

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

64) According to Maslow's hierarchy of needs which of the following is the LEAST pressing need? A) physiological needs B) social needs C) esteem needs D) self-actualization needs E) safety needs

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

154) Which of the following product characteristics refers to the degree to which the innovation appears superior to existing products? A) compatibility B) divisibility C) communicability D) relative advantage E) complexity

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

86) Which of the following is LEAST relevant when a firm evaluates different market segments? A) segment size and growth B) company resources C) segment structural attractiveness D) core competencies of competitors E) company objectives

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

150) Which of the following states the product's membership in a category and then shows its point of difference from other members of the category? A) a mission statement B) a vision statement C) a general need description D) a positioning statement E) an order-routine specification

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

"18) are consumer products and services that customers usually buy frequently immediately and with minimal comparison and buying effort." A) Unsought products B) Capital items C) Shopping products D) Convenience products E) Supplies and repair services

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

Principles of Marketing 17e (Kotler/Armstrong) Chapter 8 Products Services and Brands: Building Customer Value 1) Which of the following is true with regard to products? A) The quality of products is far more difficult to measure than that of services. B) Products do not include experiences organizations persons places and ideas. C) Products are not meant for sale in the market. D) Products include services events persons places organizations ideas or a mixture of these. E) Products refer to only those activities that are essentially intangible.

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

"62) refers to freedom from defects and consistency in delivering a targeted level of performance." A) Performance quality B) Product style C) Branding D) Conformance quality E) Product design

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Easy

"76) The major product line decision involves product the number of items in the product line." A) features B) line depth C) line conformance D) line length E) packaging

71) Which of the following has become a major packaging concern in recent years? A) underpackaging B) legibility of print C) colors used D) product safety E) durability

67) Which of the following questions is most important for product designers to consider while developing a product? A) Which specific features of the product do customers like most? B) How does the product appear to buyers? C) What are the product's technical specifications? D) How would customers use and benefit from the product? E) How can the product be packaged to stimulate instant purchase?

"114) According to the service profit chain superior internal service quality results in . A) lesser service value" B) increased word-of-mouth sales C) reduced after-sale services D) more satisfied loyal and hardworking employees E) negative brand equity of newly launched products

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Moderate

"118) Service companies can differentiate their offering by . A) having a lower price than their competitors" B) designing a superior delivery process C) offering a stellar physical environment in which the product is delivered D) developing innovative features E) adopting a recognizable image

and supporting service people to work as a team to provide customer satisfaction. A) service inseparability B) social marketing C) service variability D) internal marketing E) corporate image marketing

"45) In the stage of the new product development process products undergo rigorous tests to make sure that they perform safely and effectively or that consumers will find value in them." A) product design B) idea generation C) concept development and testing D) product development E) product activation

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Easy

20) Which of the following statements is true of the idea generation stage in the new product development process? A) The purpose of idea generation is to reduce the number of ideas to the least possible number. B) Truly innovative companies rely exclusively on a single source for new product ideas. C) Customers are the least important sources of new product ideas. D) Truly innovative companies develop extensive innovation networks that capture ideas and inspiration from every possible source. E) Truly innovative companies seldom rely on customers and the general public for ideas.

53) All of the following are disadvantages of test marketing EXCEPT that test marketing . A) is typically expensive B) can be time consuming C) enables competitors to gain advantages D) encourages dishonesty among participants E) fails to guarantee product success in the market

69) Which of the following is a disadvantage of a team-based approach to new product development? A) It takes longer for the development of a new product. B) The development effort is not as effective because of employee inexperience. C) It decreases the efficiency of the new product development process. D) It can result in organizational confusion and tension. E) The process does not work with the shorter life cycles of many of today's products.

"110) is the product life cycle period when sales fall off and profits drop." A) Introduction B) Growth C) Maturity D) Decline E) Product development

Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Easy

113) What causes a specific brand's life cycle to change quickly? A) costs of raw materials B) changing demographics C) shift in company strategy D) competitive attacks and responses E) new technology

"92) A manufacturer of a variety of technological devices asked its marketing department to develop inexpensive methods of building and maintaining brand awareness and excitement. The marketing department then recruited consumers who were early adopters of technological devices to spread the word about the company's new products. This is an example of ." A) a reverse marketing activity B) nonpersonal marketing C) sales promotion D) buzz marketing E) direct marketing

Answer: D AACSB: Application of knowledge

97) John and Barb could have drawn attention to their services in several ways by using effective integrated marketing communications. Which of the following is NOT a part of an IMC strategy? A) public relations B) personal selling C) direct marketing D) strategic planning E) sales promotion

Answer: D AACSB: Application of knowledge

30) Which of the following product mix pricing strategies did Polaroid use when it set the general price range of its cameras low and the markup on its film high? A) product-segmented pricing B) by-product pricing C) customer-segmented pricing D) captive product pricing E) product bundling pricing

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

"70) In return for participating in Honda advertising and sales support programs Honda dealerships are rewarded with payments or price reductions which are known as ." A) seasonal discounts B) functional allowances C) cash discounts D) promotional allowances E) trade-in allowances

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Moderate

137) In response to price cuts from competitors a cereal company with several more expensive and higher quality cereals introduced a lower-priced option to its product line. This is an example of which of the following responses to a competitor's price cut? A) raising the perceived value of a product B) improving product quality C) accepting a reduced market share D) launching a "fighter brand" E) using high-low pricing

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Challenging

17) Which of the following companies uses a direct marketing channel? A) Fishhooks a factory that manufactures fishing equipment that it ships to hobby stores worldwide B) Germfight a factory that manufactures dental products that it distributes only to select department stores C) Apple Blossoms a company that sells its cosmetics exclusively through Ray's Retail Store D) Holly Wreaths a store that sells Christmas ornaments to customers via its online click-to- order catalogs E) Showdown a clothing store that stocks merchandise from different international brands

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

"45) The management of two Panizza restaurants has an ongoing disagreement over the discount rate given to students from the local high school. This is an example of conflict." A) intensive B) selective C) exclusive D) horizontal E) vertical

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

83) A charitable trust's appeal which states "While you are trying to figure out what to get the man who has everything don't forget the man who has nothing" is an example of a(n) appeal. A) structural B) awareness C) rational D) moral E) standard

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

108) Crocus a gift store specializes in serving customer segments that major competitors overlook and ignore. Which of the following best describes Crocus? A) market follower B) market challenger C) early adopter D) market nicher E) laggard

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it. Difficulty: Moderate

"121) Donna wants to buy a new coat. During the stage of the buyer decision process she will ask her friends to recommend stores that sell good quality winterwear clothing. She will also go through newspapers and magazines to look out for offers and sales on coats." A) product evaluation B) alternative evaluation C) need recognition D) information search E) purchase decision

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 5.3: List and define the major types of buying decision behavior and the stages in the buyer decision process. Difficulty: Challenging

"22) Gilron Holidays runs a premium membership club that caters to customers whose annual salary exceeds $100000. Members of this club are offered seasonal discounts at select luxury hotels in select cities worldwide. Gilron Holidays most likely follows a(n) segmentation approach." A) gender B) benefit C) occasion D) income E) geographic

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

16) Delta Motorworks markets its cars based on the age gender and income of its customers. Which of the following types of market segmentation is evident here? A) geographic segmentation B) benefit segmentation C) occasion segmentation D) demographic segmentation E) psychographic segmentation

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"22) Erica wants to replace her old washing machine with a new one. In order to get the maximum value for her money she plans to spend substantial time and effort in gathering information and making product comparisons before making the actual purchase. In this instance Erica is planning to buy a(n) product." A) convenience B) unsought C) specialty D) shopping E) exclusive

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"24) A hickory rocking chair handmade by an Amish woodcarver in Lancaster Pennsylvania from locally grown wood is an example of a ." A) convenience product B) capital item C) service D) specialty product E) product attribute

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"133) Due to dropping sales a company that manufactures soaps begins to sell them to restaurants and hotels to extend their product's life. The soap manufacturer is in the stage of PLC." A) introduction B) growth C) maturity D) decline E) development

Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle. Difficulty: Moderate

"134) When Kraft focused on cost cutting with its older established brands leaving them to wither without much investment or modification Kraft decided to the older products." A) extend B) modify C) drop D) harvest E) analyze

"3) Marketing is defined as a social and managerial process by which individuals and organizations obtain what they need and want through ." A) research and development B) innovation and creativity C) manufacturing efficiencies D) value creation and exchange E) sales and revenue creation

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate

49) Which of the following marketing orientations holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do? A) the product concept B) the production concept C) the selling concept D) the marketing concept E) the societal marketing concept

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy

"48) The selling concept is typically practiced ." A) to balance consumers' wants company's requirements and the society's long-run interests B) with products that offer the most in terms of quality performance and innovative features C) when the company focuses on building long-term customer relationships D) with goods that buyers normally do not think of buying E) by customer-driven companies

42) Which of the following is the aim of the product concept? A) improve the marketing of a firm's best products B) market only those products with high customer appeal C) focus on the target market and make products that meet those customers' demands D) focus on making continuous product improvements E) ensure that product promotion has the highest priority

45) Which of the following statements is true of the selling concept? A) It requires minimum promotion efforts. B) It creates long-term profitable customer relationships. C) It takes an outside-in perspective. D) It is typically practiced with unsought goods. E) It follows the customer-centered sense-and-respond philosophy.

61) Which of the following statements reflects the marketing concept? A) Focus on making continuous product improvements. B) Undertake a large-scale selling and promotion effort. C) Emphasize an inside-out perspective. D) Consider customer focus and value as the paths to sales and profits. E) Focus on a product-centered make-and-sell philosophy.

107) Customers can be classified into four relationship groups based on their profitability and projected loyalty. Which customer type is associated with high profitability and long-term loyalty? A) barnacles B) strangers C) butterflies D) true friends E) cash cows

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

109) A financial services firm has several loyal customers who conduct business with them exclusively. However the company has noticed that this customer group is the least profitable for the company and in some cases it increases their losses when engaging in business with this group. Which of the following customer groups is being referred to in this scenario? A) butterflies B) true friends C) strangers D) barnacles E) cash cows

"3) A market-skimming pricing strategy should NOT be used for a new product when ." A) the product's quality and image support its higher price B) enough buyers want the products at that price C) competitors are unable to enter the market D) competitors can undercut prices easily E) producing a smaller number of goods is feasible

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Easy

"35) Using pricing companies are able to turn their trash into cash allowing them to make the price of their main product more competitive." A) product bundle B) optional product C) captive product D) by-product E) product line

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Easy

84) La Belle released a cut glass bottle of perfume at $299 per item even though its major competitor prices its signature scent at $99 per item. La Belle reasons that customers in search of luxury goods will prefer its product because they are likelier to believe that high price indicates superior quality. What price adjustment strategy is evident in its reasoning? A) seasonal pricing B) time-based pricing C) captive product pricing D) psychological pricing E) location-based pricing

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Challenging

85) A supermarket places its store brand of blackberry jam priced at $5 per jar in the fruit preserves aisle alongside the jam jars of a better known brand-whose products are priced at $8 apiece. Store managers reason that customers are more likely to choose the store brand instead of the better-known brand when they realize the price difference. What price adjustment strategy is evident in the supermarket's reasoning? A) by-product pricing B) product bundle pricing C) captive product pricing D) psychological pricing E) seasonal pricing

"59) Solar Tanning Salon prices tanning sessions at $25 per visit. It also offers seasonal passes for $175 that allow the customer to visit the salon multiple times in a year. This is an example of a ." A) sample B) promotional allowance C) product bundle D) discount E) product line

"76) When a firm varies its price by the season it is using pricing." A) product form B) customer-segment C) location-based D) time-based E) value-added

68) Shoe Trends a company that manufactures formal shoes for men and women offers to give its customers $10 for an old pair of shoes when they buy a new pair. In essence they're reducing the price of the new shoes by $10. What is this type of price adjustment called? A) functional discount B) captive product pricing C) seasonal discount D) trade-in allowance E) by-product pricing

86) What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency? A) segmented pricing B) international pricing C) reference pricing D) promotional pricing E) basing-point pricing

129) Which of the following would most likely lead to a company initiating a price increase? A) weakened economy B) possession of outdated merchandise C) excess capacity D) over-demand E) possession of defective merchandise

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Easy

they evolve. C) Some channel systems are formal interactions guided by strong organizational structures. D) Intermediaries play interchangeable roles in the system. E) Different types of intermediaries develop and emerge.

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Challenging

"121) Producers of strong brands sometimes sell to dealers only on the condition that dealers take some or all of the rest of a product line. This practice is known as ." A) product line franchising B) selective dealing C) cross merchandising D) full-line forcing E) disintermediation

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 12.4: Explain how companies select motivate and evaluate channel members. Difficulty: Easy

"130) involves planning implementing and controlling the physical flow of goods services and related information from points of origin to points of consumption to meet customer requirements at a profit." A) Advertising B) Product positioning C) Mass customization D) Marketing logistics E) Branding

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"133) logistics involves moving products from the factory to resellers and ultimately to customers." A) Customer-centered B) Reverse C) Upstream D) Outbound E) Inbound

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

"139) Major logistics functions are logistics information management inventory management transportation and ." A) advertising B) product design C) financial projections D) warehousing E) customer sales

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

142) Which of the following is true of using trucks as a transportation mode? A) Transportation via trucks is costlier than by rail or air. B) Trucks are a specialized means of shipping petroleum natural gas and chemicals from sources to markets. C) Trucks provide in-transit services such as the diversion of shipped goods to other destinations en route. D) Trucks are highly flexible in their routing and time schedules. E) Trucks are the slowest mode of transportation and most affected by the weather.

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

146) Which of the following is true about using air carriers as a transportation mode when shipping products? A) Air carriers are the most cost-effective way to ship non-perishable goods over short distances. B) Air carriers are the slowest and least reliable modes of transport. C) Air carriers provide in-transit services such as the processing of goods en route. D) Air carriers are ideal when time is short and speed is needed. E) Air carriers are a specialized means of shipping chemicals from sources to markets.

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

"46) In order to avoid shortsightedness today marketers are moving toward viewing communications as managing the ." A) organizational culture B) nonpersonal communication channels C) word-of-mouth influence D) ongoing customer relationships with the company E) product life cycle

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"82) Moral appeals ." A) relate to the audience's self-interest by showing that the product will produce the desired benefits B) attempt to stir up either negative or positive emotions that can motivate purchase C) range from love joy and humor to fear and guilt D) are directed to an audience's sense of what is "right" and "proper" E) are based on the idea that practical benefits are more important for consumers than emotions

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

77) Which of the following statements is true about personal communication channels? A) A magazine advertisement exemplifies the use of a personal communication channel. B) All personal communication channels are directly controlled by a company. C) Personal communication channels do not allow sending and receiving of feedback. D) ord-of-mouth influence uses a personal communication channel. E) A billboard message exemplifies the use of a personal communication channel.

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

132) Which of the following promotional tools is the most effective in building up buyers' preferences convictions and actions? A) mass-market advertising B) sales promotion C) segmented advertising D) personal selling E) public relations

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Easy

from customers. A) Public relations B) Personal selling C) Advertising D) Sales promotion E) Direct marketing

market attractiveness. A) product attribute B) product design C) market penetration D) market growth rate E) market segmentation

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

"26) products are those products purchased for further processing or for use in conducting a business." A) Unsought B) Specialty C) Shopping D) Industrial E) Convenience

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Easy

15) What is the core customer value a customer might purchase when buying Urban Decay cosmetics? A) variety of collections B) unique packaging C) unusual colors D) sense of adventure E) long-lasting makeup

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

35) A company that uses well-known celebrities to help sell its products is using marketing. A) interactive B) internal C) social D) person E) organization

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. Difficulty: Moderate

"144) The strongest brands are positioned on ." A) desirable benefit B) good packaging C) service inseparability D) strong beliefs and values E) product attributes

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy

156) Which of the following is a potential drawback of multibranding? A) Multibranding tends to decrease brand loyalty. B) Company resources are likely to be concentrated on a single brand. C) Multibranding curbs the growth opportunities of established brands. D) Each brand might obtain only a small market share and none may be very profitable. E) Multibranding causes companies to refrain from product diversification.

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Moderate

"60) A company getting ready to launch a new product must make several decisions. The company must first decide on ." A) whether to launch the product in a single location B) whether to launch the product in a region C) whether to launch the product into full national distribution D) when to introduce the product E) when to develop a planned market rollout

Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Moderate

52) Which of the following generations is the most educated to date? A) Lost Generation B) Baby boomers C) Millennials D) Generation X E) Silent Generation

Answer: D AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

"58) Gen Zers are highly mobile connected and social. They base their purchases on . A) input from their friends" B) text messages C) social media ratings D) product research on their own E) their parents' opinions

70) Which of the following is an accurate statement about the diversity of the American population? A) African Americans represent the largest non-white segment of the population. B) More than 20 percent of the people living in the United States were born in another country. C) By 2050 the Asian population is estimated to remain at 4.7 percent. D) By 2060 Hispanics are estimated to be 28 percent of the population. E) The United States has become more of a "melting pot" than a "salad bowl."

"143) The fact that people are dropping out of organized religion doesn't mean that they are abandoning their faith. Some futurists have noted a renewed interest in perhaps as a part of a broader search for a new inner purpose." A) interacting with nature B) the fine arts C) charitable giving D) spirituality E) materialism

Answer: D AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

"23) Consumer purchases are influenced strongly by characteristics that marketers cannot control but must take into account including cultural social psychological and characteristics." A) economic B) professional C) medical D) personal E) genetic

Answer: D AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

"44) Marketers often segment international markets according to the type and stability of government. In such instances they segment markets based on ." A) geographic location B) economic factors C) cultural factors D) political factors E) sociocultural factors

Answer: D AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

"158) While comparison pricing claims are legal if they are truthful the FTC warns sellers not to advertise a) factory or wholesale prices unless such prices are what they claim to be b) comparable value prices on imperfect goods or c) ." A) a sale unless the products are available in sufficient quantity to meet expected demand B) in a way which confuses potential buyers of the product C) a description of a product unless all versions of the product are offered with the same pricing terms D) a price reduction unless it is a savings from the usual retail price E) if only a limited quantity are available at the reduced price

Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Overview the social and legal issues that affect pricing decisions. Difficulty: Moderate

145) Of the following actions which is permitted in personal selling activities? A) obtain or use trade secrets B) criticize competitors by using inaccurate information C) bribes to those who can influence a sale D) offer incentives such as discounts based on size of an order E) stretching the truth when describing advantages of a product

Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 14.4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Difficulty: Moderate

153) Which of the following best describes the role of a product steward? A) to protect employees and laborers from harm B) to evaluate new product ideas against a set of general criteria C) to develop a new product concept into a physical product D) to protect consumers from harm and the company from liability E) to decide whether to maintain harvest or drop the product in the decline stage of the PLC

Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 9.4: Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Difficulty: Moderate

"24) Of the various digital marketing categories is the fastest-growing category." A) blogs B) e-mail C) social media D) mobile E) brand Web sites

Answer: D AACSB: Information technology Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

"26) Marketers now view themselves as that create and share brand messages and conversations with and among customers across a mix of paid owned earned and shared communication channels." A) promotion managers B) public relations managers C) sales managers D) content marketing managers E) account managers

Answer: D AACSB: Information technology Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Easy

"17) Changes to the marketing communications model include that consumers are changing and are better informed that marketing strategies are changing and are moving from mass marketing and that ." A) manufacturing processes are becoming more efficient B) distribution of products worldwide is more feasible and cost-effective C) segmenting and targeting of consumers are more detailed than ever before D) digital technologies are changing the ways companies and customers communicate E) retailing is more competitive with more sources of products available for consumers

Answer: D AACSB: Information technology Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

"108) Many firms today use RFID technology to . A) identify new target markets" B) analyze threats and opportunities in the macroenvironment C) move toward environmental sustainability D) track products through various points in the distribution channel E) track patterns of online consumer behavior

Answer: D AACSB: Information technology Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate

"61) Samsung Mobile plans to launch a new phone with a unit cost of $270 and wants to earn a 10 percent markup on its sales. Samsung's markup price is ." A) $275 B) $280 C) $295 D) $300 E) $335

Answer: D AACSB: Reflective thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

"32) Excel Enterprises uses a Web site online social networks and print advertisements to promote its products. Since Excel Enterprises practices integrated marketing communications all these different brand contacts maintain in design and tone." A) variety B) simplicity C) creativity D) consistency E) flexibility

Answer: D AACSB: Written and oral communication Skill: Application Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

word-of-mouth marketing

Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

"48) While using integrated marketing communications the communications process should start with a(n) ." A) advertising strategy B) competitive-parity analysis C) long-term public relations plan D) audit of all potential customer touch points E) strategy for implementing a social media presence

Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

"56) In a communication process a receiver assigns meaning to the symbols encoded by a company in its advertisements through a process known as ." A) integrating B) reciprocating C) acknowledging D) decoding E) coordinating

Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

47) Communications programs need to be developed for specific niches individuals and . A) genders B) countries C) departments D) products E) segments

Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

49) Which of the following is one of the four major communication functions? A) coordination B) distribution C) noise D) response E) preference

Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

5) According to the five-step model of the marketing process a company should before designing a customer-driven marketing strategy. A) determine how to deliver superior value to customers B) build profitable relationships with customers C) use customer relationship management to create full partnerships with key customers D) understand the marketplace and customer needs and wants E) construct an integrated marketing program

Answer: D Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate

"84) Customer equity refers to ." A) a firm's current sales B) the share a firm earns of a customer's purchasing in their product categories C) the amount a customer is spending each year on certain products D) the total combined customer lifetime value of all of the company's current and potential customers E) a firm's market share

Answer: D Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

14) Factors a company considers in setting its price include all of the following EXCEPT . A) competitors' strategies and prices B) product costs C) overall marketing strategy and mix D) value of the product on the pre-owned market E) nature of the market and demand

152) Discuss the challenges and advantages of new communication technologies for marketers as they work to build relationships with their customers.

Answer: Through the Internet and related technologies people can now interact in direct and surprisingly personal ways with large groups of others from neighbors within a local community to people across the world. With communication technologies such as e-mail blogs Web sites online communities and online social networks today's marketers incorporate interactive approaches that help build targeted two-way customer relationships. Marketers can create deeper consumer involvement and a sense of community surrounding a brand making a brand a meaningful part of consumers' conversations and lives. However while new communication tools create relationship-building opportunities for marketers they also create challenges. They give consumers a greater voice and therefore greater power and control in the marketplace. In fact the marketing world is beginning to embrace customer- managed relationships. Today's consumers have more information about brands than ever before and they have a wealth of platforms for airing and sharing their brand views with other consumers. This benefits companies when views of its products are positive but can be damaging when customers share stories of negative experiences with a company's products. AACSB: Information technology Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

120) Differentiate between dynamic and fixed pricing.

Answer: Throughout most of history prices were set by negotiation between buyers and sellers. The fixed price policy-setting one price for all buyers-is a relatively modern idea that arose with the development of large-scale retailing at the end of the nineteenth century. Today most prices are set this way. However some companies are now reversing the fixed pricing trend. They are using dynamic pricing adjusting prices continually to meet the characteristics and needs of individual customers and situations. Dynamic pricing makes sense in many contexts. It adjusts prices according to market forces and it often works to the benefit of the customer. AACSB: Application of knowledge

84) What are the primary requirements for effective market segmentation?

Answer: To be useful market segments must be: 1. Measurable: The size purchasing power and profiles of the segments can be measured. 2. Accessible: The market segments can be effectively reached and served. 3. Substantial: The market segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. 4. Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If men and women respond similarly to marketing efforts for soft drinks they do not constitute separate segments. 5. Actionable: Effective programs can be designed for attracting and serving the segments. AACSB: Written and oral communication Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

154) What is cause-related marketing? Illustrate with examples.

Answer: To exercise their social responsibility and build more positive images many companies are now linking themselves to worthwhile causes. Some companies are founded entirely on cause-related missions. Under the concept of "values-led business" or "caring capitalism" their mission is to use business to make the world a better place. Cause-related marketing has become a primary form of corporate giving. It lets companies "do well by doing good" by linking purchases of the company's products or services with benefiting worthwhile causes or charitable organizations. The P&G Tide Loads of Hope program provides mobile laundromats and loads of clean laundry to families in disaster-stricken areas-P&G washes dries and folds clothes for these families for free. Down the street needy people will probably find the P&G Duracell Power Relief Trailer which provides free batteries and flashlights as well as charging stations for phones and laptops. AACSB: Ethical understanding and reasoning

131) How do companies identify attractive market segments? How do they choose a target marketing strategy?

Answer: To target the best market segments the company first evaluates each segment's size and growth characteristics structural attractiveness and compatibility with company objectives and resources. It then chooses one of four marketing strategies: undifferentiated differentiated concentrated and micromarketing. The seller can ignore segment differences and target broadly using undifferentiated marketing. This involves mass-producing mass-distributing and mass- promoting nearly the same product in about the same way to all consumers. Or the seller can adopt differentiated marketing by developing different market offers for several segments. Concentrated marketing involves focusing on only one or a few market segments. Finally micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. The targeting strategy depends on the company resources product variability product life-cycle stage market variability and competitive marketing strategies. AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

129) As competition and costs increase and as productivity and quality decrease what are the three major marketing tasks facing service companies in contemporary times?

Answer: Today as competition and costs increase and as productivity and quality decrease more service marketing sophistication is needed. Service companies face three major marketing tasks: They want to increase their service differentiation service quality and service productivity. AACSB: Application of knowledge Skill: Concept Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Difficulty: Moderate

102) Explain the impact of the baby boomers Generation Xers Millennials and Generation Zers on today's marketing strategies.

Answer: Today's baby boomers account for about 26 percent of the U.S. population but control an estimated 70 percent of the nation's disposable income. This group is an attractive market for financial services new housing and home remodeling travel and entertainment and health and fitness products among others. Generation Xers carry a more cautious outlook

103) Define total costs.

Answer: Total costs are the sum of the fixed and variable costs for any given level of production. AACSB: Written and oral communication Skill: Concept Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Easy

158) Briefly discuss monopolistic competition.

Answer: Under monopolistic competition the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. A range of prices occurs because sellers can differentiate their offers to buyers. Because there are many competitors each firm is less affected by competitors' pricing strategies than in oligopolistic markets. Sellers try to develop differentiated offers for different customer segments and in addition to price freely use branding advertising and personal selling to set their offers apart. AACSB: Analytical thinking Skill: Concept Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Moderate

157) Compare and contrast pure competition and oligopolistic competition.

Answer: Under pure competition the market consists of many buyers and sellers trading in a uniform commodity such as wheat copper or financial securities. No single buyer or seller has much effect on the going market price. In a purely competitive market marketing research product development pricing advertising and sales promotion play little or no role. Thus sellers in these markets do not spend much time on marketing strategy. On the other hand under oligopolistic competition the market consists of only a few large sellers. Because there are few sellers each seller is alert and responsive to competitors' pricing strategies and marketing moves. AACSB: Application of knowledge

132) Distinguish between undifferentiated and differentiated marketing strategies.

Answer: Undifferentiated (mass) marketing refers to a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. On the other hand differentiated (segmented) marketing refers to a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each. AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

8) Why is price considered one of the most flexible elements of the marketing mix?

Answer: Unlike product features and channel commitments prices can be changed quickly. AACSB: Application of knowledge Skill: Concept Objective: LO 10.1: ,Answer the question "What is a price?" and discuss the importance of pricing in today's fast-changing environment. Difficulty: Easy

49) Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production the company generates a great deal of scrap hardwood. How can using by- product pricing benefit the company?

Answer: Using by-product pricing Sensenig can seek a market for the hardwood and should accept any price that covers more than the cost of storing and delivering the by-products. This practice allows Sensenig to reduce the main product's price to make it more competitive. Sensenig might even find that the by-products themselves are profitable. AACSB: Application of knowledge

161) Marketers can choose from two basic promotion mix strategies-push promotion or pull promotion. Compare these two strategies.

Answer: Using the pull strategy the producer directs its marketing activities toward final consumers to induce them to buy the product if the pull strategy is effective consumers will then demand the product from channel members who will in turn demand it from producers. Using a push strategy the producer focuses instead on the channel members persuading them to carry the product and promote it to final consumers. AACSB: Application of knowledge

26) How do suppliers help companies like Walmart maintain consistently low prices?

Answer: Walmart has been able to maintain its promise of providing low prices to its customers only because of its suppliers who provide merchandise at low costs. Walmart has developed and managed relationships with its suppliers. AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate

127) Explain how companies select motivate and evaluate intermediaries or channel members.

Answer: When selecting intermediaries the company should evaluate each channel member's qualifications and select those who best fit its channel objectives. The company should use economic criteria control issues and adaptive criteria to analyze each possible channel member. Once selected channel members must be continuously motivated to do their best. The company must sell not only through the intermediaries but also to and with them. It should work to forge long-term partnerships with channel partners to create a marketing system that meets the needs of both the manufacturer and the partners. The company must also regularly check channel member performance against established performance standards rewarding intermediaries who are performing well and assisting or replacing weaker ones. AACSB: Application of knowledge

128) What does a company focus on when using a concentrated marketing strategy?

Answer: When using a concentrated marketing (or niche marketing) strategy instead of going after a small share of a large market a company goes after a large share of one or a few smaller segments or niches. AACSB: Written and oral communication Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

166) How can a company benefit through a just-in-time logistics system?

Answer: With just-in-time logistics systems producers and retailers carry only small inventories of parts or merchandise often only enough for a few days of operations. This creates substantial savings in inventory carrying and handling costs. AACSB: Application of knowledge Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

50) Explain product line pricing.

Answer: With product line pricing management must decide on the price steps to set between the various products in a line. The price steps should take into account cost differences between the products in a line customer evaluations of different product features and competitors' prices. The seller's task is to establish perceived quality differences that support the price differences between various price points. AACSB: Application of knowledge

answer the following question(s). "John Mayes opened Sparkle Janitorial in 2005. John began his business by acquiring two contracts for office cleaning services from two local manufacturing facilities. For two years John and his wife Barb performed the cleaning services alone. After acquiring three additional cleaning contracts in 2007 John hired two employees. ""Up to that point we had room to grow but we really had no advertising plan"" John stated. ""We were relying mostly on word-of-" mouth." By 2010 Barb hired another two full-time employees to begin Sparkle's new endeavor: carpet cleaning in homes and offices. "Competition was getting tough for both of our services at that point" Barb added. "We ran a local radio spot three times each week. Then we had an advertiser print coupons on placemats. That gave us a little more exposure." John and Barb Mayes admit that they did not realize the value of a sound promotional plan earlier. "We wish we would have put together something catchy with a jingle long before now" they said. "146) When starting their business John and Barb would most likely have benefitted from understanding ." A) social media B) buzz marketing C) public relations campaigns D) network television advertising E) integrated marketing communications

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answer the following question(s). Considering that most young households have limited financial resources Alden attempts to engage in target costing. "In doing this" says Milt Alden the co-founder of Alden Electronics "we have better control over keeping price right in line with customers." Alden manufactures a three-speed blender its top seller along with a five-speed blender. The hand mixers are manufactured in two variants-a small handheld mixer with two rotating beaters and another that comes with an optional stand and an attached mixing bowl. Alden's temperature-controlled skillets are manufactured in a single style with three color options. "Our product offerings are narrower" Milt Alden added "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low. 143) Milt Alden uses which of the following strategies for pricing his products? A) basing company price on competitors' prices B) using everyday low pricing C) initiating an aggressive promotional campaign D) starting with customer-value considerations E) focusing on overall fixed costs of manufacturing ,Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Challenging

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answer the following question(s). Alden Manufacturing produces small kitchen appliances-blenders hand mixers and electric skillets-under the brand name First Generation. Alden attempts to target newlyweds and first- time home buyers with this brand. Considering that most young households have limited financial resources Alden attempts to engage in target costing. "In doing this" says Milt Alden the co-founder of Alden Electronics "we have better control over keeping price right in line with customers." Alden manufactures a three-speed blender its top seller along with a five-speed blender. The hand mixers are manufactured in two variants-a small handheld mixer with two rotating beaters and another that comes with an optional stand and an attached mixing bowl. Alden's temperature-controlled skillets are manufactured in a single style with three color options. "Our product offerings are narrower" Milt Alden added "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low. "77) Milt Alden says that his line workers ""know each product like the back of their hands"" and that this knowledge helps the company keep its prices low. This indicates that Alden Manufacturing most likely benefits from the ." A) cost-plus pricing B) value-added pricing C) experience curve D) inelastic demand in the market E) derived demand in the market ,Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Identify the three major pricing strategies and discuss the importance of understanding customer-value perceptions company costs and competitor strategies when setting prices. Difficulty: Challenging

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answer the following question(s). Casey Brickly opened The Landing a convenience store on the north shore of Witmer Lake in 1962. With a sandwich counter on one side and a bait shop and grocery on the other The Landing was an immediate hit with weekend lake visitors and local residents alike. In the summer boaters parked at the piers and bought all their fishing needs such as rods and reels bait snacks and soft drinks at The Landing. Even during the winter months snowmobilers and ice fishermen were lured to The Landing for snacks and hot coffee or hot chocolate. As time passed the business changed and grew tremendously. What was formerly a weekend tourist area gradually became a full-fledged residential area. Many of the houses which were built as cottages in the 1950s and 1960s were remodeled into residential homes. By the end of the 1970s the days of small motorboats and 10 mile-per-hour speed limits were gone

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answer the following question(s). Champion Inc. is a manufacturer of lunch boxes school bags and school stationery. Charles Payton the CEO of Champion hopes to sell the products at a low price to penetrate the market quickly. 14) Which of the following best supports a market-penetration strategy for Champion? A) Production costs increase as sales volume increases. B) It is very difficult for competitors to enter the market. C) The cost of producing a smaller volume is negligible. D) The quality of the products supports high initial prices. E) The market for the products is highly price sensitive. ,Answer: E AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Challenging

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answer the following question(s). Champion Inc. is a manufacturer of lunch boxes school bags and school stationery. Charles Payton the CEO of Champion hopes to sell the products at a low price to penetrate the market quickly. 40) Noticing that themed envelopes aren't selling well Charles Payton decides to offer customers a special "letter writing" kit. He prices the kit-which comprises letter paper matching envelopes and pens-at $5 even though the combined prices of the individual items is $8. Which of the following pricing strategies is he using? A) optional product pricing B) product bundle pricing C) by-product pricing D) dynamic pricing E) captive product pricing ,Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 11.2: Explain how companies find a set of prices that maximizes the profits from the total product mix. Difficulty: Challenging

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answer the following question(s). Giant Beanstalks is a company based in Maryland that processes and cans vegetables. It has contracts with several large farms in Riverdale 80 miles away from the factory that agree to sell their produce to Giant Beanstalks. The company's products are available to the public only through Greenleaf a grocery chain with 38 stores in the country. 103) What distribution strategy does Giant Beanstalks use? A) inclusive distribution B) exclusive distribution C) selective distribution D) intensive distribution E) extensive distribution ,Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

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answer the following question(s). Giant Beanstalks is a company based in Maryland that processes and cans vegetables. It has contracts with several large farms in Riverdale 80 miles away from the factory that agree to sell their produce to Giant Beanstalks. The company's products are available to the public only through Greenleaf a grocery chain with 38 stores in the country. 153) Roland is the logistics manager of Giant Beanstalks. Which of the following is NOT an area of responsibility for him? A) the transportation of the canned vegetables to Greenleaf B) the storage of the unprocessed vegetables C) the advertising of the final product D) product inventory management E) the packaging of the final product ,Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

Refer to the scenario below to

answer the following question(s). Giant Beanstalks is a company based in Maryland that processes and cans vegetables. It has contracts with several large farms in Riverdale 80 miles away from the factory that agree to sell their produce to Giant Beanstalks. The company's products are available to the public only through Greenleaf a grocery chain with 38 stores in the country. 26) Which of the following is Giant Beanstalks' upstream partner? A) the management of Greenleaf B) the farmers of Riverdale C) the trucks that carry Giant Beanstalks' products to Greenleaf D) the end-consumers who buy the canned vegetables from Greenleaf E) the logistics division of Giant Beanstalk ,Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate

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answer the following question(s). John Mayes opened Sparkle Janitorial in 2005. John began his business by acquiring two contracts for office cleaning services from two local manufacturing facilities. For two years John and his wife Barb performed the cleaning services alone. After acquiring three additional cleaning contracts in 2007 John hired two employees. "Up to that point we had room to grow but we really had no advertising plan" John stated. "We were relying mostly on word-of- mouth." By 2010 Barb hired another two full-time employees to begin Sparkle's new endeavor: carpet cleaning in homes and offices. "Competition was getting tough for both of our services at that point" Barb added. "We ran a local radio spot three times each week. Then we had an advertiser print coupons on placemats. That gave us a little more exposure." John and Barb Mayes admit that they did not realize the value of a sound promotional plan earlier. "We wish we would have put together something catchy with a jingle long before now" they said. 96) In a recent radio spot John and Barb gave a quick explanation of Sparkle's cleaning process and a description of the value consumers receive for their money. This is an example of a(n) appeal. A) emotional B) standard C) rational D) moral E) social ,Answer: C AACSB: Application of knowledge

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answer the following question(s). Kimberly's Crown sells and designs jewelry. Despite the jewelry's popularity products are available only through a few shopping stores across the country. 155) What distribution strategy does Kimberly's Crown use? A) exclusive B) intensive C) selective D) inclusive E) extensive ,Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

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answer the following question(s). Most people laughed when Evelyn Ringler explained her product idea: a solar-powered vacuum cleaner. But the concept was practical and the technology used in the vacuum was the same as that used in many electronic toys. After setting up a demonstration booth in a mall in a Chicago suburb Evelyn felt more assured than ever that her idea would be a hit. Consumers seemed receptive and offered helpful pieces of advice such as how much they would pay for the vacuum what colors they would prefer and why they would not buy the vacuum. The vacuum itself was shaped like a small saucer with a filter bag on top and sensory nodes along the edges. After being charged in the sunlight the vacuum could run for 7 hours covering a floor area of 600 square feet. As the apparatus lightly bumped into table legs chairs and so on the sensory nodes allowed the vacuum to move around the objects in various directions. This is the same type of technology used in the manufacture of children's racecars and walking dolls. Evelyn knew that the solar-powered vacuum would be especially helpful to both elderly consumers who may have a more difficult time with vacuuming and on-the-go consumers who lead busy lives. The price would be above average but would likely be reduced after Evelyn recouped some of her costs. After a 500-unit production run and a substantial financial investment Evelyn set up a multiple-city test market in a Chicago mall and in an appliance store in New Jersey and several other retail stores in Florida. "It's such a novel idea" Evelyn added. "People will notice it even if they don't buy it right away." "74) Evelyn's is the practical use of solar power in a vacuum cleaner that is designed to effortlessly vacuum clean the floors of on-the-go and elderly consumers." A) product placement B) product concept C) product image D) product idea E) virtual product ,Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 9.2: List and define the steps in the new product development process and the major considerations in managing this process. Difficulty: Challenging

Refer to the scenario below to

answer the following question(s). Ruben Delgado built his enterprise on the faithful patronage of four specialty shops and a large contract from Elmore Distributors. But after two years the maker of novelty pens and pencils had to rethink his strategy when his contract with Elmore ended. Ruben built a company reputation on the manufacturing and distribution of a variety of wooden writing utensils with customized engravings. Specialty shops loved to display the products in their fancy lighted showcases but such specialty shops alone were not profitable. Ruben Delgado established a brand name known merely as Delgado and decided to expand on it. Ruben extended his writing utensil lines to include quills felt-tip pens and multiple-cartridge pens that write in different colors. He even added a line of various grades of personalized stationery and business cards. Perhaps Ruben's biggest added touch however was the addition of two salespeople who would work to explain the diverse array of products offered by Delgado as well as nurture existing accounts. "We make an excellent product" Ruben Delgado stated "and we honor a good guarantee on everything we sell. But let's face it-we face hundreds of competitors! We need Delgado representatives out there to help prospects understand what they should demand in something as simple as a writing tool." The Delgado brand was fast-becoming synonymous with top-notch customer service. Part of the purchase package brought personal visits from the Delgado representative before the purchase and long after. "87) The new felt-tip pens multiple-cartridge pens and quills offered by Ruben Delgado are examples of ." A) product line filling B) multibranding C) megabranding D) product line inconsistencies E) co-branding ,Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 8.2: Describe the decisions companies make regarding their individual products and services product lines and product mixes. Difficulty: Challenging

Refer to the scenario below to

answer the following question(s). Ruben Delgado was making wooden pens and pencils which had unique engravings as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent but Simon's enthusiasm and the recent sales were enough to change his mind. With limited resources Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months just prior to the holiday season each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that" Ruben stated "but in February I was contacted by Elmore Distributors. At that point I had to make a huge decision about how far I wanted to go with this business." Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and along with it the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project" Ruben added. He decided to place his major focus on the large contract with Elmore. However to avoid placing his total emphasis with one customer Ruben continued nurturing his four previously established accounts without targeting any additional customers. "At this point I had set up an assembly line in a rented building" Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes." "114) In marketing his wooden pens and pencils to specialty-shop customers Ruben was most likely using marketing." A) mass B) trigger-based C) concentrated D) segmented E) individual ,Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

Refer to the scenario below to

answer the following question(s). Ruben Delgado was making wooden pens and pencils which had unique engravings as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent but Simon's enthusiasm and the recent sales were enough to change his mind. With limited resources Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months just prior to the holiday season each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that" Ruben stated "but in February I was contacted by Elmore Distributors. At that point I had to make a huge decision about how far I wanted to go with this business." Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and along with it the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project" Ruben added. He decided to place his major focus on the large contract with Elmore. However to avoid placing his total emphasis with one customer Ruben continued nurturing his four previously established accounts without targeting any additional customers. "At this point I had set up an assembly line in a rented building" Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes." "62) In the scenario Ruben has segmented his market based on . A) geography" B) benefits sought C) occasion D) degree of loyalty E) demographics ,Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy

Refer to the scenario below to

answer the following question(s). The Attic Trunk opened in 1999 as an upscale dress shop in Forest Ridge's fashionable shopping district catering to a wealthy mature clientele consisting mostly of older first- generation Hispanics. Many other specialty shops lined the main avenue over the next few years. But as Forest Ridge began to attract a more price-conscious younger and more demographically diverse population the once-popular shopping district was increasingly perceived as stodgy and snobby by the new segment of customers. By the mid-2000s many of these specialty shops suffered financially. Most shops attracted only tourists who enjoyed browsing through the displays of alligator belts and shoes piles of scented soaps and so on often laughing at the ridiculously high prices. Owners of The Attic Trunk had noticed the shifts in buying behavior of customers by the mid- 2000s. In fact the owners had observed that the once-fashionable shopping district in Forest Ridge no longer attracted the wealthy mature clientele. This clientele had been replaced with price-conscious families with children a mix of Asian and African Americans as well as Caucasians. Specialty items at The Attic Trunk gradually disappeared replaced by brand-name apparel fashion accessories and jewelry. Other owners followed suit in the late 2000s bringing restaurants an outdoor cafe and a day spa to the main avenue in Forest Ridge. 77) Which of the following best supports the idea that The Attic Trunk's mature wealthy clientele can remain a viable target market? A) Older first generation Hispanic consumers are not especially family-oriented. B) Older first-generation Hispanic consumers favor sellers who show special interest in them. C) Older first generation Hispanic consumers tend to be very price conscious. D) Older first generation Hispanic consumers tend to display little brand loyalty. E) Older first generation Hispanic consumers are motivated by mainstream marketing. ,Answer: B AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Challenging

Refer to the scenario below to

answer the following question(s). attraction with 20 rides a restaurant and an outdoor performing arts theater. "My wife Gail and I didn't know what we were getting into" commented Ron Hart the owner. "We just knew that weekenders coming to the lakes in our rural area represented an untapped market." "Today thousands of visitors flock to Fun-Spot: families children of all ages and even senior citizens who enjoy strolling through the gardens and the arbors. ""There's something here for everyone"" Gail Hart said with a smile. ""Dozens of companies hold annual company picnics here. We have welcomed class field trips. And we even had one wedding here at the park!""" "Here's the funny thing" Ron chimed in. "We really don't know why we've been so successful. There is nothing else like Fun-Spot Fun Park in the area. We were just lucky." "I think it's the ambience of the park that has brought so many visitors" Gail added. "We provide a 'total package' of entertainment. Plus we try to change our rides and various attractions from time to time for variety." Ron and Gail Hart admitted that making every visitor happy is a priority. "That has always been our philosophy" they said. "Like the park's motto at the entrance reads 'We're here to make you happy!' And we've always been able to deliver on that because we've never allowed ourselves to grow too big too quickly." "66) Fun-Spot's mission is . A) product oriented" B) technology oriented C) market oriented D) design oriented E) narrowly focused on profits ,Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

Refer to the scenario below to

answer the following question(s). attraction with 20 rides a restaurant and an outdoor performing arts theater. "My wife Gail and I didn't know what we were getting into" commented Ron Hart the owner. "We just knew that weekenders coming to the lakes in our rural area represented an untapped market." "Today thousands of visitors flock to Fun-Spot: families children of all ages and even senior citizens who enjoy strolling through the gardens and the arbors. ""There's something here for everyone"" Gail Hart said with a smile. ""Dozens of companies hold annual company picnics here. We have welcomed class field trips. And we even had one wedding here at the park!""" "Here's the funny thing" Ron chimed in. "We really don't know why we've been so successful. There is nothing else like Fun-Spot Fun Park in the area. We were just lucky." "I think it's the ambience of the park that has brought so many visitors" Gail added. "We provide a 'total package' of entertainment. Plus we try to change our rides and various attractions from time to time for variety." Ron and Gail Hart admitted that making every visitor happy is a priority. "That has always been our philosophy" they said. "Like the park's motto at the entrance reads 'We're here to make you happy!' And we've always been able to deliver on that because we've never allowed ourselves to grow too big too quickly." A) A rival amusement park announces plans to open three new rides next season. C) Ron and Gail have paid off the mortgage on Fun-Spot significantly reducing their monthly expenses. D) Fun-Spot employees tend to be enthusiastic and young projecting an image of fun and vitality. E) Fun-Spot plans to further diversify its offerings by beginning a two-week summer camp for elementary school students. ,Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.5: List the marketing management functions including the elements of a marketing plan and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate

78) What is horizontal conflict? Illustrate your

answer with an example. ,Answer: Horizontal conflict is conflict that occurs among firms at the same level of the channel. For example Chevrolet would experience horizontal conflict if two of its dealers in the same area complain that each is being undercut by the other. Student answers will vary. AACSB: Application of knowledge Skill: Application Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate

79) What is vertical conflict? Illustrate your

answer with an example. ,Answer: Vertical conflict occurs between different levels of the same channel

28) Briefly compare and contrast the concepts of needs wants and demands and provide examples to illustrate your

answer. How do these three concepts relate to marketing practices? Answer: Human needs are states of felt deprivation. Needs are a basic part of the human makeup

37) Which of the following customer questions is

answered by a company's value proposition? A) "Why should I buy your brand rather than a competitor's?" B) "What is your company's estimated customer equity?" C) "What are the costs involved in the production of your brand?" D) "What is the budget allocated by your company for research and development?" E) "What is the financial stability of your company?" ,Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate

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